A U.S. appeals court has revived a shareholder lawsuit against BP PLC over statements the company made in the wake of a 2006 oil spill in Alaska. The ruling from the 9th U.S. Circuit Court of Appeals allows shareholders to proceed with some securities fraud claims against BP. A lower judge had previously dismissed those claims. In the event some of our readers have forgotten about this oil spill, in March 2006 about 200,000 gallons of oil spilled from a BP pipeline onto the Alaskan tundra at Prudhoe Bay. The appeals court in its order wrote:
Despite BP’s public statements suggesting that the spill was an anomaly, a second leak was discovered five months later in a different BP oil transit line in the region. As a result, the company temporarily shut down regional operations.
BP-Alaska eventually pleaded guilty to a “misdemeanor” for negligent discharge of oil, and paid a $20 million fine to settle state and federal criminal claims. This was along with additional civil penalties. A group of shareholders filed a proposed class action against the company in 2008, claiming that BP and its executives made knowingly false statements about the events.
A Seattle federal judge dismissed all claims, but on Feb. 13, the 9th Circuit Court of Appeals ruled that the Plaintiffs had provided enough evidence to show that some of the statements at issue should be litigated. In that regard, the court wrote:
In this case, facts alleged in the complaint support the conclusion that BP had been aware of corrosive conditions for over a decade, and yet chose not to address them.
This case is a prime example of how BP has operated throughout the years. The oil giant has not made safety a real top priority and that reality has become very clear in the Gulf of Mexico. Hopefully, the company will eventually learn that safety and the rights of individuals are important. That’s a lesson that thus far the oil giant hasn’t learned.
Source: Insurance Journal
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