Hood files scathing brief in BP MDL

Steve Korris Apr. 25, 2011, 4:28am


Mississippi Attorney General Jim Hood is arguing that citizens of his state are incapable of resolving their oil spill claims, according to Gulf Coast Claims Facility administrator Kenneth Feinberg.

"In stark contrast to the strong record of the GCCF to date in processing claims, the involvement by the Mississippi Attorney General has been, if anything, threatening to the rights and interests of claimants," Feinberg's lawyers wrote on April 12.

David Pitofsky of New York and William Sheehan of Washington urged U.S. District Judge Carl Barbier to ignore a scathing brief Hood filed on April 7.

They wrote that an audit Hood proposed would delay processing nationwide.

"The work of the GCCF has brought much needed financial relief to individuals and businesses throughout the Gulf states, applying generous protocols that far exceed anything required or even contemplated by the Oil Pollution Act of 1990," they wrote.

They wrote that in the previous month, the facility received 47,230 claims.

"The success of the GCCF program is a direct result of its fair, accelerated, voluntary and generous process for reviewing claims and providing compensation," they wrote.

Feinberg manages claims for oil company BP as the party responsible for the Deepwater Horizon explosion under the act.

Barbier separately presides over Deepwater Horizon suits from federal courts around the nation by appointment of the U.S. Judicial Panel on Multi District Litigation.

Hood, attorney generals of six other states, and Barbier's plaintiff steering committee want Barbier to exercise jurisdiction over Feinberg.

At their request, Barbier rewrote the script for Feinberg's claim handlers.

Hood stormed into Barbier's court alone on April 7, alleging malfeasance and calling Feinberg an undisputed failure.

Hood wrote that Feinberg continued to violate the act and the rights of claimants.

He accused Feinberg of manipulating desperate claimants through economic duress.

He wrote that Feinberg obtained improperly broad releases of claims and rights in exchange for inadequate consideration.

Pitofsky and Sheehan answered that Hood predicated damaging allegations on nothing more than anecdotes.

"GCCF has accomplished an extraordinary amount of work in a short time, even while confronted with an unprecedented challenge," they wrote.

"GCCF believes that this Court lacks power to regulate the Oil Pollution Act claims process," they wrote.

They wrote that the facility has received about 850,000 claims from about 500,000 individuals and businesses in all 50 states.

They wrote that the facility has paid almost $4 billion to about 170,000 claimants in honoring about 300,000 claims.

They wrote that in Mississippi alone, more than 15,000 claimants received more than $230 million in emergency payments in 90 days last year.

"These payments of emergency compensation were made without requiring any release whatsoever," they wrote.

They wrote that the act doesn't contemplate emergency payments or payments without release.

They wrote that the facility has received 274,174 claims for final payment, interim payment, or quick payment, and has processed more than two thirds of them.

They wrote that more than 100,000 claimants accepted quick payments, at $5,000 for an individual and $25,000 for a business, in return for total releases.

"We submit that it is unsurprising that more than 100,000 claimants have jumped at the opportunity to take advantage of this generous program," they wrote.

"The Attorney General's argument that the citizens of Mississippi(and elsewhere) are incapable of evaluating their options and making an informed decision to accept or reject the quick payment option is patronizing at best and at worst insulting to Mississippi claimants," they wrote.

They wrote that the facility offered final payment to about 28,000 claimants on Feb. 18, with 90 days to respond.

About half of them accepted in 53 days, they wrote.

They wrote that the facility made 5,495 interim payments with no release.

They wrote that the facility has declined to pay about 44,000 claims.

"GCCF does not pay unsubstantiated claims that lack the proof necessary to demonstrate a link between alleged damage and the oil spill," they wrote.

They wrote that in Mississippi court, Hood has demanded confidential claim files.

They wrote that the facility provided five files on March 15, after claimants waived privacy, andit provided 11 on April 5.

They wrote that the facility is compiling 75 more for Hood.

They wrote that if he reviewed the first 16, he would see that about half were held in abeyance for possible fraud.

BP hired Feinberg last year with the approval of President Barack Obama.

After Feinberg has paid claims, BP can seek recovery from others at fault.

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