In a move that Kenneth Feinberg hopes will bring holdout commercial fishers to the settlement table, the Gulf of Mexico oil spill claims czar announced Wednesday he will double compensation payments for shrimpers and crabbers. From now on, Feinberg's Gulf Coast Claims Facility will compensate shrimp and crab harvesters at four times their documented 2010 losses, rather than the old formula of twice the 2010 losses. Those who have already received final payments will not be eligible for more money, he said.
Feinberg decided to up the payouts after shrimpers and shrimp processors told him during an October meeting that the white shrimp catch was down 80 percent, presumably from oil-related impacts. He also learned that there was a group of commercially licensed shrimpers who felt their ongoing losses were not being addressed.
So far, more than 4,000 shrimpers have received final payments and released BP from further claims, Feinberg said. The new formula will likely apply to fewer than 1,000 commercial establishments, plus any of their employees who have yet to accept final payments, he said.
Feinberg also said he will all but cut off compensation for non-fishing-related claims based in Texas and the Florida peninsula.
Shortly after the announcement, complaints began flying that it's unfair for Feinberg to pay some at twice the rate he's paid others.
"Feinberg's initial offer of a 'full final' payment has now been exposed as less than what every shrimper and crabber should receive immediately as an interim payment with no strings attached," said Joe Waltzer, a plaintiff attorney who represents many Vietnamese shrimpers. "GCCF is not focused on fairness. If GCCF were truly about fairness, it would pay two more years to the thousands of shrimpers and crabbers who already signed final releases, folks who relied on Feinberg to be telling the truth."
Feinberg, however, said he is unwilling to reopen claims or change the terms of already signed releases.
Clint Guidry, president of the Louisiana Shrimp Association, said that shows Feinberg still doesn't understand the industry. Shrimpers are concerned that the oil's impact on their catch may not be fully felt for years, just as the fisheries impact of the far smaller Exxon Valdez disaster took four years to manifest itself.
Even at four times their 2010 losses, shrimpers who can afford to wait likely will not settle with Feinberg, Guidry said. Rather, they'll wait and try their luck in civil court cases slated to begin in February, he said.
Feinberg's goal is to keep 90 percent of claimants out of court by paying them and getting them to release all other claims against BP and the other parties responsible for the spill. It's still unclear how that will play out, but Feinberg has already reached final settlements with 186,000 claimants.
Waltzer, like Guidry, is confident the courts will impose punitive damages that will more than make up for the two-year payment increase Feinberg is now offering. They also say that if Feinberg really wanted to help, he would pay a lot more interim claims. The interim claims process allows claimants to collect for actual losses on a quarterly basis without waiving their right to sue.
Feinberg has paid 30,000 interim claims in the past10 months, a quarter of the requests he's received. By contrast, he has paid two-thirds of all claimants seeking final payments.
"It's good to see that he has taken into consideration that we have losses that extend past his original two-year methodology," Guidry said. "But our complaint is that he's not addressing interim claims. The interim claims still are really slow to come out."
Feinberg said the argument that he's slow-walking interim claims because they don't involve releases of BP's liability is simply false. On the contrary, he said that most of his interim payment offers also include final payment offers and most of the claimants simply prefer to take the final payment.
In making the change, Feinberg has recognized that the spill had a greater economic impact on shrimpers and crabbers than on tourism-related businesses, something fishing industry leaders have been complaining about for months. Until now, all legitimate claims were paid twice their documented 2010 losses, except for oyster harvesters and leaseholders, who have been eligible for more since early this year.
Qualified shrimping and crabbing claims that were filed before the new formula was announced are eligible for the new payment method as long as the claimant hasn't accepted payment yet.
The move comes as Feinberg is under increasing pressure from BP to curtail payments, which have reached $5.7 billion to 216,000 claimants. BP is battling with more than 100,000 claimants in a massive federal court case, but it's unclear how many of those have already signed a release with Feinberg preventing them from pursuing compensation in the courts.
