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BP Business Economic Loss Claim Appeal 2016-135: Shipbuilder not subject to moratoria hold


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 is a subcontractor located in Irvington, Alabama that provides services to the shipbuilding industry. Claimant received an award of $299,124, pre-RTP. BP appeals on the basis that the claim should have been excluded because the Settlement Agreement expressly excludes “any loss whatsoever causes by or resulting from” federal moratoria on offshore drilling. BP points out that Claimant admits that its alleged loses were suffered “because of the hold on offshore drilling due to the spill,” and that “whatsoever” is a broad word, and Claimant’s admission clearly seems to fit.

Claimant argues that only those businesses listed in Exhibit 19 shall be subject to automatic review, and only those businesses listed in Exhibit 19 are excluded. The Settlement Program assigned Claimant the code for shipbuilder which is not included in Exhibit 19. However, this panelist finds that a claimant’s industrial type does not have to be specifically marked in Exhibit 19 in order to be subject to the moratoria exclusion. While this claim was not subject to “automatic review,” due to the NAICS code assigned to it not matching with any in Exhibit 19, this does not mean that review is not called for if otherwise appropriate. The Settlement Agreement also calls for inquiry and review when there is evidence that the claimant provides “significant” goods or services “to businesses in the offshore oil & gas industry in the Gulf of Mexico.” Section

It appears that more of a direct contact with the oil and gas business is required then we find here. Claimant provides services to the shipbuilding business, not the oil and gas business. Claimant makes a logical comparison to a restaurant near a shipyard that lost revenue because of cut backs at the shipyard caused by the spill. Such a restaurant would not be excluded on the basis of the federal moratoria exclusion. In the Appeal Panel Decision cited by BP, claimant had a direct connection with the oil and gas industry. Here Claimant has no such direct connection. BP’s appeal is denied.

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