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BP Business Economic Loss Claim Appeal 2017-849: Settlement Agreement and Courts’ Rulings Allow Claimant to Pick Benchmark Months

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 non-profit church headquartered in Fort Myers, Florida. The Claims Administrator (CA) awarded Claimant the sum of $185,437.91 (pre – 0.25 RTP). BP appeals the award.
Claimant filed a Consolidated Multi-Facility BEL Claim. BP complains that the CA erred when it included revenues and expenses in the calculation from the Claimant’s
and facilities. In 2009, the facilities each separately incorporated and separated from Claimant to each form their own independent congregations. BP objects to the inclusion of financial data from these twofacilities being included in the Benchmark Period Calculation.
In a Discretionary Review decision from the U.S. District Court, the Court held:
“The Settlement Agreement allows a claimant to pick months of
the “Benchmark” and “Compensation” and compare them. See
DEEPWATER HORIZON Economic and Property Damages
Settlement Agreement as Amended on May 2, 2012, Volume I,
Exhibit 4C; Rec. Doc. 6430-10.
In this case, the claimant, as provided for in the Settlement Agreement, selected a Benchmark Period which included revenue from the property that was sold
prior to the spill. The claimant then compared the same calendar months to the Compensation Period and computed its reduction in profit. As the Fifth Circuit has found, “comparable,’ clearly indicate[s] that the Benchmark and Compensation Periods were referring to months oft he same name, without any complex analysis of what type of business activities took place within those months.” In re Deepwater Horizon, 732 F.3d 326,340 (5th Cir.2013).
Thus, in this case the computation of lost revenue was in accord with the Settlement Agreement and should not be modified to account for losses that may not be reasonably attributed to the spill. Of equal significance is the fact that, under Exhibit 4B, “causation is generally assumed if economic loss can properly be shown. BP did agree that alternative causes of losses were irrelevant if the financial figures supported that a loss occurred.” 732 F.3d at 338.
“There is nothing fundamentally unreasonable about what BP accepted but now wishes it had not…. The claims administrator, in working through how the proposed claims processing would apply in specific situations, submitted a hypothetical to BP and others. It posited three accountants being partners in a small firm located in a relevant geographic region.
The Settlement Agreement defines Compensation Period as: the Compensation Period selected by the claimant to include 3 or more consecutive months between May and December 2010. Benchmark Period is “the pre-DWH Spill time period which claimant chooses as te baseline for measuringits historical financial performance. Id.
In an analogous case,  one of the three partners takes medical leave in the period immediately following the disaster, thus reducing profits in that period because the partner is not performing services for the firm. At least some of the firm’s loss, then, would have resulted from the absence of the partner during his medical leave. BP
responded that such a claim should be paid.” In re Deepwater Horizon, 744 F.3d 370, 378 (5thCir.2014). The response was unequivocal.
In this case, the claimant selected its Benchmark Period,compared it to the Compensation Period and calculated its lost revenue. That is what the Settlement Agreement requires and the Claims Administrator was correct when it made the award to the claimant.
For these reasons, the decision of the Appeal Panel is REVERSED, and the determination of the Claims Administrator is REINSTATED.”
Claimant cited the Court’s decision in its Appeal Memorandum. BP did not dispute the application of the Court’s decision in the instant appeal. This panelist is bound to enforce the terms of the Settlement Agreement and follow the dictates of the U.S. Courts. Claimant’s Final Proposal prevails.

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