Judge stays lawsuit against actor Stephen Baldwin over oil spill cleanup technology

Alejandro de los Rios Oct. 3, 2011, 6:11am


A New Orleans federal judge has stayed a liability lawsuit against actor Stephen Baldwin over oil spill cleanup technology the actor claims he was tricked into selling.

The order stays litigation brought on by the Continental Casualty Company against Baldwin and the law firm of Gauthier, Houghtalin & Williams LLP (GHW).

In late 2010, Baldwin filed a federal lawsuit against GHW claiming legal malpractice and breach of fiduciary duty, among other allegations. The suit claimed the firm misrepresented Baldwin as the actor sold his stock in a company that built oil spill cleanup technology.

The company, owned by actor Kevin Costner, had developed a special type of centrifuge technology to help with the 2010 Gulf of Mexico oil spill caused by the BP-leased Deepwater Horizon oilrigh explosion.

Baldwin and his partners filed suit in U.S. District Court for the Eastern District of Louisiana and three suits in Orleans Parish Civil District Court against Costner, GHW and other parties.

GHW forwarded one of the state court petitions to its insurer, Continental, seeking coverage.

Continental then filed a federal suit seeking declaratory judgment that it neither has to provide coverage nor has a duty to defend GHW in its state court claims.

U.S. District Judge Martin Feldman issued the order to stay Continental's litigation on Sept 19.

"The risk that parallel proceedings in two courts would result in inconsistent policy interpretations and piecemeal litigation weighs in favor of staying the present action — pending Continental's substitution into, as well as consolidation and resolution of, the state court proceedings," Feldman wrote in his ruling.

Baldwin's federal suit claims that Contogouris was hired almost 10 years ago to help market CINC's technology. Marketing had been unsuccessful and Costner ended up selling his stock in CINC to a man in Nevada. But when the Deepwater Horizon oilrig exploded, Contogouris saw the potential to sell CINC's centrifuge.

Baldwin became involved when Contogouris was unable to get a hold of Costner and then learned that Costner had sold his stock. Baldwin and Contogouris, along with New Orleans attorney John Houghtaling, formed a joint venture to market the technology.

The suit states that disagreements as to how to sell the technology - whether to make it a one-time deal or long-term relationship with BP - developed and it wasn't until Costner spoke before Congress in June about the centrifuge that BP became interested in buying the technology.

The suit claims that the defendants then withheld information about an $18 million down payment BP made to buy a number of centrifuges. Believing the joint venture had failed, the plaintiffs sold their shares. The defendants allegedly bought out the plaintiffs with the money paid by BP.

The next day, the suit alleges, BP purchased 32 centrifuges for more than $52 million. Shortly after, the suit claims that the defendants "secretly" opened a new bank account to use "as their own personal piggy bank."

The plaintiffs are suing for misrepresentation and securities fraud. Contogouris is claiming $10.64 million in damages and Baldwin is claiming $3.8 million in damages.

New Orleans attorneys Henry King, Timothy Madden and Monica Manzella filed the suit on behalf of Baldwin on December 22.

Federal case 2:11-cv-01508

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