November 17, 2009 6:00 AM

Chevron Files Malicious Prosecution Suit Against Plaintiffs Lawyer

Posted by Brian Baxter

Chevron is suing one of the architects of a massive environmental torts case against the company for his role in filing a separate civil suit against the energy giant in April 2006.

In a 15-page complaint filed Friday in U.S. district court in San Francisco, Chevron accuses Cristobal Bonifaz of malicious prosecution and seeks $4 million in legal fees and unspecified damages for his role in filing the April 2006 civil suit. A federal judge tossed the bulk of that suit in August 2007 after finding that plaintiffs' attorneys "manufactured" illness claims.

"This is a frivolous lawsuit with absolutely no merit," says John Bonifaz, an attorney and son of Cristobal Bonifaz, of Chevron's action. "The judge made clear that a mistake was made, but the idea that there was any malicious prosecution is offensive on its face. Chevron has gone off the rails here."

Cristobal Bonifaz, a U.S. citizen of Ecuadorian extraction who practices law out of Conway, Mass., teamed with New York plaintiffs' lawyer Steven Donziger in 1993 to file the original civil suit against Ecuador in New York. After almost a decade of litigation, the suit was dismissed on jurisdictional grounds by a federal judge in 2001.

A new case with different claims was then filed in Ecuador. It is there that since May 7, 2003, Chevron has been locked in a highly publicized legal and public relations battle with 30,000 indigenous Ecuadorian plaintiffs gathered under the banner of the Amazon Defense Coalition (ADC).

Bonifaz eventually was removed from representing plaintiffs in the case in Ecuador. The plaintiffs lawyer then sued Chevron in federal court in San Francisco on behalf of seven plaintiffs who claimed they contracted cancer from oil contamination.

Chevron viewed the case as important because it was the first time after years of litigation--the suit filed in New York never got past pretrial motions--that cancer claims would be subjected to the scrutiny of a U.S. court. (There are no personal injury or damage claims in the suit currently being contested in Ecuador.)

Bonifaz initially filed the San Francisco suit against Chevron as a class action, but class allegations were dropped by the time an amended complaint was filed. As evidence emerged during discovery, some of the plaintiffs were eliminated for statute of limitations reasons, while Bonifaz dismissed others himself.

On August 3, 2007, U.S. district court judge William Alsup ruled in favor of Chevron on summary judgment, dismissing the personal injury claims of three plaintiffs--Gloria Chamba, Luisa Gonzales, and Nixon Rodriguez Crepo. According to excerpts of depositions in the suit posted on a Chevron Web site, Alsup held that the trio's case was "manufactured by plaintiffs' counsel" after two of the claimants admitted never actually contracting the illnesses they were suing Chevron over.

In October 2007, Alsup ordered Bonifaz to pay $45,000 in fines to Chevron after ruling that the company's attorneys at Jones Day had spent $80,000 investigating false claims in the case, which never went to trial after Bonifaz dismissed claims by remaining plaintiffs.

Representing Chevron in the suit against Bonifaz are Jones Day partners Robert Mittelstaedt and Caroline Mitchell and Gibson, Dunn & Crutcher partners Scott Edelman and Andrea Neuman. Jones Day and its litigation chair Thomas Cullen, Jr., have long represented Chevron in Ecuador-related litigation, and sources say Gibson Dunn was brought in several months ago to advise on mass torts matters. (Edelman recently helped Dole Food Company get several cases dismissed after exposing fraud by plaintiffs.)

With a two-year statute of limitations looming on the horizon, San Ramon, Calif.-based Chevron needed to make a decision soon on whether or not to press civil claims against Bonifaz, whom the company has sought to tie to the current case pending in Ecuador. (Philadelphia firm Kohn, Swift & Graf is funding the Ecuador litigation against Chevron as lead plaintiffs' counsel to the ADC.)

A declaration by an Ecuadorian attorney named Alejandro Ponce-Villacis in the San Francisco suit states that Bonifaz still has an undetermined financial stake in the outcome of the case in Ecuador. It also notes that Bonifaz has quarreled with members of the Ecuadorian plaintiffs group, acting in a "unilateral and personal fashion, without consulting with those affected."

The ADC terminated its relationship with Bonifaz in February 2006, but the lawyer's son says that his father's heart is still with the plaintiffs cause.

"There are other people involved in the case now, but [Cristobal Bonifaz] initiated it from what he had seen in the Amazon and the destruction wrought by Chevron in that region," John Bonifaz says. "The stake my father now has is seeing that destruction be remedied in some way for those people."

As part of its complaint against Bonifaz, Chevron claims that Bonifaz's San Francisco suit was "likely a smaller piece of some larger scheme against [Chevron]." Chevron's lawyers assert that Bonifaz sought to represent Ecuador's state-run oil company, Petroecuador, in arbitration proceedings against Chevron in order to work with others in concert against the company.

Chevron also claims the San Francisco suit was filed as a result of Bonifaz potentially losing his financial interest in the Ecuador litigation after being sidelined by the ADC in 2006. John Bonifaz disputes that claim, adding that Chevron's allegations are merely designed to distract others from the company's own illicit conduct.

"Chevron is a company clearly on the run with respect to what it's done in the Amazon," says John Bonifaz, who unsuccessfully ran for secretary of state in Massachusetts in 2006. "It's one of the worst apples in corporate America and it should be investigated in every direction for the abuses it engages in, including this latest round of litigation."

An ADC spokeswoman declined to comment, noting that Bonifaz no longer has a role representing those pressing claims against Chevron in Ecuador.

Chevron inherited the litigation from Texaco, which it bought for $35 billion in 2001. Since the suit was refiled in Ecuador in 2003, Chevron has aggressively lobbied to have Ecuador's trade preferences revised. The company faces $27 billion in damages if found liable in the case. A decision is expected sometime next year.

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