It is almost a year ago that an explosion at the Deepwater Horizon well started sending oil into the Gulf of Mexico. Since then, we have all watched, with some mix of helplessness, urgency and disbelief, as oil gushed unstoppably into the ocean, appearing later along the southern shore of the United States. In the ongoing paradox that is oil in the United States, the same substance that this country is deeply addicted to for our day to day living became an unrefined destroyer, obliterating natural ecosystems and human livelihoods for hundreds of miles.
In the aftermath of this destruction, BP appointed one Kenneth Feinberg as administrator of their $20 billion fund set aside to compensate victims of the Gulf oil spill. On the surface, it sounds great — but the way that BP has been talking about Feinberg is as slick as the water. BP routinely refers to him, and he refers to himself, as “neutral” or “independent,” when the reality is that he is appointed by BP and essentially acting on their behalf.
According to a new ruling by a federal judge from New Orleans, from this point forward, Mr. Feinberg and BP will both need to stop referring to him as “neutral.” In addition, BP will need to disclose in all communications of the Gulf Coast Claims Facility (GCCF) that Feinberg and the GCCF are both acting on behalf of BP.
“While BP may have delegated to Mr. Feinberg and the GCCF independence in the evaluation and payment of individual claims, many other facts support a finding that the GCCF and Mr. Feinberg are not completely ‘neutral’ or independent from BP,” said the judge.
On one hand, Mr. Feinberg argues that those who agree to a settlement will receive more money and get it faster than those who join one of the claims pending in Federal court. On the other hand, those who agree to a settlement also agree to not take their claims to court in the future.
Around 87,000 people have accepted a settlement from Feinberg, rather than taking their claim to Federal court, and so far the fund has handed out $3.5 billion.
While this ruling does not say that all previous settlements should be revisited, it opens the door to question the integrity of how BP is dealing with their settlement fund.
Presenting their settlement administrator as neutral is clearly misleading, and I’m glad that a judge is stepping in to say that the language is legally unacceptable — but at the same time it’s hard to believe that anyone would not understand that Feinberg is acting on the behalf of BP.
Do you think this means that all of the 87,000 settlements that have been signed so far are compromised and should be reopened? Or should people be aware enough to realize that they can join one of the hundreds of lawsuits against BP rather than take BP’s money?
Photo Credit: lagohsep / Creative Commons via Flickr