Tampa, Florida


Email Tom Young Tom Young on LinkedIn Tom Young on Twitter Tom Young on Facebook Tom Young on Avvo
Tom Young
Tom Young
Attorney • (813) 251-9706

BP Business Economic Loss Claim Appeal 2015-1274: Medicare income stopped, resulting in meeting causation – NO alternative 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.

In this appeal, the panelist has struggled to understand when and why a claim might properly be questioned as “implausible” and/or “suspicious.” The panelist’s difficulty arises from the discussion of those types of claims, either expressly or indirectly, in the various writings of the participating judges in the decisions of the United States Court of Appeals for the Fifth Circuit in the sequential decisions In re Deepwater Horizon, 732 F.3d 326 (October 2, 2013), 744 F.3d 370 (March 3, 2014) and 753 F.3d 509 (May 19, 2014). In particular, the panelist has attempted to discern the implications of these two statements:

(1) “[W]e conclude the Settlement Agreement does not require a claimant to submit evidence that the claim arose as a result of the oil spill. Each claimant does attest, though, under penalty of perjury, that the claim in fact was due to the Deepwater Horizon disaster. The attestation, of course, applies to all assertions on the claims form, including the financial figures and other details. Suspicious forms would be subject to investigation.”

744 F.3d 370, 376-77

(2) “Though we are reluctant to say that all claims must be accepted no matter how clear the absence of the required nexus may be, no one has concerned itself in this appeal with the when, by whom, and how of analyzing such suspicious claims after they are submitted. It seems to us that absent any specific provision in the Settlement Agreement, and no one suggests there is one, such concerns are to be addressed in the usual course of processing individual claims. The Settlement Agreement contained many compromises. One of them was to provide in only a limited way for connecting the claim to the cause. The claims administrator, parties, and district court can resolve real examples of implausible claims as they resolve other questions that arise in the handling of specific claims.”

744 F.3d 370, 378

In the present appeal, Claimant is a medical equipment and supplies provider located in Rolling Fork, Mississippi (Zone D).

Contrary to Claimant’s sworn attestations that it suffered losses due to the spill, Claimant’s attorney admitted in writing that Claimant’s decline in 2010 revenue and profits was the direct result of Claimant’s failure to file the necessary paperwork with Medicare (its primary source of revenue) and its ensuing loss of Medicare accreditation.

Claimant’s P&Ls reflect that during 2007, 2008 and 2009, Medicare fees constituted roughly two-thirds of its total revenue, but from November of 2009 until July 2011, it received not a penny from Medicare.

Based on that clear-cut picture, the panelist remanded the appeal in February of 2015 for the SP to investigate and consider whether the claim was “implausible” and “suspicious.”

On April 19, 2015, the SP issued its lengthy “Response to Remand,” which the panelist now sets out in full:

Certain Business Economic Loss (“BEL”) claims that were on appeal before the Settlement Program’s Appeal Panel, including this one, have been remanded with a request that the Settlement Program investigate and consider whether the claimants’ claims are “implausible” and/or “suspicious.” The Settlement Program considers its analysis of causation to be properly limited to the application of the objective causation test set out at Exhibit 4B of the Settlement Agreement. As reflected by the Claims Administrator’s Policy 308, as far back as 2012 both Class Counsel and BP agreed that no causation analysis beyond that contained in the Settlement Agreement was required or intended. Thus, Policy 308 – to which neither BP nor Class Counsel objected – stated:

“The Settlement Agreement does not contemplate that the Claims Administrator will undertake additional analysis of causation issues beyond those criteria that are specifically set out in the Settlement Agreement. Both Class Counsel and BP have in response to the Claims Administrator’s inquiry confirmed that this is in fact a correct statement of their intent and of the terms of the Settlement Agreement. The Claims Administrator will thus compensate eligible Business Economic Loss and Individual Economic Loss claimants for all losses payable under the terms of the Economic Loss frameworks of the Settlement Agreement, without regard to whether such losses resulted or may have resulted from a cause other than the Deepwater Horizon oil spill provided such claimants have satisfied the specific causation requirements set out in the Settlement Agreement. Further, the Claims Administrator will not evaluate potential alternative causes of the claimant’s economic injury, other than [as specifically required with respect to certain Individual Economic Loss claims].”

That policy was recognized and upheld by the District Court in its April 9, 2013 opinion, In re Deepwater Horizon, No. 10-MDL-2179 (E.D.La., filed April 9, 2013), was again recognized in its December 24, 2013 opinion, No. 10- MDL-2179 (E.D.La., filed December 24, 2013), and was recognized and quoted by the Fifth Circuit in In re Deepwater Horizon, 739 F.3d 790 (5th Cir. 2014). The Fifth Circuit’s rulings on this issue became final with the Supreme Court’s denial of certiorari.

As the Settlement Program understands the governing orders of the Courts, causation determinations are dictated solely by the agreed upon objective criteria set out in Exhibit 4B. The Claims Administrator is not to perform a gatekeeping function that would add an additional level of subjective causation analysis beyond the objective terms and conditions of Exhibit 4B. The Settlement Program addresses issues of implausible or suspicious assertions made by claimants in the normal course of claims processing. That analysis, however, does not characterize claims as “suspicious” or “implausible” when the submitted financials satisfy the objective causation criteria set out in Exhibit 4B.

In the instant claim, the Claims Administrator did not determine that there was anything presented by the claimant that would render the claim “implausible” or “suspicious” under the parameters outlined above.

The ensuing “Eligibility Notice After Remand Appeal” awarded the same Compensation Amount as before and BP appeals, asserting that the SP had failed to investigate whether attestation was implausible and suspicious. BP argues that:

The Claims Administrator’s position, that the Settlement Program categorically will not find a false or baseless attestation of a spill-related loss to be implausible or suspicious if the Claimant satisfies the applicable Exhibit 4B test, runs directly counter to the holdings of the Fifth Circuit. Had the Fifth Circuit intended for the Settlement Program to accept all attestations regardless of their veracity, provided only that the claim satisfies the mathematical requirements of Exhibit 4B, there would have been no need for the Fifth Circuit to hold that implausible and suspicious attestations of a spill-related loss should be investigated, as Exhibit 4B would necessarily provide the mathematical answer in every case.

· · ·

This is not a matter of debating “alternative causation,” where the parties have competing, good-faith arguments as to whether the alleged loss was or was not caused by the spill, and the Claims Administrator uses the economic tests set forth in Exhibit 4B to decide the matter. Rather, it is a situation where the foundational sworn attestation required by the Settlement Agreement and emphasized by the Fifth Circuit is demonstrably untrue and is therefore by definition suspicious and implausible.

BP notes that in the Appeal Panel Decision previously issued in Claim ID [XXXXX] the conclusion reached was “The Claims Administrator is not prohibited by the Settlement Agreement from investigating and denying suspicious or implausible claims. To the contrary, it is part of his duties.”

BP requests a further remand, with a renewed instruction to the SP that it investigate whether the attestation by Claimant was implausible and suspicious or, failing that, calls upon the panelist to deny the claim on that basis.

There was not presented to the SP a “suspicious form,” in the words of the Fifth Circuit, in the sense that within its four corners there was some obvious misrepresentation or contradiction. Facially, the claim form would arouse no suspicion. Having cleared that hurdle, should the claim itself have been investigated as implausible and suspicious when facts surfaced during the claims handling process which seemingly refuted causation, given that the submitted financials otherwise satisfied the causation criteria of Exhibit 4B? The panelist remanded for that reason. Now, in light of the SP’s Response to Remand, and having painstakingly parsed all of the writings of the Fifth Circuit judges on point, the panelist does not consider that he independently should undertake, or order the SP to undertake, an analysis beyond what has taken place. It may just be that the Fifth Circuit’s observation that “the claims administrator, parties, and district court can resolve real examples of implausible claims as they resolve other questions that arise in the handling of specific claims,” essentially assigns the issue to the exercise of discretion and professional judgment by the SP. The panelist notes that the SP has created the Fraud, Waste and Abuse Department, staffed by a number of experienced investigators and headed up by former law enforcement executives, with the mission to protect the process from fraudulent claims.

Declining to order further “investigation,” the panelist denies the request for a second remand and, as between Final Proposal in the amount of the SP’s award, and BP’s Final Proposal of a complete denial of the claim, adopts that of Appeal denied.

Leave a Comment

Have an opinion? Please leave a comment using the box below.

For information on acceptable commenting practices, please visit Lifehacker's guide to weblog comments. Comments containing spam or profanity will be filtered or deleted.