Gulf spill suit lawyers want claims czar reined in

Published 3:56 pm Thursday, December 23, 2010

Lead attorneys for people and businesses suing over the Gulf oil spill want a federal judge overseeing their cases to rein in the administrator of the $20 billion victims compensation fund that BP set up.

Describing fund administrator Ken Feinberg as a pawn in a BP shell game designed to settle as many claims as possible to avoid lawsuits, the lawyers asked U.S. District Judge Carl Barbier in a lengthy and scathing court filing Tuesday to order changes to the release form people must sign if they accept a final payment from Feinberg.

The lawyers say people should only have to give up the right to sue BP for compensatory damages if they accept a final payment from the fund, but they should still be allowed to go after BP in court for punitive damages. And, the lawyers say, people who accept final payments from the fund should be allowed to sue other responsible parties for both compensatory and punitive damages.

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The more people who accept final payments from the fund and agree not to sue BP or any other responsible party, the fewer potential clients for plaintiffs attorneys who have already filed more than 300 lawsuits over the oil spill. The fund is separate from the oil spill litigation, but the lawyers argue Barbier has authority to intervene to protect spill victims.

Feinberg currently requires people who accept final payments to agree not to sue BP or any other responsible party, including companies involved with the rig Deepwater Horizon, which exploded April 20 off the coast of Louisiana.

The blast killed 11 workers and led to more than 200 million gallons of oil spewing from BP’s undersea well, according to government estimates that BP disputes.

The plaintiffs lawyers also want claimants reminded that BP is paying Feinberg’s firm $850,000 a month to administer the fund.

“By all appearances, Mr. Feinberg — in his approach towards the timing and nature of settlement offers, in the protection of his deliberative process from disclosure, and in securing full releases and assignments in BP’s favor — seems indistinguishable from a defense attorney attempting to settle cases on behalf of BP,” the lawyers wrote in their filing in federal court in New Orleans.

Reached on his cell phone, Feinberg declined to comment. BP did not respond to requests for comment. There was no immediate ruling. The lawyers are seeking a hearing Jan. 5.

President Barack Obama appointed Feinberg to administer the fund that BP agreed to set up following the rig explosion.

So far, the fund has paid out $2.55 billion to 167,555 claimants. Some 73,000 claimants have requested final payments.

Money left over in the fund is expected to be returned to BP.