Power struggle emerges over oil spill claims procedures

By Steve Korris | Jan 18, 2011


Leaders in litigation over the Deepwater Horizon explosion and oil spill grabbed for power over $17 billion without making sure their followers would back them up.

As of Jan. 17, six firms that don't belong to the plaintiff steering committee opposed its Dec. 21 proposal to rewrite the rules of the Gulf Coast Claims Facility.

Daniel Becnel of Reserve, Anthony Buzbee of Houston, and Camilo Salas of New Orleans objected, and three Florida firms adopted their arguments.

Salas told U.S. District Judge Carl Barbier that his clients "do not wish any interference by the PSC and they have not requested any assistance from the court."

Barbier presides over civil suits from federal courts in Gulf Coast states by appointment of the U.S. Judicial Panel on Multi District Litigation.

The Gulf Coast Claims Facility, operating independently of the court, started with a $20 billion deposit from BP and has paid about $3 billion.

The steering committee's proposal would disrupt further negotiations, Buzbee wrote.

He told Barbier the proposal "will only prejudice people who have received offers of settlement by unnecessarily delaying resolution of their claims."

"Represented claimants should be able to enter into any type of agreement or release with the Gulf Coast Claims Facility, or any other party for that matter, without micromanagement from other attorneys," Buzbee wrote.

Salas wrote the same sentence but changed "from other attorneys" to "by the PSC."

Buzbee also wrote that the court shouldn't inject itself into private negotiations, and Salas wrote that neither the PSC nor the court should do that.

Becnel wrote that the court lacked jurisdiction over claims administrator Kenneth Feinberg because President Obama chose him.

He wrote that Feinberg stands in the shoes of the President.

He wrote that numerous lawyers from Louisiana, Texas, Mississippi, Alabama and Florida have worked tirelessly with Feinberg.

"In stark contrast to these attorneys' successful workings with the GCCF, many other attorneys' primary impression of the GCCF seems to be as nothing more than an obstacle to more fees," Becnel wrote.

"The more they can control and limit the efficacy and power of the GCCF, the more their fees will increase."

He wrote that their antagonism toward Feinberg was long standing, and he predicted that motions would follow to limit him in every way.

"Mr. Feinberg has uniformly and unequivocally performed all his work honestly and efficiently," Becnel wrote.

He wrote that more than 13,000 facility claimants are represented by counsel.

Peter Cambs, of Parker Waichmann Alonso in Bonita Springs, Fla., adopted the objections of Becnel and Buzbee on behalf of Key West Tiki Charters.

Douglas Lyons, of Lyons and Farrar in Tallahassee, adopted them on its own behalf.

Samuel Adams of Panama City adopted them on behalf of five clients in a single case.

The steering committee's proposal drew First Amendment fire from BP, which challenged it as prior restraint on speech.

Don Haycraft of New Orleans wrote that committee members have exercised their First Amendment right to disagree with Feinberg.

He quoted Brian Barr of Pensacola, Fla., telling Reuters that Feinberg acted in BP's interest and the best process for victims was going to court.

He quoted Stephen Herman of New Orleans telling ABA Journal that Feinberg "is nothing more than a defense lawyer trying to settle cases for BP."

Haycraft quoted James Roy of Lafayette telling Associated Press that Feinberg "is preying on the victims in an effort to settle this case and absolve his client BP."

He wrote that Feinberg doesn't represent BP but is an independent contractor.

BP, responsible at the moment for all claims under the Oil Pollution Act of 1990, has asked Barbier for a Feb. 2 hearing.

The act sets forth claim resolution procedures and prohibits the filing of civil suits by those who haven't followed the procedures.

The act requires designation of a responsible party who must set up a claim facility.

After the spill, BP set up Gulf Coast Claims Facility and agreed to pay Feinberg's firm $850,000 a month.

Haycraft wrote that Feinberg's fee doesn't come from the facility's trust fund.

He wrote that the facility has approved and BP has paid more than 205,000 claims.

According to the steering committee, the facility has improperly obtained signatures that release claims against BP and everyone else.

Their motion alleges Feinberg doesn't make it clear to claimants that they have claims for additional damages from Transocean, Halliburton or others.

Though they listed seven other things he doesn't make clear and seven things they wish he would stop saying, they didn't offer any language for Barbier's approval.

They wrote that they didn't seek an injunction but sought to ensure that the release and associated communications weren't confusing or misleading.

Haycraft responded that parties to a settlement are free to agree as to its scope.

He wrote that the proposal "would encourage litigation rather than settlement, as claims which could be settled or not, and potentially liable third parties who are not released by claimants could then drag all the named parties back into the suit."

Cameron International, on defense in Barbier's court as blowout prevention contractor, also pleaded against limits on the scope of releases.

David Beck of Houston wrote that plaintiffs cited no authority for suggesting Barbier might rewrite releases that were products of legitimate settlements.

He wrote that the trust document doesn't forbid Feinberg from paying claims for losses that might be attributed to third parties.

"Indeed, the Oil Pollution Act requires that BP pay such claims," he wrote.

He wrote that when Feinberg pays a claim, the act transfer a claimant's rights to BP.

"The claimant has no direct right against third parties like Cameron," he wrote.

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