Brent Rigging Suit Lawyers Fight Over Litigation Control

Attorneys for four oil traders suing over alleged manipulation of crude prices copied much of their complaint and violated federal court rules in an attempt to control the litigation, a rival group of lawyers claimed.

The traders, represented by the New York-based law firm Kirby McInerney LLP, sued last month in Manhattan federal court claiming some of the world’s biggest oil companies, including BP Plc, Statoil ASA and Royal Dutch Shell Plc, conspired with Morgan Stanley and energy traders including Vitol Group to manipulate spot prices for Brent crude oil for more than a decade. The benchmark is used to price more than half the world’s crude and helps determine what consumers pay for fuel.

Kirby McInerney has asked U.S. District Judge Andrew L. Carter Jr., who’s overseeing a dozen class-action cases targeting alleged Brent crude price rigging, to appoint it lead counsel. A group of three law firms, led by New York’s Lovell Stewart Halebian Jacobson LLP, claimed in court papers filed Nov. 26 that Kirby McInerney “suffers from an experience deficit” in litigating similar commodity manipulation suits.

Lovell Stewart, Minneapolis-based Robins, Kaplan, Miller & Ciresi LLP and White Plains, New York-based Lowey Dannenberg Cohen & Hart PC are urging Carter to name them as lead counsel, with Lovell Stewart as chair.

Largest Fees

Lead counsel in class actions control the direction of the litigation, assign tasks to other law firms, decide whether to settle or go to trial, and eventually reap the largest fees.

In their complaint, the traders alleged they paid “artificial and anticompetitive prices” for Brent futures. They claim the defendants artificially drove the Dated Brent spot price up or down to allow them to profit on swaps.

The traders said the oil company and energy-trading house defendants, which include Trafigura Beheer BV and Phibro Trading LLC, submitted false and misleading information to Platts, an energy news and price publisher whose quotes are used by traders worldwide.

Kirby McInerney claimed in court papers that it has devoted the most resources to investigating the case. Its complaint contains the “most substantial and particularized allegations,” including claims against New York-based Morgan Stanley, Vitol and other energy traders not named in other lawsuits, Kirby McInerney said.

‘A Compliment’

“You just have to look at our complaint to see that our work is original,” David Kovel, the lead Kirby McInerney lawyer on the case, said yesterday in a phone interview. “It’s a compliment that Chris Lovell wants to claim credit,” he said, referring to the Lovell Stewart partner.

Kovel’s practice includes representing clients in whistle-blower cases and in antitrust and commodities litigation, according to a biography on the firm’s website. Part of the support for Kirby McInerney’s request to be named lead counsel is contained in papers that a magistrate judge agreed to seal.

In its court filing, Kirby McInerney said the sealed material contains “work product and confidential information that cannot be publicly disclosed.”

The Lovell Stewart group claimed Kirby McInerney broke court rules in filing the material directly with the court without first seeking permission. They argued the sealed material should be disregarded or provided to them.

The lawyers also said Kirby McInerney’s complaint made use of “extensive copying” of material from earlier-filed lawsuits and from the Platts Crude Oil Marketwire, an industry publication. Platts isn’t a defendant in the lawsuits.

The case is McDonnell v. Royal Dutch Shell Plc, 13-cv-07089, U.S. District Court, Southern District of New York (Manhattan). The multidistrict litigation is In Re North Sea Brent Crude Oil Futures Litigation, 13-md-02475, U.S. District Court, Southern District of New York (Manhattan).

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