Lago Agrio: Donziger Responds to Contempt Motion

Steven Donziger, the LAPs’ lead American lawyer, has now responded to Chevron’s motion for an order finding him in contempt of court. The response covers two basic topics: the shares in Amazonia, a Gibraltar company set up to disburse proceeds of the Ecuadoran judgment; and Donziger’s attempt to sell an interest in the Ecuadoran judgment to a litigation funder. I am going to focus here on the second issue, which I think is the more interesting issue.

In my prior post, I explained that Chevron was claiming that Donziger’s attempt to sell interests in the Ecuadoran judgment was a violation of the final judgment, which enjoined such sales. I opined that Donziger’s attempt might be a violation of the injunction, if he was trying to sell his own interest, but that it wasn’t clear whether that’s what he was trying to do: perhaps he was trying to sell the interests of others. Donziger’s new memorandum makes this point, too, and he notes that Chevron’s motion “is devoid of any allegation that the interests supposedly being ‘monetized’ were specifically Donziger’s …” So far, so good.

But then Donziger’s paper goes off the rails a little. He claims that Chevron brought its contempt motion in bad faith, for the purpose of taking discovery that will “intimidate and scare off the financial supporters of the case.” And he says that Chevron is merely speculating about whose interest Donziger was trying to sell. But Donziger never denies that the interest is his. The obvious thing to do here would be to submit a declaration explaining what Donziger was trying to do. The slightly less obvious but still pretty obvious thing to do, if it were important to keep confidential the identity of the person whose interest Donziger was trying to sell, would be to move for leave to submit that information under seal. But Donziger hasn’t done either of these things. At the very least Donziger should have asserted the interest was not his, even if he wasn’t willing to identify the investor in question. The failure to do these things makes it almost certain, I think, that the judge will order discovery. If I were the judge, I would.

Donziger might respond that Judge Kaplan is going to rule against him no matter what he does, so what is the point, but when ordered to show cause why you shouldn’t be held in contempt in a federal court, I think you have to put your best foot forward, at least to preserve your rights on appeal. On this record, if Judge Kaplan orders discovery, I think he’d be affirmed, and how is Donziger better off then?

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