BP Employees May File Lawsuits Over Retirement Losses
A New Orleans appellate judge rejected United States District Judge Keith Ellison’s 2012 decision denying employees the right to file lawsuits for millions of dollars lost in their retirement plans after the 2010 Gulf of Mexico oil spill. The court cited a recent Supreme Court ruling as their reason for overturning Judge Ellison’s decision. Retirement Fund Losses According to lawsuit documents, plan managers knew or should have known that investing in BP shares were not prudent. Shares of BP stock dropped more than 40 percent after the worst offshore oil spill in history and many have still not recovered the value lost. Judge Ellison ruled, based on then-prevailing law, that retirement plan managers were entitled to a presumption of prudence that protected them from lawsuits. Supreme Court Ruling Last month, the Supreme Court ruled, unanimously, that company managers are not entitled to that presumption if the Employee Retirement Income Security Act (ERISA) covers the savings plan. The case in the Supreme Court ruling was unrelated to the BP case. Because ERISA managers are subject to the same prudence as any other ERISA fiduciary, the protection against lawsuits does not exist, the three-judge panel determined. The court returned the case to Judge Ellison for reconsideration under the new standards issued by the Supreme Court. BP Response BP does not believe the lawsuits have merit, even under the new standards. The company attorneys plan to renew their motion to dismiss the case in district court. BP continues to believe that the law protects plan managers when investments do not achieve as expected. When the negligence of another person is suspected as the cause or contributing factor in an incident that causes financial damage, a lawsuit may be in order. Contact Dallas-Fort Worth lawyers at Frenkel & Frenkel to schedule a free initial consultation regarding a law violation or other incident where financial injuries may have been caused or worsened by someone else’s error.