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New York judge throws Transocean class action lawsuit out of court

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  • New York judge throws Transocean class action lawsuit out of court

GLOBAL - A class action brought against the owner of the notorious Deepwater Horizon oil platform on behalf of Danica Pension and others has been thrown out by a judge in New York.

Earlier this week, US district judge Naomi Reice Buchwald dismissed the lawsuit, which alleged that top executives at Transocean had misled shareholders over safety problems in the run-up to the disastrous oil well blowout in the Gulf of Mexico.

Swiss company Transocean had leased the Deepwater Horizon rig to BP. But in April 2010, a blowout led to an explosion at the rig - which was located at the Macondo Prospect off the coast of Louisiana - killing 11 workers and causing the largest oil spill in history.

Along with the company itself, the case named current chief executive Steven Newman and former chief executive Robert Long as defendants.

The plaintiffs in the case - heard at the US District Court, Southern District of New York - alleged that Newman had made misrepresentations in comments in the course of three investor conference calls held between 5 August 2009 and 23 July 2010 (the 'class period').

They alleged Transocean had been "suffering 'systemic' failures and problems with respect to personnel training, safety and preventative maintenance", despite Newman's assertions to the contrary, according to the court ruling.

However, the judge said the lead plaintiff had failed to state a claim of securities fraud against Transocean and its current and former chief executives.

A spokesman for Danica Pension said the company had "no relevant comment to make".

At Transocean, a company spokesman said: "We're pleased with the outcome."

Gregory Castaldo, lawyer for the plaintiff and a partner at the firm of Kessler Topaz Meltzer & Check, said he had no comment on the case.

But he confirmed that, apart from Danica Pension as lead plaintiff, there had been well over 100 other plaintiffs - all of which were public shareholders in Transocean during the class period.

Kessler Topaz Meltzer & Check says it specialises in bringing complex class action litigation and that clients include more than 40 European pension funds and institutional investors.

In the ruling, the judge warned that the outcome of the case had no bearing on whether Transocean had substantive liability for the Macondo accident.
 
"Despite Lead Plaintiff's attempts to conflate the two issues, they are wholly separate," Judge Buchwald said.

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