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BP Business Economic Loss Claim Appeal 2016-1176: Neither Settlement Agreement Nor Policy 495 Excludes Defense Contractor/Subcontractor Which Earned Less Than 50% of Its Revenue From Defense Contracts


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  filed this Business Economic Loss claim under the Settlement Agreement. The Settlement Program found a Compensation Amount of $185,320.93. BP appeals.

BP urges a remand because the Settlement Program erred in its analysis of whether is an excluded Defense Contractor/Subcontractor. The Settlement Agreement expressly excludes Defense Contractors/Subcontractors which derive 50% or more of their revenue from contracts with the United States Department of Defense. Settlement Agreement, § See also Settlement Agreement, Exhibit 18 at 15.

Policy 465 amplifies the exclusion: “if the Claims Administrator determines that the Entity derived 50% or more of its 2010 revenue from DOD Contracts, the Entity is an Excluded Defense Contractor.” Policy 465, at 4. The Settlement Program determined generated 9.34% of its 2010 revenue from DOD contracts. In reaching this conclusion, the Settlement Program followed Policy 465 to the letter. Policy 465 articulates a multi-step process that is objective. BP argues that Policy 465 is insufficient and that the Settlement Program should dissect each and every transaction to make a judgment, perhaps objective, perhaps subjective. Neither Policy 465 nor reason suggests such an approach. Thus, there is no basis for a remand.

Final Proposal adopts the Settlement Program’s determination of Compensation Amount. It is the correct award and prevails over BP’s Final Proposal of $0.00.

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