Impact

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In the culmination of a long civil rights fight, Gibson Dunn won a historic marriage equality victory when the U.S. Supreme Court let stand a district court ruling striking down California’s Proposition 8, an amendment to the California Constitution prohibiting same-sex marriage. Gibson Dunn began the constitutional challenge to Prop 8 in 2009, won a historic trial in 2010, successfully defended that trial win in the Ninth Circuit, and achieved the final victory in 2013, in Hollingsworth v. Perry, after Prop 8 proponents appealed to the Supreme Court. In 2009 just three U.S. states permitted gays and lesbians to marry. By the time our clients were married in California in June 2013, that total had increased to 14 states and the District of Columbia. It continued to climb, with federal courts striking down marriage bans in a number of other states, including, at Gibson Dunn’s urging, in Virginia, a ruling later affirmed by the Fourth Circuit in Bostic v. Schaefer.

​​When we first brought the case it was extremely controversial. Skeptics feared it was too soon, too risky and too likely to fail. If a federal case went all the way to the Supreme Court and the result was negative, marriage equality across the United States could be stopped cold. We analyzed the issues, the Supreme Court’s decisions, and the probabilities of winning or losing. Believing that we and the cause could prevail, we pressed the constitutional challenge with co-counsel Boies Schiller & Flexner, arguing that Prop 8 violated the dignity and equality of same-sex couples and harmed their families. The groundbreaking lawsuit was the first federal challenge to a same-sex marriage ban. We developed and began to tirelessly implement a public relations and awareness campaign.

We prevailed after a three-week trial in the district court, which declared Prop 8 unconstitutional, explaining that it did “nothing more than enshrine in the California Constitution the notion that opposite-sex couples are superior to same-sex couples.” The court enjoined enforcement of Prop 8. Our defense of that result on appeal in the Ninth Circuit culminated in the holding that “Proposition 8 serves no purpose, and has no effect, other than to lessen the status and human dignity of gays and lesbians in California, and to officially reclassify their relationships and families as inferior to those of opposite-sex couples. The Constitution simply does not allow for laws of this sort.” In the final step, the U.S. Supreme Court held that the Prop 8 proponents had suffered no harm and lacked standing to appeal, a ruling that allowed the original district court injunction to take effect. While the Supreme Court’s decision on standing grounds did not reach the merits of our clients’ constitutional challenge to Prop 8, the Court adopted their arguments in another case. On the same day as the Hollingsworth ruling, the Supreme Court released its opinion striking down the federal Defense of Marriage Act in Windsor v. United States, holding that DOMA robs gays and lesbians of their dignity and “humiliates tens of thousands of children now being raised by [same-sex couples].”

​​​We represented Arcapita Bank and certain of its affiliates in their unique Chapter 11 restructuring involving more than $3.5 billion in claims. Arcapita is an investment bank, headquartered in the Kingdom of Bahrain, specializing in investments that comply with Shari’ah, the Islamic law. Arcapita has additional offices in London, Singapore and Atlanta, and over 25 portfolio companies that own investments in every region of the globe.

​​​We assisted our clients in resolving multiple challenges. After creditors threatened to begin bankruptcy proceedings in the Cayman Islands, we filed a U.S. Chapter 11 case on less than five days’ notice in early 2012, and an ancillary Cayman Islands proceeding. The filing was a highly unusual move for a company based in the Middle East, a region unaccustomed to such proceedings. We assembled a large multidisciplinary team and, among other things, began to carefully and steadily tackle cultural and communications hurdles to overcome resistance and garner creditor support for a Chapter 11 plan of reorganization.

To comply with its Shari’ah-compliant mandate, the Arcapita restructuring needed to be accomplished in a Shari’ah-compliant manner, something that had not before been done in a U.S. bankruptcy court. This required Shari’ah-compliant DIP and exit financing, and plan structuring. During the case, we also assisted Arcapita in resolving complex issues related to exits from minority investment positions, and in negotiating comprehensive intercreditor, co-investor and management agreements that facilitated maximization of the value of the Arcapita portfolio investments.

In addition to developing a U.S. Chapter 11 plan of reorganization that was overwhelmingly approved by Arcapita’s creditors, we structured an innovative mechanism to obtain approval of the plan transactions by the Grand Court of the Cayman Islands. Consummated in 18 months, the Arcapita Bank restructuring represents the first-ever Chapter 11 restructuring of a Shari’ah-compliant company and was awarded the 2014 Grand Prize for Global Finance Deal of the Year by The American Lawyer, and the Financial Times 2014 award for Innovation in Finance Law.

​​​Chevron Corporation called on Gibson Dunn in 2009. The company needed to expose the fraud being perpetrated against it in a two-decades-old case in Ecuador over alleged environmental damages in the Amazon. Chevron never actually did business in Ecuador but was sued because it had acquired the shares of Texaco, Inc., a subsidiary of which ceased petroleum operations in 1991, cleaned up its sites, and got releases from the Ecuadorian government. We developed a global, three-dimensional strategy, uncovered evidence of the plaintiffs’ fraud, and in 2014 won an extraordinary lawsuit against the plaintiffs and their U.S. lawyer, stopping enforcement of a $9.2 billion Ecuadorean judgment against Chevron in the United States.

​​​First, we convinced a New York federal judge to allow Chevron to proceed with an international treaty arbitration against Ecuador for denying Chevron due process there. Then we tenaciously pursued exculpatory evidence through the innovative use of a federal statute permitting court-ordered discovery in aid of foreign litigation. The results were nothing short of astounding. In a series of landmark court rulings, Gibson Dunn obtained hundreds of hours of a documentary filmmaker’s outtakes capturing plaintiffs’ lawyers on film admitting that their case was “all smoke and mirrors.” We also obtained the plaintiffs’ lead U.S. lawyer’s documents about the case, including an internal e-mail acknowledging they all “might go to jail” over their misconduct in Ecuador. (We were able to depose that lawyer for more than two weeks.) We convinced the Fifth Circuit to uphold Chevron’s right to obtain allegedly privileged and confidential communications between the plaintiffs’ environmental consultants and the Ecuadorian court’s damages expert. We began to oversee Chevron’s successful defense against the Ecuadorian plaintiffs’ worldwide initiatives to enforce the $18 billion judgment that was entered against the company. (The judgment was later reduced to $9.2 billion.) And finally, with evidence that the Ecuadorian judgment was ghostwritten with the help of the Ecuadorian plaintiffs’ lawyers, we filed a complaint against the plaintiffs, their lawyers and representatives in New York, alleging claims under the U.S. Racketeer Influenced and Corrupt Organizations Act (RICO), as well as fraud and other claims.

That case was Chevron Corp. v. Donziger et al. in the Southern District of New York. In March of 2014, after a seven-week bench trial, we won a verdict in favor of Chevron. In its 485-page opinion, the court described the case as “includ[ing] things that normally come only out of Hollywood,” including “coded emails,” “payments out of a secret account,” videotaped evidence of crimes in progress, and blockbuster evidence that the defendants “wrote the [Ecuadorian] court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment.” This verdict followed on the heels of dozens of discovery proceedings that we had filed in district courts around the United States. Our efforts led eight courts to apply the crime-fraud exception to the attorney-client privilege and order production of evidence related to the racketeering scheme. As Chevron requested, the Southern District imposed equitable relief preventing the conspirators from enforcing the judgment in the United States and ensuring that they “not be allowed to benefit from [the Ecuadorian judgment] in any way.”