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BP Business Economic Loss Claim Appeal 2017-754: Electrical Contractor Is Not a “Multi-Facility” Claimant

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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 electrical contractor based in Tampa, Florida. The Settlement Program determined Claimant was entitled to a $3,883,103.28 award (post-RTP and Claimant accounting support). BP appeals alleging that Claimant earned significant portions of its revenues and profits in each of the relevant years (2007-2011) through projects it conducted outside the Gulf Coast Areas.
The Settlement Agreement compensates business claimants only for “loss of profits, income and/or earnings arising in the Gulf Coast Areas or Specified Gulf Waters.” Settlement Agreement § 38.57. BP cites various permits and licenses obtained by Claimant for electrical  contracting work outside the Gulf Coast Area throughout 2007-2011, and asserts that the income and profits from these and any other out-of-zone projects did not “arise in” the Gulf Coast Areas,and as such, the purported loss of profits associated with these and any other out-of-zone projects cannot form the basis of an award. BP requests that this claim be remanded and states that
because the current record does not contain the information necessary to calculate and accurateaward, BP submits an Final Proposal of $0.
Claimant counters that there is absolutely no evidence in the record to support BP’s argument and BP’s “speculative” appeal should be rejected. Claimant asserts that in order to have out of zone revenues excluded from a claim calculation, a claimant has to maintain facilities outside of the Zone (citing Policy 467). Claimant points out that BP’s proposal does not even assert that Claimant has facilities outside the Zone.
Claimant’s only office is located in Tampa, Florida. As to BP citing various permits Claimant has outside the zone as the basis for its position that there is “income and profits that did not arise in the Gulf Coast Areas,” Claimant contends that these permits are irrelevant. Permits to do business in certain locations is not a criterion for excluding out of zone revenues. Claimant cites Appeal Panel Decision 2016-2196 for the proposition that “[t]he fact that the claimant has employees in other states, maintains licenses and pays taxes there is insufficient to conclude that it maintains a ‘Facility’ in such out-of-Zone locations.” Claimant purchases all of their material
out of their sole Facility in Tampa. All of those purchases are delivered to their office in Tampa before they go on to a customer. All of the hiring, material ordering, billing, accounting, designing, scheduling, Auto CAD, drawing reproduction, estimating, administration, contract administration, purchase orders and executive management is performed and completed at the Tampa location.
Policy 467 criteria must be met for a claimant to be considered a multi-facility claimant. The criteria are as follows: a) A separate and distinct physical structure or premises; b)owned, leased or operated by the Business Entity; c) at which the Business Entity performs and/or manages its operations. Criteria “c” is not met as all projects are managed by project managers out of their sole Facility in Tampa. Claimant concludes by asserting that BP’s speculative assertion that Claimant has income derived from activities that are out of the Gulf Coast Areas is without merit. This Panel agrees. Claimant’s Final Proposal is adopted and BP’s appeal is denied.

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