The Donziger Saga Continues

Imagine what would happen to a US lawyer who bribes a foreign judge to obtain a multi-billion dollar award against an American company.

Forbes - Michael I. Krauss 30/06/2021

Imagine what would happen to a US lawyer who bribes a foreign judge to obtain a multi-billion dollar award against an American company. One would expect this lawyer to lose his law license and maybe even spend time behind bars. Perhaps the ex-lawyer might repent and devote the remainder of his life to charitable causes, as Michael Milken has done.

But Steven Donziger, whom (as this column has exhaustively detailed) a United States federal court found to have bribed an Ecuadorean judge and ghost-written his $9.5 billion ruling against Chevron Corp. in the infamous Lago Agrio pollution case, is no Michael Milken.

Donziger’s license to practice law has been revoked in New York, his home state. Though he has surrendered his U.S. passport pending his current trial for criminal contempt of court, he is still considered a flight risk and has been confined to his residence for almost two years while the criminal case against him proceeds (slowly, largely because of Donziger’s own dilatory efforts).

It bears mentioning that Steven Donziger’s current criminal trial is totally independent of Chevron Corp. — the criminal contempt charge was initiated by a federal judge and is occurring without any input from Chevron — but the courageous persistence of that company in defending itself against Donziger did put him in the position to commit the alleged contemptuous acts. As the Wall Street Journal recently noted, “[b]ig companies that see lawsuits against them as unfounded often reach a point, after losing a court ruling or two, when settling seems the sensible course. Chevron never did. Twenty-eight years after the Ecuador case was filed, 10 years after it came to a verdict and seven years after Chevron got a [United States District] court to find egregious misbehavior by [Donziger], Chevron fights on.” The company’s principled defense should be taught in MBA classes in the future.

Donziger’s allies have dwindled in number, likely both because of the avalanche of facts against him and because he can no longer credibly offer shares of an eventual contingent fee as consideration for support. The Embassy of Ecuador in Washington itself characterized the judgment against Chevron as “fraudulent.” Ecuador’s government, pursuant to orders from an international tribunal in The Hague, has informed courts in Argentina, Brazil, and Canada that the judgment was found to have been procured through fraud, bribery and corruption, that the environmental claims it purported to vindicate had been settled and released by Ecuador following an environmental remediation in the 90s, and that the fraudulent judgment must therefore not be enforced in any country pursuant to international law. The Ecuadorean spill is clearly the exclusive responsibility of the national oil company that exclusively owned and operated the fields over the last 28 years, not of Chevron, which by the way has never itself operated in Ecuador.

Meanwhile, the Unión de Afectados por Texaco (UDAPT), which purports to represent 36 of the 46 Lago Agrio plaintiffs and all relevant indigenous communities in the region, has fired Donziger as its lawyer, spokesman, and representative. UDAPT declared Donziger persona non grata in Ecuador in 2013. It said its members decided to do this after Donziger failed to explain what he had done with $20 million raised in their name. “Donziger is not authorized to represent them or raise money,”, UDAPT claimed, “and if he does, the communities will disavow any statement or commitment made on their behalf.” Steven Donziger still has allies, though. Roger Waters, the Pink Floyd musician who has infamously included a flying inflatable pig adorned with a Star of David during a concert, remains a staunch ally. A Chevron subsidiary acquired a stake in Israeli natural gas fields, and Donziger has recently raised in “progressive” Israeli media the same Lago Agrio claims that had been rejected in The Hague. It’s doubtful that Waters will be used to plead Donziger’s case in Israel.

Donziger has bemoaned that he would almost certainly be convicted of the criminal contempt charge. That charge is the result of his continued and admitted disobedience of court orders in the civil proceeding before United States District Judge Lewis Kaplan to timely relinquish his contingent fee in the fraudulent Ecuadorian judgment, to stop selling interest in that fee, to turn over his computer, phones and other electronic devices, and to surrender his passport. Donziger has recently petitioned for dismissal of the criminal contempt charge. He invokes this term’s Supreme Court Arthrex ruling. In Arthrex, Administrative Patent Judges (APJs) issued decisions that determined the property rights of citizens. A divided Supreme Court held that that final determinations of rights may only be made by people nominated by the President and confirmed by the Senate. It thus held that the Patent Act should be interpreted to give the Patent and Trademark Office Director discretion to review and overrule decisions by APJs. Donziger claims that the special prosecutor appointed by Judge Kaplan to prosecute Donziger (the local U.S. Attorney’s office had declined to act because “the matter would require resources that we do not readily have available”) is in violation of the ruling in Arthrex. Though some have attacked the constitutionality of special prosecutors, I don’t think Arthrex provides them with additional ammunition. The appointment of a special prosecutor is specifically provided by Federal Rules promulgated by the Supreme Court. Unlike the APJs in Arthrex, the special prosecutor in this case cannot decide Donziger’s rights — she can only argue for an outcome that will be determined by United States District Judge Preska. And all parties agree that Judge Preska is duly appointed under the Constitution.

The term “Hail Mary Pass” became a metaphor for a desperate move when Dallas Cowboys quarterback Roger Staubach (a Roman Catholic) revealed that as he threw his game-winning touchdown pass to Drew Pearson on December 28, 1975 against the Minnesota Vikings, "I closed my eyes and said a Hail Mary." I expect Steven Donziger’s latest Hail Mary Pass will have less success than Mr. Staubach’s. In any case, here’s hoping Michael Milken’s example will one day rub off on Mr. Donziger.