8/3/2019 Abstract: Diving into the wreck:BP and Kenneth Feinberg's Gulf Coast Gambit

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FORDHAM  New York City’s Jesuit University

School of Law 

FACULTY

140 W  EST 62 ND STREET  ,  N  EW Y ORK  ,  NY  10023-7485 

GEORGE W. CONK   212-636-7446

ADJUNCT PROFESSOR OF LAW FAX: 212-923-1990

SENIOR FELLOW GCONK@LAW.FORDHAM.EDU

LOUIS STEIN CENTER FOR LAW & ETHICS

Diving into the wreck: BP and Kenneth Feinberg’s 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.

BP’s 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 GCCF’s allocations are often

impenetrable. BP’s 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 BP’s 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 Feinberg’s 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 OPA’s 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 company’s 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.