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BP Business Economic Loss Claim Appeal 2017-1132: Claimant Not Required to Present Independent Evidence of Causation

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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 challenges the entirety of the $1,035,893.23 pre-RTP BEL award the Settlement Program (“the SP”) granted Huntsville, Alabama (Zone D), construction contractor
BP asserts that it is“facially implausible” that could have been impacted by the Oil Spill. BP bases this contention on the fact thatis located 360 miles from the Gulf of Mexico and the fact that its decline in revenue began before the Spill. Thus, argues BP, claim for attestation of a Spill-related loss is “implausible and suspicious,” requiring an investigation by the SP at the threshold of the claims process and now, on appeal, a denial of the claim in its entirety by this Panel. BP’s Final Proposal is for such a denial or, in the alternative, a remand to the SP “with instructions to evaluate whether Claimant’s sworn attestation is implausible or suspicious.”
In In Re: Deepwater Horizon, 744 F. 3d 370 (5th Cir. 2014) (Deepwater Horizon III), the 5th Circuit stated:
In light of our reading of the Settlement Agreement, claim form, letter briefing, and the voluminous record in this appeal,
we conclude the Settlement Agreement does not require a claimant to submit evidence that the claim arose as a result of the oil
spill. Each claimant does attest, though, under penalty of perjury, that the claim in fact was due to the Deepwater Horizon disaster.
The attestation, of course, applies to all assertions on the claims form, including the financial figures and other details.
Suspicious forms would be subject to investigation. These requirements are not as protective of BP’s present concerns as might
have been achievable, but they are the protections that were accepted by the parties and approved by the district court. It
was a contractual concession by BP to limit the issue of factual causation in the processing of claims. Causation, or in Rule 23 terms,
trace ability, was not abandoned but it was certainly subordinated.
• • •
We do not agree that we should order the claims administrator to perform that gate keeping function. There is no language
in the Settlement Agreement nor inBP’s briefing, supplemental submissions, or emergency motions, about a procedure
to be followed when an attestation of a nexus seems at odds with the specifics of the claim. Far from proposing a specific procedure
or even guidelines for crafting one, the entirety of BP’s requested relief, exemplified in its Renewed Motion for Injunction, is
a permanent injunction barring the [claims administrator] from issuing or paying awards to claimants whose alleged injuries are
not traceable to the spill.” BP identifies its desired relief but does not identify a part of the Settlement Agreement that in any way
suggests that each submitted claim would be examined as to whether it satisfies a traceability requirement.
Deepwater Horizon III, 744 F. 3d at 376-378 (emphasis added).
This analysis by the 5th Circuit makes clear that BEL claimants are not required to furnish independent evidence of causation beyond the objective criteria of Exhibit 4B to the Settlement Agreement and that the Claims Administrator is not required to serve as a gate keeper, weighing the plausibility of a claim’s nexus to the Spill by some standard beyond the requirements of Exhibit 4B. BP takes the position that it is simply implausible that a claimant located in Zone D Huntsville-360 miles from the Gulf -could have experienced any impact from the Spill. But Section 38.80 of the Settlement Agreement negotiated by BP places the entire State of Alabama within the Gulf Coast Areas eligible for compensation consideration and Section 38.177 defines Zone D as the residual portions of the Gulf Coast Areas outside of Zones A-C. Exhibit 4B.III. spells out the “Causation Requirements for Zone D.” Claimant satisfies those requirements.
If BP had wished to reserve to itself the right to disqualify claimants based on their distance from the Gulf, it should never have agreed to have the entire State of Alabama included within the Gulf Coast Areas. The effect of a claimant’s distance from the Gulf is taken into account in the designation of the four Economic Loss Zones into which the State of Alabama is subdivided.
Many appeal panels have now had occasion to confront this “implausible and suspicious” defense BP began asserting several months ago, and it has been uniformly rejected, except in one claim where the claimant had engaged in illegal activity. As presented by BP, the defense is nothing more than the long-ago discredited alternative causation argument, and this Panel joins the host of previous appeal panels which have rejected it. BP’s request for remand is declined and its Final Proposal of “$0” is rejected in preference toin the amount of the pre-RTP award by the SP. Appeal denied.

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