The Deepwater Horizon Economic and Property Damages Settlement Agreement consists of a main document and 49 exhibits that contain many key details. The main document states that most business economic loss claimants “must establish that their loss was due to or resulting from the Deepwater Incident.” It then immediately states: “The causation requirements for such claims are set forth in Exhibit 4B.”
This all-important Exhibit 4B, titled “Causation Requirements for Business Economic Loss Claims,” is a 17-page document that lays out a causation test for each plaintiff. It divides all businesses into four geographic zones, and different tests apply to each zone. With some exceptions, businesses must show that their revenue after the spill dropped by a defined amount and then rebounded, forming a “V” or “U” shaped curve. Once causation is established under these tests, the award is calculated using formulas from Exhibit 4C.
The plaintiffs maintain that both sides intended these objective tests to substitute for a more subjective analysis of causation. They stress that nowhere does Exhibit 4B, or any other section of the settlement, mention a process for establishing that a loss was caused by the Deepwater spill.
BP counters that the causation tests in the exhibits are trumped by the language in the main agreement stating that claimants must establish that their loss was due to the Deepwater disaster. “The settlement agreement’s plain text requires the claims administrator to assess whether a claimant’s injuries are traceable to the oil spill before authorizing payment,” said BP group general counsel Rupert Bondy in a statement. Bondy also stated that the claims application materials “further confirm that the settlement agreement compensates spill-related losses.”