Steven Donziger Predicts Conviction for Criminal Contempt in Trial Likely to Set Dangerous Precedent, Chilling Public Interest Litigation against Large Corporations

Last week—in what will likely mark the end of a fight between Steven Donziger and Chevron Corporation spanning nearly three decades—the prosecution rested its case against Donziger in a trial seeking to convict him of criminal contempt.  If convicted, Donziger faces up to six months in prison.

In 1991, Donziger, along with other attorneys, brought a class action lawsuit in New York against Texaco on behalf of over 30,000 farmers and indigenous people from the Amazon region to recover for damages caused by drilling operations in Ecuador.  Chevron acquired Texaco in 2001 and, shortly thereafter, had the case removed to the Ecuadorian courts.  Ultimately, those courts found in favor of the plaintiffs, awarding $18 billion in damages, though this was later remitted to $9.5 billion on appeal.  Immediately, Chevron moved its assets out of Ecuador, forcing the lead plaintiffs to seek enforcement of the judgment in other countries, though those efforts were unsuccessful. 

In 2011, Chevron filed a RICO lawsuit against Donziger in the Southern District of New York, wherein Judge Lewis Kaplan refused to enforce the $9.5 billion judgment, ruling that it had been achieved through unethical conduct, including racketeering.  Donziger appealed the order to the Second Circuit; however, while the appeal was still pending, Judge Kaplan ordered Donziger to submit his computer, phones, and other electronic devices to Chevron to allow it to search for his assets to support its RICO claim.  Donziger refused to turn over his devices based on understandable concerns that giving his adversary unfettered access to his electronic communications would breach the attorney-client privilege. 

Judge Kaplan responded by charging Donziger with six counts of criminal contempt.  However, federal prosecutors declined to take on the case.  Accordingly, in a move that has been described as “virtually unprecedented,” Judge Kaplan appointed a private law firm, Seward & Kissel LLP, to prosecute Donzinger in the U.S. Attorney’s stead.  Notably, Seward & Kissel has represented Chevron as recently as 2018.  Further, rather than using the standard random assignment process for choosing a judge to preside over Donziger’s trial for criminal contempt, Judge Kaplan handpicked Senior District Judge Loretta Preska to oversee the trial.  In August 2019, Judge Preska sentenced Donziger to home detention while awaiting trial.  She also ordered Donziger to post a bail bond of $800,000, which is a record for a misdemeanor case in the United States.  As for the trial itself—for which Donziger waited nearly two years in home confinement—Judge Preska denied Donziger’s request for a jury and refused multiple requests that the trial be publicly accessible via videoconference.

As his trial nears its end, Donziger views his conviction as an inevitability: “There is no doubt in my mind Judge Preska will convict me,” Donziger said in a May 14, 2021 press conference. “I also believe had I had an unbiased fact-finder—that is, a jury of my peers—there is a very good chance I would be acquitted of all six counts.” 

Regardless of Judge Preska’s decision, Donziger’s prosecution in and of itself raises serious concerns for plaintiffs seeking to retain the best attorneys possible to represent them in civil and human rights litigation.  Even assuming Donziger did, in fact, obtain the Ecuadorian judgment through unethical means, that he is now being tried for contempt—by a firm with financial ties to Chevron after prosecutors declined to pursue the case, and without the opportunity to defend himself before a jury of his peers—is incredibly troubling.  Donziger’s refusal to turn over his electronic devices directly to his adversary without restriction was completely justified, and he has already been disbarred and faced RICO charges for his alleged unethical conduct in connection with the Ecuadorian judgment. 

Against this backdrop, the pursuit of spurious contempt charges (under circumstances that deny Donziger his constitutional right to due process, no less) appears to be purely punitive.  Chevron, with the help of a couple of federal judges, seemingly hopes to make an example of Donziger to send a message to plaintiffs and their attorneys not to pursue lucrative judgments against corporate interests large and powerful enough to punish them for doing so.

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Faruqi & Faruqi, LLP focuses on complex civil litigation, including securities, antitrust, wage and hour, personal injury and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Delaware, Georgia and Pennsylvania.

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About Alex Hartzband

Alex Hartzband's practice is focused on employment litigation. Alex is a senior associate in the firm's New York office.

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