The Deepwater Horizon oil rig explosion in the Gulf of Mexico on April 20, 2010, caused the largest offshore oil spill in U.S. history. The spill damaged marine and wildlife habitats and the Gulf’s seafood and tourism industries. As a result, British Petroleum (BP) set aside $20 billion dollars in an escrow fund to compensate affected businesses and individuals. Unfortunately, the claims process, which was administered by the “Gulf Coast Claims Facility” was difficult, time-consuming and in many cases unfair.
CLASS ACTION LAWSUIT
Therefore, what followed was a federal class action lawsuit in the United States District Court for the Eastern District of Louisiana. Judge Carl J. Barbier oversees this case, which is known as In re: Oil Spill by the Oil Rig “Deepwater Horizon”in the Gulf of Mexico on April 20, 2010, MDL No. 2179.
A Settlement was recently reached in that case pursuant to which BP will pay out claims to those businesses or individuals on the Gulf Coast, including Tampa Bay, who may have suffered financial damage as a result of the spill.
Many affected businesses have not filed claims. This is because of multiple misconceptions about the Settlement and or claims process which include: that a business must be directly related to the seafood or tourism industries, that a claimant must be located on the water and that a claimant must be able to prove with certainty that the reason they financially suffered after the spill was indeed a direct result of the spill.
Again, these are common misconceptions. The following is the reality:
Tourism is Florida’s #1 industry. Florida’s Gulf Coast tourism industry was decimated by the spill due to the perception that oil was on our beaches. Many businesses, whether they knew so or not at the time, suffered financially as a result.
When tourists stop arriving, there are less people at the hotels, in the restaurants, at our amusement parks, or on our beaches, charter boats or golf courses. As a result, waitresses’ hours are cut, taxi-cab drivers have fewer fares, hotel workers are laid off, and so on. All of these people, not to mention the tourists, are consumers of Florida’s economy. When consumers begin tightening their belts and spending less, all businesses, and the economy as a whole, suffers. In short, there is a logical ripple effect known as the chain of causation. This is why many veterinarians, personal trainers, hair stylists, landscapers, and those in most any industry, experienced their own personal economic downturn after the spill.
As a result of this known ripple effect, the Settlement Agreement that was negotiated with BP allows almost ANY business that is located in one of the four geographic areas or “Economic Loss Zones” to recover from the settlement fund if they can show economic losses in 2010.
As long as a business in one of these four Zones has financial numbers that pass the test, the law presumes BP caused the loss, and we do not have to prove anything further.
KNOW YOUR AREA/ZONE
The Gulf Coast was divided into four Economic Loss Zones (A-D) under the Settlement Agreement. Zone A is considered the most impacted by the spill and Zone D the least impacted. Here is the map that shows the Zones, but if an individual or business does not know whether they fall in to one of the zones or which Zone they fall under, they should contact our firm.
Pursuant to the terms of the BP Settlement Agreement, there is a presumption that individuals and businesses in Zone A were negatively impacted the most by the oil spill because Zone A is located on the waterfront or certain inland areas. Consequently, businesses in Zone A do not have to prove that they lost revenue because of the spill, and they will probably receive the most satisfactory settlements. Areas in Florida that fall in Zone A include:
- Anna Maria Island
- Cape Coral
- Captiva Island
- Cedar Key
- Clearwater Beaches
- Coastal Manatee
- Coastal Pinellas
- Florida Panhandle
- Key West
- Longboat Key
- Parts of the Tampa Bay area
- Parts of the Fort Myers area
- Sanibel Island
- Coastal Sarasota
- St. Petersburg Beaches
- The Florida Keys
Zones B, C and D are geographic areas that are not right on located on barrier islands. Florida businesses in these Zones should understand that the BP settlement structure is based on a specific pattern of lost revenue, not the type of industry. Most businesses in Florida can file a claim if they can show, in essence, a dip in revenues between May and December, 2010, and perhaps an upswing in 2011. For example, a veterinary clinic located in Tampa, several miles inland of the Gulf Coast, is eligible to participate in the BP settlement if it suffered any decline in revenue between May and December 2010. Pursuant to the oil spill class action lawsuit settlement agreement, certain formulas must be run on a company or individual’s financials to determine if that business or person has a viable claim.
WHAT TYPES OF BUSINESSES CAN RECOVER
Very few businesses can offer up concrete proof verifying that the reason their business suffered in late 2010 was because of the Spill. The good news is they don’t have to! A business’s revenue figures alone will qualify or disqualify them from recovering losses. With just a few rare exceptions, most any type of business is eligible, including:
- Pension Funds
- Daycare services
- Car Dealers
- Luxury services
- Nail salons
- Law firms
These businesses, like the veterinary clinic example, easily could have lost revenue because their customers were negatively impacted by the oil spill and could not afford their services. Again, these businesses do not have to prove a direct connection between their lost revenue and the spill because they are part of the causation chain.
In light of the above, ANY Florida business located in Economic Loss Zones B, C and D should have an attorney review their revenue figures for the few years preceding the April 20, 2010, oil spill and their revenue figures for the one-year period following that date. After some simple initial calculations, that attorney will be able to advise that business whether they have a claim.
Please also bear the following in mind, many businesses cannot show a lost revenue pattern but, nonetheless, lost tangibles such as customers or clients around the time of the spill. These businesses too may be eligible to participate in the settlement fund. Additionally, a business that had to close down or file for bankruptcy may qualify.
In short, anyone who is unsure about their revenue figures or has any questions about whether they should should talk to a attorney who is knowledgeable about the BP oil spill about filing a claim today, before its too late.