HOUSTON – On Feb. 16, attorneys for BP presented the Houston Division of the Southern District of Texas with a memorandum in support of their motion for judgment to dismiss several pending individual securities actions, citing a recent U.S Supreme Court case.
In its five-page memorandum, BP’s legal team set forth their argument for why 20 of the 31 claims filed against them under the Securities Exchange Act should be dismissed based on the statue of reform.
The Houston Division of the Southern District of Texas was "faced with a circuit split" and concluded in 2014 that "the Exchange Act's five-year statute of repose does not bar claims that repose period is subject to tolling under American Pipe & Construction v. Utah," the motion states.
"Last year, the Supreme Court resolved the circuit split by holding that American Pipe tolling does not apply to statues of repose. ... As a result of that intervening Supreme Court decision, defendants now move for judgment on the pleadings dismissing as time-barred all Exchange Act claims in the pending individual actions ..." the motion states.
BP’s defense argued that “the court should grant judgment on the pleadings and dismiss all Exchange Act Claims that are based on alleged misstatements made more than five years before the filing of the initial complaint in the actions,” the motion states.
The Exchange Act of 1934 deals with stock market security transactions and is designed to create greater transparency and less manipulations and fraud. By filing under the Exchange Act, the plaintiffs claimed BP allowed its companies to continue their investments, knowing that BP stock would plummet.
Plaintiffs in the case, including Alameda County Employees’ Retirement Associations, Verizon Investment Management Corp, The Bank of America Pension Plan, Pension Reserves Investment Management Board of Massachusetts, and the New York City Employees Retirement System attempted to sue BP for alleged losses they suffered because of the decline in BP American shares following the 2010 Deepwater Horizon explosion off of the Louisiana coast in The Gulf of Mexico.
The Deepwater Horizon explosion claimed the lives of 11 employees, injured 17, and has been labeled as the worst environmental disaster in the history of the United States of America.
The plaintiffs in multidistrict legislation argued that although this filing comes after the statue of repose, which places a five-year limitation on plaintiffs to file suit, due to equitable tolling, they are within their legal rights.
Equitable tolling is a law stating that the statute of limitations cannot keep plaintiffs from filing claims if their injuries (physical, mental, or financial) were discovered after the limitation period. Since the decline in American shares and the subsequent loss to the companies was not revealed all at once, they argued that they are within their legal rights to file against BP.
BP disagrees with the plaintiff’s claims. In December 2013, the motion states BP's legal team originally fought the claims, pushing to dismiss all of the Exchange Act claims. They countered in the motion that 20 of the 31 claims made against BP are inadmissible because they were made more than five years after the explosion, thus exceeding the legal statue of repose. The claims were based on “alleged misstatements” that were filed outside the legal time limit.
BP cited multiple previous cases that set the legal precedent, specifically the Supreme Court's ANZ ruling of 2017. BP’s legal team reminded the court earlier rulings “made clear in ANZ that the filing of the ADS class action did not toll the running of the Exchange Acts statue of repose on plaintiff’s claims.”
BP urged the court to dismiss the cases claiming, “The object of a statue of repose, to grant completely peace to the defendants, supersedes the application of a tolling rule based in equity.”