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Members of the plaintiffs’ steering committee in the sprawling multidistrict litigation over the Gulf of Mexico oil spill won their second major victory in a week on Wednesday, when a New Orleans federal judge ruled that a $20 billion fund established for spill victims must tell claimants it is acting on behalf of BP. U.S. District Judge Carl Barbier ruled that Kenneth Feinberg and the Gulf Coast Claims Facility he oversees are not independent of BP and that “the hybrid role of Mr. Feinberg and the GCCF has led to confusion and misunderstanding by claimants, especially those who are unrepresented by their own counsel.” He ordered Feinberg and the fund to cease referring to themselves as independent and to disclose to claimants that they are acting “for and on behalf of” BP. He also ordered the parties to submit briefs on whether BP is complying with federal law in its claims evaluations and the releases claimants sign to finalize settlements through the fund. Barbier noted that BP created the GCCF fund, appointed Feinberg to lead it, and entered into a private, $10.2 million-a-year contract with Feinberg and his firm, Feinberg Rozen. “Under these circumstances, while Mr. Feinberg appears ‘independent’ in the sense that BP does not control Mr. Feinberg’s evaluation of individual claims, Mr. Feinberg and the GCCF cannot be considered ‘neutral’ or totally ‘independent’ of BP,” the judge ruled. “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,” plaintiffs’ co-liason counsel James Roy of Domengeaux Wright Roy Edwards said in a statement. Richard Godfrey and J. Andrew Langan, BP lawyers at Kirkland & Ellis, could not immediately be reached for comment. As of this week, more than 485,000 individuals and business have submitted claims to BP’s fund. About 170,000 of them have received emergency payments while retaining their right to sue, but more than 87,000 have opted for “quick pay” settlements that require them to sign a full release from further claims against BP or other defendants. Plaintiffs’ lawyers have accused BP of using the GCCF litigation releases to shield itself and other defendants from all possible claims, in violation of Oil Pollution Act provisions that mandate a claims process for short-term damages. In his ruling on Wednesday, Barbier ordered the parties to submit briefs by Feb. 11 on whether BP is complying with the OPA in both its claim evaluations and the releases it has required claimants to sign. A ruling against BP on the fund’s claims and release practices could force re-examinations of many of the $3.33 billion in payments the fund has released so far. It could also clear the way for claimants who’ve already settled through the fund to become plaintiffs in the multidistrict litigation. For now, according to plaintiffs’ steering committee member Ervin Gonzalez of Colson Hicks Eidson, Barbier’s ruling mainly affects future communications by Feinberg and the claims fund. “Only a few claimants have received final payments rather than emergency funds, and in the larger cases most people were represented by counsel and I don’t think [the releases] are an issue,” he said. Wednesday’s ruling is the second from Barbier to favor the plaintiffs’ powerful 15-member steering committee in the past week. On Jan. 27, the judge rejected a motion filed by Louisiana’s attorney general and backed by the U.S. government and 16 other states to separate government cases from private ones in the litigation. While Barbier did appoint coordinating counsel for states’ and U.S. government in the MDL, his ruling keeps the existing steering committee firmly in control as the mammoth case moves forward. David Bario can be contacted at [email protected].

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