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BP Business Economic Loss Claim Appeal 2017-1057: “Suspicious and Implausible” Argument Rejected Again

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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 an irrevocable trust located in Mobile, Alabama. The Settlement Program awarded this owner of timber land $789,603.37, pre-RTP. BP appeals appeals alleging that Claimant is not entitled to any award because Claimant’s attestation of loss is both “suspicious and implausible,” citing selected portions of the Fifth
Circuit’s decision in In re Deepwater Horizon, 744 F.3d 370 (5th Cir. 2014). Thus, BP asserts again in this appeal that if a claimant attests that the spill caused its loss, but its own statements, records or other record evidence contradict that attestation, the attestation is “manifestly suspect” and no award is warranted. BP’s  basic
assertion in this appeal on the fact that Claimant’s primary source of revenue is the sale of timber, and “there is no plausible basis to allege that the oil spill in the Gulf of Mexico impacted Claimant’s timber sales,” and furthermore, “Claimant’s revenue was in a steep decline well before the spill.” Thus, BP asserts that given the nature of Claimant’s business—selling timber—coupled with its decline in revenue prior to the spill, Claimant has no basis to attest that it suffered a spill-related loss.
However, BP reads the Fifth’s Circuit’s opinion out of context to propose it allows for a new causation test. The alternative causation argument has been repeatedly
rejected and BP has provided nothing to justify the attempted resurrection of the discredited alternative causation argument. In its Memorandum in Support of Approval of the Settlement Agreement BP specifically stated there was “no analysis required to determine whether the declines [in revenue] might have been due, at
least in part, to other causes.” However, after that when BP previously presented an “alternative causation” argument, BP argued that Section 1.3.1.2 required a claimant to show to the Administrator’s satisfaction it suffered loss from the Deepwater Horizon Spill. After Judge Barbier held the causation test in the Settlement
Agreement was the exclusive causation test, and ordered appeals based on the argument to be summarily denied, BP appealed. The Fifth Circuit affirmed Judge Barbier, and held that under the terms of the Settlement Agreement, losses are caused by the “Deepwater Horizon Incident” if the tests set out in Exhibit 4 are satisfied.
No further inquiry or tests were allowed. In re Deepwater Horizon, supra. The Fifth Circuit also noted that the attestation BP seeks to rely on only attests to the “financial figures and other details” which make up the claim. The Court recognized that it “was a contractual concession by BP to limit the issue of factual causation in the processing of claims” and there “is nothing unreasonable about what BP accepted but now wishes it had not.” This panelist will again decline BP’s attempt to revive and revise the alternate causation argument by denying BP’s appeal.

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