Crisis Response &
Incident Investigation

Archive for the ‘Crisis Management’ Category

Extension of FCPA Pilot Program Signals Commitment to Proactive Disclosure

Posted on: June 28th, 2017

The extended life of a Department of Justice program that promotes self-disclosure of violations of the Foreign Corrupt Practices Act signals a continued emphasis on individual culpability, according to two Eversheds Sutherland (US) lawyers experienced in defending against government investigations.

Olga Greenberg, who co-leads the firm’s Corporate Crime and Investigations and Securities Enforcement teams, co-authored a recent legal alert assessing the DOJ’s plan to keep the FCPA Pilot Program in operation. It had been scheduled to expire on April 5.

The extension means the DOJ “will continue to encourage proactive disclosure and remediation of potential FCPA violations for at least the near future,” wrote Ms. Greenberg with counsel and co-author Yvonne Williams-Wass. Both lawyers advise and defend companies confronted with internal and government investigations.

The FCPA pilot “emphasizes the identification of culpable individuals – including executives – by companies as part of full cooperation and disclosure.” The stated goal has been to promote greater accountability by motivating companies to voluntarily report misconduct, fully cooperate with investigators, and, where appropriate, remediate flaws in their controls and compliance programs, the two lawyers explained.

Last year was a record-breaking one for FCPA enforcement actions brought by the DOJ and the Securities and Exchange Commission. And during his confirmation hearings for Attorney General, Jeff Sessions said he would enforce the FCPA “as appropriate based on the facts and circumstances of each case,” notwithstanding President Trump’s earlier criticism of the law.

Mark Thibodeaux Quoted on Cybersecurity Risk, Liability Issues in Law360

Posted on: October 17th, 2016

Houston attorney Mark Thibodeaux, Deputy Practice Leader of the Cybersecurity and Privacy team for Sutherland Asbill & Brennan, was quoted by Law360 in an article exploring liability risks from cyberattacks on energy companies.

“The biggest security risk for the energy industry is these cyber-physical attacks, it’s not just data being stolen and moved around. The big liability risk is a power grid shutdown, or an overpressured pipeline, or a drilling rig in the Gulf of Mexico that is attacked and causes a major oil spill,” Mr. Thibodeaux said in an article headlined “5 Ways Energy Cos. Can Limit Legal Fallout From Attacks” (subscription required).

The article notes that the U.S. Department of Homeland Security and the Federal Energy Regulatory Commission are just two of the regulatory agencies putting pressure on oil and gas and power companies to make every effort to protect their increasingly automated layers of industrial controls. And while energy infrastructure companies are heavily insured, damages or losses from cyberattacks may be excluded, or greatly limited by insurance policies.

A Lloyd’s of London report estimated that a cyberattack that shuts down significant portions of the U.S. electric grid could have a $1 trillion impact on the U.S. economy, with insurers paying out more than $70 billion in claims.

“There’s not enough insurance in the world to cover a major event affecting a large portion of the grid,” Mr. Thibodeaux said.

He noted that energy companies also need to protect against contractors accidentally compromising their cybersecurity protections and should explore this question: “Does your contractor have deep enough pockets to protect you?”


Jack Massey Writes on Crisis Response in Texas Lawyer Newspaper

Posted on: October 10th, 2016

Houston commercial litigator Jack Massey, who is on the Sutherland Asbill & Brennan crisis response team, outlined what goes on behind the scenes of a major disaster in an article for Texas Lawyer newspaper.

Headlined “The Aftermath of Deepwater Horizon: Responding to a Catastrophe,” the article’s publication coincided with the recent release of the movie, “Deepwater Horizon.” As a member of the legal team in Houston that represented the drilling contractor in the real Deepwater Horizon disaster of 2010, Mr. Massey wrote: “By my count, what happened on the rig was litigated at least five times,” counting the regulatory hearings, a presidential oil spill commission, the assessment of investigative reports, the BP employee prosecutions and finally the federal multidistrict litigation. In addition, there were the demands from the media, state governments, Congress, shareholders, employees and other regulators.

“Books could be written about the particulars of these actions, but they share one overarching characteristic: Each was greatly influenced by how the parties reacted in the days and months following the blowout. Practically speaking, the successes (and failures) of the parties’ crisis responses drew battle lines, framed issues, and materially affected liability,” Mr. Massey wrote.

He listed the major steps essential for dealing with such a crisis: coordination, control, mobilization of the best experts, and finally, playing the long game, which is aided by people who have been through big crises before.

His conclusion: “Dwight Eisenhower said that plans are nothing, but planning is everything. That’s the essence of crisis response — knowing the risks and opportunities so well that any exigency can be handled.”

Sean Jordan’s Texas Supreme Court Arguments Featured in Law360

Posted on: January 10th, 2014

AUSTIN – Sutherland Asbill & Brennan LLP partner Sean D. Jordan was quoted extensively by Law360 from his arguments to the Texas Supreme Court that it should reject a trial court’s invalidation of an arbitration agreement in a dispute over a cotton supply contract.

Mr. Jordan argued that the trial court could have rejected problematic provisions involving attorneys’ fees and damages limitations rather than throwing out the entire arbitration clause. The arbitration involved a cotton supply agreement that a group of farmers had sued to change.  Mr. Jordan and Austin partners Kent C. Sullivan and Danica L. Milios represent Noble Americas Corp. and Venture Cotton Cooperative in the dispute.

“This court’s precedent for years … [has] said that any unconscionable provision in a contract must be severed if it is possible,” Mr. Jordan said. “And if it is not possible because that provision is essential to the purpose of the agreement, only then will the entire agreement not be enforced.”

The article, “Cotton Cos. Want Arbitration of Farmers’ Contract Fight,” appeared in the Jan. 9 issue of Law360 (subscription required). The case is Venture Cotton Cooperative et al. v. Freeman et al., case number 13-0122, in the Supreme Court of the State of Texas.



BP Engineer’s Trial ‘Stark Reminder’ About Preserving Evidence, Sutherland Lawyers Write in Commentary

Posted on: December 18th, 2013

HOUSTON – Sutherland Asbill & Brennan LLP lawyers Carter Williams and Thomas Appleman co-authored a commentary on essential lessons from the trial of a BP engineer who deleted text messages related to the Gulf of Mexico oil spill in 2010.

Their column, “BP engineer’s trial shows worst outcome of failure to preserve evidence,” appeared on the Houston Chronicle’s popular “Fuel Fix” blog. The column discusses the issues involved in the government’s successful obstruction case against former Kurt Mix, the BP engineer who was involved in efforts to stop the flow of leaking oil. A jury convicted Mix of one charge that he deleted messages to obstruct a federal investigation into the spill. He was acquitted of a second charge.

“The trial provides a stark reminder that the consequences of failing to preserve evidence can be much more severe than adverse inferences and/or employee disciplinary actions,” the attorneys wrote. According to the government indictment, BP sent at least 10 notices to employees warning them that destroying evidence related to the spill could lead to prosecution.

Although obstruction charges rarely result from failure to preserve evidence related to civil suits, “the risks increase whenever the litigation arises out of regulated activity or other circumstances likely to lead to congressional, agency, or grand jury proceedings. In such cases, counsel should ensure that their clients appreciate the additional risks associated with a failure to preserve data,” Mr. Williams and Mr. Appleman wrote.

Both attorneys, working in the Houston office, were on the trial team representing defendant drilling contractor Transocean in the multidistrict litigation arising from the oil spill, with Williams managing much of the case’s massive discovery efforts. Sutherland’s attorneys in Austin and Houston represent clients in Texas and around the world in litigation, energy, transactional, regulatory, environmental and intellectual property matters.

Houston Sutherland partners Rachel Clingman and Steven Roberts selected to ‘Who’s Who in Energy’ list

Posted on: November 22nd, 2013

HOUSTON – Sutherland Asbill & Brennan LLP partners Rachel Giesber Clingman and Steven L. Roberts  are being recognized among the Top 100 leaders in the Houston energy market in the 2013 edition of “Who’s Who in Energy.”

This is the second time both were named among the top influencers in the energy industry based on his selection by the editors of the Houston Business Journal. The “Who’s Who in Energy” list accompanies similar rankings compiled by editors at American City Business Journal publications in Austin, Dallas, Denver, Pittsburgh, San Antonio, St. Louis, and Columbus, Ohio. The full list was published Nov. 15.

Ms. Clingman, partner in charge of the Houston office, is nationally recognized as a litigator who delivers success as defined by the client. She regularly represents energy, chemical, and transportation companies in government, regulatory, and internal investigations. She was selected for Benchmark Litigation’s inaugural list of “Top 250 U.S. Women Litigators;” The American Lawyer’s “45 Under 45” list; and honored with BTI Consulting Group’s Client Service Award for delivering unsurpassed client service.

Mr. Roberts has more than 35 years of courtroom experience, litigating energy, commercial, international insurance, maritime and professional services matters. Recognized nationally for his litigation, insurance and maritime knowledge, he was named to Chambers USA: Guide to Leading Business Lawyers in the area of insurance law; selected as a Texas Local Litigation Star by Benchmark Litigation; and repeatedly named to The Best Lawyers in America in the areas of admiralty & maritime law and personal injury litigation.

Sutherland’s attorneys in Austin and Houston represent clients in Texas and around the world in litigation, energy, transactional, regulatory, environmental and intellectual property matters.



Altered landscape: Pipeline safety agency expands rules to midstream operators

Posted on: November 13th, 2013

The regulatory landscape for midstream gas processing and storage could change significantly, Sutherland’s pipeline attorneys say, thanks to plans by the federal pipeline safety agency, PHMSA, to expand its oversight.

Recently, the Pipeline and Hazardous Materials Safety Administration (PHMSA) indicated it would require midstream natural gas processors and storage operators to abide by the same rules applied to pipelines that transport natural gas liquids. These midstream facilities traditionally have been regulated by OSHA, not PHMSA.

This expansion would obligate companies to reassess their operations and create new compliance programs, says Rachel Giesber Clingman, partner in the Houston office. It also may cause confusion over which specific regulatory rules or standards will be applied to midstream facilities.

The prospect of simultaneous regulation by PHMSA and OSHA is sure to increase operational uncertainty and compliance costs. In at least one case, PHMSA has fined one operator $800,000 and ordered extensive remedial action after finding its midstream process safety management program didn’t comply with the pipeline agency’s regulations.

The full analysis by Sutherland attorneys can be read here. In addition to Ms. Clingman, other Sutherland attorneys familiar with this issue are Jacob Dweck, Paul F. Forshay, Sean D. Jordan, Susan G. Lafferty, Jack Massey and Mark Thibodeaux.

Sutherland partner featured in story on energy companies doing business in Mexico

Posted on: September 17th, 2013

Sutherland partner Steven L. Roberts was quoted recently in the Houston Business Journal in an article about the challenges for energy companies dealing with the legal system in Mexico.

The energy industry is anxiously waiting to see what types of reforms Mexico’s new president might support. Roberts notes that country’s legal system has some significant differences that must be navigated.

“It’s almost required to have a Mexican national agent,” Roberts told the HBJ. Also key is writing arbitration into the contract.

While some might think the U.S. system is a free-for-all at times, it’s a rule-driven methodical process compared to litigation in Mexico, says Roberts. “You want to be in the arbitration situation when at all possible.”

The legal system in Mexico isn’t based on common law practices as it is in the U.S. That can mean that a case that might be a simple commercial dispute in this country could wind up in criminal territory in Mexico, he says.

The full article, “Complex Mexican legal system can challenge foreign energy companies,” is here (subscription required):

Sutherland lawyer quoted about offshore platform accident investigation

Posted on: August 23rd, 2013

Daniel Johnson recently discussed with the Houston Business Journal the decision by Black Elk Energy Offshore Operations LLC to commission its own investigation into the cause of a deadly platform accident that killed three workers last year.

The report by an outside consultant said the explosion that occurred was due to poor training of workers who were hired by a contractor in violation of Black Elk’s contract. Such a report could be most effective with the investment community, Johnson says, because it suggests Black Elk is taking a deep look at the incident with the idea of preventing future disasters.

The company’s report doesn’t absolve the oil company from fault with federal regulators, Johnson told the HBJ, although they may take it into account as they do their own investigation.

The full article, “Black Elk explosion report could boost company profile,” is available here (subscription required):

Sutherland attorneys to discuss oil spill liability at ACC event

Posted on: April 8th, 2013

In the wake of the Deepwater Horizon trial, oil spill liability and compensation issues are being re-examined throughout the world.  Sutherland partners David Baay and Peter Rodgers will speak on a panel at the upcoming ACC Energy Practice Group luncheon on Tuesday, May 7, 2013. The title of their presentation is, “Oil Spill Liability in the U.S. and Abroad.” They will discuss such topics as:

  • Existing United States laws and international regimes regarding oil spill liability and compensation
  • The manner in which the laws have been implemented by regulation and policy
  • What might be expected on the new horizon
  • Possible best practices from the lessons learned so far.

For more information on the event, visit the ACC Houston Chapter website.