Update on the Patton Boggs Case

George Washington Bridge
The George Washington Bridge, connecting New York and New Jersey
On February 28, 2012, I commented on the new case filed by Patton Boggs against Chevron. The claim was for injury arising out of the erroneous injunction Judge Kaplan had issued enjoining the Lago Agrio plaintiffs and their lawyers—including Patton Boggs—from seeking to enforce the Ecuadoran judgment anywhere in the world. One of the claims is a claim on the bond that I think Patton Boggs’s reasons for filing in a district other than the Southern District of New York are fairly obvious. I suggested, tongue-in-cheek, that Chevron would ask to have the case transferred to New York and the tender mercies of Judge Kaplan. I guess my tongue-in-cheek suggestion was not so tongue-in-cheek after all: Chevron has moved to transfer the case. It points to the “first-filed” rule (which is not a hard-and-fast rule but a doctrine promoting comity and sound judicial administration) and to the traditional venue transfer statute, 28 U.S.C. § 1404(a), which provides for transfer “for convenience of parties and witnesses, in the interest of justice.”

Chevron has also sought to get Judge Kaplan involved in the case by moving for exoneration of the bond. The basic argument is that the purpose of the bond was to protect the plaintiffs from damages suffered on account of a delay in enforcement of the Ecuadoran judgment, but the plaintiffs acknowledged that the Ecuadoran judgment was unenforceable until the Ecuadoran appellate court ruled on Chevron’s appeal, the plaintiffs stipulated that they would not seek to enforce the judgment until that time, and in any event in the months since the Ecuadoran courts ruled, the plaintiffs still have not sought to enforce the judgment. Thus there are no damages, and the bond no longer serves a purpose and should be exonerated.

Patton Boggs has not yet responded on the merits in Judge Kaplan’s court, but in the New Jersey action, it seeks an injunction enjoining Chevron from seeking exoneration in New York. It points out that Chevron did not really wait for the New Jersey judge to decide whether to transfer the case, but improperly help[ed] itself to its forum of choice. Chevron has effectively told this Court that it will adjudicated Patton Boggs’s right to the bond where Chevron wants to litigate this issue, whether this Court agrees or not.” Zing! Patton Boggs also pointed to the “first filed” rule in support of its position.

For a party that spent a long time trying to avoid the courts in New York, Chevron (yes, I know, Chevron is not the same entity as Texaco) is making a big effort these days to spend as much time in the New York courts as possible!

Photo credit: Jack E. Boucher

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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