Gbarabe v. Chevron Corp.

Negligence

Northern District

U.S. District Judge Susan Illston

Defense Lawyers: Robert A. Mittelstaedt, Caroline N. Mitchell, Christopher H. Domingo, Craig E. Stewart, Scott W. Cowan, David L. Wallach, Rowan T. Mason, Leah Q. Pike, Michael J. Dailey, Robert A. Dahnke, David H. Seidel, Jones Day

Plaintiff's Lawyers: Jacqueline A. Perry, Neil J. Fraser, Perry Fraser LLP

Lawyers in a recent multibillion-dollar lawsuit against Chevron Corp. were willing to go as far as needed to get the matter dismissed. In this case, it was Lagos, Nigeria.

In a class action backed by third-party litigation funding, more than 65,000 Nigerian fishermen claimed their health and means of income were damaged by a Chevron glass well blowout more than 60 miles away in 2012.

Jones Day partner Robert A. Mittelstaedt said the case sounded implausible from the beginning given the distance involved. Then came the 2016 trip he and several associates made to the Nigerian capital to visit the parties.

They spent three weeks interviewing 30 of the plaintiffs, and it was soon revealed that some signatures were forged in the names of deceased persons and on behalf of people without their knowledge or consent, according to a ruling by U.S. District Judge Susan Illston. Gbarabe v. Chevron Corp., 14-CV00173 (N.D. Cal., filed Jan. 13, 2014). The case was dismissed in August.

"It was a way to vividly illustrate the individual nature of the claims, to put it charitably," Mittelstaedt said. "At a minimum, they were highly individualistic, if not fraudulent."

Illston agreed not to certify the class because the plaintiff failed to demonstrate requirements of typicality, adequacy and superiority and found the plaintiff's evidence to be "riddled with falsity and unreliability."

The class action was helmed by fishermen, who claimed it was normal in Nigeria for large groups of people to sign onto a lawsuit executing their powers of attorney, Illston's ruling read.

"I think it provided evidence that a class action would be unmanageable ..." Mittelstaedt said.

Mittelstaedt said he and his team also sought to compel the plaintiff's side to produce an unredacted copy of the litigation funding agreement and eventually learned the dollar amount pumped into the case by third-party funder U.K.-based Therium Capital Management Ltd.

"They agreed to advance almost $2 million to the plaintiff's lawyers in exchange for a formula recovery and I think something like six times their investment plus two percent of the overall judgment if there was one," he said.

After the case was dismissed, the Northern District amended Rule 3-15, requiring disclosure in all proposed class actions of "any person or entity that is funding the prosecution of any claim or counterclaim."

"I think it underscores the importance for third-party funders to undertake due diligence and it shows the risks involved in third-party funding," Mittelstaedt said.

-- Arin Mikailian