The US Supreme Court refused Mar. 27 to review a case derived from the long legal war between Chevron Corp. and attorney Steven Donziger, who originally sued the company over pollution claims derived from oil production in Ecuador.
The legal saga began in 1993, when Donziger sued Texaco Inc. on behalf of Ecuadorian plaintiffs long before Chevron acquired Texaco in 2001. It has dragged on for 30 years, in both US and Ecuadorian courts and some other courts, and Donziger has lost several decisions along the way and was disbarred in his home state of New York because of his conduct in his fight with Chevron.
The latest action is a consequence of a ruling by the US District Court for the Southern District of New York that Donziger had committed criminal contempt of court by violating the terms of the settlement imposed on him when he lost a lawsuit brought against him by Chevron. Donziger appealed the contempt conviction, lost in the US Court of Appeals for the Second Circuit, and now has seen his case rejected by the Supreme Court.
The Supreme Court, with a heavy docket, refuses to review most of the cases brought to it. In this case, Justice Neil Gorsuch dissented, saying the case merited review because of a legal technical matter, not the substance of the district court’s decision about Donziger’s conduct. Justice Brett Kavanaugh joined Gorsuch’s dissent, but the other seven justices remained silent in agreeing to the denial of review.
Whether that ends the saga may depend on whether Donziger adheres to the terms of the settlement.
Problems in Ecuador
Texaco served as operator of an oil exploration and production consortium in Ecuador from 1967 to 1992, with state oil company Petroleos del Ecuador becoming the majority partner in the consortium starting in the 1970s. In 1992, the concession expired and Petroecuador became 100% owner. Texaco and Ecuador agreed the company would be freed of any government claim of environmental harm after remediation work, and in 1998 government inspectors agreed the remediation had been completed.
While remediation work was getting under way, Donziger in 1993 joined a legal team that launched a class-action lawsuit in the US District Court for the Southern District of New York on behalf of Ecuadorian residents of the region where much of the oil production had occurred. The court told the plaintiffs to take their case to Ecuador’s courts, which they did, and in 2011 they won an Ecuadorian court ruling for Chevron, as owner of Texaco, to pay $8.646 billion to the plaintiffs.
The judgment raised the possibility of a big payday for Donziger, the attorney team he led, and financial backers. By then, his allies notably included the law firm Patton Boggs, now called Squire Patton Boggs.
Chevron went back to the US district court in 2011 and sued for relief, contending the Ecuadorian judgment had been obtained fraudulently. Through the court-ordered discovery process, the company obtained information from Donziger, notably including emails to and from his legal team and public relations staff. Donziger allies began withdrawing from the fight.
Judge Lewis Kaplan in 2014 issued a 485-page ruling that concluded Donziger had engaged in fraud, bribery, money laundering, violation of the Foreign Corrupt Practices Act, attempted extortion of Chevron, witness tampering, obstruction of justice, and other violations, and the judge concluded Donziger’s actions amounted to a violation of the Racketeer-Influenced and Corrupt Organizations Act.
The court ordered as a settlement that Donziger turn over any money he might derive from the case to Chevron.
Problems for Donziger
Donziger did not attempt to appeal the substance of the district court’s findings. He appealed on technicalities, including Chevron’s standing to sue and whether the district court exceeded its authority in its determination of the settlement. The US Court of Appeals for the Second Circuit in 2016 rejected his arguments and noted in passing “that appellants do not challenge the sufficiency of the evidence to support the district court’s factual findings.”
Donziger tried to take that case to the Supreme Court, which refused to hear it. He also tried to convince courts in other countries to uphold the Ecuadorian judgment against Chevron but lost there, too, notably in Canada, Argentina, and Brazil. Chevron won a 2018 judgment against the Ecuadorian decision in the Permanent Court of Arbitration in The Hague, Netherlands.
A New York state tribunal disbarred Donziger for his behavior in the case, and when Donziger appealed, the disbarment was confirmed by a state court in 2020.
In 2021, the federal district court in New York found Donziger guilty of six counts of contempt of court for violating the terms of the 2014 settlement. It was an odd case in which the US attorney for the Southern District of New York “respectfully declined” to prosecute the case because of resource constraints. The court then assigned attorneys to prosecute the case on behalf of the government.
It was that assignment of prosecuting attorneys by the court that led Donziger to appeal his contempt conviction—only to lose again in the appellate court.