NEW ORLEANS (Legal Newsline) - Paying oil spill claims on an honor basis sounds generous to a fault, but Gulf Coast Claims Facility administrator Kenneth Feinberg plans to keep doing it.
On Aug. 18, he roasted plaintiff lawyers who want him to stop issuing quick payments without substantiation so that victims can seek interim payments with full review.
His lawyer, David Pitofsky of New York City, urged U.S. District Judge Carl Barbier to reject their call for appointment of a special master over Feinberg.
He wrote that more than 120,000 claimants have taken advantage of quick payments.
"Quick payments claims are almost presumptively payable," he wrote.
"They require no substantiation other than proof that the claimant previously received an emergency assistant payment or an interim payment," he wrote.
"By contrast, an interim claim requires the claimant to document previous earnings and claimed losses, and can include fully documented claims, imperfectly documented claims, invalid claims, and fanciful claims," he wrote.
He wrote that the quick payment program offers $5,000 to individuals and $25,000 to businesses in full satisfaction of remaining claims.
He wrote that a plaintiff steering committee suggested without supporting evidence that only desperate people elect quick payments.
He wrote that it can be a rational decision to accept an assured short term payment over a possibly larger but postponed long term payment.
"Threatened and pending lawsuits are routinely settled on the basis of such consideration," he wrote.
"Plaintiffs' unsupported supposition that the citizens of the Gulf are incapable of evaluating their options and masking an informed decision to accept or reject the quick payment option is patronizing at best," he wrote.
He wrote that claimants might disfavor interim claims for a number of reasons.
He wrote that conditions in the Gulf appear to be improving and claimants can't document damage.
He wrote that claimants may have already been overpaid in the emergency program.
He wrote that the facility has complied with an order Barbier signed in February, covering communications with claimants.
Barbier ordered Feinberg to refrain from contacting claimants with lawyers.
He ordered him to refrain from saying the facility is neutral or independent of BP.
He ordered him to begin communications by advising claimants they can consult with counsel before signing releases.
He ordered him to refrain from giving legal advice to claimants or advising them not to hire counsel.
He ordered him to disclose options under the Oil Pollution Act if claimants don't accept final payment.
He ordered him to advise claimants that BP compensates attorneys and community representatives who assist them.
Pitofsky wrote, "The Gulf Coast Claims Facility fully implemented those directions."
"Moreover,the Gulf Coast Claims Facility is already effectively supervised by the Coast Guard and by several committees of Congress," he wrote.
BP separately asked Barbier to reject appointment of a special master.
Don Haycraft of Houston wrote that the steering committee's motion ignored $3 billion in emergency payments.
He wrote that they relied on interim payment statistics more than two months out of date.
"Plaintiffs continue to complain that the Gulf Coast Claims Facility has processed quick pay claims more swiftly than interim claims," Haycraft wrote.
"Of course, by their very nature quick pay claims can be processed almost immediately because they require no further substantiation or support."
He wrote that claimants who don't like it are free to file interim or final claims.
"Some claimants will not be able to substantiate their claims for Oil Pollution Act compensable damages, connect their alleged damages to the oil spill, or provide a sum certain as required by the Oil Pollution Act," he wrote.
"Others may not have any documentation or will have greater difficulty providing documentation due to, for example, the prevalence of a cash economy in certain industries," he wrote.
He wrote that the steering committee's allegation of duress was without merit.
"Rhetorical repetition is no substitute for evidence, and on this score plaintiffs offer nothing that even approaches the high legal standard for establishing duress," he wrote.
"To make such a claim, a complainant must demonstrate that another party has taken or threatened to take some action against complainant that actually overcomes the complainant's free will by forcing her to do something she otherwise would not have done," he wrote.