British Petroleum now faces a two-front litigation war.
Yesterday, the Judicial Panel on Multidistrict Litigation sent to the U.S. district court in New Orleans dozens of cases alleging personal injury, wrongful death, property damage, and other economic loss resulting from the Deepwater Horizon oil spill. In re Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico on April 21, 2010, MDL No. 2179 (J.P.M.L. Aug. 10, 2010)
Later in the day, the Panel posted an order transferring securities law cases against BP to Houston. These assert that BP breached an "alleged duty . . . to recognize and disclose the likelihood that a calamity such as this might occur." In re BP p.l.c. Securities Litigation, MDL No. 2185, slip op. at 2 (J.P.M.L. Aug. 10, 2010).
The Panel explained why it chose to divide the tort cases from the securities cases, noting that "the typical benefits of common discovery would likely be few", that the tort "claims alone will require, in all probability, the [New Orleans] transferee judge's undivided attention", and that combining the tort and securities cases "would likely create an unwieldy and ultimately counterproductive litigation vehicle." Id. at 2-3.
The Panel also stated its intention to send a shareholder derivative action to Houston "in a forthcoming conditional transfer order" and to require parties to cases asserting claims under the Employee Retirement Income Security Act "to show cause why those actions should not be included in this MDL." Id. at 3.
U.S. District Judge Keith P. Ellison will handle MDL No. 2185. Judge Ellison was born in New Orleans, won a Rhodes Scholarship, and graduated from Harvard College and Yale Law School. Scary smart.