Third Circuit reverses ruling that Kohn Swift must disclose e-mails in Chevron pollutioncase

In a decision lending support to plaintiffs' lawyers in a massive pollution lawsuit against Chevron, the U.S. Court of Appeals for the Third Circuit on Wednesday reversed a lower-court ruling that the Philadelphia law firm of Kohn, Swift & Graf P.C. must disclose e-mails and other confidential communications it had in connection with the case.

The appeals court sent the case back to U.S. District Judge Jan E. DuBois in Philadelphia, saying there must be evidence linking the Kohn firm to fraud before the firm must disclose communications with its experts in the case and other lawyers. It said it had seen no such evidence.

The firm initiated the lawsuit in the early 1990s in federal District Court in Manhattan with others against Texaco, which later merged with Chevron, alleging that decades of drilling operations had polluted a vast swath of the Ecuadoran rain forest.

When the case was transferred to Ecuador in 2003, the Kohn firm withdrew from its lead role, but continued to provide financing and legal representation in the United States. It has since withdrawn from the case entirely and pledged not to accept any fees.

An Ecuadoran court awarded the plaintiffs $18 billion in damages in February, but Chevron, citing outtakes from a documentary film and journal entries from one of the plaintiffs' lawyers, has alleged that the plaintiffs' team committed fraud by falsifying expert witness reports and seeking to intimidate judges.

The confidentiality of attorney-client communications is one of the most hallowed principles of the law, and breaching that privilege is an exceedingly difficult legal test.

Yet hundreds of pages of e-mails, journal entries, and other communications already have been released in the case, largely as a result of findings by judges in other jurisdictions that there was evidence that the plaintiffs' team in Ecuador had engaged in fraud.

Chevron wants to depose Joseph Kohn, name partner of Kohn Swift & Graf, a prominent plaintiffs' firm in Center City, and gain access to its e-mails and other written communications with the plaintiffs' team in Ecuador.

But a three-judge panel of the Third Circuit said that for discovery to take place, Chevron must show that not only was there evidence of fraud but that it must have involved Kohn himself.

"We acknowledge the seriousness of the fraud that Chevron applicants have alleged," said Judge Morton Greenberg, writing for the panel. "Yet the circumstances supporting the fraud largely are allegations, and allegations are not factual findings."

Neither Chevron nor its local counsel, Burt Rublin, a partner at the Center City law firm of Ballard Spahr L.L.P., was available for comment.

Nor was Kohn or his attorney.

James E. Tyrrell Jr. of the Washington firm of Patton Boggs L.L.P., which is representing the Ecuadoran plaintiffs, maintained that the Third Circuit ruling would make it very difficult for Chevron to move forward with its request to examine Kohn's confidential communications since there was no evidence that he had been involved in fraudulent conduct.