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.
Sutherland Asbill & Brennan LLP bankruptcy Partner Mark Sherrill was quoted in the Houston Chronicle in an article headlined “Bankruptcy filings on rise in Houston,” which zeroed in on the oil price collapse and its impact. The story reported that the world’s Energy Capital saw 210 companies file for Chapter 11 protection in the U.S. Southern District of Texas during the first six months this year. That compares to just 98 filings for the same period in 2015.
The bankruptcy spike didn’t surprise Houston economic observers. And Mr. Sherrill noted that as the downturn dragged on and lenders cut off credit, the financial outlook only darkened for many companies.
The numbers cited in the article may actually under-represent the true picture. The data did not include Houston-based companies that filed for Chapter 11 in other states, such as Delaware. Mr. Sherrill told the Chronicle that in the past, large companies favored Delaware and New York for their experience and efficiency. However, he said, Houston’s federal court has changed some administrative rules to match Delaware’s speed, and that has perhaps encouraged more companies to file in Houston.
Mr. Sherrill joined the Houston office from Sutherland’s Washington office earlier this year to focus on complex energy bankruptcy matters. In recent months, he has been widely quoted in Texas and energy media on the potential industry impact of bankruptcy court rulings that allowed certain distressed producers to break gas-gathering contracts.
Daniel Johnson, Partner in Charge of the Houston office of Sutherland Asbill & Brennan LLP, was selected among the Bayou City’s most influential energy leaders by the Houston Business Journal, which recently published its 2015 Who’s Who in Energy list.
This year’s rankings were among the most selective in recent years with only 38 local lawyers chosen among the leaders in various sectors of energy and the firms that service energy companies. The honorees were chosen by the publication’s journalists based on nominations.
Mr. Johnson has focused his practice on energy litigation since the beginning of his legal career more than a decade ago. He was deeply involved in the successful representation of an international drilling contractor in high-profile litigation after the 2010 Gulf of Mexico oil spill. Mr. Johnson also advises energy clients on regulatory investigations and compliance issues, contractual liability exposure and risk shifting provisions, and incident response and crisis management.
With colleagues in New York, London, Washington D.C., Austin, Atlanta, and Geneva, Sutherland’s Houston office continues to forge the firm’s strong reputation as a trusted legal adviser in the energy space. Daniel’s selection to the Houston Business Journal’s energy leaders list is continued confirmation of Sutherland’s reputation in the Houston energy market in the areas of crisis management, project development, maritime law and commercial litigation.
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.
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 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):
http://www.bizjournals.com/houston/blog/drilling-down/2013/09/complex-mexican-legal-system-can.html
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): http://www.bizjournals.com/houston/blog/drilling-down/2013/08/black-elk-report-could-boost-company.html?s=print
Transocean executive is grilled; BP lawyers work to poke holes in case
The Times-Picayune
By Richard Thompson
27 March 2013
The Transocean executive who led the Swiss-based company’s internal investigation into the 2010 Deepwater Horizon disaster testified Tuesday that the drilling rig was “in really good shape” before the accident, as the company’s lawyers worked to poke holes in previous testimony that blamed the rig owner for BP’s Macondo well blowout.
Bill Ambrose, Transocean’s director of special projects, testified on the 17th day of the sprawling civil trial to determine liability for the accident and assess tens of billions of dollars in fines and damages. Ambrose was Transocean’s director of maintenance and technical support when the Deepwater Horizon caught fire and exploded April 20, 2010, killing 11 workers and leading to one of the largest oil spills in the nation’s history.
During direct questioning by Transocean lawyer Rachel Clingman, Ambrose recalled learning about the accident early the next morning.
Sutherland attorney Jack Massey recently was quoted in a Houston Business Journal article addressing the U.S. Environmental Protection Agency’s efforts to prevent fraud in its renewable fuel credit program.
Click here to read the article (subscription required):
http://www.bizjournals.com/houston/print-edition/2012/09/28/energy-companies-await-epa-rule-on.html