Attorney General Bill McCollum appealed Friday to the federal government and besieged oil giant BP for help in his battle over the $20 billion compensation fund established for Gulf oil victims.
McCollum sent letters to U.S. Attorney General Eric Holder and BP general counsel Jack Lynch urging that they support his push for revisiting the protocols for those seeking oil spill settlements. Independent administrator Kenneth Feinberg, who oversees the Gulf Coast Claims Facility, is putting heavy emphasis on a business or individuals proximity to the Gulf which McCollum says could eliminate hundreds of potential victims in Florida.
In his letters to Holder and Lynch, McCollum warned that Feinbergs approach may well hamper injured parties as they seek to be made whole, and lead to unnecessary litigation.
McCollum also sought to enlist BP as an ally in the states bid for a more generous compensation process particularly when it comes to covering claims by businesses far from the beach that still feel they lost income because of the spill. McCollum contends that BP will be inundated with lawsuits from victims ruled ineligible for a direct payment from the $20 billion escrow account controlled by Feinberg.
Even claims that have been paid under the BP claims process will apparently be rejected by the GCCF, McCollum told Lynch. Such an inequitable result is harmful to the public and not in BPs long-term interest.
The compensation fund, which was passed this week from BP to the Gulf Coast Claims Facility, has drawn mixed reaction early from Florida organizations. Florida Realtors secured one of the first major settlements from the fund, with $16 million awarded Monday for compensating agents for lost sales and broken contracts.
But the Florida Restaurant and Lodging Association announced Wednesday that it was partnering with three law firms to help members navigate the claims process. Carol Dover, president of the association, said a lawsuit against BP remained a possibility partly because of increasing frustration with the compensation process.
Unfortunately, over the past couple of weeks, we have begun to see claims denied, Dover said.
Real estate developer St. Joe Co., the Panhandles largest private landowner, this week also sued a Houston-based company that supplied drilling fluids it alleges should have controlled pressure in the Deepwater Horizon well and prevented the April 20 blowout leading to the massive spill.
St. Joe contends that at its worst point during the spill, it lost about $1.4 billion in stock value.
McCollum said the claims process has become more complicated and restrictive under Feinberg. He said presumptive victims who dont meet the narrower compensation standards in place will end up pushing their claims in court.
The protocols appear to be significantly more restrictive for eligibility, McCollum told the News Service of Florida. I think BP and a lot of us assumed the escrow account would proceed with the same standard of openness that BP did, and the claims could be filed with the same opportunities.
More than 300 lawsuits against BP and its partners have been filed and assigned to a federal judge in New Orleans. People and businesses who receive final, lump-sum settlements from the compensation fund will be asked to sign a release waiving their right to sue BP.
But those seeking emergency payments would still be allowed to sue, with the value of the initial compensation subtracted from any future legal settlements.
I would think they would want to be an ally, McCollum said of BP in his challenge to Feinberg. Theyre going to face a lot of lawsuits.
BP did not immediately respond to requests for comment.
The GCCF had received 20,062 claims through yesterday, officials said. Feinberg earlier this week also disputed the criticism from McCollum and his fellow Republican attorney general, Troy King of Alabama, who has raised similar concerns about such companies as suppliers of beachfront businesses who suffered secondary damage from the spill.
Feinberg has said he respectfully disagreed with the attorneys general. He has said that distance from the spill will be only one of the factors involved in compensation rulings but that a critical component will remain: how dependant a claimant is on the Gulf.
