The well is capped. Much of the surface oil is gone and scientists are now debating the presence of oil on the Gulf floor or suspended at depths that may still cause significant damage to the ecosystem. Tony Hayward is out as CEO of BP. Many changes in the BP catastrophe have happened in the last several weeks – but it appears that no major changes are in sight for the businesses and property owners who have been damaged by the oil spill. The positions taken by Kenneth Feinberg, who started administering claims for damages suffered by businesses and residents of the Gulf Coast from the oil spill on August 23rd, have remained consistent. Mr. Feinberg has said people with “legitimate” claims will receive quick relief. But his definition of “legitimate” leaves many injured parties out in the cold.
Injured Gulf Coast residents have begun lining up at claims centers to apply for relief. Mr. Feinberg has said Gulf Coast residents and companies would be able to receive an emergency payment equal to six months of wages or income without waiving the right to sue. However, anyone who accepts a second, final payment would have to agree not to litigate. Mr. Feinberg is hopeful the $20 billion pledged by BP will be sufficient to pay “legitimate” claims.
Multiple news sources have quoted Mr. Feinberg’s positions regarding what he perceives to be the “craziness” of people or businesses hiring lawyers to assist with the claims process or filing lawsuits. Further, Mr. Feinberg has repeatedly described the difficulty of the “judgment calls” he will have to make regarding claims presented for payment:
“It’s easy if you are a beachfront restaurant with oil or a fisherman with oil (who) can’t harvest… It’s the tough case — ‘I own a motel 20 miles from the beach; I’ve lost 30 percent of my guests.’ Is that a legitimate claim?”
“Property value has diminished as a result of the spill. Let’s assume that’s right. That doesn’t mean that every property is entitled to compensation… I’m on the beach, but there’s no oil at all there. It’s just the public perception that drives the values down… There’s not enough money in the world to pay every homeowner, wherever they live in the Gulf Coast, who says, ‘My property is down because of the oil spill.’”
“I use that famous example of a restaurant in Boston that says, ‘I can’t get shrimp from Louisiana, and my menu suffers and my business is off.’ Well, no law is going to recognize that claim.”
Clearly, Mr. Feinberg is still trying to figure out how to handle “indirect claims” from businesses that are not immediately on the coast, or hotels or condos that lose bookings because tourists think the beaches are covered in oil. Further, there has been no confirmation that claims will be paid for people who see their property values decline.
What is not in question is that businesses and property owners along the Gulf Coast – as well as businesses and property owners located inland – are feeling the pain from this disaster even if they have not had direct contact with the oil. A New York Times article on July 20, 2010, detailed the plummeting prices of Gulf Coast properties from the Louisiana to Clearwater, Fla., “[A] stretch that before the spill was worth at least $4.3 billion, just counting the land and buildings within an acre of the shore, according to Norm Miller, an economist at the University of San Diego who is also the vice president of analytics at CoStar Group Inc.” Reports of home sales falling through and condo rentals being cancelled abound. Yet, Mr. Feinberg suggests many of these property and business owners may not be due compensation.
Then there are countless other business like travel agencies, dive shops, booking agencies and other tourism related industries located inland that are being told they will never be able to prove a claim due to their remoteness from the Gulf Coast. These businesses have documentable, real and verifiable losses. But the question remains – will their claims be “legitimate” in the eyes of Kenneth Feinberg? Or are these victims of the spill “crazy” to seek counsel to assist them in determining whether they should pursue a claim?
What is clear is that these businesses and property owners should enter the claims process, obtain a claim number and gather the records they have to support their loss. Further, claimants should not be dissuaded from seeking counsel. Clearly, from Mr. Feinberg’s own statements, the process of determining what claims should be paid and how to value the damages suffered by property owners and businesses – both on the Gulf Coast and inland – will be challenging. The ability to receive a payment outside of the litigation process does not, in and of itself, negate the necessity for counsel when going through this daunting ordeal – whether that is Mr. Feinberg’s preference or not.
