Patton Boggs LLP v. Chevron Corp., s. 11–7082

• Citation: 401 U.S.App.D.C. 263,683 F.3d 397,82 Fed.R.Serv.3d 1344
• Decision Date: 22 June 2012
• Docket Number: Nos. 11–7082,11–7089.,s. 11–7082
• Parties: PATTON BOGGS LLP, Appellant v. CHEVRON CORPORATION and Gibson, Dunn & Crutcher LLP, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

683 F.3d 397
401 U.S.App.D.C. 263
82 Fed.R.Serv.3d 1344

PATTON BOGGS LLP, Appellant
v.
CHEVRON CORPORATION and Gibson, Dunn & Crutcher LLP, Appellees.

Nos. 11–7082, 11–7089.

United States Court of Appeals,
District of Columbia Circuit.

Submitted March 19, 2012.
Decided June 22, 2012.

[683 F.3d 399]

Appeals from the United States District Court for the District of Columbia (No. 1:10–cv–01975).
James E. Tyrrell Jr., Anthony J. Laura, Eric S. Westenberger, and Charles E. Talisman were on the briefs for appellant.

Theodore J. Boutrous Jr., Thomas H. Dupree Jr., and John F. Bash were on the brief for appellee. Thomas G. Hungar and Andrea E. Neuman entered appearances.

Before: SENTELLE, Chief Judge, BROWN and GRIFFITH, Circuit Judges.

Opinion for the Court filed by Circuit Judge GRIFFITH.

GRIFFITH, Circuit Judge.

This case is but a small part of a long-running and now sprawling international litigation battle in which various indigenous Ecuadorian groups claim that Chevron Corporation is liable for environmental harm caused in the Amazon over three decades. Patton Boggs LLP represents the plaintiffs and would like to continue to do so. The district court denied Patton Boggs both a declaratory judgment that it could not be disqualified from that representation and leave to amend its complaint with claims that Chevron and its counsel, Gibson, Dunn & Crutcher LLP, tortiously interfered with the firm's contract with its clients. For the reasons set forth below, we affirm the district court.

I

In 1993, indigenous Ecuadorian groups (the Ecuadorian Plaintiffs) filed suit against Chevron in the Southern District of New York. That suit was eventually dismissed in 2001 on grounds of forum non conveniens. In February 2011, an Ecuadorian court hearing a successor suit entered a multibillion dollar judgment against Chevron. Chevron has appealed that judgment in Ecuador and sued in tribunals around the world to prevent its enforcement. See Chevron Corp. v. Donziger, 768 F.Supp.2d 581 (S.D.N.Y.2011) (discussing the underlying environmental dispute and the ensuing litigation).

To aid its defense against the Ecuadorian suit, beginning in 2009 Chevron filed multiple proceedings under 28 U.S.C. § 1782, which authorizes federal district courts to compel discovery for use in foreign litigation. In November 2010, Patton Boggs appeared on behalf of the Ecuadorian Plaintiffs in one of those matters. Patton Boggs had recently acquired the Breaux Lott Leadership Group, a lobbying firm in Washington, D.C. that had provided services to Chevron on issues related to the litigation in Ecuador. (The record does not disclose the precise nature of those services.) Gibson, Dunn & Crutcher LLP sent Patton Boggs a letter expressing “grave concerns that [its] appearance in this matter constitutes a conflict of interest that could result in disqualification” because “Patton Boggs attorneys, former Senators Lott and Breaux, formerly represented Chevron in a substantially related matter.” Def.'s Mot. to Dismiss Ex. A. Despite disavowing any intent to take immediate action, Chevron and Gibson Dunn reserved “the right to take any action we deem appropriate” in the future. Id.

The day after receiving Chevron's letter, Patton Boggs sued in the district court in Washington, D.C. seeking a declaratory judgment that it could not be disqualified from representing the Ecuadorian Plaintiffs in any current or future proceeding on the basis of Breaux Lott's prior relationship with Chevron. Compl. 10. Chevron moved to dismiss the suit, arguing it was not ripe because no one had asked any court to disqualify Patton Boggs. Chevron also urged the district court to use its discretion under the Declaratory Judgment Act and decline to exercise jurisdiction.

[683 F.3d 400]

Before the district court ruled on Chevron's motion to dismiss, Patton Boggs sought leave to amend its complaint to add claims against both Chevron and Gibson Dunn for, among other things, tortious interference with contract. ¹ Patton Boggs alleged that Chevron and its counsel had undertaken a series of abusive litigation tactics and engaged in a public campaign of false accusations that Patton Boggs was complicit in fraudulently obtaining the Ecuadorian judgment, all “aimed at forcing Patton Boggs to breach its contract with the Ecuadorian Plaintiffs with the ultimate aim to deprive the Ecuadorian Plaintiffs of counsel.” Am. Compl. ¶ 75.

The district court dismissed Patton Boggs's declaratory judgment claim, holding it was premature. Patton Boggs, LLP v. Chevron Corp. (Chevron I), 791 F.Supp.2d 13, 23–25 (D.D.C.2011). And even if it were ripe, the court explained that it would nevertheless use its ample discretion under the Declaratory Judgment Act to decline jurisdiction. Id. at 25. The court also denied Patton Boggs leave to bring what the court concluded was a futile claim. Alleging conduct aimed at forcing but not actually causing a breach was simply not enough to make out a claim for tortious interference with contract. Id. at 20–21.

In response, Patton Boggs asked the court to reconsider its decisions, which the court did under Federal Rule of Civil Procedure 59(e). See id. at 27. The court again concluded that the more prudent use of its discretion under the Declaratory Judgment Act was to leave the question of disqualification to the various courts in which the § 1782 proceedings are pending. Id. at 27–29. As for the tort claim, Patton Boggs asserted that the district court used the wrong analysis by assessing the claim under the Restatement (Second) of Torts § 766, which requires a breach of contract, rather than § 766A, which does not and requires only allegations that its performance was made “more expensive or burdensome.” But the court found that Patton Boggs had not, in fact, pled such a claim and held that its argument on reconsideration was new and therefore untimely. Id. at 30–31. Finally, as part of this same motion, Patton Boggs sought yet again to amend the complaint, this time expressly alleging a claim under § 766. But the court ruled once again that it was too late in the day to advance new legal theories. Id. at 32.

At the same time that it filed its motion for reconsideration, Patton Boggs took the unusual step of filing a new, separate complaint asserting claims identical to those in the original lawsuit.² The district court dismissed this new complaint, explaining that the duplicate claims were barred by issue or claim preclusion and that Patton Boggs had also failed to properly state a cause of action with its new § 766 theory. See Patton Boggs, LLP v. Chevron Corp. (Chevron II), 825 F.Supp.2d 35, 38–42 (D.D.C.2011).

[683 F.3d 401]

Patton Boggs appealed each of these orders.

II

Patton Boggs argues on appeal that the district court abused its discretion by failing to exercise jurisdiction and take up the request for a declaratory judgment that Patton Boggs cannot be disqualified from representing the Ecuadorian Plaintiffs because of Breaux Lott's prior work for Chevron. “Since its inception, the Declaratory Judgment Act has been understood to confer on federal courts unique and substantial discretion in deciding whether to declare the rights of litigants.” Wilton v. Seven Falls Co., 515 U.S. 277, 286, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995). As a result, in declaratory judgment actions “the normal principle that federal courts should adjudicate claims within their jurisdiction yields to considerations of practicality and wise judicial administration.” Id. at 288, 115 S.Ct. 2137.³

Urging that “it would be impracticable ... to resist disqualification in the numerous jurisdictions in which § 1782 proceedings are now pending and any future jurisdictions where Chevron continues to file these proceedings,” Compl. ¶ 41,...