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FEB
9
2 YEARS

Kevin Costner Gets Green Light to Countersue Stephen Baldwin in Slippery Oil Spill Case

Costner is defending himself against charges of tricking fellow investors out of their shares in a spill cleanup company in the months after Deepwater Horizon exploded.

Stephen Baldwin Kevin Costner Split - H 2012
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Stephen Baldwin and Kevin Costner

A federal judge in Louisiana is allowing Kevin Costner to pursue counterclaims against fellow actor Stephen Baldwin and investor Spyridon Contogouris in an ongoing lawsuit over whether Costner and his partners "orchestrated a nefarious scheme" to gain sole interest in oil spill cleanup technology in the wake of the Deepwater Horizon disaster.

Separating oil from water is tough. But severing a liability release provision from a joint venture agreement can be just as difficult. On Tuesday, U.S. District Judge Martin Feldman ruled that the liability section of the parties' agreement clearly covers the activities that prompted Baldwin and Contogouris to file their lawsuit.

In April 2010, the BP oil rig Deepwater Horizon exploded off of the coast of the Gulf of Mexico, dumping massive amounts of oil into the ocean.

What should have been a promising moment for Costner's oil spill technology first developed in the 1990s was dampened by the fact that Costner had already sold his interest in his company, CINC ("Costner In Nevada Corporation"), a few years earlier.

With things looking up for a technology that purportedly separates oil from water, Costner wanted back aboard.

To get there, Costner and his partners allegedly tricked Contogouris and Baldwin. The two had a company called Ocean Therapies Solutions (OTS), which had an exclusive agreement with CINC to market the oil spill technology. Contogouris owned a 28% interest and Baldwin owned a 10% interest.

As Costner testified before Congress and met with BP officials, his team allegedly told Contogouris and Baldwin to put up an additional $3 million without explanation and purportedly created the impression that BP wasn't going to make an order. But BP was on the verge of making an $18 million order for the technology. Costner allegedly knew this and wanted to use part of the money to buy Contogouris and Baldwin out of their OTS shares.

The wheeling-and-dealing eventually resulted in a lawsuit whereby Costner and several of his partners were sued for securities fraud.

Costner was unsuccessful in dismissing it, so last June, he filed counterclaims against Countogouris and Baldwin for violating the liability release provisions of their agreement.

On Tuesday, Judge Feldman ruled that while the parties differ as to the scope of the language in the liability release, there can be no confusion that the provision envisioned dealings by OTS.

"This plainly covers the purchase BP made from OTS, which qualifies as an arrangement entered into by OTS, as well as a contract," writes the judge in a written opinion. "The plaintiffs’ claims relate directly to this arrangement: they are all grounded on the assertion that defendants had misled them about the BP purchase as well as the source of the money used in the transaction, and caused them to sell their interests while possessing inaccurate information."

He adds, "The scope of the release provision is broad: no claims relating to such arrangements are allowed. Far from allowing plaintiffs’ claims, the release provisions found in the Agreement bar them."

The case is still continuing, however, and a forthcoming trial looks like it will hold high drama.  Besides dozens of witnesses, including Costner and Baldwin, the plaintiffs plan to showcase what was going through Costner's mind in the days after the Deepwater Horizon spill via e-mails and texts. The actor has unsuccessfully sought to quash subpoenas relating to this information.

E-mail: eriqgardner@yahoo.com

Twitter: @eriqgardner