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BP Business Economic Loss Claim Appeal 2017-363: Rebates Paid Outside Ginning Season Appropriately Reallocated to Ginning Season Under Policy 495

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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 appeals the denial of its BEL Claim. Claimant failed Causation. On appeal, Claimant argues that the Settlement Program erroneously reallocated some of its revenue.
Claimant is a cotton ginning business. Claimant generates revenues by ginning cotton and selling the resulting cottonseed to an oil mill that processes the seed into oil, meal and hulls. Claimant sells its cottonseed to an oil mill that operates as an agricultural cooperative. Members of the cooperative, like Claimant, receive a rebate from the cooperative based on the amount of cottonseed sold to the cooperative.
In the cotton ginning business, September through December is considered the cotton ginning season. Any rebates received by the Claimant outside of these months were reallocated by the Program to the previous cotton ginning season and restated evenly throughout the season.
Claimant argues that this restatement of rebate revenues was unfair. In a similar appeal involving agricultural rebates (a/k/a dividends) paid by cooperatives, the District Court ruled that, pursuant to Policy 495, it was appropriate to reallocate these payments to the growing season that produced the crop that led to the dividend.
See Appeal Decision 2016-548.
The same principal applies in the instant case. Rebates paid outside the ginning season are appropriately reallocated to the ginning season that led to the rebate.
In light of the above, the denial of this Claim is upheld.

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