Lago Agrio: MCSquared Sues Sharon Stone?

Here is the most amusing ancillary litigation to arise out of the Lago Agrio to date, as far as I know. MCSquared, the PR firm that Ecuador hired, that failed at first to register as Ecuador’s agent under the FARA, and that paid Mia Farrow to visit Ecuador to support the government’s PR efforts, has sued another actress, Sharon Stone, for breach of contract.

According to the complaint, MCSquared paid $275,000 to American Program Bureau, Inc., an speaker’s bureau, to arrange for a visit by Stone to Ecuador. No written contract was ever executed. MCSquared also spent thousands of dollars “to accommodate Stone’s diva-like requests, including first class airfare tickets and luxury hotel suites for herself and her three (3) companions, hair and make-up at the events, personal guides, etc.” But a few days before the event, Stone fell ill and was hospitalized in Brazil. Neither she nor APB repaid the money to MCSquared.

Two things surprise me about the case. First, the complaint is, well, not very lawyerly, in my opinion. It pleads facts supporting personal jurisdiction and venue at great length. Instead of simply saying that there was a contract and Stone and APR breached it, it goes on quite defensively about the reasons why no written contract was executed even though one was negotiated. It pleads civil conspiracy and fraud—both claims seem pretty suspect to me given that this is a simple case of breach of contract or unjust enrichment. It includes an affidavit from MCSquared’s principal, Maria Garay, even though there is no indication MCSquared is seeking preliminary relief that would require an affidavit. It is heavy on allegations meant to embarrass (“diva-like demands?”). In short, not very promising from a pleading practice perspective, in my view.

Second, and more substantively, MCSquared is a PR firm. Did it not consider the PR implications of the lawsuit? Chevron’s people have been yucking it up on social media over the new claim. (On the other hand, it’s probably a bit much for one of Chevron’s media people, who is a “paid shill,” to accuse Stone and other personalities of being “paid shills” on the other side of the dispute).

This is why you have arbitration agreements and confidentiality clauses in contracts. More to the point, I guess, this is why you make sure you have a written contract before you wire someone a quarter million dollars.

Update (2/25/14): A previous version of this post stated that MCSquared had “advertised for ‘ethically diverse’ people to play protesters at Chevron’s annual meeting.” In fact, that advertisement was run by DFLA Films, as noted in my prior post. I apologize for the error!

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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