Daniel Becnel Jr., also known as “the king of torts” filed the first federal lawsuit eight days after the April 20 Gulf of Mexico rig explosion and oil spill.
From his French colonial-style office in Reserve, Louisiana, population 10,000, he tracks the legal squadrons gathering to sue BP Plc and its contractors for claims that experts say could add up to a half-a-trillion dollars or more. About 110 suits have been filed, according to Becnel, and dozens more appear to be on the way, Ken Wells, of Bloomberg Businessweek, reports in the May 31 issue.
As the spill has spread, waves of lawyers have followed. Becnel, as is his custom, is surfing out front. So far, he and partnering law firms have filed nine federal suits -- representing Louisiana commercial fishermen, a New Orleans area oyster restaurant and Key West charter boat operators, among others -- and they’re preparing to file three or four more.
BP officials declined to comment for this story.
Becnel, 65, is soft-spoken. In his khakis, open-collar shirt and fondness for breaking out dog-eared volumes on industrial safety, he might be mistaken for an engineering professor. In fact, he has represented plaintiffs in some of the highest-profile class actions in American history, from fen-phen diet pills and Big Tobacco to Dow Corning breast implants and the Toyota Motor Corp. sudden-acceleration cases.
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BP Pressured Rig Worker to Hurry Before Disaster, Father Says
The highest-ranking crew member to perish aboard the Deepwater Horizon drilling rig warned his family that BP Plc was pressuring him to sacrifice safety for the sake of time and money, Bloomberg News’s Joe Carroll and Laurel Brubaker Calkins report.
Jason Anderson, one of 11 rig workers presumed dead after an April 20 explosion and fire sank the Deepwater Horizon and triggered the worst oil spill in U.S. history, told relatives in February and March that BP was urging him to accelerate work on the Macondo well off the Louisiana coast, said his father, Billy Anderson.
On previous wells drilled with the same rig, Jason Anderson, a 35-year-old employee of vessel owner Transocean Ltd., had been able to convince BP representatives to eschew shortcuts that he believed would compromise safety, his father said. But in the eight weeks preceding the disaster, BP stepped up the pressure and overruled safety objections, Billy Anderson, 66, said.
“My Jason told me he had argued BP down a few times on previous wells when they wanted him to speed things up and make changes that were unsafe,” Billy Anderson said May 27 in an interview at his home near Blessing, Texas, about 110 miles southwest of Houston. “But the last two times he was home he said they were putting more and more pressure on him and he was worried.”
The Anderson family has retained Texas attorney Ernest Cannon to represent their interests.
BP Chief Executive Officer Tony Hayward told the CNN television network on May 26 that “a whole series of failures” preceded the disaster.
“Safe, reliable operations are our number one,” Jon Pack, a spokesman for London-based BP, said May 28 in a telephone interview. “It’s been Tony’s number one since he got here, and we obviously would not comment on things under investigation, under several investigations.”
In a statement, Transocean said its workers have the right to stop work any time they perceive an unsafe situation. “So critical is safety at Transocean that every crewmember has stop work authority,” the company said in the statement. This authority gives them the ability to halt work should an employee suspect an unsafe situation.
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Commerzbank Loses Bid to Dismiss Dresdner Bonus Suits
Commerzbank AG failed in a bid to halt a lawsuit from more than 100 current and former bankers at its Dresdner Kleinwort unit in the largest U.K. bonus dispute stemming from the financial crisis.
Justice Peregrine Simon in London ruled May 28 that he hasn’t been given enough evidence to dismiss the case. Still, he also ruled that any claims based solely on events prior to a December letter to staff regarding their bonuses would have “no realistic chance of success” if they went to trial.
“A fuller investigation into the facts of the case would add to or alter the evidence available and so affect the outcome of the trial,” said Simon.
At a hearing earlier this month, lawyers for Commerzbank said that the collapse of Lehman Brothers Holdings Inc. and its affect on the financial markets made it impractical for the bank to pay what it considered to be discretionary bonuses. The bankers say they were paid a 10th of what they were owed in a contract with Dresdner Kleinwort before it was acquired by Commerzbank. The bank argued May 4 that it wasn’t obligated to pay the money.
The May 28 ruling said that in December 2008, Dresdner Kleinwort’s human resources department sent letters to employees detailing discretionary bonus arrangements for that year. Prior to the letters there had been other announcements and statements from the bank about payouts referred to by claimants.
“I have concluded that a cause of action based solely on the announcement and subsequent statements prior to the 19 December letters has no realistic chance of success at trial,” Simon said.
Commerzbank said in an e-mailed statement that this finding “supports the view that Dresdner Bank was entitled to reduce its employees’ 2008 discretionary bonuses in the light of the marked deterioration in the investment bank’s performance in late 2008.” The bank said it will “continue to contest the remaining aspects of this litigation vigorously.”
Louise Beeson, spokeswoman for some of the claimants, said they planned to appeal the section of the judgment relating to the December letters.
“We always believed Commerzbank’s application to seek summary dismissal of this case was inappropriate and we are delighted that Mr. Justice Simon has agreed,” Beeson said in an e-mailed statement.
The case is The parties named in Schedule A v. Dresdner Kleinwort Ltd. & ors, High Court, IHQ/10/0062 IHQ/10/0063
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Heckmann Sued by Ex-China Water Executive Over Shares
Heckmann makes private labeled bottled water.
Ng Tak Kau, China Water’s former chief operating officer, contends Heckmann officials violated Delaware law by canceling more than 4 million shares he got in the bottled-water company’s acquisition of its Chinese rival.
Analysts said Palm Desert, California-based Heckmann’s bought China Water in 2008 to tap into the fast-growing Chinese bottled-water market and gain a foothold in the global water business.
By wiping out the shares, Heckmann executives circumvented the judicial process and took “matters into their own hands by effectively stealing plaintiff’s property,” Kau’s lawyers said May 28 in the Delaware Chancery Court suit.
The case is Ng Tak Kau v. Heckmann Corp., 5524, Delaware Chancery Court (Wilmington).
Google Woes Spread as Oregon Court Demands Wi-Fi Data
Google Inc. has been ordered to turn over to an Oregon district court by next week data it collected with people’s e- mails, files and digital phone records, according to court documents.
House Judiciary Committee Chairman John Conyers May 28 also requested that Google preserve any information related to its data gathering.
Google sends out cars to photograph streets and houses that people can see with the Street View feature in Google Maps. The vehicles also scanned for Wi-Fi networks used for Internet access and collected private data from the wireless networks of some homes, according to a complaint filed by two people who may have been affected. Google said in a blog in May that it mistakenly collected the Wi-Fi data.
Oregon District Court Judge Michael Mosman issued a restraining order this week to stop Google from destroying the data it gathered and to turn over copies of the information, after Google deleted similar data from other countries. The order came at the request of plaintiffs in alleging invasion of privacy, according to a complaint filed on May 17.
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Pakistan Court Orders Facebook Ban to Be Lifted
A Pakistani court ordered the government to lift a ban on Facebook Inc., the world’s No. 1 social networking service after the company “assured” the court no blasphemous material will be available. The order came 12 days after the court blocked access to the website, Chaudhry Zulfiqar, the lawyer who asked the court to block Facebook on May 19, said by telephone from Lahore yesterday.
The Lahore High Court ordered the ban on Facebook on May 20 and blocked Google Inc.’s YouTube video service a day later. The Pakistan Telecommunication Authority also blocked 450 Web links for carrying objectionable material.
The ban began after a Facebook user started a competition asking participants to draw sketches of Muhammad, the Prophet of Islam, which is prohibited in Islam.
The U.S. government is not involved in the case, according to Richard Snelsire, spokesman at the U.S. consulate in Islamabad. Palo Alto, California-based Facebook’s corporate communications department didn’t immediately respond to an e- mailed enquiry.
A further hearing is scheduled for June 15.
Adviser Starr’s Alleged Scheme Uncovered During Stein Probe
The criminal investigation that led to the May 27 arrest of investment adviser Kenneth Ira Starr began with a probe of former Manhattan Borough President Andrew Stein on a separate matter, a federal prosecutor said.
Starr was charged May 27 with stealing at least $30 million dollars from wealthy clients as part of a scheme to buy a $7.5 million apartment. At the same time, federal prosecutors accused Stein, who faced millions of dollars in tax debt, of hiding from the Internal Revenue Service assets he held in a shell corporation called Wind River LLC.
At a bail hearing May 27 in Manhattan federal court, Assistant U.S. Attorney William Harrington told a judge that prosecutors were probing Stein’s use of Wind River before coming across Starr’s alleged fraud. Starr is accused of stealing funds from celebrity and socialite clients, diverting client funds into investments in which he or his associates had a secret stake.
Starr’s lawyer, Joshua Klein, declined to comment May 28. Stein’s lawyer, Andrew Maloney, didn’t immediately return a call.
The case is U.S. v. Starr, 1:10-mj-1135, U.S. District Court, Southern District of New York (Manhattan).
Toyota Ordered to Turn Over Acceleration Evidence
Toyota Motor Corp. was ordered to give lawyers suing over sudden acceleration claims most of the documents it previously produced for Congress.
U.S. District Judge James V. Selna in Santa Ana, California, denied Toyota’s request for a delay in turning over the records and told the company to produce them within 30 days. Toyota lawyers had argued the documents are too numerous, many are in Japanese rather than English, and some are protected by legal privileges.
Selna allowed Toyota more time to produce Japanese items and filter out any that are inadmissible in federal lawsuits. He also ordered plaintiffs’ lawyers to submit a consolidated complaint 30 days after they get the material.
Toyota, the world’s largest automaker, faces at least 228 federal and 99 state economic and personal injury lawsuits related to sudden-acceleration incidents.
The cases are combined as In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices and Products Liability Litigation, 8:10-ml-02151, U.S. District Court, Central District of California (Santa Ana).
BOC Hong Kong Staff Plead Not Guilty on Lehman Notes
Two BOC Hong Kong (Holdings) Ltd. managers pleaded not guilty in the city’s District Court yesterday to fraudulently selling structured products linked to Lehman Brothers Holdings Inc.
Judge Stanley Chan set Nov. 8 as the date for the trial of Tai Ching, 38, and Nov. 25 for the trial of Cheung Kwai-kwai, 47.
Cheung was charged with ten counts of fraudulently or recklessly inducing others to invest money in the securities between 2005 and 2008. Tai was charged with one count of the same crime.
The minibonds, or custom-made securities linked to the credit worthiness of companies, were backed by collateralized- debt obligations and often sold to elderly, mentally ill and poorly educated people, according to an Hong Kong Monetary Authority investigation made public by lawmakers a year ago.
A third BOC Hong Kong employee was arrested on March 26, and is due to appear in court in August, according to Hong Kong police spokeswoman Michelle Mak.
The three are free on bail
The cases are Hong Kong SAR v. Cheung Kwai, DCCC526/2010 and HKSAR v. Tai Ching, DCCC527/2010, Hong King District Court.
Continental Denies Concorde Crash Blame, Asks Court to Clear It
Continental Airlines Inc. isn’t to blame for the fatal crash in 2000 of a Concorde supersonic jet outside Paris and should be cleared of any responsibility, the company’s lawyer told judges May 28.
The Concorde crash that killed 113 people wasn’t caused by the metal strip that prosecutors said was responsible for the accident, Continental lawyer Olivier Metzner told judges in his closing arguments on the final day of the trial in Pontoise, near Paris.
Investigators said the crash was caused by a titanium wear strip that fell from a Continental plane on the runway at Paris’s Charles de Gaulle airport. The piece of metal ruptured the tire of the Air France SA Concorde, sending debris into fuel tanks and sparking the fire that brought down the plane, according to the criminal probe. The crash hastened the end of Concorde services.
“How could this little piece of metal bring down this huge airplane?” Metzner said. “Common sense sometimes trumps science,” he said, criticizing the experts consulted by the investigation.
Air France, which bought KLM Royal Dutch Airlines NA in 2004 to become Europe’s biggest airline, asked for 15 million euros in damages, saying the crash harmed the company’s reputation. Prosecutor Bernard Farret asked for a 175,000 euro- fine against Continental.
The court said it would issue the verdict on Dec. 6.
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Porsche Wins Dismissal of Suit Over 2009 Shareholder Meeting
Porsche SE, the maker of the 911 sports car, won dismissal of minority investor suits seeking to invalidate the 2009 supervisory board election and other decisions taken at that year’s shareholder meeting.
The Stuttgart Regional Court in Germany rejected the bid that also targeted decisions discharging directors from liability for the 2008 fiscal year, claiming they approved illegally high compensation for the management board, the court said in an e-mailed statement May 28.
The suit centered around the 143.5 million euros ($177.4 million) in salary Porsche’s management board received in the fiscal year ending in July 2008. About 139.5 million euros of the amount was linked to options on Volkswagen AG shares Stuttgart-based Porsche had built up that year during a failed takeover attempt.
After the unsuccessful takeover-attempt, Volkswagen, based in Wolfsburg, agreed to merge in August with the 911 sports-car maker. Porsche’s debt had tripled to more than 10 billion euros following the failed bid to buy Volkswagen.
The shareholder meeting took place in January 2009, before Porsche’s takeover bid, led by former Chief Executive Officer Wendelin Wiedeking, was abandoned.
Under German law, minority shareholders can ask court’s to invalidate decisions taken at annual meetings if the decision was taken contrary to applicable rules including procedural issues, like proper invitations to the meeting.
The case is LG Stuttgart, 31 O 56/09 KfH.
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Sojitz Faces U.S. Criminal Probe Over Alba Payments
U.S. prosecutors are investigating whether Sojitz Group, a Japanese trading company, paid bribes to employees of Bahrain’s state-owned aluminum producer, according to a court filing in a civil lawsuit.
The Justice Department disclosed the criminal probe May 27 in asking a judge to halt a lawsuit by Aluminum Bahrain BSC, or Alba, against Sojitz. Alba claims Sojitz paid more than $14.8 million in kickbacks to Alba managers between 1993 and 2006 to secure discounts on aluminum prices.
“The United States has a direct and substantial interest in this case, as the subject matter giving rise to this case is also the subject of an ongoing criminal investigation,” Adam Safwat, assistant chief of the Justice Department’s fraud section, wrote in a memo filed in federal court in Houston.
The U.S. investigation of whether Sojitz violated the Foreign Corrupt Practices Act intersects with an FCPA probe of Alcoa Inc., the largest U.S. aluminum producer, according to the filing. In March 2008, prosecutors won a halt to a civil lawsuit that Alba filed against Alcoa in federal court in Pittsburgh.
The Justice Department has been probing since 2008 whether Alcoa made corrupt payments to public officials in Bahrain related to Alcoa’s sale of alumina, the principal raw material in aluminum, to Alba, according to the May 27 filing.
No one was available at Sojitz’s New York office for comment, according to an operator.
Two attorneys for Sojitz, Timothy Treanor and Lynn Dummett of Sidley Austin LLP in New York, didn’t return calls seeking comment.
Alba attorney Mark MacDougall of Akin Gump Strauss Hauer & Feld LLP in Washington said the company “certainly respects the important role that the Department of Justice has to play.”
In his application to halt the proceedings, Safwat said that lawyers for Sojitz and Alba don’t oppose the motion. He said the civil proceedings should stop “based on the need to avoid prejudice to ongoing criminal investigations.”
A spokesman for Pittsburgh-based Alcoa, Kevin Lowery, had no immediate comment on the investigation.
The cases are Aluminum Bahrain v. Sojitz Corp., 09-cv-4032, U.S. District Court, Southern District of Texas (Houston) and Aluminum Bahrain v. Alcoa Inc., 08-cv-299, U.S. District Court, Western District of Pennsylvania (Pittsburgh).
L’Oreal, Chanel Face Possible Price-Fixing Fines in Switzerland
L’Oreal SA and Chanel SA may be fined by Switzerland’s competition commission, which said it found evidence of price- fixing of cosmetics and perfumes.
Fines for possible cartel-rules violations by the two companies, as well as Clarins SA and Christian Dior SA, could be 17,000 francs to 25.5 million Swiss francs ($22 million), the commission said. The size of the penalties will be decided after the companies have responded to the allegations and will take into account their level of sales and the severity of any violations, the watchdog said May 28 in a statement.
“Evidence has made it more and more clear during the investigation that the companies concerned were able to harmonize their prices and protect their market share thanks to information exchanges,” the regulator said.
L’Oreal Produits de Luxe Suisse SA and L’Oreal’s YSL Beaute Suisse SA units “deny any breach of the cartel act that could have been intended to distort competition,” said Stephanie Carson-Parker, a spokeswoman for the French cosmetics company. The units will respond to the allegations, she said.
High Court Nominee Kagan May Get Support From Republicans
Some Republican senators are extolling the record of U.S. Supreme Court nominee Elena Kagan, suggesting she might win confirmation with support from many members of the minority party.
Kagan’s background, including serving as dean of Harvard Law School, is impressive and her lack of judicial experience isn’t a barrier to serving on a high court as far as some Republicans are concerned.
Barring surprises, there may be more votes for Kagan than for President Barack Obama’s first Supreme Court appointee, Sonia Sotomayor, said Manuel Miranda of the conservative judicial group Third Branch Conference in Washington. Sotomayor was approved 68-31 last year.
Kagan’s critics have focused on her lack of judicial experience and her opposition, as Harvard’s law school dean, to military recruiting on the campus in protest over the policy of banning openly gay men and women from serving in the armed forces.
While neither issue has gained much traction with some Republicans, the hearings could still be contentious. Lawmakers in both parties want to look into memos and e-mails Kagan wrote while serving as in the White House when Clinton was president.
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High Court Limit on Youth Life-Without-Parole Tops Chart
A U.S. Supreme Court ruling that said that youths can’t be sentenced to life in prison without parole unless they are convicted of murder, which may mean shorter jail terms for scores of inmates, was the most-read litigation docket on the Bloomberg Law system last week.
The ruling, which split the court along ideological lines, extends a 2005 decision that outlawed the execution of murderers who were under 18 at the time of the crime. Both cases turned on the ban on “cruel and unusual” punishment in the Constitution’s Eighth Amendment.
“This clear line is necessary to prevent the possibility that life without parole sentences will be imposed on juvenile nonhomicide offenders who are not sufficiently culpable to merit that punishment,” Justice Anthony Kennedy wrote for five of the six justices in the majority.
The ruling will have its biggest impact in Florida, which Kennedy said houses 77 of the 129 juveniles who have been sentenced to life without parole for a crime other than murder. The court’s reasoning might also put new constraints on judges in other sentencing contexts, said Douglas Berman, an Ohio State University law professor who writes a blog on federal sentencing.
The case is Graham v. Florida, 08-7412, U.S. Supreme Court (Washington).
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