Lawyer accused of filing fake news article in Chevron case rebuked by US appeals court

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9th Circuit awards fees to Chevron's Gibson Dunn team

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Attorney challenged power of appeals court to impose sanctions

By Mike Scarcella

June 28 (Reuters) - A Seattle lawyer who was accused of submitting a made-up news article in court to help bolster his clients' claims against Chevron must pay legal fees and will be referred to a state bar for possible disciplinary action, a U.S. appeals court said on Tuesday.

In its ruling, a panel of the San Francisco-based 9th U.S. Circuit Court of Appeals approved sanctions — recommended by another judge on the court — against attorney Edward Chung of Chung, Malhas & Mantel.

Chung did not respond to messages seeking comment about the 9th Circuit's order.

Chung had attached the purported "Saudi Sun" news article as part of his effort in the court to revive a lawsuit seeking confirmation of a $18 billion foreign arbitration award against Chevron. A U.S. judge in 2019 found that Chevron and the plaintiffs did not have an arbitration agreement and declined to confirm an award.

The article submission was "formatted like a newspaper," as attorneys for Chevron described it in a court filing.

Circuit Judge A. Wallace Tashima, serving as a court-appointed "special master," concluded the article was "false and misleading." The judge said "Chung presented no evidence that it is a publication of a third-party news organization or how and where he obtained it."

The three-judge appeals court panel's Monday order approved an award of more than $251,000 in legal fees owed to Chevron and its lawyers at Gibson, Dunn & Crutcher, but the panel said a trial court judge should determine "what portion of that amount Chung should be ordered to pay."

Chevron did not immediately respond to a message seeking comment.

In the underlying case, Chung represented clients who said they were beneficiaries and titleholders of land in Saudi Arabia. They claimed Chevron owed them compensation for the rental and taking of oil-rich land.

Chung in 9th Circuit filings objected to any sanctions over the "Saudi Sun" article, which he called a "demonstrative/illustrative exhibit."

Chung's filings said the article, submitted as part of a motion asking the court to consider it, "explains and provides an informative summary of factual and procedural events" to the arbitration proceedings. The panel subsequently raised questions, saying the "article appears to have been fabricated for purposes of this litigation."

Chung challenged the power of the appeals court to impose any sanctions at all, and he asserted judicial bias and misconduct were driving the proceedings over punishment.

The 9th Circuit panel said Chung's arguments were "meritless."

The case is Al-Qarqani, et al v. Chevron Corp, et al, 9th U.S. Circuit Court of Appeals, No. 19-17074.

For plaintiff: Edward Chung of Chung, Malhas & Mantel

For defendant: Thomas Hungar of Gibson, Dunn & Crutcher

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'Slapdash' plaintiffs merit sanctions, energy firm tells U.S. appeals court (Reporting by Mike Scarcella; editing by Leigh Jones)