Boles
When U.S. Magistrate Judge Sally Shushan ordered BP to deliver documents to minority owners of the Deepwater Horizon oil rig, she dealt the company a double defeat.
On May 20, a week after her ruling, ten percent owner MOEX reached agreement with BP to contribute $1.065 billion to a $20 billion recovery trust fund.
Ten percent of the fund equals $2 billion, so the American affiliate of Japan's Mitsui cut its apparent loss by $935 million.
On May 25, BP abandoned a motion that would have excluded quarter owner Anadarko Petroleum from debate over allocation of liability for the rig's explosion.
A new motion, like the old one, would stay Anadarko's cross claims against BP pending arbitration, but it would not stay Anadarko's defense against 130,000 other claims.
That means Anadarko can see volumes of files BP previously sought to keep private.
Anadarko and BP await a decision from U.S. District Judge Carl Barbier, on the remaining motion to enforce an arbitration clause in their operating agreement.
Anadarko claims BP's gross negligence created an exception to the agreement.
In April, after joint defense among the owners broke down, Anadarko and MOEX moved to compel production of evidence from BP.
BP moved to stay the proceedings in favor of arbitration.
Barbier referred the first motion to Shushan, and took upon himself the second.
For BP, Martin Boles of Los Angeles protested to Shushan that Anadarko and MOEX "voluntarily and expressly agreed to arbitrate their disputes with BP, curtail discovery, and not resort to court remedies."
"BP, Anadarko and MOEX can and will face each other in a separate arbitration to sort out allocation of liability between themselves," Boles wrote.
"As co-owners of the well, Anadarko and MOEX are contractually liable for their ownership share of any resulting liability."
Shushan granted the motion on May 13, finding the requests of Anadarko and MOEX relevant to their cross claims against BP and their defenses against others.
"Discovery that is relevant to pending litigation is not barred merely because it is relevant to an arbitration proceeding,"Shushan wrote.
A day earlier, Anadarko and MOEX had urged Barbier to deny BP's arbitration motion as a violation of due process.
"BP's motion jeopardizes the integrity of the allocation of fault not just as to Anadarko, but as to all defendants," Ky Kirby of Washington wrote for Anadarko.
MOEX advanced a similar argument, but dropped it upon settling with BP.
Anadarko didn't settle, and BP persisted in pushing for arbitration.
"When a court is faced with a binding arbitration clause, it has no discretion but to stay arbitrable claims," Boles wrote on May 25.
"The policy in favor of arbitration is so strong that a denial of stay is immediately appealable," he wrote.
At a status conference on May 26, Barbier said he would not entertain oral argument on the motion.
He said he would decide it on the briefs.