Glenn v. BP p.l.c. (In re BP p.l.c. Sec. Litig.), MDL No. 10-md-2185

CourtU.S. District Court — Southern District of Texas
Writing for the CourtKEITH P. ELLISON
PartiesIn re: BP p.l.c. SECURITIES LITIGATION Robert R. Glenn, Plaintiff, v. BP p.l.c. Defendant.
Decision Date05 July 2012
Docket NumberMDL No. 10-md-2185,Civil Action No. 11-cv-2941

Robert R. Glenn, Plaintiff,
BP p.l.c. Defendant.

MDL No. 10-md-2185
Civil Action No. 11-cv-2941


Dated: July 5, 2012



Pending before the Court is Defendant BP's Motion to Dismiss the Class Action Complaint (Doc. No. 16; MDL Doc. No. 261).1 Having considered the parties' pleadings, arguments, and the applicable law, the Court finds that Defendant's motion must be GRANTED.


Robert Glenn2 ("Glenn" or "Plaintiff"), an Oregon resident, asserts claims of assumpsit, money had and received, unjust enrichment, and breach of contract against defendant BP p.l.c. ("BP," "the Company," or "Defendant").3 BP is a company organized under the laws of England and Wales, with its global headquarters in London. (Complaint ("Compl."), Doc. No. 1, ¶ 14.) According to Plaintiff, BP is the largest oil and gas producer, operating in more than eighty

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countries, and is one of the largest gasoline retailers in the United States. (Id.) Plaintiff characterizes BP as "a predominantly American company" in that more than forty-percent of its fixed assets and upwards of thirty-percent of its workforce are located in the United States. (Id.) BP's American Depositary Shares ("ADSs") are listed and trade on the New York Stock Exchange ("NYSE"). (Id.)

Glenn's claims stem from the unusual trajectory of a dividend BP declared immediately following the Deepwater Horizon catastrophe. The Deepwater Horizon rig exploded on April 20, 2010. (Compl. ¶ 24.) On April 27, 2010, BP announced that its Board of Directors had declared a quarterly dividend for the first quarter of 2010 in the amount of $0.84 per ADS, payable on June 21, 2010, to its shareholders of record as of May 7, 2010. (Id.) The total value of the dividend was approximately $2.6 billion. (Id.) Glenn claims that the declaration of this dividend created a binding obligation on the part of BP to pay the dividend on June 21, 2010, and created a legal "debt owed" by BP to the May 7, 2010 ADS shareholders. (Id. ¶ 3.)

Between the declaration of the dividend and the date payment was due, BP took several actions that, according to Plaintiff, assured shareholders of the Company's continued intent to pay the dividend. First, on May 10, 2010, BP announced the reference share price for its scrip dividend program. (Id. ¶ 31.) Second, on June 4, 2010, during a webcast with shareholders, BP stated that it was committed to "meet [its] obligations to [its] . . . hundreds of thousands of shareholders, and millions more in mutual and pension funds, who rely on their investment in BP as part of their financial security and in many cases their retirement income." (Id. 33.) Finally, on June 8, 2010, BP announced the amount of the Sterling dividend on its ordinary shares. In connection with that announcement, BP referenced the dividend on its ADS shares, stating:

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"As previously announced, the dividend payable to holders of American Depositary Shares ('ADSs'), each of which represents six ordinary shares, will be US$0.84 per ADS. The dividend will be paid to holders of ADSs in cash in US dollars." (Id. ¶ 32.)

According to Plaintiff, as it was making these alleged assurances, BP simultaneously was facing political pressure from the United States Congress and the Obama Administration. On June 2, 2010, two U.S. senators sent BP a letter urging the Company to suspend its dividend. (Id. ¶ 35.) The letter further insinuated that BP's decision to go forward with the dividend payment would invite scrutiny by the Justice Department. (Id.) Dozens of U.S. representatives signed on to another similar letter, urging BP "to halt your planned dividend payout and cancel your advertising campaign until you have done the hard work of capping the well, cleaning up the Gulf Coast and making whole those whose very livelihoods are threatened by this catastrophe." (Id. 36.) On June 4, 2010, the same day that BP held its webcast with shareholders, President Obama publicly criticized BP's intention to pay the dividend. (Compl. ¶ 34.) (quoting Obama as saying, "[T]here are reports that BP will be paying $10.5 billion—that's billion with a B—in dividend payments this quarter. . . . Now I don't have a problem with BP fulfilling its legal obligations. But I want BP to be very clear, they've got moral and legal obligations here in the Gulf for the damage that has been done.").

According to Plaintiff, BP was the loser in this political face-off. On June 16, 2010, after a meeting with President Obama, BP announced that its board of directors had cancelled the previously declared first quarter dividend. (Id. 38.) BP issued a statement explaining that the Company had decided to cancel the dividend "in spite of [its] strong financial position and deep asset base." (Id.) Despite reporting losses during the first half of 2010 (attributed mainly to the creation of the $20 billion escrow fund for claims arising out of the Deepwater Horizon disaster), BP subsequently announced a third quarter profit of nearly $1.8 billion and declared a fourth

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quarter dividend of $0.42 per ADS payable on March 28, 2011. (Id. ¶ 42-44.)

Plaintiff contends that applicable law, as well as BP's Articles of Association, did not allow BP to cancel the properly declared dividend, despite any political pressure or public relations concerns the Company faced. The Complaint thus contends that BP's decision to cancel the interim dividend put BP in breach of its legal obligation to its shareholders, including Plaintiff. Plaintiff seeks to recover the unpaid dividend retained by BP and prejudgment interest. (Id. ¶¶ 54, 60, 68, 74.)

Plaintiff's first claim, for assumpsit, alleges that BP's declaration of the dividend created an immediate binding obligation on BP to pay the dividend. Plaintiff therefore seeks to enforce his right to receive the dividend. Plaintiff's second claim, for money had and received, asserts the same. Plaintiff's third claim, for unjust enrichment, asserts that it would be unjust to allow BP to retain the unpaid dividend to which Plaintiff is entitled. Finally, Plaintiff brings a fourth claim, for breach of contract, alleging that the declaration of the dividend created a binding contract obligating BP to pay the dividend and created a corresponding right on the part of Plaintiff to enforce that contract.

Glenn originally filed suit in the U.S. District Court for the District of Oregon, Eugene Division, on April 7, 2011. (Doc. No. 1.) His case was transferred to this Court pursuant to an order from the United States Judicial Panel on Multidistrict Litigation ("MDL Panel"). (Transfer Order, Doc. No. 7.) On September 20, 2011, BP filed a motion to dismiss the Complaint pursuant to Rules 12(b)(2) and 12(b)(6). (Doc. No. 16; MDL Doc. No. 261.) In its motion to dismiss, BP asserts three grounds for dismissal. First, BP contends that, pursuant to the internal affairs doctrine, English law governs this case and well-settled English law allows a corporation to cancel an interim dividend at any time without incurring liability. Second, BP argues that the

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case is best left to the English courts and, therefore, the Court should dismiss this action on the basis of forum non conveniens. Finally, BP claims that this Court lacks personal jurisdiction over BP because the Complaint fails to allege that BP took or directed any activities in the state of Oregon.

On October 27, 2011, Plaintiff filed a response in opposition to BP's motion to dismiss (Doc. No. 25). BP filed a reply in support of its motion to dismiss on November 18, 2011 (Doc No. 33). This Court held oral argument on the motion to dismiss on February 10, 2012.


A. 12(b)(2)

"The Due Process Clause of the Fourteenth Amendment operates to limit the power of a State to assert in personam jurisdiction over a nonresident defendant." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14 (1984). These due process requirements are only satisfied where "in personam jurisdiction is asserted over a nonresident corporate defendant that has 'certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks and citation omitted)). When a controversy "arises out of" a defendant's relationship with the forum state, the "relationship among the defendant, the forum, and the litigation" is the essential foundation of in personam jurisdiction. Shaffer v. Heitner, 433 U.S. 186, 204 (1977). However, even where the claim does not stem from a foreign corporation's activities in the forum state, "due process is not offended by a State's subjecting the corporation to its in personam jurisdiction when there are sufficient contacts between the State and the foreign corporation." Helicopteros Nacionales, 466 U.S. at 414.

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"There are two types of personal jurisdiction: general and specific." Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995). "For general jurisdiction to exist over a nonresident defendant . . . the defendant must engage in continuous and...

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