FORDHAM

School of Law
FACULTY 140 WEST 62ND STREET, NEW YORK, NY 10023-7485 GEORGE W. CONK
ADJUNCT PROFESSOR OF LAW SENIOR FELLOW LOUIS STEIN CENTER FOR LAW & ETHICS

New York Citys Jesuit University

212-636-7446 FAX: 212-923-1990

GCONK@LAW.FORDHAM.EDU

Diving into the wreck: BP and Kenneth Feinbergs Gulf Coast Gambit 17 Roger Williams University Law Review 137 (2012) by George W. Conk The 1990 Oil Pollution Act mandate - that a party responsible for an oil spill establish a procedure to pay interim damages - has largely removed the courts from the process of determining scope of liability and turned it over to the private ordering of the claims bureau established by the responsible parties designated by the President under the OPA. BP put its procedure in the hands of a lawyer of solomonic reputation - Kenneth Feinberg. His broad settlement authority was designed to produce both prompt compensation for current losses (without prejudice to future claims) and early settlements of claims for any future losses. Through its Gulf Coast Claims Facility BP - making interim payments - has had a nearly free hand in determining the extent of its liability under the OPA. Though plaintiffs lawyers have moved to supervise the process through the MDL, neither a negotiated grid nor any court ruling has defined the scope of liability. BPs private claims resolution process is almost entirely unregulated. Only after months of jaw-boning by Gulf Coast Attorneys General and the U.S. Attorney General did BP agree to be audited. No regulations govern responsible parties who establish a procedure. The GCCFs allocations are often impenetrable. BPs GCCF can be described as the pseudo-fund model for mass tort claims resolution. Though its name suggests an independent fund, the GCCF is in fact merely BPs statutorily compelled mechanism for satisfying economic loss and clean-up claims. In the absence of either regulatory guidance or court rulings on scope of liability the settlement parameters are indistinct to claimants. Even BP is uneasy because Feinbergs settlement offers under the OPA go well beyond the narrow parameters of maritime courts which in spill claims have historically denied compensation to all in the supply chain except fishermen and those who suffered property damage. The executive branch should examine the OPAs regulatory gap. No regulations govern the manner in which a solvent polluter meets its statutory clean-up and compensation responsibilities. There is no liability guidance, no audit, no reporting, no monitoring of the companys ability to meet its obligations, no review of its success in meeting its obligations. If the executive branch does not take this up, Congress in its oversight capacity should do so.