A group of BP retirees urged the Fifth Circuit on Wednesday to reverse a lower court’s ruling barring intervention in a long-running Employee Retirement Income Security Act lawsuit against BP North America and its retirement plan, arguing a recently certified class with no opt-out rights couldn’t adequately represent their claims.
The recently certified class of BP retirees and the group seeking intervention both allege the oil giant shorted their pensions when converting legacy plans for former Standard Oil of Ohio workers in 1989 and want to recoup lost benefits. But a proposed class of roughly 280 retirees looking to intervene, led by Sohio retiree Michael Press, told a three-judge panel of the circuit court during oral arguments that they were inadequately represented in the recently certified action.
The recently certified action was first filed in 2016 against BP and the company retirement plan, led by retirees Fritz Guenther and Walt Fujimoto.
The so-called Guenther class, certified in March 2021, includes an estimated 680 Sohio employees who had their retirement plans converted from a legacy plan by BP in 1989. The certified class seeks reformation of the plan, which could result in calculations by BP finding retirees are owed more money. While the Guenther case began with a broader set of ERISA claims, years of litigation have left the certified class with the single plan reformation claim against BP.
Press leads a proposed class action against BP first filed in September 2020 alleging the company breached its fiduciary duty to retirees in violation of ERISA related to the Sohio plan conversion. A federal judge in Texas stayed the action in November pending resolution of the Guenther class action.
Jason Burge, attorney for movant-appellant Press, told the panel during arguments that the group of 280 former employees should be allowed to intervene and assert their own claims because the Guenther class was certified without opt-out rights and involved claims arising from the same transaction. The transaction involves a pension change BP made after acquiring Sohio in a way that decreased the value of Sohio retirees’ vested benefits.
Burge said the group of 280 ex-workers led by Press — some of whom were managers and executives of first Sohio and then BP — had different claims arising from the same transaction as the Guenther class that they wouldn’t be able to pursue without the court granting intervention.
“My clients are forced into a mandatory class, they’re forced to give up independent prosecution of their claims,” said Burge, absent intervention being granted by the circuit court.
Burge said the late U.S. Supreme Court Justice Antonin Scalia had warned in the 2011 decision Wal-Mart v. Dukes that plaintiffs in the type of certified class action at issue in Guenther had a perverse incentive to drop potentially valid claims to secure certification. In Dukes, the high court reversed an appellate court ruling upholding class certification in a sex bias case.
“That’s precisely what has happened here. That’s why my clients, who want to assert all the claims they’ve brought, are not adequately represented for the purposes of Rule 24 by class counsel,” Burge said.
In response to a question from U.S. Circuit Judge Stuart Kyle Duncan about what claims Burge was arguing were dropped by the Guenther class in order to secure certification, Burge said the Press plaintiffs had brought a claim for surcharge under ERISA as well as theories of recovery.
Burge said the Press plaintiffs’ theory of recovery was “very important to us” because it involved claims that BP had applied interest rates in a way that resulted in opening account balances for retirees being artificially low and “could be worth thousands, hundreds of thousands of dollars per claim.”
“We shouldn’t be limited to challenging on a very limited record a settlement later or collaterally attacking a decision later, we should have our own opportunity to be heard before the court makes decisions,” Burge said.
Ian Morrison, lawyer for BP, urged the circuit panel during argument to reject the intervention motion, and said granting intervention would extend resolution of a case that had been proceeding for six years already.
“I’m aware of one witness who’s already died, there are 7,000 potential class members, I don’t even know how many of them are still alive. And I assume by the time we’re done dealing with the addition of 280 people, many of them will have passed away,” Morrison said. “That’s clearly prejudice resulting from the delay, and we think that provides ample reason to find the petition was untimely.”
Susan Weeks, attorney for the Guenther class, also argued against intervention before the court.
Weeks said of both the Press and Guenther classes, “we both seek reformation of that plan to address that pension deficiency,” but said some claims from the Press plaintiffs were “outside of our class action.”
U.S. Circuit Judges Carolyn Dineen King, Stuart Kyle Duncan and Kurt D. Engelhardt sat on the panel for the Fifth Circuit.
Counsel for BP declined to comment. Counsel for the Press plaintiffs didn’t immediately respond to a request for comment Wednesday.
Peter Steilberg, an attorney for the Guenther class, said in a statement Wednesday that “we were honored to present our argument to the Fifth Circuit in person and on behalf of the pension class participants.”
The Press plaintiffs are represented by Jason W. Burge, Kerry J. Miller, Caroline Hogan Paschal, James Richard Swanson and Rebekka Claire Veith of Fishman Haygood LLP.
The Guenther class is represented by Susan Weeks, Brady Lee Espeland and Leander Laurel James IV of James Vernon & Weeks PA and Rossi Maddalena, Philip Randolph Meade and Peter Steilberg of Merrick Hofstedt & Lindsey PS.
BP is represented by Ian Hugh Morrison I, Emma C. Mata and Esteban Shardonofsky of Seyfarth Shaw LLP and Robert W. Rachal and Howard Shapiro of Jackson Lewis PC.
The appeal is Guenther v. BP Retr Accumulation, case number 21-20617, in the U.S. Court of Appeals for the Fifth Circuit.
