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BP looks to kill shareholder lawsuit Case focuses mainly on Deepwater Horizon disaster; BP lawyers argue English law bars pursuit of ‘derivative’ claims in Alaska court Wesley Loy For Petroleum News
Lawyers for BP are seeking dismissal of a “shareholder derivative” lawsuit brought in an Alaska court against the company’s board of directors following the Deepwater Horizon disaster.
In a 33-page argument filed Nov. 16 in Superior Court in Anchorage, BP lawyers say the lawsuit rightfully belongs in a court in England, where the company’s based.
They also note that the Anchorage case is among more than a dozen shareholder derivative actions that have been filed in state and federal courts in various states, including Louisiana and Texas, since the Deepwater Horizon rig explosion in the Gulf of Mexico. Plaintiffs in these cases are “competing” to assert claims against BP’s board for mismanagement, the BP lawyers say.
Three cases in one After the Gulf disaster, plaintiffs identifying themselves as BP shareholders filed a series of lawsuits in Anchorage against BP board members and executives, including the company’s former chief executive, Tony Hayward, and John Minge, president of BP Alaska.
Jeffrey Pickett, an Alaska resident, filed the first suit. A couple of city pension funds in Florida brought two more suits. Law firms including Ashburn & Mason of Anchorage and class-action specialist Robbins Geller Rudman & Dowd of San Diego brought all three suits.
In September the suits were consolidated into a single case.
Suing derivatively on behalf of BP, the shareholder plaintiffs seek compensatory and punitive damages, plus improved safety and environmental compliance.
While the case largely focuses on Deepwater Horizon, it also delves into pipeline leaks and other problems in BP’s North Slope operations, as well as the deadly Texas City refinery explosion in 2005, as evidence of “gross mismanagement.”
Arguments for dismissal By alleging BP safety violations in Alaska in a suit mostly about the Gulf disaster, the plaintiffs are making “a transparent attempt to manufacture a ‘local’ element to this action,” BP’s lawyers argue.
The case should be dismissed, they say, because an Alaska court is not the right forum for a shareholder derivative case involving a company incorporated under the laws of England and Wales.
An English law, the Companies Act 2006, holds that a shareholder seeking to sue derivatively on behalf of a company such as BP must first win permission from the English High Court, BP’s lawyers contend in their Nov. 16 argument.
They note that few of the plaintiffs or defendants are residents of Alaska, adding: “The conduct that gives rise to this action — the alleged breach of fiduciary duties and corporate mismanagement — did not occur in Alaska, but rather in London where BP is headquartered.”
A BP shareholder derivative lawsuit was brought previously in Anchorage, in 2006, following oil pipeline spills that year in the Prudhoe Bay field. But the case was settled before the state Supreme Court could decide the question of whether it could proceed in Alaska, BP’s lawyers say.
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