Tags: BP | oil | spill | lawsuit

BP Investors Can't Sue as Group Over Losses, Judge Says

Friday, 06 Dec 2013 03:14 PM

BP Plc’s U.S. investors can’t pursue as a group a lawsuit claiming the company misled them before and after the 2010 spill in the Gulf of Mexico, inflating its share value, a judge ruled.

Shareholders sought permission to sue in two groups, the larger including all buyers of BP’s American depositary receipts from Nov. 8, 2007, to May 28, 2010. The second subgroup would cover about 900,000 individual investors, who purchased BP ADRs from March 4, 2009, to April 20, 2010, the date BP’s Macondo well blew out, triggering the biggest U.S. offshore oil spill.

U.S. District Judge Keith P. Ellison in Houston denied the investors’ request for a group, or class, status today. Ellison had earlier set a trial date for August 2014.

Ellison ruled that the investors failed to show that their damages could be calculated on a class-wide basis in a way that was consistent with their legal theory on BP’s culpability. If they could’ve done so, he said, he’d have been “inclined” to give the investors permission to sue as a class.

“Because the court’s ruling is based in large part on a recent Supreme Court decision that, in this court’s opinion, has appreciably changed the landscape for class certification,” Ellison said in today’s ruling, investors should be given a “second attempt to establish the elements necessary for class action treatment.”

Damages Model

Ellison gave lawyers for the investors 30 days to revise their motion and supplement it. He said he declined to certify the class based on the high court’s ruling in a case involving Comcast, in which investors weren’t allowed to sue as a group because the court found a disconnect between the investors’ class-wide damages model and the company’s liability.

The investors, led by New York and Ohio pension funds, sued London-based BP and certain of its officers in 2010, alleging violations of U.S. securities laws. The investors also claimed BP publicly proclaimed a commitment to improving safety while cutting budgets and rejecting employee concerns.

The investors said their ADRs “were artificially inflated as a result of defendants’ dissemination of materially false and misleading statements and material omissions,” according to papers filed in federal court in Houston in June.

Disputed Claims

“All suffered losses when the truth surrounding those misstatements and material omissions was revealed to the market and BP’s stock price declined,” they said.

BP disputed the claims and opposed certifying the investors as a class.

“Plaintiffs must demonstrate that the alleged misrepresentations were publicly known, that the stock traded in an efficient market, and that the relevant transaction took place between the time the misrepresentations were made and the time the truth was revealed,” BP said in a filing in August.

In court filings, the company has denied fraud or any lack of attention to safety.

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BP Plc's U.S. investors can't pursue as a group a lawsuit claiming the company misled them before and after the 2010 spill in the Gulf of Mexico, inflating its share value, a judge ruled.
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2013-14-06
Friday, 06 Dec 2013 03:14 PM
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