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BP Business Economic Loss Claim Appeal 2017-1189:Tourism Designation Withdrawn for Club Which Caters to People with Two Homes

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 the BEL award to the claimant. The parties agree on the compensation amount and the sole issue on appeal whether the Program erred in the application of the tourism designation and the corresponding RTP.
Claimant is a private, members-only social and dining club in Bonita Springs, Florida. Its membership is capped at 400 and members pay a $40,000 equity membership plus annual dues. Over 60% of Claimant’s revenue is derived from annual dues. These facts are undisputed and even Claimant admits that “substantially all members are local residents.” The Program initially issued an Eligibility Notice with a non-tourism RTP.
Claimant requested Re-Review and the totality of its argument was as follows: “The Claimant is entitled to the tourism designation. The Claimant is a Restaurant and beach club, both are listed as tourism in Exhibit 2.”
The Program re-issued the notice with the tourism designation, assigning NAICS Code 713990 (All Other Amusement and Recreational Industries). BP questions the NAICS code as this code typically applies to amusement parks, recreational clubs. bowling league s, etc. On appeal, Claimant raised for the first time that the club’s membership consists largely of “snowbirds” who come south for the winter. The record contains no documentation of the percentage of snowbird membership.
BP argues that snowbirds who own second homes in Florida effectively have two “home communities” and are thus “locals” for Exhibit 2 purposes.
Exhibit 2 is clear that a “tourism” business is one that provides “services such as attracting, transporting, acommodating or catering to the needs or wants of persons traveling to, or staying in, places outside their home community.”
Claimant argues that the NAICS code presumptively designates a business as “tourism;” however, the NAICS code is not determinative. The determination is based on a “totality of circumstances” test.
After a de novo review, this panel concludes that BP’s position is the more persuasive and that it was error to award the tourism designation. BP’s final proposal is the correct result.

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