Deepwater Horizon Claims Center

Deepwater Horizon Claims Center
Name	Deepwater Horizon Claims Center
Formation	2010
Headquarters	New Orleans, Louisiana
Region served	Gulf Coast
Leader title	Administrator
Leader name	Kenneth Feinberg
Parent organization	BP Settlement Program

Deepwater Horizon Claims Center

The Deepwater Horizon Claims Center was the administrative mechanism established in the aftermath of the Deepwater Horizon oil spill to adjudicate and disburse compensation to individuals, businesses, and entities affected by the Macondo Prospect blowout. It operated alongside federal and state responses including the United States Coast Guard Unified Command and the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, interfacing with claims brought under the Oil Pollution Act of 1990, state statutes, and private litigation. The center became a focal point amid high-profile involvement from figures and institutions such as Kenneth Feinberg, BP plc, and the United States Department of Justice.

Background and establishment

The center was created after the Deepwater Horizon oil spill in April 2010, following directives involving BP plc and federal authorities including the United States Department of Homeland Security and the United States Department of the Interior. Its creation was influenced by precedent from responses to incidents like the Exxon Valdez oil spill and administrative compensation frameworks used after the September 11 attacks and the Hurricane Katrina recovery efforts. Key decisions drew on guidance from the Federal On-Scene Coordinator system and coordination with state governors such as Bobby Jindal of Louisiana, Bob Riley of Alabama, and Rick Scott of Florida. Early administration referenced protocols from the Environmental Protection Agency and input from the National Oceanic and Atmospheric Administration.

Structure and operations

The operational model mirrored established claims administration mechanisms, led by an appointed administrator, staff, and independent auditors including firms with ties to KPMG, Ernst & Young, and law firms active in major tort resolutions like Kirkland & Ellis and Skadden, Arps, Slate, Meagher & Flom. Regional offices were coordinated across Gulf Coast locations including New Orleans, Mobile, Alabama, Gulfport, Mississippi, and Tampa, Florida. The center coordinated with state agencies such as the Louisiana Department of Natural Resources, Alabama Department of Conservation and Natural Resources, and the Mississippi Department of Environmental Quality. Operational protocols referenced standards from organizations like the American Bar Association and reporting requirements under the Securities and Exchange Commission when BP disclosed settlement impacts. Oversight involved judges from federal districts such as the United States District Court for the Eastern District of Louisiana during review phases.

Claims process and eligibility

The claims process accepted submissions from claimants including commercial fishing operations like those represented by the Southeastern Fisheries Association and tourism businesses in locales such as Pensacola and Galveston. Eligibility criteria addressed losses under statutes including the Oil Pollution Act of 1990 and contractual commitments by BP plc; claimants included individuals covered by worker compensation systems like Longshore and Harbor Workers' Compensation Act provisions in some instances and businesses seeking loss of revenue under state statutes. The center required documentation comparable to filings before tribunals such as the United States Court of Appeals for the Fifth Circuit for contested matters and engaged forensic accountants familiar with standards from the American Institute of Certified Public Accountants. Outreach efforts involved collaboration with community organizations such as National Wildlife Federation chapters, Gulf Restoration Network, and local chambers of commerce including the New Orleans Chamber of Commerce.

Payouts and financial oversight

Disbursement procedures directed funds from BP and related escrow arrangements into individual and corporate settlements, coordinated with financial institutions including Wells Fargo, JPMorgan Chase, and trustees familiar with settlement funds used in cases such as Enron. Financial oversight invoked scrutiny from the United States Department of Justice, the United States Congress through hearings in the United States House Committee on Energy and Commerce, and auditors connected to the Government Accountability Office. Payouts ranged from emergency interim payments to negotiated compensations adjudicated under standards similar to those used in major mass tort settlements like the Tobacco Master Settlement Agreement. Bank transfers and settlement accounting followed protocols influenced by rulings from judges such as those on the United States District Court for the Eastern District of Louisiana and reporting obligations to regulators like the Internal Revenue Service for tax treatment of awards.

Legal challenges and litigation

The center’s determinations faced litigation in federal courts, including appeals heard in the United States Court of Appeals for the Fifth Circuit and cases filed in the United States District Court for the Eastern District of Louisiana. Parties invoked statutes such as the Oil Pollution Act of 1990 and relied on precedent from cases like Exxon Shipping Co. v. Baker and other maritime law decisions. High-profile litigants included state attorneys general from Louisiana, Mississippi, and Florida, as well as national civil rights organizations and business coalitions. Class actions and multidistrict litigation procedures echoed processes used in the Multidistrict Litigation Panel consolidations from other large-scale industrial incidents, and settlements were reviewed for fairness consistent with Federal Rules of Civil Procedure standards.

Impact and criticisms

The center’s work affected stakeholders across the Gulf Coast including commercial fisheries, tourism sectors in Bay St. Louis, Biloxi, and Destin, and energy-related service firms in Houston and New Orleans. Critics from entities like the New York Times editorial boards, legal scholars at institutions such as Tulane University Law School and Loyola University New Orleans College of Law, and policy analysts at think tanks including the Brookings Institution and the Economic Policy Institute raised concerns about transparency, claims denials, and adequacy of compensation. Congressional hearings featured testimony from figures such as Henry Waxman and Bobby Jindal and critiques from nonprofit organizations including Public Citizen. Supporters pointed to successful disbursement metrics and coordination with agencies such as the National Oceanic and Atmospheric Administration and recovery initiatives tied to the Gulf Coast Ecosystem Restoration Council.

Category:Oil spills in the United States Category:BP litigation