La. pension fund sues BP

Michelle Massey May 17, 2010, 9:58am

NEW ORLEANS (Legal Newsline) - BP shareholders have filed a lawsuit accusing the company of choosing to maximize output at BP's production facilities instead of complying with safety regulations.

This failure to comply with its duties has caused "one of the worst oil spills in the history of the United States," the lawsuit states.

Louisiana Municipal Police Employees' Retirement System (LAMPERS) filed the shareholder derivative complaint against BP on May 10 in the federal court in New Orleans.

The named defendants include BP's board of directors, Transocean, Cameron, Halliburton and the insurance companies which provided policies to Transocean, Cameron and Halliburton.

According to the complaint, the BP board has been unable to regulate the poor safety record despite deadly accidents, such as the 2007 Texas City Explosion that killed 15 workers.

BP has promised safety improvements and implementation of effective safety initiatives but has failed to follow through with its obligations, the lawsuit says.

"These failures have cost employees their lives and made the company incur billions of dollars in damages," the plaintiff argues.

Since the BP-leased Deepwater Horizon rig exploded off the Louisiana coast April 20, killing 11 workers, about 5,000 barrels, or 210,000 gallons, of oil have been flooding into Gulf waters daily.

In a letter to the five state attorneys general who represent Gulf Coast states, BP General Counsel John Lynch Jr. said claimants against the company will not be asked to release BP from liability.

For years BP has ignored crucial safety issues with the Deepwater Horizon oil rig and other oil rigs, the shareholders maintain. Further, the company cut costs including safety and maintenance costs and lobbied federal and state governments to remove the safety regulations, they claim.

LAMPERS states the financial consequences of the Deepwater disaster will be in the tens of billions of dollars, which includes an estimated $2.5 billion loss to the fishing industry and $3 billion loss in tourism.

The disaster has caused BP's stock price to drop by over 19 percent, wiping out BP's market value. The group states that BP is incurring additional costs of at least $6 million per day trying to stop and clean-up the oil spill.

LAMPERS, a retirement system for full time municipal police officers and employees in Louisiana, is asking the court to award damages, plus interest, punitive damages and court costs.

The group is also asking the Court to order BP to reform and improve corporate governance policies including establishing an environmental and litigation exposure oversight committee.

New Orleans attorneys Lewis S. Kahn, Albert M. Myers, Paul Balanon and Melinda Nicholson of Kahn Swick & Foti are representing the shareholders. Addition counsel includes New Orleans attorney G. Anthony Gelderman III, of Bernstein Litowitz Berger & Grossman and New York attorneys Gerald H. Silk, Amy Miller and Jeremy Friedman also of Bernstein Litowitz Berger & Grossman.

U.S. District Judge Martin L. C. Feldman is assigned to the litigation.

A nearly identical shareholder derivative lawsuit was filed by Katherine Firpo, a Pennsylvania BP investor. The case was filed May 7 in the federal court in New Orleans but was voluntarily dismissed Tuesday.

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