Fla. AG objects to lawyer payment in oil spill MDL

Bryan Cohen Jan. 17, 2012, 1:57pm


NEW ORLEANS (Legal Newsline) - Florida Attorney General Pam Bondi filed a brief on Thursday in the multi-district oil spill proceedings in New Orleans challenging a plan that she says will take hundreds of millions of dollars from business and individual claimants.

The plan would take the money from claimants who decided to pursue non-litigation recoveries through the required claims process designated by the Oil Pollution Act of 1990, she argues.

"Individuals and businesses that suffered financial losses due to the oil spill deserve to receive fair compensation as quickly as possible, and that compensation should not be reduced due to the overreaching demands of Plaintiffs' lawyers who have done nothing to help them," Bondi said.

"I have asked the court to ensure that claimants receive the full compensation that they deserve."

The court issued an order on Dec. 28 establishing a reserve account at the request of the Plaintiffs' Steering Committee without holding a hearing. As part of the order, the court directed that an amount equivalent to 6 percent of any payments made on or after Nov. 7, later amended to Dec. 31, would be withheld from claimants settling directly with the Gulf Coast Claims Facility. That 6 percent would become a potential funding source for the PSC.

"The PSC has argued that the fund would provide a source of compensation for the 'common benefit' work if it was unable to obtain compensation directly from the defendants," Bondi said.

"While the PSC has claimed that the seized 'holdback' funds might later be returned to claimants, in whole or in part, it has not acknowledged the uncertainty over when the case may be resolved, especially since the Exxon Valdez litigation continued for almost 20 years before the litigants were paid."

The 6 percent fund would be equal to approximately $850 million on the amount remaining from BP's commitment of $20 billion to the claims facility.

"The state of Florida's interest is to see that its citizens are protected, with the recovery from this environmental disaster taking place as soon as possible," Bondi said.

"Allowing the PSC to take tens of millions of dollars from the individual and business claimants that have decided to pursue a non-litigation claims process frustrates that interest and is contrary to both law and public policy."

It has been more than a year since the explosion and fire that occurred on the drilling rig Deepwater Horizon. The rig was operated by Transocean and was licensed to BP. Eleven workers died in the incident, which led to the largest offshore spill in the history of the United States.

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