The Times-Picayune lays out what all the current legal fuss is about. Let's hope that Judge Barbier takes a dim view of Feinberg claiming that interim payments he is not actually making is a satisfactory alternative for financially desperate victims signing away their right to sue.
The documents that oil spill claims czar Kenneth Feinberg is making people sign in exchange for their final damage settlements are illegal and should be voided by a federal judge, according to the plaintiffs in the massive federal civil case against BP and others.
U.S. District Judge Carl Barbier ruled earlier this month that Feinberg must stop representing himself as independent of BP. The oil giant owned the deepwater oil well that exploded last April, fouling the Gulf of Mexico for three months, and pays Feinberg's law firm $850,000 a month to dole out money from a $20 billion compensation fund.
Now, Barbier is considering whether Feinberg, who was jointly appointed by BP and President Barack Obama, has set up a claims payment procedure that properly follows the law.
The central issue is a release, or waiver, that claimants must sign before receiving a final settlement from Feinberg.
To qualify for a final payment to cover all past and future losses, claimants must sign away their right to sue BP or other responsible parties for any spill-related damages that may emerge later.
The plaintiffs say the releases go too far and shouldn't keep claimants from seeking payments for damages from the spill that they don't yet know about.
"Certainly (Feinberg) can devise a methodology to pay future payments, and he's done that, arguably, for some cases," said Brian Barr of Pensacola, Fla., one of four lawyers in charge of the plaintiffs' side of the case. "But if he ends up being wrong, he can't come back and say, 'Well, you've released that.' He has to pay that (additional) claim if it turns out his forecast is wrong."
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Feinberg said those quick payments are specifically designed to pay people who don't contemplate any future losses, making it senseless to preserve their right to pursue more money down the road. But the plaintiffs believe some of the people taking quick payments actually will face larger losses, but signed the waivers out of desperation when they saw Feinberg wasn't paying interim claims in a timely manner.
He has paid just one of the 54,000 interim claims filed since mid-December.
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But claimants and their advocates are worried about what will happen if a hurricane whips up oil deposits from the seabed or if the largely unstudied effects of chemical dispersants applied a mile below the sea end up hurting fisheries more than anticipated.
Even Feinberg and the experts he's hired to help establish a method for determining future losses acknowledge that what they came up with is based on assumptions of how long fisheries and the Gulf economy will take to recover and is, therefore, imprecise.
The plaintiffs, echoing an argument already made by the state attorneys general of Florida and Mississippi, contend that the law governing oil spills, the Oil Pollution Act of 1990, ensures a claimant's right to "settlement of a claim for interim, short-term damages" without giving up the ability to later collect "the full amount of damages to which the claimant ultimately may be entitled."
But Feinberg, in his own brief posted on the court's website Tuesday, takes a totally different view of the law. He contends his critics are misconstruing it to forbid releases for final claims when it really only deals with interim claims. He contends he already complied with it by offering quarterly interim payments that don't require recipients to sign a release.
He also contends that Barbier's court has no power to regulate his claims process at all. Still, he goes on to defend it, saying it complies with the law because the Oil Pollution Act "has no mandates" regarding methods of calculating claims or what can or can't be included in a settlement release.
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His filing also defends the transparency of his process, even though he admitted for months that he needed to make it more open.
Although the U.S. Justice Department has been critical of some of Feinberg's procedures and even warned him at one point about straying from the Oil Pollution Act, the government filed its own brief that largely supports Feinberg's process and contends the court shouldn't interfere in a process set up to make victims whole without resorting to litigation.
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