Crisis Response &
Incident Investigation

NEWS & NOTES

Baay quoted by AP, Law360, Others on Impact of Court Decision on Chemical Board’s Authority in Transocean Case

Posted on: March 24th, 2015

Comment from Sutherland Asbill & Brennan partner and energy litigator David Baay of Houston was carried by media across the country in stories about the impact of a federal appeals court decision confirming the U.S. Chemical Safety Board’s power to investigate offshore oil spills.

The decision has “some significant ramifications for offshore operators,” Mr. Baay told The Associated Press in a national story headlined, “Court: Chemical Safety Board Can Investigate Offshore Spills.” The result is “that any offshore incident of significance is likely to face one more federal agency among an already crowded field.”

The AP story was posted on dozens of news websites, including The New York Times, ABC News, Yahoo News, CNBC, many local TV websites and newspapers, and the London-based Daily Mail.

The chemical board was investigating the April 2010 explosion in the Gulf of Mexico which sank Transocean Deepwater Drilling Inc.’s rig and led to a massive oil spill. The chemical board had subpoenaed Transocean for thousands of pages of documents. Baay and others on Sutherland’s legal team representing Transocean contended the board was not authorized to investigate marine oil spills.

In September 2014, a three-judge panel of the 5th U.S. Circuit Court of Appeals ruled in favor of the Chemical Safety Board. And on March 12, 2015, the full court rejected Transocean’s request for a rehearing.

In an article headlined, “Transocean loses appeal in safety board subpoena case,” the Houston Chronicle also quoted Mr. Baay: “The Chemical Safety Board — an agency with no rule making or enforcement authority, and one that struggles to survive from year to year — will now be emboldened to investigate any marine spill on an offshore rig that might possibly have a related, unanticipated hazardous emission.”

Mr. Baay added in an interview with Law360 (subscription required): “It’s a bit troubling to these operators, because on the first front you’re dealing with agencies that have real authority, like the DOJ (Department of Justice). The fact that you’re answering to a federal agency that has no power beyond an ability to investigate, it’s a distraction.”

He also pointed out an additional troubling bit of fallout from the 5th Circuit decision in the article by Texas Lawyer (subscription required), “5th Circuit Gives Chemical Board Subpoena Power in Deepwater Horizon Probe.” “One more impact is that the Fifth Circuit ruled in this case that the Deepwater Horizon rig is a stationary source,” he explained. “That is inconsistent with how the Fifth Circuit has classified semisubmersible deepwater drilling rigs in the past.”

Daniel Johnson Quoted by Argus on Crude-by-Rail Challenges

Posted on: August 11th, 2014

Daniel Johnson, Partner-in-Charge of the Houston office of Sutherland Asbill & Brennan LLP , recently was quoted about the challenges of transporting crude by rail in a publication of Argus Media, the London-based provider of data, news and market intelligence on global energy markets.

In an article headlined “Rolling Resistance” in the subscriber-only Argus Petroleum Transportation North America, Mr. Johnson discussed the regulatory patchwork of state and local laws confronting companies that want to ship oil by train. Specifically, many highly populated locales are wary of approving construction for new rail delivery unloading terminals.

“The industry is having to react in a very piecemeal manner,” Mr. Johnson says in the article. “If you are a shipper, rail company or producer, it is hard to know, ‘What do I need to go do, where do I need to make my investment so I am able to comply with the regulatory landscape?’”

Mr. Johnson predicts that ultimately industry will get most of its projects built, though not as quickly or easily as hoped. “As a society we are responding to a need, and that need is to add infrastructure and enhance infrastructure to support a growth industry in the U.S. It is not always a clean and easy process,” he tells Argus readers, “but I do think the regulatory process will unfold in a way to accommodate everybody.”

Sutherland Partner Daniel Johnson Talks to Houston Business Journal about Union with Energy Firm Arbis LLP

Posted on: May 14th, 2014

HOUSTON – Sutherland Asbill & Brennan LLP Partner Daniel Johnson was interviewed by the Houston Business Journal about what the firm’s recent union with European energy boutique Arbis LLP will mean for clients.

Mr. Johnson says Arbis Sutherland LLP, with offices in London and Geneva, bolsters Sutherland’s energy practice, especially in the transactional and trading areas. “It’s sort of a natural expansion for us. With Arbis, we saw the opportunity to grow our expertise, and felt we needed a presence there (in the U.K.) to serve our clients,” he said.

“They offer a pretty broad range of energy expertise. In particular, the energy sector in terms of commodity trading, shipping. They’re also very well regarded in the upstream energy space.”

Read the full interview, “Houston-based law office joins forces with UK firm to expand energy expertise,” here.

 

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):

http://www.bizjournals.com/houston/blog/drilling-down/2013/09/complex-mexican-legal-system-can.html

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): http://www.bizjournals.com/houston/blog/drilling-down/2013/08/black-elk-report-could-boost-company.html?s=print

Sutherland lawyer featured in Gulf Spill news story

Posted on: June 25th, 2013

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.

(more…)