How Does a Business Prove Causation under the Settlement?

New Orleans, LA BP Oil Spill Settlement Lawyers

BP has falsely suggested in Court filings and to the Press that a business does not have to show that its damages were caused by the Spill in order to recover from the Settlement Program. This is not the case.

Indeed, approximately 3,000 business claims have already been denied by the Settlement Program because they could not establish causation.

Specifically, the Settlement generally requires a business to show that its revenues fell after the Spill, and then recovered in 2011. This is commonly referred to as the “V-Test”. The further the business is from the coast, the deeper the V.   Businesses that can’t satisfy the V-Test can attempt to meet other alternative tests, such as the Down-Only or the Modified-V, which require additional showings regarding a certain ‘Customer Mix’ of either locals or tourists, which fell off after the Spill.

To be sure, there is a narrow group of Tourism, Seafood and other “Zone A” businesses right on the water, for which BP agreed that losses from the Spill would be presumed. But these are not the businesses BP is complaining about. Rather, BP is complaining about agricultural, construction, educational and professional service claims north of I-10, which actually submitted affirmative evidence of causation, in the form of financial records or other materials that BP agreed would satisfy the objective requirements set forth in the Settlement Agreement.

Interestingly, although BP now complains about payments to businesses north of I-10 – which BP specifically wanted to be included in the Settlement Class – the payment history from BP’s own GCCF show significant payments to businesses throughout the States of Louisiana, Mississippi and Alabama, north of I-10. [To View Louisiana and Alabama GCCF Maps, Click Here]

While these tests may allow for what BP Counsel referred to as “false positives”, they were intended to ensure that all businesses would be evaluated under the same objective and transparent criteria, and to prevent the situation where different adjusters might look at situations subjectively, which would invariably lead to arbitrary, inconsistent and/or unfair results, and accusations of special treatment or favoritism. In a PowerPoint prepared by BP for the Claims Administrator, BP illustrated these agreed-to tests for causation:

In that same PowerPoint, BP acknowledged that: “Qualifying businesses receive compensation for all losses regardless of actual facts and circumstances.”

BP also has a tendency to cherry-pick facts – and leave out some of the inconvenient truths – when it is compiling examples.  A Declaration submitted by Class Counsel John Creevy reveals some of the facts that BP has omitted.

Again, approximately 3,000 Business Economic Loss Claims have been denied because they could not meet the Settlement’s objective standards and criteria for establishing causation. And certainly there are tens of thousands of other businesses who could not meet the Settlement’s requirements, and therefore never even bothered to file a claim.