Lawsuit Filed in State Court Against Kenneth R. Feinberg, Feinberg Rozen, LLP and Gulf Coast Claims Facility
Lawsuit Filed Against Kenneth R. Feinberg, Feinberg Rozen, LLP and
Gulf Coast Claims Facility
Complaint Alleges Gross Negligence, Fraud, Fraudulent Inducement and Unjust Enrichment
Tampa, FL (March 2, 2011) – A first-of-its-kind lawsuit has been filed in state court in Florida against Kenneth R. Feinberg, Feinberg Rozen, LLP and Gulf Coast Claims Facility (“GCCF”). The 42-page complaint, filed by Attorney Brian J. Donovan on behalf of Pinellas Marine Salvage, Inc. and Mr. John Mavrogiannis alleges, in part, gross negligence, fraud, fraudulent inducement and unjust enrichment on the part of the defendants.
Pinellas Marine Salvage, Inc., a corporation organized under the laws of the State of Florida, is a full-service marine salvage facility on the west coast of Florida serving the Gulf Coast states of Louisiana, Mississippi, Alabama and Florida. The company was founded in January, 1997 by Mavrogiannis for the purpose of addressing a strong market need for used and refurbished marine parts, supplies and vessels. As a result of the actions of the defendants, the company is struggling to survive.
Feinberg, acting through and as Managing Partner of Feinberg Rozen, established GCCF to independently administer and where appropriate settle and authorize the payment of certain claims asserted against BP as a result of the explosion at the Deepwater Horizon rig and consequent spillage of oil into the Gulf of Mexico.
In their lawsuit, the plaintiffs allege, in part: (a) the defendants, without any legal authority for doing so, circumvent many of the rights provided to victims of the BP oil spill under the Oil Pollution Act of 1990; (b) the defendants employ a “Delay, Deny, Defend” strategy against claimants. This strategy, commonly used by unscrupulous insurance companies, is as follows: Delay payment, starve claimant, and then offer the economically and emotionally-stressed claimant a miniscule percent of all damages to which the claimant is entitled. If the financially ruined claimant rejects the settlement offer, he or she may sue; (c) the defendants delay payment by telling claimants, “claims will be paid within 90 days after substantiation.” Unbeknownst to the claimants, substantiation means “the claim has been received and reviewed by GCCF.” This definition of substantiation allows a claim to be received and held “under review” indefinitely by GCCF. When GCCF finally “substantiates” the claim, the claimant is told he or she will be paid within 90 days; (d) Feinberg uses the fear of costly and protracted litigation to coerce claimants to accept grossly inadequate settlements from GCCF. During widely-reported town hall meetings organized to promote GCCF, Feinberg repeatedly tells victims of the BP oil spill: “The litigation route in court will mean uncertainty, years of delay and a big cut for the lawyers.” and “I take the position, if I don’t find you eligible, no court will find you eligible;” and (e) Feinberg misleads claimants by advising during well-reported town hall meetings, on a number of occasions, potential claimants that the fund which he administers is fully funded in the amount of $20 billion. At the end of 2010, the most the fund would have had in its escrow account would have been $5 billion.
Pinellas Marine Salvage, Inc. and Mavrogiannis seek economic and compensatory damages, in amounts to be determined at trial, and punitive damages.
Brian J. Donovan can be reached at BrianJDonovan@verizon.net.
A very different perspective is provided in the following excerpt from an article titled “Pinellas Marine Salvage sues Feinberg over oil spill claim” which appeared in the Tampa Bay Business Journal on March 11, 2011:
Carl Nelson, a shareholder at Fowler White in Tampa, represents 450 businesses – including national companies with nearly 2000 locations – bringing claims related to the spill. His experiences are counter to those outlined in the Mavrogiannis complaint.
“We’ve been treated quite nicely,” Nelson said. “We know how to do it. We’re using economists and forensic accountants.”
Under OPA, the party responsible for a spill is obligated to set up a claims process and to pay claimants that satisfy the conditions set up in the process, Nelson said. The remedy allowed in the law for claimants that satisfy the requirements but are not paid is to sue the responsible party.
“If my clients are not satisfied, then we’ll sue BP,” he said. “Feinberg has no duty to pay anybody.“