Court File No.: CV-12-00467836-00CP
ONTARIO SUPERIOR COURT OF JUSTICE
PETERKAYNES
Plaintiff
BP, PLC
Defendant
Proceedings under the Class Proceedings Act, 1992
FRESH AS AMENDED STATEMENT OF CLAIM
TO THE DEFENDANTS
A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the plaintiff. The claim made against you is set out in this Statement of Claim served on you pursuant to Rule 17.02 and 17.04 the Ontario Rules of Civil Procedure.
IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting for you must prepare a statement of defence in Form 18A prescribed by the Rules of Civil Procedure, serve it on the plaintiffs lawyers or, where the plaintiff does not have a lawyer, serve it on the plaintiff, and file it, with proof of service, in this court office, WITHIN TWENTY DAYS after this notice of action is served on you, if you are served in Ontario.
If you are served in another province or territory of Canada or in the United States of America, the period for serving and filing your statement of defence is forty days. If you are served outside Canada and the United States of America, the period is sixty (60) days.
Instead of serving and filing a statement of defence, you may serve and ftle a notice of intent to defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you to ten more days within which to serve and file your statement of defence. IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO DEFEND THIS PROCEEDING BUT ARE UNABLE~ PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE. ..J-- \l Date: November 15,2012 Issued by: AJ.-..rt<; \l..:\ Registrar
Address of Court Office:
SUPER IOR COURT COUR SUP~RIEURE OF:JUSTICE DE JUSTICE 393-0N IVERSITY AVE. 393 AVE. UNIV£RSITY TO: 10TH FLOOR 10E tTAGE TO"'ONTO, ONTARIO TORONTO, ONTARIO M5G 1E6 MSG 1E6
OSLER, HOSKIN & HARCOURT LLP
Larry P. Lowenstein, LSUC#23120C Laura Fric, LSUC#36556Q Kevin O'Brein, LSUC#51568U P.O. Box 50 1 First Canadian Place Toronto, Ontario M5X 1B8 Tel: 416.862.5899 Fax: 416.862.6666
On behalf ofBP, p.l.c.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 2 DEFINED TERMS
1) In addition to the terms and meanings used in section 138.1 of the
Ontario Securities Act, the capitalized terms used throughout this statement of claim have the meanings indicated below:
a) "Baker Report" means an BP published report concerning safety management and systems across U.S. operations and how it would improve operational safety by adopting 10 recommendations, chaired by former U.S. Secretary of State James Baker, III, which was disseminated to the public on January 16, 2007;
b) "Biy Report" means BP's Deepwater Horizon Accident Investigation Report dated September 8, 201 0;
c) "BOP" means a blowout preventer, which has several features that could be used to seal oil wells; two donut-shaped rubber elements called "annular preventers" that encircled drill pipe or casing inside the BOP, and, five sets of metal rams to cut thru drill pipe insider the BOP to seal off the well in emergency situations. The BOP is designed to contain pressure within the wellbore and halt an uncontrolled flow of hydrocarbons into the ocean and up to the rig;
d) "BP" or the Company, means BP p.I.c.;
e) "Class" and "Class Members" means all residents of Canada, other than Excluded Persons, who acquired equity securities of BP during the period from (a) May 9, 2007 to and including January 12, 2009, and who held some or all of those securities at the close of trading on May 28, 2010, and (b) January 13,2009 to and including May 28, 2010;
f) "CJA" means the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended;
. g) "Deepwater Horizon" means a vessel or offshore facility capable of being used to drill offshore wells, which has as part of its operating equipment and appurtenances a BOP and LMRP, a marine riser and associated piping, and other equipment. On April 20, 2010, it exploded and subsequently sake into the Gulf of Mexico;
h) "Equivalent Securities A-cts" means Securities Act, RSA 2000, c S-4, s. 211.03; Securities Act, SNB 2004, c S-5, s. 161.2; Securities Act; CCSM
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 3 c S50, s. 176; Securities Act RSBC 1996, c 418, s. 140.3; Securities Act, 1988, SS 1988-89, c S-42.2, s. 136.11; Securities Act RSNS 1989, c 418, s. 146C; Securities Act, RSNL 1990, c S-13, s. 38.3; Securities Act, RSPEI 1988, c S-3.1, s. 124; Securities Act, RSQ c V-1.1, ss. 225.8, 225.9, 225.10, and 225.11; Securities Act, SNWT 2008, c I 0, s. 124; Consolidation of Securities Act, SNu 2008, c 12, s. 124 and Securities Act, SY 2007, c 16, s. 124;
i) "Excluded Persons" means BP's subsidiaries, affiliates, officers, directors, executive level employees, legal representatives, heirs, predecessors, successors and assigns, and all residents of Canada who acquired BP's securities listed on the New York Stock Exchange who do not deliver an opt out notice in the matter of BP, plc Securities Litigation, MDL No. 2185 (S.D. Tex.);
j) "Frankfurt" means the Frankfurt stock exchange, which is known as the Deutsche Borse AG;
k) "Hydrocarbons" means a compound of hydrogen and carbon, such as any of those that are the chief components of petroleum and natural gas;
1) "IEP" means BP's initial exploration plan for the Mississippi Canyon Block 252, which is where the Macondo Well is located within the Gulf of Mexico;
m) "LON" means the London Exchange;
n) "LMRP" means a lower marine riser package;
o) "NYSE" means the New York Stock Exchange;
p) "Macondo Well" means an underwater oil well approximately 1,500 meters deep located within a geographic region of the Gulf of Mexico identified as Mississippi Canyon Block 252, which was connected to the Deepwater Horizon;
q) "OMS" means BP's operating management system, which is published in its annual Sustainability Reviews and elsewhere, as the primary framework that alleged to have served as the foundation for processes designed to increase BP's process safety procedures and a blueprint for safety and all aspects of operations throughout BP and how every BP project, site, operation and facility is managed following OMS Group Essentials;
r) "OMS Group Essentials" means the core aspects of the OMS as defmed by BP in a letter to the United States Securities & Exchange Commission dated October 8, 2010, which includes each of BP's operating entities
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 4 creates its own local OMS, tailored to its operations, including crisis plans;
s) "OSA" means the Securities Act, R.S.O. 1990 c. S.5, as amended;
t) "OSRP" means BP's Regional Oil Spill Response Plan for the Gulf of Mexico, published June 30, 2009, as required by the Oil Pollution Act of 1990 and necessary to publish in order to engage in drilling and exploration activities in the Gulf of Mexico, which requires the owners or operations of offshore oil-handing, storage, or transportation facilities to prepare a oil spill response plan;
u) "Plaintiff' means Peter Kaynes;
v) "Presidential Commission Report" means the Report to the President, National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling published January 2011;
w) "Process Safety" means, as described by BP's Sustainability Report, applying good design principles, engineering and operating and maintenance practices to manage operations safely.
x) "Sustainability Review" means the annual report that BP published that detailed its Process Safety and operational risk guide and risk management systems, including the OMS, in April2007;
y) "Top Kill method" (a/k/a, "dynamic kill" or ''top kill") means a procedure by which BP was hoping to cut-off the flow of oil completely by pumping heavy drilling mud into the top of the well through the BOP's chock and kill lines, at rates and pressures high enough to force escaping oil back down the well and into the reservoir. The method also includes pumping materials, including pieces of tire rubber and golf balls, into the bottom of the BOP through the choke and kill lines ideally to impede the flow of oil. By slowing the flow of oil, this is used to make it easier for the drilling mud to cut-off the flow of oil completely;
z) "SEC" means the U.S. Securities and Exchange Commission;
aa) "SEDAR" means the System for Electronic Document Analysis and Retrieval which is a filing system developed for the Canadian Securities Administrators; and
bb) "TSX" means the Toronto Stock Exchange.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 5 RELIEF CLAIMED
2) Plaintiff claims on his own behalf and on behalf of the other Class
Members:
a) an order granting leave to amend this amended statement of claim to assert the causes of action set out ins. 138.3 of the OSA and the analogous provisions in the Equivalent Securities Acts, effective nunc pro tunc to April 20, 20 12;
b) an order pursuant to the CPA certifying this action as a class proceeding and appointing him as the representative plaintiff of the Class;
c) a declaration that BP made a misrepresentation about its IEP, OMS and OSRP;
d) a declaration that BP made an omission about the amount of and ability to recollect the oil being leaked into the Gulf of Mexico;
e) a declaration that the BP made the misrepresentation negligently;
t) assessment of damages pursuant to s. 138.5 of the OSA in the sum to be determined at once it is determined how many shares ofBP were purchased by residents of Canada during the relevant time period or such other sum as this court finds appropriate at the trial of the common issues or at a referenc.e or references;
g) an order directing a reference or giving such other directions as may be necessary to determine issues not determined in the trial of the common issues;
h) pre-judgment interest and post-judgment interest, compounded, or pursuant toss. 128 and 129 of the CJA;
i) costs of this action on a full indemnity basis, or in an amount that provides substantial indemnity plus, pursuant to s. 26(9) of the CPA, the costs of notice and of administering the plan of distribution of the recovery in this action; and
j) such further and other relief as to this Honourable Court seems just.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 6 NATURE OF THE ACTION
3) This Action relates to BP, a Responsible Issuer until January 12, 2009, publishing, on a global scale including directly to Canadian resident shareholders, a misrepresentation and omission in its core documents concerning its IEP, OMS, and
OSRP. The primary Corrective Disclosures occurred after the stock exchanges closed on May 28, 2010, when there was a failure with BP's OSRP and resulting oil spill and clean-up efforts, which could have happened at any ofBP's oil exploration facilities around the world. This time the failure ofBP's IEP and OMS resulted in the April20,
2010 Deepwater Horizon explosion, which occurred in the Gulf of Mexico. Plaintiff acquired equity securities of BP prior to and after when BP disseminated these documents containing the misrepresentation and omission. The value of Plaintiffs securities lost material value after the misrepresentation and omission were corrected.
4) BP's documents containing the misrepresentation or omission, which was repeated during the Class Period, relevant to this Action are:
a) BP's Sustainability Reviews published to investors and the public
between April2007 and April2010;
b) BP's IEP for the Macondo Well;
c) BP's OSRP for the Gulf of Mexico;
d) BP's 2006 to 2009 annual reports published to investors and the public
between 2007 and 201 0; and
e) Certain ofBP's press releases published after the April20, 2010 oil spill
accident.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 7 5) During the Class Period and when BP was a Reporting Issuer, BP's securities were listed and traded on the TSX until August 15, 2008. BP delisted its shares from the TSX and transferred to those shares to LON and NYSE. On December
8, 2008, BP motioned and on January 12,2009, received relief from being a Reporting
Issuer in Canada on the condition that it undertook the responsibility to continue to send or provide the financial disclosure materials to its security holders in Canada.
6) Between November 14, 2008 and March 3, 2010, BP disseminated core documents relating to its regional oil spill response plan for the Gulf of Mexico, which is where the Deepwater Horizon was located, exploded, and sank. Between April 2007 and April 15,2010, BP disseminated three Sustainability Reports relating to its OMS.
7) The economic viability of BP's offshore drilling and exploration projects relied upon the adoption of various operational and personnel safety programs, including its ability to engineer and manage how to respond to worst case discharges of oil from production facilities while concurrently processing its offshore drilling and exploration wells.
8) An error in interpreting or failure to follow the operational and personnel safety programs or drilling and processing oil from any of its offshore deepwater facilities, including those located in the Gulf of Mexico, could and did expose BP to billions dollars in additional costs, delays, and the possibility of not obtaining the necessary licenses to engage in offshore drilling and exploration activities.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 8 9) BP's representations about its operational and personnel safety programs and ability to process oil from any of its offshore deepwater facilities, including those located in the Gulf of Mexico, as articulated in its IEP, OMS and OSRP, influenced its perceived investment quality and caused its securities to trade at artificially high prices.
BP's executives were keenly aware that their representations about BP' s activities in the
Gulf of Mexico influenced the Company's perceived investment quality and share price.
10) After the market closed on April 20, 2010, the Deepwater Horizon, in the
Gulf of Mexico, exploded resulting in an environmental disaster. The Deepwater
Horizon burned out-of-control for almost two days before sinking. Sixty-eight days passed before BP stopped the flow of oil from the Macondo Well on July 15, 2010.
Between 3.2 and 4.9 millions of barrels of oil leaked into the sea, which is at least
47,500 barrels of oil per day.
11) Subsequent to the Deepwater Horizon explosion and as oil leaked from the Macondo Well into the Gulf of Mexico, BP misrepresented the quantity of oil that was being lost at sea and how much it could recover. At least several employees ofBP attempted to destroy business records that evidenced that more oil was being lost at sea and how much it could recover but were caught and are now subject to criminal proceedings in the United States. BP' s most senior level executives published knowingly false statements about the severity of the oil spill and its ability to execute its
OSRP to investors, U.S. Congress, and media.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 9 12) After the April20, 2010 Deepwater Horizon explosion, BP and the U.S. federal government each published a document, for a total of two (2) documents, including BP's Bly Report, that made conclusions that expressly contradict BP's prior statements in the documents concerning its operational management of safety procedures, condition of the BOP connected to its Deepwater Horizon, and OSRP, published prior to the Deepwater Horizon explosion. BP's current and former executives have also provided evidence, under oath, to the United States of America's congressional hearings and to plaintiffs in civil class actions in Texas and Louisiana.
13) As the truth regarding BP's ability or its inability to respond to the oil spill as represented in the OSRP became evident, BP's securities lost value.
14) BP negligently made the misrepresentation and omission about its IEP,
OMS, OSRP, volume of oil leaking into the Gulf of Mexico, and related efforts to control the leak and recover the lost oil because it understood the likely negative effect on its ability to obtain governmental licenses to conduct oil drilling and exploratory activities in the Gulf of Mexico as well as the share price as reflected by what happened to the share price the ten (10) days after each of the corrective disclosures commencing with the April20, 2010 explosion and the associated investment quality of the Company.
15) BP understated the events surrounding the Deepwater Horizon explosion and when the truth emerged the price of BP's securities materially dropped.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 10 16) On November 15, 2012, after the markets closed, BP published a press release admitting liability to resolve all criminal and civil securities claims lodged by the
U.S. Securities & Exchange Commission relating to the Deepwater Horizon accident, including a USD $525,0000,000 penalty for publishing false statements after the explosion as reflected in the matter of Securities & Exchange Commission v. BP p.l.c.,
12-cv-2774 (E.D. La.).
THE PLAINTIFF
17) Plaintiff, Peter Kaynes, in an individual resident of the City of Barrie, in the Province of Ontario. He previously resided in Calgary, Alberta. He earned a bachelor of Applied Sciences (Mining) from the University ofToronto and is also a certified management accountant and certified internal auditor. Has been an auditor for
VALE, Inc., Dome Petroleum, and the Province of Ontario. He is now retired and owns over 1,400 shares ofBP.
18) While he resided in Calgary, Alberta, he opened a brokerage account with
RBC Dominion Securities in Calgary, Alberta. Plaintiffs investment advisor originally purchased the BP securities listed on the TSX and during the Class Period purchased additional BP securities listed on the NYSE. Plaintiff also opened a brokerage account with TD Waterhouse in Toronto, Ontario, to purchase additional BP securities.
In re BP pic Securities Litigation, CV-12-00463836-00CP , Amended Statement of Claim 11 19) During January 1999, October 1999, October 2002, January 28,2008,
April 29, 2008, August 12, 2008, and July 2010, Plaintiff acquired over 2,000 shares of
BP in brokerage accounts located in Alberta and Ontario. Plaintiff reviewed BP' s first quarter results for 2008 and annual report for 2007 prior to making his purchases during
2008. Before, during, and after the Class Period, BP sent its securities holders, including
Plaintiff, certain investor materials, including annual reports and a proxy to vote on corporate issues from the United Kingdom to Ontario and across Canada. For approximately 20 minutes, BP cross-examined Plaintiff on these representations.
20) With respect to Plaintiffs July 2, 2010 purchase, it is now known that soon after the April20, 2010 explosion, internal BP engineers began work on modeling the potential oil spill flow rate from the leaking Macondo Well, and shared these estimates with other BP employees, which ranges were between 64,000 to 138,000 barrels of oil per day. The author of these ranges of potential oil flow rate attempted to destroy the evidence of his work-product and is subject to a criminal investigation.
Publicly, however, BP was disclosing that its best estimates were that 5,000 barrels of oil per day were leaking. Had these oil flow rate estimates been published, Plaintiff would not have purchased additional shares of BP. He continued to hold those shares until after the Class Period ended.
21) As a long-term investor ofBP equity, BP had a special relationship with
Plaintiff and the other shareholders of BP' s securities. During the Class Period and after
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 12 the April20, 2010 explosion, BP published the misrepresentation and omission inducing
Plaintiff and other Class Members to purchase additional BP securities.
22) Plaintiff suffered damages, in the form of lost value of his BP shares, in his brokerage accounts located in Alberta and Ontario as a direct and foreseeable result ofBP's misrepresentation and omission.
23) Plaintiff has common interests that he shares with the residents of Canada who purchased shares ofBP securities during the Class Period and held those securities until after the Class Period ended.
THE DEFENDANT
24) BP is incorporated pursuant to the laws of the United Kingdom with its principal executive offices located in London, England. In Canada, the Company is engaged in the exploration and development of mineral properties in two territories and five provinces. In Canada, BP operates and owns 100% of two Canadian subsidiaries,
BP Canada Energy and BP Canada Finance.
25) BP was a Reporting Issuer prior to the Class Period and until January 12,
2009. On that date, the Alberta Securities Commission granted BP's request to cease being a Reporting Issuer provided that it committed to continue to send its shareholders in Canada, including Plaintiff, its investor documents. BP complied with the In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 13 Commission's order and provided its shareholders in Canada with the investor documents.
26) Before, during and after the Class Period, BP also directed its communications originating from the United Kingdom and elsewhere, including from within Canada, about its investment quality to Canadian investors located within Canada and abroad to encourage Canadian investors to purchase BP's securities:
(a) On October 23, 2001 , former BP Chief Executive Officer, Lord Browne, presented to an audience of investors and members of the media at the Canada Club in London, England, whereby he touted the growth opportunities in Alberta, Canada;
(b) On December 10, 2004, former BP Chief Executive Officer, Lord Browne, presented to an audience of investors and members of the media at the Empire Club of Canada and Royal York Hotel, Toronto, Ontario, when Lord Browne stressed the importance of Canada and BP's safety measures to BP's investment quality;
(c) During 2008, BP, with the help of Canadian investment bankers, entered into a strategic relationship with Husky Energy, Inc., another Canadian oil exploration company in Alberta In associated press releases, former BP Chief Executive Officer, Tony Hayward, stressed the importance of Canada as part ofBP's investment quality and further growth;
(d) BP published its Canada Strategic Performance Unit Gas Operations, verified site report: 2008, which was designed to promote BP's Canadian operations and made available to Canadian investors ofBP. This Report touted BP's OMS and other safety protocols to influence BP's investment quality;
(e) During September 2008, BP sent its executives from the UK to the International Pipeline Conference & Exposition in Calgary, Alberta;
(f) During 2008 and 2009, BP's former Chief Executive Officer, Tony Hayward, stated that BP would continue to invest and expand in Canada;
(g) During early 2010, BP sent its executives from the UK to Ottawa and Alberta to ensure the Canadian government that it had prudent safety
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 14 protocols in order to continue developing the Alberta oil sands and seek licenses to engage in deep sea oil exploration activities;
(h) On Aprill5, 2010, BP published its 2009 Sustainability Review. BP expressly represented that the OMS provides a single framework for all BP operations to follow, covering all areas from process safety, to personal health, to environmental performance. This representation supported BP's investment quality and share price;
(i) BP published its BP Canada Energy Company, verified site report: 2009, which was designed to promote BP's Canadian operations and available to Canadian investors ofBP. This Report touted BP's OMS and other safety protocols to influence BP's investment quality;
(j) BP published its BP in Canada Sustainability Report 2010, which was designed to promote BP's Canadian operations and made available to Canadian investors ofBP. This Report touted BP's OMS and other safety protocols to influence BP's investment quality; and
(k) During February 2012, BP had its subsidiary BP Capital Markets plc conduct a Cdn$500 million bond offering, when BP engaged Citibank N.A. Toronto to serve as its paying agent for the offering.
27) BP Canada Energy is a registered corporation incorporated pursuant to the laws of the Province of Alberta with its head office in Calgary, Alberta. It is active in three provinces and the Northwest Territories and claims to rank among Canada's top marketers and traders of natural gas, crude oil, natural gas liquids and fmancial products.
BP Canada Energy holds three oil sands projects in Alberta, including a joint venture with Husky Energy to develop the Sunrise oil sands, a joint venture with Devon Energy to develop the Pike oil sands, and a partnership with Value Creation Inc. to develop the
Terre de Grace oil sands, which oil sands projects are in Alberta encompassing 270,000 acres.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 15 28) BP Exploration Operating Company also has a registered branch in
Canada, which consists of interests in the Canadian arctic primarily in the Beaufort Sea with approximately 2,390,000 acres of discovery and exploration licenses.
29) Employees ofBP's wholly owned subsidiaries in Canada were encouraged to purchase BP's securities.
30) BP considered Canada and its shareholders to be important to its global operations as reflected by it (a) sending senior executives from the U.K. and Untied
States to Canada to promote its global operations; (b) meeting with Canadian institutional investors, (c) its annual reports before and during the Class Period it disclosed that it had well established and profitable operations in Canada which allegedly followed the same OMS as in the Gulf of Mexico; (d) BP and its wholly owned Canadian subsidiaries continuously published in its investors reports that they were allocating corporate assets into further developing its Canadian operations.
31) On February 19, 2008, which is during the Class Period while BP was a
Reporting Issuer and its securities were listed on the Toronto Stock Exchange,
899,270,264 ADS (equivalent to 5,395,621,585 ordinary shares) were outstanding.
During December 2008, BP disclosed that Canadians held approximately 2% or
16,000,000 ADS, or hundreds ofmillions worth ofBP 's equity.
32) During the Class Period, BP was covered and promoted by Canadian stock analysts from CIBC and RBC to Canadian resident investors, such as Plaintiff.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 16 33) During a portion of the Class Period, until mid-August 2008, BP listed its securities on the TSX. While BP listed its securities on the TSX, it engaged CIBC
Mellon Trust Company in Toronto, Ontario, to serve as its Canadian transfer agent. BP is publicly traded and its securities, ordinary shares and ADS are now listed for trading on the LON, Frankfurt, and the NYSE under the symbol "BP."
34) During the Class Period, BP had approximately hundreds, if not thousands, of employees and subcontractors in Canada. Canadian resident investors held well over a million shares of BP stock.
35) BP is a "responsible issuer" within the meaning of s. 138.1 of the Ontario
Securities Act.
THE MATERIAL FACTS
A. PRE-APRIL 20, 2010 MACON DO WELL OIL SPILL
36) On January 16, 2007, BP published the "Baker Report" and published a press release to discuss BP's commitment to improving its process safety programs, which formed the basis of a new OMS. BP represented that it would implement the recommendations made by the Baker Report across all U.S. refineries and other global operations. This representation supported BP's investment quality and share price.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 17 37) BP was aware that its Gulf of Mexico operations and associated revenues were very significant to BP's investment quality and revenues. BP was also aware that the news it published about its operations in the Gulf of Mexico, including the
Deepwater Horizon, influenced its stock price.
38) During May 2007 (for the year 2006), May 2008 (for the year 2007),
April2009 (for the year 2008), and April15, 2010 (for the year 2009), BP published its annual Sustainability Reviews whereby it would describe and tout the Company's success with its implementation of the OMS. In these Sustainability Reviews, BP represented, among other things, that the OMS would be applied to each of BP's sites.
The OMS was introduced to improve the management of safety risks and the quality of performance in BP's operations. These representations supported BP's investment quality and share price.
39) In the 2006 Sustainability Review, which was published May 8, 2007, BP represented that the OMS is a comprehensive system that covers all aspects of its operations and that it will apply to all operations because it was the foundation for a safe, effective, and high-performing BP. This representation supported BP's investment quality and share price.
40) BP's 2006 Sustainability Review contained the misrepresentation because, among other reasons, the OMS did not apply to all ofBP's operations and, specifically, not the Deepwater Horizon in the Gulf of Mexico. As such, BP's
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 18 investment quality and share price was artificially higher than had the misrepresentation not been made.
41) In the 2008 Sustainability Review, BP represented that the OMS was introduced and completed in the North America Gas, Gulfof Mexico, Columbia and the
Endicott Field in Alaska. This representation supported BP's investment quality and share price.
42) BP's 2008 Sustainability Report contained the misrepresentation because, among other reasons, the OMS did not apply to all ofBP's operations and, specifically, not the Deepwater Horizon in the Gulf of Mexico. As such, BP's investment quality and share price was artificially higher than had the misrepresentation not been made.
43) On March 10,2009, BP published its IEP, which is where the Macondo
Well is located within the Gulf of Mexico. This IEP provided technical information for this section of the Gulf of Mexico, including that the estimated worst case scenario oil leak would be 162,000 barrels of oil per day and that BP had the capability to respond with proven equipment and technology, to the maximum extent practicable, to a worst case discharge recovering up to 300,000 barrels of oil per day. This IEP also provided that it would not be required to utilize new technologies for the Macondo Well operations because it could utilize, among others, its BOP equipment and other mechanisms and procedures identified in the OSRP. This representation supported BP's investment quality and share price.
In re BP pic Securities Litigation, CV- I 2-00463836-00CP, Amended Statement of Claim 19 44) BP's IEP contained the misrepresentation because, among other reasons,
BP did not have the proven BOP equipment or technology, as of that date, to respond to the April 20, 2010 explosion, including its ability to measure the volume of oil being leaked into the sea, and that BP' s oil spill response plan was created on an ad hoc basis.
As such, BP's investment quality and share price was artificially higher than bad the misrepresentation not been made.
45) On June 30,2009, BP disseminated its revised OSRP from the November
2008 version. The oil spill response plan is supposed to be the core of the overall plan of action in the event of an oil spill, and in turn is required to include information regarding the spill-response team, the types and characteristics of oil at the facilities, procedures for early detection of a spill, and procedures to be followed in the case of a spill. This representation supported BP's investment quality and share price.
46) The OSRP covered the Gulf of Mexico waters ofTexas, Louisiana,
Alabama, Mississippi, and Florida. BP represented in its OSRP that:
a) the worst case discharge scenario in the Gulf of Mexico ranged from a release of28,033 barrels (less than 10 miles from shore), 177,400 (greater than 10 miles from shore) to 250,000 barrels of oil per day (from an exploratory well from offshore drilling);
b) the Company and its subcontractors could recover approximately 491,721 barrels of oil per day in the event of an oil spill from an exploratory well in the Gulf of Mexico and certified that it maintained the necessary spill containment and recovery equipment to respond effectively to spills;
c) the Company had the state-of-art technologies to detect and mitigate oil spills as soon as possible; and
d) the Company had an approved and proven ability and method to use the dispersant Corexit to use in the event of an oil spill.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 20 47) BP's OSRP contained the misrepresentation because, among other reasons, BP and its subcontractors could not accurately measure the volume of oil being leaked at the depths of the Macondo Well, the types and quantity of oil dispersants to be used in the type of oil spill as the Deepwater Horizon oil spill were not previously approved for use by the U.S. federal government, and BP could not recover or control the amount of oil being leaked from the Macondo Well into the Gulf of Mexico. As such, BP's investment quality, and share price was artificially higher than had the misrepresentation not been made.
48) BP's IEP and OSRP also represented that in the event of an oil spill it would use specific safety equipment, as required by U.S. federal regulations, to take control over the oil spill, including utilizing its BOP with designated personnel and back-up. In the event the procedures did not work as designed, BP represented that it would create a trained team to utilize the BOP and the BOP would function. This representation supported BP's investment quality and share price.
49) BP's IEP and OSRP contained the misrepresentation because, among other reasons, BP's BOP systems and apparatuses were inoperable due to human failures prior to the April20, 2010 explosion. As such, BP's investment quality and share price was artificially higher than had the misrepresentation not been made.
50) On January 14, 2010, BP revised its IEP to reflect that the Deepwater
Horizon would be performing the exploration and drilling operations. On January 31,
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 21 2010, the Deepwater Horizon arrived at the Macondo Well. By February 6, 2010, the
Deepwater Horizon began drilling.
51) On March 5, 2010, BP published its 2009 Annual Report, reporting that:
a) the Gulf of Mexico is its largest area of growth in the United States;
b) Safety, both process and personal, remains our top priority with the focus on operational integrity;
c) by the end of2009, all ofBP's operated refmeries were using BP's OMS, which follows several years of intense focus on training and procedures across BP and provide a "single operating framework for all BP operations"; and
d) that BP's consistent principles and processes across the BP group's operations, the OMS provides for an integrated and consistent way of working to enable consistent execution of focus on safety performance.
This representation supported BP's investment quality and share price.
52) BP's Annual Report contained the misrepresentation because, among other reasons, BP did not have a single operation framework for safety training for all
BP operations. BP's Deepwater Horizon did not have any documented and auditable risk management process or Hazard Operability Report in violation of its own policies.
Additionally, BP's Annual Report omitted to disclose that an independent auditor of
BP's operations found significant gaps in its implementation of the OMS. These omissions distorted BP's investment quality and share price.
53) On Aprill5, 2010, BP published its 2009 Sustainability Review. BP expressly represented that the OMS provides a single framework for all BP operations to
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 22 follow, covering all areas from process safety, to personal health, to environmental performance. This representation supported BP's investment quality and share price.
54) BP's 2009 Sustainability Report contained the misrepresentation because, among other reasons, the OMS did not provide for a single framework for all BP operations and it did not apply to all of the Gulf of Mexico, such as the Deepwater
Horizon site in the Gulf of Mexico. Further, the Deepwater Horizon's Process Safety, as discussed within the 2009 Sustainability Report, contained the misrepresentation because the BOP was inoperable for a few reasons, including being modified without documentation to inform the user that it was linked to a test pipe and both of the auto safety back-up components of the BOP were inoperable because one had a broken solenoid (a critical component) and the other had too low of a battery charge to perform as designed. As such, BP's investment quality and share price was artificially higher than had the misrepresentation not been made.
B. THE APRIL 20, 2010 MACONDO WELL OIL SPU..L
55) On April 17, 2010, BP's Houston-based team leader for the Macondo
Well wrote to another BP Houston-based executive expressing safety concerns that due to last minute changes to the Deepwater Horizon he noted that his rig-based management were expressing safety concerns and that he, the author, was unclear about their own authority to intervene to cure the problem, but wrote that the Deepwater
Horizon project would not succeed. The executive that received this email did nothing to respond to the rig-based managements' concerns besides for writing that he would talk
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 23 to him later because he was going to dancing lessons. The executive did not follow
OMS protocol or offer any type of reasoned response that would be consistent with the spirit of the Baker Report or OMS.
56) On April 19, 2010, the Deepwater Horizon crew began to pump drilling mud down the casing but problems occurred. On April 20, 21 0, the crew finished pumping the primary cement through the wellbore. BP was to conduct an acoustical test, also known as cement log, to ensure the cement was curing properly. BP, however, decided to forgo the acoustic test and sent the team of technicians home.
57) On April 20, 2010, BP began to remove the drilling mud from the riser.
As operations proceeded, the drilling mud was returning to the rig, but BP failed to monitor the rate of return of drilling mud. The returned mud should have been placed in a subset of the rig's mud pits, referred to as the "active mud pits," to facilitate monitoring. Instead, the returned mud was being dispersed over a number of pits and mud from other operations was being routed to the active mud pits. As a result, there was no way to know whether more mud was returning to the rig than was being pumped into the Macondo Well.
58) Subsequently, the pressure measurements in the Macondo Well began to increase, which was not supposed to occur. The crew did not respond to the pressure reading until later in the evening when driller Dewey Revette ordered a crewmember to bleed pressure from the drilling pipe. BP and its crew took no steps to assess the cause of the pressure reading or to seal the well opening. Although the information was being
In re BP pic Securities Litigation, CV~ 12~00463836-00CP, Amended Statement of Claim 24 sent back to BP's headquarters in Houston, no employee in BP's Houston office was monitoring the pressure in the Macondo Well.
59) Then the frrst hydrocarbons returned to the surface of the rig and began spewing onto the rig floor and the crew attempted to close the sealing valve, or variable bore ram, but it failed. The drilling mud on the rig ignited, causing the first explosion.
This explosion could have been avoided had BP's personnel on the Deepwater Horizon followed the OMS or if the BOP was properly operable.
C. POST-EXPLOSION MACONDO WELL OIL SPILL
60) Pursuant to the OSRP, BP crew then attempted to engage the BOP's emergency disconnect system, which should have severed the drill pipe, sealed the well, and disconnect the Deepwater Horizon from the BOP and, thus, the Macondo Well shutting hydrocarbons off from escaping from the Macondo Well. The emergency disconnect system did not work. The back-up system to the emergency disconnect system did not work.
61) BP crew and employees did not follow its previously published OMS or other safety programs to monitor and evaluate the Macondo Well's conditions and to minimize the oil flow from the seafloor to the surface of the Deepwater Horizon. With no manner to bring the explosion under the control, the crew-members abandoned the
Deepwater Horizon. The Deepwater Horizon burned for thirty-six hours before tipping and sinking into the Gulf of Mexico.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 25 62) BP's former CEO testified that there was an "undoubtedly" "potential" that had the OMS protocol been implement in the Gulf of Mexico, as previously represented in the Sustainability Reviews, certain events leading up to and the
Deepwater Horizon explosion could be avoided.
63) On April 21, 2010, BP published a press release vaguely describing the
Deepwater Horizon explosion. The press release omitted that: (1) oil was being leaked into the Gulf of Mexico, (2) BP could not accurately measure the volume of the leak, or,
(3) that their attempts to remotely control the explosion and cut off the drilling mud were failing. On this same date, BP engineers began work on modeling the potential oil spill flow rate from the leaking Macondo Well, and shared these estimates with other BP employees, which ranges were between 64,000 to 138,000 barrels of oil per day. The author of these ranges of potential oil flow rate subsequently attempted to destroy the evidence of his work-product and is subject to a criminal investigation.
64) The above omission artificially inflated BP's investment quality and share price. Had these flow rate estimates been published, Plaintiff would not have purchased additional shares ofBP.
65) On April 28, 2010, BP announced that its best estimate was that 1,000 barrels of oil per day were flowing from the Macondo Well into the Gulf of Mexico. On
April29, 2010, BP reported that its best estimate of the quantity of oil per day flowing from the Macondo Well was now between 1,000 to 5,000 barrels. These two statements
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 26 omitted to disclose that BP's actual "best estimate" was more likely 5,758 to 14,226 barrels per day. Further, one senior BP executive testified under oath that days before the April 28 announcement, one internal BP estimate was as high as 92,000 barrels per day.
66) The above omission artificially inflated BP's investment quality and share price.
67) On May 4, 2010, BP reported that its best estimate of the quantity of oil per day flowing from the Macondo Well was now 5,000 barrels daily. BP endorsed this estimate but omitted to disclose that BP's actual "best estimate" was more likely 5,758 to 14,226 barrels per day. Further, one senior BP executive, now known to be David
Rainey, testified under oath that days before the April28 announcement, one internal BP estimate was as high as 92,000 barrels per day.
68) The above omission artificially inflated BP's investment quality and share price.
69) On May 21, 2010, an internal BP financed audit of the explosion determined that:
a) BP did not have a documented engineering procedure on how to conduct the type of test that was need for the Deepwater Horizon explosion and that this type of procedure and correctly interpreting the safety and results would be considered a critical and high significant risk activity; and
b) The engineering staff on the Deepwater Horizon who wrote and approved the testing program for parts of the Macondo Well drilling procedure
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 27 without a detail procedure and the lack of formal risk assessment for safety critical and significant risk activity.
70) On or about May 24, 2010, BP announced that its new method of attempting to take control of the Macondo Well, called "Top Kill", would start on the
1 morning of May 26 h. Both BP's CEO and COO publicly stated that day that Top Kill had a 60 to 70 percent chance of success. These announcements, however, omitted that
BP had strong reason to know that this statement was materially misleading because its internal data suggested that the Top Kill method was unlikely to succeed if the oil flow rate was more than 15,000- 18,000 barrels per day and it had a reasonable belief that the oil flow exceeded the limits to allow the Top Kill method to work.
71) The above omission artificially inflated BP's investment quality and share price.
72) On May 28, 2010, BP continued to publish statements that the Top Kill method was broadly proceeding according to plan when it was not.
73) This omission artificially inflated BP's investment quality and share pnce.
74) On May 29, 2010, BP terminated the Top Kill method and publicly announced its failure. BP's stock price dropped approximately another 15 percent on the next trading day in response to this announcement.
In re BP pte Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 28 75) During May 2010, on behalf of BP, BP's former chief executive officer testified before the United States Congress about the Deepwater Horizon explosion and subsequent oil spill response plan and status of BP's ability to measure the oil leak and recovery methods. He testified that BP was eager to determine the cause and appointed
Mark Bly to head the investigation to determine the cause(s) of the oil leak. BP's former chief executive officer chose not to disclose that Mark Bly, the author of the Bly Report, was BP's most senior person that created and made the decision to implement the OMS in the Gulf of Mexico and who reported only to BP's then chief operating officer.
76) On June 1, 2010, the U.S. Department of Justice opened formal criminal and civil investigations into BP resulting in BP suspending its dividend payments to holders of its securities. BP's securities lost additional value.
77) On July 19, 2010, the U.S. Securities & Exchange Commission opened an investigation into the accuracy of BP's investor reports, including its annual report and its related disclosures about its alleged internal controls for managing risks and process safety procedures ending December 31, 2009. Ultimately, the U.S. Securities &
Exchange Commission charged BP with employing a device, scheme, or artifice to defraud investors by making inaccurate statements in its core documents dated April 29,
30, and May 4, 2010, published to investors by misrepresenting the material information known to BP regarding the rate at which oil was flowing into the Gulf of Mexico. This claim is entitled Securities & Exchange Commission v. BP p.l.c., Case No. 12-cv-2774
(E.D. La.). On November 15, 2012, BP settled the charges by paying a $500 million penalty. Prior to this settlement BP never published a corrective disclosure. ln re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 29 78) On September 8, 2010, the date BP published its Deepwater Horizon
Accident Investigation Report also known as the Bly Report. BP chose to hide the OMS
and OSRP misrepresentation because it intentionally withheld information about the
failure ofBP's management to adopt the OMS or system causes.
79) On April 24, 2012, the U.S. FBI published the affidavit of agent Barbara
O'Donnell, dated April 23, 2012, in support for obtaining an arrest warrant for Kurt
Mix, who was BP's Drilling and Completions Project Engineer that worked within BP
on a number of efforts to stop the flow of oil from the Macondo Well into the Gulf of
Mexico. He was arrested for intentionally destroying evidence about the oil leak flow
levels and BP's inability to execute the OSRP, specifically information about BP's
ability to measure the amount of oil being disbursed into the sea and not being re
collected. The criminal claim is entitled United States ofAmerica v. Kurt Mix, Case No.
12-47-MAG (E.D. La.).
80) On November 14, 2012, the U.S. indicted David Rainey, the former BP
Vice President of Exploration for the Gulf of Mexico. The criminal claim is entitled
United States ofAmerican v. David Rainey, Case No. 12-00291-MAG (E.D. La.). He is
being charged with intentionally misleading the public and the U.S. Congress during
April and May 2010 about the extent of oil being leaked from the Macondo Well. On
June 19, 2013, the U.S. served David Rainey with a superseding indictment with
Obstruction of Congress and False Statements.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 30
------81) On November 15, 2012, the U.S. charged BP with fourteen criminal counts of manslaughter and negligent discharge of oil as well as Obstruction of
Congress. BP pled guilty and agreed to pay $4 billion in total criminal penalties. The criminal claim is entitled United States of American v. BP Exploration & Production
Inc., Case No. 12-cr700292 (E.D. La.).
CONFLICTS WITH BP'S REPRESENTATIONS CONCERNING THE CONDITION OF THE DEEPWATER HORIZON AND ITS ABILITY TO EXECUTE THE REGIONAL OIL SPLL RESPONSE PLAN
82) A BP audit of Deepwater Horizon, which was published to the public and investors of BP, found safety concerns relating to overdue maintenance of high priority on the rig that could lead to loss of life, serious injury or environmental damage as a result of inadequate use and/or failure to equipment. This BP internal audit also found that:
a) as of December 2009, none of the overdue maintenance issues were cured or resolved;
b) the status of the rig being identified as having an ineffective maintenance management system; and
c) the crew were aware of at least six leaks in the BOP hydraulic control system, as well as a leak at the hose/fitting on the annular preventer surge bottle, yet none of the leaks were disclosed in any of the Transocean IADC or ROV Dive Daily Reports as Transocean's operating policy required as represented to investors.
72. On September 8, 2010, BP published the Bly Report. The Bly Report analyzed the events leading up to the accident and concluded:
a) there were weaknesses in cement design and testing, quality assurance and risk management;
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 31 b) the investigation team identified potential failure modes that could explain how the cement and float collar allowed hydrocarbons ingress into the production casing;
c) BP well site leaders reached the incorrect view that the negative-pressure test was successful and that well integrity had been established;
d) the crew did not recognize the influx and did not act to control the well until hydrocarbons had passed through the BOP and into the riser;
e) if fluids had been diverted overboard, rather than inside the Deepwater Horizon's internal holding space, there may have been more time to respond, and the consequences of the accident may have been reduced;
f) the design of the Deepwater Horizon's internal holding space was poorly designed resulting in it being overwhelmed;
g) the heating, ventilation and air conditioning system probably transferred a gas-rich mixture into the engine rooms, causing at least one engine to over speed, creating a potential source of ignition; and
h) in a review of audit findings and maintenance records, the investigation team found indications of potential weaknesses in the testing regime and maintenance management system for the BOP.
73. This Bly Report determined that if any of the critical factors identified above (a) - (h), the outcome of the Deepwater Horizon events on April20, 2010, could have been either prevented or reduced in severity. These factors relate to BP's OMS.
74. The Bly Report also identified a lack of operational safety evidenced by:
a) it appears that the crew did not test the BOP on the surface prior to deployment on the Macondo Well;
b) there were several modifications to the BOP that may have adversely affected the performance of the BOP system, including one undocumented modification; and
c) there is evidence that the crew did not initiate the high-pressure BSR function to close the BOP system in emergency mode.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 32 75. The Presidential Commission Report found that BP's management process did not adequately identify or address risks created by changes to well design and procedures, personnel were not well trained, management failed to communicate to each other, and were not aware of certain safety procedures, and that:
a) it appears that the crew did not test the BOP on the surface prior to deployment on the Macondo Well;
b) there were several modifications to the BOP that may have adversely affected the performance of the BOP system, including one undocumented modification; and
c) there is evidence that the crew did not initiate the high-pressure BSR function to close the BOP system in emergency mode.
NEGLIGENT MlSREPRESENTATION OF BP, PLC
76. BP owed a duty of care to its long-term investors and public, including
Plaintiff, and the investing public to disseminate promptly and to make prompt corrective disclosures to prior statements to ensure that its oral and written statements contained accurate and complete information about the OMS and OSRP including its deep-sea oil project in the Gulf of Mexico, the Deepwater Horizon.
77. BP failed to meet the reasonable standard of care expected in the circumstances when it made the Misrepresentation and Omission about the Company's investment quality, OMS and OSRP which was materially false and misleading when made because:
a) it failed to act reasonably, honestly, candidly and in the best interests of the plaintiff and the other Class Members;
In re BP pic Securities Litigation, CV-12-00463836-00CP , Amended Statement of Claim 33 b) it failed to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including the execution of the OMS and OSRP;
c) it made or authorized the making of announcements, news releases, filings and other public documents containing the misrepresentation and omission;
d) it failed to give the plaintiff and the Class current and continuing information about the adoptions and implementation of the OMS and OSRP;
e) it gave the plaintiff and the Class stale and outdated information about the development of and related information about its OMS and OSRP, including the safety policies and condition as it related to the Deepwater Horizon;
f) it should have known prior to when it issued its OMS (as discussed in its Sustainability Reports and Annual Reports), IEP and OSRP, the condition of the Deepwater Horizon, and whether it could execute the OMS and OSRP, as represented were inaccurate and should have known that the Class Members would rely on it; and
g) it failed to maintain appropriate quality control to ensure that BP's disclosure documents adequately, accurately and fairly presented the true status of the condition of the Deepwater Horizon and its OMS and OSRP.
78. BP could have reasonably foreseen and intended that Plaintiff and the other Class Members would rely upon the operational and personnel safety programs, including the condition of its offshore drilling and exploration oil rigs such as the
Deepwater Horizon, OMS and OSRP, as well as the statements about the quantity of oil that was leaking into the Gulf of Mexico and not recovered, in deciding whether to purchase and hold securities ofBP.
79. After the Deepwater Horizon explosion, BP published inaccurate information about the quantity of oil being released into the Gulf of Mexico. BP also
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 34 published inaccurate information about the potential success of its different methods to take control of the Macondo Well, including the Top Kill method.
80. BP's breaches of the duty of care caused damage to long-term investors, such as Plaintiff, and the other Class Members by causing them to purchase securities of
BP at artificially inflated prices during the Class Period.
THE RELATIONSHIP BETWEEN THE MISREPRESENTATION AND THE PRICE OF SECURITIES
81. BP, including its former chief operating officer, was aware that the price of BP's publicly traded ordinary shares and ADS were directly affected each time BP communicated new material information about the condition of its offshore drilling and exploration rigs such as the Deepwater Horizon, and OSRP to the public.
82. BP's Sustainability Reports, Annual Reports, IEP, and OSRP disseminated into the market between January 2007 and April 2010, and press releases about its ability to control the oil spill and the volume of oil being spilled into the Gulf of Mexico disseminated into the market between April21, 2010 and September 8, 2010, caused BP's securities to be improperly valued by investors resulting in its shares trading at artificially high prices.
83. The disclosure documents referred to herein were posted on BP's website and filed with the SEC and thereby became immediately available to and were
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 35
------reproduced for inspection by the Class Members, the public, financial analysts and the financial press through the internet and financial publications.
84. BP regularly communicated with the public investors and financial analysts via established market communication mechanisms, including through regular dissemination of documents and news releases on newswire services in North America and through teleconferences with investors and analysts.
85. BP was the subject of Canadian-based analysts' reports that incorporated the information in the disclosure documents referred to herein, with the effect that any recommendation in such reports during the Class Period was based, in whole or in part, upon the condition of its offshore drilling and exploration rigs such as the Deepwater
Horizon, and OSRP, which were inaccurate and unreliable.
86. BP's securities were and are traded on the LON, Frankfurt, and NYSE, which are highly efficient and automated markets. Until August 2008, BP also listed its securities on the TSX.
THE CLASS PROCEEDINGS ACT
87. Plaintiff intends to deliver a notice of motion and motion record requesting this Court to certify this Action as a class proceeding pursuant to section 5 of the Ontario Class Proceedings Act asserting a claim against BP for breaching section
138.3 of the OSA, only, with respect to the following sub-classes:
In re BP pic Securities Litigation, CV-12-00463836-00CP , Amended Statement of Claim 36 a) All residents of Canada, except Excluded Persons, that purchased BP's securities, while BP was a Reporting Issuer and a Responsible Issuer, between May 9, 2007 and January 12, 2009, and held all or some of those securities until May 28, 201 0; and
b) All residents of Canada, except Excluded Persons, that purchased BP's securities, while BP was a Responsible Issuer but prior to all the Corrective Disclosures, between January 12, 2009 and May 28, 2010.
88. On June 14,2013, the plaintiffs in the In re BP p.l.c. Securities Litigation,
MDL No. 2185 (S.D. Tex.) filed their motion for class certification seeking to represent all investors that purchased BP' s securities listed on the NYSE, only, between
November 8, 2007 and May 28,2010.
89. No residents of Canada that purchased BP's securities listed on the NYSE between May 9, 2007 and November 8, 2007 will be protected in the corresponding U.S. shareholder class action litigation unless this Action gets certified as a class proceeding.
90. No residents of Canada that purchased BP's securities listed on the
London or Frankfurt Stock Exchanges between May 9, 2007 and May 28, 2010 will be protected in any class action unless this Action gets certified as a class proceeding because those jurisdictions do not have the class action procedural law.
91. There have been no published shareholder class actions in English or
German jurisprudence.
PART XXIII. I OF THE OSA
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 37 (88) On or about November 19, 2012, Plaintiff served on BP his notice of motion seeking leave under s. 13 8.8(1) of the OSA to amend the notice of action and the statement of claim, nunc pro tunc to April 20, 2012, to plead the causes of action set out in s. 138.3 of the OSA against BP. The Record included the affidavits of Plaintiff and counsel, which include numerous examples of BP's senior executive in London, U.K. coming to Canada, including Toronto, Ontario, to promote its investment quality.
(89) On December 13, 2012, Plaintiff served on BP an amended affidavit of his counsel pointing out that within hours after issuing his Statement of Claim BP admitted to stock manipulation charges lodged by the U.S. Securities & Exchange
Commission and announced that it was going to pay a fine in an amount of $525 million relating to BP securities traded on the NYSE after April 20, 2010. This amended affidavit did not include any evidence about a corresponding U.K. settlement because the U.K. authorities never brought charges despite BP acknowledging wrong-doing and its securities are also listed on the London Stock Exchange.
(90) The material facts of this Amended Statement of Claim are substantially similar to that of the Statement of Claim. Plaintiff does not anticipate serving an amended section 138.8 motion record.
DAMAGES
(91) As a result ofthe conduct ofBP as pleaded, Plaintiff and each other Class
Member suffered losses and damages as a result of acquiring BP securities at artificially inflated prices and holding those securities after April 20, 2010 and each of the
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 38 subsequent corrective disclosures up to May 28, 2010. Therefore, BP is liable to pay damages to the Plaintiff and the other Class Members pursuant to s. 138.5 of the OSA.
(92) Plaintiff and the other Class Members are also entitled to recover as damages, or costs in accordance with the CPA, the costs of administering the plan to distribute the recovery in this action, and reasonable attorneys' fees.
REAL AND SUBSTANTIAL CONNECTION WITH ONTARlO, CANADA
(93) Plaintiff pleads that this action has a real and substantial connection with
Ontario, Canada, because, among other things:
(a) Plaintiff is a resident of Ontario and suffered damages in Alberta and Ontario, and his brokerage account holding the shares ofBP was and continues to be with RBC Dominion Securities (Alberta) and TD Waterhouse (Ontario);
(b) the documents and statements referred to herein as containing the misrepresentation and omission were disseminated in Ontario and throughout Canada, and specifically to Plaintiff, by BP pursuant to an Alberta Securities Commission order;
(c) before, during, and after the Class Period, BP provided its investor documents to Canadian investors, including Plaintiff;
(d) BP was a Reporting Issuer in Ontario prior to and during the Class Period and up until January 12, 2009;
(e) BP sent its executives, including two ChiefExecutive Officers, to Canada to tout and promote its investment quality and encourage Canadians to purchase BP's securities;
(f) during the Class Period, BP listed its shares on the TSX, which is located in Toronto, Ontario;
(g) BP has and had hundreds of employees that are resident of Canada;
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 39 (h) the profits generated from BP's Canadian subsidiaries, including those in Ontario, are ultimately transferred back to BP and reflected in its Core Documents; and
(i) many of the Class Members reside in Ontario and their damages were suffered in Ontario, including individual and institutional investors, including Plaintiff, Sprucegrove Investment Management, Portland Investment Counsel, Picton Mahony Asset Management, CIBC Global Asset Management, CPP Investment Board, Caisee de Depot et Placement du Quebec, Scotia Asset Management, TD Bank Group, Fiera Capital Corporation, Ontario Pension Board, Lombard Odier & Cie (Canada) Ltd., and BNP Parisbas Canada.
SERVICE OUTSIDE OF ONTARIO
91. Pursuant to Rules 17.02(g) and (h) and 17.04(1) of the Ontario Rules of
Civil Procedure, this Statement of Claim may be served without court order outside
Ontario in that the claim is:
a. All the reasons identified in the preceding paragraphs, including that Plaintiff and member of the Class sustained damages in Ontario (rule 17.02(g) and (h)); and
b. During a portion of the Class Period, BP was a Reporting Issuer in Ontario and listed its securities on the TSX during a portion of the Class Period.
RELEVANT LEGISLATION
92. Plaintiff pleads and relies on the CJA , CPA, the OSA, the Equivalent
Securities Acts, and all relevant amendments thereto.
PLACE OF TRIAL
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 40 93. Plaintiff proposes that this action be tried in the City of Toronto, in the
Province of Ontario.
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 41 Issued November 14, 2012 Amended August 9, 2013 LAW OFFICE OF ANDREW MORGANTI, JD, LL.M. 119 Spadina A venue, Suite 604 Toronto, ON M5V 2L1
ANDREW J. MORGANTI LSUC# 57895E
Tel: 416.800.2171 Fax: 416.800.2171
GAERTNER & BARON LLP 119 Spadina A venue, Suite 604 Toronto, ON M5V 2L1
ARIE GAERTNER
Tel: 416.260.2100 Fax: 416.260.2700
DOCKEN & COMPANY 900, 800-6 Avenue SW Calgary, Alberta T2P 3G3
CLINT G. DOCKEN, Q.C. WILLIAMS. KL YM
Admitted in Alberta
Tel: 403.269.3612 Fax: 403.269.8246
Lawyers for the plaintiff
In re BP pic Securities Litigation, CV-12-00463836-00CP, Amended Statement of Claim 42 PETER KA YNES v. BP, P.L.C. Plaintiff Defendant
Court File No. CV-12-00467836-00CP
ONTARIO SUPERIOR COURT OF JUSTICE
PROCEEDINGS COMMENCED AT TORONTO
FRESH AS AMENDED STATEMENT OF CLAIM
LAW OFFICE OF ANDREW MORGANTI, JD, LL.M. 119 Spadina A venue, Suite 604 Toronto, ON M5V 2Ll
ANDREW MORGANTI, LSUC #: 57895E TeVFax: 416.800.2171 [email protected]
LA WYERS FOR THE PLAINTIFF
In re BP pic Securities Litigation, CV-12-00467836-00CP, Amended Statement of Claim 43 1.
CITATION: Kaynes v. BP, 2013 ONSC 5802 COURT FILE NO.: CV-12-00467836-00CP DATE: 20131009
SUPERIOR COURT OF JUSTICE- ONTARIO
RE: Peter Kaynes, Plaintiff
AND:
BP, pic ("BP"), Defendant
BEFORE: Conway J.
COUNSEL: Lan)' Lowenstein, Laura K. Fric and Kevin 0 'Brien, for BP, moving party
Andrew },;forganti and Arie Gaertner, for the Plaintiff, responding party
HEARD: September 23 and 24, 2013
Proceeding under the Class Proceedings Act, 1992
REASONS FOR DECISION (rc: Jurisdiction Motion)
Conway J.
[1] Mr. Kaynes, the plaintiff, brings this proposed class action against BP. He alleges that BP made various misrepresentations in its investor documents before and after the Deepwater Horizon oil spill in the Gulf of Mexico in April 2010 (the "Oil Spill"). He seeks leave to bring a statutory action for secondary market misrepresentation under Part XXIII .I of the Securities Act, R.S.O. 1990, c. S.5 (the "Act"). He makes a fmiher claim for common law negligent misrepresentation.
[2] BP brings this jurisdiction motion in advance of the leave and certification motions. It seeks an order staying this proceeding (in part) on the basis that this comi does not have jurisdiction over the dispute or, alternatively, on the basis offorum non conveniens.
Overview
[3] BP is a U.K. incorporated company. Its principal offices are located in London, England. It owns no real or personal property in Canada and has no offices or employees here. BP has several indirect Canadian subsidiaries that conduct exploration and development of energy propetiies in Canada. 2.
[4] BP's equity securities consist of common shares and American Depositary Shares ("ADS"). The common shares are listed on the London Stock Exchange and the Frankfurt Stock Exchange (the "European exchanges").
[5] The ADS were listed on the Toronto Stock Exchange (the "TSX") until August 2008, at which time BP voluntarily de-listed them. The ADS are now listed only on the New York Stock Exchange (the "NYSE").
[6] BP was a repotiing issuer in Ontario and other Canadian provinces until January 12, 2009. When BP applied to cease being a reporting issuer, it undertook with the Ontario and Albetia securities commissions to continue sending its Canadian shareholders all disclosure material that it was required to send to its U.S. investors.
[7] Mr. Kaynes, the plaintiff, is an Ontario resident. He owns over 1400 ADS. He purchased the ADS through his brokerage accounts in Alberta and Ontario. All of his purchases during the proposed class period were over the NYSE.
[8] The plaintiff claims that BP made various misrepresentations and omissions about its operational and safety programs prior to the Oil Spill and about its cleanup efforts after the Oil Spill. He claims that these misrepresentations were contained in BP investor documents including sustainability reviews, annual reports and press releases. The plaintiff alleges that these misrepresentations had the effect of artificially inflating BP's share prices. He claims that once the truth came out about BP's ability to respond to the Oil Spill, the share prices dropped.
[9] This is not the only proposed class action against BP. A class action is underway in the United States (the "U.S. Proceeding"), 1 brought on behalf of a proposed class consisting of all purchasers of ADS over the NYSE between November 8, 2007 and May 28, 2010.
[1 0] The plaintiff seeks to represent a class of Canadian residents who purchased BP shares between May 9, 2007 and May 28, 2010. 2 The proposed class includes all Canadians who purchased common shares and ADS, whether on the TSX, NYSE or European exchanges; however, the plaintiff has excluded from the proposed class any Canadian residents who purchased BP shares over the NYSE and who do not opt-out of the U.S. Proceeding. 3
Legal Principles- Jurisdiction
[11] When a foreign defendant is sued in a tort claim in Ontario and challenges the court's jurisdiction to adjudicate the dispute, the court must determine whether there is a "real and
1 The case is entitled In BP pic Securities Litigation and is currently before the United States District Court for the Southern District of Texas, Case No. 4:1 0-md-02185. 2 The proposed class definition is "all residents of Canada, other than Excluded Persons, who acquired equity securities ofBP during the period fi·om (a) May 9, 2007 to and including January 12, 2009 and who held some or all of those securities at the close oftrading on May 28, 201 0; and (b) Janumy 13, 2009 to and including May 28, 2010." 3 The class definition also excludes anyone related to or affiliated with BP. 3.
substantial connection" between the province and the claim: Club Resorts Ltd v. Van Breda, 2012 SCC 17, [2012]1 S.C.R. 572 ("Van Breda").
(12] The plaintiff bears the onus of establishing one of four presumptive connecting factors that, prima facie, entitle a comt to assume jurisdiction: (a) the defendant is domiciled or resident in the jurisdiction; (b) the defendant carries on business in the jurisdiction; (c) the tort was committed in Ontario; or (d) a contract connected with the dispute was made in Ontario. 4 If one of these presumptive connecting factors is present and is not rebutted, the court may assume jurisdiction over the dispute: Van Breda, at paras. 80, 90, 100.
[13] The list of presumptive connecting factors is not closed. The Supreme Comt recognized that over time new connecting factors may be identified. One of the factors for the court to consider is the treatment of the connecting factor in statute law: Van Breda, at para. 91.
[14] Van Breda dealt with a common law tort claim, not a statutory claim. In Ontario v. Rothmans, 2013 ONCA 353, 115 O.R. (3d) 561 ("Rot/mums"), the Ontario Comt of Appeal conducted the Van Breda analysis in the context of a statutory claim. In that case, the statutory claim was founded on the common law tort of conspiracy. The court held the statutory claim, while not technically a claim in respect of a tort committed in Ontario, was tantamount to such a claim or sufficiently analogous to one that it qualified as a new connecting factor: Rothmans, at para. 44.
[15] In reaching that conclusion, the court considered where the alleged statutory tort had been committed. It noted that the tort of conspiracy occurs in the jurisdiction where the harm is suffered and that the statut01y claim (founded on the tort of conspiracy) was for alleged damage sustained in Ontario. It therefore held that the statutory claim was a claim in respect of a tort committed in Ontario and was presumptively connected to the province: Rothmans, at paras. 31- 39.
[16] In this case, the alleged "statutory tort" or "new c01mecting factor" is the cause of action created by s. 138.3 of the Act for secondary market misrepresentation.
Statutory Claim for Secondary Market Misrepresentation
[17] Section 138.3 of the Act creates the cause of action for secondary market misrepresentation. It reads as follows:
Where a responsible issuer ... releases a document that contains a misrepresentation, a person or company who acquires or disposes of the issuer's security during the period between the time when the document was released and the time when the misrepresentation contained in the document was publicly
4 The presence of the plaintiff in the jurisdiction is not, on its own, a sufficient connecting factor and does not have presumptive effect: Van Breda, at para. 86. 4.
corrected has, without regard to whether the person or company relied on the misrepresentation, a right of action for damages.
[18] A "responsible issuer" is defined in s. 138.1 of the Act as: (a) a reporting issuer, or (b) any other issuer with a real and substantial connection to Ontario, any securities of which are publicly traded.
BP's Position
[19] BP does not challenge this court's jurisdiction over the plaintiffs proposed class action in its entirety. BP concedes that this comi can assume jurisdiction over the action, but only with respect to the claims of proposed class members who purchased BP shares on the TSX (the "TSX purchasers"). 5 It argues that this court has no jurisdiction over the claims of proposed class members who purchased BP shares on the NYSE or European exchanges (the "non-TSX purchasers" or the "NYSE and European pm·chasers").
[20] BP's argument is that since BP is not resident in Ontario, does not carry on business here and the claim does not relate to a contract made in the province, 6 the only basis on which this court could possibly assume jurisdiction is under the presumptive comtecting factor "tort committed in the province".
[21] However, BP argues that even if the statutory claim under s. 138.3 is considered to be a statutory tort, it could only have been "committed" in Ontario in the case of the TSX purchasers. BP argues that:
• an investor no longer has to prove reliance on an alleged misrepresentation under s. 138.3 as he would for the common law tort of negligent misrepresentation;
• s. 138.3 instead focuses on the "release" of the alleged misrepresentation by the responsible issuer, which can occur anywhere;
• the purchase of shares in Ontario is therefore the only act that could connect the purchaser's claim under s. 138.3 to the province.
[22] Therefore, according to BP, the couti can assume jurisdiction on the basis of a "tort committed in the province" only for the TSX purchasers, as they are the only ones who purchased their BP shares in Ontario.
[23] BP submits that its position is in keeping with the U.S. Supreme Court's decision in Morrison v. National Australia Bank, 130 S. Ct. 2869, 2881-83 (2010). In Morrison, the comi
5 The plaintiff concedes that his common law claim for negligent misrepresentation is restricted to TSX purchasers. Since BP concedes jurisdiction for the TSX purchasers, there is no jurisdictional issue with respect to the common law claim. 6 However, BP concedes that the claims ofTSX purchasers relate to a contract made in the province. 5.
held that the statutory cause of action under s. 1O(b) of the Exchange Act and Rule I Ob-5 promulgated thereunder applies only to the purchase or sale of a security listed on an American stock exchange and the purchase or sale of any other security in the U.S. BP submits that a careful application of Van Breda to the statutory cause of action created by s. 138.3 of the Act would lead to the same "exchange-based" result as is now applied in the U.S.
Preliminary Comment
[24] This is a preliminary jurisdiction motion. It is not a certification hearing.
[25] The issue on this motion is whether this comi can assume jurisdiction over a claim against BP, a foreign defendant. I will conduct the analysis under Van Breda to determine whether there is a real and substantial connection between the plaintiffs claim and the province that would entitle this court to assume jurisdiction over the claim against BP.
[26] For purposes of this analysis, I am considering the claim only as it relates to an Ontario resident such as Mr. Kaynes. Since the action has not been certified, the court has not determined whether a national class or a class including non-residents is appropriate.7 I will therefore conduct the Van Breda analysis only with respect to the claim of an Ontario resident.
Analysis- Jurisdiction
[27] In my view, this motion can be disposed of on the basis that the plaintiffs statutory claim under s. 138.3 is tantamount to "a tort committed in Ontario" or sufficiently analogous to one that it qualifies as a "new connecting factor".
[28] Section 138.3 of the Act gives a purchaser of shares a cause of action with respect to secondary market misrepresentations made by a responsible issuer. This statutory cause of action is founded on misrepresentation. It can be viewed as a "statutory tort".
[29] For jurisdictional purposes, the issue then becomes - where was the statutory tort committed? According to Rothmans (applying Van Breda), if the claim relates to a statutory loti committed in Ontario, it is presumptively connected to Ontario and, unless the presumption is rebutted, this court may assume jurisdiction over the claim.
[30] As noted, BP's central argument is that the statutory tort under s. 138.3 could only have been committed in Ontario for the TSX purchasers. I reject that submission, for the following reasons.
7 BP did not argue this motion based on whether a proposed class member is or is not an Ontario resident (although BP appears to accept that this court has jurisdiction over the claims of non-residents, if they purchased their shares on the TSX). Its argument focused only on where (i.e. on which stock exchange) the investor purchased his shares. 6.
Wording of s. 138.3
[31] BP's position that the statutory tort could only be committed in Ontario for the TSX purchasers is not in keeping with the broad language of s. 13 8.3.
[32] The Act provides that if a responsible issuer releases a document containing a misrepresentation then a "purchaser of that issuer's shares between the time when the document was released and the time the misrepresentation was publicly conected" has a right of action.
[33] There is nothing in the wording of the Act that restricts the cause of action to investors who purchased their shares on an Ontario exchange. BP's proposed application of the real and substantial test in Van Breda would effectively restrict this statutory claim to those who purchased shares on an Ontario exchange. In essence, BP would be imposing a limitation in the Act where none exists.
Deemed Reliance
[34] Section 138.3 was introduced as remedial legislation to overcome the obstacles in proving claims for secondary market misrepresentation at common law: Silver v. !max Corp., 2009 CanLII 72342 (ONSC), at para. 294. The section does this by relieving the investor from having to prove reliance. Where a responsible issuer makes a misrepresentation in the secondary market, the investor is deemed to have relied on that misrepresentation: McKenna v. Gammon Gold Inc., 2010 ONSC 1591, at para. 159.
[35] In a common law claim of negligent misrepresentation, the place or situs of the tort is the place where the misrepresentation is received and relied upon: Central Sun Mining Inc. v. Vector Engineering Inc., 2013 ONCA 601 ("Central Sun"), at paras. 30-34; 2249659 Ontario Ltd. v. Siegen, 2013 ONCA 354, 115 O.R. (3d) 241, at para. 31; and Silver v. !max COJJJ., [2009] O.J. No. 5585, at para. 151. In determining where the alleged toti occurred, the comi looks at where the recipient received the misrepresentation and relied on it to make a particular decision or to take a particular action. As stated in Central Sun, at paras. 31 and 32:
There can be no question that the appellant acted on these studies in Ontario. That is where it relied on the studies to take the decisions about where to locate the mine and how to build and operate it ... The inevitable conclusion is that the misrepresentations were received and relied on in Ontario.
[36] By analogy, if a responsible issuer makes a misrepresentation and the Act deems the Ontario investor to have relied on the misrepresentation when he purchased shares of that issuer, the statutory tort must be considered to have been committed in Ontario. I cannot agree that the situs of this statutory tort is to be determined, in each case, by the location of the exchange on which the actual share purchase occurred. 7.
The Ontario Court of Appeal's Decision in Abdula v. Canadian Solar
[37) BP's position is inconsistent with the Ontario Court of Appeal's decision in Abdula v. Canadian Solar Inc., 2012 ONCA 211, 110 O.R. (3d) 256, leave to appeal to the Supreme Comi of Canada refd [2012) S.C.C.A. No. 246 ("Abdula"). 8
[38) In Abdula, an Ontario resident brought a proposed securities class action against Canadian Solar. Canadian Solar was not a reporting issuer in Ontario and did not fall within the definition of a responsible issuer ins. 138.l(a). In a preliminary jurisdiction motion, Canadian Solar argued that it could not be a responsible issuer under s. 138.1(b) because its shares were traded only on the NASDAQ and not on a Canadian exchange.
[39) Since Canadian Solar was not a rep01iing issuer, the motions judge had to consider whether the company fell within the definition ins. 138.l(b). He concluded that Canadian Solar had a real and substantial connection to Ontario.9 He also held that Canadian Solar's shares did not have to be publicly traded on a Canadian exchange for it to come within the definition.
[40) The decision was upheld on appeal. Hoy J.A., for the comi, reviewed the history and purpose of the secondary market liability sections of the Act. She rejected Canadian Solar's argument that s. 138.l(b) only applies to issuers whose shares are publicly traded in Canada.
[41] While decided in a different context, 10 the result in Abdula was that an Ontario resident who had purchased shares of a non-reporting issuer was entitled (subject to obtaining leave) to bring a secondary market claim against the company in an Ontario comi, notwithstanding the fact that he had purchased his shares on a foreign exchange.
[42) In my view, it would be inconsistent with the result in Abdula to hold, on the one hand, that an Ontario investor who purchased shares of a non-reporting issuer on a foreign exchange could bring a claim against the company in an Ontario court but to hold, on the other hand, that an Ontario investor who purchased shares of a reporting issuer on a foreign exchange could not bnng. tI 1at c1·. mm m an 0 ntano. court. ll
8 The Supreme Court of Canada leave decision was rendered after the release of Van Breda. 9 See Abdula v. Canadian Solar Inc., 2011 ONSC 5105. The motions judge came to this conclusion because, among other things, the company was incorporated in Canada, held its annual meeting in Ontario, carried on business in Ontario and the alleged misrepresentations were contained in press releases issued in Ontario. This analysis was required because s. 138.l(b) states that a non-reporting issuer must have a real and substantial connection to Ontario. 10 The issue in Abdula was whether Canadian Solar was a responsible issuer. In this case the issue is whether the comt has jurisdiction over a claim against BP as a foreign defendant. 11 I have focussed on the period that BP was a repmting issuer until January 2009 in concluding that this court has jurisdiction over the claim. The plaintiff alleges that BP continued to be a responsible issuer after January 2009. In light of my conclusion that this comt has jurisdiction over the claim, I do not propose to restrict this jurisdiction to a specific time period. 8.
Conclusion on Jurisdiction
[43] The plaintiffs statutory claim is presumptively cotmected to the province. BP's arguments to rebut this presumption for the non-TSX purchasers are the same as those I have already rejected. I am satisfied that there is a real and substantial connection between the plaintiffs claim under s. 138.3 of the Act and the province of Ontario. This court can assume jurisdiction over the claim.
Forum 11011 Conveniens
[44] BP submits that even if this comt has jurisdiction simpliciter over the claim, it should decline to exercise that jurisdiction on the basis of forum non conveniens for the non-TSX purchasers.
[45] The burden is on BP to show why this court should decline to exercise jurisdiction. It must show that the alternative forum is clearly more appropriate: Van Breda, at paras. 101-112. The non-exhaustive list of factors that the court is to consider are: (a) the comparative convenience and expense for the parties to the proceeding and for their witnesses, in litigating in the court or in any alternative forum; (b) the law to be applied to issues in the proceeding; (c) the desirability of avoiding multiplicity of legal proceedings; (d) the desirability of avoiding conflicting decisions in different courts; (e) the enforcement of an eventual judgment; and (f) the fair and efficient working of the Canadian legal system as a whole: Van Breda, at para. 105.
[46] BP argues that the trading volume of BP shares on the TSX was negligible12 and that the plaintiff should not use this minimal trading to bring the claims of the NYSE and European purchasers before this court. It submits that the courts of the U.S. and U.K. are clearly more appropriate forums in which to litigate those shareholders' claims. It submits that the NYSE and European purchasers could reas6t1ably expect to have their claims adjudicated in the forums in which they purchased their shares.
[47] The plaintiff submits that there are approximately 1500 Canadian holders of BP shares that (as at December 2008) beneficially owned 2% of all outstanding BP securities, 13 worth over $200 million.
[48] In my view, BP is seeking to restrict and fragment the proposed class at this early stage of the proceedings. BP's submission would result in this potential claim against an alleged Ontario responsible issuer being litigated in three different jurisdictions. That is not convenient, cost effective or efficient.
12 BP's evidence is that trading of the ADS on the TSX during the proposed class period amounted to 0.001 percent of the volume of trading on the NYSE and 0.001 percent of the adjusted volume on the London Stock Exchange. 13 The plaintiff states that there is no precise evidence on the number of Ontario and Canadian residents in the proposed class. It submits that it obtained this information from BP's disclosure to the Alberta Securities Commission in December 2008. 9.
[49] BP's submission will not avoid a multiplicity of proceedings, as BP concedes that this court has jurisdiction over the claims of TSX purchasers. There will be an Ontario action regardless of the outcome of this motion.
[50] BP argues that the NYSE purchasers are already patt of the U.S. Proceeding and that their claims should be litigated in that proceeding, rather than in the Ontario action. In my view, it would be premature to stay the Ontario action on this basis. The U.S. Proceeding is still at the pre-certification stage and may or may not be certified. 14 Even if it is certified, a NYSE purchaser who wants to opt-out of that proceeding will no longer be able to pmticipate in the Ontario action if it has been stayed. BP effectively will have eliminated this claim. 15
[51) With respect to purchasers on the European exchanges, BP's evidence is that those purchasers would be required to bring individual actions in the U.K. and seek an order to have them consolidated or tried together or adjudicated on a group or representative basis. I cannot see how that would be a clearly more appropriate forum for their claims.
[52) BP has failed to meet its bul'den of establishing that the U.S. and U.K. courts are clearly more appropriate forums in which to adjudicate the claims of the non-TSX purchasers.
Decision
[53) BP's motion is dismissed.
[54] I encourage the parties to agree on the costs of this motion. If the parties are unable to agree, brief written submissions (not exceeding 3 pages, double spaced, exclusive of bill of costs) may be made to me, by the plaintiff within 21 days and BP within 15 days thereafter.
Date: October 9, 2013
14 The cettification hearing for the U.S. Proceeding is scheduled for November 2013. 15 I note that the plaintiff has already addressed BP's concerns to a large extent by excluding fi·om the proposed class any NYSE purchaser who does not opt-out of the U.S. Proceeding.