Oil spill claims facility an ‘ideal’ for future, say Ken Feinberg attorneys


MOBILE, Ala. – Lawyers for oil spill claims czar Ken Feinberg argued in a court filing released Tuesday that his Gulf Coast Claims Facility is the “ideal against which future” operations should be measured and should not be impinged upon by the U.S. District Court in New Orleans.

Plaintiffs attorneys and state attorneys general from the Gulf Coast have asked Judge Carl Barbier to institute various measures of oversight of the claims operation because, they argued, it violates the Oil Pollution Act of 1990.

Feinberg’s New York-based attorneys, David Pitofsky and William Sheehan, argued in a brief that the judicial system does not have the authority to supervise the claims operation and, even if it did, it should not because the claims facility is operating according to law.

They also defended Feinberg’s process against a barrage of criticisms it has received.

“The openness and transparency with which the GCCF has conducted itself is unparalleled in the history of the statute and nothing short of extraordinary,” they said in the filing. “The facts regarding the GCCF’s performance show that it should be the ideal against which future, large-scale OPA claims handling should be measured.”

The statement did not go over well with some on the Gulf Coast.

“I think very few if any shrimp processors would agree with that,” said C. David Veal, executive director of the Biloxi-based American Shrimp Processors Association. “The facts are, they have had a difficult, if not impossible time, getting information about their own claims.”

Orange Beach Mayor Tony Kennon laughed for about 15 seconds after a reporter read the quote to him.

“Sounds to me like he had one too many mimosas,” Kennon said. “With all due respect, the man is either delusional or the greatest demagogue I’ve ever met. There is zero accountability, zero transparency. For him to make that statement, someone should step in and relieve him of his duties immediately.”

Feinberg in August took over the oil spill compensation process from BP PLC, the majority owner of the well that gushed nearly 200 million gallons of oil into the Gulf of Mexico last summer.

While at first hailed as a savior from a BP process derided as too slow and difficult, Feinberg has since become the target of much of the same criticism.

He defended his process in a statement included in the court filing. He noted that he has paid out more than $3.5 billion in the past six months.

He said that he has given elected officials and members of affected industries the ability to review and offer comment on his procedures through every step of the program. He has held several town hall and one-on-one meetings with claimants along the Gulf Coast. And he employs nearly 3,500 people to process the hundreds of thousands of applications that have been submitted.

His lawyers argued that the Oil Pollution Act requires the responsible party in an oil spill to compensate any harmed parties but does not lay out the exact process with which to do it. If the court took any supervisory action, it would just be substituting its judgment for Feinberg’s, they argued.

Feinberg last year offered emergency payments that were to cover six months of lost revenue and did not require anyone to waive their right to sue or seek future compensation.

He is now offering claimants three options:

  • Quick payments, which let any of the 168,000 businesses and individuals who got emergency checks get money — $5,000 for individuals, $25,000 for businesses — without further proof of damage. In exchange, claimants must promise not to seek further compensation, or to sue BP or any other party involved in the spill. More than 86,000 have asked for quick payments, and more than 82,000 have already been paid.
  • Settlements to cover present and future damages, also requiring a lawsuit waiver.
  • Quarterly interim payments, which don’t require a waiver.

Both the full and interim options require claimants to document their damages.

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

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