Chevron Corp. v. Donziger ( 2021 )

18-855-cv (L)
Chevron Corp. v. Donziger
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2020
Argued: September 15, 2020 Decided: March 4, 2021
Docket Nos. 18-855-cv (L); 18-2191-cv; 19-1584-cv
CHEVRON CORPORATION,
Plaintiff - Counter-Defendant - Appellee,
— v. —
STEVEN DONZIGER,
Defendant - Counter-Claimant - Appellant,
DONZIGER & ASSOCIATES, PLLC, THE LAW OFFICES OF STEVEN R. DONZIGER,
Defendants - Counter-Claimants,
PABLO FAJARDO MENDOZA, LUIS YANZA, FRENTE DE DEFENSA DE LA AMAZONIA,
AKA AMAZON DEFENSE FRONT, SELVA VIVA SELVIVA CIA, LTDA, MARIA AGUINDA
SALAZAR, CARLOS GREFA HUATATOCA, CATALINA ANTONIA AGUINDA SALAZAR,
LIDIA ALEXANDRA AGUIN AGUINDA, PATRICIO ALBERTO CHIMBO YUMBO, CLIDE
RAMIRO AGUINDA AGUINDA, LUIS ARMANDO CHIMBO YUMBO, BEATRIZ MERCEDES
GREFA TANGUILA, LUCIO ENRIQUE GREFA TANGUILA, PATRICIO WILSON AGUINDA
AGUINDA, CELIA IRENE VIVEROS CUSANGUA, FRANCISCO MATIAS ALVARADO
YUMBO, FRANCISCO ALVARADO YUMBO, OLGA GLORIA GREFA CERDA, LORENZO
JOSE ALVARADO YUMBO, NARCISA AIDA TANGUILA NARVAEZ, BERTHA ANTONIA
YUMBO TANGUILA, GLORIA LUCRECIA TANGUI GREFA, FRANCISCO VICTOR
TANGUILA GREFA, ROSA TERESA CHIMBO TANGUILA, JOSE GABRIEL REVELO LLORE,
MARIA CLELIA REASCOS REVELO, MARIA MAGDALENA RODRI BARCENES, HUGO
GERARDO CAMACHO NARANJO, JOSE MIGUEL IPIALES CHICAIZA, HELEODORO
PATARON GUARACA, LUISA DELIA TANGUILA NARVAEZ, LOURDES BEATRIZ CHIMBO
TANGUIL, MARIA HORTENCIA VIVER CUSANGUA, SEGUNDO ANGEL AMANTA MILAN,
OCTAVIO ISMAEL CORDOVA HUANCA, ELIAS ROBERTO PIYAHUA PAYAHUAJE, JAVIER
PIAGUAJE PAYAGUAJE, DANIEL CARLOS LUSITAND YAIGUAJE, BENANCIO FREDY
CHIMBO GREFA, GUILLERMO VICENTE PAYAGUA LUSITANTE, DELFIN LEONIDAS
PAYAGU PAYAGUAJE, ALFREDO DONALDO PAYAGUA PAYAGUAJE, MIGUEL MARIO
PAYAGUAJE PAYAGUAJE, TEODORO GONZALO PIAGUAJE PAYAGUAJE, FERMIN
PIAGUAJE PAYAGUAJE, REINALDO LUSITANDE YAIGUAJE, LUIS AGUSTIN PAYAGUA
PIAGUAJE, EMILIO MARTIN LUSITAND YAIGUAJE, SIMON LUSITANDE YAIGUAJE,
ARMANDO WILMER PIAGUAJE PAYAGUAJE, ANGEL JUSTINO PIAGUAG LUCITANT,
KEMPERI BAIHUA HUANI, AHUA BAIHUA CAIGA, PENTIBO BAIHUA MIIPO, DABOTA
TEGA HUANI, AHUAME HUANI BAIHUA, APARA QUEMPERI YATE, BAI BAIHUA MIIPO,
BEBANCA TEGA HUANI, COMITA HUANI YATE, COPE TEGA HUANI, EHUENGUINTO
TEGA, GAWARE TEGA HUANI, MARTIN BAIHUA MIIPO, MENCAY BAIHUA TEGA,
MENEMO HUANI BAIHUA, MIIPO YATEHUE KEMPERI, MINIHUA HUANI YATE, NAMA
BAIHUA HUANI, NAMO HUANI YATE, OMARI APICA HUANI, OMENE BAIHUA HUANI,
YEHUA TEGA HUANI, WAGUI COBA HUANI, WEICA APICA HUANI, TEPAA
QUIMONTARI WAIWA, NENQUIMO VENANCIO NIHUA, COMPA GUIQUITA, CONTA
NENQUIMO QUIMONTARI, DANIEL EHUENGEI, NANTOQUI NENQUIMO, OKATA QUIPA
NIHUA, CAI BAIHUA QUEMPERI, OMAYIHUE BAIHUA, TAPARE AHUA YETE,
TEWEYENE LUCIANA NAM TEGA, ABAMO OMENE, ONENCA ENOMENGA, PEGO
ENOMENGA, WANE IMA, WINA ENOMENGA, CAHUIYA OMACA, MIMA YETI,
Defendants.*
*
The Clerk of Court for the U.S. Court of Appeals for the Second Circuit is
respectfully directed to amend the official caption as shown above.
3
B e f o r e:
JACOBS, LYNCH, and SULLIVAN, Circuit Judges.
Defendant-Appellant Steven Donziger appeals from an amended judgment
of the United States District Court for the Southern District of New York (Kaplan,
J.) awarding costs to Plaintiff-Appellee Chevron Corporation (“Chevron”)
pursuant to Federal Rule of Civil Procedure 54(d), several interlocutory orders
declining to dismiss civil contempt proceedings against him and ordering
compliance with post-judgment discovery, and a judgment and order finding
him in civil contempt. We conclude that the district court did not err in awarding
costs to Chevron. However, we also conclude that the district court was not clear
and unambiguous in prohibiting Donziger from fundraising by selling interests
in a fraudulently procured judgment.
We therefore AFFIRM the district court’s amended judgment awarding
costs to Chevron. We also AFFIRM in part and REVERSE in part the district
court’s contempt finding and VACATE the supplemental judgment awarding
Chevron $666,476.34 in compensatory sanctions. Lastly, we VACATE the
supplemental judgment awarding attorneys’ fees and REMAND to the district
court to determine the fees reasonably expended to secure the contempt findings
affirmed on appeal.
Judge Sullivan DISSENTS in part in a separate opinion.
THOMAS G. HUNGAR, Gibson, Dunn & Crutcher LLP,
Washington, DC (Randy M. Mastro, Andrea E.
Neuman, Gibson, Dunn & Crutcher LLP, New York,
NY, William E. Thomson, Gibson, Dunn & Crutcher
LLP, Los Angeles, CA, on the brief) for Plaintiff -
Counter-Defendant - Appellee.
3
STEVEN R. DONZIGER, Pro Se, New York, NY for Defendant -
Counter-Claimant - Appellant.
GERARD E. LYNCH, Circuit Judge:
The pending appeals constitute the latest installment in the long-running
litigation between Chevron Corporation (“Chevron”) and Steven Donziger
(“Donziger”); Donziger & Associates, PLLC; and the Law Offices of Steven R.
Donziger (collectively, the “Donziger Defendants”). The saga began as a battle
over environmental damage to Ecuador’s Lago Agrio region of the Amazon
Rainforest allegedly caused by Texaco, now owned by Chevron, in which
Donziger represented a large number of indigenous people who claimed to have
suffered from the destructive effects of Texaco’s activities. But the current fight is
not about Chevron’s alleged pollution of the Amazon, which was litigated in the
courts of Ecuador and culminated in a multi-billion dollar judgment against
Chevron (the “Ecuadorian Judgment”). Rather, the three pending appeals relate
to a subsequent civil Racketeer Influenced and Corrupt Organizations (“RICO”)
suit in which the United States District Court for the Southern District of New
4
York (Lewis A. Kaplan, J.) found that the Donziger Defendants and a group of
Ecuadorian residents conspired to procure that judgment through illegal means.
Nor, however, do these appeals concern the merits of the RICO action,
which has been authoritatively resolved against Donziger. In March 2014, after a
seven-week trial, the district court entered a final judgment that principally
awarded damages in the form of litigation costs to Chevron, imposed a
constructive trust for Chevron’s benefit on funds obtained by Donziger traceable
to the Ecuadorian Judgment, and enjoined Donziger from seeking to enforce the
Ecuadorian Judgment in the United States and from engaging in activities that
would allow him to profit from the fraudulently procured judgment (the
“Injunction,” and, together with other remedies, the “RICO Judgment”). This
Court affirmed the RICO Judgment, and the Supreme Court denied further
review. Chevron Corp. v. Donziger, 833 F.3d 74 (2d Cir. 2016), cert. denied, 137 S. Ct.
2268 (2017).
These appeals stem from yet another phase of the litigation, which ensued
following the RICO Judgment. First, Donziger appeals a supplemental judgment
quantifying the award of costs due to Chevron for successfully litigating the
RICO action. Second, Donziger appeals several of the district court’s orders
5
entered during the pendency of contempt proceedings initiated by Chevron
arising out of Donziger’s alleged violations of the Injunction. Third, Donziger
appeals the court’s final order and judgment finding Donziger in civil contempt
of the Injunction and awarding sanctions and attorneys’ fees to Chevron.
We conclude that the district court did not err in awarding costs to
Chevron under Federal Rule of Civil Procedure 54(d). We also affirm the district
court’s finding that Donziger violated the Injunction in several respects and its
judgment of civil contempt relating to those violations. However, we hold that
the Injunction, previously affirmed by this Court and clear and far-reaching on its
own terms, was insufficiently clear and unambiguous, when read alongside the
district court’s explanation of that Injunction in a subsequent opinion, in
prohibiting Donziger from raising funds by selling interests in the Ecuadorian
Judgment. Thus, we conclude that the district court erred in finding Donziger in
contempt for engaging in that conduct.
We emphasize, however, that the district court’s further elaboration on the
terms of the Injunction in its contempt rulings have now clarified that the actions
taken by Donziger that formed the basis of the now-vacated contempt findings
are prohibited by the Injunction, such that any repetition of those actions in the
6
future would be in contempt of the Injunction.
BACKGROUND
I. The Injunction and Constructive Trust
After the RICO trial, the district court found by clear and convincing
evidence that the Donziger Defendants and two other defendants (the “LAP
Representatives” or “LAPs”)1 fraudulently procured the Ecuadorian Judgment
against Chevron through a pattern of racketeering activity in violation of 18
U.S.C. §§ 1962(c) and (d). Chevron Corp. v. Donziger, 974 F. Supp. 2d 362, 567-603
(S.D.N.Y. 2014) (“Chevron I”), aff’d, 833 F.3d 74 (2d Cir. 2016). Specifically, the
court found that Donziger, among other things, bribed the presiding judge to
enter a judgment in his clients’ favor in exchange for $500,000 of the judgment’s
proceeds; coerced the court to appoint a hand-picked expert whom Donziger
paid for favorable testimony; and ghost-wrote the Ecuadorian Judgment “in
1
Chevron initiated the RICO action against dozens of defendants, including the
Donziger Defendants and 47 Ecuadorian individuals. Only two of the Ecuadorian
defendants answered the complaint. The post-trial RICO Judgment thus ran only
against the Donziger Defendants and the two appearing LAP Representatives.
On April 18, 2018, however, the district court clerk found the non-appearing
individuals in default (the “non-appearing defendants”). On April 23, 2018, the
district court enjoined those individuals under the same terms as the Donziger
Defendants and the appearing LAP Representatives.
7
whole or in major part” with only “light editing” by the judge who signed it. Id.
at 558-60.
The district court’s judgment awarded costs to Chevron as the prevailing
party, enjoined Donziger from performing actions that would allow him to profit
from the fraudulently procured Ecuadorian Judgment, and imposed a
constructive trust on any proceeds accruing to Donziger from exploitation of that
judgment. The Donziger Defendants appealed the RICO Judgment, but in 2016,
this Court affirmed as “unchallenged” the district court’s extensive findings “as
to [Donziger’s] fraud, coercion, and bribery.” Chevron Corp. v. Donziger, 833 F.3d
74, 151 (2d Cir. 2016) (“Chevron II”). We also held that the district court had the
authority to grant equitable relief under RICO and did not abuse its discretion in
prohibiting Donziger “from profiting from the corrupt conduct that led to the
[Ecuadorian Judgment] against Chevron.” Id.The Injunction, in relevant part, ordered the following:
1. The Court hereby imposes a constructive trust
for the benefit of Chevron on all property, whether
personal or real, tangible or intangible, vested or
contingent, that Donziger has received, or hereafter may
receive, directly or indirectly, or to which Donziger now
has, or hereafter obtains, any right, title or interest,
8
directly or indirectly, that is traceable to the [Lago
Agrio] Judgment or the enforcement of the [Lago Agrio]
Judgment anywhere in the world . . . .
3. Donziger shall execute in favor of Chevron a
stock power transferring to Chevron all of his right, title
and interest in his shares of Amazonia [Recovery
Limited] . . . .
5. Donziger and the LAP Representatives, and
each of them, is hereby further enjoined and restrained
from undertaking any acts to monetize or profit from
the [Ecuadorian] Judgment, as modified or amended, or
any New Judgment, including without limitation by
selling, assigning, pledging, transferring or
encumbering any interest therein.
6. Notwithstanding anything to the contrary in
this Judgment, nothing herein enjoins, restrains or
otherwise prohibits Donziger, the LAP Representatives,
or any of them, from (a) filing or prosecuting any action
for recognition or enforcement of the [Ecuadorian]
Judgment or any New Judgment, or any for
prejudgment seizure or attachment of assets based in
courts outside the United States; or (b) litigating this
action or any appeal of any order or judgment issued in
this action.
Sp. App’x at 1-3.
After the district court issued the Injunction, the Donziger Defendants
moved for a stay pending appeal. In that motion, Donziger argued that the
Injunction wrongfully encroached on his ability to enforce the Ecuadorian
Judgment in other countries on behalf of his clients, devastated his law practice,
9
and would preclude his clients from financing an appeal by selling interests in
the Ecuadorian Judgment.2 These effects, Donziger argued, would inflict
irreparable injury on him and his clients that could not be cured by a successful
appeal.
On April 25, 2014, the district court granted the motion in part (the “Stay
Order”), but rejected Donziger’s contention that the Injunction imposed
sweeping restrictions on his ability to represent the Lago Agrio plaintiffs in
pursuing enforcement of the Ecuadorian judgment in other countries and to be
paid for such work, explaining that the court “granted only narrow relief
intended to preclude Donziger . . . from profiting from the misdeeds for which
[he was] responsible.” Chevron Corp. v. Donziger, 37 F. Supp. 3d 653, 655 (S.D.N.Y.
2014) (“Chevron Stay Opinion”). The Stay Order emphasized that “[n]othing in the
[Injunction] prevent[ed] Donziger from continuing to work on the Lago Agrio
case. Period.” Id. at 658.
2
Donziger’s clients had financed the litigation by selling interests in the
Ecuadorian Judgment, and the district court was keenly aware of this financing
structure. See, e.g, Chevron Corp. v. Donziger, 37 F. Supp. 3d 653, 662 (S.D.N.Y.
2014) (“This case always has been financed . . . by outside investors, not the
individual defendants.”).
10
II. The Imposition of Costs
As part of its judgment in the RICO action, the district court ordered that
“Chevron shall recover of Donziger . . . the costs of this action” pursuant to Rule
54(d)(1) of the Federal Rules of Civil Procedure and 28 U.S.C. § 1920. Sp. App’x at
4. However, the amount of costs to be taxed against Donziger was not ascertained
until much later, because the local rules require the prevailing party to file a
notice of taxation of costs “within thirty (30) days after the final disposition of the
appeal.” S.D.N.Y. R. 54.1. After this Court affirmed the judgment on appeal,
Chevron timely filed its notice of taxation of costs. The district court then ordered
the clerk not to tax costs until any petition for certiorari was adjudicated by the
Supreme Court. Thus, it was only on July 17, 2017, after the Supreme Court
denied the petition, that the district court ordered the clerk to tax costs.
Donziger objected to the imposition of certain costs and wrote a letter to
the clerk, asking her to “hold in abeyance any action regarding taxation of costs”
until certain issues were fully resolved. Supp. App’x (18-855) at 46.
Unsurprisingly, the clerk followed the court’s order and taxed costs in the
amount of $944,463.85 on August 8, 2017. On August 16, 2017, Donziger wrote to
11
the district court, objecting to the “exorbitant and unprecedented taxation of
costs.” Id. at 58. On November 9, 2017, the district court ordered the two special
masters it had appointed to oversee discovery issues in the case to provide
Donziger and the court with time records sufficient to allow Donziger to object to
the reasonableness of their charges.3 The district court required Donziger to file
any objection by December 4, 2017. The court also ordered the special masters to
file a report and recommendation (“R&R”) setting forth how their costs should be
allocated as between the parties by December 9, 2017.
Though the special masters furnished their records to Donziger on
November 21, 2017, Donziger failed to object to the reasonableness of the fees.
Thus, on December 6, 2017, the district court found the costs reasonable and
3
The district court had appointed two special masters to oversee the dozens of
depositions that were scheduled in this case. Initially, the special masters’ fees
were to be split equally between the Plaintiff and the Defendants. Donziger
objected to the appointment, citing his inability to pay the fees. To alleviate this
concern, the district court ordered Chevron to advance all of the special masters’
fees but allowed Chevron to “move, pursuant to Fed. R. Civ. P. 53(g)(3), for an
allocation of part of the fees and costs advanced by it to one or more of the
defendants” within 14 days after the submission of the special masters’ final
billings. J. App’x 78. Though the special masters submitted billings throughout
the litigation, Chevron never moved for an interim allocation of the fees it had
advanced; instead, it requested the special masters’ fees as costs in its notice to
the clerk.
12
deferred its decision on allocation pending the special masters’ forthcoming R&R.
That same day, Donziger filed an untimely letter to the district court objecting to
the reasonableness of the costs and arguing that Chevron’s attorneys committed
misconduct throughout the case.
On December 8, 2017, the special masters filed their R&R, recommending
that the defendants in the RICO action be held jointly and severally liable for 85%
of their fees, as they considered the defendants responsible for most of the costs
incurred. Donziger did not timely object to the R&R. On March 1, 2018, the
district court accepted the R&R and amended the total costs imposed to
$813,602.71, reflecting the assessment of 85% of the special masters’ costs to
defendants.
III. Contempt Proceedings in the District Court
After this Court affirmed the district court’s RICO Judgment, Chevron
began alerting the district court to alleged violations of the Injunction. On June
19, 2017, Chevron notified the court that Donziger had failed to transfer his
shares of Amazonia Recovery Limited (“Amazonia”) to the Clerk of the Court.
On March 19, 2018, Chevron asserted that Donziger was in contempt of
13
paragraphs three and five of the Injunction because he had persisted in his failure
to transfer his shares of Amazonia and had attempted to monetize the
Ecuadorian Judgment by offering to sell an interest in the judgment’s future
proceeds to a hedge fund. In a letter dated May 11, 2018, Chevron argued that
Donziger was also in contempt of paragraph one of the Injunction by failing to
transfer all property traceable to the Ecuadorian Judgment to Chevron. Between
September 2018 and May 2019, Chevron filed five motions to hold Donziger in
contempt for violations of the Injunction and associated court orders.
In response to this flurry of contempt motions, Donziger began to raise
concerns about his obligations under the Injunction as clarified by the Stay Order.
On May 31, 2018, Donziger moved to dismiss Chevron’s contempt motions and
for declaratory relief in the form of a declaratory judgment stating that the
Injunction does not prevent Donziger from, inter alia, attempting to enforce the
Ecuadorian Judgment in non-U.S. jurisdictions and raising funds by selling
interests in a recovery of the Ecuadorian Judgment – as opposed to shares in
Donziger’s specific contingency interest in that judgment – to cover litigation
expenses. The district court denied the motion in June 2018, characterizing
Donziger as arguing that the Injunction had been “modified by the [c]ourt’s” Stay
14
Order, and rejecting that argument. Sp. App’x at 117.
On May 23, 2019, the district court entered its order holding Donziger in
contempt of the Injunction (the “Contempt Order”). The Contempt Order found
that Donziger violated the Injunction by, among other things, improperly
monetizing and profiting from the Ecuadorian Judgment in violation of
paragraphs one and five of the Injunction.4 Specifically, the court found that
Donziger sold shares in the Ecuadorian Judgment to at least six investors in
exchange for over $1.2 million between January 2016 and June 2018 and paid
himself with those funds.
4
The district court’s contempt findings were very detailed. The Contempt Order
found Donziger in contempt of the Injunction for: (1) failing to transfer and
assign his right to a 6.3 percent contingent fee of moneys obtained from the
Ecuadorian Judgment; (2) attempting to sell a portion of his personal contingent
fee recovery in exchange for services; (3) monetizing and profiting from the
Ecuadorian Judgment by using it to raise funds to pay his personal expenses; (4)
transferring property in which he had an interest in violation of a restraining
notice; and (5) violating a court order to provide forensic experts access to certain
electronically stored information. On May 16, 2018, the district court had
previously found Donziger in contempt of paragraph three of the Injunction for
failing to transfer Amazonia stock to Chevron between March 4, 2014 and May 9,
2018, the date on which Donziger signed a stock power in favor of Chevron.
Donziger challenges the contempt finding only as to his alleged profiting and
monetizing of the Ecuadorian Judgment. Indeed, he expressly admits that he has
not addressed any other “lingering civil contempts” in the present appeal.
Appellant’s Reply Br. at 7 n.6.
15
The court held that selling interests in the Ecuadorian Judgment to
investors violated paragraph five of the Injunction because doing so allowed
Donziger to “monetize or profit from the [j]udgment . . . by selling . . . any
interest therein.” Sp. App’x at 3. The court found that Donziger profited from the
judgment because he paid himself for his legal work with the funds that he
raised. Thus, the court found clear violations of paragraph five.
Even if Donziger were entitled to pay himself from the funds that he raised
by selling interests in the Ecuadorian Judgment, the court concluded, those funds
would have been property “traceable to the [Ecuadorian] Judgment” subject to
the constructive trust in favor of Chevron under paragraph one. Sp. App’x at 2.
The court reasoned that such funds were attributable to the judgment and
therefore fell under a plain meaning of the word “traceable.”
Donziger argued that he reasonably believed that his behavior did not
violate the Injunction based on the assurances the district court provided him in
the Stay Order: namely, that the Injunction would not prohibit him from
continuing to work on the Lago Agrio case by pursuing enforcement of the
Ecuadorian Judgment in countries other than the United States and to be paid for
16
such work “as he [had] been paid . . . over the past nine or ten years.” Chevron
Stay Opinion, 37 F. Supp. 3d at 658. The court rejected that argument. First, it
noted that the Injunction was on appeal at the time that the Stay Order was
issued, so the district court had no jurisdiction to modify it. Even if the Stay
Order could have modified the Injunction, the court disagreed with Donziger’s
interpretation of the Stay Order. It rejected Donziger’s reading of the Injunction
as prohibiting monetizing or profiting from only his interest in the Ecuadorian
Judgment, while allowing him to sell others’ interests and pay himself from those
funds. The court also rejected Donziger’s argument that the Stay Order signaled
that only funds collected from the enforcement of the Ecuadorian Judgment were
subject to the constructive trust.
Ultimately, the district court found Donziger in contempt of the Injunction
for, inter alia, taking “at least $666,476.34 of investor funds traceable to the
Ecuador[ian] Judgment in violation of paragraphs 1 and 5 of the [Injunction]”and
entered a supplemental judgment for Chevron in that amount. Sp. App’x at 201,
216. The district court further awarded Chevron $3,433,384.30 for reasonable
attorneys’ fees. Donziger contends the funds he received were payments for his
monthly retainer or arrears on the retainer, which, in his view, he was allowed to
17
collect in compliance with the Injunction as he understood it.
IV. The Appeals
This Opinion addresses three appeals pending before this Court. First,
Donziger appeals from the supplemental judgment of the district court
determining the amount of costs awarded to Chevron incurred in the litigation to
obtain the RICO Judgment. Second, during the pendency of post-judgment civil
contempt proceedings, Donziger filed an appeal challenging the district court’s
interlocutory orders denying several of his motions relating to those proceedings.
Finally, at the conclusion of the contempt proceedings, Donziger appealed the
court’s order and supplemental judgment finding him in civil contempt and
awarding Chevron compensatory sanctions.
DISCUSSION
Donziger argues that imposing costs on him is inequitable due to the
disparity of resources between the parties and Chevron’s alleged misconduct
during the RICO suit, and that, in any event, he had a right to a jury trial if costs
were to be imposed. Next, Donziger contends that the district court erred in
denying his Rule 12(b)(6) motion to dismiss Chevron’s motions to hold him in
18
civil contempt and further erred in denying his motion for a declaratory
judgment clarifying the Injunction.5 Lastly, Donziger argues that the district court
erred in finding him in contempt of the Injunction and awarding Chevron
compensatory sanctions. We take each argument in turn.6
5
Donziger also argues that the district court erred in denying his motion for a
protective order. However, that issue is now moot. An appeal becomes moot
“when, by virtue of an intervening event, a court of appeals cannot grant any
effectual relief whatever in favor of the appellant.” Calderon v. Moore, 518 U.S.
149, 150 (1996) (internal quotation marks omitted). Donziger argues that his First
Amendment right of association would be threatened if Chevron obtained access
to his finances and associates. However, the relevant information has already
been disclosed during the extensive discovery Chevron conducted on this matter.
Additionally, Donziger waived any objection to the public disclosure of that
information when he failed to object to Chevron’s motion for leave to file its
contempt motion without redactions. Thus, no “effectual relief” can be awarded
that would make the already public information nonpublic again. Id.6
The parties disagree about whether this Court has jurisdiction over Donziger’s
appeal of the district court’s interlocutory orders denying his motion to dismiss
Chevron’s contempt motions and declining to issue a declaratory judgment
clarifying the Injunction. Donziger argues that these decisions “applied a
fundamentally modified and broadened version of the injunctive relief that
originally issued.” Appellant’s Br. (18-855) at 9. Thus, he argues, we have
jurisdiction under 8 U.S.C. § 1292(a)(1), because these decisions effectively
modified the district court’s Injunction.
Whether we have jurisdiction in this circumstance is a “close[] question”
that requires looking at the merits of Donziger’s argument. Wilder v. Bernstein, 49
F.3d 69, 72 (2d Cir. 1995). “In order to determine whether [interlocutory] ruling[s]
modif[y] [an injunction], we must assess [the] merits because if the Judge
correctly construed the [injunction], he did not modify it, but if he erred in his
construction, he did modify it.” Id. Because Donziger also appeals the district
19
I. Standards of Review
A district court’s award of costs is reviewed for abuse of discretion. See In
re Air Crash Disaster at John F. Kennedy Int'l Airport on June 24, 1975, 687 F.2d 626,
629 (2d Cir. 1982).
We review a district court’ s contempt finding for abuse of discretion,
though our review is “more exacting” than that standard typically connotes. U.S.
Polo Ass’n, Inc. v. PRL USA Holdings, Inc., 789 F.3d 29, 33 (2d Cir. 2015) (internal
quotation marks omitted). Prior to finding a party in contempt, the “district court
must find that the alleged contemnor had notice of the underlying order, that the
terms of the order were clear and unambiguous, and that proof of noncompliance
was clear and convincing.” Id. Indeed, the order must leave “no doubt in the
minds of those to whom it was addressed.” Drywall Tapers & Pointers of Greater
New York v. Local 530, 889 F.2d 389, 395 (2d Cir. 1989). Factual determinations
underlying a contempt finding “are reviewed for clear error, but questions of
court’s ultimate judgment finding him in contempt of the Injunction, we need not
decide this question, since Donziger’s appeal of the district court’s final order
finding him in contempt brings before this Court all of the parties’ contentions
regarding the meaning of the Injunction and thus moots his separate appeal of
the related interlocutory orders.
20
law, including interpretation of the order, are reviewed de novo.” U.S. Polo Ass’n,
Inc., 789 F.3d at 33.
An award of sanctions or attorneys’ fees resulting from a contempt order is
also reviewed for abuse of discretion. See, e.g., CBS v. FilmOn.com, Inc., 814 F.3d
91, 100 (2d Cir. 2016); Townsend v. Benjamin Enterprises, Inc., 679 F.3d 41, 58 (2d
Cir. 2012).
II. Costs
A. Scope of Appeal
Donziger does not challenge the district court’s power to award to
Chevron the costs of the litigation leading to the RICO Judgment. Nor does he
argue that the special masters’ fees fall outside the categories of expenses that can
be taxed as costs. Rather, he argues that the district court “disregarded, distorted,
or misapplied” several principles that should have compelled the court to find
that awarding costs would be inequitable or unfair. Appellant’s Br. (18-855) at 50.
Specifically, Donziger argues that the district court erred in awarding costs to
Chevron in light of the large disparity in resources between him and the oil
company and the misconduct in which Donziger alleges that Chevron engaged
21
throughout the proceedings. He also argues that the district court ignored his
objections to the taxation of certain costs. Lastly, Donziger argues that, under
these circumstances, the Seventh Amendment provides him the right to a jury
trial to determine the proper assessment of costs.
In response, Chevron argues that Donziger waived his right to challenge
the award of costs when he failed to raise the issue in his appeal of the RICO
Judgment. Although Donziger appealed the judgment in the RICO action, which
not only included the Injunction but also ordered that Chevron was entitled to
costs pursuant to Rule 54(d), he did not raise any issue in that appeal with
respect to the award of costs. Thus, in Chevron’s view, Donziger may challenge
only the amount of costs taxed against him. For its part, the district court taxed
costs on the assumption that Donziger had waived any arguments regarding
costs that were inconsistent with the final judgment in the RICO action.
By failing to appeal the district court’s general imposition of costs in his
merits appeal of the RICO Judgment, Donziger waived any arguments
inconsistent with that judgment. Arguments not raised on appeal are deemed
abandoned and need not be reviewed by this Court. Deep Woods Holdings, L.L.C.
22
v. Sav. Deposit Ins. Fund of Republic of Turkey, 745 F.3d 619, 623 (2d Cir. 2014).
Moreover, “a legal decision made at one stage of litigation, unchallenged in a
subsequent appeal when the opportunity to do so existed, becomes the law of the
case for future stages of the same litigation, and the parties are deemed to have
waived the right to challenge that decision at a later time.” N. River Ins. Co. v.
Phila. Reinsurance Corp., 63 F.3d 160, 164 (2d Cir. 1995) (internal quotation marks
omitted). Thus, when Donziger appealed the March 18, 2014 judgment in the
RICO action but failed to challenge the award of costs during that appeal, he
waived any arguments regarding the general imposition of costs against him. In
other words, Donziger can now challenge only the amount of costs imposed, as
set by the supplemental judgment from which he now appeals.
Donziger’s characterization of this result as “brutally unfair” misses the
mark. Appellant’s Br. (18-855) at 52. He describes the merits appeal as
“extraordinarily complex” and asserts that he had only limited space to properly
address his numerous other legal arguments. Id. First, while this litigation may be
complex, that is of no matter here. Donziger was represented by counsel in his
merits appeal, and even if he were not, Donziger is not a typical pro se litigant; he
is an attorney, and this Court does not give special solicitude to pro se litigants
23
who are themselves attorneys. “[A] lawyer representing himself ordinarily
receives no [special] solicitude at all.” Tracy v. Freshwater, 623 F.3d 90, 102 (2d Cir.
2010).
Second, Donziger’s assertion that he did not have enough space in his
merits brief to address all of his arguments is not credible. In fact, Donziger
sought and received leave to file an oversized brief of up to 29,000 words in his
merits appeal, while our typical rules provide for a principal brief containing no
more than 14,000 words. 2d Cir. R. 32.1(a)(4)(A). If Donziger needed more space,
he could have asked for it, but he did not. In any event, litigants facing space
limitations must make choices as to the issues that they wish to pursue in
appeals, and abide by the consequences of their decisions.
In short, there is nothing unfair about this result. Donziger failed to object
to the imposition of costs when he had the opportunity to do so, and, as a result,
he has waived his arguments that a disparity of wealth between the parties,
alleged misconduct on the part of Chevron’s attorneys, or the district court’s
failure to provide him a jury trial to determine whether costs should be imposed
24
should have categorically precluded an award of costs.7 His arguments regarding
the amount of costs assessed and the allocation of fees earlier advanced by
Chevron, however, which he could not have previously raised because the issues
were resolved subsequent to Donziger’s initial appeal, are not waived, and we
address them here.
B. Taxation of Costs
Donziger argues that the district court erred in allowing the clerk to tax
7
Donziger’s argument that “forcing [him] to empty out his life savings to an oil
company that grosses $250 billion per year is . . . a clear abuse of discretion” is
made as part of his discussion of the district court’s power “to refuse to impose
costs on the losing party at all.” Appellant’s Br. (18-855) at 49-50 (internal
quotation marks omitted). That is a categorical objection to the award of costs
that could have been raised in his earlier appeal and thus has been waived. Even
if we were to construe that argument as challenging the amount of costs imposed
or as objecting specifically to the division of responsibility for the special masters’
fees and thus as properly raised in this appeal, the argument would be
unavailing. The district court’s allocation of costs relied on the special masters’
conclusion, which Donziger did not timely challenge, that it was Donziger’s
obstructive conduct that resulted in expenses beyond what they should have
been. It was hardly clear error for the district court to adopt that finding. In light
of that conduct, and given that costs were sought in a litigation in which
Donziger has been found liable for engaging in a pattern of racketeering
involving corruption of a foreign judiciary resulting in a multi-billion dollar
judgment, it was not an abuse of the court’s equitable discretion in the matter of
costs to award costs to Chevron, including the lion’s share of the special masters’
fees, notwithstanding the disparity in resources between the parties.
25
costs related to the special masters’ fees because Chevron had failed to timely
seek allocation of those fees under an order from the district court. Therefore, he
argues, Chevron waived its right to recover those fees as costs at the conclusion
of the litigation.8 His argument is not persuasive.
As a preliminary matter, Chevron points out that Donziger did not follow
proper procedure when he raised this argument in letters and not in a motion.
That is true. However, given that the district court looked past its own
procedural rules to address Donziger’s timeliness argument on the merits,9 we
8
Donziger also argues that there was “clear evidence” that the special masters
were biased against him. Appellant’s Br. (18-855) at 54. This is an argument that
Donziger could have raised in his merits appeal, and thus may not be raised now
in this subsequent appeal. N. River Ins. Co., 63 F.3d at 164. Even if it were
properly before us, Donziger’s three-sentence argument – which only references
arguments that he made to the district court – is conclusory, which itself results
in waiver. “Issues not sufficiently argued in the briefs are considered waived and
normally will not be addressed on appeal.” Norton v. Sam’s Club, 145 F.3d 114,
117 (2d Cir. 1998). “Appellants do not preserve questions for appellate review by
merely incorporating an argument made to the district court by reference in their
brief.” Lederman v. N.Y.C. Dep’t of Parks and Recreation, 731 F.3d 199, 203 n.1 (2d
Cir. 2013) (internal quotation marks and alteration omitted).
9
In its order regarding costs, the district court noted that “[a]ll or substantially all
of [Donziger’s] arguments could be rejected on the ground that he disregarded
court rules in seeking review of the Clerk's actions” by, for example, filing letters
to the clerk and the judge instead of filing a formal motion. Supp. App’x (18-855)
at 120, 150. But the district court proceeded to look past its own rules to decide
the merits of his arguments regarding the taxation of the special masters’ fees. Id.26
review the district court’s decision. See Somlyo v. J. Lu-Rob Enterprises, Inc., 932
F.2d 1043, 1048-49 (2d Cir. 1991) (describing a district court’s “inherent discretion
to depart from the letter of the Local Rules” and reviewing the result).
Donziger contends that Chevron forfeited its right to certain special
masters’ fees “when it failed to timely seek allocation of those fees under a very
specific district court order.” Appellant’s Br. (18-855) at 53. That order, issued in
response to Donziger’s assertion that he could not afford to advance the special
masters’ fees, directed Chevron to advance those fees but allowed it to “move,
pursuant to Fed. R. Civ. P. 53(g)(3), for an allocation of part of the fees and costs
advanced by it” within 14 days after the submission of the special masters’ final
billings. J. App’x at 78. Chevron did not move for that allocation; instead it chose
to wait until the conclusion of the litigation to recover the special masters’ fees as
part of its award of costs.
Donziger argues that the district court’s order allowing Chevron to seek an
at 121 (“Accordingly, the application to review the taxation of costs – except as it
relates to the taxation of the special master fees and expenses which, as discussed
below, raises at least some issues that may be decided on the existing record and
without briefing – is, to the extent it is denied, denied based on Donziger’s failure
to comply with the Federal Rules of Civil Procedure and the local rules of this
Court.” (emphasis added)).
27
allocation of the interim costs as they were incurred was, in effect, mandatory.
Under his logic, because Chevron failed to avail itself of the opportunity to
request an allocation of the fees earlier in the litigation, it is now barred from
requesting the fees as costs at the conclusion of the litigation. The district court
found that Donziger’s interpretation of the order “makes little sense” because the
order was meant to give “Chevron the option, but not the obligation, to move to
recover on an interim basis any or all of the funds it advanced.” Supp. App’x (18-
855) at 149.
The district court’s interpretation of its order is reasonable; Chevron did
not waive its right to recover the special masters’ fees that it advanced
throughout the litigation. As the district court noted, the Federal Rules of Civil
Procedure give the district court authority to “allocate payment among the
parties after considering . . . the parties’ means,” and an interim allocation of
payment “may be amended to reflect a decision on the merits.” Fed. R. Civ. P.
53(g)(3). In addition, the Local Civil Rules provide that special masters’ fees “are
taxable as costs.” S.D.N.Y. R. 54.1(c)(8). After considering the district court’s
order alongside these rules, it is clear that the district court did not abuse its
discretion in awarding special masters’ fees as costs to Chevron at the conclusion
28
of the litigation. See United States ex rel. Evergreen Pipeline Constr. Co. v. Merritt
Meridian Constr. Corp., 95 F.3d 153, 171 (2d Cir. 1996) (“[I]f costs are authorized,
the determination of amounts is vested in the sound discretion of the district
court.”).
In summary, because Donziger failed to appeal the district court’s
judgment awarding costs to Chevron in the first instance, Donziger may
challenge in this appeal only the amount of costs taxed against him, as that
amount was ascertained after the conclusion of his first appeal. His only
argument in that regard is that Chevron waived its right to recover the special
masters’ fees, because it failed to take advantage of the district court’s order
providing it the option of moving to recover those costs piecemeal throughout
the litigation. However, the order did not require Chevron to proceed in that
manner, and the Federal Rules of Civil Procedure, as well as the Local Civil
Rules, allow the clerk to tax special masters’ fees as costs at the conclusion of the
litigation. The clerk did so, and the district court did not abuse its discretion
when it issued its supplemental judgment awarding $813,602.71 in costs to
Chevron.
29
III. Contempt
Prior to the district court’s contempt finding, Donziger argued that the
court’s post-judgment discovery rulings showed that it had “implicitly modified”
the Injunction as he understood it after the Stay Order. Appellant’s Br. (18-855) at
4, 32. Thus, he was ready to “respectfully go into civil contempt as necessary to
achieve an appeal on the merits of any alleged non-compliance with the modified
injunction.” Id. at 5. The court then held him in contempt. He appeals that
decision, arguing that the court erred because the Injunction did not clearly
prohibit his selling interests in the Ecuadorian Judgment to finance the litigation.
Because we find that the Stay Order created ambiguity as to what precisely
Donziger could no longer do to assist his clients in raising funds to continue their
litigation efforts, we agree that the contempt finding on that limited issue cannot
stand. See Drywall, 889 F.2d at 395 (holding that an injunction must leave “no
doubt in the minds of those to whom it [is] addressed . . . precisely what acts are
forbidden” to support a contempt finding).
Donziger does not challenge the district court’s numerous other contempt
findings in this appeal. See Appellant’s Reply Br. at 7 n.6. Thus, any objection
30
Donziger may have to those findings of contempt has been waived. See Norton v.
Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998). The district court’s judgment finding
Donziger in contempt of its orders in all respects other than his participation in
the sale of interests in the Ecuadorian Judgment (as distinct from interests in his
own right to a portion of that judgment as a contingent fee) is therefore affirmed.
A. The Injunction
The plain language of the Injunction as written is clear and expansive.
Paragraph one imposes “a constructive trust for the benefit of Chevron on all
property . . . which Donziger [had or would obtain] . . . that is traceable to the
[Ecuadorian] Judgment or the enforcement of the Judgment anywhere in the
world.” Sp. App’x at 1-2 (emphasis added). Thus, the most logical reading of this
paragraph is that it prohibits Donziger from selling any interest he might have in
the Ecuadorian Judgment because such funds would be “traceable to the
[j]udgment,” id., and subject to the constructive trust.
Paragraph five is also far reaching. It forbids Donziger “from undertaking
any acts to monetize or profit from the [Ecuadorian] Judgment . . . including
without limitation by selling, assigning, pledging, transferring or encumbering
31
any interest therein.” Id. at 3 (emphasis added). Standing alone, this language is
most plausibly read to prohibit Donziger from raising funds by selling interests
in the Ecuadorian Judgment to pay himself his retainer and use the funds thus
obtained for personal expenses because that would constitute his profiting from
the judgment by “selling . . . [an] interest therein.” Id.
Paragraph six of the Injunction made clear what it did not prohibit. The
district court evidently tailored the Injunction in light of its apparent
understanding that it lacked authority to restrain Donziger from attempting to
enforce the Ecuadorian Judgment abroad, see Chevron Corp. v. Naranjo, 667 F.3d
232, 243-44 (2d Cir. 2011) (noting that a court’s attempt to preclude the
enforcement of a foreign judgment in courts of other nations raises a grave
“international comity concern[]”), or to interfere with Donziger’s appeal of the
RICO Judgment. Thus, the Injunction explicitly allows Donziger to “fil[e] or
prosecut[e] any action for recognition or enforcement of the [Ecuadorian
Judgment] . . . in courts outside the United States” and continue to “litigat[e] this
action or any appeal of any order or judgment issued in this action.” Sp. App’x at
3.
32
Taken together, the terms of the Injunction at the time it was issued
enjoined Donziger from monetizing or profiting from the Ecuadorian Judgment.
It separately imposed a trust over Donziger’s property that was or would be
traceable to that judgment or its enforcement. Both of these provisions on their
face appear to prohibit his practice of selling interests in the judgment to pay
himself for legal work on the case. Finally, the Injunction was explicit in that it
did not restrain Donziger from attempting to enforce the judgment abroad or
limit Donziger’s appeal of the action.
Contrary to Donziger’s assertions, these terms are not facially inconsistent.
That the Injunction allows Donziger to continue pursuing enforcement of the
Ecuadorian Judgment abroad, which undoubtedly requires funding, does not
mean that Donziger could himself monetize or profit from the judgment in the
process of funding those efforts. Donziger could have continued his work by
being paid legal fees from funds that were not traceable to the Ecuadorian
Judgment. Nor would the Injunction preclude those of his clients who were not
initially bound by the Injunction from pursuing those efforts with the assistance
of other counsel retained on a contingency basis. In other words, it was possible
for Donziger and his clients to comply with the Injunction and continue litigating
33
their case.
Donziger clearly recognized at the time the RICO Judgment was entered
that the plain terms of the Injunction would affect his ability to continue to
fundraise by leveraging the Ecuadorian Judgment; he brought several concerns
about such effects to the court in his motion to stay. In his brief on the stay
motion, he asserted that the Injunction would deprive him of “his . . . ability to
work on” the case, which “constitutes [his] only personal source of earned
income.” J. App’x at 97. Specifically, he argued that “by broadly enjoining him
from undertaking any acts to monetize or profit from the [j]udgment,” the
Injunction would “obliterate his [law] practice.” Id. at 98 (internal quotation
marks omitted) (emphasis in original). Furthermore, he noted that the Injunction
also enjoined his co-defendants from monetizing the judgment, which would
leave them “without sufficient funds to finance any appeal of this action . . .
because even a contingency arrangement would monetize the judgment and
therefore violate the order.” Id. at 99.
That Donziger himself recognized that the Injunction would have dramatic
effects on his ability to monetize the Ecuadorian Judgment is further evidence
34
that the Injunction as written and issued was unambiguous in prohibiting that
conduct. See Drywall, 889 F.2d at 395 (concluding that a party’s complaint about
an injunction’s effect can be evidence that the injunction was clear as to those
effects). As he himself explained, the Injunction would have far reaching effects
on his ability to monetize the judgment and pay himself from the funds thus
raised to continue litigating this case on behalf of his clients. Standing alone, the
Injunction was unambiguous and would support a contempt finding if Donziger
sold interests in the Ecuadorian Judgment to pay himself retainer payments and
arrears.
B. The Stay Order
The district court, however, dismissed Donziger’s concerns in its Stay
Order. It assured him that his concerns were unfounded, stating “[n]othing in the
[Injunction] prevents Donziger from continuing to work on the Lago Agrio case.
Period.” Chevron Stay Opinion, 37 F. Supp. 3d at 658. It then went on to discuss
how Donziger could or could not be paid for such work.
1. Paragraph One
The court first discussed paragraph one of the Injunction. It recognized
35
that Donziger’s compensation for his work on the case was governed by a
retainer agreement that included both a monthly retainer and a contingent fee. In
discussing what Donziger was prohibited from doing, the court distinguished
payments to Donziger as part of his contingent fee from payments of the monthly
retainer, stating that while “any payments of a Contingent Fee would be ‘traceable
to the [Ecuadorian] Judgment,’ and thus subject to the constructive trust . . .[,] the
same would not be true of Monthly Retainer payments unless those payments
were traceable to the [Ecuadorian Judgment].” Id. (emphasis added). That
language, standing alone, could still be read as prohibiting Donziger from
receiving his monthly retainer if it were paid by funds raised by selling any share
in the judgment. But the very next sentence of the Stay Order identified monies
“traceable to the [Ecuadorian] Judgment” with “collections . . . funneled to
Donziger as retainer payments.” Id. (emphasis added). In full, that sentence
stated: “Thus, at least as long as no collections are made in respect of the
[Ecuadorian] Judgment and funneled to Donziger as retainer payments, the
[Injunction] would not prevent Donziger from being paid, just as he has been
paid . . . over the past nine or ten years.” Id. (emphasis added).
Beginning that sentence with “[t]hus” signals that it was meant to clarify
36
the previous sentence’s prohibition on paying the retainer from funds “traceable
to the [Ecuadorian] Judgment.” Id. The sentence goes on to describe what specific
types of payments are prohibited: those derived from collections on the
Ecuadorian Judgment channeled to Donziger in the form of retainer payments.
The district court next explained that “as long as no collections are made [on] the
[Ecuadorian] Judgment . . . the [Injunction] would not prevent Donziger from
being paid, just as he has been paid . . . over the past nine or ten years.” Id. This
language, which a reasonable person could interpret to mean that Donziger’s
monthly retainer payments could continue as long as no collection occurred,
introduced considerable ambiguity into the otherwise clear text of the injunction.
In the same vein, the court acknowledged that the Injunction would
prevent “the payment of any Contingent Fee to Donziger, as any such payment
would be traceable to the Judgment.” Id. But preventing contingent fees, the court
continued, would not keep Donziger from being paid for continuing the
litigation, because Donziger had been paid to litigate the case for years, without
receiving any contingent fees, and, since there was no prospect that the judgment
would be collected during the pendency of the appeal, the Injunction did not
prevent Donziger from carrying on as before. Id. at 658-59. Despite the
37
Injunction’s language imposing a constructive trust on all property “traceable to
the [j]udgment or the enforcement of the [j]udgment,” Sp. App’x at 2, the Stay
Order left open the possibility that Donziger could raise money as he had before,
and continue to be paid from the money he raised.
There is no question that those fundraising efforts over the past years had
included selling to investors shares in any eventual recovery. Such prior
fundraising was known to the district court. Indeed, in the Stay Order itself, the
district court clearly acknowledged its understanding that “[t]he litigation
against Chevron has been funded by investors in exchange for shares of any
eventual recovery,” Chevron Stay Opinion, 37 F. Supp. 3d at 660.
In sum, however paragraph one of the Injunction might have been best
construed on its face at the time it was issued, the Stay Order injected
considerable uncertainty into it.
2. Paragraph Five
The district court went on to assure Donziger that paragraph five, too, was
no obstacle to his pursuing the case, and being paid for his work – at least so long
as he was not cashing in on his contingent fee share of the judgment. Donziger
38
told the court that the Injunction’s prohibition on monetizing or profiting from
the Ecuadorian Judgment “would have [an] irreparable effect on . . . his law
practice.” Id. at 659. “But,” the district court emphatically said, “he is wrong.” Id.
The court explained:
The point of paragraph 5 . . . was to prevent
Donziger and the LAP Representatives from avoiding
the effect of the constructive trust imposed on assets in
their hands that otherwise would have been direct
proceeds of the [Ecuadorian] Judgment by selling,
assigning, or borrowing on their interests in the . . .
Judgment and thus at least confusing the issue of
traceability.
Id. at 659-60 (emphasis in original). The district court emphasized, in italics, that
those bound by the Injunction could not sell or assign their interests in the
judgment – not the interests of others. Indeed, that was “the [p]oint” of the
paragraph. Id. at 659.
The court went on to dismiss Donziger’s concern that the Injunction would
keep him from being paid for continued work on the case. It stressed that
Donziger himself acknowledged in his brief that the Injunction would deprive
him “of his interest in a case to which he has devoted the better part of the last
two decades.” Id. at 660 (internal quotation marks omitted) (emphasis in
39
original). The court explained that the “practical effect” of paragraph five was to
keep Donziger from“benefitting personally” by monetizing his interest – that is,
his contingent right under his retainer agreement to a share – in the Ecuadorian
Judgment, id., something that was not likely to occur given the small chance that
any collection on the judgment would occur during the period when the appeal
of the RICO Judgment was pending, which was the period for which the stay was
sought. To a reasonable reader, that statement too would confirm what the
district court itself said was the point of this portion of the Injunction: to prohibit
Donziger from monetizing his contingent fee interest in the judgment.
C. Contempt Finding
In May 2019, more than five years after the district court issued its Stay
Order, the court found Donziger in contempt for, inter alia, “rais[ing] money in
exchange for shares of his . . . client[s’] interest in [the Ecuadorian Judgment]” and
using the funds for his “personal benefit” instead of placing the funds in the
constructive trust. Sp. App’x at 186 (emphasis added). Donziger argues that he
reasonably relied on the Stay Order to interpret his responsibilities under the
Injunction. In his view, the district court’s contempt finding “radically changed . .
. the court’s prior interpretation” of its Injunction, as there is “no way to
40
reconcile” the Stay Order with the district court’s current interpretation of the
Injunction. Appellant’s Br. (19-1584) at 3.
Both the district court and Chevron note that the Stay Order lacked any
power to modify the Injunction because Donziger appealed the Injunction before
the Stay Order was issued. Thus, Chevron argues, “the plain meaning of the
terms of the [Injunction] must control.” Appellee’s Br. (19-1584) at 47. Even if the
Stay Order could have an effect on the Injunction, Chevron argues that
Donziger’s interpretation of the order is erroneous and would create absurd
results contrary to the Injunction’s “clear purpose.” Id. at 49.
The district court and Chevron are correct that the Stay Order could not
and did not modify the Injunction, but that is not the question that we are tasked
with deciding. While “[t]he filing of a notice of appeal . . . divests the district
court of its control over those aspects of the case involved in the appeal,” Griggs
v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982), what Donziger contends
happened here is not that the Stay Order modified the Injunction, but rather that
the Stay Order communicated the court’s interpretation of what the Injunction
prohibited. Thus, we are not asked to decide what is the best reading of the
Injunction; instead, we must answer whether the Injunction, as its terms were
41
conveyed to Donziger, “left no doubt in [Donziger’s] mind . . . precisely what acts
[were] forbidden.” Drywall, 889 F.2d at 395. Given the district court’s assurances
in its Stay Order, we hold it was not.
Far from a modification, the district court clearly believed its Stay Order
was consistent with the Injunction. In addressing Donziger’s various concerns,
the court, at several points, characterized those concerns as contrary to “the terms
of the [Injunction].” See, e.g., Chevron Stay Opinion, 37 F. Supp. 3d at 658. The
district court indicated that its Stay Order was written to explain the Injunction’s
“practical effect[s],” id. at 660, in response to Donziger’s concerns about those
effects. Surely the district court had the authority to explain its Injunction while it
was on appeal, and, in fact, “[w]hen the district judge who is being asked to
interpret an injunction is the same judge who entered it,” courts give “heavy
weight” to that interpretation on review. Schering Corp. v. Illinois Antibiotics Co.,
62 F.3d 903, 908 (7th Cir. 1995). In turn, the parties subject to that injunction
should be entitled to rely on the issuing court’s professed interpretation of it and
tailor their behavior accordingly.
The Stay Order injected ambiguity into an otherwise largely unambiguous
Injunction. While the Injunction forbid Donziger “from undertaking any acts to
42
monetize or profit from the [j]udgment,” including by selling interests in it, Sp.
App’x at 3, the court assured Donziger “the [Injunction] would not prevent [him]
from being paid, just as he ha[d] been paid” before, but that he could not be paid
from collections on the judgment. Chevron Stay Opinion, 37 F. Supp. 3d at 658.
Despite the Injunction’s creation of a constructive trust on all property “traceable
to the [j]udgment or the enforcement of the [j]udgment,” Sp. App’x at 2 – words
that could reasonably be read to include funds raised by selling interests in the
judgment – the Stay Order pronounced that “[n]othing in the [Injunction]
prevents Donziger from continuing to work on the . . . case. Period.”, Chevron
Stay Opinion, 37 F. Supp. 3d at 658, and that he could continue to be paid his
monthly retainer from funds raised to pursue the litigation, “as he ha[d] been
paid” in the past, id., which both the district court and Donziger knew to be by
monthly retainer payments drawn from funds largely raised by selling to
investors contingent shares in any eventual judgment.
Given the district court’s own interpretation of the Injunction, it was not
unreasonable for someone in Donziger’s position to believe that he could
continue monetizing his clients’ interests in the Ecuadorian Judgment and pay
himself with those proceeds because, as the district court itself noted, that is how
43
the case “always has been financed.” Id. at 662. But, five years after the district
court issued the Stay Order, it found him in contempt for (among other things)
doing exactly that.
An Injunction must comply with Federal Rule of Civil Procedure 65(d)(1),
which requires that “[e]very order granting an injunction . . . must . . . state its
terms specifically; and describe in reasonable detail . . . the act or acts restrained
or required.” And, critically, a party may be in contempt only for a violation of “a
clear and unambiguous order.” Drywall, 889 F.2d at 395. Thus, the central
question on review of a contempt order is whether the injunction “left no doubt
in the minds of those to whom it was addressed . . . precisely what acts [were]
forbidden.” Id. Read in light of the Stay Order, the Injunction failed to accomplish
that.
Chevron argues that Donziger’s interpretation of the Stay Order is too
narrow and would render portions of the Injunction ineffective. It further
contends that the interpretation is inconsistent with the district court’s listing of
“all rights to any contingent fee” as an example of property traceable to the
Ecuadorian Judgment. Sp. App’x at 2. Chevron also takes issue with Donziger’s
interpretation of paragraph five’s prohibition on monetizing and profiting from
44
the judgment, arguing that the Injunction and Stay Order allow Donziger to
continue his work as a lawyer on this case (by, for example, receiving charitable
donations to support his work), but it prohibits him from accepting any funds
traceable to the Ecuadorian Judgment as a profit.10
Chevron is correct that Donziger’s interpretation of “traceable” is not well
supported by the text of the Injunction. But his interpretation is consistent with
the Stay Order, which was the district court’s authoritative explanation of what
the Injunction prohibited Donziger from doing, issued in direct response to
Donziger’s argument that the Injunction, given its literal meaning, was so broad
that it should be stayed pending this Court’s review. The Injunction, the court
explained, permitted Donziger to continue to be paid “just as he ha[d] been,” i.e.,
by selling interests in the judgment, as long as he was not paid by collections on
the judgment. Chevron Stay Opinion, 37 F. Supp. 3d at 658. The district court
recognized that Donziger’s compensation for his work on the Ecuadorian case
was governed by a retainer agreement that included both a monthly retainer and
10
Chevron also contends that the district court’s findings under paragraph one
are irrelevant because the district court “rest[ed] its [contempt] decision on”
Donziger’s violations of paragraph five. Sp. App’x at 197. However, in its
Contempt Order, the district court explicitly held Donziger in “violation of
paragraphs 1 and 5 of the [Injunction].” Id. at 201 (emphasis added).
45
a contingent fee. The court made clear that “any payments of a Contingent Fee”
were subject to the Injunction. Id. It then contemplated that some monthly
retainer payments could be “traceable to the [Ecuadorian Judgment],” id., but
that not all retainer payments were prohibited. Finally, it explained that Donziger
could continue to be paid his monthly retainer as long as the funds were not
“collections . . . made in respect of the [judgment].” Id. The district court clearly
contemplated not only that Donziger could continue working on this case, but
that he could continue to be paid for his work as he previously had – with funds
raised by selling interests in the judgment.
Finally, Chevron argues that the Stay Order confirms that the Injunction
prohibited Donziger from selling any interest in the judgment, not just his own.
The Stay Order says no such thing. In fact, it indicates Donziger and the LAP
Representatives were prohibited only from “selling, assigning, or borrowing on
their interests in the [Ecuadorian] Judgment,” id. at 660 (emphasis in original),
suggesting that they could sell other interests in the judgment. That is what
Donziger did here.
“The judicial contempt power is a potent weapon,” Int’l Longshoremen’s
Ass’n, Local 1291 v. Phila. Marine Trade Ass’n, 389 U.S. 64, 76 (1967), limited by a
46
“more rigorous” abuse of discretion review to cases in which the injunction left
“no doubt . . . precisely what acts [were] forbidden,” CBS, 814 F.3d at 98, quoting
Drywall, 889 F.2d at 395 (emphasis added). However clear the original language
of the Injunction, the Stay Order muddied the waters. Donziger argued that the
Injunction should be stayed because it limited his activities in ways that he
contended would be irreparable if he succeeded in overturning the order on
appeal. The district court assured him that it would not limit him in those ways,
and Donziger was entitled to rely on those assurances. The Stay Order made
clear that it was the district court’s intention to “preclude Donziger . . . from
profiting from the misdeeds for which [he was] responsible” and from
“benefitting personally, at Chevron’s expense.” Chevron Stay Opinion, 37 F. Supp.
3d at 655, 660. But, whatever the district court's intention might have been, the
language in the Stay Order was not “clear and unambiguous” in prohibiting
Donziger’s fundraising activities. U.S. Polo Ass’n, Inc., 789 F.3d at 33. By finding
Donziger in contempt for continuing those activities, the district court exceeded
the bounds of its discretion.11
11
Our dissenting colleague reads the Injunction and Stay Order and offers an
interpretation of the two documents under which they are “entirely consistent.”
Dissent at 6. We do not suggest that his reading is unreasonable. But the question
47
Lest this Opinion be taken as somehow vindicating Donziger, it is
important to put our holding in context. Our ruling today has no effect on, and
does not in any way call into question, the district court’s thorough and fully
persuasive fact findings and legal conclusions, which we have already affirmed
in full, establishing Donziger’s violations of law and ethics that added up to a
pattern of racketeering in violation of the RICO statute. Nor does it question in
any way the district court’s conclusions that Donziger acted in contempt of the
Injunction that resulted from the RICO Judgment in numerous ways. Indeed,
except with respect to the very specific alleged violation of the Injunction
discussed in this Opinion, Donziger does not even attempt to challenge the
district court’s findings of his contumacious conduct.
Nor should there be any mistaken conclusion that this Opinion somehow
authorizes any continued belief on Donziger’s part that the Injunction permits,
before us is not whether his interpretation is reasonable, or even whether it might
be the most reasonable reading of the district court’s intentions. The question
rather is whether, after the district court’s assurances in its Stay Order, someone
in Donziger’s position could reasonably conclude that the sanctioned conduct
was allowed. We conclude that, in light of the Stay Order, a reasonable person
could have so interpreted the injunction, and that until that ambiguity was
dispelled, a finding of contempt for acting in a manner consistent with that
interpretation cannot be sustained. Nothing in the dissent persuades us
otherwise.
48
going forward, his prior practice of continuing to receive legal fees, or to profit in
any manner from the sale of interests of any kind in the Ecuadorian Judgment.
Let us be very clear about what we are not holding, and about what Donziger can
– and more importantly cannot – now reasonably believe about his actions going
forward. Whatever ambiguity existed in the period between the issuance of the
Stay Order and the contempt adjudication most emphatically no longer exists.
The district court made clear in its Contempt Order that the Injunction prohibits
Donziger from monetizing others’ interests in the Ecuadorian Judgment and
paying himself with those proceeds. That interpretation, as we have emphasized
throughout this Opinion, is fully consistent with the actual text of the Injunction.
Moreover, as we concluded in Chevron II, the issuance of an injunction of that
breadth was entirely justified by the district court’s well supported fact findings,
and was well within the bounds of its remedial discretion. Any ambiguity that
Donziger may have perceived in the Injunction on the basis of the district court’s
statements in the Stay Order has now been resolved, and any loophole he may
have seized upon in the language of the Stay Order has been closed.12 Moving
12
In any event, the non-appearing defendants have since been enjoined from
selling their own interests in the Ecuadorian Judgment, as the district court found
them in default and entered an identical injunction against them. For that reason
49
forward, Donziger should have “no doubt,” Drywall, 889 F.2d at 395, that he can
no longer sell any interests in the Ecuadorian Judgment for any reason, and use
the proceeds for his benefit, whether for business or personal expenses or as part
of a monthly retainer or arrears, or profit from such sales in any way whatsoever,
without violating the Injunction and risking a contempt finding.
We cannot, however, uphold a contempt finding on the basis of conduct
that, at the time it was committed, could reasonably have been construed as
outside the terms of the Injunction as the district court had explained it in
denying a stay of the Injunction pending appeal.
D. Remedy
To remedy Donziger’s contempt, the district court sanctioned Donziger in
the amount of $666,476.34 for “profiting in [that amount] from the sale of
as well, it can no longer be argued that Donziger is entitled to profit from the sale
of their interests in the Ecuadorian Judgment. Because the district court did not
distinguish, in its contempt finding, between Donziger’s actions before and after
the default judgment was entered, and because Chevron does not argue that the
finding can be sustained based solely on his actions after that date, we need not
and do not address whether a contempt finding could have been sustained based
on the theory that payments received by Donziger after the date of the default
judgment can be traced specifically to sales of interests in the Ecuadorian
Judgment that took place after the default judgment was entered.
50
interests in the Ecuador[ian] Judgment and his failure to assign and transfer to
Chevron that profit.”13 Sp. App’x at 213-14. It then awarded Chevron reasonable
attorneys’ fees for successfully prosecuting its motions to hold Donziger in
contempt for his violations. Chevron’s request for attorneys’ fees sought
reimbursement for all fees incurred in prosecuting its contempt motions, without
distinguishing amounts attributable to pursuing different theories of contempt.
The district court granted the request in full, awarding Chevron $3,433,384.30 in
attorneys’ fees.
Because we reverse the district court’s contempt finding as to Donziger’s
violation of paragraphs one and five of the Injunction for monetizing the non-
appearing defendants’ interests in the Ecuadorian Judgment, we must vacate the
associated relief. See, e.g., E.E.O.C. v. Local 638 . . . Local 28 of Sheet Metal Workers’
Int'l Ass’n, 753 F.2d 1172, 1181 (2d Cir. 1985) (vacating relief where the
underlying contempt was vacated). Thus, the district court’s sanction in the
13
The district court also imposed coercive fines to compel Donziger to assign to
Chevron all of his rights to any contingent fee and to comply with the forensic
inspection order. Donziger failed to challenge the underlying contempt finding
for failing to assign those interests, so we do not disturb the district court’s
sanctions related to that finding.
51
amount of $666,476.34 is VACATED.14
We also vacate an award of attorneys’ fees when an underlying finding of
civil contempt is reversed. See, e.g., New York State Nat’l Org. for Women v. Terry,
41 F.3d 794, 797 (2d Cir. 1994) (vacating attorneys’ fees when the underlying
contempt was vacated). Here, however, the district court’s award of attorneys’
fees covers work for findings that we affirm on appeal. Therefore, we REMAND
to the district court to reassess Chevron’s request for fees based on the contempt
14
The district court calculated its sanction from data presented in a forensic
financial investigator’s analysis of Donziger’s bank accounts. It found that “[t]he
evidence shows that from January 1, 2016 to June 30, 2018, $1,315,973.31 was
deposited into Donziger’s accounts from external sources. Approximately
$1,242,985.00 of that amount came from investors.” Sp. App’x at 200. Of those
funds, Donziger received at least $666,476.34 “in his personal capacity either
through direct payments of invoices or through payments to cover personal
expenses.” Id. at 201. As noted above, we take no position as to whether Donziger
could be held in contempt for any actions he took or payments he received after
April 23, 2018, the date of the default judgment and injunction against the non-
appearing defendants, who, of course, were the only individuals with any
interest in the Ecuadorian Judgment on which Donziger could have reasonably
believed, between the date of the Stay Order and the imposition of a parallel
injunction against them, that he was permitted to raise money. We vacate the
entire sanction because it is not clear on this record how much, if any, of the
$666,476.34 was traceable to fundraising activities that followed the April 23, 2018
injunction.
52
findings upheld on appeal.15
CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s supplemental
judgment in the RICO action awarding costs to Chevron, and DISMISS as moot
Donziger’s interlocutory appeal of orders entered during the pendency of the
contempt proceedings (Docket No. 18-2191). We AFFIRM the district court’s
contempt findings, with the following exception. We REVERSE the district
court’s contempt finding as to Donziger’s sale of interests in the Ecuadorian
Judgment other than of interests in his contingent share of that judgment, and
VACATE the supplemental judgments awarding Chevron $666,476.34 in
compensatory sanctions related to that erroneous finding and attorneys’ fees. We
REMAND the matter to the district court to determine the fees reasonably
expended to secure the contempt findings affirmed on appeal, and for any
further proceedings consistent with this Opinion.
15
While Donziger takes issue with the district court’s calculation of the attorneys’
fees as a “blend” of work done on the contempt findings collectively, he does not
challenge the reasonableness of the award. Appellant’s Br. (19-1584) at 24-25.
53
Richard J. Sullivan, Circuit Judge, dissenting in part:
I join the majority’s opinion in all respects except for its conclusion that the
district court erred in finding Donziger in contempt for selling interests in the
Ecuadorian Judgment. Even under this Court’s “more exacting” standard
applicable to contempt orders, Perez v. Danbury Hosp., 347 F.3d 419, 423 (2d Cir.
2003), I cannot agree that the district court abused its discretion in determining
that Donziger’s financing activities violated the court’s March 2014 injunction (the
“Injunction”).
Like the majority, I agree that “[t]he plain language of the Injunction as
written is clear and expansive,” and that, “[s]tanding alone, the Injunction was
unambiguous and would support a contempt finding if Donziger violated the
order by selling interests in the Ecuadorian Judgment to pay himself retainer
payments and arrears.” Majority Op. at 31, 35. I am simply not persuaded that
the district court’s April 2014 stay order (the “Stay Order”) somehow obscured the
Injunction’s unambiguous language so that it created “doubt in the minds of those
to whom it was addressed . . . precisely what acts [were] forbidden.” Drywall
Tapers & Pointers of Greater N.Y. v. Loc. 530, 889 F.2d 389, 395 (2d Cir. 1989); see
Majority Op. at 42.
1
As an initial matter, the Stay Order made clear that Donziger’s work as a
lawyer on the Chevron case was permissible, but that any attempts to profit from
the Ecuadorian Judgment were not. In Donziger’s motion for a stay pending
appeal, Donziger’s counsel claimed that the Injunction “threaten[ed] to destroy
Mr. Donziger’s law practice and thereby deprive him of his means of earning a
livelihood and providing for his family.” Dist. Ct. Dkt. 1888 at 16. In response,
Chevron argued that “the [I]njunction d[id] not prevent Donziger from practicing
law – it preclude[d] him from continuing and profiting from illegal conduct.” Dist.
Ct. Dkt. 1893 at 17. The district court agreed with Chevron. In the Stay Order, the
district court wrote in no uncertain terms:
The [Injunction], including paragraph 5, in fact would
deprive Donziger of the ability to profit from the
[Ecuadorian] Judgment that he obtained by fraud. The
practical effect of that, however, . . . is not to prevent him
from working on the case nor to prevent him from being
paid his monthly retainer for his labors. It is to prevent
him from benefitting personally, at Chevron’s expense, from
property traceable to that fraudulent Judgment.
Chevron Corp. v. Donziger, 37 F. Supp. 3d 653, 660 (S.D.N.Y. 2014) (“Stay Opinion”)
(emphasis added). The district court therefore acknowledged Donziger’s concerns
and clarified that he could continue to work as a lawyer and be paid for his
services. But the logical inference from the Injunction and the Stay Order is that
2
such payments could not come from property that is “traceable to” the Ecuadorian
Judgment. Id.The majority reasons that the Stay Order interpreted “traceable to” to mean,
essentially, only those funds that were actually collected on the Ecuadorian
Judgment. Majority Op. at 36–37. The majority then concludes that the type of
financing at issue here – selling interests in the Ecuadorian Judgment other than
Donziger’s own contingency fee interest – does not constitute a “collection[] on the
Ecuadorian Judgment channeled to Donziger in the form of retainer payments,”
and that it was therefore reasonable for Donziger to believe he could receive those
funds without violating the Injunction. Id. at 37–38.
There are two problems with the majority’s analysis. First, it is by no means
clear that the Stay Order so narrowly interpreted the phrase “traceable to.”
Certainly, the ordinary meaning of “traceable” is broad enough to cover not only
those funds that were actually collected on the Ecuadorian Judgment, but also
those funds that were generated by selling interests in that judgment – no matter
who owned those interests. See, e.g., United States v. Gordon, 710 F.3d 1124, 1135
n.13 (10th Cir. 2013) (explaining that property is “traceable to” a cause when the
property’s “acquisition is attributable to” that cause (internal quotation marks
3
omitted)); see also United States v. Voigt, 89 F.3d 1050, 1087 (3d Cir. 1996) (“‘traceable
to’ means exactly what it says”). And while the Stay Order does discuss
“collections” on the Ecuadorian Judgment, see Stay Opinion, 37 F. Supp. 3d at 658,
it does not suggest that the phrase “traceable to” is limited solely to collections.
Indeed, the Stay Order regularly uses broad language that indicates just the
opposite, such as when it explains that the Injunction “does not limit efforts to
enforce the [Ecuadorian] Judgment outside the United States, even by Donziger,”
but that “[i]t does, of course, limit the personal ability of Donziger . . . to profit from
such efforts.” Id. at 665 & n.51 (emphasis added).
Second, and more importantly, even if the Stay Order could be read as
narrowing the meaning of “traceable,” nothing in that order can reasonably be
read to suggest that Donziger himself could engage in financing efforts involving
the Ecuadorian Judgment. As the district court explained in its 2019 contempt
order, “Donziger raised [the money] himself by selling interests in [the Ecuadorian
Judgment] to investors.” Chevron Corp. v. Donziger, 384 F. Supp. 3d 465, 500
(S.D.N.Y. 2019) (“Contempt Opinion”). “He then controlled the flow of those
funds,” which he deposited into his own bank and credit card accounts. Id.; see
also id. at 499 (“[Donziger] had substantially unfettered control over the funds . . . ,
4
including the discretion to pay himself with that money whenever he wished.”).
So, while the Stay Order made clear that the Injunction did not prevent Donziger
“from continuing to work on the Lago Agrio case” as a lawyer, Stay Opinion, 37 F.
Supp. 3d at 658, the Stay Order nowhere suggested that Donziger could act as a
financier, selling off interests in his clients’ eventual recovery for his own benefit.
That sort of activity was plainly prohibited by paragraph 5 of the Injunction, which
barred Donziger from “undertaking any acts to monetize or profit from the
[Ecuadorian] Judgment,” including “by selling, assigning, pledging, transferring
or encumbering any interest therein.” Sp. App’x at 3.
Similarly, while the majority is correct that the Stay Order permitted a
certain degree of litigation financing by the non-representative Ecuadorian
plaintiffs (the “LAPs”), see Majority Op. at 37–38, nothing in that order suggests
that the LAPs could outsource such financing efforts to Donziger himself. Indeed,
in discussing the litigation financing that had taken place prior to the Injunction,
the district court wrote:
The litigation against Chevron has been funded by
investors in exchange for shares of any eventual
recovery. In fact, the LAPs have raised at least $15.99
million and perhaps $21 million or more from such
sources. At least $7.5 million of that amount has been
paid to U.S. counsel, much of it to firms representing the
5
LAPs. Nothing in the [Injunction] prevents the LAPs
(other than the two LAP [r]epresentatives who are named in
the [Injunction]) and their allies from continuing to raise
money in the same fashion.
Stay Opinion, 37 F. Supp. 3d at 660–61 (emphasis added). This passage plainly
states that the Injunction prohibited “the two LAP [r]epresentatives” – and, by
extension, Donziger, since the Injunction subjected him to all of the same
restrictions as the LAP representatives – from inducing “investors [to] exchange
[cash] for shares of any eventual recovery.” Id. at 660. 1 That is precisely the type
of financing that Donziger engaged in here, which resulted in the district court’s
contempt finding. Again, the Injunction was crystal clear on this point, prohibiting
Donziger from “undertaking any acts to monetize or profit from the [Ecuadorian]
Judgment,” Sp. App’x at 3, and the Stay Order in no way contradicted that
emphatic language.
At bottom, the district court’s 2014 Stay Order is entirely consistent with the
broad and unequivocal language of the Injunction – which we all agree prohibited
Donziger from selling interests in the Ecuadorian Judgment, no matter who
1As the district court explained in its contempt order, this passage applied with equal force to
Donziger: “[h]is name did not appear in the quoted passage . . . only because that passage was
addressed to an argument made only by the LAP [r]epresentatives.” Contempt Opinion, 384 F.
Supp. 3d at 496.
6
originally owned those interests. By reading the Stay Order as somehow
“mudd[ying] the waters” of that broad and unequivocal Injunction, Majority Op.
at 47, the majority’s opinion invites future litigants – and Donziger himself – to
supply their own mud in order to evade the scope of similarly (and necessarily)
restrictive judgments.
It is true that “[t]he judicial contempt power is a potent weapon.” Int’l
Longshoremen’s Ass’n, Loc. 1291 v. Phila. Marine Trade Ass’n, 389 U.S. 64, 76 (1967).
But it is also a necessary one, which courts must be able to invoke to “protect[] the
due and orderly administration of justice and [to] maintain[] the authority and
dignity of the court.” Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980)
(internal quotation marks omitted). Because I cannot agree that the district court
abused its discretion by invoking that power here – in response to Donziger’s
blatant profiting from the Ecuadorian Judgment he obtained through fraud – I
respectfully dissent.
7