In Re Bp, Plc Securities Litigation
2010 U.S. Dist. LEXIS 136871
| S.D. Tex. | 2010Background
- Seven putative securities class actions against BP, arising from the Deepwater Horizon spill, were consolidated in SDTX.
- Plaintiffs seek to represent ADR and BP common stock purchasers from various periods between 2005–2010.
- Notice was issued under the PSLRA; several proposed lead plaintiffs withdrew, leaving New York & Ohio and the Ludlow Plaintiffs.
- Court preliminarily determines consolidation is appropriate due to overlapping issues of law and fact.
- Court must decide lead-plaintiff appointment, including whether to create a subclass and which counsel to approve.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether consolidation is appropriate. | New York & Ohio and Ludlow favor consolidation for efficiency. | Defendants advocate unified handling to avoid duplicative litigation costs. | Yes, consolidation granted. |
| Which party has the largest financial interest for lead plaintiff. | New York & Ohio claim the longest period yields the largest stake. | Ludlow contends different period results in larger stake for their group. | Using the longest-noticed period (New York & Ohio) yields largest financial interest. |
| Whether New York & Ohio satisfy typicality and adequacy to be presumptively most adequate lead plaintiff. | New York & Ohio argue their claims align with class theory and they meet typicality/adequacy. | Ludlow and others contend New York & Ohio have conflicts due to different theories and periods. | New York & Ohio not presumptively adequate due to conflicts; no clear typicality/adequacy. |
| Whether a subclass should be created and Ludlow appointed as subclass lead plaintiff. | Subclass ensures distinct periods/theories are represented; Ludlow suitable for Ludlow Period claims. | Subclassing risks fragmentation; PSLRA favors single lead plaintiff but allows co-leads where warranted. | Yes, appoint New York & Ohio as class lead and Ludlow as subclass lead to protect all interests. |
| Approval of lead counsel for each lead plaintiff group. | Both groups have capable counsel; appointment should reflect PSLRA choice. | No objection to counsel; avoid increased fee percentages due to multiple firms. | Lead counsel for each group approved. |
Key Cases Cited
- In re Enron Corp. Sec. Litig., 206 F.R.D. 427 (S.D. Tex. 2002) (lead-plaintiff standard and class-period considerations)
- MGIC Invs. Corp. Sec. Litig., 256 F.R.D. 620 (E.D. Wis. 2009) (longest-class-period approach and caution against frivolous periods)
- James v. City of Dallas, Tex., 254 F.3d 551 (5th Cir. 2001) (typicality and adequacy standards in lead-plaintiff analysis)
- Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620 (5th Cir. 1999) (adequacy principles and conflicts between named plaintiff and class)
- Oxford Health Plans, Inc. Sec. Litig., 182 F.R.D. 42 (S.D.N.Y. 1998) (presumption and representation considerations under PSLRA)
- Gluck v. CellStar Corp., 976 F. Supp. 542 (N.D. Tex. 1997) (early framework for typicality/adequacy and lead-plaintiff analysis)
- Star Gas Sec. Litig., 745 F. Supp. 2d 26 (D. Conn. 2010) (sanctions and class-action dynamics in lead-plaintiff context)
- Cable & Wireless PLC Sec. Litig., 217 F.R.D. 372 (E.D. Va. 2003) (co-lead/plaintiff considerations in securities cases)
- Wenderhold v. Cylink Corp., 188 F.R.D. 577 (N.D. Cal. 1999) (intra-class period considerations and aggregation of plaintiffs)