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BP Business Economic Loss Claim Appeal 2015-1242: Discontinued business line irrelevant to causation


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.

Claimant filed this Business Economic Loss claim under the Settlement Agreement. The Settlement Program awarded Claimant $56,161.36 pre-RTP. BP appeals.

Until 2008, Claimant operated a pallet sales business. After that, Claimant rented forklifts. Following the 2008 switch, revenues declined significantly. BP complains that, under the Settlement Program’s approach, Claimant’s benchmark period for sales was when it was in the pallet business. Since Claimant was not in the pallet business in 2010, when the Spill occurred, BP Claimant reasons could not have suffered economic damage to a non-existent business line resulting from the Spill.

Claimant rejoins that this is a causation argument and that since it is in Zone A, causation is presumed under the terms of the Settlement Agreement. Claimant also observes it has continuously been in business at all pertinent times. Claimant correctly characterizes BP’s argument as causation-based.

Under the Settlement Agreement, causation is presumed for all Zone A claimants. The causation presumption prohibits the Settlement Program from examining each dollar of revenue to ascertain its source and whether all or part of a loss was directly related to the Spill. Here, the etiology of the loss is irrelevant per the Settlement Agreement, to which BP agreed.

Claimant’s Final Proposal, which reflects the Settlement Program award, is the correct award and thus prevails.

[Editor’s Note: See also Discretionary Review Decision in 2015-1237.]

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