BP PLC told a Texas federal court last month that investors in securities lawsuits arising from the deadly 2010 Deepwater Horizon drilling platform explosion should not get a special allowance to skip proper procedures for opting out of the oil giant’s $175 million class settlement. The settlement by BP resolves a certified class action alleging the company misrepresented the seriousness of the explosion and its aftermath, in which 11 workers were killed and an estimated 4.9 million barrels of crude oil were spilled into the Gulf of Mexico.
About 135 institutional investors said in September that they wanted to opt out of the deal, as they have brought separate, individual cases arising out of the Deepwater Horizon disaster. But BP responded by saying that just because the investors filed separate actions does not mean they can automatically opt out. BP further said:
The submission of the individual action plaintiffs confirms that they, at bottom, seek special treatment not afforded to any other member of the … settlement class in this action, or to class members typically in securities class action settlements. The individual action plaintiffs concede that they are able to opt out of the settlement if they wish not to be bound by it, and that they intend to do so.
A number of securities suits had been filed against BP after the rig explosion, which resulted in three months of unchecked oil flow. A class of purchasers of American depositary shares who bought the securities after the explosion alleged they were misled about the incident’s impact. That class was certified in 2014, after many of the suits were consolidated in multidistrict litigation (MDL). The class covers anyone who purchased depositary shares between April 20, 2010, when the explosion occurred, and May 28, 2010, when it became apparent that the oil flow from the broken wellhead was much higher than BP initially disclosed. The Plaintiffs who want to opt out said their claims are broader than what was covered in the settlement and also relate, for example, to BP’s alleged withholding of information about the safety of Deepwater Horizon ahead of the incident.
BP says that any class member who wants to opt out has to provide certain information, such as identifying any American depositary share transactions during the class period. However, the 135 Plaintiffs have said it would be onerous for them to provide this data. BP said that their statement that they may be unable to identify all their class period American depositary share transactions should not allow them special treatment. BP wrote in its response:
The parties to the settlement also are entitled to know the number of shares that have opted out because that fact is relevant to their supplemental agreement, which affords BP the right to terminate the settlement in certain circumstances. A group of plaintiffs who previously opted out of the class action asked the court to let them withdraw their opt-out request and to allow them back into the class. A group of investment funds and individuals who bought BP American depositary shares after April 26, 2010, had said their claims were broader than what was alleged in the class action, so they filed individual suits to recover losses unlikely to have been recouped in the class action. Those investors opted out of the class action to protect their rights to continue with their individual actions, but because the settlement has not been preliminarily approved and other class members can now opt out, the class members would not be prejudiced if the opted-out investors are allowed back into the class.
Our firm hasn’t been involved in this litigation. We felt our resources were needed in the other claims against BP and we elected not to be involved in the securities’ litigation.
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