This was blogged by an attorney hustling business but it does a great job of laying out the key points of Judge Barbier's recent February 2 ruling concerning the Gulf Coast Claims Facility run by Kenneth Feinberg. The disastrous mess that the GCCF has become cries out for legislation to establish a truly independent process to compensate victims both fairly and quickly.
As described earlier, the motion asserted that the Gulf Coast Claims Facility (GCCF), its administrator Ken Feinberg, and Feinberg’s law firm Feinberg Rozen LLP, were not independent decisionmakers as to claims filed by oil spill victims under the Oil Pollution Act of 1990.
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The Plaintiffs’ motion challenged the notion that putative class members were being asked to, among other things: execute a full release of all defendants, not just BP; release claims for punitive damages and other relief not recognized by the GCCF; and release the claims of spouses, minors, and their business interests. This, despite the fact that BP and GCCF had, according to the motion, confusingly represented the GCCF as “independent” and urged putative class members not to retain counsel.
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Judge Barbieri rejected BP’s argument that the GCCF, Mr. Feinberg, and Feinberg Rozen, LLP were fully “independent” of BP. The Court found instead that BP had created a hybrid entity, rather than one that was fully independent of BP. In particular, the Court said, while BP may have delegated to Mr. Feinberg and the GCCF independence in the evaluation and payment of individual claims, many other facts supported a finding that the GCCF and Mr. Feinberg were not completely “neutral” or independent of.
Such facts included that Mr. Feinberg was appointed by BP, without input from opposing claimants or the Plaintiffs’ Steering Committee, and without an order from the Court, so that he is not a true third-party neutral such as a mediator, arbitrator, or court- appointed special master; BP pays Mr. Feinberg and his law firm a flat fee each month, pursuant to a written contract which outlines his duties and responsibilities in great detail; BP decided the amount and manner in which it funded the GCCF; BP agreed to “indemnify, defend, and hold harmless” Feinberg Rozen, LLP as to any actions by any person relating to or arising from the operation of the GCCF; and BP retains the ability to audit Feinberg Rozen, LLP so long as the firm retains information about claimants.
The clear record in this case demonstrates that any claim of the GCCF’s neutrality and independence is misleading to putative class members and is a direct threat to this ongoing litigation, as claimants must sign a full release against all potential defendants before obtaining final payments. – Judge Carl J. Barbier
Concluding that the Court had authority to supervise or control certain communications with potential class members, and that such supervision or control did not run afoul of pertinent First Amendment concerns, Judge Barbier ordered that BP, through its agents Ken Feinberg, Feinberg Rozen LLP, and the Gulf Coast Claims Facility, and any of their representatives, in any of their communications with claimants, shall:
Refrain from contacting directly any claimant that they know or reasonably should know is represented by counsel, whether or not said claimant has filed a lawsuit or formal claim;
Refrain from referring to the GCCF, Ken Feinberg, or Feinberg Rozen, LLP (or their representatives), as “neutral” or completely “independent” from BP. It should be clearly disclosed in all communications, whether written or oral, that said parties are acting for and on behalf of BP in fulfilling its statutory obligations as the “responsible party” under the Oil Pollution Act of 1990.
Begin any communication with a putative class member with the statement that the individual has a right to consult with an attorney of his/her own choosing prior to accepting any settlement or signing a release of legal rights.
Refrain from giving or purporting to give legal advice to unrepresented claimants, including advising that claimants should not hire a lawyer.
Fully disclose to claimants their options under OPA if they do not accept a final payment, including filing a claim in the pending multidistrict litigation.
Advise claimants that the “pro bono” attorneys and “community representatives” retained to assist GCCF claimants are being compensated directly or indirectly by BP.
In addition, the Court ended its order by directing the parties to submit additional briefing as to whether and how BP, as the responsible party, is fully complying with the mandates of the Oil Pollution Act.