Appeals court rules in Bucs claim for BP oil spill damages

A federal appeals court has affirmed a lower court decision stating that the Tampa Bay Buccaneers are not entitled to compensation from the BP Deepwater Horizon oil spill.

The case is one of two involving local sports teams that said their revenue was impacted because of the April 2010 disaster in the Gulf of Mexico. The spill is considered the largest marine oil spill in the history of the petroleum industry.

More than 100,000 businesses have filed claims in the settlement program, and for some of the businesses such as commercial fishing, hotels and restaurants near the coast the impact on the bottom line was obvious, a May 24 ruling from the U.S. Court of Appeals for the Fifth Circuit said. But various types of businesses with weaker connections to conditions in the Gulf also received compensation.

Obtaining money from the settlement does not require showing a direct connection between the spill and the claimant’s business. Instead, BP agreed to determine eligibility largely based on whether a claimant’s financial condition worsened after the spill.

The settlement agreement established geographic loss zones. Tampa is in the zone that’s farthest from the spill. The agreement also created a “v-shaped revenue pattern” test and said a claimant needed to show a drop in revenue during a three-month period in the spill year, followed by increased revenue in the same three months the next year.

The Bucs sought $19.5 million, based on revenue shifts in May-July 2010 and in May-July 2011.

The Bucs showed a revenue increase in 2011, due to “NFL Ventures” revenue, which refers to a share each team receives from NFL profits, according to the court ruling. The Bucs said the change was due to the labor dispute that threatened the 2011 season and told settlement administrators that the NFL had provided guidance to record NFL Ventures revenue in April, May and June of 2011 in case there was a lockout.

The claims administrator said the money should have been recorded in August when the rest of the NFL Ventures money was recorded. The administrator denied the claim because moving the revenue meant the team failed the “v-shaped” test.

An appeal panel said the team was justified in recording NFL Ventures revenue when it did because of the threatened lockout. BP appealed that decision and a district court found the Bucs lockout explanation “not persuasive,” and denied the claim.

“The district court’s rejection of the lockout explanation was sound,” the three-judge appeals court panel said. Read the full opinion here.

The Bucs declined comment, according to NBC Sports.

The Tampa Bay Lightning received an award from the BP settlement earlier this year, but not as much as the hockey team sought, Bloomberg Law reported.

A claims administrator initially determined the hockey team was eligible to receive just under $300,000 for its business economic losses, then later upped the amount to $788,000. After adding a “risk transfer premium” and “claimant accounting support,” the total award ballooned to $902,820.15, according to a March 20 decision from the Fifth Circuit appeals court published on casemine.com.

The Lightning contended errors by claims administrators reduced its award from about $12.5 million but a district court declined to review the case.

“The district court did not abuse its discretion by declining review,” the Fifth Circuit appeals court said, in affirming the district court’s decision.

The Lightning don’t plan any further appeals, a spokesman for the team said.