***FOR PRINT**Shareholders must sue BP under British law, judge rules
HOUSTON - Shareholders who sued BP directors in American courts under British law must pursue their claims in London, U.S. District Judge Keith Ellison ruled on Sept. 15.
He dismissed suits that shareholders filed on behalf of BP after the Deepwater Horizon explosion, deciding they belonged at the English High Court.
"At base, this case seeks to resolve questions surrounding the appropriate internal governance of an English company," he wrote.
"In such situations, courts have found that the country of incorporation has the greatest interest," he wrote.
Two separate groups of shareholder suits remain active in Ellison's court, alleging violations of U.S. securities and pension laws.
Those who sued under British law tried to bolster their case by blaming directors for a series of accidents over 20 years, but the strategy weakened their case.
Ellison wrote, "The court is persuaded that this lawsuit is not intended to redress the devastating impact of the Deepwater Horizon disaster in the United States.
"Instead, this lawsuit is intended to compensate BP for the financial and reputational harm the company suffered as a result of its high level management's alleged disregard for the safety of its operations."
He wrote that the deference normally accorded to a plaintiff's choice of forum is not necessarily applied where thousands of shareholders could have brought suit.
"Although the plaintiff shareholders who brought the cases consolidated before this cour tare American, more than 60 percent of BP's shareholders are not," Ellison wrote.
"Plaintiffs have not demonstrated that they have a substantial interest of their own to protect or any knowledge that would aid in the prosecution of breach of fiduciary duty claims on behalf of BP.
"Indeed, the evidence in the record indicates that plaintiffs are mere phantom plaintiffs with interest enough to enable them to institute the action and little more."
He wrote that most of the relevant documents are at BP headquarters in London.
He wrote that six of 17 defendants are British citizens and three are citizens of other European nations.
He wrote that eight are U.S. citizens, and that one of them resides in London.
He wrote, "The court is convinced that this lawsuit represents a substantial burden on the court's docket."
He wrote that he received a preview of intricate questions of law he would have to resolve, as well as disagreements of appropriate standards he would have to apply.
He wrote that trial would have proceeded at federal court in Louisiana, where plaintiffs filed the suits.
He wrote that theonly party that stands to gain from the case is BP, not the citizens ofLouisiana.
"When considering the distinct nature of the claims plaintiffs advance, which seek to compensate BP for reputational and financial damage from disasters the company allegedly caused, it is clear that it would be unfair to burden the citizens of Louisiana with the lawsuit," he wrote.
He called on BP to stipulate that it would submit to jurisdiction of an English court, adding that he would reassert jurisdiction if English courts refuse it.