Process now likely to drag out without set timeline for recouping investment losses
On May 22 the State of Oregon's case against oil giant British Petroleum (BP) for close to $19 million was moved to federal court from Multnomah County Circuit Court. The state sued BP a month ago for lost investment revenue due to the company's failed oil rig in the Gulf of Mexico.
BP filed to move the case to the United States District Court under the Outer Continental Shelf Lands Act (OCSLA), which states that any controversy concerning areas including the Gulf of Mexico fall under federal jurisdiction.
Oregon sued BP in April for fraud and claimed the petroleum company made misleading statements about safety procedures. The state's lawyers claim the fraud was exposed by the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Because of the disaster, BP's stock plummeted 50 percent, dragging the state's BP stock down with it and damaging the state pension fund.
State Treasury officials said that the disaster, which claimed 11 lives and contaminated 665 miles of coastline with the spilled oil, ravaged the Common School Fund, the Higher Education Endowment Fund and the Oregon Public Employee Retirement Fund.
Many other states have also sued BP for lost pension funds, including Ohio and New York.
The Treasury filed the case in the county circuit court to ensure that Oregon gets the full payoff if it wins, according to Tony Green, spokesman for the Oregon Department of Justice, which represents state agencies in court.
'One of the responsibilities that both the Treasury and the Attorney General have is to protect the employee retirement fund,' said Green. 'This is an example of the type of efforts they are willing to make in order to protect it.'
Green said now that the case has been moved to federal court, it could take much longer to close and there is no definitive timeline.
If the state does win back the billions of dollars, Green said the money will return to the pension fund.
Lawyers for BP did not return phone calls.
Editor's note: a previous version of this story misstated how much the lawsuit is seeking from BP in damages. The amount is $19 Million