Suspended lawyer ordered to pay $3.4M in attorney fees to Chevron as contempt sanction
Chevron Refinery in Richmond, California. Photo by Todd A. Merport/Shutterstock.com.
A suspended lawyer who was found in contempt of court for stonewalling Chevron’s efforts to collect a money judgment against him has been ordered to pay $3.4 million in attorney fees to the oil company.
U.S. District Judge Lewis Kaplan ordered New York lawyer Steven Donziger to pay the attorney fees for “intransigence” that blocked Chevron’s “considerable efforts” to get at the facts. Forbes covered Kaplan’s July 16 order.
Donziger told the ABA Journal that $3.4 million is the highest sanction in the history of New York courts. And it’s not his total liability—court fees, attorney fees and fines add up to about $10 million.
“I’m supposed to pay Chevron all of this money, and I work out of a two-bedroom apartment,” Donziger says. “It is a corporate and judicial scandal, and I am appealing it and I don’t believe it will stand.”
Donziger’s troubles began when Chevron filed a RICO suit against Donziger and his law firm in an attempt to block collection of a $9.5 billion Ecuadorian civil judgment against the company. Donziger had represented the Ecuadorian plaintiffs in their suit over alleged environmental damage by Chevron predecessor Texaco during oil exploration activities.
In a 2014 decision, Kaplan blocked enforcement of the Ecuadorian judgment against Chevron after finding that it was the product of bribery and fraud. A federal appeals court upheld the decision in 2016.
Kaplan’s 2014 decision also awarded Chevron an $800,000 judgment against Donziger on the RICO claim. Kaplan barred Donziger from monetizing or selling shares in the Ecuador judgment and required him to assign any rights in contingent fees to Chevron.
Chevron then sought to locate assets to satisfy the judgment. “Donziger largely has stonewalled Chevron’s efforts,” Kaplan wrote when he found Donziger in contempt in a May 23 decision that was also covered by Forbes.
Donziger also “engaged in persistent efforts to raise money by selling interests in the Ecuador judgment which, in an effort to avoid contempt liability, he characterizes as assisting his clients to sell their interests in it,” Kaplan said in the May 23 decision.
Donziger raised at least $2.3 million selling interests in the judgment, of which $1.5 million went directly or indirectly to Donziger or related bank accounts, Kaplan said. Donziger personally profited from at least $666,000 in the deposited funds, according to Kaplan, who entered judgment for Chevron for an additional $666,000.
Kaplan also imposed a fine of $2,000 per day, beginning on May 28, that doubles each subsequent day that Donziger fails to assign his contingent fee interest to Chevron.
Kaplan also mentioned a separate case in Canada in which Donziger was trying to enforce the Ecuador judgment—a case in which Donziger hoped to find exoneration. But a group of Ecuadorian plaintiffs agreed to dismiss the case earlier this month, according to a Chevron press release.
Donziger told the ABA Journal that the attorney-fee sanction was based on a “bogus case” by Chevron. “Chevron has used 60 law firms and 2,000 lawyers to attack me because I helped win a landmark environmental judgment in Ecuador against the company for dumping billions of gallons of toxic waste in indigenous and ancestral lands,” Donziger says.
Donziger says Chevron “is trying desperately” to evade paying a legitimate civil judgment “that has been affirmed by four layers of courts and 16 separate appellate judges in Ecuador.”
ABAJournal.com: “Racketeering case filed by Chevron against lawyer who won $18B enviro award goes to trial”
Modern Law Library: “Author tells tangled tale of the $19B verdict against Chevron in ‘Law of the Jungle’ (podcast)”
Updated July 25 at 1:01 p.m. to note the dropped Canadian case.