A federal judge in Louisiana ruled Wednesday that oil spill claims administrator Kenneth Feinberg cannot keep referring to himself as “neutral” or “independent” from BP.

The company set up the Gulf Coast Claims Facility (aka the GCCF), which Feinberg oversees, and pays his firm to manage the claims process as part of its obligations under the Oil Pollution Act. An ethics professor hired by the fund said in December that the arrangement was kosher and that Feinberg was “not BP’s lawyer,” but he should clarify what he meant by “independent” in his disclosures to claimants.

Under Judge Carl Barbier’s order, Feinberg and the facility have to clearly disclose that they are “acting for and on behalf of BP in fulfilling its statutory obligations … under the Oil Pollution Act of 1990″:

While BP may have delegated to Mr. Feinberg and the GCCF independence in the evaluation and payment of individual claims, many other facts support a finding that the GCCF and Mr. Feinberg are not completely “neutral” or independent from BP. For example, Mr. Feinberg was appointed by BP, without input from opposing claimants or the Plaintiffs’ Steering Committee (“PSC”), and without an order from the Court. Mr. Feinberg is not a true third-party neutral such as a mediator, arbitrator, or court- appointed special master.

Bloomberg reports that lawyers for spill victims are pleased with the ruling. They’ve argued that Feinberg was misleading claimants in an effort to persuade them not to sue the company:

“Today is a good day for the thousands of victims of the Deepwater Horizon tragedy,” Jim Roy, a lawyer for spill victims, said yesterday. “With this ruling, the court is protecting the rights of the thousands of victims of this preventable tragedy, and has unequivocally stated that Mr. Feinberg no longer has carte blanche to mislead the public on BP’s behalf.”

Attorneys for spill victims asked Barbier to order the fund to post information on its website declaring that Feinberg, his firm and the fund are acting as “BP’s agents.”

Here’s the full ruling:

Judge: Feinberg is not neutral

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