HOUSTON (Legal Newsline) - BP stands for British petroleum but BP directors should face American justice, shareholders suing over losses from the Deepwater Horizon explosion believe.
On Aug. 31, shareholder lawyer Thomas Ajamie of Houston urged U.S. District Judge Keith Ellison to deny transfer of their claims to the High Court of England.
"If ever there was or will be a single case in which a federal court could and should adjudicate a derivative suit involving a foreign company, this it," Ajamie wrote.
"BP board members and senior managers continued to focus on short term cost cutting measures over process safety," he wrote.
"BP's board was told for years, by U.S. investigators, regulators and legislators, that BP operated in the U.S. in violation of applicable safety and environmental laws, and did so in a manner and to a magnitude that made inevitable a calamity harming U S. citizens and environment," he wrote.
He asked for jurisdictional discovery to show how directors and managers personally inspected Gulf Coast operations.
He wrote that they knew of BP's deficient compliance with U.S. regulatory standards.
"Plaintiffs expect that jurisdictional discovery will conclusively establish that defendants' actions constituting the breaches of their fiduciary duties to BP caused effects here such that the exercise of specific jurisdiction over the defendants is warranted," Ajamie wrote.
He wrote that BP is the largest oil producer in the Gulf.
He located its disaster response center in Houma, and its Gulf operation base in Port Fourchon.
Ellison presides over BP shareholder suits from many federal courts by appointment of the U.S. Judicial Panel on Multi District Litigation.
He held a hearing on jurisdiction in June, and ordered further briefs.
He asked if he could apply British law to determine the standing of shareholders to bring the action.
He asked if he could apply British law to determine if he should permit shareholders to proceed with the action.
He asked if he could allow an action under common law if British law doesn't apply.
Ajamie made the case for shareholders first, and Thomas Taylor of Houston pleaded BP's case on Sept. 9.
Taylor wrote that "only the English High Court is authorized to grant shareholders permission to pursue derivative claims on behalf of an English company."
"Plaintiffs' failure to obtain permission to sue on behalf of BP from the English High Court is fatal to their ability to maintain this derivative action," Taylor wrote.
"Plaintiffs fail to allege any illegal acts by defendants.
"They instead allege that defendants reached their fiduciary duties to BP by failing to provide effective oversight of the company's safety culture and major accident prevention programs.
"Indeed, plaintiffs have repeatedly emphasized that the conduct at issue here is allegedly insufficient oversight and excessive cost cutting.
"If accepted by this court, plaintiffs' theory would subject directors and officers of multinational companies to jurisdiction in any forum in which the company operates."
Daryl Libow and Bruce Hickey, of Sullivan and Cromwell in Washington, helped Taylor write the brief.
Ajamie associate Dona Szak worked on the shareholder brief.
So did Mark Lebovitch, Jeroen van Kwawegen and John Meade, all of Bernstein Litowitz in New York City.
So did Lewis Kahn, Albert Myers, Michael Swick and Melinda Nicholson, all of Kahn Swick and Foti, in Madisonville.