SDNY: World Government Gone Mad | Donziger & Chevron

This is the sort of thing I should talk more about. US empire works in big, loud and violent ways, but that’s not where the true power lies. The power is in offices and courts around the country and around the world. The Southern District of New York, the subject of today’s video, is one of those locations of power. The thing that keeps me from doing more video on US legal domination is complexity. Sure, I can read an article unpacking some aspect of the legal-regulatory complex, but how do I know I’ve got a trustworthy interpretation? The extraordinary case of Steven Donziger and Chevron is a rare animal. Commentators across the ideological spectrum are disturbed, so I can feel confident making some comments. I hope you enjoy it.

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Video Transcript after the jump…

So today I want to talk about one of the world’s most powerful institutions, and the fact that it is going insane. I am talking about the US federal court of the Southern District of New York, and what it has done to a lawyer named Steven Donziger. This is may seem like a boring US constitutional issue, but it’s actually very relevant to your rights and privileges, no matter what country you happen to live in. You may not be interested in the SDNY, but the SDNY is interested in you.

It’s not immediately obvious that the federal courts of the Southern District of New York are one of the world’s most powerful institutions. It’s not even that obvious that it’s one of the most powerful courts in the United States. The US has at least two separate court systems. There are the various state and local systems, that still handle the majority of criminal and civi matters, in whatever manner each state feels is right. Then there is the federal system, which handles more and more of the matters that really matter. The federal courts have three levels, with the Supreme Court at the top, 13 circuit courts under it, and then under that district courts for every jurisdiction of the Union. Some states have just one district court. New York is big enough that it has four. New York City itself has two, the Southern District for Manhattan and some suburbs and the Eastern District for Brooklyn and Long Island.

So why the heck would the New York City courts be such a big deal? There are two levels of judges above them, how important can their decisions be? Well the Southern District of New York happens to be where New York City’s main business district is located. Along with Delaware, that makes it one of the most important courts for commercial disputes on the planet.

And unlike Delaware, the Southern District of New York is also home to some of the richest people in the world, in a state that used to be the richest and most populous in the United States. New York’s 160 year run as the country’s largest state ended in 1970, but the city, and its federal courts have held on to their prestige, and their control of many of the country’s most important issues.

Over the past 100 years US federal power has been growing and consolidating. And New York City’s federal courts have been at the forefront of this process. From Abortion and guns to education, the environment and so much more, the courts have taken over more and more of American life, and it has primarily been federal courts guiding that process.

But again, why is this lower level court so important? Well it’s because this is where the actual work of national and world government happens. The Supreme Court is just 9 geriatrics, who sit together and argue about every case they take. 8,000 cases apply to be heard by the Supreme court annually. And they only have time for 60 to 80 each year.

The Donziger case we will eventually discuss today wasn’t decided by the Supreme Court. Last week they simply decided not to hear it. Two Supreme Court justices dissented against that decision, but it doesn’t matter, Donziger is out of luck, because the Supreme Court doesn’t have the time to hear his case.

The Southern District of New York, however has a vastly larger bandwidth. It has 44 district judges and 15 magistrate judges that hear cases individually. They have hundreds, if not thousands of legal professionals working for them. And they have tremendous power over not just the lives of the people in their courts, but over the development of international law everywhere.

This is where things get weird. People often ask me how I worked in corporate law in Turkey with an American law degree. Well if you live in a country that uses international money to fund construction, the chances are very good that the law governing the bridges, tunnels and shopping malls you use might be made in the Southern District of New York.

Now obviously, if you shoot someone on a bridge in Istanbul, that’s an issue for the Turkish authorities. But if that bridge falls down, and somebody has to be sued, Turkish plaintiffs may be forced to make their case in the southern district of New York.

The construction of every large project in the world is governed by contracts that are a couple hundred pages long, and can include thousands of pages of supplemental documentation. And in those contracts, there is usually a single paragraph that specifies the governing law for disputes related to that contract. Almost every single project I worked on in two years in Turkey was governed by Swiss law, the laws of London, or those of the Southern District of New York.

We already have world government. People wonder why I am so dismissive of theories about BRICS or coming Chinese domination. The power of the US military is very important, but it’s just the blunt edge of the incredibly intrusive, deeply imperial power of the US’s various court systems. The US military has destroyed a handful of countries this century. The Southern District of New York makes law for every country in the world.

An example I have talked about before is the 2015 FIFA prosecutions. The US still doesn’t care much about soccer, is not the headquarters for the sport’s governing organizations, and was not the residence or nationality for many of the defendants. Yet New York City courts are where this globally significant prosecution happened. And people only noticed because it was so globally significant. New York courts deal with lower profile globally significant cases all the time.

Sam Bankman-Fried, the alleged mastermind behind the international FTX fraud, is of course being tried in the Southern District of New York. A week or so back it was announced that new charges would be added alleging that he had bribed Chinese officials. Nobody thought it was strange that this Chinese crime would be tried in a New York court.

The matter of Chevron and Steven Donziger is another example. Donziger is the kind of environmental lawyer that most first year law students want to be, before they see their college debt bills, and go work for a large company like Chevron, the oil company that has spent a decade destroying Steven Donziger.

This litigation started all the way back in 1993, when Donziger sued Texaco for the environmental catastrophe it unleashed while drilling for oil in Ecuador from the 60s to the 90s. Even back then, the obvious jurisdiction for this case was the Southern District of New York. The case dragged on for years, until Chevron, the oil company that bought Texaco, convinced a friendly New York judge that the case should be moved to Ecuador, where Chevron assumed they could easily overpower Donziger and his impoverished indigenous plaintiffs. This turned out to be a mistake.

From 2002 to 2011, Donziger and his team executed a multi front public relations and litigation campaign that moved through all levels of Ecuadorean courts, and ordered Chevron to pay just under 9 billion dollars to the plaintiffs.

It’s probably not surprising that Chevron has managed to avoid paying any of that money. But the very fact that that isn’t surprising, or really commented on much at all in this controversy, tells us a lot about how the world really works.

I have read a lot of discussion of this case over the past few days, and nobody sees it as particularly surprising or even worth commenting on that the lowest level of US federal courts seems to have the right to investigate, comment on and discard the settled judgement of the highest court in Ecuador. In a case that concerns events and responsibilities exclusively related to Ecuador. It’s not particularly surprising that some of the highest priced lawyers in the world went over the Ecuadorean process with a fine toothed comb and were able to find reasons to call the result corrupt and invalid. No US state court would be able to stand up under that kind of scrutiny, and Ecuador’s process has been easily discarded.

What is legitimately surprising, and honestly quite shocking, is the lengths that Chevron has gone to to destroy Donziger, the US lawyer who beat them in Ecuador.

For the temerity of trashing them in the Ecuadorean courts they chose, Chevron has gotten Donziger disbarred, disgraced, and essentially forced out of business. Chevron won a variety of cases against him in the Southern District of New York that have left him with debts he can never pay, and absurdly legally forbidden from getting paid for working on the Ecuador case he won.

Now this sure looks to me like a clear case of a corporate Goliath punishing a successful legal hero by pushing him into a Kafkaesque nightmare. But that could just be my biases.

Maybe the unethical stuff Donziger did went beyond what you need to do to win a fight this unbalanced and he really does deserve to have his life and career utterly destroyed. Frankly I don’t have the spare months that would be necessary to research this case’s decades long history and make those kinds of determinations. But the destruction of Donziger’s career and life isn’t even the most outrageous part of this case. If the Southern District of New York had left it there, they would have remained protected from scrutiny by the case’s complexity. But no, instead they decided to try to come for the environmental lawyer’s freedom as well.

Donziger, quite understandably, hasn’t been very cooperative with some of the judgements against him. You will note that Chevron has also avoided paying that 9 billion dollars it was ordered to for a solid decade now. But the SDNY wasn’t content to let Donziger continue trying legal remedies. They wanted to throw him in jail for criminal contempt. The problem is that under the US constitution, you need to get the executive branch involved to deprive someone of their freedom. The department of justice looked at this mess, and politely declined to prosecute Donziger. So the Southern District of New York decided to appoint a bunch of Chevron adjacent lawyers as prosecutors to convict Donziger and place him under house arrest. He spent almost three years in that condition.

Unconstitutional behavior is usually a popular story in US news media. Every time the Tallahassee incest court breaks a norm, or the Ipswich Alabama school board bans a book, we hear about it for weeks. But there has been shockingly little attention one of the most powerful courts in the world just deciding to give itself the power to incarcerate lawyers.

The silence of mainstream media is all the more surprising when you consider how profoundly this move has troubled people across ideological lines. I have probably learned the most about Donziger and his case from a leftist podcast called Chapo Trap House. Last week, they were joined as Donziger defenders by two Trump appointees to the Supreme court, Kavanaugh and Gorsuch, who dissented against the Supreme court’s choice not to hear the case. We can argue about whether Donziger went too far in his Ecuadorean fight against Chevron. But with supporters this diverse, there can be no question that the SDNY is out of control.

It’s too bad that we are spending all this time focused on Donziger rather than his poor, indigenous clients, who continue to suffer from the ravages of pollution. But the role of the attorney is very important.

We already live in a world where the United States Courts determine everything. US courts can steal Afghanistan’s central bank, sanction anybody, and treat the decisions of the highest courts of even our closest allies like toilet paper. In this world zealous US plaintiffs lawyers like Donziger are the last defense non-American people have. And now even that is being taken away.