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BP Business Economic Loss Claim Appeal 2016-1777: Education Methodology Properly Applied to Dental Assistant Education Program

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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.

Claimant is a dental assistant educational program located in Zachary, Louisiana. It filed a BEL claim and its financial reports triggered three matching criteria under Policy 495. The claim proceeded under the Education Methodology and was denied after the Claims Administrator determined that it did not pass the causation
requirements of Exhibit 4. Claimant appeals that decision.
Claimant raises two issues on appeal. First, it contends that the Program erred by reallocating Claimant’s revenue on a calendar year basis. In addition, Claimant maintains the Program abused its discretion by applying the Education Methodology, which the claimant asserts “does not fit” the peculiarities of Claimant’s business.
Claimant suggests that the Construction Methodology would be more appropriate.
The record demonstrates that Claimant offers courses in 10-week sessions that occur 4-5 times per year. In response to an inquiry from the Program analyst, Claimant was not able to provide the starting and ending dates for any academic period from 2007 – 2011 as “Claimant does not and is not required to maintain this type
of information.” Claimant’s only source of income is tuition for its courses and the majority of its revenue is received within 60 days of the start date of its classes.
Exhibit E of Policy 495 provides that tuition-related income may be allocated evenly through months in which teaching activities take place. Since there was no information available when those dates occurred, the Program used its professional judgment based on these circumstances and allocated Claimant’s income over the calendar year. Claimant takes great umbrage at this, contending that such an allocation was an abuse of discretion and, because Claimant’s course offerings sometime span different calendar years, this caused Claimant to fail causation.
The Settlement Agreement in general, and Policy 495 in particular, allows the Program the ability to use professional judgment in both methodology selection and allocation of revenue and expenses. While that discretion is not unfettered, the District Court has supported the Program in such instances. After a review of the record, this panelist does not feel that the Claims Administrator abused his discretion by allocating Claimant’s revenue on a calendar year basis under these circumstance, nor was it an abuse of discretion to apply the Education Methodology to the claim. This panelist finds no support in the record for the use of the Construction Methodology. Accordingly, the Claims Administrator’s decision is upheld and the appeal is denied.

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