BP fund, Feinberg face lawsuits by claimants

Mon Feb 28, 2011 9:45pm GMT
 

By Moira Herbst

NEW YORK Feb 28 (Reuters Legal) - BP Plc's (BP.L: Quote) fund to compensate victims of the worst oil spill in U.S. history is facing lawsuits in Florida and Louisiana state courts, in which victims are seeking to undo agreed settlements or recover more money.

The lawsuits could further undermine the credibility of the fund and its administrator, Kenneth Feinberg, after a federal judge in Louisiana ordered Feinberg to stop describing himself as independent of BP.

Marine salvage company Pinellas Marine Salvage Inc. filed suit in Florida state court on Friday alleging negligence and fraud and seeking economic, compensatory and punitive damages. On Feb. 14, Knotty Girl Fishing LLC of Tangipahoa Parish, Louisiana, filed suit against BP in Louisiana state court seeking to undo an agreement to accept a $25,000 payment from the fund in exchange for giving up the right to sue BP and its partners.

BP set up the fund last year to compensate people who had been injured by the oil spill and named Feinberg as its administrator at President Barack Obama's suggestion.

On Feb. 2, U.S. District Court Judge Carl Barbier, who is overseeing hundreds of lawsuits consolidated against BP in the Eastern District Court of Louisiana, ordered Feinberg to stop calling himself "neutral" or "completely independent" of BP. Attorneys general from Mississippi, Alabama, Florida and Louisiana have made filings with the court asking the judge to take further control of the fund, and plaintiffs' attorneys have asked Barbier to throw out more than 90,000 lawsuit waivers that claimants have signed in exchange for payments.

BP declined to comment and messages requesting comment from Feinberg's office were not immediately returned. In an amicus brief filed to Barbier's court on Feb. 23, Feinberg said the Gulf Coast Claims Facility is in full compliance with the law and has gone "far beyond" what the law requires in terms of paying out claims. The fund has received more than 490,000 claims and paid out about $3.5 billion to approximately 170,000 claimants.

In the Florida lawsuit, filed in the Sixth Circuit State Court in Clearwater, plaintiffs alleged Feinberg and the fund are circumventing many of the rights provided to victims of the BP oil spill under the Oil Pollution Act of 1990. It stated they are employing a "delay, deny, defend" strategy against claimants to coerce them into accepting "grossly inadequate" settlements. The complaint was filed by Brian Donovan of the Donovan Law Group on behalf of Pinellas Marine Salvage Inc.

In the Louisiana case, Knotty Girl Fishing alleged it was misled by BP's Gulf Coast Claims Facility into accepting a final payment in exchange for signing away its right to sue BP and its partners. It referenced changes the fund made to its website after Barbier's order that acknowledged the fund is acting on behalf of BP. The suit -- filed by John B. Edwards of Edwards & Associates in Amite, Louisiana, and Frank C. Dudenhefer Jr. of the Dudenhefer Law Firm in New Orleans - seeks to undo the legal release the company signed and recover additional compensatory damages.

(Reporting by Moira Herbst of Reuters Legal; Editing by Eddie Evans)

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