The Southern District of Texas found that negligent misstatement claims filed more than two years after the last alleged misstatement were time-barred and that the applicable statute of limitations was not tolled under American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974).
The Plaintiffs, private investment funds, alleged that the Defendants, BP oil affiliates, directors and officers, made misrepresentations regarding: (i) the extent of BP’s commitment to a safety first approach to oil drilling; (ii) the size of the Deep Water Horizon explosion oil spill and BP’s ability to contain it; and (iii) the extent of BP’s likely responsibility for it. They further alleged that after the Deep Water Horizon explosion in the Gulf of Mexico, the “truth about BP slowly emerged” causing BP stock to “plunge in value.”
The court applied the Texas two-year statute of limitations for misstatement claims, reasoning that Texas courts, unlike federal courts, view statutes of limitation as procedural, except in limited inapplicable circumstances.
The court agreed with Plaintiffs that the Texas tolling rule is similar to American Pipe tolling, but rejected Plaintiffs’ argument for American Pipe tolling, reasoning that under Bell v. Showa Denko K.K., 899 S.W.2d 749, 758 (Tex. Civ. App. – Amarillo 1995), “a class action does not toll a later-filed individual claim unless the class action provides the defendant with ‘notice of the type and potential number of the claims against it.’”
The court noted that the Fifth Circuit, in Vaught v. Showa Denko K.K., 107 F.3d 1137, 1145 (5th Cir. 1997), has cited Bell for the proposition that a federal class action likely cannot toll the statute of limitations for a claim filed in state court, and thereby stated “in very strong terms that it doubts ‘a federal class action filed in Texas or in any other state would ever toll a statute of limitations, regardless of the type claims raised.’”
In Re: BP p.l.c. Securities Litig., MDL No. 10-md-2185 (S.D. Tex. September 30, 2014)