The oil spill that began in April 2010 at the Deepwater Horizon rig in the Gulf of Mexico gave rise to lawsuits of many types related to the direct impacts and consequences of the incident itself. However, the litigation fallout from the tragic event also extended into disputes over certain collateral issues. One such area of litigation involved plaintiffs who alleged that they provided services or intellectual property in connection with the defendant companies’ effort to halt and remediate the oil spill, with the plaintiffs alleging they were not paid for their services or ideas. Additionally, those who were already developing and promoting technologies for oil spill remediation, who made efforts to avail themselves of the business opportunities afforded by this high-profile incident, landed in a lengthy jury trial involving two well-known Hollywood stars.
Indeed, when a company confronted with a disaster on the scale of the Deepwater Horizon oil spill receives some 123,000 volunteered suggestions from the public as to how the company might address and remedy the spill, it should come as no surprise that differing perceptions might follow as to which of the suggestions were in fact used, and whether any compensation was due for the proffered ideas. See Suzanne Goldberg, BP Bought Kevin Costner’s Oil Spill Clean-up Machines—Despite Field Test Failure, The Guardian (July 12, 2011, 08:30 EDT). The remedial efforts associated with the Deepwater Horizon oil spill have led to several lawsuits in which the plaintiffs asserted that they were not fairly compensated for their contributions to those efforts.
In Richards v. British Petroleum, 869 F. Supp. 2d 730 (E.D. La. 2012), Richards filed a pro se complaint alleging that she provided BP with ideas for containing the flow of oil and cleaning up the oil that was released and that BP, Halliburton, Transocean, Cameron and the Gulf Coast Claims Facility had used her intellectual property without compensating her for it. The proposals the plaintiff allegedly provided for how to address the oil spill included, among others: “(1) plugging the leak using a combination of materials, (2) placing a giant plunger on the well, (3) using a vinegar solution to clean up the spill, (4) the use by BP of spiritual terms to inspire confidence and respect for the American people, . . . (7) an email to Kenneth Feinberg concerning the drilling of a hole and siphoning of oil.” Id. at 733.
After examining Richards’ complaint and amended complaint, the court found that the plaintiff’s claims were “implausible due to the dearth of factual matter therein. The court is unable to draw an inference that any of the named defendants are liable for the alleged patent and copyright infringement and theft of intellectual property.” Id. at 737. The court granted the defendants’ motions to dismiss.
The plaintiff in Southeast Recovery Group, LLC v. BP America, Inc., 278 F.R.D. 162 (E.D. La. 2012), sued for breach of contract and sought to recover more than $1 million for helicopter services allegedly provided to BP in connection with the Deepwater Horizon incident. BP pled fraud among its defenses to this claim. The United States moved to intervene in the case and sought a stay of the proceedings “on grounds that it is currently conducting an active criminal investigation, including grand jury proceedings, concerning the same transaction.” Id. at 165. The court noted that BP, as the potential victim of any criminal fraud that might be identified through the criminal proceedings, did not oppose the government’s motion. Subject to a series of conditions described in its ruling, the court allowed the government to intervene and stayed the civil proceedings pending the outcome of the criminal investigation.
The case of Stanwood Boom Works, LLC v. BP Exploration & Production, Inc., 476 Fed. App’x 572 (5th Cir. 2012), involved a series of e-mails, negotiations, proposals, and counterproposals in June and July of 2010 concerning the contractual specifications and purchase price for an oil containment boom that Stanwood proposed to sell to BP. When the communications ended without a purchase of the containment boom from Stanwood, it sued BP asserting claims of breach of contract and promissory estoppel. In affirming the district court’s ruling in favor of BP, the Fifth Circuit concluded that “BP’s purchase order was not an offer because BP’s signature, after Stanwood’s assent, was a condition precedent to contract formation.” Id. at 575. Even if BP’s purchase order were to be considered an offer, the court found that Stanwood’s response was not an acceptance. The court likewise found against Stanwood on its claim of promissory estoppel, noting that BP had promptly advised Stanwood that the purchase order was on hold due to the inability to obtain BP management approval.
In Vann v. British Petroleum Oil Co., 451 F. App’x 404 (5th Cir. 2011), the court denied Vann’s appeal of the trial court’s order dismissing without prejudice “his suit alleging that the defendants violated his civil rights when they failed to financially compensate him after he submitted to them, and they used, his plans for a device designed to stop the Deepwater Horizon oil spill.” Id. at 405. The plaintiff moved for leave to proceed in forma pauperis on appeal. After reviewing the procedural history showing that the plaintiff had made little effort in the proceedings below to respond to the requests for additional information regarding his claims, the court dismissed the appeal as frivolous.
Actors Kevin Costner and Stephen Baldwin, among others, were adversaries in a real life lawsuit that proceeded to a nine-day jury trial in federal court in New Orleans in June 2012. The case was styled Contogouris v. Westpac Resources, LLC., No. 10-4609, 2012 WL 3017521 (E.D. La. 2012), appeal docketed, No. 12-30870 (5th Cir. Feb. 4, 2013), Stephen Baldwin was the co-plaintiff and Kevin Costner was among the co-defendants. Since the mid-1990s, Costner received occasional publicity with respect to his investment in, and promotion of, novel technology designed to cleanup oil spills, but that venture had experienced mixed results. On April 20, 2010, the Deepwater Horizon oil spill commenced in the Gulf of Mexico. As a result of negotiations that followed in the aftermath of that incident and continuing through mid-May, Costner (through his entity WestPac Resources), Baldwin, and several other parties invested in and formed Ocean Therapy Solutions, LLC (OTS), to market the unique oil spill clean-up technology generally, and to promote the use of that technology by BP in particular. Pre-Trial Order at 6–14, Contogouris v. Westpac Res., LLC, No. 10-4609 (E.D. La. Apr. 13, 2012) (summary of plaintiffs’ factual allegations and factual background). After forming OTS, Costner and other representatives and contractors of OTS promptly made contacts with BP to market the technology for use in the ongoing oil spill.
By virtue of the lengthy chronology of communications and events detailed in the often-conflicting assertions of the litigants, certain members of OTS soon proposed that a “cash call” be made that would have required Baldwin and his co-plaintiff to invest an additional $1.18 million in OTS, with uncertainty as to the purposes for which the additional money would be used. Costner and Smith (one of Costner’s primary associates in the OTS venture) were alleged to have pushed for the cash call up to the point when, on June 11, 2010, Baldwin and Contogouris agreed to sell their interests and signed transfer agreements agreeing to transfer their interests to Smith or his designee.
In the present lawsuit, which was filed in December 2010, Baldwin and Contogouris alleged, among many other assertions, that the “cash call” was a sham that never occurred and was calculated to pressure the plaintiffs to sell their interests in OTS before the company realized the profits from anticipated transactions with BP. The plaintiffs asserted that the defendants led them to believe that BP had made no agreements to purchase OTS’s product at the time plaintiffs agreed to sell their interests, and that plaintiffs only later learned that BP had, days earlier, placed an order for 32 units, which substantially contributed to over $30 million in distributions to the members of OTC between July and December 2010. Costner and the other defendants responded with many counterallegations, including that they had no duty to disclose the alleged information to the plaintiffs, that the plaintiffs possessed actual or constructive knowledge of the facts they alleged were misrepresented and/or omitted by the defendants, and that the transfer documents included a waiver and release of their claims. At the conclusion of the trial, the jury reached a verdict in favor of the defendants and against the plaintiffs. Contogouris v. Westpac Res., No. 10-4609, 2012 WL 3017521 (E.D. La. July 23, 2012) (verdict filed June 14, 2012).
It has often been said that we should never let a disaster or crisis go to waste by overlooking the opportunities those circumstances present. The multiple litigation subplots that have developed since the occurrence of the oil spill in the Gulf reveal that there has been no shortage of those who have recognized opportunity in the resulting crisis.