Ellison rejects plea to impose American discovery and procedure rules in BP shareholder suit
Steve Korris Nov. 29, 2011, 12:41am
HOUSTON – U.S. District Judge Keith Ellison rejected a plea to impose American rules on discovery and procedure before he sends a shareholder suit against BP directors to the English High Court.
On Nov. 23, he denied a motion to attach conditions to an order finding England a more appropriate forum for common law claims against directors.
"If granted, the majority of the conditions would severely restrict discovery in the English courts," he wrote.
"This court has already decided that England is the appropriate alternative forum and thus declines to superimpose U.S. procedural rules there," he wrote.
He spotted potential inconsistencies in the scope of discovery, the availability of multi party litigation, fee arrangements and awards, and the time to bring a case to trial.
"While plaintiffs have made it clear that they want additional conditions, they have not demonstrated that they need them," he wrote.
Ellison presides over suits shareholders filed in federal courts against BP directors after the Deepwater Horizon oil rig explosion.
Some sued under securities law and some under retirement law.
Two individuals filed derivative actions under common law, seeking damages on behalf of the company for the actions of directors.
Two other individuals filed a derivative suit along with pension funds of New Orleans city workers and Louisiana police.
Ellison consolidated the derivative actions last year, and dismissed them this Sept. 15.
He called on BP to stipulate that it would submit to English jurisdiction, and BP did so.
On Oct. 12, lead derivative lawyer Dona Szak of Houston moved to amend the order in ways that would blur the line between American and English jurisdiction.
She asked Ellison to require BP directors to waive statute of limitation defenses.
She asked him to require that they can't object to admission of discovery from his court or from separate multi district proceedings in New Orleans.
She asked him to require them to conduct discovery in the United States in accordance with federal rules of procedure.
She asked him to require them to submit employees based in the United States to United Kingdom jurisdiction for discovery without subpoena.
She asked him to require them to satisfy in the United States any judgment the English court might render.
She asked for a stay of 60 days, to assess the risks and benefits of English litigation.
Ellison disposed of the motion.
He wrote that to prevail on the motion, plaintiffs needed to show a change in law, new evidence, or manifest error.
"Plaintiffs point to no intervening change in the law," he wrote.
"Plaintiffs do not directly address the other two bases for altering or amending an order either."
He wrote that only two statements in the motion could be construed as justifications for alteration or amendment.
He wrote that plaintiffs provided no evidence for one and the other was "too nebulous to support any finding of a manifest error of law or fact."
"Plaintiffs cite a slew of factually dissimilar cases in which district courts imposed some combination of the conditions plaintiffs now request," he wrote.
"Plaintiffs appear to have selected their citations regardless of relevance to the case at hand.
"The cases plaintiffs cite also do not address any concerns that may be specific to the securities context or England as an alternate forum."
He also rejected conditions on enforcement of judgment and statute of limitations.
"It would be premature for this court to condition the terms of enforcement of a foreign law judgment in a case that has not even been filed," he wrote.
"Defendants have not expressed any intentions to raise a statute of limitations defense in this case.
"Just as it is inappropriate for this court to prefix the outcome of anticipated discovery disputes, it is also inappropriate for this court to referee statute of limitations issues when plaintiffs have identified no concrete concern in connection with the limitations period."