Hundreds of Gulf oil spill victims represented by Exxon Valdez litigator
By Dan Murtaugh
MOBILE, Alabama — Two decades ago, Gerry Nolting represented 2,200 fishermen harmed by the Exxon Valdez oil spill in Alaska and took the role of lead prosecutor in the class-action lawsuit, in which 32,000 claimants initially were awarded $5.3 billion.
Then he watched as Exxon fought the judgment all the way to the U.S. Supreme Court, which cut damages to about $1 billion in 2008.
Full distribution of the damages ended last year, more than 21 years after the spill occurred. By then, about 600 of his 2,200 original clients were dead, Nolting said.
Now, Nolting is working for clients hurt by the Gulf oil spill, but he’s trying to keep them out of the courtroom. His Minneapolis-based Faegre & Benson LLP set up offices in Bayou La Batre, Biloxi and New Orleans this year and has contracts with about 550 workers and business owners to guide them through BP’s claims system.
“It’s certainly an alternative on paper that should provide fishers and other claimants a very good option to get closure financially and emotionally and move on with their lives in a matter of a year or two years instead of 21 years,” Nolting said.
It’s Nolting’s job to translate that “on paper” into currency. BP has paid out more than $4.7 billion in claims through its own process and through the Gulf Coast Claims Facility since the spill started April 20, 2010.
But many business owners and politicians along the Gulf Coast have launched strong protests, insisting that the documentation requirements are onerous, the calculations are arbitrary and the payments are too small.
Betsy Stanley, who owns S&S Oyster House in Bayou La Batre with her husband, Robert, said that the spill has cost her more than $200,000 in lost revenue. She got an emergency check for $12,000 from the Gulf Coast Claims Facility last year.
She filed for additional relief in November, she said, but hasn’t received any more money.
“They seemed to have pulled numbers out of thin air,” said Stanley, who is one of Nolting’s clients. “They said BP had paid me, they had not. They said I had zero income in 2009. They had me listed as a bakery worker. I’ve been a seafood wholesaler since 1990.
“We’re betting the farm on Mr. Nolting,” she said. “We’re really hoping he can help us out.”
Nolting said his first job is to try to persuade the claims operation’s administrator, Ken Feinberg, to change the formula he is using to calculate payments.
Feinberg announced in February that he would give most people a total of double their 2010 losses — minus anything they’ve already received — if they sign a waiver promising not to sue BP or seek further compensation from the claims operation. The only exception to that is oyster harvesters, who receive four times their 2010 losses.
Nolting said those numbers are not fair to his clients, all of whom make their living in the seafood industry. While Gulf of Mexico seafood has consistently passed federal safety tests, there could be biological consequences that take years to manifest.
Also, Gulf seafood companies face market changes and suspicion that could take years to reverse, he said.
Stanley, for example, said that she used to sell to several restaurants on the Virginia coast. But when the spill closed Gulf waters, she said she had to shut down, and those restaurants started buying seafood from California and from overseas.
In addition, she said, the disruption to the Gulf supply chain helped send Gulf seafood prices soaring, even as prices elsewhere stayed stable.
Right now, Stanley said, the market price for processed oyster meat is about the same as it costs her to purchase raw Gulf oysters. “We might have to shut back down,” she said. “It’s hard for us to get our foot back in the door.”
Nolting said he plans to submit all of his clients’ claims in one batch to Feinberg’s operation at the end of July. He will also send supporting documents from his own team of experts to show why the Gulf Coast Claims Facility should be paying out at a higher rate.
In an interview with the Press-Register, Feinberg said he is constantly re-evaluating his payment standards, and would do so again based on Nolting’s submission. If a change is made, it would apply to all claimants, not just Nolting’s clients, Feinberg said.
“I’ve always said that if (the formula) proves to be unfair or at odds with the latest facts, we reserve the right to make the final payment calculations more or less generous,” Feinberg said. “Anything Mr. Nolting wants to provide us to help demonstrate a reasonable modification to the formula would be fine with us.”
Clients who accept the resulting payments will pay Nolting’s firm a portion of their checks. Nolting would not say what percentage he is charging, but it is “much less” than the typical 30 percent fee that lawyers charge in litigation.
If that strategy doesn’t work, Nolting said, his clients could join litigation in U.S. District Court in New Orleans that already includes more than 130,000 plaintiffs.