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BP Business Economic Loss Claim Appeal 2016-1297: Sales to Nearby Residents, Internet Customers and Tourists Traveling Away From the Gulf Negates Tourism Designation

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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,a photo store in Mobile, AL, received a BEL award of $145,529.86 and files this appeal, contending it is entitled to a Tourism designation and the
corresponding RTP.

The Claims Administrator assigned this business NAICS Code 443130, Camera and Photographic Supplies Stores, which is not listed in Exhibit 2 as a Tourism NAICS
code. Nevertheless, the NAICS code list that qualifies a claimant for inclusion in the Tourism category is not exclusive. A party may still be considered a Tourism entity if it provides services such as attracting, transporting or catering to the needs and wants of persons traveling to, or staying in, places outside their home community.

BP argues claimant is primarily engaged in providing supplies and services to local customers, and individuals preparing to travel outside the Gulf Coast on excursions abroad and to other parts of the U.S. Claimant counters that a Tourism designation is appropriate , regardless of whether an entity’s customers are tourists traveling to regions outside of the Gulf Coast or individuals visiting the Gulf Coast region. Claimant, in its Memorandum, states as follows:

The proposition that ‘Tourism’ is somehow specific to Gulf Coast tourism is not supported by the Settlement
Agreement or related policies. There is no mention of geographic location in Exhibit 2 or Policy
289. Thus, there is no requirement that for Claimant to qualify for a ‘Tourism’ designation it
must focus primarily on Gulf Coast regional travel.

Claimant also posits that, even if its position is not accepted, slightly over 50% of its sales are to
out of town customers.

After reviewing claimant’s submissions, this Panelist asked the Claims Administrator for a Summary of Review explaining why Tourism status was not conferred in this
case. The following detailed explanation was given:  submitted correspondence stating that it owns and operates a full-service camera and photography store that caters to tourists traveling to and from the Mobile area. However, the documentation submitted in support of the Tourism Industry Designation only includes affidavits
from local customers who purchased products and services from in preparation for trips away from the Gulf Coast Areas, such as trips to Europe and Canada.  Claimant
did not submit any affidavits from non-local customers traveling to the Gulf Coast Areas. In addition, Claimant provided detailed customer lists showing many out -of-state customers, but a large portion of those customers are corporate clients such as  ***. These clients purchase photography equipment and/or printing services from  Claimant but are not tourists traveling to the Gulf Coast Areas who stop in the store. Finally, Claimant operates a website with an extensive online shopping section and the customer and order information that Claimant submitted does not distinguish between products shipped to non-local customers and those purchased by non-local customers who visited the Mobile store. For the purposes of our Tourism analysis, we (the CA) would only consider non-local customers who visited the store in person.

In accordance with the analysis from the Settlement Program, this Panelist agrees that the Tourism designation is meant for businesses that cater to tourists traveling to the Gulf Coast area. It is true that the Settlement Agreement does not state that Tourism entities only include claimants catering to individuals traveling “to” the Gulf Coast. Additionally, this Panelist recognizes it is a precarious exercise to postulate on what the Settlement Agreement is meant to say when the Agreement does not explicitly define certain parameters. Nevertheless, the evaluation from the Claims Administrator is compelling. The Settlement Agreement was created by the parties to address economic loss due to the Spill. As a part of that framework, a special category was created for “Tourism” entities on the premise that these businesses were
especially impacted due to the diminished number of tourists desiring to travel to the Gulf Coast. It is counterintuitive to consider that travel destinations outside of the claim zone would be similarly affected by the Spill. There is a finding affirming the position of the Claims  Administrator that the tourist designation is meant to apply to businesses servicing travelers within the Gulf Coast area.

Additionally, as articulated in the Summary of Review, the information in the file does not support Claimant’s contention that over 50% of its revenues is attributable to individuals from out of town traveling to the Mobile location. A large portion of the company’s revenues is attributable to corporate clients who are headquartered out of state. The Settlement Agreement references businesses catering to the needs “of persons traveling to, or staying in, places outside
their home community ” These corporate transactions do not qualify as servicing individuals who are staying outside their home community.

It should be noted that did address the issue of internet sales and offered evidence that this portion of its business was minimal. According to claimant, eliminating internet sales brings the percentage of out of state sales from approximately 51% to 50%. However, as noted above, some of these ” sales to non-local customers” are attributable to out of state corporate clients and these sales do not count toward the total of individuals traveling outside their home community. A breakdown of the numbers reveals that, after excluding sales to out of state corporate clients, revenues allegedly attributable to individuals from out of
town constitutes approximately 35% of claimant’s business. If this were only true, this figure would certainly place a claimant in the grey zone when considering tourism status.

However, a closer review of the customer list demonstrates that many of these customers, while not from Mobile, reside in communities much too close to claimant’s location to be considered tourists. In order to be considered a tourist for purposes of the Settlement Agreement, an individual should come from approximately 60 miles away. The data that claimant submitted indicates a large number of its “out of town customers” come from communities quite close to Mobile. A
substantial number come from the following locations, all of which are within 25 miles of Mobile:
1) Chickasaw, AL
2) Creola, AL
3) Daphne, AL
4) Eight Mile, AL
5) Fairhope, AL
6) Irvington, AL
7) Point Clear, AL
8) Satsuma, AL
9) Semmes, AL
10) Spanish Fort, AL
11) Theodore, AL
12) Wilmer, AL
Claimant sells hundreds and hundreds of photos and supplies to individuals from these locations each year. These customers should not be considered tourists and, once these sales are removed from the totals for sales to tourists, the claimant falls far short of fitting into the Tourism category based on its business with out of town customers.

Counsel did an excellent job in presenting claimant’s position. Additionally, a review of the file evidences that runs an outstanding consumer oriented business. Nevertheless, there is a ruling that claimant is not entitled to the tourism designation. Accordingly, the award by the
Settlement Program is affirmed.

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