The Donovan Law Group

Kenneth R. Feinberg to SCOTUS: “The BP Oil Spill Fund has been extraordinarily effective, by any measure, at efficiently and fairly compensating victims!”

Kenneth R. Feinberg to SCOTUS: “The BP Oil Spill Fund has been extraordinarily effective, by any measure, at efficiently and fairly compensating victims!”

Tampa, FL (May 10, 2015) – On September 4, 2014, Kenneth R. Feinberg filed an amicus brief with the U.S. Supreme Court in support of BP. In his brief, Feinberg asks the Supreme Court to grant cert because claim facilities, like the Gulf Coast Claims Facility, [allegedly] apply a causation requirement that parallels that of the tort system. Feinberg argues the settlement agreed to by BP does not include as strong a causation requirement, and this threatens the possibility of future compensation funds to solve mass torts. Feinberg’s argument is flawed. Yes, the BP oil spill settlement imposes a looser causation requirement than tort law requires. However, that causation requirement was agreed to by BP in order for claimants to be able to try to collect under the settlement and obtain closure for BP.

Although his basic SCOTUS argument is flawed, two statements made by Feinberg in his amicus brief are instructive.

Statement No. 1: “Kenneth R. Feinberg was selected by Executive Branch officials.”

“Amicus Kenneth R. Feinberg was selected by Executive Branch officials to help design, implement, and administer two successful alternatives to the conventional tort litigation system.” This is true for the 9/11 fund, not for the BP oil spill fund.  It is important to note that Feinberg was “selected” by BP and merely presented at a June 2010 White House press conference. Yes, Feinberg mislead (“blatantly lied to”) the U.S. Supreme Court. However, “selected by Executive Branch officials…….” does sound a great deal more impressive than “hired by Defendant BP to limit its liability.”

Statement No. 2: “Administrative claims programs like the 9/11 and Deepwater Horizon funds provide much-needed alternatives to conventional mass tort litigation.”

Feinberg’s brief is replete with statements which are intended to support this statement. The following are a few examples.

(a) The Gulf Coast Claims Facility program “demonstrates that principled, transparent, and effectively administered claims programs can fairly compensate victims, conserve judicial resources, and efficiently resolve claims without the uncertainty and cost associated with conventional litigation.”

(b) “Mr. Feinberg offers a unique perspective on effective alternatives to mass tort litigation – and has an interest in the continued viability of those alternatives. The September 11th Victim Compensation Fund and the Gulf Coast Claims Facility administered by Mr. Feinberg demonstrate that when designed and implemented appropriately, these alternatives to mass tort litigation can secure fair compensation for eligible victims, avoid delay, and alleviate crowded court dockets.”

(c) “Given scarce judicial resources, these alternatives to conventional mass tort litigation – the shortcomings of which are well-documented – are essential because they provide expedited relief for injured parties and relieve overburdened courts clogged with mass tort filings.”

(d) “The Court should therefore grant the petition to ensure that a key alternative to the conventional tort system remains viable for the fair, efficient, and expeditious compensation of injured victims.”

(e) “While these programs (the 9/11 Victim Compensation Fund and the GCCF Fund) have been extraordinarily effective, by any measure, at efficiently and fairly compensating individual victims, the Fifth Circuit’s decisions in this case affecting the causation standard, if permitted to stand, threaten to make these sorely needed alternatives to mass tort litigation unlikely to be replicated.”

(f) “The 9/11 Victim Compensation Fund and the Gulf Coast Claims Facility, both designed and administered by Mr. Feinberg, successfully compensated thousands of victims with billions of dollars in claims in a streamlined and efficient fashion.”

(g) “The numbers confirm the success of both the 9/11 Fund and the Gulf Coast Claims Facility. An overwhelming percentage of eligible claimants chose to file a claim and receive compensation from the funds rather than litigate in court. And both programs worked precisely as intended. If a claimant could demonstrate causation – i.e., that the death, physical injury, or business loss was caused, respectively, by the terrorist attacks or the oil rig explosion – payment was authorized without having to resort to litigation. Instead of waiting years for an uncertain litigation outcome, hundreds of thousands of claimants received prompt, certain, and fair compensation with relatively minimal delay and cost.”

(h) “The success of the 9/11 Fund and the Gulf Coast Claims Facility demonstrate that fair compensation can be efficiently delivered to thousands of eligible victims without the necessity of litigating for years in federal and state courts throughout the Nation.”

These statements are false and misleading.

The 9/11 victim compensation fund was established because Congress was concerned that conventional mass tort litigation would threaten the financial viability of the Nation’s airline industry. The purpose of this fund, funded entirely by federal taxpayer dollars, was not to compensate victims of the attacks in a prompt and fair manner.  See HERE and HERE.

The purpose of the Gulf Coast Claims Facility (GCCF) was not to ensure that victims of the BP oil spill received prompt, certain, and fair compensation with relatively minimal delay and cost. The numbers confirm that the principal purpose of the GCCF, funded entirely by BP, was to limit BP’s liability.

The GCCF status report data indicates that a total of 574,379 unique claimants filed claims with the GCCF during the period from approximately August 23, 2010 to March 7, 2012. The GCCF paid only 221,358 of these claimants. In sum, the GCCF denied payment to approximately 61.46% of the claimants who filed claims; the average total amount paid per claimant was a paltry $27,466.47.

The status report data further indicates that the GCCF paid a total of 230,370 claimants who filed claims with the GCCF during the “Phase II” period. Of these, 195,109 were either Quick Pay or Full Review Final payments; only 35,261 were Interim payments. In sum, the 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; only 15.31% of the claimants were not required to sign a “Release and Covenant Not to Sue” in order to be paid.

Feinberg’s “Release and Covenant Not to Sue” excluded approximately 200,000 BP oil spill victims from the MDL 2179 Economic and Property Damages Class Settlement Agreement.

There is no doubt that the above statements made by Kenneth R. Feinberg in his amicus brief are false and misleading (“blatant lies”). However, this is not the first time that Feinberg has played so fast and loose with the court. See HERE and HERE.

Enough is enough.

Let’s be very clear:

(a) A Feinberg-administered claims program like the 9/11 Fund and the GCCF does not provide the much-needed alternative to conventional mass tort litigation;

(b) Kenneth R. Feinberg was BP’s defense attorney. He was not a “Fund Administrator.” BP paid Feinberg Rozen, LLP a sum of $1.25 million per month to have Ken Feinberg limit its liability;

(c) Kenneth R. Feinberg was appointed (“hired by BP”) due to his political connections and his willingness to do whatever was necessary to limit BP’s liability; and

(d) Kenneth R. Feinberg is not the “Master of Disasters.” Kenneth is a “Master of Deception” and a “Master of Self-Promotion.”

Kenneth R. Feinberg’s latest self-promotional video is hosted by David Hammer on WWL-TV.

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