Lawyer who won $9B Chevron judgment can't collect it; 2nd Circuit upholds RICO injunction
A federal appeals court has upheld a federal judge’s decision to block enforcement of a $9 billion Ecuadorian judgment against Chevron Corp. after determining the award was the product of bribery, coercion and fraud.
Lawyer Steven Donziger and his law firm were among the defendants who appealed the March 2014 ruling by U.S. District Judge Lewis Kaplan. Donziger had represented the Ecuadorian plaintiffs in their suit over alleged environmental damage by Chevron predecessor Texaco during oil exploration activities. The initial award against Chevron was more than $18 billion; the Ecuadoran high court had cut the verdict to about $9.5 billion.
Chevron had sued Donziger and his firm to block the judgment under the Racketeer Influenced and Corrupt Organizations Act. Kaplan blocked enforcement in the United States after finding justice had been “perverted” in the case. Chevron also sued two Ecuadorean plaintiffs under New York common law; they also lost their appeal before the 2nd Circuit.
The 2nd Circuit opinion begins with a summary and table of comments, then spends the next 64 pages discussing evidence of wrongdoing by Donziger and his legal team, and Kaplan’s findings in the case. The discussion of Donziger’s arguments on appeal begins at page 74.
Kaplan had found a RICO violation, citing a variety of predicate acts, including these alleged extortionate acts: ghostwriting the Ecuadorian judgment and promising the judge $500,000 to sign it, and falsely portraying an expert as neutral despite payments to ensure he “played ball.” Other predicate acts included the laundering of money to pay the judge and the expert, and obstruction of justice, Kaplan found.
The appeals court noted that Kaplan’s findings of fact had not been challenged, and an Ecuadorian appeals court had preserved the parties’ rights to pursue corruption allegations in the United States.
Donziger had claimed that Chevron had no standing; Chevron should be estopped from challenging the judgment because of its earlier positions in litigation; equitable relief isn’t allowed under RICO or common law; and the federal judge’s ruling violated principles of international comity. “We are unpersuaded,” the 2nd Circuit said.
The case is Chevron Corp. v. Donziger.
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