Monday, June 09, 2014

DHECC - 495 matching policy

I was going to save this until after the final segment of the Lionel Sutton interview but it's becoming such a topic of discussion among commenters I figured I should go ahead and discuss it.

For those of you who may not understand, about a month ago Judge Carl Barbier capitulated (to some extent) to BP's demands and officially adopted Policy No. 495 for BEL claims, also known as the "matching policy".  Essentially this raises the bar for claimants and requires them to not only file revenue information in order to receive a claim, now they must match their expenses to their revenue.

Barbier order to adopt 495  

This order completely changes the playing field.  Claimants that are still waiting in queue may now have to go back and refile claims or their claim may simply be outright denied according to these new standards.  Claimants that have already been paid didn't have to meet the matching requirements.

That includes all the claims the PSC had expedited for their personal clients.

Meanwhile, the PSC has been popping corks and running victory laps as Doug put it, over the Appeals Court decision against BP.  Even the peanut gallery is dutifully trumpeting the masterful heroics of the PSC:

Makes a great story doesn't it?  Except it's bullshit.

Even the PSC admits in this Motion to Amend 495 that the claims process has now shifted against the current batch of claimants.  This Motion states that the 495 policy "fundamentally alters the specific (causation) criteria and formulae" that was previously agreed to in the settlement.  The memo also states the matching policy "exceeds the authority of the Claims Administrator and the Court".

That doesn't sound like much of a victory to me.  Coupled with the fact that current claimants no longer have the option to opt out of the settlement because these requirements weren't in place during the fairness hearing, it seems to me the good ol' boys have royally fucked this settlement up.  I doubt they care too much considering they expedited their own claims and they'll get their 600 million dollar gratuity in the end whether the buffet runs out of food or not.

And let's not forget Louis Freeh is rumored to have over 70 employees in the Claims Office for a $3 million a month contract including an expense account that would arch the eyebrows of Dennis Kozlowski's accountant.  What do you think he's doing for all that cash?  I certainly don't think he's investigating the PSC....I do suspect he's scrutinizing claims in a much more rigorous fashion than they were a year ago.

How does this constitute a "besting" over BP by the podunk PSC attorneys?  Yeah boy!  They're really sticking it to BP ain't they?

I'm told the matching policy may affect 10's of thousands of claims...and on the high end of 10's of thousands...closer to 100k.

As AZ commenter IN-HALE mentioned in a previous post, there are numerous plaintiff attorneys ready to go to war with the PSC if they don't make an effort to strike 495 down.  If they're going to lobby Barbier to strike it...they better do it quickly.          


Anonymous said...

Blood on the streets.

Well here we go since June 2, 2014 when the claims center announced payments will start to resume so have the denials. This is the largest blood bath to date over a 7 day period 3,921 denials along with $32,043,869.00 in payments.

268 IEL Claims Denied

357 Start Ups Denied

200 Failed Businesses Denied

3096 Business Claims Denied


Kevin said...

This is all so confusing.

Will Policy 495 work to exclude certain types of BEL claims that were accepted and paid by the DHECC prior to Policy 495.

Does the new Policy 495 affect only BEL claims that have not been paid and no release has been signed?

Does Policy 495 affect BEL claims where matching issues were never raised by anybody?

Could Policy 495 affect the claims of the BEL Class Representatives?

Anonymous said...

"Will Policy 495 work to exclude certain types of BEL claims that were accepted and paid by the DHECC prior to Policy 495."


"Does the new Policy 495 affect only BEL claims that have not been paid and no release has been signed?"

No, only paid claims, ones that were too small to appeal, and ones that were never appealed are exempt. That doesn't mean that any particular claim that is subject to 495 will actually be determined under 495's screening criteria to involve "matching" issues and therefore need to be recalculated.

"Does Policy 495 affect BEL claims where matching issues were never raised by anybody?"

Apparently yes, but even application of 495 shouldn't cause any changes in the end because BP's failure to raise matching issues in its appeal should still result in the claim being "deemed" to not involve matching issues and therefore can proceed towards a final notice and payment without being recalculated.

"Could Policy 495 affect the claims of the BEL Class Representatives?"

Yes. It should impact their claims in exactly the same way it impacts any other claim.

Anonymous said...

Response to Kevin

Q.Will Policy 495 work to exclude certain types of BEL claims that were accepted and paid by the DHECC prior to Policy 495.

A.NO 495 only affects the BEL claims that didn’t receive a timely offer or a signed release by Oct 3, 2013.(Several claims were just set aside in the final stage in QA or in Accounting Review status when they were completed).

Q.Does the new Policy 495 affect only BEL claims that have not been paid and no release has been signed?


Q.Does Policy 495 affect BEL claims where matching issues were never raised by anybody?

A.NO all claims are subjected to 495 unless the appeal process was exhausted on an offer by Oct 3, 2013.see; motion to alter or amend 495

Q.Could Policy 495 affect the claims of the BEL Class Representatives?

A.Yes if the claim didn’t receive an offer and signed a release by Oct 3, 2013 Policy 495 would apply.

This gets to the heart of the problem and questions the non- transparent payment selection process. The person who controls when a claim is given the offer apparently is the same person that has the ability to expedite a claim. By not adhering to “FIFO” First in First Out they can insure who receives these payments.


Anonymous said...

That's, eight months, not one week, worth of claims that have been on hold since BP's appeal.

Anonymous said...

Kevin, to be clear, I answered your questions the way Policy 495 is actually being applied, while IN-HALE answered the way we (the plaintiffs) WANT it to be applied. He is going by the arguments in the PSC's motion to clarify Barbier's 5/28/14 Order, while I answered based on how 495 is currently being applied in practice.

While I'm not 100% sure why he answered your first question the way he did, I think it was because he read your question differently than I did. When I answered "yes," to your first question, what I meant was that policy 495 will cause many TYPES of BEL claims, such as farm claims, to not be paid after application of 495 even though that same claim would have been processed and paid without incident had it been processed prior to policy 495 being adopted. I don't think there is any serious debate about that at this point in time. I think IN-HALE was just saying that in his opinion policy 495 SHOULDN'T apply to claims that already had an offer/signed release, not that it ISNT being applied to those claims. The truth is that, for the time being, IT IS being applied to claims that already had signed releases. That's because Barbier's 5/28 Order said "It is Further Ordered that the Claims Administrator’s Policy No. 495, “Business
Economic Loss Claims: Matching of Revenue and Expenses” shall be applied to all BEL Claims currently in the claims process at any point short of final payment." The Order then excluded exactly two categories of claims that wouldn't be subject to 495: ones that had a final eligibility notice/denial as of Oct 3rd and either (1) no appeal was filed at all, or (2) the claim wasn't an appealable claim in the first place. It clearly applies 495 to many claims that already had signed releases. Should it apply to those claims? I don't think so. Is it? Yes.

Our answers to your second question were different for the same reason as explained above. While nothing suggests it would apply to claims that were already paid, for the moment it does apply to unpaid claims even if they had signed releases (unless they fall within one of the two excluded categories from Barbier's order).

On your third question, IN-HALE seemed to say that 495 doesn't impact appealed claims if BP never raised matching issues, but then he says it applies to all of them unless the appeals process was exhausted on or before Oct 3rd. I'm not sure what he meant there, but he seems to be going by the PSC's motion rather than what is really happening right now. Currently, the ONLY claims not being subjected to 495 are ones that (1) were already paid, or (2) were too small to be appealed, or (3) were appealable, but BP never actually appealed them. I agree with IN-HALE that it SHOULDNT apply to claims that already completed the entire appeals process, but for now it most certainly is being applied to those claims. Specifically, as Barbier Ordered, it is currently being applied to "all BEL claims currently in the claims process at any point in the process short of payment, including claims in the appeals process, except" ones too small to appeal or ones that were never appealed at all. However, like I said, even if you apply 495 to some appeal claims, that doesn't mean the claim will be recalculated because 495 should operate to "deem" any appealed claim to NOT involve matching issues if BP never raised those issues in its appeal. That would mean it can proceed to payment,...even though 495 "applied" to it. 495 is a two part rule that applies to all claims going forward. The first part is just the screening test to see which claims don't have properly "matched" financials. The second part is the recalculation part, but a claim would have to fail the screening tests from part one before that ever became necessary.

Just didn't want anyone confused by our divergent answers to the same questions.

Kevin said...

Anonymous at June 11, 2014 at 8:25:00 AM CDT:

Thank you for that detailed explanation. You and In-Hale sound very familiar with the process, possibly from different perspectives. That helps illustrate my point about confusion.

Anonymous said...

Lets take a look on the bright side.

Report Card new offers and payments made by settlement from Oct 16, 2013 the day of the injunction to May 19, 2014 the closest report I have before the injunction was about to be lifted.

Please note the injunction applied to BEL claims several offers were appealed at that time attempting to slow the process.

Although the seafood program has its own 2.3 billion dollar cap it helps to obscure the facts about the Economic Settlement.

The stats used in this analysis indicate just over 1 billion is attributed to the seafood claims and just recently they added the 40% offers accepted that were given by GCCF.

The PSC is on record that virtually every claimant would receive more under this settlement than what was being offered by GCCF.

We now have 2,813 class members that have realized the balance of the 40% is more than the settlement was willing to pay equaling a little over 46.7 million.

This report is a comparison between two stats using the eligibility offer column and the payment numbers and amounts the results are listed below.

529 Seafood Claim offers made.
Payments made 1,064 in the amount of $76,908,019.00

1,096 IEL Claim offers made.
Payments made 1,563 in the amount of $20,206,768.00

0 IPV Festival Claim offers made.
Payments made 0

-37 BEL Claim offers withdrawn.
Payments made 3 in the amount of $ 7,697,408.00

-1 Start Up Claim offer withdrawn.
Payments made 1 in the amount of $ 987,417.00

-2 Failed Business Claim offer withdrawn.
Payments made 0 in the amount of $ 0

3,930 Coastal Real Property offers made.
Payments made 4,333 in the amount of $ 21,041,727.00

662 Wetland Real Property offers made.
Payments made 618 in the amount of $ 19,995,062.00

123 Real Property Sales offers made.
Payments made 118 in the amount of $ 4,415,070.00

919 Subsistence offers made.
Payments made 843 in the amount of $ 5,085,468.00

1 VoO Charter offers made.
Payments made 132 in the amount of $ 2,450,536.00

33 Vessel Damage offers made.
Payments made 73 in the amount of $ 824,181.00

Total 159,611,656.00 paid out during the 8 month injunction well below the average of 300 - 400 million the CA was maintaining from Oct 2012 thru Sept 2013.

Take it or use it for what its worth these are the facts.


Kevin said...

"As AZ commenter IN-HALE mentioned in a previous post, there are numerous plaintiff attorneys ready to go to war with the PSC if they don't make an effort to strike 495 down." - See more at:


Any idea what those numerous plaintiff attorneys are doing in response to BP's motion for restitution?

Anonymous said...

Breaking this motion down is helpful to killing 495 and if BP wins then they lose the GCCF release fight.

Basically they admit they enter an agreement to trap claimants with no intent to pay except the seafood, coastal claims,wetlands and true up the VoO.


Some claimants were paid who would not even have qualified for any payment.

To do otherwise would be to create discrepancies between similarly-situated claimants based solely on the happenstance of when the awards were made.

Exhibit 4C to the Agreement sets forth the compensation framework for BEL claimants, which compensates these claimants “for any reduction in profit between the 2010 Compensation Period selected by the claimant and the comparable months of the Benchmark Period.”

Although lacking in some cases all of the facts necessary to fully apply Policy 495, as the attached declaration demonstrates, BP’s assessment indicates that were the awards correctly calculated, they are sometimes millions of dollars smaller than those calculated under the Settlement Administrator’s now-invalidated policy.

Allowing award calculations for similarly situated claimants pursuant to vastly different compensation policies would upend the “common methodologies” integral to the Settlement Agreement.

For these claims, it is possible that full application of Policy 495 will reveal that the overpayment is different than estimated or that the claimant no longer passes the Exhibit 4B tests and therefore is not entitled to any compensation.

The release is final little to no chance the judge will approve this and if 495 stands they are correct it would award claimants vastly different.

The clarification order also supports witch way he’s leaning on the motion to amend 495.


Kevin said...


"The release is final little to no chance the judge will approve this .... ."

Agreed on the part about little to no chance the judge will approve this. But, I do think BP will ultimately be successful in clawing back money from those claims where they objected and appealed on the basis of matching issues.

Do you know anything about the Oil Pollution Act Causation Test Case Plaintiffs and their upcoming trials? I noticed that 6 of the 7 plaintiffs are the clients of PSC members.

Anonymous said...

BP already fought one motion on the finality of awards and argued that signing the release is what makes an award final. They lost but on the basis that the offer and acceptance occurs before the release is signed. That decision might doom BP's current motion and even exempt any claim with a signed release from 495 since the release says that any interpretive changes or new policies won't impact the award for better or worse. The court hasn't previously ruled directly on that language, so this motion might require him to do that now. The language is clear, so hopefully it will help.

Steve McKay said...

Just saw this post. I like it. I found some other online stats about what is happening to claims under 495. Thought it might interest everyone