In re BP P.L.C. Securities Litigation (922 F. Supp. 2d 600, 2013)

United States District Court for the Southern District of Texas 2013-02-06

Citations

Full opinion text

MEMORANDUM AND ORDER

KEITH P. ELLISON, District Judge.

Pending before the Court is Defendants’ Motion to Dismiss In Part the Second Consolidated Amended Complaint (Doc. No. 360). Having reviewed the motion, Plaintiffs’ response (Doc. No. 373), Defendants’ reply brief in support of their motion (Doc. No. 377), and all papers in support thereof, the Court finds that Defendants’ Motion to Dismiss In Part the Second Consolidated Amended Complaint (Doc. No. 360) must be GRANTED IN PART and DENIED IN PART.

I. BACKGROUND AND PROCEDURAL HISTORY

This Court is called upon to consider, for a second time in this case, consequences of the loss of life and destruction caused by the April 20, 2010 Macondo well blowout and the resulting oil spill. In particular, the Court must decide whether the tragedy can be translated into financial recovery on behalf of the conglomeration of individuals and pension funds who invested in BP pic, the company at the helm of the Deep-water Horizon drilling effort. The Court first considered consolidated securities class action claims advanced in two separate complaints, one brought by the New York and Ohio Plaintiffs, acting as lead plaintiffs, and a second brought by the Ludlow Plaintiffs, acting as lead plaintiffs of a subclass. On February 13, 2012, this Court issued two decisions dismissing the New York and Ohio Plaintiffs’ complaint in part (“NY/OH Order,”, 843 F.Supp.2d 712 (S.D.Tex.2012)), and dismissing the Ludlow Plaintiffs’ complaint in its entirety (“Ludlow Order,”, 852 F.Supp.2d 767 (S.D.Tex.2012); collectively with the NY/OH Order, the “February 13th Orders”). The decisions gave the Plaintiffs leave to re-plead claims dismissed without prejudice. At this juncture, and after a status conference held on February 23, 2012, both sets of lead plaintiffs agreed to work together to file a single, consolidated amended complaint.

The fruit of this joint effort is the single Second Consolidated Amended Class Action Complaint for All Purchasers of BP ADS Securities (the “Second Amended Complaint” or “SAC”) now before the Court. (Doc. No. 339.) It is this Complaint which Defendants seek to dismiss in part. (Doc. Nos. 355-357, 360.)

Most broadly, the Second Amended Complaint seeks redress under Section 10(b) of the Securities and Exchange Act for alleged misrepresentations made in connection with the Deepwater Horizon drilling project and the safety of BP’s operations generally. Specifically, Plaintiffs assert violations of section 10(b) of the Securities and Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5 of the Securities and Exchange Commission (“SEC”) against all Defendants. (SAC ¶¶ 419-21.) They also assert violations of section 20(a) of the Exchange Act against the individual defendants Anthony B. “Tony” Hayward, Andrew G. “Andy” Inglis, and Douglas J. Suttles. (Id. ¶¶ 422-25.) As discussed in greater detail below, the Second Amended Complaint both: (1) alleges new misrepresentations not found in the Plaintiffs’ previous complaints, and (2) reformulates and supplements allegations regarding misrepresentations dismissed in the February 13th Orders. The Second Amended Complaint also significantly reduces the number of individual defendants.

Defendants seek dismissal of all new alleged misrepresentations and all alleged misrepresentations previously dismissed in the February 13th Orders. Defendants contend that this action should proceed based only on the twelve statements held to be actionable in the NY/OH Order. (Doc. No. 356, at 2.) The alleged misrepresentations sustained in the NY/OH Order concern the following overarching themes: (1) BP’s improvements in process safety as measured against the recommendations of an independent commission known as the “Baker Panel” convened in 2005 to review and improve the Company’s safety procedures; (2) BP’s ability to respond to and contain an oil spill in the Gulf of Mexico; and (3) the spill-rate following the Deep-water Horizon explosion. (Id. at 3.) Using the lettering system instituted by Plaintiffs in the Second Amended Complaint, the alleged misrepresentations not subject to dismissal under Defendants’ motion are Statements D, E, F (partial), G (partial), H, K, M, O (partial), Q, T, U, and V.

A. The Parties

Plaintiffs are Thomas P. DiNapoli, Comptroller of the State of New York, as Administrative Head of the New York State and Local Retirement Systems and sole Trustee of the New York State Common Retirement Fund (“New York”); the Ohio Public Employees Retirement System, along -with its statutory litigation counsel, the Ohio Attorney General Mike DeWine (“Ohio” and collectively with New York, the “NY/OH Plaintiffs”); and four individual plaintiffs (the “Ludlow Plaintiffs” and collectively with the NY/OH Plaintiffs, “Plaintiffs”). (SAC ¶¶ 35-40.) The four individual plaintiffs, citizens of California and purchasers of BP American Depositary Shares (“ADSs”), are Robert H. Ludlow, Jr., Peter D. Lichtman, Leslie J. Nakagiri, and Paul Huyck. (Id. ¶¶ 37-40.)

The Second Amended Complaint names three corporate defendants — BP pic; BP America, Inc. (“BP America”); and BP Exploration & Production, Inc. (“BP Exploration” and collectively with BP pic and BP America, “BP” or “the Company”)— that were also named in Plaintiffs’ previous complaints. BP pic is a UK corporation with its principal executive offices located in London, England. (SAC ¶ 41.) BP’s ADSs are listed on the New York Stock Exchange (“NYSE”), and BP is the largest oil and gas producer in the United States. (Id.) BP America and BP Exploration, both wholly-owned subsidiaries of BP pic, are Delaware corporations with their principal places of business in Houston, Texas. (Id. ¶¶ 42-43.)

The Second Amended Complaint also names three individual defendants who were directors and officers of BP prior to and during the Deepwater Horizon spill. They are Hayward, Suttles, and Inglis (collectively, the “Individual Defendants”).

Hayward served as BP’s Chief Executive Officer from May 2007 until October 2010. (SAC ¶ 44.) According to Plaintiffs, his ascension to the chief executive position at BP coincided with the launch of a public relations campaign to resurrect BP’s image with respect to safety. Shortly after taking over, Hayward publicly declared his intention to “focus on safety like a laser.” (Id. ¶ 20.)

In addition to serving as the public face of BP’s ongoing safety reform efforts, Hayward was also involved in executive management of those efforts. Beginning in 2006, he headed the Group Operations Risk Committee (“GORC”), which reviewed the Company’s safety protocols and responded to safety incidents in Company operations. (SAC ¶44.) Hayward was also the executive liaison to the Safety and Ethics & Environment Assurance Committee (“SEEAC”), a committee of directors tasked in part with ensuring that company publications regarding environmental, safety, and ethical matters were accurate. (SAC ¶¶44, 90.) Hayward reported to SEEAC on issues within the purview of GORC. (Id.)

Inglis was CEO of BP’s Exploration & Production (“E & P”) business unit, and an executive director of the Company, from February 2007 until October 2010. (SAC ¶ 46.) In his position as CEO of E & P, Inglis attended SEEAC meetings to report on topics specific to E & P. (Id.) He also served on the GORC alongside Hayward. (Id.) In a deposition taken in connection with a related multi-district litigation (“MDL 2179”), Inglis testified that he was second only to Hayward in terms of authority and responsibility for the safety of BP’s worldwide drilling and exploration operations. (Id.)

B. New Factual Allegations

In a Rule 12(b)(6) motion to dismiss, the Court must accept as true a plaintiffs well-pleaded factual allegations. Cent. Laborers’ Pension Fund v. Integrated Elec. Servs. Inc., 497 F.3d 546, 550 (5th Cir.2007). The Court does not, however, “accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions.” Id. (citation omitted) (internal quotation marks omitted). Nor does the Court accept as true factual allegations that are contradicted by documents on which they are based. See U.S. ex rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370, 377 (5th Cir.2004) (“[When] an allegation is contradicted by the contents of an exhibit attached to the pleading, then indeed the exhibit and not the allegation controls.”). As the Court provided extensive facts and background in the February 13th Orders, the Court will highlight only new factual allegations here.

With one exception, the new and restated alleged misrepresentations in the Second Amended Complaint concern BP’s Operating Management System (“OMS”) — a signature safety measure enacted following a deadly explosion at BP’s Texas City refinery in 2005. (SAC ¶¶ 71, 95.) As more fully explained in the Court’s February 13th Orders, the Texas City disaster — which killed 15 people and injured approximately 170 others — was one incident among many which had shaken public confidence in BP’s ability to manage the risks inherent in its operations. In response to pressure from the U.S. Chemical Safety Board (“CSB”), BP commissioned an independent panel of experts to review its safety culture and procedures and recommend improvements. (Id. ¶ 73.) This panel — led by former U.S. Secretary of State James Baker, III and known as the “Baker Panel” — issued a report in January 2007 (the “Baker Report”) criticizing BP for emphasizing personal safety (i.e., occupational safety such as slip and falls) over process safety. (Id. ¶ 13.) To address this and other shortcomings, the report recommended that BP “establish and implement an integrated and comprehensive system that would systematically identify, reduce and manage process safety risks.” (Id. ¶ 84.) BP publicly accepted the Baker Panel’s advice and announced that it would develop and implement an integrated safety management system— OMS — across all of its business units worldwide. (Id. ¶¶ 82, 95.) OMS was intended to optimize BP’s process safety protocols and make them uniform and consistent across all of BP’s operations. (Id. ¶¶ 95, 98.)

A new committee of executives — the GORC — was created in part to serve as the “‘overall steward of the OMS implementation project.’ ” (SAC ¶ 84.) The GORC — including Hayward and Inglis— played a pivotal role in reviewing and approving the structure and scope of OMS. (Id. ¶ 102.) The framework approved by GORC specified that OMS would be implemented on BP-owned and operated entities only — a facet of the design that the committee specifically discussed before its approval. (Id.) Following approval of the framework, GORC tracked the progress of OMS implementation through quarterly Health Safety Environment & Operations Integrity Reports known as the “Orange Books.” (Id. ¶¶ 44, 87.)

OMS became the “cornerstone” of BP’s safety reform efforts, and the centerpiece of many public speeches, reports, and statements heralding a sea change within BP on the issue of process safety. None of these public statements, however, noted the limitation of OMS to BP-owned and operated assets. Due to this omission, Plaintiffs contend that thirteen public statements regarding the scope and roll-out of OMS were materially misleading to investors and misrepresented BP’s ability to manage the risk of catastrophic safety failures in its most dangerous operations. (SAC ¶¶ 101,106, 407.)

The first alleged misrepresentation was contained within the 2006 Sustainability Report, issued May 9, 2007. That document described OMS as follows:

The OMS is a comprehensive system that covers all aspects of our operations, including three dimensions of safety-personal safety, process safety and the environment.... The new OMS will apply to all operations by the end of 2010 and includes safety, integrity, environmental management and health.... Each site will have its own local OMS, based on a consistent group-wide framework.

(SAC ¶ 315 (Statement A).) Plaintiffs contend that this description painted a false picture of OMS because “OMS applied only to rigs that BP fully-owned but not to BP’s operations where BP leased rigs from others, as it did with Transocean’s Deep-water Horizon in the Gulf of Mexico.” (Id. ¶ 316.) This carve-out of contractor-owned rigs was a significant one. Deep-water exploration and drilling in the Gulf of Mexico was among BP’s riskiest endeavors. (Id. ¶ 106.) It was also an area where BP relied heavily on contractor-owned assets. In early 2010, for example, six out of the seven wells that BP worked on in the Gulf involved contractor-owned rigs. (Id. ¶ 100.)

On July 24, 2007, BP held a conference call with analysts and investors in which Hayward participated. During the call, Hayward stated:

First, safety. We are ensuring that we have consistent, safe, reliable operations across BP. We are implementing the Baker Panel recommendations. We are also in the early days of establishing a new way of operating in BP — with the progressive rollout of a common group-wide Operating Management System.

(SAC ¶ 317 (Statement B).) As with the preceding statement from the 2006 Sustainability Report, Plaintiffs contend that Hayward’s description of OMS was misleading because it failed to explain a key limitation of OMS in the case of contractor-owned assets. (Id. ¶ 318.) Hayward was aware of this limitation through his involvement in GORC, which was the “overall steward” of OMS implementation and had approved the framework of OMS. (Id. ¶¶ 44, 84, 102.) His deposition testimony in MDL 2179 confirmed his awareness that contractor safety systems — not BP safety systems — were in place on contracted rigs such as the Deepwater Horizon. (Id. ¶ 103.)

On September 25, 2007, Defendant Inglis made the following statement about OMS at the Sanford Bernstein 4th Annual Strategic Decisions Conference:

One aspect of our focus on safe and reliable operations that I mentioned earlier, is our new standardized Operating Management System (OMS). This will provide a blueprint for safety and all aspects of operations throughout BP, making sure operations are undertaken to a consistently high standard worldwide.

(SAC ¶ 319 (Statement Q.) Once again, Plaintiffs contend that this description gave a false impression about the scope of OMS because it failed to clarify that OMS would not be imposed on contractor-owned rigs. (Id. ¶ 320.) Inglis, like Hayward, was aware of the intended scope of OMS through his involvement on the GORC committee, which approved the OMS framework. (Id. ¶¶ 46,102.)

Hayward made similar statements about OMS during a February 27, 2008 conference call with investors and analysts and at the Company’s 2008 Annual General Meeting on April 17, 2008. At both of these events, Hayward stated:

[Ojur intense focus on process safety continues. We are making good progress in addressing the recommendations of the Baker Panel and have begun to implement a new Operating Management System across all of BP’s operations.

(SAC ¶¶ 325 (Statement F), 327 (Statement G).) Plaintiffs claim that, as before, these statements overstated the reach of OMS, which was not designed or intended to apply to contractor-owned rigs.

In 2009, BP began to report publicly on its progress in implementing OMS across its operations. The 2008 Annual Review, dated February 24, 2009, stated:

During [2008] we began migrating to the new BP OMS, which has an increased focus on process safety and continuous improvement. The majority of our operations in North America Gas, the Gulf of Mexico, Colombia and the Endicott field in Alaska all completed the migration to the OMS in 2008.

(SAC ¶ 331 (Statement 1-1).) Plaintiffs claim that the representation that the Gulf of Mexico had “completed the migration” to OMS in 2008 was false. (Id. ¶ 333(a).) Plaintiffs also allege that GORC members, in addition to being aware of the limited scope of OMS and the actual pace of implementation, were on notice through a December 2008 “internal BP strategy document” that there were “ ‘major’ ” process-safety concerns in the Gulf of Mexico region. (Id. ¶ 333(c).) Plaintiffs urge that this awareness made it particularly misleading for the 2008 Annual Report to suggest that the Gulf of Mexico was “operating within uniform Company-wide process safety procedures.” (Id.)

The 2008 Annual Review contained another alleged misrepresentation, this one issued by Defendant Hayward. In the portion of the report designated the “Group chief executive’s review,” Hayward stated:

The BP operating management system (OMS) turns the principle of safe and reliable operations into reality by governing how every BP project, site, operation and facility is managed.

(SAC ¶ 332 (Statement 1-2).) Plaintiffs claim that it was misleading of Hayward to state that OMS would “govern” “every BP project, site, operation and facility” when OMS applied only to BP-owned and controlled sites — a key limitation known by Hayward. (Id. ¶ 333(b).)

On March 4, 2009, BP filed its 2008 Annual Report with the SEC on Form 20-F, signed by Hayward in his capacity as chief executive. (SAC ¶ 334.) That document stated:

We continue to implement our new operating management system (OMS), a framework for operations across BP that is integral to improving safety and operating performance in every site.

When fully implemented, OMS will be the single framework within which we will operate, consolidating BP’s requirements relating to process safety, environmental performance, legal compliance in operations, and personal, marine and driving safety.

(Id. ¶ 335 (Statement J-l).) Plaintiffs allege that these statements falsely represented the scope of OMS by suggesting that OMS was a “single framework” applied to “every site” when in fact it applied only to rigs fully-owned by BP. (Id. ¶ 336(f).) Separately, the Annual Report described the status of OMS implementation, representing that the Gulf of Mexico completed the transition to OMS in 2008:

All operated businesses plan to transition to OMS by the end of 2010. Eight sites completed the transition to OMS in 2008; two petrochemical plants, Cooper River and Decatur, two refineries, Lin-gen and Gelsenkirchen and four Exploration and Production sites, North America Gas, the Gulf of Mexico, Colombia and the Endicott field in Alaska.

(Id. ¶ 335 (Statement J — 2).) Plaintiffs contend that this statement was false, because the transition to OMS was not complete in the Gulf of Mexico by the end of 2008, as specifically confirmed in a report received by Hayward from Inglis in the month before the Form 20-F issued. (Id. ¶ 336(b)-(c).)

A month later, on April 16, 2009, BP issued its 2008 Sustainability Review. The document contained a section titled “Group Chief executive’s review,” in which Hayward made another statement about the scope of OMS:

You can see a similar balanced approach in our new operating management system (OMS), which is to be implemented at each BP site. It covers everything from compliance and risk management through to governance and measuring results.

(SAC ¶ 347 (Statement L).) Plaintiffs allege that Hayward misrepresented that OMS was being implemented “at each BP site” when in reality OMS applied only to rigs fully-owned by BP. (Id. ¶ 348.)

On February 26, 2010, BP issued its 2009 Annual Review, the content of which was discussed at the January 26, 2010 meeting of the Board of Directors. (SAC ¶¶ 351, 352(a).) The Annual Review stated:

Safe, reliable and compliant operations remain the group’s first priority. A key enabler for this is the BP operating management system (OMS), which provides a common framework for all BP operations, designed to achieve consistency and continuous improvement in safety and efficiency. Alongside mandatory practices to address particular risks, OMS enables each site to focus on the most important risks in its own operations and sets out procedures on how to manage them in accordance with the group-wide framework.

(Id. ¶ 351 (Statement N).) Plaintiffs allege that the foregoing statements were false or misleading because: (1) OMS was not fully implemented in the Gulf of Mexico at the time the statement was made, but was in fact in its “infancy,” hamstrung by turnover of key personnel in the. region; and (2) OMS did not apply to contractor-owned rigs, meaning that major components of OMS — such as Safety and Operations (“S & 0”) Audits and Major Accident Risk analysis — were not deployed on six out of seven drilling rigs in the Gulf of Mexico. {Id. ¶¶ 352(b)-®.)

On March 5, 2010, BP filed its 2009 Annual Report with the SEC on Form 20-F, signed by Hayward in his capacity as chief executive officer. (SAC ¶ 353.) That document stated:

Safe, reliable and compliant operations remain the group’s first priority. A key enabler for this is the BP operating management system (OMS), which provides a common framework for all BP operations, designed to achieve consistency and continuous improvement in safety and efficiency.

BP’s operating management system (OMS), which provides a single operating framework for all BP operations, is a key part of continuing to drive a rigorous approach to safe operations.

{Id. ¶ 353 (Statement O).) Plaintiffs claim that these representations were false or misleading because OMS applied only to rigs that BP fully owned. {Id. ¶ 354(b).)

Defendant Inglis included remarks on OMS in his speech at the Howard Weil Energy Conference in New Orleans, Louisiana, on March 22, 2010, which was later posted by BP on its website. (SAC ¶ 355.) During the presentation, Inglis stated:

Safety and operational integrity underpins everything we do, and we are now in the final phase of rolling out our operating management system that provides a single, consistent framework for our operations, covering all areas from personal and process safety to environmental performance.

(Id. (Statement P).) These remarks occurred in a speech in which Inglis referred to the nearby deepwater Gulf of Mexico operations. {Id.) Plaintiffs contend that they were misleading because implementation of OMS in the Gulf was incomplete, and the key elements of OMS would not be applied to the vast majority of the drilling rigs in the Gulf of Mexico because they were contracted rigs. (Id. ¶¶ 356(a)-(c).) Inglis knew the risks posed by these contracted rigs, as he noted concern in a June 2009 internal email that contracted rigs were not conforming to BP’s “Control of Work” practices. (Id. ¶ 356(d).) “Control of Work” was one of the elements of OMS. (Id.)

On April 15, 2010, BP issued its 2009 Sustainability Review and its 2009 Sustainability Report. (SAC ¶¶ 359, 363.) Both documents addressed OMS. In the 2009 Sustainability Review, Defendant Hayward reported on the status of the OMS implementation project:

Having been initially introduced at eight sites in 2008, the OMS rollout extended to 70 sites by the end of 2009, including all our operated refineries and petrochemical plants. This means implementation is 80% complete.

{Id. ¶ 359 (Statement R-l).) The “eight sites” referenced in the above statement are the eight sites alleged in the 2008 Annual Report to have completed the transition to OMS by the end of 2008. {Id. ¶ 360(c).) Plaintiffs allege that the statement was false or misleading because the Gulf of Mexico had not completed the transition to OMS in 2008 {id. ¶¶ 360(e)-®)), and because OMS did not apply to a majority of the deepwater wells in the Gulf {id. ¶ 360(d)). Plaintiffs allege that Hayward was privy to multiple internal sources of information describing the major risks facing the Gulf of Mexico, which rendered misleading his statements suggesting that the Gulf of Mexico unit was “operating within uniform company-wide process safety procedures.” (Id. ¶ 360(g).)

The 2009 Sustainability Review also contained the following statement about the scope of OMS:

BP’s operating management system (OMS) provides a single framework for all BP operations to follow, covering all areas from process safety, to personal health, to environmental performance.

Providing an integrated and consistent way of working, the OMS helps ensure that a rigorous approach to safe operations continues to be taken. Its principles and processes are designed to simplify the organization, improve productivity, enable consistent execution and focus BP on performance.

(SAC ¶ 361 (Statement R-2).) Plaintiffs contend that it was misleading to describe OMS as a “single framework for all BP operations” given the reality that OMS did not apply to contractor-owned rigs. (Id. ¶ 362(e).)

On the same day the 2009 Sustainability Review was issued, BP also issued the 2009 Sustainability Report. (SAC ¶ 363.) This document was evaluated and recommended for publication by SEEAC, at a meeting attended by Hayward and Inglis. (SAC ¶ 365(c); Doc. No. 521-2, at 2.) The Report contained the following statement about BP’s ability to respond to an oil spill:

Preparation: we seek to ensure an infrastructure is in place to deal effectively with spills and their impacts. Our operating facilities have the capacity and resources to respond to spill incidents and we participate in industry and international forums to coordinate contingency planning and emergency response.

(SAC ¶ 363 (Statement S-l).) The Report went on to make the following statement about OMS:

BP continues to implement its operating management system (OMS), a cornerstone of achieving safe, reliable and responsible operations at every BP operation.

(Id. ¶ 364 (Statement S-2).) Plaintiffs allege that both of these statements were false or misleading because: (1) contemporaneous Orange Books, distributed to members of the GORC, revealed deficiencies in BP’s process safety and operations, including BP’s ability to respond to an oil spill; (2) OMS implementation in the Gulf was behind schedule, incomplete, and hamstrung by key personnel turnover; (3) GORC had been informed of significant safety incidents in the Gulf of Mexico, putting its members on notice of deficient safety processes there; and (4) BP conducted its operations without any legitimate oil spill response plan. (Id. ¶¶ 365(d)-(j).)

II. LEGAL STANDARDS

A. Rule 12(b)(6)

To survive a motion to dismiss, a complaint must contain sufficient factual allegations, accepted as true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. It follows that, where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged— but has not shown — that the plaintiff is entitled to relief. Id. at 679, 129 S.Ct. 1937; see also Fed. R. Civ. P. 8(a)(2). Well-pleaded factual allegations must be taken as true, but the court does not “accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions.” Cent. Laborers’, 497 F.3d at 550 (citation omitted) (internal quotation marks omitted).

In considering a Rule 12(b)(6) motion to dismiss, the court must limit itself to the contents of the pleadings, including attachments thereto, with two exceptions. First, the Fifth Circuit allows the court to consider certain documents attached to the motion to dismiss. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.2000). Such documents must be referenced in the complaint and central to the plaintiffs claim. Id.; Scanlan v. Texas A & M Univ., 343 F.3d 533, 536 (5th Cir.2003). Second, because this is a securities case, the court may take judicial notice of the contents of public disclosure documents that the law requires be filed with governmental agencies, such as the SEC, and that are actually filed with those agencies. Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1018 n. 1 (5th Cir.1996). However, these documents may be considered only for the purpose of determining what statements they contain, not for proving the truth of their contents. Id.

As is required for Rule 12(b)(6) analysis, the court must draw all reasonable inferences in favor of the plaintiff. Nathenson v. Zonagen Inc., 267 F.3d 400, 406 (5th Cir.2001). However, for scienter only, in keeping with the requirement of the Private Securities Litigation Reform Act (“PSLRA”) that plaintiffs plead facts giving rise to a “strong” inference of scienter, the court must take into account plausible inferences opposing as well as supporting scienter. Tellabs, Inc. v. Makor Issues & Rights, Ltd. (“Tellabs I”), 551 U.S. 308, 323-24, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007). Accordingly, for purposes of a Rule 12(b)(6) motion to dismiss, a strong inference of scienter is one at least as compelling as any opposing inference of non-fraudulent intent. Id. at 324, 127 S.Ct. 2499.

B. Section 10(b)

Under section 10(b) of the Securities Exchange Act of 1934,

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange ... (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe as necessary or appropriate in the public interest or for the protection of investors.

15 U.S.C. § 78j(b). SEC Rule 10b-5, promulgated pursuant to section 10(b), implements section 10(b) by forbidding, among other things, the making of any “untrue statement of a material fact” or the omission of any material fact “necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.” 17 C.F.R. § 240.10b-5. The Supreme Court has implied from the text of section 10(b) that it affords a right of action to purchasers or sellers of securities injured by its violation. Tellabs I, 551 U.S. at 318, 127 S.Ct. 2499. To state a private claim under section 10(b), a plaintiff must allege the following: (1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation, i.e., a causal connection between the misrepresentation or omission and the loss. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 238-39 (5th Cir.2009).

1. Material Misrepresentations and Omissions

Because Plaintiffs assert securities fraud claims, they must satisfy the heightened pleading requirements of Rule 9(b) and the PSLRA. See Lormand, 565 F.3d at 239; see also Tellabs I, 551 U.S. at 322, 127 S.Ct. 2499 (noting that the PSLRA’s twin goals are to “curb frivolous, lawyer-driven litigation, while preserving investors’ ability to recover on meritorious claims”). Rule 9(b) requires that, “[i]n alleging fraud or mistake, a party must state -with particularity the circumstances constituting fraud or mistake.” Fed. R. Crv. P. 9(b); see also Rosenzweig v. Azurix Corp., 332 F.3d 854, 866 (5th Cir.2003) (noting that the PSLRA’s particularity requirement incorporates, at a minimum, the pleading standard for fraud under Rule 9(b)). The PSLRA enhances the requirements of Rule 9(b) in two ways. First, plaintiffs must “specify- each statement alleged to have been misleading, [and] the reason or reasons why the statement is misleading.” 15 U.S.C. § 78u-4(b)(l). Second, for each act or omission alleged to be false or misleading, plaintiffs must “state with particularity facts -giving rise-to a strong inference that the defendant acted with the required state of mind.” Id. at § 78u-4(b)(2)(A).

In order to meet these additional requirements of the PSLRA, a plaintiff must, therefore: (1) specify each statement alleged to have been misleading; (2) identify the speaker; (3) state when and where the statement was made; (4) plead with particularity the contents of the false representation; (5) plead with particularity what the person making the misrepresentation obtained thereby; and (6) explain the reason or reasons why the statement is misleading, i.e., why the statement is fraudulent. ABC Arbitrage Plaintiffs Group v. Tchuruk, 291 F.3d 336, 350 (5th Cir.2002). These allegations constitute the “who, what, when, where, and how” required under Rule 9(b) and the PSLRA. Id. What constitutes particularity will necessarily differ with the facts of each case. Guidry v. Bank of LaPlace, 954 F.2d 278, 288 (5th Cir.1992). A dismissal for failure to plead fraud with particularity as required by Rule 9(b) is a dismissal on the pleadings for failure to state a claim. Southland Sec. Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 361 (5th Cir.2004).

To be actionable, a misrepresentation of a fact, or an omission of a fact, must be material. The Supreme Court recently reaffirmed that there is no bright-line rule for determining whether information withheld from a company’s filings is material as a matter of law. Matrixx Initiatives, Inc. v. Siracusano, — U.S. -, 131 S.Ct. 1309, 1318-22, 179 L.Ed.2d 398 (2011). Unwilling to allow materiality to be reduced to a test of “statistical significance,” the Court held instead that assessing materiality involves a “fact-specific inquiry ... that requires consideration of the source, content, and context” of the allegedly omitted information. Id. at 1321. The misrepresentation of a fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in making an investment decision. Basic Inc. v. Levinson, 485 U.S. 224, 231, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). For an omission to be material, there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available. Id. at 231-32, 108 S.Ct. 978; see also Krim v. BancTexas Group, Inc., 989 F.2d 1435, 1445 (5th Cir. 1993) (explaining that the appropriate inquiry is whether the statement or omitted fact is significant, “such that it alters the ‘total mix’ of information available about the proposed investment”). Materiality is not judged in the abstract, but in light of the surrounding circumstances. Rubinstein v. Collins, 20 F.3d 160, 168 (5th Cir.1994).

With regard to misstatements, the PSLRA establishes a “safe harbor” protecting individuals and corporations from liability for certain forward-looking statements that prove false. To qualify for protection, the statement must be “accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement” or be immaterial. 15 U.S.C. § 78u-5(c)(l)(A)(i)-(ii). Where a material forward-looking statement is not accompanied by cautionary language, a defendant may still claim safe harbor if plaintiff fails to prove that the defendant made the statement with “actual knowledge” as to its falsity. Id. at § 78u-5(c)(l)(B).

2. Scienter

Section 10(b) and Rule 10b-5 do not protect investors against negligence or corporate mismanagement. Indiana Elec. Workers’ Pension Trust Fund IBEW v. Shaw Group, Inc., 537 F.3d 527, 539 (5th Cir.2008). Under the PSLRA, it is not enough to particularize false statements or fraudulent omissions made by a defendant; rather, for “each act or omission alleged” to be false or misleading, plaintiffs must “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2)(A). To establish a section 10(b) claim, a private plaintiff must prove that the defendant acted with scienter. Tellabs I, 551 U.S. at 319, 127 S.Ct. 2499.

In the context of federal securities fraud, scienter is “defined as ‘an intent to deceive, manipulate, or defraud or that severe recklessness in which the danger of misleading buyers or sellers is either known to the defendant or is so obvious that the defendant must have been aware of it.’” Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU Corp., 565 F.3d 200, 207 (5th Cir.2009) (quoting R2 Invs. LDC v. Phillips, 401 F.3d 638, 643 (5th Cir.2005)); see also Plotkin v. IP Axess Inc., 407 F.3d 690, 697 (5th Cir.2005) (“[A] securities fraud plaintiff must prove that the defendant either consciously misbehaved ... or was so severely reckless that it demonstrates that the defendant must have been aware of the danger of misleading the investing public.”). Severe recklessness is “ ‘limited to those highly unreasonable omissions or misrepresentations that involve not merely simple or even inexcusable negligence, but an extreme departure from the standards of ordinary care, and that present a danger of misleading buyers or sellers which is either known to the defendant or is so obvious that the defendant must have been aware of it.’ ” Rosenzweig, 332 F.3d at 866 (quoting Nathenson, 267 F.3d at 408).

For a complaint to adequately plead scienter, “Congress require[s] plaintiffs to plead with particularity facts that give rise to a ‘strong’ — i.e., a powerful or cogent-inference.” Tellabs I, 551 U.S. at 323, 127 S.Ct. 2499. The inference need not be “irrefutable, i.e., of the ‘smoking gun’ genre, or even the most plausible of competing inferences.” Id. at 324, 127 S.Ct. 2499 (citation omitted) (internal quotation marks omitted). Nonetheless, the “inference of scienter must be more than merely ‘reasonable’ or ‘permissible’ — it must be cogent and compelling, thus strong in light of other explanations.” Id. In addition, “[t]he strength of an inference cannot be decided in vacuum.... To determine whether the plaintiff has alleged facts that give rise to the requisite ‘strong inference’ of scienter, a court must consider plausible, nonculpable explanations for the defendant’s conduct, as well as inferences favoring the plaintiff.” Id. at 323-24, 127 S.Ct. 2499. “[0]missions and ambiguities count against inferring scienter, for plaintiffs must ‘state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.’ ” Id. at 326, 127 S.Ct. 2499 (quoting 15 U.S.C. § 78u-4(b)(2)(A)).

Tellabs I outlined a three step approach to reviewing scienter allegations in a motion to dismiss a federal securities fraud case pursuant to the PSLRA. 551 U.S. at 322-23, 127 S.Ct. 2499. First, the allegations must, as in federal pleadings generally, be taken as true. Id. at 322, 127 S.Ct. 2499. Second, the court may consider documents incorporated in the complaint by reference and matters subject to judicial notice. Id. The facts must be evaluated collectively, not in isolation, to determine whether a strong inference of scienter has been pleaded. Id. at 322-23, 127 S.Ct. 2499; see also Barrie v. Inter-voice-Brite, Inc., 397 F.3d 249, 260 (5th Cir.2005) (“While [the Fifth Circuit] will view a complaint in toto when considering whether a complaint has adequately pled scienter ... each allegation of fraud must individually meet the particularity requirements of the PSLRA.”) (citation omitted). Third, a court must take into account plausible inferences opposing as well as supporting a' strong inference of scienter. Tellabs I, 551 U.S. at 324, 127 S.Ct. 2499. At the conclusion of this process, scienter has been adequately pled if the alleged facts, taken as true, give rise to an inference that the defendant ■ intentionally or recklessly misled the public which is at least as compelling as any inference that the defendant acted non-culpably or merely negligently. Id.

Although circumstantial evidence can support a strong inference of scienter, allegations of motive and opportunity standing alone will not suffice. Abrams v. Baker Hughes Inc., 292 F.3d 424, 430 (5th Cir.2002). Appropriate motive and opportunity allegations may, however, “ ‘meaningfully enhance the strength of the inference of scienter.’ ” Southland, 365 F.3d at 368 (quoting Nathenson, 267 F.3d at 412). Corporate officers are not liable for acts solely because they are officers, even where their day-to-day involvement in the corporation is pleaded. Fin. Acquisition Partners LP v. Blackwell, 440 F.3d 278, 287 (5th Cir.2006). However, corporate statements can be connected to a particular officer if plaintiffs allege the officer signed the document in which the statement appears or they adequately allege the officer’s involvement in creating the document. Id.

The Fifth Circuit has rejected the group pleading approach to scienter. Shaw Group, 537 F.3d at 534. As a result, the court may not “construe allegations contained in the Complaint against the ‘defendants’ as a group as properly imputable to any particular individual defendant unless the connection between the individual defendant and the allegedly fraudulent statement is specifically pleaded.” Southland, 365 F.3d at 365. Plaintiffs pleading fraud claims against individuals under section 10(b) and Rule 10b-5 must distinguish among defendants and allege the role of each. Id. The Court will then look to the “state of mind of the individual corporate official or officials ‘who make or issue the statement (or order or approve it or its making or issuance, or who furnish information or language for inclusion therein, or the like) rather than generally to the collective knowledge of all the corporation’s officers and employees acquired in the course of their employment.’ ” Shaw Group, 537 F.3d at 533 (quoting Southland, 365 F.3d at 366).

3. Section 20(a) claims

Under section 20(a) of the Exchange Act, “[e]very person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable ... unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.” 15 U.S.C. § 78t(a). Section 20(a) is a secondary liability provision, and plaintiffs must therefore establish a primary violation under section 10(b) before liability arises under section 20(a). ABC Arbitrage, 291 F.3d at 348 n. 57 (noting that “control person” liability is “derivative, i.e., such liability is predicated on the existence of an independent violation of the securities laws”). Accordingly, if a plaintiff fails to state a claim for a primary securities fraud violation under section 10(b) or Rule 10b-5, they necessarily fail to state a claim for control person liability under section 20(a). Blackwell, 440 F.3d at 288.

III. ANALYSIS

A. Alleged Misstatements Regarding the Scope of OMS

The first category of alleged misrepresentation — that BP misled investors when it described OMS as a comprehensive, single framework that would govern safety protocols at each and every BP site and operation — was partially vindicated in the Ludlow Order. The Ludlow Plaintiffs had highlighted two occasions on which this type of misrepresentation was made. These statements are found in the Second Amended Complaint as Statements N and P:

• Statement N. BP’s 2009 Annual Review, dated February 26, 2010, stated: “A key enabler for [safe, reliable and compliant operations] is the BP operating management system (OMS), which provides a common framework for all BP operations .... OMS enables each site to focus on the most important risks in its own operations and sets out procedures on how to manage them in accordance with the group-wide framework(SAC ¶ 351.)

• Statement P. At the Howard Weil Energy Conference on March 22, 2010, Inglis stated: “Safety and operational integrity underpins everything we do, and we are now in the final phase of rolling out our operating management system that provides a single, consistent framework for our operations, covering all areas from personal and process safety to environmental performance.” (SAC ¶ 355.)

The Court was persuaded that these statements were false by the Ludlow Plaintiffs’ inclusion of allegations in their complaint that (1) BP’s operations in the Gulf of Mexico, most notably its offshore exploration rigs, never received any information related to OMS; (2) the implementation of OMS in the Gulf was hamstrung by cost-cutting measures and employee turnover; and (3) BP’s OMS program lagged behind that of its peers. (Ludlow Order, 852 F.Supp.2d at 800-01, 801-02.) The Court was also persuaded that the statements were misleading to investors because they omitted that OMS did not and was not intended to apply to offshore drilling operations for which BP was the operator but not the owner of the rig. (Id. at 802-04.) Placing this allegation that OMS did not apply to contractor-owned rigs against Defendants’ unqualified, expansive, and repeated descriptions of OMS as applying to all operations at each site, the Court found that the Ludlow Plaintiffs had met their burden to allege with particularity how the misrepresentations were false or misleading and material to investors. (Id.) Both misrepresentations were dismissed, however, because the Ludlow Plaintiffs had not adequately established the scienter of the statements’ speakers— BP for Statement N (id. at 819-20) and Inglis for Statement P (id. at 817-18).

Statements N and P have been repled in the Second Amended Complaint, along with eleven other statements concerning the scope of OMS. In the Ludlow Order, the Court focused on Statement N’s and Statement P’s repeated use of words such as “all,” “each,” “single,” and “consistent” to describe OMS, finding that these words taken at their literal, dictionary meaning reasonably left investors with the impression that OMS would apply to each and every endeavor touched by BP. (Ludlow Order, 852 F.Supp.2d at 802-03.) A review of the eleven other statements from the SAC included in this category reveals that most of them contain similarly expansive — and in many cases, identical — words conveying the same general impression regarding the scope of OMS:

• Statement A. BP’s 2006 Sustainability Report, dated May 9, 2007, stated: “The OMS is a comprehensive system that covers all aspects of our operations .... The new OMS will apply to all operations by the end of 2010 .... Each site will have its own local OMS, based on a consistent group-wide framework.” (SAC ¶ 315.)

• Statement B. On a July 24, 2007 conference call with analysts and investors, Hayward stated: “We are also in the early days of establishing a new way of operating in BP — with the progressive rollout of a common group-wide Operating Management System.” (Id. ¶ 317.)

• Statement C. At the Sanford Bernstein 4th Annual Strategic Decisions Conference on September 25, 2007, Inglis stated: “One aspect of our focus on safe and reliable operations ... is our new standardized [OMS]. This will provide a blueprint for safety and all aspects of operations throughout BP.” (Id. ¶ 319.)

• Statements F and G. At the 2008 Strategy Presentation conducted via teleconference on February 27, 2008, and again at the 2008 Annual General Meeting held April 17, 2008, Hayward stated: “[We] have begun to implement a new Operating Management System across all of BP’s operations.” (Id. ¶¶ 325, 327.)

• Statement 1-2. In the 2008 Annual Review dated February 24, 2009, Hayward stated: “The BP [OMS] turns the principle of safe and reliable operations into reality by governing how every BP project, site, operation and facility is managed.” (Id. ¶ 332.)

• Statement J-l. BP’s 2008 Annual Report, filed March 4, 2009 and signed by Hayward, stated: “We continue to implement our new [OMS], a framework for operations across BP that is integral to improving safety and operating performance in every site. When fully implemented, OMS will be the single framework within which we will operate.” (Id. ¶ 335.) Elsewhere, the Report stated: “All operated businesses plan to transition to OMS by the end of 2010.” (Id.)

• Statement L. In the 2008 Sustainability Review released April 16, 2009, Hayward stated: “You can see a similar balanced approach in our new [OMS], which is to be implemented at each BP site.” (Id. ¶ 347.)

• Statement O. BP’s 2009 Annual Report filed March 5, 2010 and signed by Hayward, stated: “A key enabler for [safe, reliable and compliant operations] is the BP [OMS], which provides a common framework for all BP operations, designed to achieve consistency and continuous improvement in safety and efficiency.” (Id. ¶ 353.) Elsewhere, it stated: “BP’s [OMS], which provides a single operating framework for all BP operations, is a key part of continuing to drive a rigorous approach to safe operations.” (Id.)

• Statement R-2. BP’s 2009 Sustainability Review dated April 15, 2010, stated: “BP’s [OMS] provides a single framework for all BP operations to follow.” (Id. ¶ 361.)

• Statement S-2. BP’s 2009 Sustainability Report dated April 15, 2010, stated: “BP continues to implement its [OMS], a cornerstone of achieving safe, reliable and responsible operations at every BP operation.” (Id. ¶ 364.)

1. Falsity

Defendants contend that the misrepresentations in this category should be dismissed because the documents upon which the Second Amended Complaint relies do not actually support the allegation of falsity. Specifically, Defendants claim that these documents show that OMS did apply to contractor-owned rigs, and that the statements were therefore accurate. (Doe. No. 356, at 6-12.)

According to Defendants, OMS required contractors either to adopt BP’s safety standards as set forth in OMS or demonstrate that their own safety standards were commensurate. (Doc. No. 356, at 6-10.) To the extent that specific deficiencies in contractors’ systems were identified, bridging documents would be used to’ bring them in line with OMS. (Id. at 9.) Defendants substantiate their argument with (1) passages from the OMS Framework dated November 3, 2008, referencing contractors and joint ventures (Doc. No. 356-8 (Ex. G), at 11, 19, 31-32); (2) passages from a Group Recommended Practice (“GRP”) titled “Working with Contractors,” discussing how to evaluate prospective contractors and bridge the safety programs of contractors and BP (Doc. No. 356-9 (Ex. H), at 4, 7); (3) passages from the “Drilling and Well Operations Practice” stating that a contractor’s safety management system “will incorporate, or be supplemented to address, the requirements of the OMS Framework” (Doc. No. 356-10 (Ex. I), at 10); (4) passages from the Gulf of Mexico Strategic Performance Unit (“SPU”) OMS' Handbook describing how the SPU ensures that contractors meet BP’s personal safety requirements, bridging contractors’ safety programs to the safety programs of BP if necessary (Doc. No. 356-7 (Ex. F), at 13); and (5) deposition testimony from Inglis and BP’s corporate witness in MDL 2179 describing in practice how OMS applied to contractors (Doc. No. 356-11 (Ex. J.), at 12-13; Doc. No. 356-12 (Ex. K), at 5, 8-10).

Consistent with this position, Defendants argue that the Second Amended Complaint’s oft-repeated allegation that OMS did not apply to contractor-owned rigs is unsupported even by those documents on which the allegation is based. In the Complaint, Plaintiffs’ allegation is substantiated by the deposition testimony of former Global Head of Safety & Operations John Mogford (SAC ¶ 102); Hayward (id. ¶ 103); Group Head of Engineering John Baxter (id. ¶ 104); Vice President of Drilling & Completions Pat O’Bryan (id.); Wells Team Leader for the Deepwater Horizon John Guide (id. ¶ 105); Well Site Leader for the Deepwater Horizon Ronnie Sepulvado (id.); and Chief Engineer of Process and Process Safety Cheryl Grounds (id.). In an attempt to show how this testimony is taken out of context and inaccurately characterized, Defendants provide additional deposition testimony from Baxter, O’Bryan, Sepulvado, and Mogford which clarifies how OMS worked in the case of contractors. (Doc. No. 356-13 (Ex. L), at 18-19; Doc. No. 356-14 (Ex. M), at 4-5; Doc. No. 356-15 (Ex. N), at 5-6; Doc. No. 356-16 (Ex. O), at 7-8.)

Plaintiffs counter with two arguments. First, Plaintiffs deny that the deposition testimony cited in the Second Amended Complaint was misquoted or taken out of context, stating that Mogford and the other witnesses — who ostensibly knew about the process documents attached to Defendants’ motion — nonetheless testified without qualification that OMS was not designed to and did not apply to contractors. (Doc No. 373, at 10-11.) Second, Plaintiffs argue that evidence cited by Defendants to support that BP imposed its own safety standards as a “floor” — and “bridged” contractors’ safety programs as necessary— show that these concepts only applied to personal safety, not process safety. Because process safety issues were the focus of the Baker Panel — and the predominant weakness in BP’s safety culture intended to be addressed by OMS — Plaintiffs argue that this evidence is irrelevant to their point that contractor-owned rigs were not subject to the process safety aspects of OMS, the aspects most pressing to savvy investors worried about BP’s poor safety history. (Id. at 11.)

The Court cannot accept Plaintiffs’ second argument, which depends upon a distinction not found in the Second Amended Complaint. Consistently throughout the Complaint, Plaintiffs allege that statements regarding the scope of OMS were false because “OMS applied only to rigs that BP fully-owned but not to BP’s operations where BP leased rigs from others.” (E.g., SAC ¶¶ 316, 318, 320, 333(b).) At the hearing on Defendants’ motion, Plaintiffs’ counsel refined this allegation:

BP knew ... as early as 2007 that they had no intention of applying the full panoply of OMS process safety and personal safety [to contracted rigs], but only certain items of personal safety.

(Doc. No. 527, at 60:10-13.) But Plaintiffs cannot avoid dismissal by changing their allegations in response to Defendants’ motion. Rule 9(b) and the PSLRA obligated Plaintiffs to plead with particularity how the alleged misstatements were misleading. Plaintiffs alleged that OMS— not certain parts of OMS, but OMS as a whole — did not apply to contractor-owned rigs. The Court must address the sufficiency of this allegation.

At the motion to dismiss stage, the Court must accept as true all well-pleaded allegations in the complaint, and draw all reasonable inferences in the Plaintiffs’ favor. Nathenson, 267 F.3d at 406. At the same time, the Court is permitted to consider documents referenced in the complaint and central to Plaintiffs’ claims. Scanlan, 343 F.3d at 536. Where one of these documents contradicts an allegation in the complaint, the document and not the allegation controls. Riley, 355 F.3d at 377.

The Court finds it appropriate to consider the OMS Framework and the Gulf of Mexico OMS Handbook (the “OMS Process Documents”) in deciding the sufficiency of Plaintiffs’ allegation of falsity. (Doc. No. 356-8 (Ex. G); Doc. No. 356-7 (Ex. F).) The availability of these particular documents to the GORC, Hayward, and/or Inglis are central to Plaintiffs’ scienter allegations, and thus central to Plaintiffs’ claims for relief. (SAC ¶¶ 44, 102, 175-76, 333(c).) If these documents contradict Plaintiffs’ allegations, they will control. For the same reasons, the Court also finds it appropriate to consider the deposition testimony of Baxter, O’Bryan, Sepulvado, and Mogford. (Doc. No. 356-13 (Ex. L); Doc. No. 356-14 (Ex. M); Doc. No. 356-15 (Ex. N); Doc. No. 356-16 (Ex. O).) Because the Second Amended Complaint expressly relies on this testimony to substantiate the allegation that OMS did not apply to contractor-owned rigs (SAC ¶¶ 102, 104-05), the Court will review the testimony for purposes of determining whether it has been accurately recounted and fairly characterized by Plaintiffs.

Considering all of these external exhibits, along with the totality of Plaintiffs’ allegations, the Court is persuaded that Plaintiffs have articulated a plausible theory for the falsity of some of Defendants’ statements about the scope of OMS. It is undisputed, and the OMS Process. Documents confirm, that contractor-owned rigs were not entirely exempted or omitted in the OMS architecture. But they were clearly treated differently from BP-owned assets. The OMS Process Documents contemplate that assets and entities not fully owned or operated by BP would be subject to the safety systems of the owning or operating party. (Doc. No. 356-7 (Ex. F) at 13; Doc. No. 356-8 (Ex. G) at 31-32.) While those safety systems would be compared to OMS standards, and rehabilitated if necessary to make them commensurate (Doc. No. 356-7 (Ex. F) at 13; Doc. No. 356-8 (Ex. G) at 31-32), this “gap assessment” or “bridging” process could plausibly be viewed as qualitatively different from, and inferior to, the purportedly “single” framework of OMS which would be deployed in “each” and “every” location where BP operates.

This conclusion is supported by the very deposition testimony cited in the Second Amended Complaint which Defendants claim has been taken out of context and misconstrued. For example, the Second Amended Complaint quotes Baxter (SAC ¶ 104), who testified that OMS did not “apply” to the Deepwater Horizon because BP “does not apply its safety management system to other activities where the contractor has their own safety management system.” (Doc. No. 356-13 (Ex. L) at 5, 9.) Elsewhere, Baxter explained that OMS “covers both BP’s activities and BP entities where BP is using contractors” and that, where a contractor’s activities are governed by its own safety management system, “BP will review the difference between the contractor safety management system and BP’s safety management system and ... then look at any gaps to see whether the contractor safety management system will deliver what BP aims to do with its own safety.” (Id. at 19.) Drawing all-reasonable inferences from the testimony in Plaintiffs’ favor, Baxter likely characterized the OMS as not applicable (in design) and not applied (in practice) to the Deepwater Horizon precisely because of the distinction between. OMS addressing the circumstance of a non-BP-owned asset and OMS substantively governing the safety management practices deployed on that asset.

The testimony of Patrick O’Bryan, Ronnie Sepulvado, and John Mogford is similarly equivocal. In Defendants’ own words, these witnesses testified that “OMS did apply to contractors, although not in the same way it applied to BP-operated entities.” (Doc. No. 356, at 11 (emphasis original).) But it is exactly this last phrase, qualifying and implicitly limiting the impact of the OMS on non-owned assets, that Plaintiffs contend needed to be disclosed in order to prevent BP’s statements from misleading investors. By ignoring the distinction between owned and non-owned entities, Defendants were able to tell investors repeatedly that a “single” robust framework would be applied to all of its operations — a much more impressive statement than one disclosing that BP’s operations would be governed by a patchwork of “equivalent” frameworks, all but one created by entities other than BP. For these reasons, the Court concludes that Plaintiffs have sufficiently articulated a plausible theory as to the misleading nature of many of Defendants’ statements regarding the scope of OMS.

Although Plaintiffs’ theory of falsity is plausible, and supported by the documents attached to Defendants’ motion, a handful of Defendants’ alleged misrepresentations regarding the scope of OMS are so general that they cannot be considered misleading even in light of the foregoing limitation to OMS’s