Lago Agrio: Standing to Seek an Injunction under RICO

Surrender of Cornwallis
The World Turned Upside Down.
Credit: Detroit Institute of Art
Here is some news that partisans of the Lago Agrio plaintiffs have gleefully passed along to me. The Courthouse News Service is reporting that lawyers with Gibson Dunn, Chevron’s law firm, will be arguing, in an unrelated case in the Second Circuit that will be heard tomorrow, that private parties lack standing to seek injunctive relief under RICO. This, of course, is precisely the opposite of what Chevron is arguing in the Donziger case. But don’t chuckle gleefully just yet, Chevron critics: it turns out that lawyers from Emery Celli, a firm that previously represented the Ecuadoran plaintiffs in their effort to enjoin the BIT arbitration, is arguing the other side!

Now, I’m not sure whether Emery Celli still represents the plaintiffs, so it may not be in precisely the situation Gibson Dunn is in. But here, for what it’s worth, is what the ABA comment to Rule 1.7 of the Model Rules of Professional Conduct, the rule on conflicts of interest involving current clients, has to say:

Ordinarily a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients. The mere fact that advocating a legal position on behalf of one client might create precedent adverse to the interests of a client represented by the lawyer in an unrelated matter does not create a conflict of interest. A conflict of interest exists, however, if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the lawyer’s effectiveness in representing another client in a different case; for example, when a decision favoring one client will create a precedent likely to seriously weaken the position taken on behalf of the other client. Factors relevant in determining whether the clients need to be advised of the risk include: where the cases are pending, whether the issue is substantive or procedural, the temporal relationship between the matters, the significance of the issue to the immediate and long-term interests of the clients involved and the clients’ reasonable expectations in retaining the lawyer. If there is significant risk of material limitation, then absent informed consent of the affected clients, the lawyer must refuse one of the representations or withdraw from one or both matters.

I suspect that there is no real problem of professional responsibility here, because it seems likely to me that in this situation, Gibson Dunn would have consulted with both clients and obtained their consent. Still, it poses an interesting public relations issue.

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.

5 thoughts on “Lago Agrio: Standing to Seek an Injunction under RICO

  1. Ted, Emery hasn’t represented the Ecuadorians for three years. And Gibson Dunn will likely make its flip flop RICO arguments to the same court, the 2nd Circuit, after Judge Kaplan rules in Chevron favor which he will.

      1. Knowing what I know about Chevron in Ecuador, I can’t wrap my head around Chevron as victim, but you are right that one of Gibson Dunn’s clients may be harmed. Obviously the question is which one? And, the 2nd Circuit may (may not) give us some insights into that answer Friday during the hearing or in its final ruling. This is why we are alerting reporters. For the Ecuadorians and others of us who have been called “criminals” and “liars” ad nauseam by Randy Mastro and his herd of lawyers at Gibson Dunn, we observe with less glee and more disdain that another herd of lawyers at the OK Corral is using our argument to defend their client. For lawyers, this may be just another day back at the ranch. But, for us non-lawyers involved in the Chevron/Ecuador legal fight, it’s one more example of how the U.S. legal system has failed the real victims of Chevron’s acts, the Ecuadorians. (Others? Sending the case to Ecuador and then bouncing it back to the US; not being allowed to testify about the contamination to defend charges of lying about the contamination.) Maybe that’s PR to you. For us, it’s an opportunity to tell our story — the story that never got told in Judge Kaplan’s court.

Leave a Reply

Your email address will not be published. Required fields are marked *