BP's nemesis fights to widen battlefield

Brent Coon, the Harley-Davidson-riding Texan lawyer - and BP's nemesis in the US courts - has some much-needed good news for the Mimosa Dancing Club, a strip club in a run-down district of New Orleans.

Last weekend it was reported that the Mimosa's owners had made a compensation claim against BP over the Gulf of Mexico disaster because local fishermen are now out of work and can no longer afford to frequent the club.

The Mimosa became an unofficial - and seemingly reluctant - test case for lawyers and the myriad would-be claimants desperately seeking answers over who qualifies for BP payouts.

Ken Feinberg, the lawyer appointed by the White House to run the new US$20 billion ($29 billion) claims fund, was asked whether the club's claim was valid. "I'm very dubious," he told ABC News.

Coon says lawyers may look unfavourably on the claim because of the nature of the club.

"But I would love to represent the club knowing what I know about BP," he said, joking that BP employees are not above letting their hair down in such establishments. When it comes to anything related to the explosion of BP's Deepwater Horizon rig - which killed 11 workers and has caused by far the worst environmental disaster in US history - he does not beat around the bush. "I'm not going to rest until some people go to jail," he warns.

Going after BP is a serious business for Coon. And it's something he's good at. He led the successful civil litigation against BP over an explosion at its Texas City refinery in 2005, which killed 14 workers and injured more than 100.

He forced BP to release hundreds of internal documents detailing cost-cutting at the plant in the years before the accident, which regulators later ruled were a factor in its cause.

Not being your average pin-striped lawyer helps when you're taking on Big Oil.

The son of an electrician, Coon started his practice in Port Arthur, Texas, an industrial town where rock-and-roll singer Janis Joplin grew up.

In his first cases he represented refinery workers exposed to asbestos, many of whom he already knew locally.

He claims that BP, once run by Lord Browne, and with close diplomatic ties to the UK Government, is a relic of the British imperial past.

"It's the primary reason why we had the American revolution - because of the attitude of the monarchy," he says.

He remains scathing about BP's safety record in the US. Last week he met officials from the department of justice who are considering legal action against BP after safety regulators said BP has a "systemic safety problem" at its refineries.

Having helped depose Browne after the Texas City fire, Coon is even more determined to topple his heir, Tony Hayward, after the Gulf spill.

BP faces potentially limitless claims across five states for an undefined period. If, as has been reported is likely, the leaked oil gets into the Gulf Stream and reaches the Atlantic, or hits Mexico or the Caribbean, the possibility of further untold liabilities opens up.

"Until BP stops the oil, the damages are ongoing," Coon says. "We don't know how long it's going to take to get wherever it ends up. We don't know how many businesses will be impacted, how hard and for how long."

Lawyers in New Orleans say that the closest comparison to the legal storm brewing in the Gulf today is the $246 billion compensation settlement made by the whole tobacco industry a decade ago for sick smokers. But in this case BP is faced with shouldering the bulk - and possibly all - of these damages alone.

Ten days ago, the White House appointed Feinberg, who administered the 9/11 victims' compensation fund, to run a new claims process, independent of BP but funded by the company.

BP has pledged to contribute US$20 billion initially. But no one knows how it will work or who will qualify for relief, because Feinberg hasn't decided yet.

The result is even more confusion and uncertainty for thousands of people facing bankruptcy in the next two months, a critical time for the tourism and fishing industries, the hardest hit by the disaster.

"We do not know how many people are sitting at home because they do not know what to do," Coon says.

Feinberg has said that claimants wanting small amounts of money from the fund to keep them going will still be able to pursue BP in the courts for further damages in the future.

But he is planning to offer lump sums in about three months in return for recipients waiving their right to seek claims in court, a move which predictably has angered some lawyers chasing juicy fees. "People are saying he's going to put us out of business," one told me.

The lawyers do not know whether claimants will receive more from an immediate payout from the fund, or from lengthy and uncertain litigation.

Coon alleges that some BP officials are telling applicants that their claims will be easier to process if they do not have a lawyer: "No company wants anyone with a claim to have a lawyer, because then they know the cost of doing business is going to go up."

In response, a BP spokesman points to a statement on its website which says the company "pledges to treat claimants represented by attorneys the same as claimants proceeding without the assistance of an attorney" - although it goes on to say that the company cannot communicate directly with these claimants without the authorisation of their lawyers. Coon says that claimants, many of whom are not highly educated, find the whole legal process bewildering.

The vast majority of people who have already received damages from BP (to a total of about US$125 million) work in the fishing industry. But applicants from businesses indirectly affected - restaurants, plumbers and people like the owners of the Mimosa Dancing Club - are having less luck: thousands of claims are in abeyance while BP decides what to do with

them. According to a report from a house of representatives committee last month, only 12 per cent of claims have been paid. BP's figures show that the bulk of its compensation cheques are for US$5000 or less.

BP officials stick to the company line that it will pay all "legitimate"claims. "That sounds good, but what's a legitimate claim?" says Coon.

Darryl Willis, the man BP put in charge of its claims process, says a boat mechanic would probably qualify, but a car mechanic who works in a fishing village may not.

It makes sense from a financial - and public relations - perspective for BP to decide to voluntarily pay all direct fishing industry claims. There are about 4000 shrimpers in the gulf and they do not earn very much, so the cost is not massive. But as the scale of the disaster and the resulting economic damage has mounted, BP has not made any commitment to pay groups indirectly affected for fear of setting a prohibitively expensive precedent.

Willis himself is a good example of BP's PR effort in full swing. It is running television adverts in Louisiana to explain its claims operation.

They are narrated by Willis, who tells the camera he was "born and raised" in Louisiana. He also recently testified before Congress that his mother lost her home because of Hurricane Katrina, further underscoring his, and by implication BP's, connection to the region.

Coon says BP - referred to as "British Petroleum" by US critics, although the company dropped that appellation some time ago - knows that the more it is perceived as a foreign company, the bigger the fallout from the crisis will be: "Willis is the person BP wants to be the public image of the BP claims process."

BP executives met Feinberg and his team last week to discuss how the claims operation will be run. It is not clear what influence, if any, BP has over the process, although clearly it will want to limit the size of the eventual payout.

For many people in the US, BP's name will be mud for years, possibly forever; executives may at some point decide that the time for goodwill gestures, like voluntarily paying compensation, is over.

Coon says BP's attention could soon switch to fighting the ruinous liability claims it is facing: "At some point it doesn't matter how much money you pay to make public relations better and protect your brand name.They might think 'our image is so shot' that they just decide to circle the wagons and protect the company."

But he'll still be fighting them.

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