NEW ORLEANS (CN) - A federal judge's order authorizing oil spill plaintiff attorneys to collect a 6 percent fee from payments made through the Gulf Coast Claims Facility has drawn bitter opposition from plaintiff attorneys and attorneys general.
The order was expedited on Dec. 28 by U.S. District Judge Carl Barbier who is overseeing the consolidated oil spill litigation. Barbier's order grants the oil spill plaintiff steering committee (PSC) attorneys' request to take 6 percent of all payments made from the Gulf Coast Claims Facility (GCCF) to victims of the spill. The fee is to be collected into a common fund to pay for litigation expenses incurred by the plaintiff steering committee.
The Gulf Coast Claims Facility was established with $20 billion from BP in June 2010 as a way for BP, as "responsible party," to pay oil spill victims directly and avoid litigation expenses. The idea is that claimants can accept payment through the fund and avoid the legal process altogether.
The fund, overseen by Kenneth Feinberg, has been criticized as slow and ineffective. Still, tens of thousands of claimants have chosen to seek compensation through the fund - often because they are desperate for immediate compensation and because litigation could take decades to resolve.
Barbier's order states: "As requested by the PSC, the defendants who are parties to this multidistrict litigation (MDL) would be required upon settlement of any claimants' case, to hold-back and pay into a special common benefit account within the registry of the court, a sum equivalent to 6 percent of the gross settlement amount in the case of private claimants. ... As explained by the PSC in its motion, such an order by the court would not set the amounts of or award any common benefit fees or expenses, but rather simply establish a fund from which common benefit fees, if any, might later be disbursed." (Parentheses in original.)
Barbier's order says the PSC has been instrumental in helping claimants settle with the GCCF.
"Considering the unique circumstances of this case, it would be unfair to allow parties to benefit from these activities of the PSC, but avoid contributing to the common benefit fund simply because they are able to settle directly with the GCCF and avoid filing a claim in the MDL," Barbier wrote.
Roughly a dozen memoranda have been filed in opposition to Barbier's order, by plaintiff attorneys not affiliated with the PSC, including attorneys general for Louisiana and Florida.
In general, the memoranda make similar arguments: a tax on payments made through the GCCF violates the Oil Pollution Act, which details how BP as "responsible party" for the oil spill must pay victims. The memoranda also state that according to civil procedure Barbier should not have issued an expedited order without first holding a hearing. Finally, attorneys say the PSC is not entitled to money from victims for work it has not performed.
Most of the motions accuse the plaintiff steering committee of wasting resources.
Many of the memoranda correct details from the judge's original order. For instance, motions take issue with credit given to the plaintiff steering committee for bringing in translators to assist fishermen affected by the oil spill.
Plaintiff attorney Daniel Becnel claims there are "material factual inaccuracies" in the judge's order.
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