Chevron Corp. v. Donziger

• Citation: 974 F.Supp.2d 362
• Decision Date: 04 March 2014
• Docket Number: No. 11 Civ. 0691 (LAK).,11 Civ. 0691 (LAK).
• Parties: CHEVRON CORP. v. DONZIGER.
• Court: U.S. District Court — Southern District of New York

974 F.Supp.2d 362

CHEVRON CORP.

v.DONZIGER.

No. 11 Civ. 0691 (LAK).

United States District Court, S.D. New York.

March 4, 2014.

OPINION TEXT STARTS HERELEWIS A. KAPLAN, District Judge.

[52] Some of the funds were used in Ecuador to pay Cabrera through both the Lago Agrio court and the secret account the LAPs established to pay Cabrera outside the court process. For example, on August 14, 2007, after receiving a request from Yanza,¹⁴⁵⁴ Donziger asked Kohn to send $50,000 to the secret account in Ecuador.¹⁴⁵⁵ The Kohn firm did so on the following day.¹⁴⁵⁶ On August 17, 2007, $33,000 was transferred from that account to Cabrera.¹⁴⁵⁷ That process was repeated in the following month: Yanza emailed Donziger to request disbursement of an additional $50,000 for Cabrera, ¹⁴⁵⁸ Donziger

[974 F.Supp.2d 593]

directed that Kohn deposit the money into the secret account,¹⁴⁵⁹ and the transfer was subsequently made to the secret account.¹⁴⁶⁰

In sum, Donziger received money from overseas and caused it to be used in this instance in at least these two ways: (1) to fund in part the ghostwriting of the Cabrera Report, which was used in an attempt to extort Chevron; and (2) to pay Cabrera in violation of the Travel Act. In so doing, Donziger committed acts indictable for money laundering.

4. Obstruction of Justice and Witness Tampering

a. Obstruction of Justice

i. The Elements of Obstruction of Justice

Criminal Code Section 1503 ¹⁴⁶¹ provides that “[w]hoever ... corruptly or by threats or force, or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice” is guilty of an obstruction of justice. “[T]he [plaintiff] must establish (1) that there is a pending judicial ... proceeding constituting the administration of justice, (2) that the defendant knew or had notice of the proceeding, and (3) that the defendant acted with the wrongful intent or improper purpose to influence the judicial ... proceeding, whether or not the defendant is successful in doing so.”¹⁴⁶² “[A] defendant does not need to know with certainty that his conduct would affect judicial proceedings ... [i]nstead, the defendant's conduct must only have the natural and probable effect of interfering with the due administration of justice.”¹⁴⁶³ Section 1503 requires also proof of “a connection between the defendant's intentional acts and the likelihood of potentially affecting the administration of justice.” ¹⁴⁶⁴ That is, “ ‘the act must have a relationship in time, causation, or logic with the judicial proceedings.’ ” ¹⁴⁶⁵ Obstruction of justice is a predicate act under RICO in cases where, as here, a defendant's efforts were “designed to prevent detection and prosecution of the organization's illegal activities [and] were part of a consistent pattern that was likely to continue for the indefinite future, absent outside intervention.” ¹⁴⁶⁶

[974 F.Supp.2d 594]

ii. Donziger Obstructed Justice

As thoroughly recounted above, Donziger and the LAPs' U.S. counsel submitted the deliberately misleading Fajardo Declaration first to the court in Denver and then to many other courts throughout the country, including this one. ¹⁴⁶⁷ The LAPs' American lawyers—including Donziger—were involved in drafting the declaration.¹⁴⁶⁸ They debated extensively the extent to which it would reveal the truth about the LAPs' “contacts” with Cabrera. ¹⁴⁶⁹ And they decided that Fajardo rather than Donziger should sign it for fear that Donziger, a U.S. resident and thus subject to compulsory process, would be deposed.¹⁴⁷⁰ Finally, the declaration, as discussed earlier, ¹⁴⁷¹ was misleading at best.

[53] Donziger's conduct with respect to the Fajardo Declaration was obstruction of justice, plain and simple.¹⁴⁷² The declaration was drafted while the Stratus Section 1782 proceeding was pending, as Donziger was acutely aware.¹⁴⁷³ Its purpose—in Donziger's words—was to “prevent Stratus' role relative to the Cabrera report from coming out.” ¹⁴⁷⁴ Donziger was involved in the communications as to what it would and would not say. He knew that it was false or misleading. His conduct was intended to “impede ... the due administration of justice,” and it fell squarely within the federal obstruction of justice statute.¹⁴⁷⁵

b. Witness Tampering

i. The Elements of Witness Tampering

The federal witness tampering statute ¹⁴⁷⁶ prohibits knowing attempts to inter alia “hinder, delay, or prevent the communication to a ... judge of the United States information relating to the commission or possible commission of a Federal offense.” ¹⁴⁷⁷ “The section was written broadly to encompass non-coercive efforts to tamper with a witness.” ¹⁴⁷⁸ Thus, one

[974 F.Supp.2d 595]

violates Section 1512 if one is “motivated by an improper purpose.” ¹⁴⁷⁹ Improper purposes include causing a witness to withhold relevant facts about a defendant's wrongful acts ¹⁴⁸⁰ or to provide false testimony to the court.¹⁴⁸¹

ii. Donziger Tampered with the Testimony of Mark Quarles

[54] Donziger attempted to have Mark Quarles alter materially the declaration he submitted to Judge Sand in an earlier proceeding in this district between Chevron and the ROE.¹⁴⁸² As discussed previously, Donziger urged Quarles to assert that Cabrera neither had entertained suggestions from nor even met with the LAPs regarding his work plan, both of which Donziger knew were false.

Although Donziger knew that the statements he sought to have Quarles make were false, he urged Quarles to adopt them to prevent exposure of the truth regarding Cabrera and to mislead the court. Donziger's effort to influence Quarles's testimony constitutes witness tampering.¹⁴⁸³

5. Violation of the Travel Act Through Furtherance of Violation of the Foreign Corrupt Practices Act

The Travel Act,¹⁴⁸⁴ an enumerated RICO predicate,¹⁴⁸⁵ prohibits the use of “any facility of interstate or foreign commerce” in furtherance of, or with the intent to promote unlawful activity.¹⁴⁸⁶ “Unlawful activity” is defined in Criminal Code Section 1952(b)(2) ¹⁴⁸⁷ as, inter alia, “bribery ... in violation of the laws ... of the United States.” Chevron asserts that Donziger violated the Travel Act through the use of facilities of interstate or foreign commerce with the intent to facilitate violations of the anti-bribery provisions of the Foreign Corrupt Practices Act (“FCPA”). He did so by using email and by causing money to be wired to Ecuador to further the payment of money to Cabrera, a court appointee.¹⁴⁸⁸

[974 F.Supp.2d 596]

a. The Elements

The FCPA's anti-bribery provisions apply where: (1) a “domestic concern,” such as a U.S. resident or a resident's agent, (2) uses the “mails or any means or instrumentality of interstate commerce” (3) “corruptly” (4) “in furtherance of an offer, payment, promise to pay, or authorization” to pay money or “anything of value” to any person, (5) “knowing that all or a portion of” the payment would be “offered, given, or promised” to a “foreign official” (6) in order to influence any official act or decision, induce an action or an omission to act in violation of a lawful duty, or to secure any improper advantage, and (7) the making of the payment or offer to assist in obtaining or retaining business for any person or company or directing business to any person or company. ¹⁴⁸⁹ Because all of the conduct material to elements of the Travel Act occurred within the United States,¹⁴⁹⁰ the presumption against extraterritoriality does not apply.

b. The Conduct

i. Donziger Was a “Domestic Concern”

“The term ‘domestic concern’ means ... any individual who is a citizen, national, or resident of the United States” and “any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States ...” ¹⁴⁹¹ Donziger is a U.S. citizen, a member of the New York Bar, and maintains his office here.¹⁴⁹²

ii. Donziger Used Instrumentalities of Interstate Commerce in Furtherance of the Payments

Under both the Travel Act and the FCPA, a domestic concern must “make use of the mails or any means or instrumentality of interstate commerce” in furtherance of the payments.

[55] Donziger's “use of the Internet to send emails in furtherance of [the Cabrera] bribery scheme [was] sufficient to satisfy the interstate commerce requirement of the FCPA” ¹⁴⁹³ and Travel Act, as was his transfer of funds to a bank account.¹⁴⁹⁴ Specifically, Donziger used email to cause Kohn to transfer funds to the secret account in order to pay Cabrera from that account.¹⁴⁹⁵ Kohn complied with Donziger's

[974 F.Supp.2d 597]

requests and wired the money.¹⁴⁹⁶ Donziger, Fajardo, Yanza, and others discussed the details of the scheme via email.¹⁴⁹⁷

iii. Donziger's Use of the Wires Was Corrupt and Intended to Influence Official Action

“Corruptly” means to act “knowingly and dishonestly, with the specific intent to achieve an unlawful result by influencing a foreign public official's action in one's own favor.” ¹⁴⁹⁸

[56] As this Court has found,¹⁴⁹⁹ Cabrera often was referred to by a code name. Donziger was instrumental in arranging for him to be paid, over and above the payments that went through the normal court process, from a secret account. The Court has found that Donziger intended that at least part of the payments via the secret account would ensure that Cabrera did what Donziger and his confederates wanted him to do as is confirmed by the multi-year effort to conceal the truth concerning the relationship among Cabrera, Stratus and the LAPs.¹⁵⁰⁰ Indeed, Donziger would not go along with the suggestion to pursue the possibility of using a global expert until he was satisfied that he and the LAPs would control the expert. The report Cabrera signed was written for him by Stratus and the LAPs. Donziger's actions were corrupt and intended to influence official action.

iv. The Offers, Promises, and Payments to Cabrera Were of Value

The FCPA prohibits...