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BP Business Economic Loss Claim Appeal 2017-577: Movie Theater Denied Tourism Designation In Keeping With Precedent

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 national chain of movie theaters and a subsidiary of Claimant brings this claim on behalf of its Key West, Florida (Zone A) location. The Settlement Program thrice calculated Claimant’s award of $136,866.04 pre-RTP and applied a non-Tourism RTP of 1.50. Claimant appeals, arguing that it should be designated a Tourism business with an RTP of 2.50. BP submits an Initial Proposal of $136,866.04 pre-RTP with an RTP of 1.50.
Exhibit 2 of the Settlement Agreement defines “Tourism” as “businesses which provide services such as attracting, transporting, accommodating or catering to the needs or wants of persons traveling to, or staying in, places outside their home community.” Businesses with industry codes, or NAICS Codes, enumerated in Exhibit 2 are automatically designated Tourism businesses. Movie theaters are not so listed. The Settlement Program characterizes a claimant with a non-enumerated NAICS Code as a Tourism business only if “the totality of the circumstances” demonstrates that the business meets Exhibit 2’s Tourism definition.
Claimant concedes that it cannot determine how many of its customers or what percentage of its revenue come from local and non-local customers. Instead, Claimant “estimates” these revenues from general statistics. (The Motion Picture Association of America annual theater revenue from a 2011 report of 2010 activity showing only 38.75% of annual theater revenue was from local population; and thus 61.25% of annual revenue was generated by tourists.) Claimant also suggests that as a Key West establishment it experiences higher revenues in summer months than in other months of the year. However, the record supports that Claimant’s revenues reflect an industry-wide trend: higher revenues in summer and winter holiday seasons that correspond to blockbuster film releases. Claimant’s revenue patterns are, therefore, the result of a seasonally-driven business that bears no relationship to the tourism season in general or tourist patronage of its movie theater in particular.
Prior appeal panels have consistently designated other movie theaters non-Tourism Businesses when confronted with the same arguments and evidence that Claimant provides here. Based on the foregoing, the Settlement Program properly designated Claimant a non- Tourism business. Accordingly, BP’s Proposal is accepted and the appeal of Claimant is denied.

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