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BP Business Economic Loss Claim Appeal 2015-892: Lessor to casino not excluded by virtue of NAICS

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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 this BEL award, arguing that Claimant is an excluded Gaming Entity.

Claimant owns the land on which the a casino located along the Mississippi Gulf Coast, is located. Claimant executed a 99-year ground lease with the casino which provides for an annual rent of (1) a fixed Base Rent and (2) 5% of gross gaming revenues. BP makes a common sense and interesting argument for excluding Claimant. BP argues that Claimant’s income is derived solely from the casino. As such, Claimant has a direct gaming interest which should result in its exclusion. BP’s position is that if the sole source of Claimant’s revenue is from an excluded entity, then Claimant, too, should be excluded.

A Summary of Review was requested requesting that the Claims Administrator articulate its rationale for not excluding Claimant. That rationale is summarized as follows:

1. All of Claimant’s 2010 income came in the form of commercial rental payments;

2. The majority of these payments came in the form of Base Rent, which is a fixed rate unrelated to the amount of gross gaming revenues;

3. Nothing in the record suggests that Claimant participated in the operation of the casino.

Based on this, the Settlement Program determined that the appropriate NAICS Code for Claimant was 531120 – Lessors of Nonresidential Buildings.

Section 2.2.4.3 of the Settlement Agreement excludes “Gaming, as identified in the NAICS codes listed on Exhibit 18.” A fair reading of this provision suggests that only those entities with an NAICS code listed on Exhibit 18 is excluded. Because the Settlement Program assigned a code to Claimant that is not on Exhibit 18, the Settlement Program declined to exclude Claimant.

Although BP’s position sounds reasonable, this Panelist is influenced by the language of Section 2.2.4.3, which identifies “gaming” as those businesses with “NAICS codes listed on Exhibit 18.” Based on the record, this Panelist agrees with the NAICS code assigned to Claimant. Hence, because this code is not listed on Exhibit 18, this Panelist agrees with the Settlement Program’s decision to allow this Claim.

Claimant’s Final Proposal is adopted.

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