Thursday, October 3, 2013

Partial win for BP in appeal of benefit calculations

Although it affirmed the District Court's dismissal of an action by BP, the United States Court of Appeals for the Fifth Circuit remanded in part.  The three judge panel objected to an interpretation of the District Court that settlement payments could be calculated by matching periods (e.g. April to June) in different years, even if the activity was not comparable, resulting in an award not supported by evidence of probable losses:
The district court reasoned that “[n]owhere does the Agreement state or indicate that revenue and expenses must be ‘matched’ or revenues ‘smoothed,’ nor does it state that one should inquire into when revenue was ‘earned.’” The district court held that revenues and expenses need not be matched and that “the same months of the Compensation Period are to be compared with the months in the Benchmark Period” rather than “months where the claimant engaged in comparable activity.”
Thus, hypothetically one might have fished March through May in the base year and calculated the loss claimed on April though June in the year of the spill.

In a second ruling - also issued on October 2, 20113 - the court remanded because it found the record inadequate to determine how the class settlement was intended to resolve certain anomalies that appear from the "divergent effects" of cash-basis and accrual basis accounting on some caegories of claims.

'via Blog this'

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