BP has been complaining for months that the company was suckered into a Settlement Agreement with Gulf Coast business owners that rewards those not harmed by the Deepwater Horizon Disaster. While the courts have largely rejected BP’s efforts to unwind the Agreement, calling the company’s position “nonsensical,” few commentators have opined on the decidedly anti-claimant characteristics of the Contract – the so-called “False Negatives” that provide BP with a sizable free pass.
If BP thinks it is getting the short end of the stick, then the company should speak to the 50,000 or so businesses whose claims have been rejected by the Settlement’s Claims Administrator, Patrick Juneau. In fact, Mr. Juneau has rejected more claims than he has paid.
You’d be forgiven if that comes as a surprise given BP’s incessant self-serving television and newspaper advertisements where the oil major portrays itself as the victim of greedy lawyers and unscrupulous claimants. Turns out that a few hundred million dollars of media buys can do wonders for corporate spin.
Unbeknownst to most, the hurdles facing businesses seeking a check from BP are many and varied. In fact, the 1,200 page Settlement Agreement and nearly 500 “interpretive policies” throw so many obstacles at claimants that the program can no longer be considered “claimant friendly,” a phrase BP used when lobbying Federal Court Judge Carl Barbier to approve the deal in 2012. It is now anything but, yet BP wants more and continues to go for the jugular. Makes you wonder if this was the company’s plan from day one?
The latest example of the shift from “claimant friendly” to “BP friendly” is the Claims Administrator’s implementation of the “Customer Revenue Mix Test” (CRM) policy. The Settlement Agreement requires many claimants to demonstrate that tourists stopped frequenting their establishments due to the spill. The method required to demonstrate same is to show the geographic origin of 100% of the claimant’s revenue, to the penny.
Claimants required to pass the CRM test must know exactly where the customer that generated that penny lives. This is a nearly impossible task for all but the most savvy businesses employing the most sophisticated accounting techniques and systems. What restaurant, bar, t-shirt shop, ice cream parlor, 7-11, surf shop, boat captain, taxi driver, dive shop, etc knows the mailing address of every patron? Credit card receipts simply have zip code info. The CRM test requires complete mailing addresses. And if a claimant has cash sales? Forget about it.
In other words, most small businesses are simply out of luck. And BP laughs all the way to the bank on the shoulders of these “false negatives.”
On April 21, 2014 the Claims Administrator officially recognized the inherent flaw in this patently unfair requirement. However, as his job is to implement the Settlement Agreement as written, Mr. Juneau concluded that his hands were tied with the announcement of Policy 345:
“The Claims Administrator has observed that it is difficult or even impossible for some claimants with Business Economic Loss or Start-Up Business Economic Loss claims to satisfy this test because they do not have documentation to establish the addresses/locations of their customers. This is particularly problematic for businesses that deal primarily in cash, which often do not maintain the type of records specified in the above-referenced section of the Settlement Agreement. However, the Claims Administrator interprets the Settlement Agreement’s documentation requirements as mandatory. The Settlement Agreement does not grant the Claims Administrator discretion to waive these document requirements.”
So, no matter how unfair this may seem, there is likely nothing the Claims Administrator can do to grant relief to the tens of thousands of business claimants who have fallen victim to the CRM requirement in Policy 345. BP is fond of trotting out a few dozen examples of what the company feels are frivolous claims that should not have been paid. Yet you never hear BP complaining about getting to walk away from these tens of thousands of claimants with billions due in restitution who were waylaid not only by BP’s spill, but by this absurd CRM requirement.
You’ve come a long way in your disingenuous PR battle, but remember BP, pigs get fat, hogs get slaughtered.
As a plaintiff attorney, Tom Young has been at the forefront of some of the Nation's worst disasters. In 2015, he was judicially appointed to represent over 200,000 plaintiffs in an allocation proceeding involving a $1.24 billion settlement with Deepwater Horizon contractor Halliburton and rig owner Transocean. Currently, he's focused on representing numerous communities across the country that have been ravaged by the opioid epidemic and are now seeking damages from drug manufacturers and distributors.