Plaintiffs Attorneys Knock BP Fund Administrator


A South Florida plaintiffs attorney active in oil spill litigation is calling on the administrator of BP’s $20 billion compensation fund to disclose how much the oil giant is paying him and to stop discouraging victims from seeking legal representation.

Ervin Gonzalez, a partner at Colson Hicks Eidson in Coral Gables, Fla., said fund administrator Kenneth Feinberg, a Washington attorney who managed the 9/11 compensation fund, has promised transparency but refused to disclose how much he is being paid by BP. The class action specialist is outraged Feinberg is flying around the Gulf states on a BP jet advising oil spill victims not to seek legal advice while BP has some of the finest attorneys at its disposal, including Miami’s Akerman Senterfitt.

Gonzalez is part of an ad-hoc committee of about a dozen plaintiffs attorneys representing oil spill victims who plan on meeting with Feinberg’s law partner, Michael Rozen, in New Orleans on Tuesday. He said it is a mistake to compare compensation of the victims for the Sept. 11 attacks to those suffering because of the oil spill.

“Lawyers such as myself represented people for free after 9/11 because we were in a war, we were attacked by terrorists,” he said. “This is gross negligence bordering on criminality from a business enterprise trying to get away from paying the full damages that they caused.”

Feinberg, an iconic figure praised by many for bringing closure to the families directly affected by the terrorist attacks, is coordinating payments under BP’s Deepwater Horizon compensation fund. He was picked by the British oil company in the wake of the rig explosion that caused millions of gallons of oil to gush into the Gulf of Mexico.

The company has earmarked $20 billion for the fund, but President Barack Obama said there is no cap on the amount to be paid. Obama demanded BP create the fund and that the claims process be administered independently. The administration recommended Feinberg for the job.

More than 6,000 lawsuits have been filed on behalf of people who say they suffered damages from the spill. They include civil racketeering claims. Lawyers will argue Thursday in front of a federal multidistrict litigation panel in Idaho for spill litigation to be consolidated in their jurisdictions.

Plaintiffs attorneys now worry Feinberg is a tool of BP, a company they say that wants hardworking people to sign releases for far fewer dollars than they deserve. The correct way to negotiate a settlement for the victims is over a table with BP lawyers and lawyers representing victims, they say. BP has made it clear its plan is to dole out the $20 billion over four years and deduct clean-up costs from the total, Gonzalez said.

“It’s a calculated plan to minimize the damages on the backs of the people that they hurt,” Gonzalez said.

“At this point they don’t know what their future damages are going be,” Gonzalez added. “It’s much more than making a living. It’s a way of life.”

Feinberg is a mediation specialist — a lawyer who pops the balloon of litigation.

The Obama administration tapped him to administer money under the Troubled Asset Relief Program, or TARP, for banks and other financial institutions run aground by the subprime mortgage crises, and he led a compensation program after the mass shooting that took the lives of 33 people at Virginia Tech.

He earned praise for his moving book published in 2005 on the heart-wrenching decisions he made to compensate 9/11 victims’ families. He was honored by his Massachusetts hometown; a street was named for him.

“The notion that this somehow a trick, or a power play, or is anything other than a way to resolve a national tragedy is, I think unfair,” Feinberg said last week.

Gonzalez, though, said Feinberg may have violated Florida Bar rules by giving legal advice to those affected by the spill without being licensed in the Gulf states.

His client, Marathon fisherman Nilo Hernandez, isn’t so sure taking Feinberg’s advice on compensation for the Deepwater Horizon disaster is the right answer since the compensation coordinator is being paid by BP. Feinberg has said, “That’s something between me and BP.”

“When you have a medical problem, you go to the doctor. When you are fighting a big corporation, you get a good lawyer,” said Hernandez, a Colson Hicks Eidson client. “They got all the money in the world, they hire the best attorneys and the best experts, and they are going to mess us all up.”

He said tarballs don’t have to wash up in Key West for the environmental impact of the spill to be felt in Florida Bay. He said one drop of oil can ruin 55 gallons of saltwater.

“It’s definitely contaminated now. How much will have to be determined,” Hernandez said.

He said spiny lobster are fickle creatures and will simply migrate to Cuba, the Bahamas and Central America when they start smelling the oil. As for stone crabs, the delicacy South Florida is known for, they will simply die because the food they eat will perish, said Hernandez, who lives in Miami.

The anger of Keys residents over the spill was apparent when BP set up a claims office across the street from the Marathon airport, Hernandez said. “People went over there, and they wanted to kill them.”

The claims office has brought in security.

Fund critics claim BP aims to take advantage of people who are not educated in the legal system and badly need money. Another important difference between the oil spill and 9/11: the effects of the oil spill are harder to quantify.

Feinberg did not respond by deadline to e-mail or messages left at his law firm, Feinberg Rozen. But he has been highly visible. He promised fishermen and others with lost incomes Monday that he is their best bet for receiving money quickly.

“Under this program, you will receive, if you’re eligible, compensation without having to go to court for years, without the uncertainty of going to court, since I’ll be much more generous than any court will be,” he declared in a speech to the Economic Club of Washington. “At the same time, you won’t have to pay lawyers and costs.”

The Exxon Valdez litigation following the 1989 spill may serve as the worst-case scenario for plaintiffs. It still lingers today with Exxon refusing to pay $70 million of a $507 million award to plaintiffs. The company argues it shouldn’t have had to fund its own appeal.

Feinberg made the hard sell for the oil spill fund, noting claimants could get emergency payments for six months without giving up their right to sue. “If you decide to litigate, you still keep the check. I mean who wouldn’t come into this program?” he asked.

He has said he is only working for spill victims and the fund will be up and running in August. He said, just like with the 9/11 fund, tough decisions will have to be made about eligibility and how to distribute money to fisherman, who often are paid in cash and have no financial records. Claims by businesses miles from the coast, such as hotels that lost bookings, also will have to be weighed.

Mike Papantonio, a Pensacola, Fla., trial lawyer and nationally syndicated radio talk show host, is a bit less caustic about Feinberg. Papantonio of Levin Papantonio Thomas Mitchell Echsner & Proctor said the suggestion not to seek counsel makes sense for people with claims under $50,000.

“But it’s important to recognize that Feinberg is no Mother Theresa,” he said. “It’s my hope we can work with him.”

He said Feinberg might have committed a misstep by alienating his fellow attorneys.

“It was almost like he was castigating them,” Papantonio said.

What is more of a concern for Papantonio is BP, who he has accused of releasing “flying monkeys” on Washington.

Papantonio said he wouldn’t mind for the oil giant to be driven out of business and is skeptical about its purported net income, saying a lot is tied up in oil leases it no longer can develop. BP reported $16.9 billion in net income in 2009.

Public Citizen, a Washington-based watchdog group, claims London-based BP has the worst safety and environmental record of any oil company operating in America.

It has pleaded guilty to two crimes and paid more than $730 million in fines and settlements to federal and state governments and civil judgments for environmental crimes, willful neglect of worker safety rules and manipulating energy markets.

“They are a sociopathic corporation. Just look at their history,” Papantonio said.

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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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