BP asked the Fifth Circuit Court of Appeals last month to approve a so-called accrual-style framework to calculate Business Economic Loss (BEL) claims filed under the 2012 Deepwater Horizon Economic & Property Damages Settlement. BP has already succeeded in changing the BEL calculation methodology, when in October 2013, the Fifth Circuit ordered Claims Administrator Patrick Juneau to issue a policy that would match a claimant’s revenue to the expenses incurred to generate that revenue rather than calculate a claim based on a claimant’s contemporaneously maintained monthly profit and loss statements. Since 2014, claims have been calculated under Policy 495 pursuant to the Fifth Circuit’s order.
While Policy 495 does not prohibit calculating claims on non-accrual based accounting methodologies, BP alleged that such claims – in particular cash-basis claimants that are based on cash receipts and disbursements whenever they are recorded – result in “fictitious, inflated and irrational awards.” Instead, BP argued, an accrual formula based on when revenue is earned and expenses incurred more accurately depicts a business’ financial situation at the time.
BP also argued that an appeal lodged by Class Counsel against certain aspects of Policy 495 implicitly meant that the Plaintiffs also urged the court to overturn its own decision. Class Counsel’s response brief, however, merely challenged what it contends were gross departures from the original calculation methodology agreed upon by the parties in the settlement and argued that the policy goes beyond what the Fifth Circuit intended. Class Counsel specifically objected to Policy 495’s reliance on “vague and subjective determinations on when revenues may have been earned” rather than using a claimant’s contemporaneous profit and loss statements to calculate the claim under an objective calculation methodology.
The legal battles over this issue have gone on now for more than three years. This appeal is BP’s latest attempt to change the calculation methodology originally agreed to by the parties in the settlement. Class Counsel are doing a phenomenal job holding BP accountable to this settlement it not only agreed to, but publicly lauded for months, and now wishes it never signed. This is just another case of a huge corporation having buyer’s remorse and doing anything it can to renege on an agreement, leaving behind untold numbers of damaged businesses and individuals. So much for being “committed to the Gulf” as BP likes to say.