BP data reveal high stakes for Florida in oil spill claims process

By | 08.30.10 | 11:33 am

A week ago today, Kenneth Feinberg began administering the Gulf Coast Claims Facility, which he has said will be an improvement over BP’s process and more generous than the treatment claimants can expect in court. Data (.xls) released last week by BP shows that Feinberg’s decisions about how to disburse compensation could impact Florida more than any other gulf state.

Graph of the number claims filed with BP for gulf oil spill damages, as well as payments made, by state

While Floridians have received larger payments on average than claimants from other states, they received payments from BP less frequently than their counterparts in Louisiana and Alabama. (Info via BP)

Floridians filed more claims with BP than people from any other state, and when they got paid, they received the largest average payments — $3,397, compared to an average of $3,114 in Texas, the next-highest, and $2,378 in Mississippi, the lowest. But Floridians also saw the largest number of claims deferred to Feinberg.

According to the data, Floridians filed more than 39,000 claims and received just over 24,000 payments worth nearly $82 million. By comparison, Louisianians filed just over 35,000 claims and received 50,000 payments worth over $153 million.

Overall, the company says it has received a total of 154,000 claims and paid out nearly $400 million since May.

Florida has a longer coastline and a larger tourism industry than any of the other states affected by the spill. It also has a high volume of “indirect” claims, like the cases of hotels where oil never came ashore, businesses that benefit from summer tourist traffic or fishermen whose waters were never closed, but suffered in the marketplace nonetheless.

Those are the sort of difficult cases Feinberg was brought in to resolve. As the Wall Street Journal documents, even he may not have made up his mind about how to handle them.

He told a House panel in June that “if there is no physical damage, and it’s all public perception, it is not compensable.” He said the same in an interview last month, asserting he didn’t plan to honor claims east of Panama City. Ten days later, he appeared to flip, saying in congressional testimony that “you do not need oil on the beach to have a compensable claim. Perception is compensable.”

But his official guidelines on how he will decide requests for emergency payments … told a different story: The claims fund “will only pay for harm or damage that is proximately caused by the spill.” In other words, claims would be weighed according to how directly linked damages are to the spill itself.

The compensation fund’s protocol asks businesses claiming lost earnings to document the “amount of profits and earnings or expenses in comparable time periods,” which, the Journal notes, could be complicated by the recession.

Statewide revenue from hotel and motel bed taxes were up in June over the same month last year, according to Florida Department of Revenue records. Officials counter that 2009 was one of the state’s worst years ever for tourism spending.

The tourist board in Pinellas County … reported that more tourists visited the county in the two months after the spill than in the same period last year, though numbers were down about 8% from pre-2009 levels.

The uncertainty about how damages will be calculated has plaintiffs’ lawyers licking their chops. In letters sent Friday to U.S. Attorney General Eric Holder and BP General Counsel John Lynch, Florida Attorney General Bill McCollum noted that the Oil Pollution Act, signed in the wake of the Exxon Valdez, was intended to prevent protracted legal battles.

In his letter to Lynch, McCollum argued that Feinberg’s process may “lead to unnecessary litigation,” thus undermining that intent.

Feinberg has emphasized that the claims process is strictly voluntary, and is designed to be more generous to spill victims than any court. He has also noted that proximate cause is only one of the criteria for assessing the validity of claims. A claimant’s dependence on the resources of the gulf will also be taken into account.

Riki Ott, a veteran of the Exxon Valdez catastrophe, has said that BP’s promise to “pay all legitimate claims” was another way of saying, “See you in court.” But she has also noted that two decades of legal battles still failed to make the Valdez victims whole. In the coming weeks, as they get their paperwork in order and wait for Feinberg’s response, Florida’s oil spill victims will find out whether history is about to repeat itself.

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