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By Jonathan Stempel
Sept 8 (Reuters) - A U.S. appeals court said BP Plc,which in July reached a $18.7 billion settlement of federal,state and local claims over the 2010 Gulf of Mexico oil spill,must face one of two proposed class-action lawsuits claimingthat the oil company defrauded shareholders over the disaster.
The 5th U.S. Circuit Court of Appeals in New Orleans saidinvestors who bought BP's American depositary shares in a 33-dayperiod soon after the spill may pursue group claims that BPinitially "lowballed" the oil flow rate, and that the shareprice tumbled as the crisis' magnitude became known.
Writing for a 3-0 panel, Circuit Judge Patrick Higginbothamsaid the issue of whether revelations of the spill's severitywere linked to earlier BP misrepresentations was "undeniablycommon to the class, and is susceptible of a class-wide answer."
The court also said investors who bought BP shares in the2-1/2 years before the spill, and said the company "lulled" theminto believing its ability to manage safety issues was betterthan it was, cannot sue as a group.
Higginbotham said some of these investors might have boughtthe stock even knowing of the risk. These investors may stillsue London-based BP individually.
Tuesday's decision upheld May 2014 rulings by U.S. DistrictJudge Keith Ellison in Houston, which both sides appealed.
The decision could boost BP's costs over the April 20, 2010explosion of the Macondo rig and subsequent spill. As of lateJuly, BP had taken $54.6 billion of pre-tax charges.
It can be easier for investors to recover more money atlower cost by suing as a group.
Russell Post, a lawyer for many plaintiffs, said: "We aredisappointed with the decision, which we believe erectsadditional hurdles to class certification that the Supreme Courtdoes not require."
BP spokesman Geoff Morrell said the company will continue todefend against the plaintiffs' "meritless" securities claims.
The defendants also include former BP Chief ExecutiveAnthony Hayward and former Chief Operating Officer DouglasSuttles. Their lawyer Richard Pepperman, who also represents BP,declined to comment.
Other plaintiffs include New York State Comptroller ThomasDiNapoli, who oversees that state's Common Retirement Fund. Aspokeswoman, Jennifer Freeman, said the comptroller is pleasedthat the certification of the post-explosion class was upheld.
The certified class period runs from April 26 to May 28,2010. BP's ADS price fell 37 percent from the start through thefirst trading day after it ended.
The case is Ludlow et al v. BP Plc et al, 5th U.S. CircuitCourt of Appeals, No. 14-20420. (Reporting by Jonathan Stempel in New York; Editing by TomBrown)
