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Androvett Blog

by Robert Tharp at 1:43:27 pm

Just weeks after the explosion on BP’s Deepwater Horizon rig back in April, insurance industry analysts were already chattering about BP’s potential exposure to shareholder derivative lawsuits. One insurance analyst at that time speculated that BP’s exposure could be significant due to the recent cash payouts in other high-profile derivative lawsuits including the $115 million settlement by AIG executives in 2008 and a $118 million settlement by chip maker Broadcom in 2009.

The Houston Chronicle’s “Fuel Fix” blog reports today that shareholder derivative lawsuits filed in Harris County are moving along and were consolidated last week by Harris County District Judge William Burke Jr., who also appointed Dallas-based law firm Goldfarb Branham as sole lead counsel in these cases.  

Reports “Fuel Fix”: In the lawsuit, shareholders allege that BP’s board and officers, including outgoing CEO Tony Hayward, “repeatedly violated the law, breached fiduciary duty, abused control, and mismanaged and wasted corporate assets, culminating with the April 20 explosion on the Deepwater Horizon oil rig.” This includes other incidents like the deadly 2005 BP Texas City refinery accident and a pipeline spill from equipment managed by BP on Alaska’s North Slope.

Hamilton Lindley of Goldfarb Branham argues the cases should be heard in Harris County since it’s “where this wrongdoing occurred. BP holds most of its assets in Harris County, the [incoming] CEO resides here, and it is where most of the company’s workers are employed. Harris County is where the decisions were made and Harris County is where these shareholders, standing in the shoes of the corporation, want to hold the board accountable for their actions.”

by Robert Tharp at 1:52:23 pm

Dallas aviation attorney and licensed pilot Wil Angelley says proposed regulations that give a nine-hour rest period to pilots – a one-hour increase from before – are a good start.  The Federal Aviation Administration has suggested the changes following the February 2009 crash of Colgan Air 3407 near Buffalo, N.Y., which killed all 49 people aboard. In that instance, federal investigators concluded the two pilots might have been impaired by fatigue.

The new regulations also would:

  • Limit pilots to 13 duty hours a day, down from 16 duty hours (duty hours are defined by the time a pilot spends ready for work or actually in the air). 
  • Allow the pilot in command to expand flight duty period by up to two hours.
  • Increase the minimum number of consecutive hours off from 24 hours to 30.

“What that (previous eight-hour rest period) gives you is eight hours of off time,” Angelley, a former Navy helicopter pilot, told KXAS-TV NBC 5 reporter Julie Tam. “During those eight hours, a pilot has to drive home, go to a hotel, get dinner, and take care of personal administrative stuff.” 

Watch the story here

The additional hour will give pilots more time to rest, he said. “Under existing rules, a pilot may or may not get eight hours of sleep a night.”

Angelley, who practices at the Dallas law firm Hightower Angelley LLP, told the Fort Worth Star-Telegram that the FAA should have amended its rules a few years ago. The proposed regulations will be open for a 60-day comment period before they’re adopted.


by Robert Tharp at 3:45:45 pm

Just days after the Obama Administration shocked many climate-change litigation observers by siding with a group of corporate defendants in a closely watched public nuisance/global warming lawsuit, respected Gardere environmental lawyers Richard O. Faulk and John S. Gray have joined in, filing an amicus brief that supplies additional ammunition for the U.S. Supreme Court to vacate a controversial lower court’s ruling that threatens to have enormous impact on businesses that produce carbon dioxide.

As widely reported, the U.S. Solicitor General filed an amicus brief asking the Supreme Court to vacate the Second Circuit’s ruling in AEP v. Connecticut, which sided with a group of state attorneys general and affirmed the right for states to sue carbon dioxide emitters under a common law theory of nuisance. At issue is whether climate change matters are issues for the political process or the courts. In their amicus brief, which can be found here, Faulk and Gray argue that the courts are ill-equipped to handle such planetary controversies.

This is not uncharted territory for Faulk and Gray, who have two other amicus briefs pending in cases under consideration by the 5th and 9th U.S. Circuit Courts of Appeal. In 2008, a Michigan State Law Review article they wrote relating to public nuisance case before the Rhode Island Supreme Court was cited four different times in the Supreme Court’s ruling rejecting the plaintiffs’ claims.



by Robert Tharp at 11:22:03 am

It’s hard to imagine a $1 million Texas Lottery jackpot win going to a nicer man than Willis Willis. Just look at his actions since he discovered that a Texas Lottery agent stole his winning jackpot and fled to Nepal – he’s been the definition of class and grace throughout the ordeal. More than a year after Mr. Willis’ winning ticket was stolen by a Grand Prairie convenience store clerk, and while efforts to reclaim his full winnings from the Texas Lottery Commission are still pending, Dateline NBC highlighted his story as part of a nationwide investigation into fraud and theft within state lotteries.

Check out the full story here.

The segment details how Lottery Texas officials have ignored their own investigators’ conclusions that Mr. Willis purchased the winning ticket, and so far have refused to give him his money.

Attorneys Randy Howry and Sean Breen of the Austin-based law firm, HowryBreen, are working closely with Mr. Willis to ensure that he receives his rightful winnings. The firm already has helped Mr. Willis recover a portion of his stolen money, and efforts to recoup the full amount and improve the Texas Lottery’s accountability for all players are ongoing.

by Alan Bentrup at 2:07:48 pm

Johnson & Johnson recently recalled two hip replacement implant devices, following closely on a study showing one in eight implant recipients required surgery to repair complications caused by the implants. According to a recent Associated Press article:

“Within five years, one in eight patients needed a revision surgery. That's required when an artificial joint doesn't fit perfectly, causing pain and difficulty walking.”

The recalled implants are the ASR Hip Resurfacing System and the ASR XL Acetabular System, both of which have long been criticized by surgeons. According to a March 2010 article from The New York Times: The director of an implant database in Australia, Dr. Stephen Graves, said the data had shown for some time that the ASR had been failing early at a significantly higher rate than some competitors’ devices… “It is way too late,” Dr. Graves said.

The culprit is metal-on-metal contact in the implants, which can cause problems when metal shavings get in to surrounding tissue, says Los Angeles attorney Dana Taschner of The Lanier Law Firm, who has handled hip implant cases for more than a decade. “The real tragedy is that patients now face a second surgery that will be more painful, more expensive and more debilitating than the original procedure,” says Taschner.

In 2001, attorneys from The Lanier Law Firm helped hundreds of implant recipients who faced a second, “explant” surgery to remove defective Inter-Op brand hip replacement units sold by Sulzer Orthopedics. The Sulzer recall resulted in a nationwide settlement of $1.2 billion for patients. The firm provides up-to-date information for patients at

More than 93,000 patients purchased the two implants before the company stopped production last year. Johnson & Johnson recorded worldwide sales of nearly $62 billion in 2009, with its DePuy unit accounting for more than $5 billion. In a recent interview with the Associated Press, J&J CEO Bill Weldon said “"We've learned a lot of lessons. They've been very painful."

I’m guessing those lessons aren’t as painful as the explant surgeries that thousands of patients are now facing.



by Robert Tharp at 1:57:29 pm

Commercial landlords are turning up the heat in financial  disputes with tenants as the tight economy places an even greater premium on available capital. As a result, many of the disagreements and misunderstandings between landlords and tenants are now ending up in courtrooms.

In Dallas, Goodyear Tire & Rubber Co. is facing a federal lawsuit filed by the owners of a shopping center who claim the automotive repair giant released toxic chemicals at a leased space used as a service center. The owners of the Montfort Square Shopping Center say Goodyear should be responsible for the costs to clean up the site. The Goodyear service center was in operation for 25 years before closing in 2008, and the property owners say they were left with a piece of land tainted by petroleum hydrocarbons, metals, chlorinated solvents and other toxic substances.

Commercial litigation specialist Michael Hurst from Dallas’ Gruber Hurst Johansen & Hail tells the Dallas Business Journal in a recent article that landlords increasingly are battling both the bad economy and their own tenants at the same time.

“You’re seeing a lot more aggressiveness from landlords as it relates to recovering monies from tenants, and you’re also seeing landlords having a tougher time mitigating or covering their damages by filling their lease space up with a replacement tenant,” Hurst tells the publication.

While most landlord/tenant disputes center on unpaid rent, many property owners are focusing on collateral claims like the environmental damage allegations in the Goodyear case. Environmental attorney Cindy Bishop from Gardere Wynne Sewell in Dallas tells the newspaper that disputes over environmental contamination at auto repair facilities are relatively common, but typically are worked out between the parties before a lawsuit is filed.

With the economic turnaround still on its way, we may see even more lawsuits than settlements when it comes to commercial landlords and their tenants. 

by Robert Tharp at 2:33:06 pm

The recently passed financial reform bill contains a “transparency” provision with disclosure requirements that could place energy companies in a considerable bind. In an effort to reduce the possibility of corruption, the late addition to the Dodd-Frank Act requires all SEC-registered corporations to disclose how much they pay foreign governments for oil, gas and mineral rights.

“Many foreign governments mandate that the terms of these agreements be kept confidential, so forcing the disclosure of this information could cause these companies to violate the terms of their contracts,” says Andrew Derman, leader of the International Energy Practice Group at Thompson & Knight. According to environmental organization EarthRights International, which supported the provision, the requirement will cover the majority of the top 15 international oil and gas companies as ranked by Fortune magazine based on total revenues. Together, these listed companies accounted for more than $2.2 trillion dollars in revenues and close to $200 billion in profits. “While some contracts with foreign governments contain exceptions that allow the disclosure of certain confidential information, it’s unclear how the SEC may interpret the limits of that disclosure,” Derman says.

The SEC is now moving forward with a rulemaking and a public comment period before the requirements take effect; a process that could take up to a year. Once disclosure rules are in place, covered companies would begin disclosures in their annual reports on an ongoing basis.