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February 15, 2011

 

New York Pension Fund Files Amended Complaint Against BP

Consolidated Suit Alleges BP Failed to Adopt Common Global Safety Standard


The New York State Common Retirement Fund and the Ohio pension funds today announced that they have filed an amended complaint on behalf of investors in the class action lawsuit against BP. The amended complaint, filed in the federal district court in Houston, alleges that the company adhered to lower safety standards in its Gulf of Mexico operations than elsewhere in the world, despite claims that the company would implement a single worldwide safety standard. The plaintiffs contend that the lowered standards led to the explosion of the Deepwater Horizon drilling rig and the disastrous oil spill.

"BP's leadership claimed that the company was 'focused on safety like a laser' after the mishaps of the last few years," said State Comptroller Thomas P. DiNapoli, trustee of the New York State Common Retirement Fund. "The truth is that BP's focus on safety wasn't so laser-like. BP repeatedly failed to maintain a common set of safety rules. We're going to fight to make sure BP is held responsible for the losses borne by the million-plus members of the Fund and all other investors who were deceived by BP's statements."

DiNapoli and the Ohio attorney general's office were appointed co-lead plaintiffs in the class-action suit against BP in December 2010, and were asked to file an amended complaint that consolidated allegations against the firm. The complaint alleges that BP's Operational Management System allowed the firm to rely on minimal safety standards set by local regulators, rather than creating a "single framework" for deepwater drilling as the company told investors during its launch in 2006.

In contrast to BP's practices, Shell's safety protocols require all of the firm's operations to follow the same mandatory practices, whether demanded by regulations or not. Shell also required each drilling operation to specify its individual efforts to mitigate risk. In an internal December 2008 memo, BP executives were warned that the company's operations in the Gulf of Mexico were riddled with significant process safety gaps. In 2009, Kevin Lacy, BP's senior vice president for drilling operations for the Gulf of Mexico, resigned after disagreeing with BP on safety protocols.

The New York State Common Retirement Fund retained Cohen Milstein Sellers & Toll PLLC as lead counsel on the suit in July 2010. The Fund provides benefits to more than one million active and retired state and local government employees, police officers, and firefighters and their beneficiaries.

 

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