Gulf Oil Spill Cases
"All Legitimate Claims"
An Essay by Gary L. Wolfstone, J.D.
A great historian, Arthur Schlesinger, Jr., when writing for The American Scholar in
1974 said: "Every political movement generates its own language-field; every language-field
legitimizes one set of motives, values and ideals and banishes the rest." Today's grief (media
coverage, Congressional hearings, and stroking sessions in America's board rooms) has
generated a corporate language-field for taking responsibility for the Gulf of Mexico Oil Spill: ~ Tony
Hayward, BP CEO [who resigned from BP effective July 26, 2010], promised to pay all legitimate claims. Mr. Hayward's catch phrase ~ all legitimate claims ~ is generally accepted as the standard for compensation. This language-field is not only political, but also
it is a socio-economic-legal instance of "law speak." Our culture across the spectrum has now
adopted the phrase "all legitimate claims." President Obama and the public are apparently reasssured with this language-field, but the safe harbor that BP has created with the words
"all legitimate claims" is a fool's paradise.
Any seasoned trial lawyer knows that "all legitimate claims" means all
claims which have been litigated in the courts. True, BP has agreed to establish a $20 Billion
emergency fund ~ at the urging of President Barack Obama ~ but that fund would probably only cover
ten percent of the true damage figure. Proving what claims are legitimate and compensating the
victims is a laborious process and is likely to occupy the claimants for decades.
Hence, the old defense strategy: "Pay Little, Pay Late, and if possible, Pay
Kenneth Feinberg, a highly respected 64 year old lawyer, was orginally appointed to head
the $20 Billion fund for compensation. Feinberg has been replaced by a Treasury official,
Patricia Geoghegan. There are two phases for claimants, and
claimants who wish to receive payments for loss of economic earnings must sign a
waiver of any right to file a lawsuit. This waiver feature is contained in the second
phase for claimants. In effect, the administration of the fund is what lawyers call
Collaborative law ~ an alternative dispute resolution [ADR] system which started in family
law matters. Before the Collaborative law process begins, the lawyers and their clients
are required to sign a Participation Agreement which contains a so-called "disqualification
provision" whereby the original lawyers must withdraw and the claimant may proceed to
litigation ~ if the collaboration degenerates. Collaborative law is fast becoming the new dream-team-approach for the legal
profession, and at least four states now have enacted statutes pertaining to this increasingly
popular ADR option. Local court rules and even bar associations are jumping in with
guidance. Collaborative law is a sexy solution to complex problems, but it hardly seems
appropriate for compensating Gulf Oil Spill claims. The best litigators might not be willing
to serve in the pre-disqualification phase; the false hopes for cordial settlments are likely to be dashed; and
the person or persons who administer the presently established fund probably have a conflict of interest (whom do they
represent?) Upshot: Resolution and payment are delayed and lawsuits ensue when collaboration
fails ~ full blown courtroom battles will inevitably follow the breakdown of the unwieldy Collaborative law process.
The solution that I am proposing is not obvious, but I am the one lawyer in the United States who can
truly achieve full compensation for the victims. Indeed, my solution offers the
added benefit of expediting the time of payment of claims. My solution is based upon 38 years
of laboring in the trenches, and the insight that my experience has given me. I am convinced that
my solution will never be articulated and never be implemented without my involvement. It is the
difference between a terrestial solution and a celestial solution. "Hitch your wagon to a star,"
Ralph Waldo Emerson said. My proposed solution would greatly enlarge the pool from which
compensation funds may be drawn. My proposed solution would make all maritime companies
contribute to the pool for recovery. The fact is that BP and its subcontractors could
never fully pay the tab for the damage resulting from the Gulf Oil Spill. My proposed
solution would ensure full compensation and would not entail any federal bail out or government
Feinberg came under criticism for the way he handled his duties as pay czar with lawmakers
including Sen. Bernie Sanders, I-Vermont, who contended he had not been tough enough in cracking down on pay excesses on Wall Street
in the wake of a severe financial crisis that forced the government to provide billions of dollars in support to major financial institutions.
On December 6, 2010, the Center for Justice and Democracy (CJD) sent a letter to Robert Dudley,
the CEO of BP, concerning "serious new issues raised about the lack of transparency and potential conflicts of interest related to
the administration of the Gulf Coast Claims Facility." In the letter, CJD pointed out actions taken by Feinberg in the administration
of the compensation fund that point to serious conflicts of interest.
At some point, the U.S. Department of Justice will jump into the fray with its
civil lawsuit ~ in contradistinction to the criminal prosecution that the print and broadcast media is speculating about ~
against the offending parties. A civil lawsuit filed by the Department of Justice seeking compensation ought to
blaze a new trail. With my guidance, the Department of Justice would take the lead in
fighting for new precedents. With my assistance, the Department of Justice could start to implement my solution.
Without my guidance, however, the Department of Justice is likely to file and serve a common garden variety
Summons and Complaint which adds nothing new ~ another big yawn. That is precisely what BP
wants. Our Constitution guarantees "Due Process of Law" and BP can argue: "How much
Process is Due?" BP has a war chest and a whole tribe of spiritual sons and daughters in the
legal profession. BP will take full advantage of its opportunity to defend the
claims in order to determine which claims are within its language-field of "All
legitimate claims." The Due Process clause and the cases which construe it certainly
guarantee that BP will have its day in court. Afterall, BP is entitled to Due
Process of law and the decades of litigation that it requires.
What I am advocating is monetary recovery based on clear, cogent and compelling liability; a vastly larger pool of funds from which
compensation money shall be taken; an expedited system for payment of claims; global
or international responsibility for contribution of funds to the pool; private
sector money without any governmental subsidy or backing; and a judicial rather
than a legislative determination that my proposed solution is the only correct
solution! The $20 Billion fund is only the beginning; the true damage is likely to
run $20 Billion per year for the next 10 years!
BP Promises to Pay "All legitimate claims"
Words strain, crack and sometimes break
Under the burden, Under the tension
Slip, Slide, Perish, Will not stay in place!
Memorize This Number