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Parties Debate Consolidation Of ERISA/Securities Actions Against BP

WASHINGTON, D.C. - Several plaintiffs in ERISA class actions pending against BP have told the Judicial Panel on Multidistrict Litigation that consolidation with securities claims and transfer of their cases to the Southern District of Texas is inappropriate (MDL 2189).

In August, the Judicial Panel transferred two Western District of Louisiana (Robert Ludlow v. BP, No. 6:10-818, and Johnson Investment Counsel v. BP, No. 6:10-903) and one Central District of California (Thomas Yuen, et al. v. BP, No. 2:10-4164) securities cases to Houston (MDL 2185).  The panel then issued to the plaintiffs in the ERISA class actions an order to show cause by Aug. 27 why their cases should not also be transferred.

One plaintiff, Charis Moule, responded to the order to show cause, stating that transfer to Texas may be appropriate.  However, plaintiffs in four other ERISA cases against BP said the cases should remain in the Northern District of Illinois, where seven of the class actions already are filed.  Not all of the plaintiffs believe the ERISA cases should be consolidated.

The ERISA plaintiffs suggest that there are more differences in the parties and the claims than there are similarities.  The dispositive issues in the ERISA actions turn on alleged breaches of fiduciary duties under ERISA while the issues in the securities cases, which were filed by investors, turn on alleged violations of securities laws, according to one response.

The ERISA actions, filed by current and former BP employees, allege that the fiduciaries of BP retirement plans violated ERISA because they imprudently permitted the plans to invest plan assets in BP stock, even after the explosion on the Deepwater Horizon rig.

The securities issues in MDL 2185 focus on alleged pre-spill misrepresentations concerning BP's operations, including safety and risk management practices and compliance with federal laws, according to one response.

Further, discovery in the two groups of cases will be different.

The ERISA cases are Arshadulla, et al. v. BP, No. 10 C 04026; Humphries v. BP, No. 10 C 3264; McGuire v. BP, No. 10 C 04337; Riley v. BP, No. 10 C 04448; Mineman v. BP, No. 10 C 04390; Moule v. BP, No. 10 C 3990; and Soesman v. BP, No. 10 C 04940, all in the Northern District of Illinois; and Whitley v. BP, No. 10-cv-4935, S.D. N.Y.

This update first appeared in HB's Oil Litigation & Insurance Coverage Report.  Developments like this and more will be discussed at the conference titled "Oil in the Gulf: Litigation & Insurance Coverage" scheduled for Nov. 4-5 in Miami produced by HB Litigation Conferences.  For more information, visit subscribers can find Deepwater Horizon-related filings here.  If you do not have a ID, you can get information on how to subscribe here.