Legal Briefing: BP-Anadarko Fight Stays Out of Court

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legal briefing

A daily look at legal news and the business of law...

BP-Anadarko War Won't Help Other Plaintiffs After All

Unfortunately for plaintiffs (and for all the ironic humor potential), when BP and its business partner Anadarko battle over whether the British oil giant was grossly negligent in the Deepwater Horizon project -- and thus whether Anadarko (APC) must pay some of the spill liabilities -- they'll be fighting before an arbitration panel, not a court. That's according to the terms of their Deepwater Horizon partnership agreement. It's too bad for Anadarko because arbitrations are secret, not bound by the rules of law, have less discovery and have no precedential value.

As a result, the dirt that comes out on BP (BP) during the process won't be made public, so Anadarko won't be able to reassure markets until after a final ruling makes clear whether it's on the hook for 25% of the spill costs. Moreover, Anadarko could get a ruling by the arbitration panel that BP was not grossly negligent, triggering Anadarko's liability -- but also face court rulings that the British company was grossly negligent, ratcheting up the amount of the spill liabilities Anadarko owes.

However, I have no sympathy for Anadarko. Although binding arbitration has been a cudgel wielded against consumers and employees to the advantage of corporations so powerfully and for so long that Congress is considering changing the rules, the one place it seems totally appropriate is as a dispute-resolution mechanism between two large, sophisticated companies, knowingly negotiated into their contracts.

As for arbitration not helping the other plaintiffs, well, it won't hurt them either. Plenty of legal firepower with sufficiently deep pockets to litigate thoroughly are representing plaintiffs.

New Jersey High Court Gives Beach Owners Compensation for Taking

The Supreme Court ruled that Florida can turn private beaches public in the name of beach protection without compensating the private beach owner. But shortly on the heels of that ruling, the New Jersey Supreme Court held that a New Jersey beachfront property owner is owed compensation when the town took his beach in the name of beach protection. Unfortunately for property-rights defenders, the New Jersey case is limited to its unusual facts, whereas the Florida case applies throughout that state and anywhere else in the country with similar law.

Surprise! More Dangerously Industry-Friendly Regulators

Much has been made of how the Minerals Management Service, which had responsibility for overseeing BP's ill-fated Deepwater Horizon project partied with the industry it was supposed to police. Now The Wall Street Journal reports that in 2007, the Mine Safety and Health Administration, under President G. W. Bush, arbitrarily limited the number of mines guilty of repeated offenses that inspectors could target for increased enforcement.

Rather than letting inspectors go after all problematic mines, the directive ordered inspectors to pick only one per field office and three per district. How many miners were hurt because inspectors were essentially ordered not to do their jobs?

Google Wins Round 1

The Viacom vs. Google/YouTube war just ended its first major battle, and Google (GOOG) is the clear victor, winning the dismissal of all Viacom's (VIA) claims. The media company could have avoided this loss and all of the associated legal costs by accepting Google's $592 million settlement offer before trial, but at that point Viacom thought it could do better at trial. Unless Viacom wins on appeal, that was a very costly choice.

The key issue in the case was whether the "safe harbor" of the Digital Millennium Copyright Act covered YouTube. Despite the judge noting that Google "was not only aware of, but welcomed, copyright-infringing material," he ruled that the safe harbor excused all of YouTube's actions. Given YouTube's documented actions early in its existence (as opposed to those of its current incarnation, which are not part of the suit), the judge's reading of the safe harbor seems to me like a blessing of classic "see no evil, hear no evil, speak no evil" behavior.

If the appellate court agrees that the judge read the safe harbor correctly, I can only guess that service providers and the new information economy companies powerfully out-lobbied the traditional content providers when the Digital Millennium Copyright Act was being drafted.

Fifth Circuit to Decide if Skilling Gets out of Jail; UBS Banker Wants Out Too

Enron ex-CEO Jeffrey Skilling had a partial victory at the Supreme Court today, but it was no get-out-of-jail-free card. The Court remanded his case to the Fifth Circuit for it to decide whether or not his convictions will stand.

Meanwhile, the former UBS (UBS) banker who turned in U.S. tax cheats that were the Swiss bank's clients has asked President Barack Obama to pardon him, reports Bloomberg.

And in the Business of Law...

Big Law associates aren't the only ones on the chopping block in the legal profession -- apparently a lot of equity partners at firms are poised to lose their lucrative slots. The ABA Journal reports that 33% of firms responding to a survey may de-equitize some partners this year.

Also, The Snark has just announced its first annual Webbie Awards for law firm websites. The awards range from the prosaic "best website" (Moye White) to the snarkier "most mocked" (Morrison & Foerster), and much more.