Ground-Breaking BP Litigation Settles After Securing Investor Rights

In early 2021, after nine years of hard-fought, landmark litigation, Pomerantz resolved lawsuits pursued on behalf of nearly three dozen institutional investors in BP plc for a confidential, favorable monetary settlement.

The U.S. Supreme Court’s 2010 decision in Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247 (2010), disrupted decades of legal precedent by barring use of U.S. federal securities laws to recover losses from investments in foreign-traded securities – even where a company dual-lists its stock or sells other securities in the U.S. Investors, including Pomerantz clients, were abruptly left unprotected, with no right of recovery under U.S. law and seemingly no viable recourse in U.S. courts, whenever the exchange on which their damaged shares traded was outside the U.S. borders.

Starting in 2012, Pomerantz filed lawsuits to pursue recovery on behalf of institutional investors seeking to recover losses in BP’s London-traded common stock stemming from its 2010 Gulf of Mexico oil spill. The Firm’s clients include U.S. public and private pension funds, limited partnerships, and ERISA trusts, and pension funds from Canada, the U.K., France, the Netherlands, and Australia. Our efforts blazed a trail forward, despite the Morrison decision, in a series of cutting-edge wins, including successful oppositions of three motions to dismiss, among many contested motions. 

In 2013, Pomerantz survived BP’s first motion to dismiss, securing the rights of U.S. institutional investors seeking recovery of BP common stock losses to pursue English common law claims in U.S. court.  The court accepted Pomerantz’s argument that the forum non conveniens doctrine did not require the cases to be refiled in England, the Dormant Commerce Clause of the U.S. Constitution did not bar the claims, and we adequately alleged reliance on the fraud based on facts developed through our extensive, collaborative work with our clients’ dozens of outside investment managers.  

In 2014, Pomerantz survived BP’s second motion to dismiss, securing the same rights for foreign institutional investors, by again defeating BP’s forum non conveniens argument and by convincing the court to reject BP’s request to extend a U.S. federal statute, the Securities Litigation Uniform Standards Act of 1998, to cover foreign law claims -- an extension that would have necessitated dismissal of our clients’ English law claims. This second victory opened the door for institutions worldwide to file claims before the limitations period expired.

In 2017, Pomerantz survived BP’s third motion to dismiss, securing the rights of investors who retained BP stock, rather than purchased it anew, in reliance on the fraud to seek recovery under English law for investment losses. The U.S. Supreme Court had barred this approach, often called a “holder claim,” under the U.S. federal securities laws in Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723 (1975).  Nevertheless, we developed facts evidencing reliance from our clients and their investment managers and consulted with English law and damages experts.  Pomerantz persuaded the court that our clients had pled cognizable damages, sufficient reliance on the fraud, and a contemporaneous, memorialized decision to retain BP shares. This ruling has significant precedential value for both U.S. and Commonwealth of Nations courts.

Pomerantz’s substantial litigation efforts, in both contested and dispositive motion practice and discovery, overcame the Morrison challenges and paved the way for 125+ institutional investors from across the globe to pursue claims against BP in U.S. courts.  Pomerantz organized these institutions and their counsel, by leading a Plaintiffs’ Steering Committee, serving as sole Liaison with BP and the Court, and by briefing and arguing every major motion on behalf of the collective. 

Pomerantz Partner Matthew L. Tuccillo led the litigation, including the briefing and arguing of most motions. Pomerantz’s team included Managing Partner Jeremy A. Lieberman, Senior Counsel Marc I. Gross, and Partner Jennifer Pafiti, among other contributing attorneys and staff.