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Donziger’s Contempt Conviction in Chevron Fraud Case Upheld

June 22, 2022, 6:56 PM

The criminal contempt conviction and six-month sentence of attorney Steven Donziger for not complying with court orders in a fraud and racketeering case involving Chevron Corp.'s operations in Ecuador and the $8.6 billion judgment Donziger won against the company were upheld by the Second Circuit Wednesday.

Donziger challenged the US District Court for the Southern District of New York’s appointment of special prosecutors to pursue the criminal contempt case, saying it violated the appointments clause of the US Constitution. The court appointed the special prosecutors because the local US attorney respectfully declined to take the case.

The appointments clause gives the president authority to nominate, and with advice and consent of the senate, appoint officers of the US, whose positions are established by law. But it also says that Congress may vest the appointment of inferior officers in the president, the courts of law, and heads of departments, the US Court of Appeals for the Second Circuit said.

Rejecting Donziger’s challenge, the opinion by Judge Michael H. Park made clear that special prosecutors are officers under the appointments clause. They are analogous to independent counsel, and their duties extend beyond the person appointed, Park said.

Although a special prosecutor serves only for a limited time, the position isn’t transient or fleeting because it can last for years, the court said. A special prosecutor’s duties are also more than incidental to regular government operations because prosecution generally is a core power of government and prosecution of contempt specifically vindicates the authority of the court, it said.

The court further noted that the attorney general supervises special prosecutors.

Donziger also argued that Federal Rule of Criminal Procedure 42(a), under which his special prosecutor was appointed, doesn’t satisfy the requirements of the appointments clause. Rejecting the argument, the court said that the district court didn’t plainly err by relying on US Supreme Court precedent to make the appointment.

Judge William J. Nardini joined the opinion.

Dissenting, Judge Steven J. Menashi said that the executive branch has exclusive and absolute authority to decide whether to prosecute a case and the district court made the decision in this case. He also said that Congress never authorized the court to make the appointment.

Glavin PLLC and Seward & Kissel LLP represented the special prosecutors. Zuckerman Spaeder LLP, Offit Kurman, Ronald L. Kuby of New York, the Water Protector Legal Collective, and Stephen I. Vladeck of Austin, Texas, represented Donziger. The Department of Justice represented the US.

The case is United States v. Donziger, 2d Cir., No. 21-2486, 6/22/22.

To contact the reporter on this story: Bernie Pazanowski in Washington at bpazanowski@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com