Case of the Day: Patton Boggs LLP v. Chevron Corp.
Posted on August 12, 2011
Patton Boggs was counsel to the Lago Agrio plaintiffs. It also owns the Breaux Lott Leadership Group, a lobbying firm named for former U.S. Senators John Breaux and Trent Lott. Breaux Lott had “previously worked for Chevron” on issues relating to the Lago Agrio affair. In 2010, after its acquisition of Breaux Lott, Patton Boggs sued, seeking a declaration that its ownership of Breaux Lott did not create a conflict of interest that would make it unethical for the firm to represent the Lago Agrio plaintiffs in their claims against Chevron. Chevron moved to dismiss. Patton Boggs sought leave to amend it complaint to add a claim of tortious interference and civil conspiracy against Chevron and its counsel, Gibson, Dunn & Crutcher. The court denied the motion for leave to amend on the grounds that the proposed amended complaint failed to state a claim for relief on a tortious intererence theory under District of Columbia law, and it dismissed the claim for a declaratory judgment on the grounds that the declaration sought—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”—was too broad given that Chevron had only allegedly threatened to seek disqualification in various judicial assistance proceedings around the country, and because the question of disqualification was more appropriately resolved by the courts before which Patton Boggs was representing the Ecuadorian plaintiffs.
Patton Boggs then brought a new action, which presented claims that were mostly identical to the claims it had brought in the first action. The obvious defense was claim preclusion, but Patton Boggs argued that its claims were not precluded because Patton Boggs had not have a “full and fair opportunity” to litigate the claims, as the doctrine of claim preclusion requires. I think Patton Boggs was fighting a losing battle here, since it seems clear that what Patton Boggs really wanted was reconsideration: according to the judge, Patton Boggs claimed it had been denied an adequate opportunity to litigate the declaratory judgment claim because “the Court mistakenly overlooked two ‘critical’ facts” in its analysis, and it claimed it had been denied an opportunity to litigate the other claims because the judge had decided the issues under District of Columbia law rather than New Jersey law or “under the Restatement” (more on that in a moment), even though Patton Boggs had presented its claims as though DC law applied. As one would expect, the judge held the claims that had been presented in the first lawsuit were precluded.
Patton Boggs’s single new claim was a claim for tortious interference arising after the first decision. Patton Boggs asserted that its claim arose under the Restatement of Torts, but of course, as the judge noted, “the Restatement is not a free-standing body of law that this Court can apply in the absence of state or local law adopting it.” The judge proceeded to apply DC law, as he had before. He found that Patton Boggs had failed to allege facts to support one of the elements of the claim, namely, that the defendants’ conduct was intended to cause a breach of Patton Boggs’s contract with its clients. Under the new Twombly/Iqbal standards, “formulaic recitation of the elements of a cause of action will not do.” Therefore, the court dismissed the new claim as well.