People who participated in BP’s Vessels of Opportunity program can now pursue claims for damage to their boats and possibly other grievances, even if they settled claims for economic losses from the oil spill with the Gulf Coast Claims Facility, according to a letter from BP. But, BP, leaseholder of the ill-fated Macondo well, also says in the letter that it reserves the right to deduct any wages that boat owners earned in the Vessels of Opportunity program from any ultimate settlements.
“The GCCF has overcompensated claimants who participated in the VoO (Vessels of Opportunity) program,” the Sept. 21 letter from BP attorney Dan Cantor to GCCF deputy administrator Jackie Zins reads. “BP reserves…the right to account…for VoO compensation that should have been but was not offset from GCCF awards.”
Steve Herman, co-lead plaintiffs attorney in the litigation over the April 2010 well blowout in the Gulf of Mexico, said in an e-mail that VoO program participants have not been overcompensated, and called the letter “a classic bait and switch” by BP.
“They went out, risked their lives and exposed their boats to oil and dispersants to help BP clean up its mess,” Herman said. “In addition, they — like other fishermen who didn’t participate in the VoO program — suffered, and continue to suffer losses from not being able to shrimp and fish.”
The question of whether or not boat owners should have their compensation from oil clean-up work deducted from any economic loss or damage settlements has been hotly contested. On one hand is the principle, reflected in the Oil Pollution Act of 1990, that workers harmed by a spill have a duty to mitigate their economic injury, meaning that if someone can reduce their economic pain by finding other work, they should. On the other hand, deducting wages for oil clean-up work would mean that displaced fishermen helped BP clean up its mess for free, and that they would be treated the same as someone who took the summer off and didn’t work at all.
In the initial weeks after the spill, BP was deducting wages earned in the oil clean-up program from payments made to commercial fishery workers who were unable to fish, catch shrimp or harvest oysters. When one of Herman’s law partners raised concerns about the practice to BP in a May 2010 letter, BP attorney A.T. Chenault responded, “Lastly, we confirm that BP will not offset payments to vessel owners or other volunteers against claims they might have.”
Herman says that statement is a pledge from BP that it won’t deduct wages earned in the VoO program from ultimate settlements, and that BP reneged on that promise in the Sept. 21 letter.
BP counters that it has been consistent in its position that wages that displaced fishers earned in cleaning up oil in summer 2010 must be deducted from any ultimate settlements, as spelled out in the Oil Pollution Act. The company wrote to Herman in August 2010, dismissing the May letter as unclear. BP said that it regretted “any miscommunication,” and that any VoO wages could be deducted from ultimate settlements.
In other correspondence with the GCCF in 2010 and 2011, BP has restated that it believes the claims facility is overpaying people. “To date, the GCCF has not offset from its damages payments amounts earned by claimants from participating in the oil spill response through the Vessels of Opportunity program. OPA requires that VoO earnings are offset from GCCF damages payments,” BP says in comments filed with the GCCF in July 2011 about its claims process.
Big money is riding on whether or not VoO compensation is ultimately deducted from settlements: BP has paid about $600 million in wages through the VoO program.
Spokesman Scott Dean said the company’s position is clear. “From the outset, BP has been committed to paying all legitimate claims. Legitimate claims do not include claims in excess of actual losses or claims seeking double recovery. Our counsel’s letter, which responds to a question posed by several plaintiffs’ lawyers, simply reiterates this basic position. If a claimant who received an overpayment from the GCCF subsequently makes a claim to BP for additional VoO compensation, BP is reserving the right to take into account and offset the GCCF’s overpayment. This is the law, and it is fair and equitable,” he said.
Meanwhile, the Gulf Coast Claims Facility said it will continue compensating claimants without deducting wages earned in the Vessels of Opportunity program. “We are not deducting it. BP is reserving their rights to deduct it when someone makes a property claim or a contract claim to them. What BP does is completely distinct from our program,” Zins said. “This letter has no impact on our methodology.”
As such, the parties seem to be on a collision course over the issue. But it could get resolved through six test cases of disputes arising from the Vessels of Opportunity program. Attorneys selected six participants in the Vessels of Opportunity program who represent the various issues at stake, and U.S. District Court Judge Carl Barbier has allowed for limited discovery and depositions and then mediation to find solutions to any problems with the program.
If that fails, plaintiffs in the consolidated litigation over the oil spill have filed a motion for summary judgment over the issue.
For anyone who has settled an economic loss claim with the GCCF, but now wants to pursue a claim over boat damage or other issues from the Vessels of Opportunity program, they must first go to the GCCF. If they are not satisfied with the outcome and want to go to court, the court may come up with a simple form allowing people for file their grievances.
BP’s stance that legal releases signed as part of GCCF compensation won’t preclude claims for boat damage and other grievances from the Vessels of Opportunity program could have other implications as well. Plaintiff attorney Joel Waltzer has long questioned how waivers that were signed before problems with the Vessels program had become apparent could be binding. Now that BP says it won’t enforce releases on Vessels of Opportunity, Waltzer believes it could open the door for attorneys to press for additional relief on fishing for subsistence, property damage and other types of claims.