BP 2013 Annual Report Download - page 267

Halliburton lawsuits
On 19 April 2011, Halliburton filed a lawsuit in Texas state court seeking
indemnification from BPXP for certain tort and pollution-related liabilities
resulting from the Incident. On 3 May 2011, BPXP removed Halliburton’s
case to federal court, and on 9 August 2011, the action was transferred
to MDL 2179.
On 1 September 2011, Halliburton filed an additional lawsuit against BP
in Texas state court alleging that BP did not identify the existence of a
purported hydrocarbon zone at the Macondo well to Halliburton in
connection with Halliburton’s cement work performed before the
Incident and that BP has concealed the existence of this purported
hydrocarbon zone following the Incident. Halliburton claims that the
alleged failure to identify this information has harmed its business
ventures and reputation and resulted in lost profits and other damages.
On 7 February 2012, the lawsuit was transferred to MDL 2179.
RICO lawsuits
BP has been named in several lawsuits alleging claims under the
Racketeer-Influenced and Corrupt Organizations Act (RICO). On 15 July
2011, the district court granted BP’s motion to dismiss a master
complaint raising RICO claims against BP. The court’s order dismissed
the claims of the plaintiffs in four RICO cases encompassed by the
master complaint.
Non-US government lawsuits
On 15 September 2010, three Mexican states bordering the Gulf of
Mexico (Veracruz, Quintana Roo, and Tamaulipas) filed lawsuits in federal
court in Texas against several BP entities. These lawsuits were
subsequently transferred to MDL 2179 on 4 November 2010. These
lawsuits allege that the Incident harmed their tourism, fishing, and
commercial shipping industries (resulting in, among other things,
diminished tax revenue), damaged natural resources and the
environment, and caused the states to incur expenses in preparing a
response to the Incident. On 9 December 2011, the district court in MDL
2179 granted in part BP’s motion to dismiss the three Mexican states’
complaints, dismissing their claims under OPA 90 and for nuisance and
negligence per se, and preserving their claims for negligence and gross
negligence only to the extent there has been a physical injury to a
proprietary interest of the states. BP, other defendants and the three
Mexican states filed cross-motions for summary judgment on 4 January
2013 on the issue of whether the Mexican states have a proprietary
interest in the matters asserted in their complaints. The district court
heard oral argument on the cross-motions on 27 June 2013, and on
6 September 2013 the court granted defendants’ motions. On
12 September 2013, the court issued a final judgment dismissing the
three Mexican states’ claims with prejudice. On 4 October 2013, the
three Mexican states filed notices of appeal from the judgment to the
Fifth Circuit. The Mexican states’ opening brief in the appeal is due on
31 March 2014.
On 5 April 2011, the State of Yucatan submitted a claim to the Gulf Coast
Claims Facility (GCCF) alleging potential damage to its natural resources
and environment, and seeking to recover the cost of assessing the
alleged damage. On 18 September 2013, the State of Yucatan filed suit
against BP in federal court in Florida, and, on 13 December 2013, its
action was transferred to MDL 2179.
On 19 April 2013, the Mexican federal government filed a civil action
against BP and others in MDL 2179. The complaint seeks a
determination that each defendant bears liability under OPA 90 for
damages that include the costs of responding to the spill; natural
resource damages allegedly recoverable by Mexico as an OPA 90
trustee; and the net loss of taxes, royalties, fees, or net profits.
Insurance-related matters
On 1 March 2012, the district court in MDL 2179 issued a partial final
judgment dismissing with prejudice certain claims by BP, Anadarko and
MOEX for additional insured coverage under insurance policies issued to
Transocean for the sub-surface pollution liabilities BP, Anadarko and
MOEX have incurred and will incur with respect to the Macondo well oil
release. BP filed a notice of appeal from the district court’s judgment to
the Fifth Circuit and on 1 March 2013, the Fifth Circuit reversed the
district court’s judgment, rejecting the district court’s ruling that the
insurance that BP is entitled to receive as an additional insured under the
Transocean insurance policies at issue is limited to the scope of the
indemnity in the drilling contract between BP and Transocean. On
29 August 2013, the Fifth Circuit withdrew its 1 March 2013 opinion and
certified two questions of Texas law at issue in the appeal to the
Supreme Court of Texas. The Supreme Court of Texas accepted the
certification. Briefing is expected to be completed on 10 March 2014, and
oral argument has not yet been scheduled.
False Claims Act actions
BP is aware that actions have been or may be brought under the Qui Tam
(whistle-blower) provisions of the False Claims Act (FCA). On
17 December 2012, the court ordered unsealed one complaint that had
been filed in the US District Court for the Eastern District of Louisiana by
an individual under the FCA’s Qui Tam provisions. The complaint alleged
that BP and another defendant had made false reports and certifications
of the amount of oil released into the Gulf of Mexico following the
Incident. On 17 December 2012, the DoJ filed with the court a notice
that the DoJ elected to decline to intervene in the action. On 31 January
2013, the complaint was transferred to MDL 2179 and remains stayed.
MDL 2185 and other securities-related litigation
Since the Incident, shareholders have sued BP and various of its current
and former officers and directors asserting shareholder derivative claims
and class and individual claims. Many of these lawsuits have been
consolidated or co-ordinated in federal district court in Houston
(MDL 2185).
Shareholder derivative litigation
Shareholder derivative lawsuits related to the Incident have been filed in
US federal and state courts against various current and former officers
and directors of BP alleging, among other things, breach of fiduciary duty,
gross mismanagement, abuse of control and waste of corporate assets.
On 15 September 2011, the district court in MDL 2185 granted BP’s
motion to dismiss the pending consolidated shareholder derivative
litigation on the grounds that the courts of England are the appropriate
forum for the litigation. On 8 December 2011, a final judgment was
entered dismissing the shareholder derivative case and, on 3 January
2012, one of the derivative plaintiffs filed a notice of appeal to the Fifth
Circuit. On 16 January 2013, the Fifth Circuit affirmed dismissal of the
action. All of the state court derivative actions have been dismissed
based on the final outcome of the federal case.
Securities class action
On 13 February 2012, the district court in MDL 2185 issued two
decisions on the defendants’ motions to dismiss the two consolidated
securities fraud complaints filed on behalf of purported classes of BP
ordinary shareholders and ADS holders. The court dismissed all of the
claims of the ordinary shareholders, dismissed the claims of the lead
class of ADS holders against most of the individual defendants while
holding that a subset of the claims against two individual defendants and
the corporate defendants could proceed, and dismissed all of the claims
of a smaller purported subclass with leave to re-plead in 20 days. On
2 April 2012, the plaintiffs in the lead class and subclass filed an amended
consolidated complaint with claims based on (1) the 12 alleged
misstatements that the court held were actionable in its February 2012
order on BP’s motion to dismiss the earlier complaints; and (2) 13 alleged
misstatements concerning BP’s operating management system that the
judge either rejected with leave to re-plead or did not address in his
February decisions. On 2 May 2012, defendants moved to dismiss the
claims based on the 13 statements in the amended complaint that the
judge did not already rule are actionable. On 6 February 2013, the court
granted in part this motion to dismiss, rejecting the plaintiffs’ claims
based on 10 of the 17 statements at issue in the motion and also
dismissing all claims against former BP employee Andrew Inglis. On
6 December 2013, the court denied the plaintiffs’ motion for class
certification and gave the plaintiffs 30 days to renew that motion, and the
plaintiffs renewed their motion on 6 January 2014. Briefing on the
plaintiffs’ renewed motion is scheduled to complete on 10 March 2014
and a hearing on this motion is scheduled for 21 April 2014. On
20 December 2013, the court revised the schedule for the action and set
a trial date for 14 October 2014.
Individual securities litigation
In April and May 2012, six cases (three of which were consolidated into
one action) were filed in state and federal courts by one or more state,
county or municipal pension funds against BP entities and several current
Additional disclosures
BP Annual Report and Form 20-F 2013 263