Plaintiffs File Motion to Hold Kenneth R. Feinberg, et al. Accountable for Financially Ruining Them
Tampa, FL (April 25, 2014) – Plaintiffs Pinellas Marine Salvage, Inc., John Mavrogiannis, Selmer M. Salvesen, and Andrew J. Ditch have filed a Motion to Remand or, in the Alternative, Motion to Commence Formal Discovery in the BP Oil Spill multidistrict litigation (MDL 2179).
On August 23, 2010, Feinberg Rozen, LLP, doing business as GCCF, replaced the claims process which BP had established to fulfill its obligations as a responsible party under OPA 90.
According to the plaintiffs, Feinberg used the fear of costly and protracted litigation to coerce victims of the BP oil spill to accept grossly inadequate settlements from GCCF. During town hall meetings organized to promote GCCF, Feinberg repeatedly told victims of the BP oil spill, “the litigation route in court will mean uncertainty, years of delay and a big cut for the lawyers.” “I am determined to come up with a system that will be more generous, more beneficial, than if you go and file a lawsuit.” “It is not in your interest to tie up you and the courts in years of uncertain protracted litigation when there is an alternative that has been created,” Feinberg said. He added, “I take the position, if I don’t find you eligible, no court will find you eligible.”
To limit BP’s liability, Feinberg, et al. employed two strategies against oil spill victims with legitimate damage claims: (a) an “Expedited Emergency Advance Payment (“EAP”) Denial” strategy, and (b) a “Delay, Deny, Defend” strategy. This resulted in tens of thousands of BP oil spill victims and GCCF victims, including Plaintiffs, being financially ruined by Feinberg, et al.
Plaintiffs filed their actions against Feinberg, et al. in Florida state courts asserting claims for gross negligence, negligence, negligence per se, fraud, fraudulent inducement, promissory estoppel, and unjust enrichment under Florida state law. The cases were subsequently transferred by the United States Judicial Panel on Multidistrict Litigation (JPML) to the MDL 2179 Court.
Because all Motions to Remand are stayed and Plaintiffs are not permitted to propound discovery by the MDL 2179 Court, Plaintiffs essentially have no recourse through the legal process.
Plaintiffs pointed out in their motion that the purpose of the Federal Rules of Civil Procedure is “to secure the just, speedy, and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1. As of the date of the filing of this motion, approximately 38 months have passed since Plaintiffs filed their complaint against Feinberg, et al.
Plaintiffs also explained that the JPML transferred, albeit inappropriately, their actions to MDL 2179 for coordinated or consolidated pretrial proceedings. These actions were not transferred in order to be indefinitely stayed (in essence, “warehoused”) for the purpose of ensuring that Feinberg, et al. are never held accountable for their tortious acts.
N.B. – BP paid Feinberg Rozen, LLP a sum of $1.25 million per month to limit its liability (“administer the BP oil spill victims’ compensation fund”).
In his brief, Kenneth R. Feinberg self-servingly argues that the U.S. Supreme Court’s review is needed to ensure that the Fifth Circuit’s rulings in this case do not compromise the ability of future programs like the Deepwater Horizon Fund “to serve as viable, much-needed alternatives to conventional mass tort litigation.”
BP Oil Spill: Plaintiffs’ Phase Two Post-Trial Brief
Had BP Prepared for a Deepwater Blowout, With a Capping Stack Available on April 20, 2010,
the Well Could Have Likely Been Shut in Within 24 Days or Less
Tampa, FL (December 22, 2013) – Phase Two was divided into two segments: the Source Control segment and the Quantification segment. The Source Control segment was tried as a bench trial before the MDL 2179 Court beginning on September 30, 2013, and concluding on October 3, 2013. The Quantification segment was tried as a bench trial before the MDL 2179 Court beginning on October 7, 2013, and concluding on October 17, 2013.
On December 20, 2013, Plaintiffs submitted their Post-Trial Brief to address specific legal and factual issues raised by the Court and by the Parties based on the evidence admitted during the Phase One and Phase Two Limitation and Liability Trial. The following are excerpts from this brief.
Plaintiffs contend, “It was established at trial that BP consciously disregarded the need to prepare for an uncontrolled deepwater blowout and willfully extended the capping of the Macondo Well by intentionally concealing material information and affirmatively misleading the U.S. Government and others regarding the volume of hydrocarbons escaping from the well after the blowout.”
The question is whether BP’s overall conduct – as evidenced by not only the Phase Two issues of post-spill lying to the Government and pre-spill lack of preparedness, but also the Phase One issues of fast and reckless drilling, establishing and maintaining a dysfunctional leadership team, proceeding with the cement job without reliable test results, proceeding with the displacement despite a failed negative pressure test, refusing to correct known and persistent maintenance failures, and recklessly selecting, configuring, and refusing to upgrade the BOP – demonstrates a willful, wanton and reckless disregard for the environment, the property rights of others, and/or public health and safety.
With respect to the Phase Two evidence in particular, BP did not dispute the fact that BP did absolutely nothing in advance of the Macondo incident on April 20, 2010 to develop source control plans and equipment in preparation for a possible deepwater blowout. BP simply attempts to muster, in its defense, an argument that the Government allegedly “approved” of its lack of preparation and that others in the industry allegedly failed to do the same.
Based on the law and on the evidence submitted in the Phase One and Phase Two Trial, BP’s corporate conduct associated with the Macondo Well explosion, fire, blowout and resulting spill was willful, wanton and reckless, and was a direct result of BP corporate policies and/or with the knowledge, approval and/or ratification of BP officers with policymaking authority.
A Finding of Willful, Wanton or Reckless Conduct Should Be Made on the Series and Accumulation of Acts and Omissions Established by the Evidence Admitted in the Phase One and Phase Two Trial
As set forth in Plaintiffs’ Phase One Post-Trial submissions, an accumulation or series of negligent acts or omissions are properly viewed together in order to determine whether the defendant has acted out of gross negligence, willful misconduct, or a wanton or reckless disregard.
Hence, the burden is not on Plaintiffs to show that BP’s pre-spill planning, in and of itself, rises to the level of wanton, willful or reckless conduct. Nor are the plaintiffs required to show that BP’s post-spill intentional misconduct, in and of itself, caused or contributed to the uncontrolled flowing of the well for 87 days.
Rather, it is only Plaintiffs’ burden to show that BP’s (i) pre-spill failure to plan, combined with BP’s (ii) post-spill intentional misrepresentations and concealment – combined with BP’s (iii) fast and reckless drilling, with little or no regard for the safe kick margin, despite multiple kicks, and in violation of the MMS Regulations requiring a safe drilling margin; (iv) creating, maintaining and largely ignoring a dangerously dysfunctional leadership team, which embraced the corporate culture of cutting costs and maximizing profits; (v) proceeding with the cement job without a set of reliable test results confirming the slurry’s stability; (vi) proceeding with the displacement despite a failed negative pressure test; (vii) selecting, configuring, sequencing, modifying, and refusing to upgrade the safety critical BOP, which was not sufficient or appropriate for the Macondo well; and (viii) knowingly refusing to correct the persistent maintenance failures of safety critical equipment on the Deepwater Horizon – evidences a willful and reckless disregard for the environment, the property rights of others, and/or public health and safety.
The Phase Two evidence, in this respect, cannot be untethered from the Phase One evidence, in making the overall determination of BP’s state of mind with respect to the damages and effects of the Macondo disaster.
Nevertheless, the Phase Two evidence, standing alone, establishes that BP was wanton and reckless in both its pre-spill lack of planning and in its post-spill lying to the Government and others regarding the flow rate and source control.
It is Undisputed that BP Willfully and Recklessly Refused to Prepare for an Uncontrolled Deepwater Blowout, the Largest Known Risk in the Gulf
There is no question that it was foreseeable to BP that a deepwater well in the Gulf of Mexico could experience a blowout. Indeed, BP Management had identified the risk of a deepwater blowout as one of the highest risks worldwide, and the number one risk in the Gulf of Mexico. And both BP and the industry generally knew, beginning in 1991, that it was necessary to engage in deepwater source control planning and to develop deepwater source control capping equipment and techniques. Yet, BP Management admittedly spent no time or money preparing for a deepwater source control effort. BP Management did not direct or provide for any training in deepwater source control. Nor did BP Management develop or acquire any capping equipment. It is clear, in sum, that BP’s pre-spill preparation was nothing more than a plan to make a plan.
Both Legally and Factually, BP Has Failed to Establish a Defense Predicated on an Alleged “Industry Standard”
Mere compliance with industry standards does not preclude a finding of gross or egregious conduct. In this particular case, the entire industry recognized the need to develop capping stack equipment as far back as 1991. Indeed, an industry study predicted and diagramed at that time an uncontrolled blowout strikingly similar to what would occur at Macondo almost twenty years later. To the extent that companies other than BP may have also failed to adequately prepare for a deepwater blowout, this reveals nothing more than laxness, inefficiency, and inattention to innovation by other companies. Yet BP, a self-proclaimed “leader” in the industry, refused to invest a single penny into developing or acquiring the necessary equipment for post-spill source control.
As a factual matter, BP came far from proving that there was an “industry standard” to develop no pre-spill capping stack or other source control plans, equipment or technology. See, e.g., Maxey v. Freightliner Corp., 665 F.2d 1367, 1376 (5th Cir. 1982) (when considering whether a defendant has complied with an industry standard, “a district court must limit its consideration to evidence actually presented at trial”). Indeed, as noted, the industry was recognizing the need for such devices since 1991.
BP Knew For More Than Two Decades That Capping Devices Are The Best Available Technology For Controlling Deepwater Blowouts
Well capping techniques have been applied both on land and offshore locations and have historically proven successful in regaining well control in shorter durations and are preferred over the more time-consuming alternative of drilling a relief well. Capping devices have existed and been used in the industry for decades. Capping device technology is feasible, well proven and not novel. Indeed, the Macondo Capping Stack was assembled using current technology and “off-the-shelf” equipment.
Within a few days of April 20, 2010, representatives from BP, Transocean, Cameron and Wild Well Control, met at BP’s offices to discuss capping solutions. On April 27, 2010, Wild Well Control provided BP with a project memo that raised “Well Capping” and “Installation of Capping Stack on existing BOP” as options that should be considered. The memo also included a summary of procedures for installation of a capping stack onto the existing BOP.
Moreover, in response to U.S. Secretary of the Interior Ken Salazar’s request for ideas from the industry after the Macondo event, Apache Corporation responded on April 30, 2010, “[i]f the LMRP can be removed from the BOP, conventional wisdom would suggest that another subsea BOP could be placed on top of the Horizon’s BOP in order to close the well in.”
There was evidence presented at trial that capping stack devices had, in fact, been developed, deployed and utilized by others in the industry, using existing technology. The evidence showed that Cameron’s own BOPs had been used as capping stack solutions as early as the 1980s, and were actually used to kill wells in Kuwait. BP itself, in 2001, adopted well capping devices in Alaska as the best available technology. Indeed, BP concluded and certified that a well capping solution could mitigate the overall duration and extent of an uncontrolled blowout by 50%.
With respect to deepwater operations, the evidence established that at least two capping-type solutions had been previously utilized in deep water: (1) a blowout in Malaysia in 1988, and (2) the JIM CUNNINGHAM incident in the eastern Mediterranean in 2004, where a BOP-on-BOP technique was used. There was also evidence that Shell and Senta Drilling had capping devices available for a deepwater project off the coast of Brazil. And BP itself recognized the potential use of capping stacks in deepwater environments, identifying them as a “Level 3: Phase 2” solution in the January 2010 Gulf of Mexico Deepwater SPU Well Control response guide.
BP Violated Regulatory Standards
As set forth in Plaintiffs’ Phase One Post-Trial submissions, a defendant’s compliance with regulatory standards does not preclude a finding of gross or egregious conduct. Moreover, in Phase Two as in Phase One: (a) The Government relied largely on information that was provided (or not provided) by BP; (b)The MMS and Coast Guard officials were frequently overtaxed, understaffed, and of limited training; (c) There were several instances where BP’s conduct (or failure to act) went beyond the scope of what was ostensibly permitted under the specific regulation, application, or approval in question; (d) There were several instances where BP provided insufficient, inaccurate or misleading information to the Government; and (e) BP clearly violated MMS regulations.
Specifically, it was clear that the Oil Spill Response Plan (OSRP) ostensibly approved by the Government was directed toward efforts to try to contain and collect the oil once it reached the surface. The Oil Spill Response Plan was not intended to be a source control plan, and the regulations concerning the plan requirements expressly state: “Nothing in this part relieves you from taking all appropriate actions necessary to immediately abate the source of a spill.” As a factual matter, moreover, the evidence is clear that the Government expected BP to be able to abate the source of an oil spill as soon as possible. “The federal government has neither the skilled personnel nor the appropriate equipment to respond independently to an oil blowout in deepwater and must rely wholly on the responsible party.”
The Phase Two evidence further establishes that the Federal Government was relying on BP to provide the Government with source control information. In addition to lying to the Government with respect to the flow rate (to which BP pleaded guilty), BP also failed to comply with its pre-spill representation to the MMS regarding the training of its employees in source control response.
Far from establishing some type of a defense based on the alleged “approval” of its OSRP by the Government, BP clearly violated the regulatory requirements to: (i) take necessary precautions to keep the well under control at all times, 30 C.F.R. ¶250.401; (ii) immediately abate the source of a spill, 30 C.F.R. ¶254.5(c); and (iii) use the Best Available and Safest Technology (BAST), 30 C.F.R. ¶¶250.105, 107 and 401(a). At the end of the day, BP certified to the Federal Government in its Initial Exploration Plan for the Macondo well that it was capable of responding at the source to a worst-case discharge of up to 162,000 barrels of oil per day. BP was clearly not in compliance with respect to that regulatory certification.
Advance Preparation Would Have Unquestionably Allowed BP to Mitigate the Length and Extent of the Spill, Irrespective of the Particular Circumstances Surrounding a Blowout
Aside from the fact that a similar post-spill situation was specifically predicted by the Drilling Engineers Association in 1991, the evidence is clear that efforts prior to the spill would have reduced the duration and extent of the post-blowout event. BP representatives admitted that “it’s much better to have a plan in place” than to “create a plan … in the middle of a crisis.” Former CEO Tony Hayward and the leaders of the post-spill source control effort, Charles Holt and James Dupree, all admitted that BP did not have the equipment it needed in place, and were essentially creating plans on how to kill the well as they went along. It is because BP “didn’t have the equipment to attack a Macondo-type event” that “we had to engineer so many things simultaneously on the fly.”
Cameron personnel similarly confirmed that the lack of pre-spill planning resulted in “paralysis by analysis,” “running this show like a game of Scrabble,” having “no clue what to do next,” and “running around like chickens with their heads cut off.”
In sum, the evidence establishes that, had BP prepared for a deepwater blowout, with a capping stack available on April 20, 2010, the well could have likely been shut in within 24 days or less.
BP’s Intentional Misrepresentations and Omissions Combined with Multiple Other Causative Factors – including BP’s Own Reckless Failure to Prepare for a Blowout and Post-Spill Miscalculations and Mistakes – to Extend the Duration and Expanse of the Spill
The General Maritime Law clearly recognizes that multiple causative factors can combine and contribute to a harmful series of results. And, as set forth in Plaintiffs’ Phase One Post-Trial submissions, an accumulation or series of negligent acts or omissions are properly viewed together in order to determine whether the defendant has acted out of gross negligence, willful misconduct, or a wanton or reckless disregard.
Plaintiffs allege that BP’s intentional misconduct in concealing material facts, overtly misstating facts it knew were not true, and otherwise misleading the Government, together with other factors, including BP’s own pre-spill failure to prepare for an uncontrolled blowout, as well as BP’s (and/or perhaps the Government’s) post-spill misjudgments and miscalculations, all conspired to significantly delay the capping of the well.
BP’s Willful Misconduct in Lying to the U.S. Government (and Others) After the Spill is Relevant to the Overall Question of BP’s State of Mind, Even If It Were Found Not to be a Direct Cause of Any Delay
The Phase Two evidence establishes that BP’s willful misconduct in lying to the Government after the spill extended the blowout by a number of weeks. Yet, even assuming arguendo that there were no causal relationship between BP’s lies and the length or extent of the spill, (which is denied), such intentional misconduct would nevertheless be relevant to the ultimate question of whether BP acted with a willful, wanton or reckless disregard. See, e.g., Clements v. Steele, 792 F.2d 515, 516-517 (5th Cir. 1986) (“the ‘mental attitude of the defendant’ is what turns ordinary negligence into gross negligence” and can be inferred from the totality of the circumstances).
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.
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.“