Oil spill claims: Attorneys general want federal judge to take larger role


MOBILE, Ala. – Trial lawyers and the attorneys general from several Gulf Coast states spelled out in a series of filings last week just how they would like a federal judge to alter the oil spill claims process.

Mississippi Attorney General Jim Hood asked Carl Barbier, a U.S. District Court judge in New Orleans, to allow each state to appoint monitors to review the work of Gulf Coast Claims Facility adjusters to make sure their decisions are in line with federal law.

Alabama Attorney General Luther Strange asked the court to order claims czar Ken Feinberg to loosen the eligibility requirements for his program.

Plaintiffs attorneys asked the judge to throw out the 90,000 lawsuit waivers that claimants have already signed and to bar the claims operation from seeking more of them in the future.

BP PLC, which is funding the claims operation, argued that the system was operating according to law and did not require any court oversight.

It was unclear when Barbier will rule. Friday was the deadline for parties to file briefs arguing whether the claims process is complying with the federal Oil Pollution Act of 1990 and whether the court needs to take a stronger oversight role in it.

Earlier this month, Barbier ordered Feinberg and BP to stop referring to the claims process as independent of the oil company, as it had been doing.

BP owns a majority stake in the well that gushed nearly 200 million gallons of oil into the Gulf of Mexico in the summer. The spill closed large swaths of the Gulf to fishing and chased tourists from Gulf beaches.

At the urging of President Barack Obama, BP contracted with Feinberg’s law firm to handle compensation for individuals and businesses suffering economic damage from the spill. BP also set aside at least $20 billion for spill damages.

The claims facility, to date, has paid out about $3.5 billion.

Obama’s Department of Justice filed a brief but passed on making any judgments on the claims operation.

“The Court has asked for a briefing concerning whether the GCCF is satisfying its obligations under OPA,“ the department stated in its brief. “The United States is not in a position to comment on specific claims or their treatment by the GCCF.“

The Justice Department also goes out of its way to say that, despite Barbier’s ruling, “Mr. Feinberg operates as an independent decision-maker. He is not a government official of any sort, and his decisions are neither controlled by the government nor BP.“

In his brief, Strange said that he has competing interests — fairness and speed. Any action the court takes must not get in the way of the claims operation expeditiously writing checks to businesses, he said.

“As the spring and summer tourist seasons approach, our tourism-based businesses cannot stand for any further delays in receiving their damage payments, which are vital in allowing many of our coastal businesses to survive another year,“ he said.

In his filing, Hood said that one of the problems with Feinberg’s process is that the claims operation won’t let anyone see the applications and financial documentation, so everyone must simply blindly trust Feinberg when he says he is paying all legitimate claims.

Hood said he has tried for months to get access to those documents so he can do his own checking, but Feinberg’s associates have stymied him at every turn.

That’s why the court needs to put monitors in place for each state, and they can closely observe the operation, Hood said.

The plaintiffs steering committee, a 15-member panel of lawyers who are managing the federal lawsuit against BP and other companies involved in the spill, went after the lawsuit waiver that Feinberg is forcing claimants to sign in return for final payments.

More than 90,000 have signed that waiver in exchange for payments of $5,000 for individuals and $25,000 for businesses.

Feinberg will also soon begin offering businesses and individuals final payments of twice their 2010 losses minus anything they have already been paid. Oyster harvesters will receive four times their losses.

Claimants will have to sign the lawsuit waiver to receive a final payment.

Feinberg said claimants who disagree with the amount he offers could accept quarterly interim payments without signing away their rights.

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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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