Tampa, Florida


Email Tom Young Tom Young on LinkedIn Tom Young on Twitter Tom Young on Facebook Tom Young on Avvo
Tom Young
Tom Young
Attorney • (813) 251-9706

BP Business Economic Loss Claim Appeal 2017-919: No Single Test For Tourism Designation–Multiple Factors Need to be Considered

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 nationwide retailer of athletic clothing with a focus on athletic shoes. BEL claims were filed for 13 store locations in the Gulf Coast Areas. This claim is for the Panama City location at Panama City, Florida (Zone C).The Claims Administrator awarded $9,396.70 but assigned a non-Tourism RTP of .25. Claimant appeals, solely challenging the Tourism determination.
Appeal panel decisions have frequently construed and applied the definition of Tourism under the Settlement Agreement. At the risk of repetition, a Tourism business is one which provides 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. In Exhibit 2, the Settlement Agreement lists a number of NAICS Codes that qualify for per se inclusion in this category of businesses.
Policy 289 v.2 and appeal panel decisions have further established the factors to be considered for the Tourism determination and the standard by which they are to be measured. First, the list of NAICS Codes in Exhibit 2 is illustrative but not exhaustive. In addition, the Tourism determination is to be made based on the totality of the circumstances, including consideration of the Claimant’s activities during the Benchmark and Class Periods. Further, a business with an NAICS Code not listed on Exhibit 2 may nevertheless qualify for the Tourism designation by showing that its business operations have more than an incidental connection with Tourism. Appeal panels have examined financial and sales data, geographic location and customer demographics in making this determination.
Neither the definition of Tourism nor Policy 289 v.2 obligates a claimant to demonstrate that the majority of its customers are tourists or that more than 50% of its sales are made to non-local customers. As often noted by appeal panels, each claim is fact specific.
With these principles in mind, the facts of this claim show that the Administrator assigned NAICS Code 448210 – Shoe Stores, which is not listed as a Tourism business in Exhibit 2. BP argues that as a shoe store, Claimant caters primarily to locals or the occasional tourist that may incidentally patronize its store. BP also reminds the panel that Claimant did not check the Tourism block on its BEL claim form, marking “No” to this question.
Claimant offers data regarding a segment of its customers who are members of its rewards program called XXXX. Claimant states that members of the program constitute approximately 60% of the annual customers for this store. The sales data for the members falls into two categories. The first category is customers that did not sign up at the Panama City store but joined the program at a different location and did not designate the subject store as their home store. Data was also provided for customers noted as “Not Home Store,” i.e., customers that joined the program at the Panama City store but reside nearer to another location. This store’s customer data is summarized as follows:
All Customers 24,392 Didn’t Sign Up There/Not Home Store 4,379 18% Not Their Home Store 3,413 14% 24,392 7,792 32% Claimant argues that the members are representative of its overall customer base at the subject store. Adding the customers that joined the while shopping at this store but who live closer to another location, together with those who indicated that they have a different home store, will approximate the percentage of customers traveling outside their home communities according to Claimant. These figures extrapolate to approximately $13,009 annual customers who either live nearer to another store or who shopped at the Panama City store but joined the program at a different location and did not designate the subject store as their home store. Based on these figures, Claimant therefore argues that a significant portion of this store’s revenue is derived from customers shopping outside their home community. Claimant also argues that the geographical location of this store strongly supports the Tourism classification because it is located at , a major tourist attraction in close proximity to the local beaches. Claimant adds that a significant amount of customers visit Panama City on vacation which requires the store to add staff during peek tourist periods.
BP contends that Claimant must produce documentation establishing that it caters to “a significant number” of non-local customers. Citing appeal panel decisions in which sufficient evidence was found lacking, BP argues that Claimant’s data is insufficient to show that it caters to a significant number of non-local patrons. Because Claimant is “primarily a shoe store,” BP also argues that its location does not enhance the likelihood that it is entitled to the Tourism designation.
Returning to the Tourism criteria, it is not necessary for the Claimant to demonstrate that the majority of its customers are non-local. A business whose NAICS Code is not listed in Exhibit 2 must demonstrate that it has more than an incidental connection to Tourism. Appeal panels have accepted relevant sales data in appropriate cases and rejected benign data in others. Whereas BP and some panel decisions have suggested that the percentage of non-local customers must be “significant” or that the data must show a threshold percentage, e.g., 30%, no such bright line is required by the Settlement Agreement. Nor is there a per se requirement that customers must live a particular distance from the store. In the final analysis, the totality of the circumstances in each case is fact specific. Faithful adherence to our standard of de novo
review permits no other approach.
This panelist is persuaded that the Claimant has established a sufficient connection to Tourism for this individual store in Panama City, Florida. This panelist is aware that other appeal panels have both accepted and rejected Tourism claims by this same Claimant in other appeals. The fact that different results may obtain for different stores is indicative of the fact specific nature of the inquiry.
For the foregoing reasons, Claimant’s Final Proposal, which includes a Tourism RTP of 2.00, is the correct result.

Leave a Comment

Have an opinion? Please leave a comment using the box below.

For information on acceptable commenting practices, please visit Lifehacker's guide to weblog comments. Comments containing spam or profanity will be filtered or deleted.