July 24, 2019
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.