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Five Years Later: Claims Process Leaves Some Businesses Dissatisfied

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Beach rental businesses struggled after the 2010 oil spill.

More than 36,000 claims have been submitted by Mississippi businesses and individuals for economic losses from the BP oil spill. That’s about 12 percent of the total, and far lower than in Louisiana, Florida or Alabama.

As MPB’s Evelina Burnett reports, many people who have filed claims say they weren’t fully compensated for what they lost, or are still waiting to be paid.

“I’ve been in the beach rental business for 31 years," says Patrick Pigott as looks out at the umbrellas, chairs and breezily blowing flags that beckon visitors to his business, Biloxi Beach Company, across from the Coast Coliseum. He watches the spring breakers enjoy the jet skis, aqua cycles and other beach rentals while recalling the ups and downs of the last 10 years.

“It was a slow rebuild process after Katrina, and just about the time we started to get some tourism back, that’s when the oil spill happened," he says.

Early in 2010, just before the spill, Pigott had gotten geared up to open two new locations. Then, the spill happened. Though Mississippi beaches didn’t see oil til late July, as soon as the first story aired, he says, the visitors disappeared.

"It was like turning off a water faucet," he says. "It was devastating."

Business that year was a tenth of what it usually is, he says. But the bills kept coming. That meant when Pigott made a claim to get his economic loss reimbursed, he says he had to take the amount offered, even though it was less than what he believed he was owed.

“They [dragged] it out so long … and finally it just got to the desperation point, where you have to take it," he says, adding: "I had payments on skis and equipment that I had to make. It was either take what they offered me or starve to death.”

Business owners and the attorneys who represent them on the Gulf Coast say Pigott was not alone in facing this dilemma, with many businesses and individuals taking immediate payments to survive even though later claims may have been much higher. But they also say there are many businesses still waiting to be paid.

Robert Wiygul is an attorney with Waltzer, Wiygul & Garside in Ocean Springs.

"It's five years after the oil spill, and there are still tens of thousands of business claims that are waiting to be processed or in some stage of being processed," he says.

In 2012, a settlement agreement with BP should have streamlined and sped up claims, but the following year, BP challenged the way the claims administrator was handling the process, arguing he was misinterpreting the agreement, which, the company said, led to "enormous payments going to businesses that did not suffer any losses." That set off a legal battle that would stall claims for almost a year. An appeals court ultimately upheld part of BP’s case, leading to a change in the way some business claims are calculated.

Wiygul says the new formula is much more complex and also reduced the value of what’s being paid.

"We have seen a lot of claims that, under the original interpretation and certainly the language of the settlement, would have been paid, that no longer have significant value or would not be paid at all," he says.

In the meantime, as attorney Steve Mullins with Ocean Springs law firm Luckey & Mullins points out, more than 600 people have died since filing their claim.

"Another 1,800 or so have declared bankruptcy," he says. "I have charter boat guys who haven’t gotten a nickel, and I can’t find out why."

BP says it’s paid more than $1 billion to individuals and business owners in Mississippi. That number is below most other Gulf states, which may be in part because Mississippi is smaller than the other states. It could also have to due with the complexity of the process.

Mullins also thinks Mississippians are generally less likely to sue or file claims than people in other Gulf Coast states. In any case, the deadline to file for a claim is just a few weeks away, on June 8. But Mullins says one key question - whether these payments will cover whatever the future effects of the spill – is still unknown.

"And we won’t know for a long time," he says. "I tell people when they take these seafood settlements, if everything goes back to normal in four or five years, you’ll be ok. If it doesn’t, you won’t."

As for Patrick Pigott, the owner of the beach rental business, he also worries about the long-term effects of the spill, especially on the coast’s image among potential visitors. Pigott says his business hasn’t totally recovered since the spill, but it’s getting progressively better.

"We used to see the dolphins out there every morning - they would feed out there," he says. "After the oil spill, they weren't out here like they used to be. But they're coming back. Now in the morning, when we're out here, we see the dolphins out there again. That's a good sign, to me."

He says things seem to be getting back on track – it’s just been a long road.

Tomorrow, we’ll finish our series with a look at what the future will bring to Mississippi in environmental restoration and research.