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Patton Boggs, Llp v. Chevron Corporation

April 19, 2011

PATTON BOGGS, LLP, PLAINTIFF,
v.
CHEVRON CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge

MEMORANDUM OPINION

The law firm of Patton Boggs, LLP brings this action against Chevron Corporation, seeking a declaratory judgment that Patton Boggs's representation of parties adverse to Chevron in other courts does not violate standards of professional conduct such that it could be disqualified from participating in those cases. Patton Boggs also seeks leave to amend its complaint to add claims of tortious interference and civil conspiracy against Chevron and Chevron's counsel, Gibson, Dunn & Crutcher, LLP.*fn1 Before the Court are: Patton Boggs's motion for leave to amend [#19]; Chevron's motion to dismiss this action [#5]; and Patton Boggs's cross-motion to strike Chevron's motion to dismiss [#12]. Upon consideration of the motions, the oppositions thereto, and the record of this case, the Court concludes that Patton Boggs's motions must be denied and Chevron's motion to dismiss must be granted.

I. BACKGROUND

This action constitutes the latest chapter in a sprawling dispute between Chevron and various parties in Ecuador regarding the operations of an oil consortium that allegedly caused extensive environmental damage in the Ecuadorian Amazon. Chevron inherited this dispute in 2001 via a merger with Texaco. Texaco was originally sued in the U.S. District Court for the Southern District of New York, but that action was dismissed, at the urging of both Texaco and the government of Ecuador, on forum non conveniens grounds. See Aguinda v. Texaco, Inc., 303 F.3d 470 (2d Cir. 2002). Subsequently, 48 Ecuadorian plaintiffs sued Chevron in Lago Agrio, Ecuador. On February 14, 2011, the Lago Agrio court issued a multi-billion dollar judgment against Chevron. See Chevron Corp. v. Steven Donziger, No. 11-0691, slip op. at 52--53 (S.D.N.Y. March 7, 2011). Chevron asserts that the proceedings in Ecuador were tainted by misconduct and lacked basic due process protections; whether that is true is beyond the scope of this action. What is of significance here is that, to aid in its defense of the Lago Agrio litigation, Chevron instituted proceedings in multiple federal courts under 28 U.S.C. § 1782, which authorizes district courts to issue orders permitting discovery for use in foreign proceedings. See Compl. ¶¶ 2, 19.

Chevron also retained the Breaux Lott Leadership Group ("Breaux Lott Group"), a consulting and lobbying organization headed by former U.S. Senators John Breaux and Trent Lott, to assist with the Lago Agrio dispute. Compl. ¶ 25. The Breaux Lott Group represented Chevron from February 2008 to July 2010. In July 2010, Patton Boggs acquired the Breaux Lott Group. Compl. ¶ 30. It subsequently asked Chevron to waive a potential conflict of interest arising from Patton Boggs's representation of the government of Ecuador. Chevron refused and terminated its relationship with the Breaux Lott Group.

In November 2010, Patton Boggs entered an appearance on behalf of the Lago Agrio plaintiffs before the U.S. Court of Appeals for the Second Circuit. See In re Chevron Corp., No. 10-4341 (2d. Cir. Nov. 11, 2010) (notice of appearance). This prompted Chevron to write to Patton Boggs via its counsel, expressing "grave concerns that [Patton Boggs's] appearance in this matter constitutes a conflict of interest that could result in disqualification," reserving "the right to take any action we deem appropriate," and requesting a response by November 16, 2010.

Def.'s Mot. to Dismiss Ex. A (letter from Randy M. Mastro to James E. Tyrrell, Jr. (Nov. 13, 2010)) at 1--2. Patton Boggs replied that it had reviewed the situation and concluded that its withdrawal was not required. See Def.'s Mot. to Dismiss Ex. C (letter from James E. Tyrrell, Jr. to Randy M. Mastro (Nov. 17, 2010)). Patton Boggs subsequently entered appearances on behalf of the Lago Agrio plaintiffs in several more of Chevron's § 1782 actions.

Patton Boggs filed this action on November 17, 2010, seeking a declaratory judgment that "the Breaux Lott Leadership Group's prior non-legal work for Chevron does not provide a basis for disqualifying Patton Boggs from representing the Ecuadorian Plaintiffs." Compl. at 10 (prayer for relief). Chevron then moved to dismiss this case on multiple grounds. Patton Boggs responded by moving to strike Chevron's motion to dismiss and requesting leave to amend its complaint to include claims of tortious interference and civil conspiracy against both Chevron and Gibson Dunn.

II. ANALYSIS

A. Patton Boggs's Motion for Leave to Amend the Complaint

The Court first addresses Patton Boggs's motion for leave to amend its complaint. Patton Boggs seeks to add three new claims, all of which would apply to both Chevron and Gibson Dunn: (1) tortious interference with a contract; (2) tortious interference with an attorney-client relationship; and (3) civil conspiracy. These claims are based on what Patton Boggs terms a "smear campaign designed to hamper Patton Boggs' ability to represent its clients in accordance with Patton Boggs' contractual and ethical duties." Pl.'s Mot. for Leave to Amend at 3.

A party seeking to amend its complaint more than once or after a certain period of time may do so only by written consent of the adverse party or by leave of the court. FED. R. CIV. P. 15(a). Because leave is to be freely given when justice so requires, see id., a refusal to allow amendment must be justified by a sufficiently compelling reason, such as undue delay, prejudice to the non-moving party, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, or futility of amendment. See Foman v. Davis, 371 U.S. 178, 182 (1962); Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996). The party opposing amendment has the burden of establishing that it would be improper. Nwachukwu v. Karl, 222 F.R.D. 208, 211 (D.D.C. 2004).

Here, Chevron opposes Patton Boggs's request on the ground that amendment would be futile because Patton Boggs's new claims would not survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). See In re Interbank Funding Corp. Sec. Litig., 629 F.3d 213, 215 (D.C. Cir. 2010). Accordingly, the Court will address each count in the amended complaint to determine whether it would survive a Rule 12(b)(6) motion to dismiss, i.e., whether it states a claim upon which relief may be granted. See id. at 215--16.*fn2 Because both parties assume that District of Columbia law would govern Patton Boggs's new claims, the Court will do likewise. See In re Korean Air Lines Disaster of Sept. 1, 1983, 932 F.2d 1475, 1495 (D.C. Cir. 1991) ("[C]courts need not address choice of law questions sua sponte."); Davis v. Grant Park Nursing Home LP, 639 F. Supp. 2d 60, 65 ...


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