Anti-Chevron Activists Accuse N.Y. Federal Judge of Financial Conflict of Interest

Anti-Chevron, rainforest and native peoples activists—which is to say, a handful of loyalists to New York-based attorney Steven Donziger and Donziger himself—have accused a federal judge in New York of allowing his personal investments to taint a March ruling that portrayed a multibillion-dollar pollution suit against the oil company as a massive shakedown. If it were taken seriously, the conflict-of-interest allegation against U.S. District Judge Lewis Kaplan would sully the reputation of a prominent jurist and undermine his decision in March that the plaintiffs’ attorney in the case, Donziger, morphed into a racketeer while pursuing Chevron in Ecuador.

Because it’s based on a fundamental distortion of the rules governing judicial financial disclosures and conflicts of interest, the ethics charge isn’t likely to be taken seriously. Moreover, the lawyer representing Donziger in a separate appeal of Kaplan’s verdict declines to endorse or associate himself with his client’s risky attack on Kaplan’s ethics. Still, it’s noteworthy because the fight over Kaplan’s credibility will help determine whether Donziger can ever force the oil company to pay for a cleanup in the Amazon .

The acrimony—unusual in ordinary litigation, but par for the course in the Chevron pollution case—stems from a multibillion-dollar judgment Donziger won in 2011 on behalf of poor residents of the Ecuadorian rain forest who blamed the oil company for decades of contamination. Three years later, after Chevron sued Donziger in New York, Kaplan ruled that the Ecuadorian judgment, now valued at about $10 billion, was actually a complete sham based on fabricated evidence, coercion, and bribery.

Donziger is appealing the Kaplan’s verdict and denies wrongdoing. A separate lawyer is representing his Ecuadorian clients, two of whom were named as Donziger’s co-defendants in the racketeering case. In addition to various technical legal arguments, Donziger is asserting on appeal that all along Kaplan was biased against him and his clients—an accusation the federal appeals court in New York has repeatedly rejected in interim procedural rulings. Now, Donziger once again is alleging that Kaplan improperly favored Chevron—in this version, out of a desire to protect personal investments.

In a press release issued Oct. 30, Donziger says that three mutual funds in which Kaplan has disclosed investments owned shares of Chevron. “I have made clear that I dispute every significant aspect of Judge Kaplan’s [racketeering] decision,” Donziger says in the release. “His hostility toward me and my highly vulnerable clients was palpable. It is thus hard for me to see his failure to disclose these investments as a mere one-time ethical lapse.” Paul Paz y Mino, director of outreach for Amazon Watch, a nonprofit allied with Donziger, adds: “Judge Kaplan’s ethical lapses reflect terribly on the U.S. judiciary and undermine the rule of law for everybody.”

Professor Stephen Gillers, an expert on legal ethics at New York University Law School, says Donziger misconstrued the rules on disclosure and recusal. “Under the federal recusal statute and the Code of Conduct counterpart, a federal judge must recuse himself if he has a ‘financial interest’ in a party,” Gillers explains via email. Ownership of a mutual fund that, in turn, holds securities in a party to a lawsuit is not considered a “financial interest,” Gillers says. “Kaplan’s ownership of shares in mutual funds that have shares of Chevron is not a ‘financial interest’ in Chevron. Mutual funds are, along with government securities, viewed as the surest way for a judge to invest without a risk of recusal.”

Notably, the three-page, single-spaced press release doesn’t quote Donziger’s appellate lawyer, Deepak Gupta of Washington, D.C. When I email Gupta, he responds: “I’m not really in a position to comment on any of this.”

A courthouse clerk on Judge Kaplan’s staff says: “The judge has no comment.” Donziger says in the release that he is “consulting with counsel to discuss what could be done to protect [his and the Ecuadorians'] right to a fair trial at this late stage, with the case on appeal.” Amazon Watch says in the release that it’s “exploring whether to file a complaint seeking a review of the judge’s conduct.”

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