Appeal Panel Decisions XXII

474 Pages·2015·11.94 MB·English

APPEAL PANEL DECISION FORM
I. CLAIMANT AND CLAIM INFORMATION
Last/Name of Business First Middle
Claimant Name

Claimant ID Claim ID
Claim Type Business Economic Loss
Law Firm
II. DECISION
Select the Compensation Amount set forth in either BP’s Final Proposal or the Claimant’s Final Proposal as the
final outcome on the claim and check the appropriate box to signify your decision.
Compensation Amount $56,572.28
BP’s Final Proposal Risk Transfer Premium .25
Prior Payment Offset
$0
Compensation Amount
$61,072.28
Claimant’s Final Proposal Risk Transfer Premium
.25
Prior Payment Offset
$0
III. PRIMARY BASIS FOR PANELIST DECISION
Please select the primary basis for your decision. You may also write a comment describing the basis for your
decision.

Error in documentation review.

Error in calculation.

Error in RTP multiplier.

Error in Prior Spill-Related Payment Amount.

No error.

Comment (optional):

BP appeals the BEL award to claimant, a flooring company located in DeRidder,Louisiana. BP asserts the Claims
Administrator erred in its allocation of claimant's payroll expenses for 2007 employee bonuses to the single
month of December 2007 rather than to the months when earned.Additionally BP argues the Claims
Administrator was remiss in not exploring the possibility that the entry in July 2007 of $25,610 for "Wages-
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Administrative" was also a bonus payment not properly allocated. The eligibility notice issued acknowledged the
claim was sufficiently matched and used the general BEL methodology to calculate a reduced award.Claimant
responds the Claims Administrator properly evaluated the claim in light of the dictates of policy 495 and relies
on a previous panel decision involving a similar fact pattern rejecting BP's argument. A review of the record
discloses the Claims Administrator determined the claim was sufficiently matched and that none of the seven
criteria of policy 495 was triggered. The calculation notes of the program accountants and correspondence
between them and claimant disclose that bonuses and administrative wages were treated on claimant's tax
returns as costs of goods sold(COGS) and this classification was accepted.Given this treatment, program
accountants deemed these expenses as properly allocated and sufficiently matched, requiring no further
application of policy 495. This panelist agrees.There is no error. Remand is not warranted.The award is affirmed
and the appeal of BP is denied.

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APPEAL PANEL DECISION FORM
I. CLAIMANT AND CLAIM INFORMATION
Last/Name of Business First Middle
Claimant Name
.
Claimant ID Claim ID
Claim Type Business Economic Loss
Law Firm
II. DECISION
Select the Compensation Amount set forth in either BP’s Final Proposal or the Claimant’s Final Proposal as the
final outcome on the claim and check the appropriate box to signify your decision.
Compensation Amount
$59,184.34
BP’s Final Proposal Risk Transfer Premium .25
Prior Payment Offset
$0
Compensation Amount
$59,184.34
Claimant’s Final Proposal Risk Transfer Premium
1.25
Prior Payment Offset
$0
III. PRIMARY BASIS FOR PANELIST DECISION
Please select the primary basis for your decision. You may also write a comment describing the basis for your
decision.

Error in documentation review.

Error in calculation.

Error in RTP multiplier.

Error in Prior Spill-Related Payment Amount.

No error.

Comment (optional):

See Decision Comment uploaded.

8/31/15
Claim No. –

BP appeals the BEL claim award to contending
only that the Settlement Program (“the SP”) erred in according a Tourism designation.
is a travel service based in New Albany, Mississippi. The SP determined that the most
appropriate NAICS Code assignment for it was “561520 – Tour Operators.” Exhibit 2 to the
Settlement Agreement specifies that if a claimant’s properly assigned NAICS Code is one of
those listed in the exhibit, that claimant is “in the Tourism Industry.” Policy 289 v.2 explains:

(a) Exhibit 2 provides that “Tourism means businesses which provide 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.”
(b) Exhibit 2 then provides a list of NAICS codes which qualify a claimant for
inclusion in the Tourism category. The Claims Administrator finds that the
list of NAICS codes is illustrative, not exhaustive.
(c) If the most appropriate NAICS code for a claimant is one of the codes listed
on Exhibit 2, that claimant will be considered to fall within the Tourism
definition.
(d) If the most appropriate NAICS code for a claimant is not one of the codes
listed on Exhibit 2, that claimant may still be considered to fall within the
Tourism definition if the Claims Administrator determines in his discretion
that the claimant’s business meets the definition outlined in Subsection (a)
above.
(e) The Claims Administrator has established a specialized team to assess
Tourism issues on a case-by-case basis.
(f) Characterization of a claimant’s business as Tourism vs. Non-Tourism shall
be based on the totality of circumstances, including consideration of the
business' activities during the Benchmark Period and the Class Period.

In deciding on a claimant’s NAICS Code, the SP is guided by Policy 480 v.2, which
provides, in pertinent part, “The appropriate NAICS Code for an Entity shall be the NAICS Code
that most accurately describes the Entity’s primary business activities, which are the activities in
which the Entity was primarily engaged during the operative Benchmark, Compensation, and Class
Periods.”

NAICS Code 561520 is among those listed in Exhibit as Tourism businesses; therefore, if the
SP’s assignment of that code was not erroneous, Exhibit 2 and Policy 289 v.2, subparagraph (c),
dictate a Tourism classification for

BP argues that the SP should have chosen NAICS Code “485519 – Charter Bus Company”
for That Code is not listed in Exhibit 2.

The SP noted in its analysis of business activities that it had consulted
website “listing its bus tour services.” That website touts 30-year experience in the travel
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business and its membership in the National Tour Association (“the premier association of escorted
group travel operations in North America”) and explains that over the course of its history it has
provided tours to all of the United States, all the provinces and territories of Canada, and several
overseas destinations. The site states that “can arrange tours for your group, providing
the hotel accommodations, tickets, tours, motorcoach, an escort, a professional driver and other
special requests.” also offers its motorcoaches for charter, with attendant services such
as pricing for hotel rooms and tickets, meals and trips tailored to include the “attractions” the
customers would like to visit.

BP points out that P&L income line item “chartered trips” represents well over
half of its reported revenue, thus weighing in favor of a “charter bus company” code assignment.
However, that category would seem to include chartered tours, whether by bus or otherwise, as
well as bus charters per se, because none of the other income line items can account for the
revenue that should result from chartered tours. BP argues that only five of the P&L income line
items can be considered as “tour revenue,” to-wit: baggage handling, motel revenue, food
revenue, tour guide revenue and admission revenue, but those items total only a very small
percentage of annual income. For example, only $120,435 out of $918,354 in 2007;
$75,721 out of $899,301 in 2008, and $52,166 out of $889,575 in 2009. motorcoaches
can seat 55 passengers and its 2015 tour rates include $3,745 per person for the New England
tour and $2,910 per person for the New York City tour. Even if each coach was only half filled,
those two tours alone would generate over $175,000 in tour passenger revenue.

Additionally, website describes a wide variety of “School Tours” available, to
dozens of cities, with guided tours of some of the local attractions. That apparently is a
substantial part of business, yet the income derived cannot be accounted for within the
P&L income line items if “chartered trips” is deemed to represent only non-tour bus charters.

BP asserts that because NAICS Code 485510, Charter Bus Company, isn’t listed in
Exhibit 2, “therefore, Claimant is not eligible for a tourism designation.” This overlooks the
discretion granted the Claims Administrator by subparagraph (d) of Policy 289 v.2, quoted
above.

BP makes other arguments against the grant of the Tourism classification to
with the force of logic behind some of them, but they all are trumped by the fact that if an
Exhibit 2 NAICS Code was permissibly assigned to by the SP in the exercise of its
Policy 480 v.2 discretion to identify the NAICS Code which most accurately describes the
entity’s primary business activities, that settles the matter. The panelist has reviewed on line all
of the NAICS Code descriptions at issue and, although a close question is presented, it cannot be
said that the SP erred in settling on NAICS Code 561520 – Tour Operators, as the most
appropriate one, under all of the circumstances. Appeal denied.

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APPEAL PANEL DECISION FORM
I. CLAIMANT AND CLAIM INFORMATION
Last/Name of Business First Middle
Claimant Name

Claimant ID Claim ID
Claim Type Business Economic Loss
Law Firm
II. DECISION
Select the Compensation Amount set forth in either BP’s Final Proposal or the Claimant’s Final Proposal as the
final outcome on the claim and check the appropriate box to signify your decision.
Compensation Amount
$0
BP’s Final Proposal Risk Transfer Premium .25
Prior Payment Offset
$0
Compensation Amount
$46,582.37
Claimant’s Final Proposal Risk Transfer Premium
.25
Prior Payment Offset
$0
III. PRIMARY BASIS FOR PANELIST DECISION
Please select the primary basis for your decision. You may also write a comment describing the basis for your
decision.

Error in documentation review.

Error in calculation.

Error in RTP multiplier.

Error in Prior Spill-Related Payment Amount.

No error.

Comment (optional):

See Decision Comment uploaded.

8/31/15
Claim No. -

In this appeal, the panelist has struggled to understand when and why a claim might
properly be questioned as “implausible” and/or “suspicious.” The panelist’s difficulty arises
from the discussion of those types of claims, either expressly or indirectly, in the various
writings of the participating judges in the decisions of the United States Court of Appeals for the
Fifth Circuit in the sequential decisions In re Deepwater Horizon, 732 F.3d 326 (October 2,
2013), 744 F.3d 370 (March 3, 2014) and 753 F.3d 509 (May 19, 2014). In particular, the
panelist has attempted to discern the implications of these two statements:

(1) [W]e conclude the Settlement Agreement does not require a claimant to
submit evidence that the claim arose as a result of the oil spill. Each
claimant does attest, though, under penalty of perjury, that the claim in
fact was due to the Deepwater Horizon disaster. The attestation, of
course, applies to all assertions on the claims form, including the financial
figures and other details. Suspicious forms would be subject to
investigation.

744 F.3d 370, 376-77

(2) Though we are reluctant to say that all claims must be accepted no matter
how clear the absence of the required nexus may be, no one has concerned
itself in this appeal with the when, by whom, and how of analyzing
such suspicious claims after they are submitted. It seems to us that absent
any specific provision in the Settlement Agreement, and no one suggests
there is one, such concerns are to be addressed in the usual course of
processing individual claims. The Settlement Agreement contained many
compromises. One of them was to provide in only a limited way for
connecting the claim to the cause. The claims administrator, parties, and
district court can resolve real examples of implausible claims as they
resolve other questions that arise in the handling of specific claims.

744 F.3d 370, 378

In the present appeal, Claimant is a
medical equipment and supplies provider located in Rolling Fork, Mississippi (Zone D).

Contrary to Claimant’s sworn attestations that it suffered losses due to the spill, Claimant’s
attorney admitted in writing that Claimant’s decline in 2010 revenue and profits was the direct result
of Claimant’s failure to file the necessary paperwork with Medicare (its primary source of revenue)
and its ensuing loss of Medicare accreditation.

P&Ls reflect that during 2007, 2008 and 2009, Medicare fees constituted
roughly two-thirds of its total revenue, but from November of 2009 until July 2011, it received
not a penny from Medicare.

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Based on that clear-cut picture, the panelist remanded the appeal in February of 2015 for
the SP to investigate and consider whether the claim was “implausible” and “suspicious.”

On April 19, 2015, the SP issued its lengthy “Response to Remand,” which the panelist
now sets out in full:

Certain Business Economic Loss (“BEL”) claims that were on appeal
before the Settlement Program’s Appeal Panel, including this one, have been
remanded with a request that the Settlement Program investigate and consider
whether the claimants’ claims are “implausible” and/or “suspicious.” The
Settlement Program considers its analysis of causation to be properly limited to
the application of the objective causation test set out at Exhibit 4B of the
Settlement Agreement. As reflected by the Claims Administrator’s Policy 308,
as far back as 2012 both Class Counsel and BP agreed that no causation analysis
beyond that contained in the Settlement Agreement was required or intended.
Thus, Policy 308 – to which neither BP nor Class Counsel objected – stated:

“The Settlement Agreement does not contemplate that the Claims
Administrator will undertake additional analysis of causation issues beyond those
criteria that are specifically set out in the Settlement Agreement. Both Class
Counsel and BP have in response to the Claims Administrator’s inquiry
confirmed that this is in fact a correct statement of their intent and of the terms of
the Settlement Agreement. The Claims Administrator will thus compensate
eligible Business Economic Loss and Individual Economic Loss claimants for all
losses payable under the terms of the Economic Loss frameworks of the
Settlement Agreement, without regard to whether such losses resulted or may
have resulted from a cause other than the Deepwater Horizon oil spill provided
such claimants have satisfied the specific causation requirements set out in the
Settlement Agreement. Further, the Claims Administrator will not evaluate
potential alternative causes of the claimant’s economic injury, other than [as
specifically required with respect to certain Individual Economic Loss claims].”

That policy was recognized and upheld by the District Court in its April 9,
2013 opinion, In re Deepwater Horizon, No. 10-MDL-2179 (E.D.La., filed
April 9, 2013), was again recognized in its December 24, 2013 opinion, No. 10-
MDL-2179 (E.D.La., filed December 24, 2013), and was recognized and quoted
by the Fifth Circuit in In re Deepwater Horizon, 739 F.3d 790 (5th Cir. 2014).
The Fifth Circuit’s rulings on this issue became final with the Supreme Court’s
denial of certiorari.

As the Settlement Program understands the governing orders of the
Courts, causation determinations are dictated solely by the agreed upon objective
criteria set out in Exhibit 4B. The Claims Administrator is not to perform a
gatekeeping function that would add an additional level of subjective causation
analysis beyond the objective terms and conditions of Exhibit 4B. The Settlement
Program addresses issues of implausible or suspicious assertions made by
claimants in the normal course of claims processing. That analysis, however,
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does not characterize claims as “suspicious” or “implausible” when the submitted
financials satisfy the objective causation criteria set out in Exhibit 4B.

In the instant claim, the Claims Administrator did not determine that there
was anything presented by the claimant that would render the claim “implausible”
or “suspicious” under the parameters outlined above.

The ensuing “Eligibility Notice After Remand Appeal” awarded the same Compensation
Amount as before and BP appeals, asserting that the SP had failed to investigate whether
attestation was implausible and suspicious. BP argues that:

The Claims Administrator’s position, that the Settlement Program categorically
will not find a false or baseless attestation of a spill-related loss to be implausible
or suspicious if the Claimant satisfies the applicable Exhibit 4B test, runs directly
counter to the holdings of the Fifth Circuit. Had the Fifth Circuit intended for
the Settlement Program to accept all attestations regardless of their veracity,
provided only that the claim satisfies the mathematical requirements of Exhibit
4B, there would have been no need for the Fifth Circuit to hold that implausible
and suspicious attestations of a spill-related loss should be investigated, as Exhibit
4B would necessarily provide the mathematical answer in every case.
· · ·

This is not a matter of debating “alternative causation,” where the parties have
competing, good-faith arguments as to whether the alleged loss was or was
not caused by the spill, and the Claims Administrator uses the economic tests set
forth in Exhibit 4B to decide the matter. Rather, it is a situation where the
foundational sworn attestation required by the Settlement Agreement and
emphasized by the Fifth Circuit is demonstrably untrue and is therefore by
definition suspicious and implausible.

BP notes that in the Appeal Panel Decision previously issued in Claim ID the
conclusion reached was “The Claims Administrator is not prohibited by the Settlement
Agreement from investigating and denying suspicious or implausible claims. To the contrary, it
is part of his duties.”

BP requests a further remand, with a renewed instruction to the SP that it investigate
whether the attestation by was implausible and suspicious or, failing that, calls upon the
panelist to deny the claim on that basis.

There was not presented to the SP a “suspicious form,” in the words of the Fifth Circuit,
in the sense that within its four corners there was some obvious misrepresentation or
contradiction. Facially, the claim form would arouse no suspicion. Having cleared that hurdle,
should the claim itself have been investigated as implausible and suspicious when facts surfaced
during the claims handling process which seemingly refuted causation, given that the submitted
financials otherwise satisfied the causation criteria of Exhibit 4B? The panelist remanded for
that reason. Now, in light of the SP’s Response to Remand, and having painstakingly parsed all
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of the writings of the Fifth Circuit judges on point, the panelist does not consider that he
independently should undertake, or order the SP to undertake, an analysis beyond what has taken
place. It may just be that the Fifth Circuit’s observation that “the claims administrator, parties,
and district court can resolve real examples of implausible claims as they resolve other questions
that arise in the handling of specific claims,” essentially assigns the issue to the exercise of
discretion and professional judgment by the SP. The panelist notes that the SP has created the
Fraud, Waste and Abuse Department, staffed by a number of experienced investigators and
headed up by former law enforcement executives, with the mission to protect the process from
fraudulent claims.

Declining to order further “investigation,” the panelist denies the request for a second
remand and, as between Final Proposal in the amount of the SP’s award, and BP’s
Final Proposal of a complete denial of the claim, adopts that of Appeal denied.
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