District Judge Carl Barbier, who supervises the multi-district litigation arising from the BP Oil Spill has issued an order which requires that BP and attorney Kenneth Feinberg who administers the "Gulf Coast Claims Facility"
[r]efrain from referring to the GCCF, Ken Feinberg, or Feinberg Rozen, LLP (or their representatives), as “neutral” or completely “independent” from BP. It should be clearly disclosed in all communications, whether written or oral, that said parties are acting for and on behalf of BP in fulfilling its statutory obligations as the “responsible party” under the Oil Pollution Act of 1990.
The order seems wise to me. The agreement between the Feinberg firm and BP provides:
A. At the request of the White House and BP, Kenneth R. Feinberg (“Feinberg”),
acting through and as a partner of Feinberg Rozen, has established the Gulf Coast Claims Facility (“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 (the “Event”).
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1. Services and compensation
acting through and as a partner of Feinberg Rozen, has established the Gulf Coast Claims Facility (“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 (the “Event”).
***
1. Services and compensation
Feinberg Rozen shall perform the claims administration and settlement services described in Exhibit A attached hereto (collectively, the “Services”) in accordance with the terms of this Agreement, including the exhibits hereto. In performing such Services, Feinberg Rozen agrees to make available the services of Feinberg.
(b) Feinberg Rozen shall perform the Services in accordance with all applicable laws and regulations and the Claims Protocols set forth in Exhibit B. Without limiting the generality of the foregoing, Feinberg Rozen shall follow OPA as it operates and administers the GCCF.
(See the BP Horizon Spill documents page on my blog TortsToday)
Feinberg's settlement authority is limited by the terms of the OPA - and BP has the right to renew (or presumably to cancel for breach) a highly remunerative contract.
Although the agreement itself declares that there is no attorney client relationship - and the estimable Stephen Gillers says so too - I think “attorney for BP” is an accurate way to describe his role. He is settling claims and obtaining general releases. Of course claims servicing agents do similar things.
But Feinberg is an attorney of impeccable reputation. So when he claims to be “independent” that may carry persuasive weight with claimants. Certainly his authority as attorney and settlement agent appears to be broad - - so long as he stays within the parameters of the Oil Pollution Liability Act of 1990. (BP can appeal to a private panel awards of more than $500,00).
Feinberg is an authorized settlement agent of BP. I think that would be a more prudent way for the Gulf Coast Claims Facility to be described to claimants. To fail to do that presents the risk that a claimant could set aside an agreement - asserting that his waiver was not fully informed - that he thought a neutral, disinterested judgment had been made. Judge Barbier's ruling seems to substantially remedy that problem.
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