A U.S. appeals court on Tuesday revived a lawsuit in which participants in four BP Plc employee retirement savings plans claimed they were deceived into buying and holding BP stock before and after the 2010 Deepwater Horizon disaster.
The 5th U.S. Circuit Court of Appeals in New Orleans said that a ruling last month from the U.S. Supreme Court upended the reasoning applied by a lower court that had dismissed the class action suit two years ago.
A unanimous three-judge panel ordered U.S. District Judge Keith Ellison in Houston to take another look at the claims of participants in the retirement savings plans.
The participants said the value of a BP stock fund in which their money was invested fell by $1.85 billion in the months after the Deepwater Horizon rig exploded in the Gulf of Mexico. The explosion killed 11 workers and caused the worst ever U.S. offshore oil spill.
The participants alleged that BP misled them, as investors, and as early as 2007 overstated the safety controls the company had in place.
They also alleged that fiduciaries who were charged with managing the retirement savings plans breached their duties by failing to sell off BP stock and take other actions to protect investors.
Ellison dismissed the lawsuit in March 2012, finding that plan fiduciaries enjoyed a legal presumption that they acted prudently.
The U.S. Supreme Court, though, did away with the presumption last month in a different case, and the appeals court said the development meant Ellison should reconsider the suit.
In May, Ellison ruled in a separate shareholder suit that another set of investors who bought BP's American depository shares soon after the explosion may pursue claims as a group.
"The Fifth Circuit today remanded the ERISA case to the district court in light of new pleading standards set forth by the Supreme Court," BP spokesman Geoff Morrell said in a statement. "BP does not believe the plaintiffs satisfy these new standards and intends to renew its motion to dismiss in the district court."
An attorney for the plaintiffs did not immediately respond.
The case is Whitley, et al, v. BP Plc, et al, 5th U.S. Circuit Court of Appeals, No. 12-20670.
(Reporting by David Ingram in New York; Editing by Noeleen Walder and Jonathan Oatis)