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Chevron Corp. v. Donziger

United States District Court, S.D. New York

February 28, 2018

STEVEN DONZIGER, et al., Defendants.

          Randy M. Mastro Andrea Neuman William E. Thompson GIBSON DUNN & CRUTCHER LLP Attorneys for Plaintiff

          Steven Donziger THE LAW OFFICES OF STEVEN DONZIGER Attorney for Defendant Steven Donziger


          LEWIS A. KAPLAN, District Judge.

         This Court found after a lengthy trial that Steven Donziger and his co-conspirators attempted to extort billions of dollars from Chevron Corporation. They did so by, among other things, violating the Racketeering Influenced and Corrupt Organizations Act (“RICO”), [1] foisting fraudulent evidence on an Ecuadorian court, coercing Ecuadorian judges, illegally writing all or much of the Ecuadorian court's purported decision, and then procuring the signature of an Ecuadorian judge on a $19 billion judgment against Chevron that the co-conspirators had written, in part by the promise of a $500, 000 bribe. This Court found also, and independently of RICO, that Donziger's actions were wrongful under the common law.

         The details of this extraordinary behavior are contained in extensive findings. The judgment specifically provided, in words relevant here, that “Chevron shall recover of Donziger and the LAP Representatives, [2] and each of them, jointly and severally, the costs of this action pursuant to Fed.R.Civ.P. 54(d)(1) and 28 U.S.C. § 1920.”[3]

         While Donziger appealed from the judgment, he challenged neither the factual findings nor the costs provision of the judgment. The entire judgment was affirmed by the Court of Appeals, which commented that “[t]he record in the present case reveals a parade of corrupt actions by the LAPs' legal team [i.e., Donziger and his co-conspirators], including coercion, fraud, and bribery, culminating in the promise to [the Ecuadorian judge, ] Judge Zambrano[, ] of $500, 000 from a judgment in favor of the LAPs.”[4] Insofar as Donziger is concerned, the case is over save for the matters of costs and attorney fees.

         Having prevailed in the litigation, Chevron gave notice of taxation of costs against Donziger and the LAP Representatives.[5] The Clerk taxed costs in the total amount of $944, 463.85, which consisted of fees and expenses of special masters in the amount of $872, 387.63, fees for service of papers of $1, 550, interpreters' costs of $23, 400, and court reporter fees of $47, 126.22.[6]

         Donziger[7] (though not the LAP Representatives) now seeks review of the Clerk's taxation by a letter filed electronically on August 16, 2017.[8] He contends that no costs should be awarded against him for various reasons and, in any case, that the special master fees and expenses should not be taxed because Chevron forfeited any right to recover them by its alleged failure to comply with an earlier procedural order of the Court.

         The Proceedings Thus Far and Donziger's Contentions

         Proceedings as to Costs - The Clerk's Office

         Chevron filed its notice of taxation of costs on December 5, 2016, not long after the docketing of the mandate affirming the judgment.[9] Following that filing, Donziger moved to hold taxation of costs in abeyance pending the outcome of a petition for a writ of certiorari.[10] The Court obliged. But the Supreme Court denied certiorari on June 19, 2017. Chevron on the same day moved to reactivate both its attorneys' fee motion and proceedings to tax costs.[11] Donziger did not object to that motion. On July 17, 2017, the Court directed the Clerk to tax costs.[12]

         Although Dongizer had not objected to the reactivation of proceedings to tax costs, his position changed after that motion was granted. On August 1, 2017, he wrote to the Clerk, arguing that taxation of costs should “be held in abeyance pending resolution of a number of critical and related legal and factual issues that are now pending or will soon be presented to the district court.”[13] These were (1) Donziger's contention that any award of attorneys' fees under RICO is foreclosed by Circuit precedent, [14] (2) his vaguely described and unsupported assertion that “a variety of appropriate judicial bodies, both in this jurisdiction and others” may consider whether Chevron “and its counsel knowingly suborned perjury, obstructed justice, violated numerous federal laws, and committed a fraud on this court with respect to the testimony of [trial witness] Alberto Guerra, ”[15] (3) Donziger's assertion that Chevron forfeited its right to seek recovery of the special masters' fees and compensation by failing to make a timely motion under the Court's July 9, 2013 order, [16] (4) a contention that the recovery of attorneys' fees and costs “to attack and to try to disable adversary counsel [would be] in violation of the First Amendment, ”[17] and (5) an assertion that all further post-judgment proceedings against him should be moved to another court because the then-chair of the Grievance Committee of this Court allegedly had referred his conduct to the Departmental Disciplinary Committee of the First Department of the New York Supreme Court in an alleged letter that Donziger has not produced.[18] None of Donziger's contentions was supported by any affidavit, declaration or exhibits.

         The Clerk declined to hold the taxation of costs in abeyance, which was entirely appropriate given the Court's prior direction to “proceed to tax costs.”[19] Accordingly, costs were taxed on August 8, 2017.[20]

         Proceedings as to Costs - The Present Position

         The procedure for objecting to costs taxed by a district court clerk is specified in Rule 54(d)(1) of the Federal Rules of Civil Procedure - “On motion served within the next 7 days, the court may review the clerk's action.” As costs were taxed on August 8, Donziger had until August 15 to file a motion seeking review of the Clerk's action. In fact, as discussed above, he never did file a motion. Rather, on August 16, 2017, the day after such a motion would have been due, he electronically filed a letter objecting to the Clerk's actions.[21] The letter was largely a reprise of Donziger's August 1 letter to the Clerk. But he added to it by (1) “insist[ing]” that the undersigned recuse himself, [22] (2) asserting that Chevron should bear its own costs because it despoiled the Ecuadorian rain forest, [23] and (3) contending that Donziger has limited means and therefore ought not to bear any costs in this matter.[24]

         Taken together, Donziger's letters purport to articulate reasons that no costs should be taxed against him and, in any case, that Chevron forfeited any right to recover the special master fees and expenses. He has not challenged specifically any of the other items of costs taxed. With respect to the special masters, however, one point warrants particular note in order to understand the proceedings.

         Chevron's bill of costs contained copies of the bills it had paid for the compensation and expenses of the special masters and their assistant. In the case of one of the two special masters, former Magistrate Judge Katz, the material included detailed, contemporaneous time records. In the case of the other, Max Gitter, Esq., it included invoices showing the hours worked and the billing rates but not time detail.[25] Accordingly, by order dated November 9, 2017, the Court (1) required that Mr. Gitter and Cleary, Gottlieb provide Donziger and the Court with “time records (including any description of services the existing records contain) sufficient to show the services rendered that were . . . included in the bill of costs taxed by the Clerk, ” and (2) requested that the special masters make a recommendation with respect to the allocation of the special master costs as between the defendants and Chevron.[26] Donziger then was given until December 4, 2017 to object to the reasonableness of the hours devoted to the services performed by any or all of the special masters or their assistant and until December 23, 2017 to object to the special masters recommendation.[27]

         The special masters furnished the necessary time records to Donziger on November 21, 2017, [28] and filed their report and recommendation on the recommended allocation of their fees and costs on December 8, 2017.[29] Donziger filed no timely objection to either. Accordingly, the Court (1) found that the hours for and the hourly rates at which the special masters and their assistant billed were reasonable and appropriate, [30] and adopted the findings set forth in the special masters' report while reserving to itself the decision whether to tax all costs against the defendants or, if not, the manner in which the costs would be apportioned.[31] In each case, Donziger - despite his failure to object prior to the Court's ruling - thereafter submitted an intemperate, unsupported and hyperbolic letter complaining of the Court's determination.[32]

         On January 12, 2018, the special masters submitted an invoice for the work they performed in preparing the report of December 8.[33] That invoice is not at issue here, as it was not, and could not have been, included in the bill of costs now under review.


         I. Donziger's Objections to the Taxation of Costs Fail to Comply With Court Rules

         Donziger's application to review the Clerk's taxation of costs fails in material respects to comply with the Federal Rules of Civil Procedure and the rules of this Court.

         The application was made by means of a letter filed electronically. Rule 54(d)(1) provides that review of a clerk's taxation of costs is to be by motion. Local Civil Rule 7.1(a), with exceptions not here relevant, requires that motions be brought on by notice of motion or order to show cause and that they be accompanied by memoranda of law and “[s]upporting affidavits and exhibits thereto containing any factual information and portions of the record necessary for the decision of the motion.” Section 13.1 of the Court's ECF Rules and Instructions make clear that the Court's letter motion practice, which applies to other sorts of mostly routine procedural applications, does not permit letter motions to review taxation of costs.[34]

         These rules serve important purposes. The requirement of affidavits, exhibits, and memoranda of law - rather than unsworn letters and other informal submissions - serves to place before the Court evidence, legal authority and argument “necessary for the decision of the motion.” Accomplishment of that purpose is especially important here, as Donziger relies on (a) factual assertions that go well beyond the record in this case which, in any event, is enormous, and (b) legal contentions, the basis for which, if there is any, is far from self evident. Yet Donziger has not supported his contentions with the materials the rules require.

         These deficiencies cannot be overlooked on the theory that Donziger is representing himself. Donziger is a graduate of the Harvard Law School and, according to the attorney search function of the website maintained by the New York Unified Court System, a member of the New York Bar for twenty years.[35] He is not entitled to any special indulgence as a pro se litigant.[36]

         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, based on Donziger's failure to comply with the Federal Rules of Civil Procedure and the local rules of this Court. The Court nevertheless considers all of Donziger's arguments, based on such materials as are readily at hand, to determine whether they would have been meritorious had they been presented properly. Even on that basis, however, he would fail in substantially all respects. Hence, the ruling on this motion rests on alternative grounds.

         II. Donziger's Arguments to Hold Costs in Abeyance

         Donziger's letter to the Clerk requested that she hold the taxation of costs in abeyance. While the letter thus ostensibly went to the timing rather than the substance of the taxation process, in fact only three of the several arguments he made there actually addressed the question of timing. Everything else went to the merits. We deal first with the timing arguments.

         A. The Claim that Attorneys' Fees Are Foreclosed by Circuit Precedent

         Among the bases for Donziger's attempt to have the Clerk hold costs in abeyance was the argument that Circuit precedent forecloses attorneys' fees in this case.[37] The argument is a non sequitur. Even if, as Donziger claims, Circuit precedent concerning attorneys' fee awards in civil RICO cases forecloses such an award in this case, it has nothing to do with the taxation of costs under Rule 54(d)(1).

B. The Assertion that “A Variety of Appropriate Judicial Bodies, Both in this Jurisdiction and Others” May Consider Whether Chevron “and Its Counsel Knowingly Suborned perjury, Obstructed Justice, Violated Numerous Federal Laws, and Committed a Fraud on this Court With Respect to the Testimony of Alberto Guerra”
Donziger's argument for delay on this basis is frivolous.[38]

         First. The reference to “a variety of appropriate judicial bodies” is unexplained, not to mention unsupported by any evidence or legal authority.[39] What judicial bodies? In what proceedings? Held in abeyance until when? And what possible relevance might these speculative possibilities, if any there are, have to the taxation of costs in this case? All of that is unexplained.

         The judgment of this Court is final and enforceable. It stands, regardless of whether courts or other “bodies” outside the United States recognize or enforce the Ecuadorian judgment or comment on testimony of Guerra either before this Court or before any other body.

         Second. Although the foregoing is more than sufficient to dispose of Donziger's argument, it bears mention that Donziger overlooks the fact that the testimony of Guerra was far from indispensable to the judgment rendered in this case. As the Court's opinion makes clear, this Court would have reached precisely the same result in this case even without the testimony of Alberto Guerra.

         The Court found that Donziger and his co-conspirators, among other misdeeds, (1) blackmailed Judge Yanez to abandon the judicial inspections and to appoint Cabrera as the global expert, (2) corrupted Cabrera, (3) wrote Cabrera's report, (4) falsely passed off Cabrera's report as the work of an independent and impartial expert, and (5) ghost-wrote former Judge Zambrano's purported decision which demonstrably relied on the fraudulent Cabrera report notwithstanding its disclaimer.[40] The first four of those findings were made entirely without regard to Guerra's testimony. And Guerra's testimony was not essential to the fifth. Moreover, the Court held that this fraudulent behavior warranted equitable relief with respect to the Ecuadorian judgment. It did so without necessary regard to whether Donziger and the LAPs bribed former Judge Zambrano, the only point on which Guerra's testimony was critical.[41]

         There is no valid reason to delay the taxation of costs on the theory that someday, somewhere, some other body may comment on Guerra's credibility in a manner more to Donziger's liking.

         C. Change of Venue

         Donziger argued that the Clerk should defer taxation of costs based on an assertion that the chair of this Court's Grievance Committee has made a complaint against him to state disciplinary authorities.[42] This, he asserted, would justify transfer of this case to another court. Deferral of the costs issue was warranted, he said, because he would “be taking up this issue with the district court and if necessary with an appellate court with the ultimate aim of having all post-trial issues moved to a different and non-conflicted venue for resolution.”[43]

         Donziger has provided no evidence, whether by affidavit or by filing a copy of the supposed letter, that any such complaint was made. Assuming, however, that such a complaint was made, it would be immaterial here. There is no basis for the assertion that the law requires or even permits a change of venue on such a basis. The substance of Donziger's suggestion is frivolous.

         Judges have a duty to refer reliable evidence of professional misconduct by lawyers to relevant disciplinary authority.[44] Indeed, a judge is not disqualified from hearing a case by reason of having made a disciplinary referral regarding a lawyer in the case.[45] In any case, Donziger does not suggest that the chair or any member of the Grievance Committee is presiding over this case.

         III. The Merits

         Having disposed of the timing arguments, we come to the merits of Donziger's arguments, assuming arguendo that they had not been forfeited for failure to comply with court rules.

         A. Some of Donziger's Claims Would Be Precluded Because They Could Have Been, But Were Not, Raised on Direct Appeal

         Donziger advances three arguments that are inconsistent with the judgment and therefore no longer available to him. First, he contends that the imposition of costs on him would violate the First Amendment.[46] Second, he again demands that the undersigned recuse himself.[47]Third, he asserts that costs should be denied because Chevron was guilty of fraud on the Court and other misconduct by virtue of its payments to or for the benefit of Alberto Guerra.[48]

         The First Amendment argument, to the extent it is comprehensible at all, is a reprise of an argument in his post-trial brief.[49] The recusal argument, as his letter makes clear, is based entirely on arguments he made prior to the entry of judgment, arguments that were rejected repeatedly by this Court and, on mandamus and other interlocutory applications, by the Court of Appeals. So too the argument with respect to Guerra. Chevron's payments to and other arrangements with Guerra were the subject of extensive briefing, direct testimony, and cross examination prior to, during, and after the trial.[50] Donziger's appellate briefs rehearsed the facts at length.[51]

         Donziger made neither the First Amendment nor the recusal argument on appeal[52]although both contentions could have been raised there.[53] Likewise, although he referred to Chevron's payments to Guerra in his appellate briefs, he never made in the Court of Appeals the argument that he now makes here - viz. that costs should be denied to Chevron because its actions with respect to Guerra were improper - although that argument too was available to him on direct appeal.[54] Nor, for that matter, did he argue on appeal that this Court's findings that relied on Guerra's testimony were clearly erroneous.

         As our Court of Appeals has held, “a [district court] 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.”[55] Defendants thus are bound by the judgment provision awarding costs. Indeed, this Court could not properly reconsider that portion of the judgment - as opposed to determining which particular categories of costs would be awarded and the amounts of each, which remain open because neither question was determined previously.[56] And even if the Court had discretion to do so, it would decline to exercise it in Donziger's favor in view of his egregious misconduct described previously and his misconduct in this litigation. That has included, among other things, outright defiance of court orders requiring him to (1) produce responsive documents located in Ecuador but subject to his control[57] and (2) contribute as required to the interim payment of the expenses of the special masters.[58] Moreover, Donziger arguably is in contempt of the final judgment of permanent injunction in this case.[59]

         B. Donziger's Allegedly Limited Means

         Donziger contends that costs should not be imposed on him because he is a person of limited means, whether considered in and of itself or in relation to the fact that Chevron is among the world's largest enterprises. These arguments too would fail even if the Court were to disregard Donziger's failure to comply with court rules governing motions to review taxation of costs.

         1. Donziger's Finances

         Rule 54(d) “creates a presumption that the district court will award the prevailing party costs.”[60] “The burden is on the non-prevailing party to overcome this presumption[, and w]hen a district court exercises its discretion and denies costs to a prevailing party, it must provide a valid reason for the denial.”[61] Thus, the burden is on Donziger to establish that costs should be denied in order to avoid financial hardship.[62]

         Donziger has not carried, or even attempted to carry, that burden, even as to the full amount taxed by the Clerk. Moreover, even if he had demonstrated that he would be able personally to pay the full amount of the costs taxed against him, that would not be dispositive. Although a district court “may deny costs based on financial hardship, indigency per se does not preclude an award of costs against an unsuccessful litigant.”[63]

         Donziger and his clients have complained of a purported lack of resources through much of this litigation to support various arguments or to justify their behavior. Indeed, they flatly refused to comply with the Court's order that they bear part of the special master costs on an interim basis.[64] Yet, despite repeated invitations by the Court to submit financial information supporting their claims of inability to pay, [65] they never did so.[66] Indeed, Donziger has not submitted any affidavits, declarations or other evidence of his own financial circumstances or those of his clients in support of his motion to review the taxation of costs. To be sure, some evidence concerning the financing of this litigation came into the trial record.[67] But that evidence does not sustain Donziger's burden of demonstrating that costs should be mitigated or denied on the basis of his financial circumstances.

         As an initial matter, Donziger repeatedly has refused to provide much information concerning his personal financial situation. Presumably to compensate for his failure to provide such information, he claims that his original trial counsel, the Keker firm, withdrew in the first half of 2013 claiming non-payment and invited an inference that it did so because Donziger lacked the ability to pay its bills. But even assuming that Donziger stopped paying the Keker firm's bills, the fact that he ceased payments would not necessarily say anything about the financial resources available to him.[68] Indeed, it came out at trial that Donziger received cash and real estate worth $1.8 to $1.9 million from “family estate related matters” during the two years prior to trial, i.e., in the period from October 2011 until October 2013, [69] during which payments to the Keker firm appear to have stopped or fallen well behind. Other evidence showed that Donziger personally received somewhere between $958, 000 and $1.3 million from litigation funders before trial, and the figure could well have been higher because the records from which that information was gleaned were incomplete.[70] There simply is no factual basis from which the Court responsibly could conclude that Donziger is unable to pay costs in the full amount taxed by the Clerk or that the amount of any such judgment should be reduced to avoid undue financial hardship.

         Perhaps more fundamentally, Donziger's focus on his supposed personal circumstances should not blind one to the fact that the litigation with Chevron, including this case, has been financed by third-party funders.[71] And it is Donziger who, with limited and apparently now long past exceptions, essentially has controlled the money.[72] Moreover, his clients at least arguably are obliged to pay the reasonable costs of defending Donziger, which may include costs imposed upon him by the Court, to the extent of monies available to them to fund the Chevron litigations.[73]Thus, no consideration of Donziger's means would be complete without full knowledge of the funding arrangements for this case.

         Neither Donziger nor his clients have come forward with complete and current evidence concerning the monies available to them. The most that can be said is that the KPMG forensic accountant called by Chevron at trial, based on his examination of incomplete records all of which now are more than four years old, testified that:

• “[T]he activites and operations surrounding the Litigation were funded by a number of investors during varying distinct periods of time throughout the course of the Litigation. Based on the documents I analyzed, it appears that the various individual investors, law firms, and litigation investment firms agreed to provide approximately $32 million in funds to finance the activities and operations surrounding the Litigation.”[74]
• “The available documents show that the individual investors, law firms, and litigation investment firms contributed approximately $16 million to finance the activities and operations surrounding the Litigation.”[75]

         In addition, the accountant concluded that:

“The extremely poor organization and incomplete nature of the financial and accounting records that Donziger produced and appeared to maintain would not have allowed him to provide accountability to either his investors or to the Lago Agrio Plaintiffs (the ‘LAPs').”[76]

         Donziger himself admitted at trial that he spent over $21.4 million on the litigation from 2007 to 2013, [77] and the figure may well have been substantially higher. Moreover, there is no evidence as to what additional monies have been raised in the several subsequent years. By the time of trial four years ago, these included at least an additional $2.5 million from a British investor.[78]And Donziger has been engaged in extensive litigation in Canada and elsewhere for some time now, which at least suggests that he has raised much more. Donziger thus has raised at least $21.4 million over the years, and probably a good deal more, a large part of which never has been accounted for. He has submitted no evidence in connection with the taxation of costs that could justify any conclusion, one way or the other, as to whether third party funding is available to pay costs in this case.

         In sum, there is no substantial basis to credit Donziger's unsubstantiated claim of inability to pay. Given that the burden of proof to establish at least that payment would cause serious financial hardship is on the party seeking to avoid imposition of costs, and given that Donziger has provided no such evidence, the Court would decline to temper the award of costs even if it were to overlook his failure to comply with court rules.

         2. Disparity of Litigants' Resources

         The other branch of Donziger's means-related argument is straightforward.

         Chevron is a huge enterprise. According to its 2016 annual report, the consolidated balance sheet for Chevron reflected net equity of $146.7 billion.[79] Whatever Donziger's personal net worth may be, the Court proceeds on the assumption that it is very small compared to that of Chevron. But virtually every circuit to consider the question has held that disparity of wealth does not justify denial or reduction of costs, at least in the absence of persuasive evidence of inability to pay.[80] Indeed, at least one circuit has reversed a reduction of costs that was made in light of the disparity of resources between an individual plaintiff and a giant corporation.[81]

         C. Chevron's Alleged Pollution of the Ecuadorian Rain Forest

         As noted previously by both this Court and the Court of Appeals:

         “The issue here [wa]s not what happened in the Orienté, more than twenty years ago and who, if anyone, now is responsible for any wrongs then done. [The issue] instead [wa]s whether a court decision was procured by corrupt means, regardless of whether the cause was just.”[82]Moreover, as one witness pointed out at trial, a singular irony of Donziger's misconduct is that its occurrence “probably means that we'll never know whether or not there was a case to be made against Chevron.”[83] An application to review the Clerk's taxation of costs is not a proper vehicle for attempting to find out, which would entail retrying on the merits a pollution case that was corruptly litigated in Ecuador.[84] That is especially so where the application fails to comply with either the Federal Rules of Civil Procedure or this Court's rules and is unsupported by competent evidence or legal analysis. Moreover, assuming that the Court's discretion extends so far as to permit denial of taxable costs on the basis of alleged behavior extrinsic to the conduct of the litigation, the fact of the matter is that Donziger simply has not proved what he alleges only in the most conclusory of terms. And certainly the fraudulent Ecuadorian judgment cannot be taken as having established anything.

         D. Donziger's Claim of Fraud by Chevron

         Donziger next argues that all costs should be denied to Chevron because it allegedly committed fraud, suborned perjury, and perhaps was guilty of other misconduct in connection with the testimony of Alberto Guerra. In essence, he claims that Guerra's testimony was false, at least in material respects, and that Chevron bought and paid for the alleged perjury. And it is true that costs may be denied to a prevailing party if the prevailing party is guilty of sufficiently serious misconduct in the course of the action.[85] But all of the evidence concerning these charges was developed before and during the trial. It was considered carefully and extensively in the Court's extensive findings and conclusions.[86] And Donziger's argument fails now for several reasons.

         First, as already noted, Donziger could have challenged the judgment's award of costs against him on the appeal from the final judgment but failed to do so. That failure forecloses the issue now.[87]

         Second, Donziger's argument would be unpersuasive even if it were not precluded. Donziger failed to prove any misconduct, let alone any of sufficient gravity to warrant denial of costs to the prevailing party.

         The crux of Donziger's argument is twofold. First, he argues once again, as he did at trial, that Guerra perjured himself and now contends that Chevron suborned that false testimony.[88]Second, he argues that Chevron at least acted improperly in providing financial support and other economic lures to Guerra to induce him to come to the United States and to testify at trial. But neither argument is well founded.

         To begin with, this Court heard Guerra's testimony. It heard as well the testimony of the other key witnesses on the relevant point, Donziger and former Ecuadorian judge Zambrano. It recognized that all three were highly flawed witnesses and laid out the economic and other inducements to Guerra to come to the United States and testify.[89] It carefully and skeptically assessed Guerra's account as well as the extensive evidence that corroborated it in many though not all respects.[90] It declined to credit certain aspects of his testimony, [91] although it credited a good deal of it.

         To the extent that the Court already has found that Guerra's testimony was credible, [92]findings by which Donziger is bound, there was no perjury and therefore no subornation. And the fact that the Court did not credit Guerra in some particulars is of no help to Donziger. Even if Guerra had perjured himself, as opposed to having been mistaken, in those particulars - and the Court declines to find so - the question here would be whether Chevron suborned perjury. In order to establish subornation of perjury, Donziger was required to prove that Chevron knew or believed that Guerra's testimony would be perjurious and nevertheless induced him to commit that perjury.[93]

         Donziger has not done so.[94]

         Donziger's other argument fares no better.

         To be sure, as the Court wrote previously, Guerra at the time of trial was “the beneficiary of what amount[ed] to a private witness protection program created for him by Chevron, which facilitated his relocation from Ecuador to the United States and ha[d] been supporting and assisting him since his arrival here.”[95] Chevron had paid him $48, 000 for physical evidence and information it contained.[96] In addition,

“Fearing retaliation from the ROE, Guerra and his family (including his wife, his son, and his son's family) relocated to the United States. Chevron representatives paid for the move and, as his visa status does not allow him to work while he is in this country, Chevron pays him $10, 000 per month for his living expenses, pays for health insurance coverage for Guerra and his family, leases a car for him, and pays for an attorney to represent him in any dealings with federal or state government investigative authorities or any civil litigation, and for an immigration attorney to deal with his resident status.”[97]

         But these arrangements would provide no basis for denying costs to Chevron even if Donziger had not forfeited the argument.

         There was extensive motion practice concerning these issues prior to trial. The motions produced an extensive record, including expert affidavits concerning the ethical propriety of the participation by Chevron's lawyers in the Guerra arrangements.[98] And the bottom line of all of that motion practice was the Court's denial of all efforts to strike or preclude Guerra's testimony on the straightforward, common sense, and well established basis that:

“‘[i]t is the province of the [trier of fact] and not of the court to determine [as a matter of law] whether a witness who may have been inaccurate, contradictory and even untruthful in some respects was nonetheless entirely credible in the essentials of his testimony.'. . . . [A]ny claims of professional or other misconduct are appropriately considered in other contexts, particularly in view of the fact that Chevron acted on the basis of substantial outside expert advice.”[99]

         Of course, we now consider the matter in a context distinct from whether Guerra's testimony should have been excluded. The concern, if the issue still were open to Donziger, would be whether Chevron engaged in misconduct and, if so, whether it was sufficient to warrant denial of costs. The evidence does not justify a finding of misconduct, let alone misconduct sufficient to warrant such a denial.

         The principles that govern the propriety of Chevron's payment for the relocation of Guerra and his family from Ecuador, living expenses in the United States prior to and during trial, the many hours he spent being debriefed by Chevron counsel and preparing to testify, and legal expenses occasioned by the relocation such as the cost of immigration counsel are not in much dispute. Donziger and the other defendants conceded before trial that a party may pay a fact witness's expenses and reimburse the witness for time lost in connection with the litigation, provided the payments are reasonable.[100] Moreover, defendants' proffered professional responsibility expert conceded that “it is permissible for attorneys to pay expenses reasonably necessary to keep [a] witness in a safe location” “if [the] witness faces a bona fide personal safety or security risk.”[101]

         In this case, there was abundant evidence, which the Court credits, that Guerra's decision to cooperate with Chevron and, ultimately, to testify in this case would have exposed him and his family to serious risks to personal safety and security had they remained in Ecuador.[102] His decision to testify effectively forced him to become an exile from his native country. The Court finds that Chevron's payments for relocating the Guerras to this country, for legal counsel to deal with immigration issues, and for living expenses (particularly in light of the fact that his immigration status barred employment) were reasonable in object and in amount. It was permissible also to compensate him within reason for time he spent being interviewed repeatedly by Chevron counsel and preparing to testify, and no more was done.[103] There is no evidence that any of these payments was conditioned upon the substance of Guerra's testimony or contingent on the outcome of this case. The evidence of record establishes no misconduct in these respects.

         So far as the payments for physical evidence are concerned, defendants' proffered professional responsibility expert conceded that “[l]awyers may pay reasonable costs to gather documents and other physical evidence from various sources” and for physical evidence itself.[104]He went on to contend, however, that payments for physical evidence that exceed the replacement cost of the physical articles themselves - and thus reflect the value of the information they contain or reflect - are improper per se.[105]

         To be sure, the Court understands the concern that motivated the defendants' witness's qualification - payments for information in a given case could edge along the spectrum in the direction of payments for testimony. But the assertion that any payment beyond the replacement cost of a piece of physical evidence inherently is unethical was entirely unsupported by any citation of authority. Chevron's expert, on the other hand, provided an extensive, well reasoned, and well supported opinion in which he said that Chevron's counsel appropriately could pay Guerra “solely for the information in his possession, so long as that payment [was] a fixed sum not in any way contingent on his testimony or the outcome of the litigation; the witness makes no promise to testify in return for the payment; and no future payment [would] be made to the witness for his testimony other than legally and ethically permitted payment for expenses incurred in connection with testifying.”[106]

         In the last analysis, the Court need not resolve this abstract disagreement between experts. The relevance of misconduct by a prevailing party with respect to taxation of costs is that misconduct may be an equitable factor that, in a proper case, could warrant departure from the presumption that the prevailing party is entitled to recover costs. In this case, any undue aggressiveness with respect to the payment for physical evidence, and the Court makes no finding of any impropriety, would not warrant such a departure for a host of reasons:

• Donziger's behavior in this litigation was outrageous and, in many respects, far beyond the bounds of propriety. Among other things, he wilfully, deliberately disregarded a court order to produce relevant documents located in Ecuador but nonetheless under his practical control.[107] He deliberately testified falsely at an evidentiary hearing on Chevron's motion for sanctions.[108] And he falsely testified that he lacked recollection in response to nearly 300 questions at his deposition in this case and on cross-examination at trial.[109] He has no claim to a favorable exercise of discretion based on what was no more than a perhaps arguable departure long before the trial that ultimately had no effect on the case.
• Chevron fully disclosed all of its payments and other arrangements with Guerra. There most assuredly was no concealment or fraud.[110]
• Chevron relied on extensive expert advice with respect to its dealing with Guerra and acted in the good faith belief that its actions were proper.[111]
• Chevron even disclosed the facts concerning its interactions with Guerra to the U.S. Department of Justice long ...

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