Legal experts question impartiality of Feinberg, spill compensation fund

Brett Michael Dykes
National Affairs Reporter
The Lookout

When he hasn't been dealing with distraught Louisiana fishermen dropping to their knees at public forums to beg him for a check, Gulf Coast Claims Facility (GCCF) administrator Ken Feinberg has been fending off critics who allege he has too many blatant conflicts of interest to discharge his duties impartially. Feinberg has strenuously denied such charges on the frequent occasions they've surfaced. "I am beholden to neither the administration nor BP. I am entirely independent," he insisted at an August news conference. However, legal experts who've examined his work to date are begging to differ.

In a petition that plaintiffs attorneys have submitted to U.S. District Court Judge Carl Barbier -- the jurist presiding over the hundreds of oil spill-related lawsuits filed by victims of the disaster -- University of California law professor Geoffrey Hazard argues that all claims that the oil spill compensation fund is acting independently are "inaccurate and misleading."

"A recognized standard of accuracy is whether the statements are materially misleading considered as a whole, which is the modern definition of fraud," Hazard chided in his 10-page statement. He contends that the claims on behalf of the facility's impartiality "portray GCCF procedure as more just and fair than that in the ordinary tort system." Hazard said such notions are belied by conditions on claims payouts, such as requiring claimants to sign away their legal rights to sue BP or other liable parties at a later date, regardless of future harm to their health or financial well-being arising from heretofore unknown consequences of the spill.

"The GCCF procedure requires claimants, in order to receive final payment, to release BP from types of damages ... that are not being considered by the GCCF," Hazard wrote.

Additionally, Hazard insists that there's no way the Feinberg-run fund can maintain objectivity when BP is paying all of its expenses -- including the $800,000-per-month fee charged by Feinberg's law firm.

"GCCF is not entirely independent because its operating expenses, which are substantial, come from BP," Hazard wrote. "The GCCF is not a mediator, according to ordinary understanding of that term, because it was established unilaterally by BP and not with agreement of opposing claimants."

In a recent posting to the Legal Ethics Forum, Hofstra University law professor Monroe Freedman also questioned the good faith of the compensation fund -- with Feinberg ostensibly working as an attorney on BP's behalf to keep a lid on damages. "It seems to me that this kind of device can effectively nullify applicable ethical duties, as well as seriously impair access to justice on the part of claimants," Freedman maintained. "Shouldn't something be done about this?"

The Lookout emailed Feinberg -- no stranger to questioning of his handling of the fund -- seeking comment on these legal criticisms. He directed us to a positive review of his work done by New York University legal ethics professor Stephen Gillers and remarked, "The letter speaks for itself." Feinberg's critics, however, would likely point out that Gillers' review of Feinberg was also funded by BP -- at a rate of $950 per hour.

(Photo of Feinberg: AP/Press-Register/Bill Starling)