A Review of the Nigerian Energy Industry

Investors lose bid to sue BP as a group

BP 109 December 2013, News Wires – A US federal judge has refused to allow investors to proceed as a group in a lawsuit accusing BP of fraud by misleading them – before and after the 2010 Gulf of Mexico oil spill – about the company’s ability to respond to an accident.

Reuters reported that US District Judge Keith Ellison denied a request on Friday to certify a class action of holders of BP’s American depository shares (ADSs) who were allegedly injured by the energy giant.

“Plaintiffs have failed to discharge their burden to establish that damages in this case can be measured on a class-wide basis consistent with their theories of liability,” Ellison wrote.

The judge said his decision was based largely on a US Supreme Court ruling from March holding that a class action against Comcast was improperly certified.

Ellison said the Supreme Court decision “has appreciably changed the landscape for class certification.”

But he said he would allow the plaintiffs another chance to argue that their case should move forward as a class action, giving them 30 days to file a new motion.

Geoff Morrell, a spokesman for BP, told Reuters the ruling “confirms BP’s view, as noted in our brief and at oral argument, that plaintiffs failed to establish that this case is appropriate for class treatment.”

Steven Toll, a lawyer for the plaintiffs at Cohen Milstein Sellers & Toll, was also quoted by the news agency as saying the investors “definitely do intend to refile the motion to address the court’s concerns about the Comcast ruling.”

Friday’s decision follows a February 2012 ruling dismissing claims by purchasers of ordinary BP shares on the basis of an earlier 2010 Supreme Court ruling limiting the ability of holders of foreign securities to bring cases in US courts.

The plaintiffs are led by the New York State Common Retirement Fund and four Ohio public pension funds.

They sued BP after the 20 April, 2010, explosion of the Deepwater Horizon drilling rig, which killed 11 people and resulted in the largest offshore oil spill in US history. The investors said BP’s shares dropped in value about 40% in the weeks after the incident.

The plaintiffs had asked Ellison to certify a class of investors who bought ADSs between 8 November 8, 2007, and 28 May, 2010. They also asked for subclass to be certified covering purchasers of ADSs from 4 March, 2009, to 20 April, 2010.

BP continues to face other litigation stemming from the Deepwater Horizon incident, which has resulted in the company taking $42.5 billion in charges to date.

In January, BP pleaded guilty to 14 criminal counts over conduct leading up to and after the disaster as part of a $4 billion settlement with the US Justice Department.

– Upstream

In this article

Join the Conversation