NEW YORK (Legal Newsline) – Federal prosecutors should consider criminal charges against the lawyer who pursued Chevron for alleged contamination of the Ecuadorian Amazon after two courts ruled that it was all a fraud, a public interest attorney says.
The New York State Bar Association also should consider disbarring Steven Donziger for the alleged fraud and racketeering that led to a multibillion-dollar judgment by an Ecuadoran court against Chevron, Washington Legal Foundation Chief Counsel Richard Samp said during a Legal Newsline interview.
WLF is a public interest law firm and policy center that regularly advocates for upholding legal ethics
"The district court made damning factual findings about Donziger’s fraudulent conduct," Samp said. "At the very least, federal prosecutors should take a careful look at the possibility of bringing criminal charges, and New York Bar authorities should take a careful look at the possibility of revoking his law license."
If federal prosecutors or the Bar are considering those steps, it won't be disclosed because such investigations generally aren’t publicly announced.
"So they may already be taking place," Samp said. "A criminal conviction requires a higher standard of proof than the one applied in the civil cause of action on which Chevron prevailed, so Chevron’s victory is not necessarily an indication that prosecutors could get a conviction.
"But the New York Bar employs the same preponderance-of-the-evidence standard employed in civil litigation, so there should be little doubt that bar authorities could muster sufficient evidence against Donziger to warrant imposition of bar discipline."
The U.S. Court of Appeals for the Second Circuit earlier this month unanimously confirmed a 2014 district court decision that the 2011 Ecuadorian court's once-$9.5 billion ruling resulted from fraud and racketeering.
The recent decision makes clear that the Second Circuit’s earlier hands-off approach only goes so far, Samp said. “The Second Circuit held unequivocally that the Ecuadorian judgment was illegitimate and was not to be enforced anywhere in the United States.”
Donziger did not return Legal Newsline requests for comment and no mention is made of the Second Circuit's decision on a page devoted to updates about the case on his website.
Donziger was the driving legal force behind the Ecuadorian court's ruling in February 2011 that Chevron was liable for the dumping of billions of gallons of toxic waste into the Amazon Basin. The dumping caused disease and decimated the area's indigenous groups, the Ecuadorian court ruled.
Chevron never paid the judgment. Instead, it pursued Donziger in American courts, claiming fraud and racketeering was behind the Ecuadorian judgment. In 2014, the U.S. District Court for the Southern District of New York agreed, handing down a decision in March of that year.
“This ruling is a resounding victory for Chevron and our stockholders," the oil giant said in a press release issued shortly after the district court ruling. It confirms that the Ecuadorian judgment against Chevron is a fraud and the product of a criminal enterprise. Steven Donziger and his associates can now be held accountable and will not be allowed to profit from their illegal acts. Any court that respects the rule of law will find the Lago Agrio judgment to be illegitimate and unenforceable.”
The Second Circuit, in a lengthy, 127-page opinion, said the record “reveals a parade of corrupt actions by the (Lago Agrio plaintiffs') legal team, including coercion, fraud and bribery.”
As Donziger's legal troubles continued to mount, many of his supporters and investors fell away. Burford Capital and the Patton Boggs law firm both renounced Donziger and their involvement with his litigation against Chevron.
Amazon Watch, a nonprofit organization founded in 1996 to protect the South American rainforest and advance the rights of the area's indigenous peoples, issued a strong statement days after the Second Circuit decision. Chevron's Racketeer Influenced and Corrupt Organizations Act (RICO) litigation was retaliatory and an effort to get out of the 2011 judgment handed by the court in Ecuador, the statement said.
"It is extremely disturbing that rather than assist in the pursuit of justice for environmental and human rights crimes, the U.S. judicial system has instead played a role in aiding a U.S. company found liable for one of the worst environmental disasters in history based on overwhelming evidence," the statement said.
"The Ecuadorians - and those of us who support their fight for justice - will ultimately succeed despite this indefensible decision."
However, Samp said he doesn't believe the case is over.
"I think there will be an appeal to the Supreme Court," Samp said. "Counsel for Donziger has already promised an appeal. And there is a reasonably good chance that the Supreme Court would grant review on one of the issues of law decided by the Second Circuit."
What may get the attention of U.S. Supreme Court justices in this case is the Second Circuit ruling that federal racketeering law allows plaintiffs to sue for an injunction even when are not seeking a monetary recovery, as in this case, Samp said.
"Other federal courts have held that private plaintiffs may not sue for an injunction under RICO," Samp said. "The Supreme Court might hear this case in order to resolve the split on this issue of law."
Samp also noted that the district court’s factual findings remain essentially uncontested.
"Donziger did not challenge those findings in connection with his appeal to the Second Circuit, and thus he is not permitted to ask the Supreme Court to review the factual findings," Samp said.
"If the Supreme Court agrees to hear the case, it won’t be passing on whether Donziger was guilty of a massive fraud, as the lower courts held. Rather, it would confine itself to deciding the disputed issue of law described above."