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BP Defends its Oil Spill Claims Process

NEW ORLEANS (CN) - BP claims that its claims process for people injured by the Deepwater Horizon oil spill "far exceeds" the requirements of the Oil Pollution Act, and that court monitoring of the process will make it less effective. The oil company stood up for its Gulf Coast Claims Facility in a 29-page document it filed in response to statements by plaintiffs' attorneys and Gulf Coast attorneys general that the claims process needs court monitoring.

U.S. District Judge Carl Barbier, who is overseeing more than 350 oil spill-related claims in the consolidated multidistrict litigation, called for arguments on whether the claims process administered by Kenneth Feinberg is effective enough.

In response, documents from attorneys and attorneys general rolled in.

BP claimed in its memo that court monitoring would make the claims process less effective.

"Judicial supervision of OPA's claims process would not promote, but instead would undermine, the fair and efficient administration of the process" according to the document filed by BP attorney Don Haycraft, with Liskow and Lewis of New Orleans.

The BP memo adds, "that there may be different ways to run a claims process does not mean that the GCCF's chosen methods fail to comply with OPA."

In a separate memo, the U.S. assistant attorney general for Environment and Natural Resources agreed with BP. Assistant Attorney General Ignacia Moreno wrote that it is not necessary for the court to monitor the Gulf Coast Claims Facility, whose success "can only be measured by whether the people of the Gulf feel fairly treated."

The Justice Department's 8-page memo, over the names of 19 attorneys, claims that the Oil Pollution Act "does not envision court management of the claims process. Rather, the OPA claims process is intended as a mechanism by which parties may avoid litigation - not a mechanism that will generate litigation or open up new forums for disputes."

The Justice Department adds that the fund overseen by Feinberg "provides neither a ceiling nor a floor on the Responsible Parties' liability," citing a phrase from the Oil Pollution Act. This memo adds that the GCCF and the $20 billion trust fund set up by BP "have been often confused in public discussion. The $20 billion trust fund is separate and distinct from the GCCF. The trust fund is established by a separate trust document and is overseen by three independent trustees, not Mr. Feinberg," according to the document.

The Justice Department said it has "worked closely" with the GCCF "and BP itself to ensure that the GCCF fulfills BP's statutory obligations and its other commitments."

However, the memo adds, "as with any independent claims administrator - albeit to a lesser degree than would be expected of a responsible party charged with spending its own money - there have been some suggestions that the GCCF has rejected. In addition, however, the GCCF has taken a number of actions not contemplated by the OPA (but not inconsistent with the OPA) in an attempt to deal with the massive impact of the Deepwater Horizon tragedy." (Parentheses in original)

Alabama Attorney General Troy King submitted a letter that he wrote to President Obama in July. King's letter protested that BP and the Obama Administration initially excluded Gulf Coast leaders from having a say in GCCF protocol.

King wrote that the first version of the protocol that Alabama was given was "Draft Nine." (Underlined and in boldface in original.)

King added: "the draft protocol is needlessly complicated with deadlines, forms, appeals processes, and other legal jargon and requirements that will not be intelligible to ordinary citizens. The legal process established by the Draft Protocol is far too complex and contains pitfalls that will trip up most individuals and prevent them from obtaining compensation for their full losses and damages. The Draft Protocol was obviously drafted by lawyers and is confusing even to lawyers who specialize in environmental practices."

And, the Alabama attorney general wrote: "No governmentally negotiated and endorsed protocol should contain any requirement that any claimant sign any release."

To collect final payment, the GCCF requires claimants to sign away their right to sue not just BP, but all other responsible parties, as well as the Coast Guard.

BP said in its memo that this is so because "otherwise, the claimant can settle with BP and then sue another potentially liable party, which in turn will file a third-party complaint or cross-claim against BP."

Among other controversial GCCF protocols, final payments made through it will work from the assumption the Gulf will be completely back to normal by the end of 2012.

Samantha Joye, a researcher from the University of Georgia, disputed claims that the Gulf would recover by the end of 2012, according to a Sunday report from the BBC.

During a recent research expedition, Joye found a layer of oil and dead marine animals on the Gulf floor as deep as 4 inches thick. Last weekend Joye reported her findings to the American Association for the Advancement of Science conference in Washington, C.C.

Death to the smallest animals in the food chain will produce results in much larger species over time, but the result may not be seen or understood fully for years, Joye said.

"Filter-feeding organisms, invertebrate worms, corals, sea-fans - all of those were substantially impacted - and by impacted, I mean essentially killed," Joye told the conference, according to the BBC.

Joye pointed out that after the Exxon Valdez spill it took years before it was fully understood that the herring industry had been completely wiped out by the spill.

"I think it's going to be 2012 before we begin to really see the fisheries implications and repercussions from this," Joye told the conference.

The science behind the GCCF's 2-year Gulf recovery estimate comes from research conducted for Feinberg and the GCCF by John W. Tunnell Jr. through the Hart Research Institute for Gulf of Mexico Studies.

Tunnell's report states that fishermen along the Yucatan Peninsula believe the mangrove oysters once prevalent there no longer exist because of heavy oil pollution from the 1979 Ixtoc oil spill. Tunnell's report states that "it is believed that oysters in most areas of the northern Gulf will likely continue along the same harvest trends in recent years in 2011." Yet "in areas where oyster reefs were heavily oiled, oyster reefs may not recover for 6-8, or even ten years."

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