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U.S. Supreme Court lets Chevron foe Donziger's contempt conviction stand

By Nate Raymond

(Reuters) -The U.S. Supreme Court on Monday declined to hear a disbarred environmental lawyer's challenge to his criminal contempt conviction after he earlier won but was unable to collect a $9.5 billion judgment against Chevron Corp over oil pollution in Ecuadorian rainforests.

The court turned away an appeal by Steven Donziger, who has argued that his prosecution violated his rights under the U.S. Constitution because private lawyers appointed by a federal judge handled the case against him after the U.S. Justice Department declined to do so.

Donziger's lawyers argued that this appointment violated separation-of-powers principles set out in the Constitution delineating the authority of the three branches of the U.S. government. They maintained that the executive branch, not the judiciary, should have pursued any prosecution.

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The New York-based 2nd U.S. Circuit Court of Appeals last year concluded that U.S. District Judge Lewis Kaplan possessed the authority to appoint the prosecutors, who nonetheless remained subject to supervision by the U.S. attorney general.

Two members of the Supreme Court's 6-3 conservative majority, Justices Neil Gorsuch and Brett Kavanaugh, dissented from the decision to not hear the appeal, with Gorsuch saying that the Constitution "does not tolerate what happened here."

"However much the district court may have thought Mr. Donziger warranted punishment, the prosecution in this case broke a basic constitutional promise essential to our liberty," Gorsuch wrote.

Donziger on Twitter called the Supreme Court's decision to not hear his case "a huge blow to the rule of law." Steve Vladeck, a University of Texas School of Law professor who represented Donziger, said Gorsuch's dissent "says just about everything I'd say."

Donziger was sentenced to six months in jail in 2021 after U.S. District Judge Loretta Preska in Manhattan found him guilty of misdemeanor contempt for defying court orders arising from a lawsuit filed by Chevron.

The Harvard Law School graduate had represented villagers in Ecuador's Lago Agrio region who sued Chevron for water and soil contamination caused by Texaco between 1964 and 1992. Chevron acquired Texaco in 2001.

While not disputing that pollution had occurred, Chevron said the company was released from any liability because it paid $40 million for an environmental clean-up in the 1990s and that Ecuador's state oil company, Petroecuador, was primarily to blame for the pollution.

In 2011, an Ecuadorian court entered an $18 billion judgment that was later reduced to $9.5 billion against Chevron for contamination resulting from oil production.

Chevron then sued Donziger and others in New York, arguing that he and his associates had secured the judgment through fraud by arranging the ghostwriting of a key environmental report and bribing the presiding judge.

In 2014, Kaplan concluded in that case that the Ecuadorian judgment against Chevron in Ecuador was obtained fraudulently through a corrupt process, rendering it unenforceable in the United States.

Theodore Boutrous, a lawyer for Chevron, on Monday noted that an appeals court later upheld Kaplan, finding that Donziger engaged in a "parade of corrupt actions" that included coercion, fraud and bribery.

When Chevron suspected Donziger was violating a related ban on trying to monetize or profit from the judgment, Kaplan ordered him to turn over electronic devices and email accounts for examination.

Donziger refused, and Kaplan ultimately charged him with criminal contempt. After federal prosecutors in Manhattan declined to take the case, Kaplan in an unusual move tapped a private lawyer, Rita Glavin, to lead the prosecution of Donziger.

(Reporting by Nate Raymond in Boston; Editing by Will Dunham)