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Shareholders win right to sue BP over 2006 oil spill

Charge that poor handling of the situation made their stake less valuable

BP is not unfamiliar with the business end of a lawsuit, but recently settlement figures and court hearings have been related to the massive oil spill it was party to in 2010. Adding more trouble to those legal woes is the go ahead from a district court that will allow shareholders to hold the oil giant culpable to another spill that occurred in 2006.

The 9th U.S. Circuit Court of Appeals in San Francisco ruled that some shareholders would be allowed to move forward with securities fraud cases against BP, after a previous judge ruled that they could not do so.

"Despite BP's public statements suggesting that the spill was an anomaly, a second leak was discovered five months later in a different BP oil transit line in the region," Reuters reports the court wrote. "As a result, the company temporarily shut down regional operations."

The suits are related to a spill from a BP owned pipeline, which leaked around 200,000 gallons of oil in March 2006. The parties seeking to suit BP claim that as a directly result of the charges the company faced as a result of the incident, stock value dropped.

BP was on the hook for $20 million in settlements as a result of the spill and pleaded guilty to a misdemeanor for negligence in relation to the spill. While the initial suit brought by shareholders was thrown out by a Seattle-based judge in 2008, litigation will now be allowed to move forward with the new the ruling from the 9th Circuit.

BP legal woes have been mounting in 2014. Earlier this year a court upheld the stalled repayment plan for those impacted by the Gulf oil spill, despite BP’s attempt to have the settlement restricted.

 

For more on BP’s litigation check out these stories:

5th Circuit upholds BP oil spill settlement

BP faces second leg of civil trial

Claims administrator says BP’s budget qualms an attempt to stall repayment

Executive Editor

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Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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