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CLAIM SUMMARY / DETERMINATION FORM

Claim Number A15017-0005 

Claimant Mr. 

Type of Claimant Private (US)

Type of Claim Loss of Profits and Earning Capacity 

Claim Manager 

Amount Requested $40,000.00 

FACTS 

On May 19, 2015, USCG Sector LA/Long Beach (LA/LB) received a report of an oil spill 

originating from Plains Pipeline line 901 onto the shore side of Highway 101 in Santa Barbara, 

CA. The ruptured pipeline discharged approximately 746 barrels of crude oil into the Pacific 

Ocean, a navigable waterway of the United States.1

 

Following the discharge, the U.S. Department of Transportation’s Pipeline and Hazardous 

Materials Safety Administration (PHMSA) issued a corrective action order to Plains Pipeline, LP 

to suspend operations and make safety improvements to line 901.2

 Shortly thereafter, PHMSA 

amended their corrective action order to Plains Pipeline, LP, suspending operations of line 903 as 

line 903 was connected to line 901 and showed similar corrosion characteristics to line 901.3 

ExxonMobil suspended operations from their offshore platforms Hondo, Heritage and Harmony 

as they were dependent on Plains Pipeline lines 901 and 903 to transport their crude oil from the 

offshore platforms to their on-shore refinery in Kern County, CA.4

CLAIM AND CLAIMANT

On April 7, 2016, Mr. , (Claimant) presented a claim to the NPFC seeking 

$40,000.00 in lost profits and earning capacity. Claimant states that as an employee of Irwin 

Industries and West Coast Logistics, he had been providing contracting services for ExxonMobil 

offshore platforms Hondo, Heritage and Harmony for the past 20 years. He further states that the 

suspended operations on these offshore platforms resulting from the Plains Pipeline line 901 oil 

spill had resulted in the loss of his job and the loss of $40,000.00 of profits and earnings.5

APPLICABLE LAW 

Under 33 C.F.R. 136.105(a) and 136.105(e)(6), the claimant bears the burden of providing to the 

NPFC, all evidence, information, and documentation deemed necessary by the Director, NPFC, 

to support the claim. 

The OSLTF which is administered by the NPFC, is available, pursuant to 33 U.S.C. § 2713 and 

the OSLTF claims adjudication regulations at 33 C.F.R. Part 136, to pay claims for 

uncompensated damages. One type of damages available pursuant to 33 C.F.R. §136.231 is a 

 

1 See CG District 11 - Potential Medium Coastal Spill - Refugio Beach, CA dated May 25, 2015. 2 See PHMSA corrective action order issued to Plains Pipeline, LP dated May 22, 2015.

3 See Plains Pipeline Information website dated June 3, 2015.

4 See LA Times Article written by Mr. dated June 23, 2015. 5

 See Optional OSLTF Claims Form dated April 4, 2016.
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claim for loss of profits or impairment of earning capacity due to injury to or destruction of 

natural resources.

Under 33 C.F.R. § 136.233 a claimant must establish the following:

(a) That real or personal property or natural resources have been injured, 

destroyed, or lost.

(b) That the claimant’s income was reduced as a consequence of injury to, 

destruction of, or loss of property or natural resources, and the amount of that 

reduction.

(c) The amount of the claimant’s profits or earnings in comparable periods and 

during the period when the claimed loss or impairment was suffered, as 

established by income tax returns, financial statements, and similar 

documents. In addition, comparative figures for profits or earnings for the 

same or similar activities outside of the area affected by the incident also must 

be established.

(d) Whether alternative employment or business was available and undertaken 

and, if so, the amount of income received. All income that a claimant 

received as a result of the incident must be clearly indicated and any saved 

overhead and other normal expenses not incurred as a result of the incident 

must be established. 

Under 33 C.F.R. 136.235, the amount of compensation allowable for a claim involving loss of 

profits or impairment of earning capacity is limited to the actual net reduction or loss of earnings 

or profits suffered. Calculations for net reductions or losses must clearly reflect adjustments for-

(a) All income resulting from the incident;

(b) All income from alternative employment or business undertaken;

(c) Potential income from alternative employment or business not undertake, but 

reasonably available;

(d) Any saved overhead or normal expenses not incurred as a result of the 

incident; and

(e) State, local, and Federal taxes.

NPFC DETERMINATION 

Claimant provided the following to support its claim:

1. Calendar year 2010 W-2 documenting an adjusted gross income of $88,836.30

while working for Irwin Industries, Long Beach, CA. 

2. Calendar year 2011 W-2 documenting an adjusted gross income of $77,005.80

while working for Irwin Industries, Long Beach, CA.

3. Calendar year 2013 W-2 documenting an adjusted gross income of $85,735.33 

while working for Irwin Industries, Long Beach, CA. 

4. Calendar year 2014 W-2 documenting an adjusted gross income of $90,188.17 

while working for West Coast Logistics, Lafayette, LA, and $11,869.56 while 

working for Irwin Industries, Long Beach, CA.
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5. Calendar year 2015 W-2 documenting an adjusted gross income of $39,754.37 

while working for West Coast Logistics, Lafayette, LA 

6. Invoice from West Coast Logistics to ExxonMobil dated October 3, 2015, billing 

Mr. time from September 27, 2015 – October 3, 2015 in the amount of 

$5,397.66 for services provided as an offshore safety supervisor. My claims 

that October 3, 2015, was the last day he worked for West Coast Logistics.6 

7. A letter from Plains Pipeline, L.P. dated February 24, 2016, in which his lost 

profits claim #080167762 was denied due to “materials and documentation 

submitted are insufficient to establish your claim under OPA.”7

 

NPFC Analysis 

Under 33 U.S.C. § 2702(b) and 33 C.F.R. Part 136, a claimant must prove that its loss of income 

resulted from injury to or destruction of a natural resource. No evidence provided by the 

Claimant indicates that the loss of wages was due to the oil spill from Plains Pipeline, L.P. The 

NPFC obtained information from the PHMSA website that Plains Pipelines lines 901 and 903 

were shut down as a direct result of their poor condition as well as the need to purge, test and 

repair the lines to the satisfaction of PHMSA.89 Since ExxonMobil’s offshore platforms Hondo, 

Heritage and Harmony depend on Plains Pipeline lines 901 and 903 to transport its oil to its 

refinery in Kern County, CA; its discontinued use was not because of the Plains Pipeline oil spill 

but because of the mandated closure of Plains Pipeline lines 901 and 903 by PHMSA due to 

purging, testing and repair of lines. As a result, any related loss of profits or earnings Claimant 

incurred or may incur is considered a consequence of PHMSA’s order and the subsequent 

stoppage of work by Claimant’s employers. The asserted losses are not the result of an OPA 

incident or injury to a natural resource and are therefore not compensable under OPA. 

In addition, the Claimant states that he was a contractor working for ExxonMobil but failed to 

provide a signed contract or some type of binding agreement with ExxonMobil. Without a 

signed contract proving continued work, it’s impossible to accurately predict or forecast any type 

of future income. Additionally, Claimant did not provide an explanation as to how he came to 

the $40,000.00 loss. 

Claimant has also not evidenced any saved overhead or normal expenses not incurred as a result 

of the incident. 33 C.F.R. 136.235 (d). 

Lastly, 33 C.F.R. 136.233 (d) requires the Claimant to disclose whether alternative employment 

or business was available and undertaken and, if so, the amount of income received. It’s unclear 

to the NPFC if the Claimant filed for and received unemployment benefits, or if other job 

opportunities have been found. If any employment benefits were received, or other employment 

found, that information would have to be disclosed to the NPFC. 

 

6 See Optional OSLTF Claims Form dated April 4, 2016.

7 See letter from Plains Pipeline, L.P. to Mr. dated February 24, 2016.

8 See PHMSA Corrective Action Order issued to Plains Pipeline, LP dated May 21, 2015. 9 See PHMSA Amended Corrective Action Order issued to Plains Pipeline, LP dated November 21, 2015.
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Summary

This claim is denied because the claimed costs are not due to the oil spill incident (injury, 

destruction, or loss of natural resources). Any claimed loss of profits or earnings Claimant 

incurred or may incur is considered a consequence of PHMSA’s order and/or the subsequent 

stoppage of work by Claimant’s employers. For this reason and others stated above this claim is 

denied. 

 

Claim Supervisor: 

Date of Review: 4/13/2016 

 

Supervisor’s Actions: Denial approved

Supervisor’s Comment