Lafayette attorney talks to legislators
Louisiana’s economy will benefit by a combined total of $561.9 million during the next three years because of expenditures and wages tied to claims processing in the aftermath of BP’s 2010 offshore disaster, state legislators were told Thursday.
Lafayette attorney Patrick Juneau also told senators and representatives on an oversight committee that state tax revenue will increase by $20.6 million because of the three-year infusion. Juneau is the court-appointed successor to former claims czar Ken Feinberg, of Washington, D.C.
More than $450 million of the projected economic impact of Juneau’s operation is attributable to direct expenditures and wages, Juneau said. Another $111 million in indirect sales and earnings also are expected to ripple through the state economy, according to his report to committee members.
A recent settlement approved by U.S. District Judge Carl Barbier, of New Orleans, means BP no longer has a ceiling on its promised payouts, Juneau added.
BP promised $20 billion for claims and cleanup after the Deepwater Horizon rig exploded, killing 11 workers and flooding the Gulf of Mexico with about 200 million gallons of oil. That money was earmarked for people, businesses and state and local governments in Louisiana, Mississippi, Alabama, Florida and Texas.
Now, the $20 billion fund “is being dissolved,” Juneau told the legislators.
A spokesman for BP America said in emails that BP already has spent $22 billion in response to the tragedy. The total includes more than $6.5 billion in claims processed by Feinberg by March, when Juneau began the transition to his formal takeover this month, said Ray Melick.
Melick, director of media and communications for the Gulf Coast Restoration Organization of BP America Inc., said BP estimates the court settlement approved by Barbier will cost “approximately $7.8 billion, including administration costs and plaintiffs’ attorney fees and expenses.”
That $7.8 billion, Melick said, would be in addition to the $22 billion BP has paid out.
Like Juneau, Melick said there is no “ceiling on BP liabilities.”
State Sen. Edwin R. Murray, D-New Orleans, chairman of the select committee for oversight of the court-approved claims process, asked Juneau for more details of BP’s estimated $7.8 billion in settlement costs.
“That is a projection,” Juneau emphasized. “If it’s (actually) $10 billion, it’s $10 billion.”
Juneau said it’s impossible to know in advance whether the actual payout could be as low as $6 billion.
“There are no caps?” Murray asked.
“No,” Juneau replied.
Responding to Murray’s questions about the projected economic impact of claims-processing expenditures and staff wages in Louisiana, Juneau said an average of 1,165 people will work in claims receipt, processing and analysis each year.
Juneau said economist Loren C. Scott estimated annual salaries of employees involved in those tasks will average $52,011. Juneau said that is substantially more than Louisiana’s average annual private-sector wage of $39,654.
Juneau said BP expenditures in Louisiana are increasing because of his decision to move the claims center from Washington, D.C., to New Orleans. “It’s the analysis and determination center” for all claims against BP in Louisiana and the other four Gulf states, he said after the committee meeting.
The new administration’s intake center is in Hammond, Juneau added. “It takes these millions of documents and puts them in an electronic database.”
Also in Louisiana are six claims assistance offices at Grand Isle, Lafitte, Houma, Cut Off, Harvey and New Orleans-East, Juneau said. Another 12 such offices are spread across the four other Gulf states, he said.
State Rep. Joe Harrison, R-Napoleonville, asked whether Juneau has firm figures for the oil leak’s financial impact on the seafood industry.
“We just don’t have all those numbers yet,” Juneau said, adding that his staff has received 20,000 claims against BP since June 4.
He also said the Hammond intake center has received requests for another 75,000 claim forms.
People who wish to pursue individual civil suits against BP have until Oct. 1 to opt out of Barbier’s approved class settlement, Juneau noted. A final hearing on the fairness of the settlement is scheduled for Nov. 8, he said.
The deadline for filing a claim with Juneau is April 22, 2014, he said, adding that existing claimants will begin to receive payments from his administration by late July.
State Rep. Ray Garofalo, R-Meraux, asked whether people who already accepted a final payment from Feinberg could file a claim with Juneau.
“They’re out,” Juneau replied.
He later said final payments were final and will not be expanded.
Juneau added, however, that many people who were ruled ineligible for claims payments during Feinberg’s administration could be eligible for such payments under the court-approved settlement.
The new administrator urged people who believe they have valid, unsettled claims, to visit his website: www.deepwaterhorizonsettlements.com.
Nick Gagliano, a Hammond spokesman for Juneau, said those who lack access to computers can obtain information by calling toll free: (866) 992-6174.
While Feinberg was in charge of claims processing, his law firm was paid more than $1 million per month from the BP fund.
Juneau said his law firm receives $275,000 per month.
“The world is focused on this case,” Juneau said. “We’ve got a chance to do something that is historical. It’s important that we get it right.”
Added the new claims administrator: “I want a good outcome here. I want it good for Louisiana. I want it good for Florida and all the other Gulf states.”