Deckhands go it alone in BP case

Many fishing boat deckhands who lost months of work when the 2010 oil spill cut into the Gulf of Mexico’s seafood bounty have decided to fare for themselves rather than accept a legal settlement they say won’t cover their damages.

On Friday, a New Orleans federal judge approved a settlement between British oil giant BP and tens of thousands of Gulf Cost residents who suffered economic damages in the deadly blowout of BP’s Macondo well.

But many prospective claimants have opted out of the settlement, including many deckhands and others in the seafood industry.

At least a third of seafood claimants received what they thought were interim payments under an earlier claims program, and since learned they won’t get more because the formula the settlement uses to calculate damages would pay less than they already have received.

“They gave me $27,000 in 2010, but now they say I should have only gotten $14,000 at most – I am underwater,” said Raymond Reyes, of Salsa, La., a former deckhand who also worked on cleanup crews after the spill. “The oysters aren’t there anymore, but $14,000 is supposed to do me.”

Joel Waltzer, a lawyer whose seafood industry clients include about 80 deckhands, said that most of them opted out of the settlement, as they, like Reyes, received more in interim payments than their final offer, meaning that they would receive nothing.

The Seafood Compensation Program, part of the settlement between BP and individual plaintiffs, will be worth $2.3 billion. More than $370 million has been offered to 1,487 claimants, making the average seafood claim worth more than $250,000. But the amounts going to deckhands are a fraction the size of other seafood claims.

Waltzer estimates that deckhands are being offered about $20,000 on average before taxes and attorney fees, money that in many cases was received and spent one to two years ago Claimants are not being asked to return any earlier payments.

“The opt-in does not give deckhands meaningful help,” said Waltzer, one of the legal representatives for GOFISH, a group representing a range of seafood industry concerns. “It seems to me that the most compensation went to the people with the most claims. As you get down the food chain, lawyers care less and less.”

The formula

The settlement offered to deckhands estimates lost earnings based on eight months of wages, plus an additional risk premium to compensate for future lost earnings.

The amount of lost earnings are based on a 37 percent calculation of actual earnings. Thus, for one Port Arthur-based deckhand who earned $8,284 in 2009, the settlement valued his loss from the spill as worth $3,064. The settlement then adds an additional payment called a risk transfer premium that is intended to reflect future losses and replace any punitive damages.

For deckhands, the premium is 2.25 times the amount of lost earnings, which would be $6,896. The losses and the premium are added for the final offer – which would be $9,960 for the Port Arthur-based deckhand.

Relatively low wages for deckhands, and the small percentage of less than a year’s wages, have meant that many deckhands received more in interim payments than the value of their claims.

The court held a hearing in November to determine whether the settlement treats claimants, including deckhands, fairly. At the hearing, one of the lead attorneys for the plaintiffs’ steering committee, Steve Herman, said that when the settlement was negotiated, deckhands were offered less because they did not have large investments, such as a $200,000 shrimp boat or a business, to lose.

“They had a strong feeling that if you were a vessel owner, you were tied up with this business – you were on the long-term hook,” Herman said. “They saw deckhands as fundamentally different – they could go get a job in some other market, they were not tied to the fishing industry, and they are getting paid for three years.”

The last straw

For Reyes, whose family has been in the fishing industry for four generations, the spill was the last straw.

“I moved to Texas because I wasn’t going to mess with the seafood anymore,” Reyes said. “I have a son, but I don’t want him to know anything about the seafood industry. If he’s going to know anything about it, he’s going to know about going to a seafood restaurant and eating it.”