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BP Business Economic Loss Claim Appeal 2015-1338: Discontinuing service offering not 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.

This Claimant is a charter boat company located in Key West, Florida (Zone A) that offers day trips to [XXXXX] as well as snorkeling, sunset and dolphin watching trips in Monroe County. It received a Business Economic Loss award in this amount of $153,584.01, and a Tourism Industry designation with an RTP of 2.50. In calculating this award, the Claims Administrator utilized the Annual Variable Margin Methodology to correct CAO Policy 495 matching issues. In this appeal, BP does not challenge the methodology or the Tourism Industry designation; rather, it argues that Claimant’s reported revenue losses in November and December of 2010 do not constitute “Economic Damage” as that term is defined in the Settlement Agreement.

More specifically, BP argues that Claimant lost a contract it had with the National Park Service to ferry tourists to [XXXXX] after opting not to bid on a renewal. To quote BP:

“The absence of this revenue does not constitute “Economic Damage” under the Settlement Agreement because there can be no “loss of profits, income and/or earnings” from business operations that had entirely ceased and that Claimant no longer had the right to conduct — particularly when that cessation relates in part from Claimant’s own voluntary business decisions.”

In light of that, BP submits Initial and Final Proposal Compensation Amounts of $63,846 preRTP, which it contends results from recalculating the award without the months following Claimant’s loss of the contract in question. Alternatively, it suggests that the claim be remanded with instructions to calculate an award “based exclusively on any Economic Damage that Claimant experienced.”

Claimant, in response, contends the record clearly establishes it is a tourist based business in Zone A and is therefore entitled to a presumption of causation. Since that is the case, BP has no basis for appeal. Citing Settlement Agreement Section, Claimant argues that unless causation is presumed, BEL claimants must establish their loss was due to or resulting from the DWH incident in accordance with Settlement Agreement Exhibit 4B. Continuing, that Exhibit 4B, Part I paragraph 4, provides:

“If you are in Zone A or Zone B, and you meet the “Tourism Definition,” you are not required to provide any evidence of causation.”

While arguing that the inquiry should end here, Claimant goes on to address the merits of BP’s argument. It asserts, first, that it did not voluntarily refrain from submitting a bid for a new contract with the National Park Service. To the contrary, the service imposed new requirements, the most significant of which included supplying a much larger vessel capable of accommodating many more passengers than any of its existing vessels, which Claimant simply could not meet. It had no choice, then, but to pursue the remaining snorkeling and dolphin watching cruises which it offered to its clients.

Second, Claimant contends, correctly, that BP’s argument is one of alternate causation which is foreclosed by court approved CAO Policy 308 v. 2.

For the foregoing reasons, this BP appeal cannot be sustained. The decision of the Claims Administrator is therefore affirmed and Claimant’s Final Proposal is hereby selected.

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