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Tom Young
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BP Business Economic Loss Claim Appeal 2015-851: Moratoria Loss

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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 Appeals Process. Links may have been added to assist the reader. The original decision may be found here.


BP appeals this award to Claimant, a truck driver from Patterson, La. Appellant, raised three issues, the failure to reconcile tax returns with the monthly P&L’s, the alleged incorrect characterization of expenses, and the failure to adequately evaluate whether any claimed losses were due to the federal moratoria. There is a finding herein that the reconciliation of the financials and the categorization of expenses were properly assessed by the Claims Administrator and no further examination of these issues is required.

The moratoria question calls for more extended analysis. There is no question that entities and individuals are not entitled to recover under the Settlement Agreement for losses attributable to the federal moratoria. Section 38.93 of the Agreement defines moratoria losses as any loss whatsoever caused by or resulting from federal regulatory action or inaction directed at offshore oil industry activity in the Gulf.

In this case, claimant’s counsel made the following damning statement in various submissions to the Claims Administrator: is the owner and driver of a truck and trailer that service(s) the hauling needs of the oil and gas industries in the Gulf of Mexico…Due to the closure of the oil and gas industries in the Gulf following the oil spill, services drastically declined over the past 17 months. Additionally, in documents provided to the GCCF, claimant explained that “he has been working in the Oil Field for the past 20 years” and that he owns “a 18 wheeler and I run it in the Oil Field.”

These statements certainly seem to run afoul of the prohibition on recovery for moratoria related losses. The Settlement Agreement references any losses “whatsoever” caused by the federal moratoria. Whatsoever is a broad word and when claimant suggests his business declined “due to the closure of the Oil and Gas industry in the Gulf following the oil spill”, this clearly seems to fit.

Initially, claimant’s counsel submitted no substantive response to BP’s argument other than to say this claim was already reviewed by the Claim Administrator’s office. Subsequently, claimant filed a comprehensive memorandum on the moratoria issue authored by Class Counsel. In the submission, Class Counsel went through an exhaustive analysis of all provisions of the Settlement Agreement relating to the moratoria exclusion. The salient arguments are as follows: In the Agreement, there is a portion of the Moratoria section which addresses Support Services to the Oil and gas Industry. This category is defined and limited by the following two situations:

a) The claims administrator determines that the claiming entity of claiming job employer falls within the NAICS Codes and descriptions marked with an “X” in Section I of “industry types subject to review by Claims Administrator for potential moratoria losses in Exhibit 19, or

b) The Claims Administrator determines that the claiming entity or claiming job employer falls within the NAICS codes and descriptions marked with an “X” in Section II of “industry types subject to review by the Claims Administrator for potential moratoria losses” in Exhibit 19, and (ii), the BEL claimant or IEL employer responds affirmatively that, in 2009, your business provided significant services, goods and/or supplies to businesses in the offshore oil and gas industry in the Gulf of Mexico.

Therefore, by extension, claimant in this case argues that only those industry types precisely identified in Exhibit 19 are properly considered as subject to the moratoria exclusion. Admittedly, trucking is not one of the specifically enumerated industries listed in Exhibit 19. Additionally, claimant argues that it responded negatively to the question of whether the company provided significant services, goods and/or supplies to businesses in the offshore oil and gas industry in the Gulf.

Despite these contentions, there is a finding herein that a claimant’s industry type does not have to be specifically marked in Exhibit 19 in order to be subject to the moratoria exclusion. There is nothing in the Settlement Agreement which dictates that the list in question is an exhaustive one. This perspective is supported by other panel decisions dealing with this issue. Moreover, claimant cannot escape the circumstances to which he concedes: He services the needs of the oil and gas industry and has done so for over 20 years and his business has suffered as a result of the moratoria in the Gulf. No other concessions could square more firmly with the outlines of the moratoria provisions.

Additionally, claimant’s reliance on his earlier statement that he did not provide significant services, goods and/or supplies to businesses in the offshore oil and gas industry in the Gulf is clearly misplaced since, subsequently, this assertion was firmly contradicted by claimant in this proceeding.

It should be noted that this panelist asked for a Summary of Review detailing whether a moratoria analysis had been performed. The Claims Administrator responded as follows:

“This business was not automatically referenced (emphasis added) to the moratoria team for potential moratoria review because (1) it’s NAICS Code 484122 (General Freight Trucking Long Distance, less than truckload) is not included in the Exhibit 19 list of NAICS Codes triggering moratoria scrutiny and (2) the claimant answered BEL Claim Form Question No. 10 “No”, denying that it provided significant goods and/or supplies to businesses in the offshore oil and gas industry in the Gulf of Mexico in 2009.

While it may be true that this claim was not subject to “automatic review”, due to the NAICS code not matching with any listed in Exhibit 19, this does not mean that a review is not called for if otherwise appropriate.

This assessment is consistent with Exhibit 18 of the Settlement Agreement under the heading of Support Services to the Oil and Gas Industry. In the first provision, it states only businesses whose NAICS codes match up to the list are subject to “automatic review”. However, the provision also references “or other evidence of the business’s activities that allow the Claims Administrator to determine whether a business falls under the Support Services to Oil and Gas Industry “ thus requiring moratoria scrutiny.

The next provision of Exhibit 18 also references other evidence of the business’s activities and says potential moratoria affected claimants should be asked the following: In 2009, did your business provide significant services and goods and/or supplies to businesses in the offshore oil and gas industry in the Gulf of Mexico? We know from claimants’ subsequent submissions, the initial negative response to this question was inaccurate. Due to the claimant’s initial negative indication on this issue, the claim was not automatically routed to the Moratoria team. However, based on the totality of evidence of the claimant’s business activities, a moratoria review is appropriate.

For the foregoing reasons, this claim is remanded so it may be evaluated for a determination of what losses were due to the federal moratoria.

appeal 851

The preceding was the appeal panel decision in Appeal 2015-851. Learn more about the BP Deepwater Horizon Settlement Business Economic Loss (BEL) Claim Appeal Process.