Kirby McInerney Leads Brent Crude Case Over Rival’s Claims

Feb 21, 2014 12:01 am ET

Feb. 21 (Bloomberg) -- Kirby McInerney LLP was selected to act as lead counsel in litigation over alleged manipulation of Brent crude oil prices, overcoming claims by a rival law firm that its attorneys are too inexperienced to run the case.

Kirby McInerney, based in New York, will oversee about a dozen lawsuits alleging that some of the world’s biggest oil companies, including BP Plc, Statoil ASA and Royal Dutch Shell Plc, conspired with Morgan Stanley and energy traders including Vitol Group to manipulate spot prices for more than a decade.

U.S. District Judge Andrew L. Carter Jr. announced his choice yesterday at a hearing in Manhattan federal court, saying the Kirby McInerney case “stands out” among those filed by competing law firms.

“It did seem to me Kirby’s complaint certainly had more particularized allegations,” the judge said.

Lead counsel directs the litigation, assigns tasks to other firms and manages trial strategy or negotiations with the defendants. Lead counsel also usually takes the biggest share of any firm from the money plaintiffs get in a verdict or settlement.

In the Kirby McInerney complaint, traders alleged that oil firms “monopolized the Brent crude oil market,” conspiring to manipulate oil prices and the prices of futures contracts.

North Sea

Brent crude, pulled from the North Sea region, has a lower sulfur content than oils produced in some other areas, requiring less processing and making it in high demand, according to the complaint. The oil serves as a benchmark for two-thirds of the world’s internationally traded crude oil supplies, according to the complaint.

Lovell Stewart Halebian Jacobson LLP, another New York- based firm, last year claimed that Kirby McInerney broke court rules and that its attorneys weren’t the best suited to lead such a big case.

Lovell Stewart, Minneapolis-based Robins, Kaplan, Miller & Ciresi LLP and White Plains, New York-based Lowey Dannenberg Cohen & Hart PC urged Carter in court filings to name them as lead counsel, with Lovell Stewart as chair.

The group claimed in court papers filed in November that Kirby McInerney “suffers from an experience deficit” in litigating similar commodity-manipulation suits. Kirby McInerney in December said it has the necessary experience and denied that it broke court rules, an issue that Lovell Stewart didn’t raise yesterday.

‘Best Plaintiffs’

“We have the best plaintiffs here. We have the best allegations. We have experience that is unmatched in the commodities markets,” David Kovel, a partner at Kirby McInerney, said in court yesterday. Kovel said that he had worked in commodities trading himself before becoming a lawyer.

His firm’s clients are “sophisticated crude oil traders with in-depth trading and industry knowledge,” including a former director of the New York Mercantile Exchange, the firm said in a memorandum filed with the court in January.

The consolidated suit includes about a dozen cases, according to a Feb. 12 letter by a lawyer for Morgan Stanley filed with the court. The cases were filed by about 20 law firms, according to the letter.

Dozens of lawyers attended the hearing yesterday, including John Edwards, the former Democratic U.S. senator and onetime presidential candidate, who is representing Louisiana landowner David Harter in a proposed class action on behalf of individuals who receive oil royalties or have interests in oil leases. His client’s case wasn’t consolidated with those to be led by Kirby McInerney.

The defendants haven’t yet filed responses to the allegations in the litigation.

The case is McDonnell v. Royal Dutch Shell Plc, 13- cv-07089, U.S. District Court, Southern District of New York (Manhattan). The multidistrict litigation is In Re North Sea Brent Crude Oil Futures Litigation, 13-md-02475, U.S. District Court, Southern District of New York (Manhattan).

--With assistance from Asjylyn Loder in New York. Editors: David E. Rovella, Andrew Dunn