18th Annual Workplace Class Action Report - 2022 Edition

694 Annual Workplace Class Action Litigation Report: 2022 Edition September 2020 regarding different commission percentages, and was expressly designated as HC-AEO. During a subsequent status conference regarding an outstanding dispute between the parties, Plaintiffs’ counsel provided specific examples of Defendant’s commission rates paid by particular business partners of Apple that Defendant asserted was not previously publically disclosed. Plaintiffs’ counsel contended that the information was previously reported by the press. Defendant filed an administrative motion to seal the relevant portion of the transcript, which the Court granted. Thereafter, Defendant filed a motion for sanctions for the violation of the protective order by Plaintiffs’ counsel. The Court warned Plaintiffs’ counsel regarding his conduct, but denied the motion for sanctions. The Court determined that Plaintiffs’ counsel disclosed information that he learned from Apple’s HC-AEO document production, but noted that the disclosed information was previously publicly reported by numerous sources. The Court cited in this regard to testimony by Apple’s CEO Tim Cook before the House Judiciary Committee in which he disclosed material that Defendant alleged was confidential, i.e ., that Defendant paid 15% commission generally to over 130 partner services. The Court thus determined that Plaintiffs should have moved to de-designate these materials under the protective order or at least given Defendant notice of the planned disclosure and offered to meet and confer about it. Id. at *13. However, the Court concluded that Plaintiffs’ counsel did not technically violate the protective order because he did not reveal anything confidential. For these reasons, the Court declined to impose sanctions. Chevron Corp., et al. v. Donziger, 2021 U.S. App. LEXIS 6355 (2d Cir. March 4, 2021). Litigation between Chevron Corp. (“Chevron”) and the Law Offices of Steven R. Donziger (collectively, the “Donziger Defendants”) began as a dispute over environmental damage to Ecuador’s Lago Agrio region of the Amazon Rainforest allegedly caused by Texaco, subsequently owned by Chevron, in which Donziger represented a large number of indigenous people in a class action who claimed to have suffered from the destructive effects of the activities. Chevron’s alleged pollution of the Amazon was litigated in the courts of Ecuador and culminated in a multi-billion dollar judgment against Chevron. A subsequent civil Racketeer Influenced and Corrupt Organizations (“RICO”) suit in the U.S. District Court for the Southern District of New York found that the Donziger and a group of Ecuadorian residents conspired to procure that judgment through illegal means. After a seven-week trial in the RICO action, the District Court entered a final judgment that principally awarded damages in the form of litigation costs to Chevron, imposed a constructive trust for Chevron’s benefit on funds obtained by Donziger traceable to the Ecuadorian judgment, and enjoined Donziger from seeking to enforce the Ecuadorian judgment in the United States and from engaging in activities that would allow him to profit from the fraudulently procured judgment. The Second Circuit ultimately affirmed the RICO judgment, and the U.S. Supreme Court denied further review. Following the RICO judgment, the District Court entered a supplemental judgment quantifying the award of costs due to Chevron as well as several orders related to contempt proceedings initiated by Chevron arising out of Donziger’s alleged violations of the injunction. Donziger appealed these judgments and orders to the Second Circuit. First, Donziger appealed the supplemental judgment quantifying the award of costs due to Chevron for successfully litigating the RICO action. Second, Donziger appealed several of the District Court’s orders entered during the pendency of contempt proceedings. Third, Donziger appealed the District Court’s final order and judgment finding Donziger in civil contempt of the injunction and awarding sanctions and attorneys’ fees to Chevron. The Second Circuit held that the District Court did not err in awarding costs to Chevron under Rule 54(d). Further, the Second Circuit affirmed the District Court’s finding that Donziger violated the injunction in several respects and its judgment of civil contempt relating to those violations. However, the Second Circuit held that the injunction was insufficiently clear and unambiguous, when read alongside the District Court’s explanation of that injunction in a subsequent opinion, in prohibiting Donziger from raising funds by selling interests in the Ecuadorian judgment. For this reason, the Second Circuit concluded that the District Court erred in finding Donziger in contempt for engaging in that conduct. In its ruling, the Second Circuit emphasized that the District Court’s further elaboration on the terms of the injunction in its contempt rulings had now clarified that the actions taken by Donziger that formed the basis of the now-vacated contempt findings were prohibited by the injunction, such that any repetition of those actions in the future would be in contempt of the injunction. As a result, the Second Circuit affirmed in part and reversed in part the District Court’s contempt finding and vacated the supplemental judgment awarding Chevron $666,476.34 in compensatory sanctions. Additionally, the Second Circuit vacated the supplemental judgment awarding attorneys’ fees and remanded to the District Court to determine the fees reasonably expended by Chevron to secure the contempt findings affirmed on appeal.