Law 360 11/05/2020
A New York federal judge rejected environmental attorney Steven Donziger's attempt to disqualify the entire federal bench of the Southern District of New York from his criminal contempt trial, saying there was "no basis" for the unusual request and adding that Donziger's arguments in a related motion "border on the absurd."
U.S. District Judge Loretta A. Preska was unimpressed on Thursday by Donziger's argument that she and her Southern District colleagues would be unable to fairly evaluate a contempt ruling by U.S. District Judge Lewis A. Kaplan.
"Reviewing the decisions of fellow judges is, simply put, part of the judicial job denoscription," Judge Preska wrote in her order. "To the extent such a review is called for here, it is neither extraordinary nor grounds for recusal."
In the same Thursday order, Judge Preska denied Donziger's motions to disqualify her specifically, his request for a jury trial instead of a bench trial, his motion to dismiss the case, and his effort to disqualify the Seward & Kissel LLP attorneys appointed as special prosecutors.
The judge said the method by which she was assigned the case was in line with proper procedure and that Donziger was entitled to a jury trial in a criminal contempt case only if the potential penalty was greater than $5,000 or six months in prison, a question that had yet to be decided.
She also said that Donziger's arguments against Seward & Kissel "border on the absurd" by attempting to play up a brief representation of Chevron, Donziger's adversary in the civil suit that spawned the contempt prosecution, and its ties to the oil industry in general.
Seward & Kissel prepared unrelated corporate forms on Chevron's behalf in 2016 and 2018 but generated only $30,000 in legal fees, the judge said, which was highly unlikely to bias the firm in favor of a former client. She also found the firm's clients' connections to Chevron to be irrelevant.
The special prosecutors and counsel for Donziger declined to comment on the ruling.
The contempt case is the latest saga in a long-running dispute that has spanned nine years and almost 2,500 court filings, which Judge Preska's ruling described as "nearing galactic proportions."
Donziger previously spent years representing indigenous people in Ecuador who said they'd been hurt by environmental pollution caused by Chevron predecessor Texaco Inc. That case resulted in a $9.5 billion judgment against the oil company in an Ecuadorian court, as well as accolades from many environmentalists for Donziger personally.
But under a well-lawyered offensive from Chevron, Donziger was later in a New York federal court facing civil claims from the energy giant that he had bribed judges in Ecuador and taken other steps to manipulate the justice system.
In 2014, Judge Kaplan ruled that Donziger secured the judgment through fraud, blocking both its enforcement in the U.S. and Donziger's ability to profit from it.
The Permanent Court of Arbitration in The Hague made a similar finding in 2018.
But with Donziger still trying to enforce the judgment outside the U.S., Chevron pressed the New York court for sanctions and contempt findings against Donziger, saying the attorney had flouted court orders by selling off portions of his interest in the judgment and refusing to turn over discovery materials.
In May, Judge Kaplan said Donziger raised at least $2.3 million by selling stakes in the judgment to investors, in violation of a court order. Judge Kaplan later issued a six-count criminal contempt order saying Donziger also failed to comply with discovery orders seeking access to his computers and other devices for forensic inspection.
He also referred the matter for a criminal charge, but federal prosecutors in New York declined to pursue the case. Judge Kaplan then referred the allegations to Seward & Kissel for prosecution.
Donziger argued in response to the contempt charges that Seward & Kissel's connections to Chevron were highly suspect, saying the firm waited eight months to reveal a past attorney client relationship it knew about at the time of its appointment and allegedly even failed to reveal the past representation when questioned by Donziger's attorneys.
"The Seward prosecutors attempted to obfuscate the issue in open court with faux indignation that Mr. Donziger had the audacity even to question that the Seward attorneys could act as disinterested prosecutors," Donziger said.
He also argued that the contempt charges were an unjustified attempt by Judge Kaplan to "punish a human rights advocate" for resisting discovery orders he believed to be improper. Donziger has continuously maintained that the information he was asked to hand over to Chevron was protected.
Although Donziger has drawn support from environmental activists and celebrities including Alec Baldwin and Pink Floyd co-founder Roger Waters, he has had little luck pressing his case in court, a streak that continued with Thursday's order.
In addition to the criminal contempt case, Donziger is also facing civil contempt proceedings. He is asking the Second Circuit to order Judge Kaplan to halt the civil contempt process while the criminal contempt charges play out before Judge Preska.
The case is U.S. v. Steven Donziger, case number 1:11-cv-00691, in the U.S. District Court for the Southern District of New York.
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