NEW ORLEANS (AP) — A federal appeals court says litigation alleging that BP misled investors about the rate of oil flowing after an offshore oil rig explosion in 2010 can proceed as a class action lawsuit.
Tuesday's 5th U.S. Circuit Court of Appeals ruling means that the lawsuit, led by pension funds in New York and Ohio, can continue on behalf of all purchasers of certain types of BP securities during a 33-day period after the Deepwater Horizon disaster in the Gulf of Mexico. The lawsuit says low estimates of the rate of oil spewing into the Gulf inflated securities prices.
The ruling also upheld the lower court's denial of class action status on a related allegation: that BP misrepresented its safety procedures before the spill. Investors must file individual lawsuits pursuing such claims.
"The Fifth Circuit has joined the District Court in rejecting a proposed class of plaintiffs who purchased BP stock over a two-and-a-half-year period before the Deepwater Horizon explosion and certifying only a 33-day class period after the explosion," BP spokesman Geoff Morrell said in an emailed statement Wednesday. "BP has long argued that the plaintiffs' damages theories do not meet their burden under the law and that all of the plaintiffs' securities claims are meritless, and we will continue to vigorously defend against them."
An attorney for New York plaintiffs in the case did not immediately respond to an emailed request for comment.
The 2010 lawsuit filed in federal court in Houston deals with purchases of BP American Depositary Shares between Nov. 8, 2007, and May 28, 2010. The explosion took place April 20, 2010, killing 11 workers and leading to millions of gallons of oil spewing into the Gulf for 87 days.
Both BP and attorneys for investors had appealed Houston-based U.S. District Judge Keith Ellison's rulings granting class-action status on the post-spill issue and denying it on the pre-spill allegation.