Spill claims czar floats pay plan


HOUMA — Wednesday wasn’t such a great day for Ken Feinberg, the claims czar charged with doling out $20 billion to fishermen, hotel owners and others damaged by the BP oil spill.

Reaction to his new plan for final payments to claimants who opt for them has drawn criticism from those most affected as well as Louisiana Gov. Bobby Jindal.

Then at day’s end, a federal judge in New Orleans ruled that Feinberg can no longer claim he is independent of BP, as he has at town-hall meetings and interviews throughout the Gulf Coast and during a teleconference that very day.

Both developments have served to dull the luster of a man who some beleaguered fishermen initially saw as a kind of Santa Claus and solidified his status as a lightning rod for critics of BP and the federal government’s handling of the Gulf oil spill.

Feinberg, appointed by President Barack Obama, maintains his program, the Gulf Coast Claims Facility is a success because it has distributed $3.5 billion in six months while processing nearly 500,000 claims.

“The program is working,” Feinberg said Wednesday. “It can be improved in a number of respects. We have received 500,000 claims, and there is going to be some inconsistency. … The constructive criticism directed at the GCCF, I understand it, I appreciated it, most of it was well intentioned. Overall the program is a success; it is paying claims as originally intended.”

The proposal would result in claimants being paid double the amount of their documented losses for the year 2010, when compared with their profits for 2008 and 2009 averaged together. Oystermen would get four times the amount of their documented losses for 2010.

Feinberg is inviting public comment on the plan. He said the formula is largely based on scientific reports of the Gulf’s potential for recovery, which he estimates would be complete within three years. The reports, from a Texas researcher and a consulting firm, which rely on information from scientists, predict recovery within three years.

The reports were included with releases sent to reporters, Feinberg said, to address questions of transparency lobbed by critics.

Comments on his proposal will be accepted until Feb. 17. E-mail them to MethodologyComments@gccf-claims.com or mail them to GCCF; P.O. Box 9658; Dublin, OH 43017-4958.

The final-payment route is one of three options claimants may take. Interim quarterly payments based on reports of losses from individuals and businesses, with no restriction on their right to sue BP later, are one option. Those claimants can file their quarterly losses through August 2013. A quick lump-sum payment of $5,000 for individuals and $25,000 for a business, requiring far less rigorous proof of loss, is also available.

That the final payment proposal includes a bar to future legal action is troubling to Jindal and Attorney General Buddy Caldwell, who with leaders in other Gulf states filed a lawsuit seeking to quash the no-sue provision.

U.S. District Judge Carl Barbier did not rule on that matter Wednesday but asked lawyers to file additional briefs. He did rule that Feinberg is not independent from BP and barred him from telling claimants or anyone else that he is.

Julie Falgout, who assists fishermen through Louisiana’s SeaGrant program, said she was not surprised by Barbier’s ruling, considering her own observations of how the claims process has progressed.

“Fishermen, some with minimal educations, have maintained all along at public meetings that Feinberg is not independent of BP,” Falgout said. “Now a judge is saying the same thing. I guess the fishermen were right in the first place.”

Jindal had not seen the Feinberg proposal Wednesday but questioned its basis.

“We will review the details of the draft protocol and the state will submit official comments to Mr. Feinberg and the Gulf Coast Claims Facility, but the reality is that we continue to have major concerns with the procedures Mr. Feinberg is attempting to establish,” Jindal said. “We continue to be opposed to the final releases of claimants’ rights. It also seems that Mr. Feinberg is arbitrarily placing an end date on the recovery of the Gulf Coast, which is outside of his purview. … That’s why we filed a motion yesterday calling for judicial oversight of the claims process to protect the legal rights of Louisianians.”

Jindal said the state asked the court to ensure the rights afforded to claimants under the Oil Pollution Act are preserved and protected, investigate any steps needed to correct misleading statements or promises made by the Gulf Coast Claims Facility and Feinberg, and prohibit the Gulf Coast Claims Facility “from forcing claimants to sign their rights away.”

Connie Townsend, proprietor of the Sportsman’s Paradise restaurant and marina in Cocodrie, was among business owners who said the proposal does not address the realities of what claimants have experienced. Townsend said the Claims Facility should be looking at pre-Gustav or pre-Katrina numbers.

“It doesn’t show what your income could have been because the people in Terrebonne Parish got hit with federal disasters for years before this, so, in fairness, people weren’t even back up to their potential in 2009 or 2008 between Katrina, Rita Gustav and Ike. After Rita and Katrina, we were shut down for 21 months and we had to start all over again,” Townsend said. “He’s got to go back to the drawing board. … If the Gulf is going to recover in two or three years, how does he know? We don’t know what happened to the fish eggs, what the hatchery is like.”

Lance Nacio, a Montegut fisherman recently appointed to Louisiana’s Shrimp Task Force, said for himself and other fishermen who have developed niche markets in order to compete with low-priced imports, the proposal would not fully compensate what has been lost.

“It takes years and years to develop these businesses, and we have to recover again,” he said. “This is a man-made disaster, and we don’t know how long it is to overcome that. How do they know in two years or three years everything to be normal?”

Nacio and other fishermen said Feinberg’s proposal does not appear to take into account the difficulty building back markets lost because of perceptions about the oil and the safety of seafood.

“What if public perception is like with Alaska?” Nacio said. “It took them a long time to rebuild their markets, and I don’t think in two years that market is going to rebuild. And what if we do have more shrimp and more people shrimping? We will be back working for a lower price. I don’t think this is going to do it.”

1 comment

  • if wednesday was bad 4 Feinberg friday has to be a nightmare because of the term “economica duress”. if I understand this correctly it mean 88,000 people who accepted quick pay may still be able to sue and they already have an admission of guilt, plus if they can prove duress doesn’t that prove punitive damages by definition. I’m glad because he waved quick pay in front of desperate people’s faces 2 weeks before christmas. I mean how low can you get.

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