The anticipated merger of two major legal firms was derailed, at least temporarily, on Thursday after one firm, Patton Boggs, a lobbying and legal force in Washington, D.C., faced a legal complication in trying to end its involvement in a bitterly contested case over damage to the Amazon rain forest.  A partnership vote had been set for this weekend to seal the Patton Boggs merger with Squire Sanders, an international firm founded in Ohio. But the vote has been suspended, according to a Squire Sanders lawyer.  The suspension came after a motion was filed on Wednesday in Federal District Court in Manhattan to block a settlement between Patton Boggs and the Chevron Corporation.  That settlement, on May 7, required Patton Boggs to withdraw from representing clients in Ecuador who were seeking to collect a $9.5 billion verdict against Chevron that their principal lawyer, Steven R. Donziger, had won in an Ecuador court. As a result of the settlement, Patton Boggs forfeited millions in fees and paid Chevron $15 million.  Chevron, which had previously won a United States judge’s ruling that the Ecuador court decision was tainted by corruption, had threatened to sue Patton Boggs for its actions in collecting for the Ecuadorian plaintiffs.  On Wednesday, Mr. Donziger sought to block the Patton Boggs-Chevron deal, telling the federal court that Patton Boggs failed to notify its clients before its withdrawal from their case.  Patton Boggs’s action was “unprecedented” and a “flagrant” ethical violation, Mr. Donziger wrote in legal papers. “That Patton Boggs did this to pave the way for a merger with another law firm,” he wrote, “that is, to secure a benefit for its partnership at the expense of its own clients — makes the violations all the more troubling.”  The motion resurrecting Patton Boggs’s role — and possible liability in the case — at the very least delayed the merger with Squire Sanders so the partners there have time consider what liability they may be accepting by agreeing to a merger. The vote suspension was first reported by The American Lawyer.  Patton Boggs, whose spokesman did not reply to a request for comment, has been seeking a merger partner for some months as it struggled to right its financial fortunes by shedding personnel and changing management practices.  But its search in recent months for a merger partner — including earlier talks with the Texas firm Locke Lord — has been haunted by its work for the Ecuadorian clients. With the challenge to its deal with Chevron, Patton Boggs is unable to put the issue to rest, for now.
Work on behalf of Ecuadorian clients in a case against the Chevron Corporation continues to haunt Patton Boggs, a law and lobbying force in Washington.