Yetter
HOUSTON – BP will pay more than $40 billion for the Deepwater Horizon explosion, public pension funds of New York and Ohio predicted on June 6.
The funds, seeking to recover losses on shares of BP, told U.S. District Judge Keith Ellison that BP's overall market capitalization declined by over $91 billion.
BP suspended dividends for three quarters, Paul Yetter of Houston wrote.
He opposed motions to dismiss class actions that New York and Ohio lead on behalf of ordinary shareholders and holders of BP's American depository shares.
For the second group, he wrote that BP misled investors and concealed information about risks.
He wrote that BP's representations with regard to safety were false or misleading.
He wrote that the class period started Jan. 16, 2007, when BP released a safety report.
"Plaintiffs do not merely allege that BP's safety oversight system was inadequate and its management, therefore, negligent," Yetter wrote.
"Rather, plaintiffs challenge BP's numerous and deceptive public representations made to investors in SEC filings, in conference calls with analysts, and elsewhere about their commitment to improving process safety.
"The complaint alleges that defendants falsely led investors to believe that BP designed industry leading infrastructure for process safety when in fact, BP did not."
For ordinary shareholders, he countered an argument from BP that the action belonged in an English court.
"U.S. courts routinely apply foreign law," he wrote.
"U.S. courts have determined and applied foreign commercial law, property law, inheritance law, citizenship law, copyright law, trademark law, liability and negligence law, and other foreign law as appropriate.
"The UK has never refused to recognize a U.S. class action judgment, and has not declared that class actions offend UK public policy."
Autry Ross, Yetter's colleague at Yetter Coleman, worked on the brief.
So did Steven Toll, Daniel Sommers, Julie Reiser, Matthew Handley, and Joshua Kolsky, all of Cohen Milstein Sellers and Toll in Washington.
So did Jeffrey Block, Jason Leviton, and Whitney Street, all of Berman DeValerio in Boston.
Also on June 6, a splinter group alleging securities fraud for a shorter period opposed BP's motion to dismiss its complaint.
"Plaintiffs do not allege that the defendants were concealing risks that are inherent in deepwater drilling or the oil business in general," wrote Richard Mithoff of Houston and Mark Molumphy of Burlingame, California.
"Plaintiffs here allege that the defendants concealed material information that was known to defendants, but not investors, specific to BP's operations in the Gulf of Mexico," they wrote.
"Like investors who confront volatile financial markets and harbor palpable concerns over a company's internal risk management policies, BP investors – mindful of the company's history and the nature of deepwater operations – would find representations about the state of its risk management systems highly material."
Ellison, who presides over shareholder suits by appointment of the U.S. Judicial Panel on Multi District Litigation, set a hearing Friday, June 17.