Southeast Texas Record

Tuesday, February 25, 2020

Shareholder suit filed against BP over Texas City violations

By John Suayan, Galveston Bureau | Aug 4, 2009

GALVESTON � Repeated environmental violations at BP's Texas City refinery are driving down the value of the company's stock, a shareholder claims in a recently filed lawsuit.

Plaintiff Nancy Goldstein alleges that BP's reckless misconduct during the last part of the decade has caused, and continues to cause, significant damage from various claims, lawsuits, investigations, enforcement proceedings and associated fees and penalties.

"The defendant's misconduct has also resulted in increased operating costs as imposed and required by regulators," the original petition states.

BP is generally accused of breaching fiduciary duties and wasting corporate assets.

Goldstein filed the shareholder's suit on July 31 in Galveston County District Court and it has been assigned to 122nd District Court Judge John Ellisor.

The suit also targets past and present members of BP's board of directors for alleged indifference toward offenses committed at the Texas City refinery since a deadly explosion in 2005.

"The individual defendants were well aware of the environmental laws and regulations and the harsh consequences that would occur if BP violated them," the complaint says. "The individual defendants knew that BP has a long history of violating environmental regulations and laws in connection with the Texas City refinery.

"Each defendant is sued individually as a conspirator and aider and abettor, as well as in their capacity as present or former officers and directors and/or executives of BP and the liability of each arises from the fact that they have engaged in all or part of the unlawful acts, plans, schemes, or transactions complained of."

Court documents show the defendant entered into a consent decree with the federal government in 2001 to resolve allegations of Clean Air Act violations raised by several states and the Department of Justice.

The decree, which has been amended five times, required BP to take substantial remedial efforts in Texas City to prevent further discharge of environmental pollutants, and specified that penalties would be imposed in the event of any future CAA violations.

Goldstein's suit claims that even though BP agreed to comply with the terms of the decree and acknowledged it understood the consequeces of noncompliance, the company has intentionally or recklessly continued to pollute the Texas environment.

The suit refers to the March 23, 2005, explosion at the Texas City refinery that killed 15 and injured more than 170, but does not raise the incident as an issue in the litigation.

In one of the amendments to the decree, the DOJ claimed BP lacked adequate controls on benzene and asbestos wastes and ordered to pay millions of dollars for its actions.

"The defendants' misconduct, which was caused by the serious CAA violations the DOJ charged BP with committing at its Texas City refinery, gives rise to this shareholder derivative action," the suit says.

Goldstein seeks monetary damages, an admittance of accountability from the defendants and a jury trial.

She is represented by attorneys with Ware, Jackson, Lee, and Chambers LLP in Houston,

The company also faces a lawsuit from the state of Texas. In June, Texas Attorney General Greg Abbott filed a suit in response to BP's alleged continuing violations of state pollution laws.

Case No. 09CV1352

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