Chevron Corporation v. Donziger

Background

Steven Donziger was charged with six counts of criminal contempt under 18 U.S.C. § 401(3), which permits punishment for disobeying a court’s lawful order. The criminal case arose from a related civil action in which Judge Lewis A. Kaplan had ruled for Chevron Corporation after finding that Donziger obtained an $8.6 billion Ecuadorian judgment against Chevron through fraudulent and corrupt means. The civil judgment barred Donziger from enforcing or profiting from that judgment in the United States and required him to transfer property traceable to it.

During post-judgment proceedings, Judge Kaplan ordered Donziger to identify and provide electronic devices and accounts for forensic examination. Donziger did not comply. Judge Kaplan also found him in civil contempt for failing to transfer certain contingency-fee rights, pledging an interest in fees for personal services, and violating a restraining notice. The court imposed coercive fines and ordered Donziger to surrender his passports. Donziger did not comply with those orders or file the appellate papers needed to trigger a conditional stay.

Judge Kaplan then issued an order requiring Donziger to show cause why he should not be held in criminal contempt. The six charges involved two alleged violations of the electronic-device protocol, failure to surrender his passports, and violations of injunctions concerning profits from and transfers of interests connected to the Ecuadorian judgment. After the United States Attorney’s Office declined to prosecute, Judge Kaplan appointed Rita M. Glavin, Brian Maloney, and Sareen Armani of Seward & Kissel LLP as special prosecutors.

Motions and analysis

Judicial disqualification and transfer. Donziger sought to disqualify every judge in the Southern District of New York under 28 U.S.C. § 455(a), which requires recusal when a judge’s impartiality might reasonably be questioned. He argued that the judges might favor Judge Kaplan, who presided over the related civil case. Judge Preska rejected that argument, reasoning that judges routinely review other judges’ decisions and that the record did not provide an objective basis to question the Southern District bench’s impartiality.

Donziger also sought transfer to a court outside the Second Circuit under Federal Rule of Criminal Procedure 21(a). The court denied the request because that rule addresses prejudice that would make it difficult to select a fair and impartial jury, not alleged judicial bias in a bench trial. The court further found no demonstrated risk of an unfair trial in the Southern District of New York.

Donziger requested a jury trial if a Southern District judge presided. The court denied that request subject to renewal. It explained that a defendant charged with contempt under 18 U.S.C. § 401 generally is not entitled to a jury when the possible punishment does not exceed six months of imprisonment or a $5,000 fine. If the court determined before trial that any conviction would not result in punishment above those limits, the trial would be before a judge.

Donziger separately sought Judge Preska’s recusal, arguing that Judge Kaplan had improperly transferred the case after supposedly recusing himself. The court rejected that argument. It held that the Southern District’s internal reassignment rules do not give litigants enforceable rights and that Judge Kaplan had not recused himself. It also concluded that the criminal contempt charges were based on alleged disobedience of court orders, not disrespect or criticism of Judge Kaplan, so the criminal procedure rule requiring recusal in the latter situation did not apply.

Special prosecutors. Donziger argued that Seward’s connections to Chevron and the oil and gas industry created a conflict of interest. The court applied the Supreme Court’s decision in Young v. United States ex rel. Vuitton et Fils S.A., which holds that special prosecutors must be impartial and must appear impartial. The court found Seward’s clients’ indirect connections to Chevron too attenuated to create the type of financial conflict involved in Vuitton.

Seward had performed limited work for two Chevron foreign affiliates in 2016 and 2018. That work involved corporate forms and related legal opinions, generated about $30,000 in fees and expenses, and represented less than 0.1 percent of Seward’s revenues in those years. The court found that Chevron was not a current Seward client, that the prior work was unrelated to Donziger’s prosecution, and that it presented no realistic risk that Seward’s lawyers would use the prosecution to advance Chevron’s interests or withhold required disclosures. The motion to disqualify the special prosecutors was denied. The court also denied Donziger’s requests to dismiss based on the timing of Seward’s disclosure or to require additional details about Seward’s prior work.

Motion to dismiss the criminal contempt charges. Donziger argued that he lacked the required intent, that at least one order was unclear, and that compliance could have caused irreparable harm by exposing protected or privileged information. The court held that these arguments raised factual questions that could not be resolved before trial and therefore were not grounds for dismissal at that stage.

The court rejected Donziger’s argument that later corrective action had purged the contempt. It distinguished civil contempt, which is intended to force compliance, from criminal contempt, which punishes a completed act of disobedience. The court also rejected his arguments that the alleged contempt was too minor for criminal punishment, that criminal charges were an excessive remedy, and that his conduct was protected as ethically motivated advocacy. It explained that a party may not challenge a court order by violating it; the party must instead seek to modify or vacate the order or obtain appellate relief.

Requested communications. Donziger sought communications between the government and Gibson Dunn & Crutcher LLP, Chevron’s lawyers in the related civil case. He argued that Gibson Dunn might have provided misleading information and that the communications were needed to determine whether improper conduct occurred. The court denied the request because speculation did not establish a right to the materials. It accepted the special prosecutors’ representation that they were complying with their disclosure duties, including the duty to provide favorable evidence under Brady v. Maryland. The court stated that it was not aware of any rule requiring permission before Donziger subpoenaed nonparties.

Disposition

Judge Loretta A. Preska concluded that the remaining arguments were unavailing and ordered that Donziger’s pretrial motions be denied. The order did not decide whether Donziger was guilty of the six criminal contempt charges; it addressed his requests for recusal, transfer, a jury trial, prosecutor disqualification, dismissal, and pretrial disclosures.