NEWS ALERT: Judge Rules Claims Facility Is NOT Independent; Finding May Invalidate Thousands of Settlements (COURT DOCUMENT)


In a huge legal development, the U.S. District Judge handling the class action against BP has ruled that the Gulf Coast Claims Facility is NOT independent of the oil company and must follow a half-dozen strict guidelines governing communications about the BP claims process.

And as I told John Schwartz, legal reporter for the New York Times, these Court findings could be used to invalidate settlements already reached with tens of thousands of claimants. This is a BIG deal!

The ruling is a major victory for spill victims. We have questioned the independence of the Claims Facility here on this blog since September of last year so we applaud Judge Barbier’s decision.

The judge, in effect, granted most of the key provisions being sought by lawyers assigned to the class-action lawsuit. The judge ordered BP and its “agent” Ken Feinberg to “…refrain from referring to the GCCF, Ken Feinberg, or Feinberg Rozen, LLP (or their representatives), as ‘neutral’ or completely ‘independent’ from BP. It should be clearly disclosed in all communications, whether written or oral, that said parties are acting for and on behalf of BP…”

Here are the other provisions the judge directed Mr. Feinberg and BP to implement. Verbal or written communications with claimants, shall:

  • Refrain from contacting directly any claimant that they know or reasonably should know is represented by counsel, whether or not said claimant has filed a lawsuit or formal claim.
  • Begin any communication with a putative class member with the statement that the individual has a right to consult with an attorney of his/her own choosing prior to accepting any settlement or signing a release of legal rights.
  • Refrain from giving or purporting to give legal advice to unrepresented claimants, including advising that claimants should not hire a lawyer.
  • Fully disclose to claimants their options under OPA if they do not accept a final payment, including filing a claim in the pending MDL 2179 litigation.
  • Advise claimants that the ‘pro bono’ attorneys and ‘community representatives’ retained to assist GCCF claimants are being compensated directly or indirectly by BP.

In his discussion of the motion, Judge Barbier noted that “…because the Court finds that the hybrid role of Mr. Feinberg and the GCCF has led to confusion and misunderstanding by claimants, especially those who are unrepresented by their own counsel, the Court finds that certain precautions should be taken to protect the interests of claimants…”

The Court flatly rejected the BP argument that, since Mr. Feinberg’s firm is not offering legal advice, it should not be subject to ethical rules restricting how lawyers can contact unrepresented people. The judge said that the BP argument “misses the larger point” that BP created the GCCF to meet its legal obligations and after reviewing the facts and submissions by the parties, the Court finds that BP “…has created a hybrid entity, rather than one that is fully independent of BP.”

This ruling will dramatically change how the claims process advances in the Gulf. For one thing, the Court effectively orders Mr. Feinberg to stop saying his claims process is superior to litigation and removes the idea that the claims center are not agents of BP.

See NYT article here:

We’ll take a deeper look at the implications as the story and response unfolds. See the judge’s order here: GCCFCourtOrder

© Smith Stag, LLC 2010 – All Rights Reserved

Add comment

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

Follow Us

© Stuart H Smith, LLC
Share This