“Want to sue BP? No oil required”

Posted: 04 Sep 2010 11:33 PM PDT

For some beach businesses outside Northwest Florida, the effects of the BP oil spill may have resulted from perception, not reality.

Consider the case of the Tradewinds Island Resort on St. Petersburg Beach, a complex that includes 800 hotel rooms and 13 bars and restaurants.

Keith Overton, the resort's chief operating officer, says business is down dramatically since the April 20 spill, even though oil has not been reported east of Panama City Beach.

Numerous visitors have canceled trips to Tradewinds, he said. And on top of that, he said, the resort also lost money by offering deep discounts to persuade tourists to come despite their misperception of ruined beaches.

Convinced that media reports scared away potential tourists, Overton filed a claim with BP for $1.7 million in damages that he says Tradewinds suffered through June 30.

BP refused to pay, and so far, Overton hasn't heard from the Gulf Coast Claims Facility, which assumed claim payment responsibility on Aug. 23 under independent administrator Ken Feinberg.

Tradewinds is typical of the hotels and restaurants that three large law firms, including Pensacola's Levin Papantonio, hope to enlist as they gear up for a major lawsuit on behalf of the Florida Restaurant and Lodging Association, which has some 10,000 members.

"I've met with Ken Feinberg a number of times. He promised to get back to me, and I have not heard a word," said Overton, who also is chairman of the board for the Restaurant and Lodging Association. "I am losing faith and our industry is losing faith in both BP and the Feinberg administration. That's why we selected the attorneys."

The association is recommending a three law-firm consortium of Weitz & Luxenberg in New York, Cooney & Conway in Chicago, and Levin Papantonio to handle its members' claims.

The firms will help restaurants and hotels make the case for maximum compensation from the Gulf Coast Claims Facility, or, if necessary, sue BP and the other responsible parties in federal court. Each hotel and restaurant will have to sign on individually.

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Brian Barr, an attorney at Levin Papantonio, believes the damage from the spill to the state's tourism industry may be nearly incalculable.

"Everyone is talking about the shrimpers and the crabbers, but everybody is ignoring the tourism industry in Florida," Barr said. "At the end of the day, that is going to be the most affected segment of the entire economy along the Gulf Coast. It's a $60 billion-a-year industry. It's 20 percent of the Florida economy. It provides $3.5 billion in sales taxes."

'Very expensive'

Feinberg has said he will use several factors in determining a claimant's eligibility, including proximity to the spill.

The law firms are banking on being able to prove that proximity is not the only consideration.

While they will be seeking clients who were directly affected in Northwest Florida, they also will be looking statewide to enlist clients who may not have seen the first tar ball but may have suffered losses.

To that end, the firms plan to hire university experts for economic modeling — that is, building sophisticated computer programs that will use information about businesses and their location to determine how the spill affected their bottom lines.

"This is very, very, very expensive," said Levin Papantonio's chief, attorney Fred Levin.

He said the Northeastern university the law firms first contacted to do the modeling wanted $1 million a month for the first 12 months. The firms have since inked a deal with Florida State University to do some of the monitoring work and may partner with other institutions as well.

Levin said a single hotel or restaurant could not afford modeling, which will be available only to the businesses that hire the firms.

"You need to get together with a bunch of people to do it," he said. "That, in effect, is what is going to happen."

Overton believes modeling will be essential to any final claim.

"If you want a long-term settlement, you're going to have to be able to demonstrate with some basis what the long-term impact might be," he said.

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Time is money

For some potential hotel and restaurant claimants, a big question will come down to "Will they be better off accepting what Feinberg eventually offers, if anything, or holding out hope that they can recover more through a lawsuit?"

Barr said he expects the lawsuits to take a couple of years, and he concedes that some hotels and restaurants could go out of business waiting.

And, though the firms have reduced their typical fee to 25 percent of the money recovered, the plaintiffs still will want enough from the suit to compensate for that fee as well as the wait for payment.

Feinberg is a Washington-based attorney who previously handled compensation for September 11 victims' families and Vietnam veterans harmed by Agent Orange.

He repeatedly has pledged that he will be more generous with those damaged by the BP oil spill than any court would be, without all the fuss of a years-long legal battle.

Barr doubts that.

"Whenever someone is going around who is a well-financed lawyer, who has an army of lawyers behind him, saying, 'You don't need a lawyer,' what should your first reaction to that be?" Barr asked. "Maybe you should talk to a lawyer."

Perception rules

Paige Hartmann, who owns Siesta Key Suites, a 16-unit resort just south of Sarasota, is torn about whether to file a claim or, eventually, a suit.

When she heard about the oil spill, she immediately thought of Hurricane Charley in 2004.

"When Charley hit Florida, it was forecast to hit Sarasota, but in the last hour, it went down and hit the Port Charlotte area," she said. "We had absolutely, almost, no effect from Charley, but it almost took two years for people to stop saying, 'Weren't you wiped out from Charley?' "

She attributes her business decline this summer to the spill. She hasn't tabulated the dollar amount yet, but even money-back guarantees did not lure business, she said.

"There is a part of me that says, as a businesswoman, I got my business to where it is today, so, who am I to say somebody else needs to take the blame for it not doing well?" she asked. "Then, as I started to think about it, what happened out there affected my business."

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