Since its founding 40 years ago, Kohn, Swift & Graf has earned a national reputation for filing sophisticated class-action lawsuits against major corporations. It says so right on the Philadelphia law firm’s website. In humiliating testimony on Nov. 4 in federal court in New York, Joseph Kohn claimed that in the course of representing residents of the Ecuadorian rainforest in litigation against the oil industry, he and his firm were serially defrauded—not by a corporate foe, but by a fellow plaintiffs’ attorney.
Chevron (CVX) used a subpoena to force a reluctant Kohn to testify in the company’s civil-racketeering suit against New York attorney Steven Donziger. The San Ramon (Calif.)-based oil producer is suing Donziger in hopes of undermining a $19 billion pollution verdict he won in February 2011 in a provincial trial court in Ecuador. Chevron alleges that Donziger masterminded an elaborate extortionate conspiracy to secure the Ecuadorian judgment and shake down the corporation for a huge settlement. Donziger denies those accusations and claims that Chevron is merely trying to evade justice and a very big liability bill.
Hoping for a slice of any winnings, Kohn financed Donziger’s lawsuit, which began in New York in 1993, was dismissed in 2001, and was eventually restarted in Ecuador in 2003. After investing roughly $7 million in the case, including $1.1 million paid directly to Donziger, Kohn and his firm backed out of the Ecuador litigation in 2009. He testified that he withdrew because Donziger repeatedly lied to him about the improper ghostwriting of a supposedly “independent” damages report submitted by Donziger’s legal team to the court in Ecuador.