BP /Gulf Coast Claims/ DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA

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BP DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA / BP, through the GCCF, is using the interim claim procedure to leverage releases in direct contravention of OPA’s mandate
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  1 UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF LOUISIANAIN RE: OIL SPILL by the OIL RIG * MDL NO. 2179“DEEPWATER HORIZON” IN THE *GULF OF MEXICO on APRIL 20, 2010 ***THIS DOCUMENT RELATES TO: *ALL CASES * JUDGE BARBIER ** MAG. JUDGE SHUSHAN*************************************PLAINTIFFS’ SUPPLEMENTAL BRIEF IN SUPPORT OFSUPERVISION OVER THE BP INTERIM CLAIMS PROCESS Plaintiffs, through undersigned counsel, respectfully supplement their briefing inresponse to the Court’s Order and Reasons of February 2, 2010, 1 requesting the parties’respective positions regarding BP’s compliance, or lack thereof, with the requirements of the OilPollution Act of 1990 (“OPA”): M AY I T P LEASE THE C OURT : As more fully outlined below, Plaintiffs respectfully submit that BP is in violation of OPA’s requirement to establish an interim claim process and to pay interim claims; that BP,through its Gulf Coast Claims Facility (“GCCF”), has violated of the spirit of the Court’s Order seeking to protect plaintiffs and putative class members from confusion and misunderstanding;and that the releases obtained from plaintiffs and other putative class members are invalid andshould not be enforced. Plaintiffs, therefore, respectfully ask the Court to appoint a Special 1 See generally, M OTION TO S UPERVISE  E   X   P   ARTE  C OMMUNICATIONS B ETWEEN BPD EFENDANTS AND P UTATIVE C LASSMEMBERS [Doc 912] (Dec. 21, 2010); O RDER AND R  EASONS [Doc 1098] (Feb. 2, 2011); and, P LAINTIFFS ’S UPPLEMENTAL M EMORANDUM C ONCERNING BP’ S F AILURE TO C OMPLY WITH THE M ANDATES OF OPA [Doc 1318](Feb. 18, 2011). Case 2:10-md-02179-CJB-SS Document 3423 Filed 07/25/11 Page 1 of 22  2Master, pursuant to Rule 53(a)(1)(A) and/or (C) of the Federal Rules of Civil Procedure, to (i) assure compliance with OPA; (ii) ensure accurate and appropriate communication withclaimants; (iii) make findings and/or recommendations regarding the satisfaction of OPA’s presentment requirements; and (iv) make findings and/or recommendations regarding the scopeand/or efficacy of releases. I. THE GCCF’S ABJECT FAILURE TO PAY INTERIM CLAIMS VIOLATESOPA. On February 2, 2011, over five months ago, this Court entered an Order identifying theGCCF as the entity with the responsibility to ensure that the mandates of OPA are implemented.(Rec. Doc. 1098). The GCCF’s own June 2011 statistics reveal that the GCCF has paid fewer than 16% of interim claims filed, compared to the 97% payment rate of “quick” final claimsaccompanied by releases. 2 This telling statistic demonstrates that the GCCF continues to followthe BP litigation mandate of settling as many claims as possible to reduce the size of the putativeclass.By amending OPA in 1996 to establish the mandatory interim claim requirement,Congress sought to ensure that victims were paid immediately after an oil spill without losingrights to pursue long-term claims. Like any law, the goals of OPA can only be accomplished if  polluters adhere to it—or they are forced to comply. The complaints of Gulf Coast residentstoday are identical to those of Rhode Island’s spill victims in 1996, which led to the creation of the interim claims process. BP’s coercive tactics to obtain final releases from putative classmembers filing claims with the GCCF are also similar to those tactics revealed to Congress in 2 Gulf Coast Claims Facility, Status Report at 1 (May 14, 2011), attached as Exhibit A. Case 2:10-md-02179-CJB-SS Document 3423 Filed 07/25/11 Page 2 of 22  31996 when it considered amending OPA. BP’s strategy to obtain releases has permeated itsinteractions with putative class members from the outset. The abject failure of the interim claims process administered by the GCCF is the latest, and most troubling, in a long line of actions byBP designed to “close the books” on the oil spill. In dire need of relief, Plaintiffs turn to thisCourt, with its broad authority to protect putative class members and “to ensure that themandates of OPA are implemented.” [Doc 1098, at 7] A.BP’s Early Tactics to Withhold Interim Payments to Obtain Releases. Barely one week after the April 20, 2010, oil spill, BP convinced hundreds of unsuspecting and confused Gulf Coast fishermen to sign releases of all claims against BP. Thereleases were extracted either as a condition of working in the Vessel of Opportunity (VoO) program or in exchange for a $5,000 one-time payment. 3 Judge Engelhardt of this Court ruled atan emergency hearing that BP’s release was overbroad. 4 After public backlash and officialrebuke, 5 BP subsequently entered into a Consent Judgment formally invalidating the release. 6 B. BP’s Coercive Tactics Continue with the GCCF. Following the failure of these early efforts, BP changed only its tactics for obtainingreleases, not its overall strategy. After struggling with its own oil spill claims process for over 3months, BP established the GCCF in August 2010 to administer the OPA-mandated interimclaim process. The first phase, the Emergency Advance Payment program, was marred byseveral significant problems, which are well documented in the previously filed Plaintiffs’ 3 SeeGeorge Talbot, BP Told to Stop Circulating Settlement Agreements With Coastal Alabamians, Mobile Press-Register, May 2, 2010, at http://blog.al.com/live/2010/05/bp_told_to_stop_circulating_se.html; Stephanie Condon, BPTold to Stop Distributing Oil Spill Settlement Agreements, CBSNews.com, May. 3, 2010, athttp://www.cbsnews.com/8301-503544_162-20003978-503544.html, attached as Exhibit B. 4 Id. 5 Id. 6 SeeConsent Judgment, Rec. Doc. 6 in Barisich v. BP, EDLA Case No. 2:10-cv-01316, attached as Exhibit C. Case 2:10-md-02179-CJB-SS Document 3423 Filed 07/25/11 Page 3 of 22  4Motion to Supervise. [Doc 912-1] Notably, when the GCCF ended the Emergency AdvancePayment program in November 2010, it left two-thirds of the claims unresolved. 7 Indeed, BP’sfailure to pay interim claims under its Emergency Advance Payment program had the effect of stranding the majority of putative class members without the type of immediate relief Congressrequired polluters to provide under OPA. As of Thanksgiving of 2010, putative class memberscontinued to go without interim relief.In mid-December 2010, the GCCF unveiled the next phase of BP’s claims program—a“quick pay” program offering $5,000 per individual and $25,000 per business. Again, rather than provide the required interim relief mandated by OPA, the GCCF’s protocol made it clear that BP intended to require putative class members to make a final claim in exchange for a fullrelease of their rights and an assignment of those rights to BP. 8 For months, this “quick pay” program was for all intents and purposes the only mechanism to obtain compensation for oil spilllosses. For example, as of late January 2011, the GCCF paid one interim claim out of the 42,155interim claims submitted. In contrast, by that same date, the GCCF had paid 81,933 quick payclaims out of the 85,741 quick pay claims submitted. 9 A seafood business owner in Mobile,Alabama, who took a quick pay during this time articulated the crux of the problem: “It was kindof like a pressure signing. If you’re hungry and someone offers you something to eat, it’s hard tosay no.” 10   7 SeeJonathan L. Ramseur, Cong. Research Serv., Liability and Compensation Issues Raised by the 2010 Gulf Oil Spill at16, (Mar. 11, 2011), attached as Exhibit D. 8 See Feinberg Releases 'Emergency Protocol' For BP Oil Spill Claims (With Complete Protocol), Mobile Press-Register,Aug. 20, 2010, at http://blog.al.com/live/2010/08/feinberg_releases_emergency_pr.html, attached as Exhibit E. 9 SeeRec. Doc. 1085 at 5-6. 10 SeeGulf Oil Spill: Tracking the Claims – Struggles Persist for Those Seeking Compensation, Mobile Press-Register,Feb. 6, 2011, http://blog.al.com/live/2011/02/gulf_oil_spill_tracking_the_cl_6.html, attached as Exhibit F. Case 2:10-md-02179-CJB-SS Document 3423 Filed 07/25/11 Page 4 of 22
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