(Reuters) - Law firm Squire Sanders has suspended voting on merger talks with the Washington, D.C., law and lobbying firm Patton Boggs, trade publication American Lawyer reported on Thursday.
Two days ago, partners from the 300-lawyer Patton Boggs voted on the proposed merger with the 1,300-lawyer Squire Sanders. The results of the vote have not yet been disclosed, but sources on Tuesday told Reuters the merger was expected to be approved.
The executive board of Squire Sanders voted on Friday to approve the merger and that firm’s partnership had been expected to vote on the deal this week.
American Lawyer cited two unidentified Squire Sanders sources as saying the vote had been suspended, and the Wall Street Journal reported that a spokesman for the firm had confirmed the report.
Neither Patton Boggs managing partner Edward Newberry, who would be co-managing partner of the new firm, nor James Maiwurm, chairman of Squire Sanders, responded to requests for comment.
American Lawyer attributed the development to a motion filed Wednesday night by a group of Ecuadorean villagers. The motion urged a judge to reconsider his acceptance of a settlement resolving claims that Patton Boggs tried to enforce a fraudulent multibillion-dollar pollution judgment against Chevron Corp.
Patton Boggs agreed on May 7 to pay Chevron $15 million to settle allegations that it represented a group of Ecuadorean villagers seeking to enforce a fraudulent 2011 $18 billion judgment awarded for damages to their country’s rainforest.
Patton Boggs agreed to cooperate with Chevron in discovery related to the case and expressed regret for its involvement in the matter.
On Wednesday night, the Ecuadoreans filed a motion in New York federal court asking U.S. District Judge Lewis Kaplan, who accepted the settlement, to reconsider and issue an order blocking the deal on the grounds that it was unethical.
The motion was filed by Steven Donziger, who represents the Ecuadoreans. In March, Kaplan ruled that Donziger had used “corrupt means,” including bribery to secure the 2011 judgment. Donziger is appealing.
Donziger said in Wednesday’s motion that Patton Boggs had abandoned its clients in order to facilitate the merger with Squire Sanders.
“There is no way to sugarcoat it: Patton Boggs has put its own interests above those of the people it was supposed to represent,” he said.
Patton Boggs has been in discussions with Squire Sanders since at least February, after seeing revenue wane and partners defect in 2013.
By expressing regret and providing “disclosure of client information” as part of the settlement, Patton Boggs violated professional legal ethical codes “and is therefore contrary to law and public policy,” the motion said.
Rebecca Roiphe, a law professor with New York Law School, said any objection to a settlement after it is accepted by a court is a “long shot” and that the judge was unlikely to block the deal based on claims of ethical violations.
Reporting by Casey Sullivan; Writing by Noeleen Walder; Editing by Eric Effron and Grant McCool