Effects of oil spill left mark on boat business


Captain Michael “Duck” Burge, left, and Captain Chuck Donney say the misconception that oil has hit the Florida Keys from the Deepwater Horizon oil spill has cost them significant fishing and snorkeling business over recent weeks. Burge has filed a lawsuit seeking damages.

Key West boat captain Chris Lembo recently sold his rods, reels and 30-foot boat. It marked the end of Incognito Charters, his once-lucrative business of taking tourists to the reef and shipwrecks to fish.

High fuel prices, new fishing regulations and the national recession all struck the business hard.

“Then the BP oil spill hit,” he said. “That was the final straw.”

Lembo is among the more than 10,000 businesses and individuals in South Florida that have filed claims or federal lawsuits against the oil giant and its contractors. They are seeking compensation for damage and future damage caused by the blowout of the Deepwater Horizon rig on April 20.

Many already have received emergency interim payments.

As of Dec. 2, the Gulf Coast Claims Facility – which is processing claims to BP’s $20 billion compensation fund – has paid out $44.1 million for 2,776 approved claims out of 6,455 filed by individuals and businesses in the Keys.

Of the claims not paid, some are still being processed, others need more documentation and some have been denied.

“I think we’ll get well over $100 million in the Keys by the time it’s done,” said former Monroe County Mayor Mario De Gennaro, a member of the Florida Oil Spill Recovery Task Force.

The BP fund also has paid out $4.1 million for 462 approved claims in Miami-Dade County and another $2.9 million for 58 approved claims from Broward County.

So far, 26 lawsuits filed in the Southern District of Florida have been consolidated into multidistrict litigation, where common pretrial work is handled before a single judge, in this case U.S. District Judge Carl Barbier based in Louisiana.

Compensation for those cases likely will take at least two years, and probably many more.

Claims have come from all types of South Florida businesses and residents. They include commercial fishermen, marinas, restaurants, hotels, dive watering holes, real estate agents, waterfront property owners, lobster trap makers, municipalities and even Ripley’s Believe It or Not Museum in Key West.

Some find it hard to believe these claims. After all, the spill occurred hundreds of miles away and not one drop of oil has reached South Florida’s waters, shorelines or beaches.

“It wasn’t the reality. It was the perception that hurt us, and is still affecting us,” said Harold Wheeler, executive director of the Monroe County Tourist Development Council. “Many people think we got the oil – and still have it.”

During the crisis, Broward tourism director Nicki Grossman said hotels and the visitor’s bureau were getting 200 calls a week about the state of the beaches. There is still concern that people “wrote off Florida and might not write it back in.”

Cancellations by those who feared the oil might reach the Keys and then travel up the Gulf Stream to Miami fueled the early claims from South Florida. Although the well has been plugged for months, the claims continue.

“There have been some gold diggers,” De Gennaro said. “But most are legitimate claims. We had to convince some people that our tourism industry was crushed by the negative media.”

It included national TV reports of tar balls found at Fort Zachary Taylor State Park in Key West and ongoing reports from the National Oceanic and Atmospheric Administration and some scientists that oil had a 60 to 80 percent chance of reaching the Keys via the Loop Current.

BP set up claims offices in Key West, Marathon and Key Largo. But when Kenneth Feinberg was appointed federal administrator of the BP $20 billion fund, he thought proximity to the spill should strongly be considered. He changed his mind after hearing from Florida officials armed with documentation of the perception problem.

Captain Marlin Scott, who runs charters to the Dry Tortugas, said the Keys also have suffered emotional damage.

“People were scared,” he said. “They took hazmat classes. The water and reef is their world and they thought their world was disappearing.”

Stock Island shrimp boat captain Kelsey Jones committed suicide in June. He was deep in debt. But Deborah Owens, a friend of Jones, said: “He also was at wit’s end thinking about the oil. I think that sent him over the deep end.”

Many could prove lost income. One was Dana Banks, a charter boat captain who operates a 38-foot boat called Warbird based in swanky Ocean Reef of the Upper Keys. He received a six-month emergency payment from BP for lost charter trips at $1,200 for a full day.

Banks declined to say how much payment he received, but called it a “decent amount” that he pumped into a new bait business. “I have to do something else so I can survive the winter,” he said.

Banks also is a plaintiff in one of the first oil spill lawsuits filed in Florida’s Southern District. He’s not sure what he will do now.

Since Nov. 23, anyone who made a claim through the BP fund now has three choices: they can agree to receive a lump sum payment and waive their right to sue; they can continue to receive emergency payments up to three years without waiving their right to file suit; or they can opt out and pursue litigation.

Feinberg has said that the BP fund’s final settlements would likely be “more generous” and “faster” than those who go through the courts.

Banks’ attorney, Robert Brown of the Miami-based law firm Baron & Budd, disagreed for the most part.

“For those who don’t lose their livelihoods or had only a small dip in income during the summer months, that may be the case,” Brown said. “But don’t put too much faith in a giant corporation.”

Coral Gables-based attorney Ervin Gonzalez, one of 15 lawyers appointed to the Plaintiff’s Steering Committee for the oil spill’s consolidated case, said taking final payments now is not in the best interest of most affected by the spill.

“They’re taking advantage of a pig in a poke as being good for them,” Gonzalez said, referring to a colloquial expression that describes something that appears good but in reality is not due to unknown ramifications.

“Nobody knows what the future damages are going to be,” he said. “There likely will be an environmental impact that will last a decade. And the BP fund doesn’t include punitive damages.”

To combat the perception of oil in South Florida, BP provided Broward County with $850,000 and Miami-Dade County with $1.25 million for tourist advertising for summer, fall and international markets. Both counties’ tourism offices said they haven’t heard questions or worries about the effect of the spill for months. Both destinations also have seen increases in visitors despite the spill.

Monroe County only received $400,000 for advertising by BP. Wheeler said he’s concerned that the message of “no oil” hasn’t quite reached their winter markets: the Northeast and Midwest.

The Florida Keys website has added real time web cams to show that the water and beaches are free of oil, and to show people boating, swimming and lounging by the water.

Statewide, during July through September, which coincided with the end of the spewing oil, the number of visitors to Florida actually increased, albeit by less than 1 percent over 2009.

While domestic visitors dropped, overseas travelers increased by more than 17 percent and Canadians flocked here by an increase of 23 percent.

On Nov. 6, Visit Florida organized a statewide walk of its 825 miles of beaches and encouraged people to post pictures of their favorite stretches of shoreline.

“That was kind of our last and final attempt to finally show for sure that the beaches are clear, clean and open for business,” said Chris Thompson, president and CEO of Visit Florida. “The final nail in the coffin of the oil spill.”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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