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Plaintiff Attorneys Urge Oil Spill Victims To Pursue Litigation, Not BP Compensation Fund

MIAMI BEACH  -- Plaintiff attorneys at a Gulf oil spill litigation conference have urged colleagues to advise clients to not accept money from the $20 billion BP compensation fund and instead pursue litigation.

Some raw anger at BP spilled out June 24 at HB Litigation Conferences' Oil in the Gulf: Litigation & Insurance Coverage Conference in Atlanta. HB's successor conference, also titled Oil in the Gulf - Litigation & Insurance Coverage, opened Nov. 4 at the Fontainebleau here, and several speakers took aim at the compensation program that they called a smokescreen to deflect attention from the environmental damage that was done.

"Something very clever is happening here that BP has done," said Mike Papantonio of Levin Papantonio Thomas Mitchell Rafferty & Proctor in Pensacola, Fla. "This is the very ugliest edge of corporate America. 

"Enough money makes it OK that they destroyed an entire ecosystem on the Gulf Coast?" he said sarcastically.

Perry Weitz of Weitz & Luxenberg in New York said attorneys who are not involved in the oil spill litigation MDL or Plaintiffs Steering Committee (PSC) seem to be focused on the fund.

"Litigation action, which is usually the priority . . . is not here with the people who are not involved in the MDL and PSC," he said.

He reminded the attorneys gathered about how plaintiff attorneys banded together to track down documents and hold companies accountable in the asbestos litigation that forced companies into bankruptcy.

"If you're not in the PSC, you still have to focus on the litigation," he said.

Weitz said the objective of Kenneth Feinberg, who administers the Gulf Coast Claims Facility (GCCF), is to entice potential clients to take fund money.

Ervin Gonzalez of Colson Hicks Eidson in Coral Gables, Fla., said it's important for plaintiff attorneys to tell their clients that they may give up the chance to receive punitive damages, the chance to collect full and complete damages and the right to file future claims if they file a claim with the fund. He said the PSC would work up the science and handle pretrial and discovery matters on behalf of all clients and that the compensation fund is "camouflage" that BP is using to "avoid being criminally charged and paying punitive damages."

The GCCF was established in June as part of an agreement between the Obama administration and BP to assist claimants in filing claims for costs and damages incurred as a result of the oil spill stemming from the Deepwater Horizon rig explosion of April 20, 2010. Feinberg announced in August that the GCCF was fully functioning and would begin to process claims for emergency payment. All individual and business claims and supporting documentation were transferred from BP to the GCCF, which is an independent facility run by Feinberg.

The Associated Press on Nov. 1 reported that Feinberg said that denied claims for Gulf of Mexico oil spill victims are rising dramatically because of a flood of new filings coming in without proper documentation or with no proof at all. AP reported that some 20,000 people have been told they have no right to emergency compensation, compared to about 125 denials at the end of September.

In a white paper presented at the HB oil spill conference Nov. 4, John A. Kilpatrick, Chris Miner and Clifford A. Lipscomb of Greenfield Advisors in Seattle and Atlanta said that as of Oct. 23, only 50 property loss claims had been paid by the GCCF, totaling just under $270,00 with an average claim paid of about $5,400. There were 15 Alabama claims paid totaling $98,363.38, 10 Florida claims totaling $24,400, 11 Louisiana claims paid totaling $2,600, seven Mississippi claims totaling $17,100 and two Texas claims totaling $2,300.

"Clearly, the claims process has not yet successfully addressed the significant losses in property values sustained and suffered by residents, business owners, and governmental entities in the [Gulf] region," according to the white paper.

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