Lago Agrio: New York Appellate Court Reverses Referee’s Decision on Collateral Estoppel

Back in November I noted a decision in the disciplinary case against Steven Donziger: the referee who was to decide the sanction Donziger will face had ruled that although Judge Kaplan’s findings of fact had had preclusive effect with respect to the question whether Donziger had violated the rules of professional conduct, the findings should not have preclusive effect with respect to the sanction. In other words, Donziger should be entitled to put on evidence to prove that Judge Kaplan’s findings were wrong at the hearing to be held on his sanction.

I opined that the referee’s decision was wrong, and I noted that the Grievance Committee had objected to it. While I don’t have a copy of the decision, I am told that the First Department, in a summary order, has reversed the referee. Thus the facts that Judge Kaplan found are the facts, or as I called them in a August 2018 post, the “facts′.” They may or may not be true, but they have been finally determined by a court.

Thus at the upcoming sanctions hearing, the referee will have to decide the sanction based on the facts′ as they were found. There may, I think, be an appeal to the Court of Appeals, so it’s not over yet.

I am sympathetic to Donziger here, because as I have often said, at least some of Judge Kaplan’s findings may well have been wrong, and perhaps the Grievance Committee should have waited for the conclusion of the Canadian proceedings and other related proceedings before acting. But I think the law here is clear and the rationale for the law is powerful, particularly since Donziger did not appeal from the findings of fact and never sought to have Judge Kaplan’s judgment set aside.

Update: An intrepid reader has found the decision, which reads as follows:

January 17, 2019

In the Matter of Steven R. Donziger, a suspended attorney:

The motion is granted to the extent of declaring that the Referee may not reexamine this Court’s determination, based on the doctrine of collateral estoppel, that respondent committed professional misconduct (M-5635) and that the post-suspension hearing is limited to whether the professional misconduct respondent committed warranted his interim suspension pursuant to 22 NYCRR 1240.9(a). No opinion. All concur.

Before: Sweeney, J.P., Renwick, Richter, Manzanet-Daniels, Kahn, JJ.

Steven Donziger

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