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BP Business Economic Loss Claim Appeal 2015-1029: Pipe fabricator not subject to moratoria review

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The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.


BP appeals the Settlement Program’s award to this BEL Claimant on two grounds:

1) the Settlement Program failed to determine whether Claimant is an excluded business under Section 2.2.4.5 (the Oil & Gas Industry exclusion) of the Settlement Agreement; and,

2) the Settlement Program failed to determine if Claimant’s losses were due to the federal moratoria.

Claimant is a fabricator of piping, heat exchanges, pressure vessels. Claimant’s tax returns and BEL claim form used an NAICS Code that the Settlement Program determined to be invalid. After reviewing Claimant’s business activities, the Settlement Program assigned NAICS Code 332410. In fact, the Settlement Program documented its determination:

“Claimant maintains a website listing its manufacturer of boilers and heat exchangers. NAICS Code 332410 – Power Boiler and Heat Exchanger Manufacturing is the most appropriate NAICS Code for the Business Entity because the entity’s tax return indicates it is engaged in the metal fabrication of boilers. Therefore 332410 is assigned.”

The Panel also determines that this was the appropriate NAICS Code.

The Oil & Gas Exclusion Issue

BP relies on websites and Youtube videos to support its contention that Claimant might be excluded under Section 2.2.4.5. BP does not dispute the NAICS Codes assigned to this Claimant and does not dispute the fact that NAICS Code 332410 is not listed in Exhibit 17 of the Settlement Agreement. Further, as referenced above, the Settlement Program did review Claimant’s website and was thus aware of Claimant’s primary business.

After de novo review, this Panel finds that Claimant is not excluded under Section 2.2.4.5 of the Settlement Agreement.

The Moratoria Issue

BP next asserts that the Settlement Program was required to determine if Claimant’s losses were potentially caused by the federal moratoria under Section 3.3 and 38.93 of the Settlement Agreement. BP asserts that Claimant’s NAICS Code requires “moratoria review” under Exhibit 19 of the Settlement Agreement.

BP is correct in stating that Code 332410 is listed in Exhibit 19. However, the Settlement Agreement provides:

“Businesses the Claims Administrator determines fall within the following codes and descriptions marked with an ‘X’ , shall be routed by the Claims Administrator to a team dedicated to the evaluation of business economic loss claims for potential moratoria losses.”

In Exhibit 19 under NAICS Code 332410, there is an “X” next to “Marine power boilers manufacturing”. No other industry type is marked by an “X”. Accordingly, if Claimant did not manufacture marine boilers, its claim is not subject to automatic moratoria review. The record here reflects an affidavit from Claimant’s General Manager since 1983 which attests that Claimant does not and has not manufactured marine power boilers during his tenure. Accordingly, the claim here was not subject to automatic moratoria review under the terms of the Settlement Agreement.

For the foregoing reasons, Claimant’s Final Proposal is the correct result.

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