BP Employee Savings Lawsuits Sent to Texas Court Handling Oil Spill Claims
Lawsuits by workers claiming BP Plc’s North American unit mismanaged their retirement savings plan will be sent to the Texas federal court already handling investor claims prompted by the Gulf of Mexico oil spill.
The employees asked that the suits be combined in Chicago, where the retirement plan is administered. BP said the cases, brought under the federal Employee Retirement Income Security Act, or ERISA, belong in Houston because the claims are similar to those in other investor suits.
In the suits, filed as class actions on behalf of all U.S. employees participating in the company’s retirement savings plan, workers claim losses of more than $1 billion from the stock plunge after the April 20 spill. BP’s pre-spill safety record made the London-based company a risky investment, the employees say.
“Certainly, there are differences between the securities actions and the ERISA actions,” the Judicial Panel on Multidistrict Litigation said today. “Notwithstanding those differences, there is significant overlap between the ERISA and securities actions warranting their concentration in a single docket.” U.S. District Judge Keith P. Ellison will oversee the lawsuits.
BP’s shares initially lost more than half their value before rebounding. BP’s American depositary receipts, each representing six ordinary shares, closed at $60.48 on April 20, the day the well blew out, and fell as low as $26.75 June 28. The ADRs rose 15 cents to $41.41 yesterday in New York Stock Exchange composite trading.
‘Key Legal Issue’
“The key legal issue in the ERISA actions is whether the company stock was a prudent investment for the plan during the class period,” the workers’ lawyers said in court papers filed Aug. 27. “This is not an issue in the securities actions.”
BP is facing more than 400 lawsuits over the largest offshore oil spill in U.S. history, set off by the April 20 explosion of the Deepwater Horizon rig in the Gulf of Mexico.
Claims by fishermen, restaurants, real-estate interests, governments and others for economic loss have been combined with personal injury and wrongful-death lawsuits for pretrial treatment in federal court in New Orleans before U.S. District Judge Carl Barbier.
The multidistrict panel in August consolidated lawsuits over claims that BP misled investors before and after the spill, sending them to Ellison in Houston. The panel told the workers’ lawyers to show why their cases shouldn’t also go there.
The lawsuits are In Re BP Plc Securities Litigation, 10-md- 2185, U.S. District Court, Southern District of Texas (Houston), and In Re BP Securities, Derivative and Employment Retirement Income Security (ERISA) Litigation.
To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.
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