New Orleans shareholders suing BP fight English jurisdiction

Steve Korris Jan. 9, 2012, 3:47pm


NEW ORLEANS – New Orleans city pension trustees leading shareholder litigation against BP directors over the Deepwater Horizon explosion want to hold their American ground rather than submit to jurisdiction of the English High Court.

On Jan. 3, trustees filed notice that they would petition the federal court for the Fifth Circuit appellate judges in New Orleans to overturn an order sending their claims to Britain, headquarters of BP.

U. S. District Judge Keith Ellison of Houston ruled in BP's favor last year, dismissing claims of New Orleans and other shareholders under British law.

New Orleans filed the notice alone, after previously acting as leader among three pension funds and seven individuals pursuing a class action.

Robert Weintraub, Daniel Krasner, and Gregory Nespole -- all of Wolf Haldenstein Adler Freeman and Herz in New York -- filed the notice.

New Orleans and others sued directors after the explosion, seeking derivative damages on behalf of BP under the Companies Act of Great Britain.

Multi-district judges in Washington consolidated the shareholder actions with similar suits under pension and securities laws, assigning all to Ellison.

Shareholders with claims under the Companies Act filed a consolidated complaint last February, with New Orleans as lead plaintiff.

The Louisiana police pension fund, the Southeast Pennsylvania Transportation Authority, and seven individuals also signed the complaint.

Ellison dismissed it in September, finding the Companies Act expressly permits litigation of derivative claims before the English High Court.

He conditioned his order on BP's consent to English jurisdiction, and BP gave it.

In October, all 10 plaintiffs moved to amend judgment.

Lead attorney Dona Szak of Houston asked for 60 days to assess risks and benefits of pursuing the suit in England without pursuing an appeal in federal court.

In case of transfer, she asked Ellison to impose American rules on English judges.

Szak proposed to apply federal rules of civil procedure and to waive statute of limitation defenses.

She proposed to admit into English court all discovery materials from Ellison's court and from separate multi district proceedings in New Orleans.

Her proposal stated employees in the United States would submit to discovery without subpoena and that any English judgment would be satisfied in the U.S.

Ellison rejected the proposal in November, finding it would severely restrict discovery.

"This court has already decided that England is the appropriate alternative forum and thus declines to superimpose U. S. procedural rules there," he wrote.

"It would be premature for this court to condition the terms of enforcement of a foreign law judgment in a case that has not even been filed," he wrote.

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