Venerable Center City law firm embroiled in Chevron fraud case

For decades, the Kohn, Swift & Graf law firm of Center City has been known as a litigation powerhouse, taking on defendants as diverse as the estate of former Philippines dictator Ferdinand Marcos and food-industry giant Chiquita Brands on behalf of plaintiffs who said they had been harmed.

But now the firm is embroiled in bitter accusations that a massive pollution lawsuit it financed in the United States and Ecuador against oil-industry giant Chevron Corp. is riddled with ethical improprieties.

In more than a dozen federal court filings around the country, Chevron is accusing a team of lawyers that had been financed by the Kohn firm of doctoring expert testimony and improperly pressuring Ecuadorean authorities to file criminal charges against Chevron lawyers. Since June, four federal District Court judges have found there was some evidence that the Kohn-financed team had engaged in fraud.

"While this court is unfamiliar with the practices of the Ecuadorean judicial system, the court must believe that the concept of fraud is universal and that what has blatantly occurred in this matter would in fact be considered fraud by any court," said Dennis L. Howell, a U.S. magistrate judge in Asheville, N.C., ruling in favor of a Chevron request to examine confidential attorney-client files.

In a highly unusual turn, evidence for the allegations is included in hundreds of hours of outtakes from a documentary film arranged by the Kohn-supported legal team. Chevron has subpoenaed the video as part of its defense of the lawsuit.

The outtakes focus in part on Steven Donziger, a Harvard-trained lawyer who headed the Kohn team in Ecuador, which is seeking billions in damages from Chevron.

The plaintiffs, indigenous people in the Amazon region of eastern Ecuador and settlers who arrived in the mid-1960s, charge that Chevron is responsible for pollution from oil production in a Rhode Island-size swath of the rain forest.

In one of the outtakes, Donziger, who openly agonizes about the progress of the case and on several occasions dismisses the Ecuadorean court system as corrupt, is seen joking about the assassination of an Ecuadorean judge.

In another, he suggests forming a protest march to occupy the court hearing the case.

"We believe they make decisions on what they fear the most, not based on what the laws dictate," Donziger says of Ecuadorean judges in one segment.

In yet another video, during a meeting at the Kohn, Swift & Graf offices in Philadelphia, Donziger discusses how evidence of alleged fraud by Chevron could be used to pressure the company.

In that same scene, name partner Joseph Kohn, a Democrat who ran unsuccessfully for state attorney general in 1992 and 1996 and is a prominent party fund-raiser, seems to suggest the evidence could be withdrawn if Chevron came to the settlement table.

Karen Hinton, a Washington-based spokeswoman for the Ecuador plaintiffs, said Donziger's remarks were injudicious, but argued that he was merely joking.

She alleged that Chevron had been using a handful of comments by Donziger and selectively edited outtakes to divert attention from what she characterized as the real issue: the oil company's responsibility for environmental harm in formerly pristine regions of the Amazon.

Kohn, who has had a falling out with Donziger, did not return a phone call for comment.

But Kohn's attorneys say he was unaware of the actions of Donziger and others working on the case in Ecuador. They say Kohn severed relations with Donziger and the case in 2009, when charges of ethical improprieties began to emerge.

Donziger was not a member of the Kohn firm. He worked on the case at times during the 1990s when the litigation was based in Manhattan, where he lives with his wife and child. During this period, he also had his own white-collar defense practice.

"What we have from the very beginning with Mr. Kohn ... made clear is that Mr. Kohn has done nothing wrong," said Patricia Hamill, a senior member of the white-collar defense practice at Philadelphia-based Conrad O'Brien P.C.

Yet condemnation of Donziger and others on the Ecuador plaintiffs team by some of the federal judges hearing Chevron motions has been searing. In all, Chevron has filed discovery motions in 15 federal courts around the country.

"Donziger's own words raise substantial questions as to his possible criminal liability and amenability to professional discipline," said federal District Court Judge Lewis Kaplan, sitting in Manhattan.

Kohn himself has had harsh words for Donziger. As allegations began to mount that plaintiffs' lawyers had engaged in improper tactics, the Kohn firm withdrew from the case.

In one letter from Kohn to the plaintiffs' team in Ecuador on Aug. 9, 2009, Kohn asserts that the case probably is lost and takes Donziger and his team to task for his allegedly improper conduct.

He said the plaintiffs' team's "outrageous" conduct "makes it highly unlikely that any court in the United States or elsewhere would ever enforce any judgment you might obtain.

"And, of course, we find out about it in part as a result of the utter stupidity, arrogance, and conceit of inviting a film to be made documenting this improper conduct," Kohn wrote.

Donziger, 48, worked for a time as a reporter for United Press International covering the Sandinistas in Nicaragua in the 1980s before returning to the United States and getting his law degree from Harvard, where he was a classmate of President Obama.

Friends and colleagues describe him as charming and charismatic, a lawyer committed to righting perceived injustices. In one journal entry made public as a result of discovery proceedings, he compares himself to the Sandinistas, Fidel Castro, and the Vietcong.

"Chevron is using me as a whipping boy," Donziger said in an interview, "and they want to make me into a cartoon villain."

The original defendant was Texaco, which stopped oil production in Ecuador in 1992. Chevron, which became the defendant when it merged with Texaco in 2001, says it is not liable because Texaco had already remediated damage in the region under an agreement with the Ecuadorean government.

When the lawsuit moved to Ecuador in 2003, following a federal District Court ruling in Manhattan that the case would be better handled there, Donziger took the lead.

The Kohn firm, while not directly involved in the Ecuadorean litigation, provided financing and coordinated litigation and public relations strategy with Donziger until withdrawing from the case last year. It has since pledged not to accept any fees that might be generated by the case.

According to court papers, the firm has provided $7 million in financing, in addition to untold hours of attorney time. The Kohn firm also handled preliminary attempts to settle the case in the United States a few years ago.

In one of the outtakes, Donziger says of Kohn, "He's very helpful, and he's the one who is behind the whole thing."

For all the money and attorney time provided by Kohn, the undisputed main player in the Ecuador litigation is Donziger.

He helped plot not only the legal strategy for local lawyers who argued the case, but also was the architect of a parallel government relations and media campaign.

Donziger and an activist group supporting the lawsuit, called Amazon Watch, arranged for celebrities including Daryl Hannah, British actress Trudie Styler, and her rock-star husband, Sting, to support the cause with tours, news conferences, and a benefit concert.

In what has turned out to be a devastating move for the Ecuadorean plaintiffs, Donziger also invited documentary filmmaker Joseph Berlinger to follow the litigation team around as it argued its case and plotted strategy behind the scenes.

Berlinger released his film, titled Crude, in 2009. It was generally sympathetic to the plaintiffs, but also included a highly problematic moment for them. The film at one point shows Donziger and his team barging into the office of an Ecuadorean judge demanding that he deny a motion by Chevron.

No Chevron lawyers were present, a tactic that in the U.S. judicial system would be deemed unethical, although the plaintiffs have argued that it was an acceptable practice in Ecuador.

"This is something we would never do in the United States," Donziger says as the cameras are rolling. "But Ecuador, you know, this is how the game is played. It's dirty."

The judge, seemingly weary of the entire matter, gives him what he wants, apparently to get Donziger out of his office.

The outtakes from the film added fuel to the fire.

In one film clip that didn't make it into the documentary, a dinner companion of Donziger suggests that any judge who ruled against the plaintiffs in Ecuador might be killed.

Donziger replies that the judge "might not be killed, but he'll think, he thinks he will be, which is just as good."

In another scene, Donziger and his team are discussing strategy. Donziger says:

"We need to do more to control the court, pressure the court. So what we want to do is take over the court.

"It's a critically important moment because we want to send a message to the court that, don't [expletive] with us anymore - not now, not later, and never."

Later in the same video, after someone asks whether the videos could be subpoenaed, members of the plaintiffs' team propose creating a private army, variously described as armed or unarmed, to keep the pressure on the Ecuadorean court.

The videos triggered an avalanche of litigation in federal courtrooms around the United States as Chevron sought discovery from anyone involved with the plaintiffs team - including the Kohn firm.

In one of those actions Monday, U.S. District Judge Jan E. DuBois of Philadelphia ruled that Kohn must make his confidential case files available for inspection and that he be deposed. Those files will likely show more about the behind-the-scenes strategizing - and doubtless trigger more months of litigation.