Ret. Assoc. v. BP (In re BP)

Citation341 F.Supp.3d 698
Decision Date18 September 2018
Docket Number No. 4:12-cv-01256 (cons.),No. 4:10-MD-2185, No. 4:14-cv-01065, No. 4:14-cv-01280, No. 4:14-cv-01085, No. 4:14-cv-01279, No. 4:12-cv-03715, No. 4:14-cv-01418, No. 4:14-cv-01072, No. 4:14-cv-01084, No. 4:14-cv-00457, No. 4:13-cv-00129, No. 4:14-cv-00980, No. 4:13-cv-01393, No. 4:14-cv-01068, No. 4:13-cv-00069, No. 4:14-cv-01087, No. 4:14-cv-01281,4:10-MD-2185
Parties IN RE: BP P.L.C. SECURITIES LITIGATION This document relates to: Alameda County Emp. Ret. Assoc. et al. v. BP p.l.c. et al. Avalon Holdings Inc. et al. v. BP p.l.c. et al. Stichting Pensionenfonds Metaal en Techniek et al. v. BP p.l.c. et al. HESTA Super Fund v. BP p.l.c. et al. New York City Employees' Ret. Sys. et al. v. BP p.l.c. et al. Arkansas Teacher Retirement Sys. et al. v. BP p.l.c. et al. Washington State Investment Board v. BP p.l.c. et al. Helaba Invest Kapitalanlagegesellschaft mbH et al. v. BP p.l.c. et al. Maryland State Ret. and Pension System v. BP p.l.c. et al. GIC Private Limited v. BP p.l.c. et al. Pension Reserves Inv. Mgmt. Bd. of Mass. v. BP p.l.c. et al. Virginia Retirement System et al. v. BP p.l.c. et al. Louisiana State Emps.' Ret. Sys. et al. v. BP p.l.c. et al. IBM U.K. Pensions Trust Ltd. et al. v. BP p.l.c. et al. Universities Superannuation Scheme Ltd. v. BP p.l.c. et al. Merseyside Pension Fund v. BP p.l.c. et al. The Bank of America Pension Plan v. BP p.l.c. et al.
CourtU.S. District Court — Southern District of Texas
MEMORANDUM AND ORDER

KEITH P. ELLISON, UNITED STATES DISTRICT JUDGE

Pending before the Court is a motion for judgment on the pleadings to dismiss certain claims under the Securities Exchange Act of 1934 ("Exchange Act") as time-barred. (Doc. No. 1662.)1 Defendants BP p.l.c., BP America, Inc., BP Exploration & Production, Inc., Anthony Hayward, Douglas Suttles, H. Lamar McKay, Robert Dudley, and Robert Malone ("Defendants") argue that Exchange Act claims based on alleged misstatements made more than five years before the filing of the actions at issue are foreclosed by the Exchange Act's statute of repose. Defendants filed a memorandum and a reply in support of their motion. (Doc. Nos. 1663, 1706.) Plaintiffs2 filed a combined response. (Doc. No. 1693.)

I. BACKGROUND

These actions arise from Defendants' alleged misstatements and omissions related to the Deepwater Horizon explosion. Plaintiffs are individual investors who are pursuing causes of action under the Exchange Act and English securities law. Detailed descriptions of the facts underlying Plaintiffs' claims may be found in the Court's prior orders. See In re BP p.l.c. Securities Litig. , 843 F.Supp.2d 712, 724–25, 741–42 (S.D. Tex. 2012) ; In re BP p.l.c. Securities Litig. , 852 F.Supp.2d 767, 775–78 (S.D. Tex. 2012). The procedural background relevant to the above-listed actions may be found in the Court's ruling on Defendants' Motion to Dismiss Plaintiffs' Amended Complaints ("Third Motion to Dismiss"). In re BP p.l.c. Sec. Litig. , No. 4:12-CV-01256-CONS, 2017 WL 7037706, at *2, *2-*3 (S.D. Tex. June 30, 2017).

Additional procedural background specific to Defendants' statute of repose argument is relevant here. Defendants raised their statute of repose argument on two prior occasions.

First, Defendants raised the statute of repose argument in their Amended Second Tranche Consolidated Motion to Dismiss ("Second Tranche Motion to Dismiss"), which the Court decided in September 2014. See In re BP p.l.c. Sec. Litig. , No. 4:13-CV-1393, 2014 WL 4923749, at *1 (S.D. Tex. Sept. 30, 2014) ; see also MDL Doc. No. 718 at 41-42. Defendants asked the Court to dismiss causes of action based on alleged misstatements made more than five years before the filing of the individual actions. The Court applied the tolling rule set out in American Pipe & Construction Co. v. Utah , 414 U.S. 538, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974), which provides that the filing of a class action tolls applicable statutes of limitations as to all putative class members until class certification is denied or until the individual ceases to be a member of the class. At the time, there was a circuit split regarding the application of American Pipe tolling to statutes of repose. The primary question was whether American Pipe tolling was an equitable rule, in which case it would not apply to statutes of repose. In re BP p.l.c. Sec. Litig. , 2014 WL 4923749, at *4. This Court concluded that American Pipe tolling was a legal rule, and further determined that it applied to the Exchange Act claims in this case. Id. at *4-*5.

On June 26, 2017, the Supreme Court held that American Pipe tolling is equitable in nature and thus does not apply to the three-year statute of repose that governs claims under Section 11 of the Securities Act of 1933. Cal. Pub. Employees' Ret. Sys. v. ANZ Sec., Inc. , ––– U.S. ––––, 137 S.Ct. 2042, 2052, 198 L.Ed.2d 584 (2017). This precedent is the basis for Defendants' motion.

Defendant Malone raised the statute of repose argument in his motion for reconsideration of the Court's decision on the Third Motion to Dismiss. (See Doc. No. 1584, at 4 n. 4.) Defendants had not argued for dismissal based on the statute of repose in their Third Motion to Dismiss; briefing and argument had been completed prior to the ANZ Securities decision. (See Doc. Nos. 1419, 1546; Minute Entry dated 5/8/2017.) In his motion for reconsideration, Defendant Malone briefly raised the statute of repose argument in a footnote, stating that "Plaintiffs' Exchange Act claims are also barred by the five-year statute of repose, 28 U.S.C. § 1658(b)(2), because Mr. Malone's April 2007 statement was made more than five years before any of the above-captioned actions were filed." (Doc. No. 1584, at 4 n. 4.) Plaintiffs countered that this presented "a new legal theory impermissibly raised for the first time in a motion for reconsideration." (Doc. No. 1587, at 15.) The Court declined to decide the statute of repose issue raised in the motion for reconsideration, since it had not been raised in the original briefing. (Doc. No. 1632, at 4.)

II. LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(c), "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." "A motion brought pursuant to Fed. R. Civ. P. 12(c) is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts." Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co. , 313 F.3d 305, 312 (5th Cir. 2002) (quotation marks omitted). Pleadings must be construed liberally, in the light most favorable to the plaintiff. Id.

III. PROCEDURAL PROPRIETY OF THE MOTION

Before turning to the substance of Defendants' motion, the Court must address the procedural arguments that Plaintiffs raise in their response brief. Plaintiffs argue that Defendants' motion is procedurally barred on multiple grounds.

First, Plaintiffs argue that the Court's holding in its decision on the Second Tranche Motion to Dismiss established the law-of-the-case regarding American Pipe tolling, and that this prior holding cannot be disturbed. A court may reexamine its prior decision if "controlling authority has since made a contrary decision of the law applicable to such issues." Royal Ins. Co. of Am. v. Quinn-L Capital Corp. , 3 F.3d 877, 880 (5th Cir. 1993). The Court's reasoning to reach its decision that the Exchange Act's five-year statute of repose was subject to American Pipe tolling—that the rule was legal and not equitable—has been directly affected by the ANZ Securities decision. Accordingly, it is appropriate for the Court to re-examine the issue.

Plaintiffs further argue that Defendants are improperly attempting to use a Rule 12(c) motion to litigate issues that were not timely raised in their Rule 12(b)(6) motion. This argument is not based in Rule 12 itself. A motion under Rule 12(c) may be filed "after the pleadings are closed but within such time as not to delay the trial." Rule 12(g) limits the filing of subsequent motions under certain sections of Rule 12(b), but it does not prevent the filing of subsequent motions for failure to state a claim. See Rule 12(g)(2). In support of their argument, Plaintiffs provide an unpublished opinion from the Northern District of Texas, in which a court declined to consider arguments raised in a Rule 12(c) motion that had already been decided in the court's ruling on an earlier Rule 12(b) motion. See Gonzalez ex rel. E.G. v. Bond , No. 16-cv, 2017 WL 3493124, at *7 (N.D. Tex. June 29, 2017) (Report and Recommendation adopted by 2017 WL 3491853, at *1 (N.D. Tex. Aug. 14, 2017) ). In Gonzalez , there was no intervening change in law or other circumstances that would have affected the court's previous analysis of the arguments. Such is not the case here.

Lastly, Plaintiffs argue that Defendants are using their Rule 12(c) motion to re-litigate an issue that was already rejected by the Court when it was raised in Mr. Malone's motion for reconsideration. Plaintiffs misconstrue the Court's holding. The Court concluded that it would not address the statute of repose argument raised in Mr. Malone's motion for reconsideration, because the issue was not part of the underlying motion of which Mr. Malone sought reconsideration. Defendants had good reason not to raise the issue in their Third Motion to DismissANZ Securities had not been decided until after briefing was complete and argument had been heard.

The Court is not persuaded by Plaintiffs' arguments that the motion for judgment on the pleadings is procedurally barred.

IV. STATUTE OF REPOSE ANALYSIS

The Exchange Act has a five-year statute of repose. 28 U.S.C. § 1658(b)(2) ; see Merck & Co. v. Reynolds , 559 U.S. 633, 650, 130 S.Ct. 1784, 176 L.Ed.2d 582 (2010) ; Hall v. Variable Annuity Life Ins. Co. , 727 F.3d 372, 375 n. 4 (5th Cir. 2013).

Defendants argue that the Exchange Act's statute of...

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