The Litigation Daily 06/02/2015
Some have called for criminal prosecution of Steven Donziger. A better idea is ethical discipline, says The Global Lawyer.
"Where's Preet?" is the unasked question of the Chevron Ecuador drama, according to Fortune's Roger Parloff. My question—posed at the keynote of ALM's Legal Tech conference Thursday—is "Where's the Bar?"
U.S. Attorney Preet Bharara has good reason to stay out the Chevron legal scrum. Yes, he could make a strong criminal case against Chevron's legal nemesis Steven Donziger on misrepresentation. But the unprecedented scale of Chevron's private fraud case against Donziger will satisfy the deterrent function of law, as long as the facts are affirmed on appeal. There's no need to devote more court resources to discredit an enterprise that already discredited itself in live technicolor five years ago.
Bar discipline is another matter.
A hallmark of Donziger's multibillion-dollar environmental case against Chevron was the belief that a U.S. lawyer can get away with dirty behavior abroad. "This is something that you would never do in the United States," Donziger said in the final cut of Crude, the sympathetic documentary chronicling his case, as he prepared to ambush an Ecuadorean judge with TV cameras. "It's dirty."
Appropriately enough, this statement was the thread that unraveled the case. As detailed in my e-book Crude Awakening, an obscure Chevron attorney named Paul Dans fixated on this line in the movie's trailer and replayed it on his computer five or 10 times. "Well, if you would never do it in the United States, you should never do it anywhere," thought Dans. "Did this guy just confess that he checked his ethics at JFK?"
Dans wrote a memo recommending that Chevron subpoena the Crude outtakes, and the rest is history. Chevron won its First Amendment battle. ALM petitioned the court to release the discovered outtakes to the public and posted the highlights. As one federal court put it, this footage "sent shockwaves through the nation's legal communities, primarily because [it] shows, with unflattering frankness, inappropriate, unethical and perhaps illegal conduct."
Could Donziger's conduct in Ecuador really be unethical in New York? Despite Donziger's armchair philosophy, the answer is clearly yes. According to New York Code of Professional Conduct Rule 8.5, "A lawyer admitted to practice in this state is subject to the disciplinary authority of this state, regardless of where the lawyer's conduct occurs."
Catherine Rogers of Penn State Law notes an ambiguity about which ethical rules will be applied in some cases. See here and here. But New York law clearly applies where the lawyer was not admitted to practice abroad. In any event, Donziger's conduct, as described by U.S. District Judge Lewis Kaplan, seems flagrant enough to offend any ethical code.
The Global Lawyer is not an ethics expert. I am merely saying that an ethics inquiry would be appropriate, as Judge Kaplan himself has repeatedly hinted. But since Donziger continues to say he has nothing to apologize for, even as the plaintiffs try to collect a $9.5 billion judgment that's been adjudicated a fraud, I will take an amateur's stab at applying the ethics code to facts I know well.
Let's start with the easy stuff. Under New York Rule 8.4, misconduct covers "conduct that is prejudicial to the administration of justice" and "conduct involving dishonesty, fraud, deceit, or misrepresentation." I submit that the bar committee can tick these boxes even if, for simplicity, it confines itself to the Donziger plaintiffs' admitted ghostwriting of the Cabrera report—the supposedly independent environmental damages report submitted to an Ecuadorean judge.
Should the ethicists wish to go further, they might look at Rule 3.5. which forbids a lawyer from seeking "to influence a judge, official or employee of a tribunal by means prohibited by law." And they also might ponder whether Donziger committed "illegal conduct that adversely reflects on the lawyer's honesty, trustworthiness or fitness as a lawyer." Both of these provisions fold out into the fascinating question of whether Donziger violated Ecuadorean law.
From the day the Crude outtake trannoscripts became public, the plaintiffs have played the culture card, and stressed that "ex parte contacts" were legal in Ecuador. This always struck me as a red herring, because the real issue was rigging the outcome of the case—which is inexcusable anywhere.
At the New York trial in Chevron's fraud and racketeering case against Donziger, the oil company's experts argued that the plaintiffs violated Ecuadorean law on multiple grounds.
They say it was unlawful for a party to corrupt the integrity of the court process by secretly discussing the merits with a court officer; by dictating his conclusions; by pressuring the court to appoint an expert who was not impartial; by bribing that expert; by dictating the final judgment; and by bribing the judge. All I can say is: I sure hope so.
I am not suggesting that the later misdeeds can be pinned with certainty on Donziger personally. But to build a bar discipline case, it strikes me as enough that Donziger's direction of the Cabrera fraud and cover-up is documented beyond doubt.
Whether lawyers at Patton Boggs and Emery Celli Brinckerhoff & Abady were implicated in that cover-up is perhaps the biggest ethics question raised by Kaplan from a law firm perspective. It's a fact-intensive question, and the lawyers fiercely deny impropriety. Chevron submitted a damning ethics opinion in New York, but its assumptions are broadly contested, and the evidence was never presented in testimony for cross-examination. I will venture only to say that the standard for permissive withdrawal was amply met in 2010—and Jeffrey Shinder made the most honorable choice by walking away.
The New York managing partner of Constantine Cannon, Shinder testified at trial that he was was "sickened" as soon as he learned of the Cabrera fraud. He withdrew from the Chevron matter the very next morning. In an ideal world, Shinder's quiet queasiness would receive as much attention as Donziger's cavalier misbehavior.
A student of professional responsibility could probably spot another 10 issues, but I'll stop here. The foremost ethical lesson of Chevron in Ecuador is this: It's not okay for U.S. lawyers to go native in a corrupt legal culture. The bar must broadcast that lesson. Or else the Donzigers of the future will think that the ethics code never made it through customs.
The Global Lawyer is a regular opinion column by American Lawyer senior international correspondent Michael D. Goldhaber.
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