10:57am PT by Eriq Gardner
Kevin Costner Fails to Dismiss Lawsuit Over Oil Spill Cleanup Technology
A Louisiana federal judge has ruled that a multi-million dollar lawsuit brought against Kevin Costner can continue. The dispute alleges that the actor allegedly tricked business associates, including actor Stephen Badwin, out of shares of a company that marketed technology that separated water for oil, which was then used to clean up the oil spill in the Gulf of Mexico left by a BP drilling rig.
In February, Coster tried to wiggle out of the lawsuit brought by Spyridon Contogouris and Baldwin, who had alleged they made a deal with Costner in the early 2000s to receive commissions on oil separator units sold by Costner's company, C.I.N.C. ("Costner in Nevada Corporation").
Costner argued that Baldwin and Contogouris had inadequately pled any allegations of how he contributed to the fraud.
In examining the issue, the court had to weigh whether the plaintiffs alleged any material misrepresentation or ommission by Costner (as well as fellow co-defendants from his company) and whether this misrepresentation was connected to the fact that Contogouris and Baldwin sold shares in their company, Ocean Therapies Solutions.
In an amended complaint, Contogouris and Baldwin alleged that Costner sold his shares in C.I.N.C. when it was looking less than promising, but then wanted back aboard when things were suddenly looking up for a technology that could clean the oceans of an oil spill. Costner and a business associated are said to have called for a $3 million cash influsion from the plaintiffs without explanation and to have created the false impression through public and private comments that BP wasn't going to make an order to clean up the Deepwater Horizon mess.
So the plaintiffs sold their shares. It's alleged that BP placed a $52 million order for Costner's technology, and some of the money was used by Costner and one of his associates to buy Contogouris and Baldwin out of their interest.
In a decision on Tuesday, Louisiana judge Martin Feldman finds enough here to continue with charges against Costner and associates for securities fraud and misrepresentation.
"The plaintiffs’ amended complaint vividly charges and specifies fraud: they would not have sold their interests in OTS had they known what they claim was the full truth," he writes.