Third Lawsuit Filed Against Kenneth R. Feinberg and Feinberg Rozen, LLP
Third Lawsuit Filed Against Kenneth R. Feinberg and Feinberg Rozen, LLP
Complaint Alleges Gross Negligence and Fraud by BP Oil Spill Fund Administrator
Tampa, FL (June 20, 2013) – A third lawsuit has been filed in state court in Florida against Kenneth R. Feinberg and Feinberg Rozen, LLP, D.B.A. Gulf Coast Claims Facility (“GCCF”). William G. Green, Jr. is also named as a Defendant. Mr. Green, a resident of the State of Florida and an “Independent Adjuster – All Lines” licensed by the State of Florida, was “Liaison” to GCCF and the “Overseer” of all seafood claims for GCCF in the State of Florida who trained accountants to specifically handle claims of clam farmers. The 31-page complaint was filed in the Circuit Court of the Twentieth Judicial Circuit in and for Lee County, Florida by Tampa attorney Brian J. Donovan on behalf of Mr. Andrew J. Ditch. The complaint alleges, in part, gross negligence, fraud, fraudulent inducement and unjust enrichment on the part of the defendants (Case No. 13-CA-001612).
On August 23, 2010, Defendant Feinberg Rozen, doing business as GCCF, replaced the claims process which BP had established to fulfill its obligations as a responsible party pursuant to the Oil Pollution Act of 1990 (hereinafter “OPA”). The protocol established by the defendants sets forth the procedure for the submission and resolution by GCCF of claims by individuals and businesses for costs and damages incurred as a result of the BP oil spill incident.
Mr. Ditch is the sole proprietor of a business engaged in aquaculture, specifically the growing of farm-raised hard-shell clams on sovereignty submerged land leased from the State of Florida.
GCCF Payment Methodology
During GCCF Phase I, which operated from August 23, 2010 through November 23, 2010, GCCF accepted Emergency Advance Payment (“EAP”) claims. Over 475,000 EAP claims were filed with GCCF by BP oil spill victims from August 23, 2010 through November 23, 2010. GCCF paid in excess of $2.5 billion to more than 169,000 Phase I claimants. In sum, the average total amount paid per EAP claimant by GCCF was a paltry $14,793.00. A claimant who received an EAP during Phase I was not required to execute a “Release and Covenant Not to Sue” BP or any other party.
During GCCF Phase II, known as the “Interim Payment/Final Payment” claims process, GCCF received the following three types of claims: Quick Payment Final Claim, Interim Payment Claim, and Full Review Final Payment Claim.
Under the “Quick Payment Final Claim,” a claimant who had received a prior EAP or Interim Payment from GCCF could receive, without further documentation of losses caused by the BP oil spill, a one-time final payment of $5,000 for individuals and $25,000 for businesses. Claimants seeking a Quick Payment were required to submit with their claim form a “Release and Covenant Not to Sue.”
Defendants cannot justify limiting payments under the “Quick Payment Final Claim” program to just $5,000 for individuals and $25,000 for businesses. There is no evidence that these amounts even remotely represent adequate consideration to compensate claimants for the damages that claimants did or will suffer as a result of the BP oil spill.
Under the “Interim Payment Claim,” a claimant allegedly could elect to receive compensation for documented past losses or damages caused by the BP oil spill for which the claimant previously had not been compensated. A claimant seeking an Interim Payment was not required to sign a “Release and Covenant Not to Sue.” A claimant was permitted to file only one Interim Payment Claim per quarter.
Under the “Full Review Final Payment Claim,” a claimant could receive payment for all documented past damages and estimated future damages resulting from the BP oil spill. Claimants wishing to accept a Final Payment were required to sign and submit a “Release and Covenant Not to Sue.” Any Full Review Final Payment awarded to a claimant was decreased by the amount of any previous payments received.
Claim forms for Phase II became available to the public on December 18, 2010. The assessment of claimant eligibility and calculation of losses for those claims did not begin until February 18, 2011.
GCCF’s “Expedited EAP Denial” Strategy
The complaint alleges, in part, that:
(a) Defendants misled Plaintiff by fraudulently, recklessly, negligently and/or knowingly stating the protocol under which GCCF operates is structured to be compliant with OPA and apply the standards of OPA;
(b) in violation of OPA, GCCF‘s approach to determining claimant eligibility was driven by two factors: (1) loss location; and (2) claimant business type;
(c) Defendants misled Mr. Ditch by fraudulently, recklessly, negligently and/or knowingly employing an “Expedited EAP Denial” strategy against him. This strategy is as follows: “Fail to verify, investigate, and appraise the amount of loss claimed by the claimant in the EAP claim and deny the EAP claim without ever requesting supporting documentation from the claimant;” and
(d) Defendant Feinberg has misled Plaintiff by fraudulently, recklessly, negligently and/or knowingly using the fear of costly and protracted litigation to coerce Plaintiff Ditch to file a claim in GCCF Phase II rather than file a lawsuit.
More than 74,000 unique claimants that filed EAP claims received denial letters from GCCF during Phase I.
Feinberg’s “Release and Covenant Not to Sue” Requirement
The ultimate objective of Defendants’ “Expedited EAP Denial” strategy was to limit BP’s liability by obtaining a signed “Release and Covenant Not to Sue” from as many BP oil spill victims as possible.
GCCF’s “Release and Covenant Not to Sue” requirement forces economically and emotionally-stressed victims of the BP oil spill to sign a release and covenant not to sue in order to receive a miniscule payment amount for all damages, including future damages, they incur as a result of the BP oil spill. GCCF’s “Release and Covenant Not to Sue” requirement violates OPA, State contract law, and is contrary to public policy. Forcing BP oil spill victims to sign a “Release and Covenant Not to Sue” in order to be compensated for their damages was the idea of Defendant Kenneth R. Feinberg.
Plaintiff’s Experience with Feinberg, et al.
On November 23, 2010, Plaintiff Ditch submitted an EAP claim to GCCF. This EAP claim was for lost earnings or profits for six months. On December 6, 2010, merely thirteen (13) days after Plaintiff Ditch submitted his EAP claim, GCCF sent Plaintiff Ditch its boilerplate denial letter wherein GCCF states, “You submitted a claim to the Gulf Coast Claims Facility (“GCCF”) for an Emergency Advance Payment for damages relating to the Deepwater Horizon incident on April 20, 2010. Your submission did not provide sufficient documentation to support your claim and consequently, your request for an Emergency Advance Payment has been denied.”
GCCF Phase I protocols did not include a process by which a claimant could appeal an adverse resolution or have its claim re-reviewed by GCCF. Prior to issuing its denial letter, GCCF never requested supplemental supporting documentation from Plaintiff Ditch which would support his EAP claim.
After GCCF denied his EAP claim, Plaintiff Ditch refused to be forced by Defendants into filing a claim during GCCF Phase II which would ultimately require him to sign a “Release and Covenant Not to Sue” in exchange for a miniscule percent of all damages to which he is entitled under OPA.
As a direct result of Defendants’ “Expedited EAP Denial” strategy, after approximately 10 years of successful operation, Plaintiff Ditch lost his market share for hard-shell clams in upstate New York.
As of the date of the filing of this Complaint, Plaintiff Ditch now estimates the extent of damages directly resulting from Defendants’ “Expedited EAP Denial” strategy to be approximately $1,570,357.00.
Unconscionable But Very Effective
Defendants’ “Expedited EAP Denial” strategy and overall “Delay, Deny, Defend” strategy, although unconscionable, have proven to be very effective for Defendants and BP:
(a) GCCF forced 84.68% of the claimants to sign a “Release and Covenant Not to Sue” in which the claimant agreed not to sue BP and all other potentially liable parties;
(b) only 15.32% of the claimants were not required to sign a “Release and Covenant Not to Sue” in order to be paid;
(c) GCCF denied payment to approximately 61.46% of the claimants who filed claims; and
(d) the average total amount paid per claimant by GCCF was a paltry $27,466.47.
In sum, Plaintiff Ditch alleges that BP is responsible for the oil spill incident; Defendants Feinberg, Feinberg Rozen, and Green (independent contractors), via employment of their “Expedited EAP Denial” strategy, are responsible for not compensating, and thereby damaging the economic interests of Plaintiff Ditch and more than 74,000 other unique claimants that filed EAP claims with GCCF during Phase I.
This case is brought by Plaintiff under the following causes of action: (a) Gross Negligence; (b) Negligence; (c) Negligence Per Se; (d) Fraud; (e) Fraudulent Inducement; (f) Promissory Estoppel; and (g) Unjust Enrichment.
Mr. Ditch seeks economic and compensatory damages, in amounts to be determined at trial, and punitive damages.