Fifth Circuit says BP dividend case should be litigated in England

May 27, 2015 by

usca5Back in 2010, we filed a putative class action seeking to recover $750 million in dividends that were not paid to shareholders of BP after the 2010 Deepwater Horizon spill.

The Fifth Circuit has ruled that the case should be litigated in London, upholding a lower court’s dismissal of the suit.

“We find no such abuse of discretion here,” the appellate court wrote in a per curiam decision. “To the contrary, the district court’s opinion is well-reasoned and provides ample support for its conclusion.”

U.S. District Judge Keith P. Ellison ruled in June 2014 that England would provide a more convenient forum for the plaintiffs’ claims that the company’s action had no legal basis since they concern primarily questions of English law. Judge Ellison had earlier tossed a similar suit filed by the same plaintiff, Robert R. Glenn, also on jurisdictional grounds. We notified the court in July that we would appeal that decision.

According to Judge Ellison, the location of the witnesses — five of 22 live in the United States — and several public interest factors tipped the scales in BP’s favor, also considering that the case concerns the rights of English corporations under English law.

We filed the complaint in New York in November 2013, several months after Judge Ellison tossed our original Oregon suit. The case was transferred to Texas district court a month later and consolidated with a slew of other cases related to the Deepwater Horizon spill.

We argued that BP created a binding obligation to its shareholders seven days after the Deepwater Horizon rig exploded on April 20, 2010, when its board declared a quarterly dividend of 84 cents per American depositary share — for a total of $750 million — payable on June 21 to shareholders as of May 7.

But on June 16, after a meeting with President Barack Obama, BP said its board had canceled the dividend “despite its ‘strong financial position’ and ‘deep asset base.’”   We do not believe the cancellation had any legal basis.

BP, which is organized under the laws of England and Wales and based in London, argued that English law grants it authority to cancel an interim dividend at any time before payment, and that its decision to cancel the first-quarter dividends in 2010 did not incur any liability to shareholders.

Judge Ellison did not weigh in on whether or not BP was obligated to honor its promise after deciding to toss the case.

Plaintiff Robert Glenn was represented by Keith A. Ketterling, Jennifer S. Wagner, Mark A. Friel, and Jake Gill of Stoll Berne.

The case is Robert R. Glenn et al. v. BP PLC, case number 14-20466, in the U.S. Court of Appeals for the Fifth Circuit.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

Legal Disclaimer

The information contained in this blog does not constitute legal advice, and does not create an attorney-client relationship. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this blog.