BP oil spill lawsuit in U.S. wins class-action status
By Jonathan Stempel
(Reuters) - A U.S. judge has allowed a group of BP Plc (BP.L: Quote) shareholders to pursue a class-action lawsuit accusing the company of misleading them by understating the severity of the 2010 Gulf of Mexico oil spill.
Tuesday's decision by U.S. District Judge Keith Ellison in Houston could add to BP's clean-up and litigation costs for the spill, which followed the April 20, 2010 explosion of the Deepwater Horizon drilling rig.
The London-based company said this week it has already taken a $42.7 billion pre-tax charge.
Ellison said investors who bought BP's American depository shares soon after the explosion may pursue claims as a group that BP publicly "lowballed" the oil flow rate, and that the share price "did not reflect the magnitude of the disaster facing the company."
It can be easier for investors to recover more money at lower cost by suing as a group.
The judge denied class certification to a second group of shareholders that claimed BP had overstated its ability to manage safety issues prior to the explosion. He said this denial was because it was too hard to calculate class-wide damages.
BP had no immediate comment. The lead plaintiffs are New York State Comptroller Thomas DiNapoli, who oversees that state's Common Retirement Fund, and the Ohio Public Employees' Retirement System. Neither was immediately available to comment.
Ellison ruled one day after the 5th U.S. Circuit Court of Appeals in New Orleans let stand a March decision forcing BP to pay some businesses for economic damages, without the businesses having to prove the spill caused their losses. Continued...