Small hotels say they’re being railroaded by BP’s Gulf Coast disaster settlement

Owners of small hotels on the Florida and Texas Gulf coasts say a proposed settlement unfairly excludes thousands in the tourism industry who suffered economic damages in the 2010 oil spill.

The Asian American Hotel Owners Association says the settlement between BP and a committee representing claimants sets arbitrary geographic boundaries including the entire coasts of Alabama, Mississippi and Louisiana, but only portions of the Texas and Florida Gulf coasts.

Several hundred hotel owners marched on BP’s west Houston headquarters Thursday afternoon to protest the geographic provisions of the settlement.

“Throughout the Gulf Coast there are business owners that have been impacted by the spill,” said Nash Patel, who is on the board of the association that estimates its members own 60 percent of the 1,280 hotels affected by the spill but not covered in the settlement.

BP officials acknowledged the protest but declined to meet to discuss the settlement.

“I suggest that you and your colleagues contact the … staff administering the court-supervised settlement process for more information on the settlement and your rights under it,” Iris Cross, a spokeswoman for BP, said in an email to the hoteliers. “All claimants, including hotel owners who believe they are entitled to compensation, may continue to pursue their claims.”

The settlement allows claims from the upper Texas coastal counties of Jefferson, Orange, Chambers and Galveston, and from 20 counties on the Gulf coast of Florida.

“It was the Gulf Coast disaster — every state in the Gulf was affected,” said Amar Patel, a business analyst on the hotel industry for Farrell and Patel, who has specialized on the economic impact of the spill.

BP and the Plaintiffs’ Steering Committee agreed in March on a tentative class action settlement to cover economic and medical damages suffered by coastal individuals and businesses.

U.S. District Judge Carl Barbier of New Orleans, who is overseeing the massive tangle of claims and counterclaims arising from the spill, has scheduled a hearing for Nov. 8 to determine whether the BP settlement provides reasonable compensation for the class.

Potential participants in the class action have until Oct.1 to decide whether to join the class action or opt out and pursue their claims as part of a trial before Barbier set to begin in January.

The settlement acknowledges that the January trial will cover claims for people and businesses outside of the geographic bounds set in the agreement.

“The PSC believes the hotels, along with many other businesses, deserve to be compensated for their losses,” said Steve Herman, one of the lead attorneys for the Plaintiffs’ Steering Committee. “We look forward to trying their liability case in January.”

The settlement divides the Gulf Coast region into four zones in which residents and businesses are eligible to make claims.

Claims from Zone A, which includes sections of coast hardest hit by the spill and its aftermath, fall under the ‘presumption’ category, meaning claimants there don’t have to prove the spill caused the damages, though they must prove the amount.

In Zones B, C and D, businesses must meet additional requirements, including causation, and must provide comprehensive accounting records for each month. Most of the eligible areas in Texas and Florida, along with inland regions in other states, are in Zone D.

The protesting hoteliers said the higher burdens of proof place unfair pressure on already struggling businesses, even if they are in eligible zones.

The hoteliers also say that the settlement negotiation process excluded small hotels and their expertise in the patterns of tourism.

“With a class action settlement, you are required to have class action representatives for each class affected,” said Ricky Patel, a Miami-based attorney with Farrell and Patel. “We do not know to this day who they managed to pick from the lodging or the hospitality or travel industry. We represent close to half of all hotels in the US, and over 3000 members with hotel properties have submitted claims. Yet our voice was muted.”

(c)2012 the Houston Chronicle. Distributed by MCT Information Services.