Feinberg backs BP in bid to overturn settlement

Shrimp trawler on the Gulf Coast

Kenneth Feinberg, who worked for BP in the Gulf oil spill while claiming to be independent, is trading again on his reputation as a modern day Edward the Confessor.  He has urged the Supreme Court to grant cert in BP's attack on the deal it negotiated but now regrets in part.

His amicus brief declares "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."  ``Selected by Executive Branch officials' is cagey.  True for the 9/11 Fund, not for the BP spill.  He was "selected" by BP and presented at a June 2010 White House press conference to spread pacifying oil on the troubled waters of public opinion as the Gulf region reeled from the still uncontained spill.

In an incidental irony BP is trying to remove Patrick Juneau as court-appointed settlement administrator.  They claim not to have known Juneau had represented Louisiana in dealing with the Feinberg-administered "Gulf Coast Claims Facility".  Feinberg, of course, knew, so in my view his principals are chargeable with that knowledge.   MDL judge Carl Barbier ruled that Feinberg was BP's agent. - gwc

Mass Tort Litigation Blog:

By Alexandra Lahav (UConn Law School)

The papers in the Deepwater Horizon Settlement cert petition are mostly in.   The case is BP Exploration & Production Inc. v. Lake Eugenie Land & Development, Inc. -- you can find the documents on SCOTUSBLOG.

BP's basic argument is that the settlement approved by Judge Barbier in the mass tort class action against it was ultra vires because it contemplated giving money to people who were, according to BP, not injured.  The plaintiffs respond that BP is just trying to overturn a settlement it championed through the backdoor now that its unhappy with the deal.

One of the most interesting briefs filed in this dispute is from Kenneth Feinberg, who oversaw both the 9/11 Victims Compensation Fund and the Gulf Coast Claims Facility.
The latter was the entity that settled claims arising out of the Deepwater Horizon oil spill immediately after it happened.

Feinberg is a world class mediator and one of the most prominent figures in the mass tort world.   The class action settlement that BP is now disputing is the successor to the Gulf Coast Claims Facility, which he headed.   What the class action did that the Gulf Coast Claims Facility could not do is give BP global peace. In other words, all civil claims against BP arising out of the oil spill are precluded by that class action settlement.
Feinberg's brief asks the Supreme Court to grant cert.  The argument is basically the following: claim facilities like the ones he ran apply a causation requirement that parallels that of the tort system. But, he 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. The brief explains:

..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.  Future funds would either adopt the Fifth Circuit's new standard, thereby threatening to overwhelm the claims process with spurious claims, or continue to require causation, thereby channeling claimants toward litigation where the burden of proof is lower. (Feinberg petition at 6).
This argument seems to me to be just wrong.  The settlement imposed a looser causation requirement than tort law requires.  But that causation requirement was agreed to in order for claimants collect under the settlement; it is not the causation requirement of the substantive law. In the future, if a defendant perferred to create a settlement fund of the Feinberg-ian variety, they could do so and rest "easy" that the causation requirement of the substantive law remains as it always was. (Whether the requirement of specific causation is the best requirement from a normative point of view in mass tort litigation I leave to another day - AL)."

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