Attorneys for Kenneth Feinberg, the administrator of BP’s $20 billion claims fund for the Deepwater Horizon disaster argued Tuesday that the Louisiana federal judge overseeing the multidistrict litigation against BP plc lacked legal authority to regulate the claims process.
Over calls for court intervention by several state attorneys general, Gulf Coast Claims Facility (GCCF) Administrator’s counsel said the Hon. Carl Barbier of the U.S. District Court for the Eastern District of Louisiana lacked power under the Oil Pollution Act (OPA)t to monitor BP’s payment of short-term damages through the fund.
Responding specifically to Mississippi Attorney General Jim Hood’s allegations that BP, the GCCF and Mr. Feinberg have subverted the claims process by delaying payments, GCCF lawyers contended court supervision was not only unlawful, but unnecessary.
Even if the OPA authorized the court to intervene, the filing said, monitoring the claims process would ultimately harm claimants by diverting the fund’s resources and preventing GCCF staff from working efficiently.
In an April 7 brief, Attorney General Hood accused BP and the GCCF of violating the OPA and claimant rights by delaying and denying interim damages.
BP and Mr. Feinberg have used “economic duress to manipulate” cash-strapped claimants, extracting broad releases through the recently implemented quick payment process, under which eligible individuals can receive $5,000 and businesses $25,000, Attorney General Hood said.
As of early April, the fund had paid 7.5 percent of pending interim claims, including 3 percent of interim business claims and 9 percent of interim individual claims, according to the brief.
On top of that, Attorney General Hood said, BP in March bumped Feinberg’s pay from $850,000 to $1.25 million per month.
Hood reiterated a request for an immediate audit of the claims process, followed by an evidentiary hearing to examine the GCCF’s compliance with the OPA. The attorneys general for Louisiana, Alabama and Florida have made similar criticisms of the claims process and have called for some level of monitoring.
In Tuesday’s filing, Mr. Feinberg’s attorneys defended the fund’s performance against what they called the Mississippi attorney general’s “inflammatory allegations.”
To date, the GCCF has paid out nearly $4 billion to 174,000 claimants, honoring some 300,000 claims, they said, pointing to a February filing by the U.S. government that called the fund’s progress “significant.”
In Mississippi alone, more than 15,000 claimants have received $231 million through the fund’s emergency advanced payment program that began in August, the GCCF said. Comparable results existed for the quick payment program, which has resolved claims with 108,000 claimants to date, according to the filing.“
The attorney general’s inflammatory allegations that the claims process is uninviting, inaccessible and a barrier to claimants seeking prompt compensation for their damage are belied by the record of GCCF performance over the past nine months,” Mr. Feinberg’s counsel said.
They also decried Attorney General Hood’s remarks about Mr. Feinberg’s pay, saying they bordered on defamation.