Oil spill victims forced to wager


OCEAN SPRINGS, Miss. – Fishermen and business owners stung by a summer of lost revenue from the Gulf of Mexico oil spill have until Wednesday to file their compensation claims for short-term damages, and then they have to ask themselves: Do I feel lucky?

Many will eventually be offered a final settlement from BP PLC’s compensation fund – but accepting that check is a gamble. To cash it, they’ll have to sign away their right to ever sue the oil giant and let a court decide how much they’re owed. And if the long-term damages end up amounting to more than the settlement, they’ll be out of luck for additional payments to cover those future losses.

They also could wait and risk getting an even lower settlement offer later if the shrimp, oyster, crab and fish industries rebound faster than expected, and tourists return in droves.

The fund’s czar, attorney Kenneth Feinberg, said he will be offering “generous” settlement checks with the goal of keeping people out of court, but they don’t have to accept the offer now. The Gulf Coast Claims Facility, set up to dole out the money, will be around until August of 2013.

However, Feinberg warns, they could end up with a much smaller check later.

“If they decide a year from now, I’ll take the final payment, they’re going to have to show prospective damage,” Feinberg said in a recent interview. “But my offer may not be available to them a year from now if everything is back to normal.”

If victims want more time to think about it, they can opt for interim payments by submitting a new claim for damages every three months over the next three years. That would still leave them with the option to sue BP. But they’ll have to continue to prove their losses, and their final settlement offer may shrink with each passing day.

Mississippi seafood processor Keath Ladner said the structure of the program is forcing people “to gamble on our livelihoods.”

The compensation fund has so far paid out nearly $2 billion, and Feinberg said about 80 percent of business claims have been paid in full.

However, many business owners with larger claims, over $100,000 and up to several million, say they are getting shortchanged or that their requests simply haven’t been paid at all. Even the Justice Department has told Feinberg to speed up the claims process and be more transparent about how the cases are being evaluated.

Ladner, who employs about 70 boats and is one of the largest processors in the state, hasn’t opened his shop since the April 20 oil rig explosion that spewed more than 170 million gallons of oil into the sea and killed 11 workers.

He hasn’t had the product or the work force to make the business profitable, and he said no national buyers want his seafood because of the lingering misperception that it’s tainted by oil.

His claim for roughly $1.7 million has been under review for weeks.

Many who are struggling through the claims process feel that Feinberg is shortchanging them or keeping their claims under review to force them into accepting the final settlement offer because they’ll be so far behind on bills, they’ll have no choice.

“If he keeps everybody hungry, they’re going to have to take any kind of settlement,” Ladner said. “We’ll have to take whatever he offers.”

Feinberg denied that and said the fund is doing the best it can given the more than 400,000 claims filed so far. About 122,000 of those have been paid or approved for payment. Feinberg said the larger business claims are taking longer because they’re more complicated.

Nearly 147,000 claims are clogging up the process because they have little or no documentation to support losses, Feinberg said, noting dozens are under review for potential fraud. He said the fund will begin denying those claims after Wednesday’s deadline. About 60,000 claims have already been denied payment, and nearly 72,000 remain under review.

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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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