CLAIM SUMMARY/DETERMINATION FORM

FACTS

On or about 20 April 2010, the Mobile Offshore Drilling Unit Deepwater Horizon (Deepwater 

Horizon) exploded and sank in the Gulf of Mexico. As a result of the explosion and sinking, oil 

was discharged. The Coast Guard designated the source of the discharge and identified BP as a 

responsible party (RP). BP accepted the designation and advertised its OPA claims process. On 

23 August 2010, the Gulf Coast Claims Facility (GCCF) began accepting and adjudicating 

certain individual and business claims on behalf of BP.

CLAIM AND CLAIMANT

On 01 February 2012, Cyrus J. Reed (the Claimant) presented an optional Oil Spill Liability 

Trust Fund (OSLTF) Claim Form to the National Pollution Funds Center (NPFC) seeking 

$21,072.77 in loss of profits and impairment of earnings capacity that allegedly resulted from the 

Deepwater Horizon oil spill.

The Claimant works in IT Services for Automatic Power, Inc. (API).1

 API is company that 

provides offshore marine aids to navigation.2

 At the time of the Deepwater Horizon oil spill, the 

Claimant worked at API’s location in Westwego, Louisiana.3

 However, due to API’s losses 

from the Deepwater Horizon oil spill, API closed its Westwego location, along with its Cut Off, 

Louisiana location, and relocated its operations to Gray, Louisiana.4

 During this transition, 

many employees at API were either laid off or asked to take early retirement. The Claimant was 

able to keep his job but now has to travel over 100 miles round trip each day with the relocation 

of his position to the Gray location.5

 The Claimant’s asserted damages are for the extra fuel and 

maintenance costs that he has incurred due to the longer commute.6

 

APPLICABLE LAW

The Oil Pollution Act of 1990 (OPA) provides that each responsible party for a vessel or facility 

from which oil is discharged into or upon the navigable waters or adjoining shorelines or 

exclusive economic zone is liable for removal costs and damages. 33 U.S.C. § 2702(a). 

Damages include the loss of profits or impairment of earning capacity due to the injury, 

destruction or loss of real property, personal property, or natural resources, which shall be 

recoverable by any claimant. 33 U.S.C. § 2702(b)(2)(E).

1 Optional OSLTF Claim Form, dated 19 January 2012.

2 GCCF Interim Payment Claim Form, dated 30 June 2011. 3 Letter from API to the GCCF, dated 18 August 2011.

4 Letter from API to the GCCF, dated 18 August 2011.

5 Letter from API to the GCCF, dated 18 August 2011.

6 Optional OSLTF Claim Form, dated 19 January 2012.

Claim Number N10036-1660

Claimant Cyrus Reed

Type of Claimant Private (US) 

Type of Claim Loss of Profits and Impairment of Earnings Capacity

Amount Requested $21,072.77

 
The OSLTF, which is administered by the NPFC, is available to pay claims for uncompensated 

damages pursuant to 33 U.S.C. § 2712(a)(4) and § 2713 and the OSLTF claims adjudication 

regulations at 33 C.F.R. Part 136. With certain exceptions a claim must first be presented to the 

responsible party. 33 U.S.C. § 2713(a). If the claim is either denied or not settled by any person 

by payment within 90 days after the date on which it was presented, the claimant may elect to 

commence an action in court or present the claim to the OSLTF. 33 U.S.C. § 2713(c).

Pursuant to the claims regulations, 33 C.F.R. § 136.233, a claimant must establish the following 

to prove loss of profits or impairment of earning capacity:

(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 U.S.C. § 2702(b)(2)(E) and 33 C.F.R. Part 136, a claimant must prove that any loss of 

income was due to injury, destruction or loss of real or personal property or of a natural resource 

as a result of a discharge or substantial threat of a discharge of oil. 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.

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 undertaken, 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.

DETERMINATION OF LOSS

The Claimant’s Submission to the OSLTF

In support of his claim, the Claimant presented the following documentation to the NPFC:

- Optional OSLTF Claim Form, dated 19 January 2012;
- Determination Letter on Interim Payment/Final Payment Claim, dated 13 January 2012; 

- GCCF Interim Payment Claim Form, dated 30 June 2011; 

- GCCF Interim Payment Claim Form, dated 30 September 2011; 

- GCCF Interim Payment Claim Form, dated 31 December 2011;

- Written Explanation of API’s business; 

- Photocopy of the Claimant’s API business card; 

- Computer printout of internet search of API; 

- Screenshot of API’s website; 

- Paystub from Automatic Power, dated 12 May 2011; 

- 2008, 2009, and 2010 Form W-2’s from Automatic Power, Inc.; 

- Letter from API to the GCCF, dated 18 August 2011; 

- Various invoices and receipts for car expenses; 

- Email Notification of the Claimant’s entry into the Multi-District Litigation, dated 05 

April 2011; 

- Direct Filing Short Form for MDL 2179. 

Prior to presenting this claim to the NPFC, the Claimant filed four claims with the GCCF for loss 

of earnings, all under Claimant ID # 3509233. The Claimant submitted one additional claim to 

the GCCF under the same Claimant ID for loss of earnings after the presentment of his claim to 

the NPFC. The table below provides relevant information for the Claimant’s GCCF claims.7

 

Date 

Presented 

to GCCF

Claim 

No. Claim Type

Amount 

Claimed 

GCCF 

Status 

04/28/2011 9346871 Interim 2 (ICQ22011) ----- Denied

06/30/2011 9410678 Interim 3 (ICQ32011) $5,272.93 Denied

09/30/2011 9516807 Interim 4 (ICQ42011) $3,481.44 Denied

12/31/2011 9552716 Interim 5 (ICQ52012) $3,170.40 Denied

04/02/2012 9588479 Interim 6 (ICQ62012) $3,429.60 Deficient

Based upon the evidence provided by the Claimant, it appears that the subject matter for the 

Claimant’s GCCF claims is the same as the subject matter of the claim before the NPFC, i.e., 

that due to the Deepwater Horizon oil spill, the Claimant’s job was relocated and he had 

increased driving expenses. The NPFC deems that the Claimant’s GCCF loss of earnings claims 

were properly presented to the responsible party and properly presented to the NPFC.8

 The 

NPFC deems that the Claimant’s claim for loss of earnings was properly presented to the 

responsible party and properly presented to the NPFC to the extent that those damages were 

presented to the responsible party. 9

 Accordingly, this Claim Summary Determination for NPFC 

Claim N10036-1660 considers and addresses the earnings claimed in the claims presented to the 

7 Report from the GCCF dated 17 April 2012. 8 The NPFC did not consider the Claimant’s Interim 6 claim because there was not valid presentment. A claim 

must have either been wholly or partially denied by the responsible party or the claim must have gone 90 days 

without action from the responsible party for proper presentment. For the Interim 6 claim, there has been no final 

action from the GCCF; nor has 90 days elapsed since 02 April 2012. 

9 Under 33 C.F.R. § 136.103(a), all claims for removal costs or damages must be presented first to the responsible 

party (RP). Based on the information provided by the GCCF, the NPFC is unable to verify the amount of damages 

claimed to the GCCF for the Claimant’s Interim 2 claim. 

 
responsible party, specifically; GCCF Claim #’s 9346871 (ICQ22011), 9410678 (ICQ32011), 

9516807 (ICQ42011), and 9552716 (ICQ52012). 

The documentation submitted by the Claimant indicated that the Claimant filed a claim in the 

multidistrict litigation now pending in the United States District Court for the Eastern District of 

Louisiana (MDL-2179 In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf Of 

Mexico, on April 20, 2010) against BP (the “MDL”) on 20 April 2011. Although, under the Oil 

Pollution Act of 1990, the NPFC may not approve and certify the payment of a claim during the 

pendency of an action by the person in court to recover costs which are the subject of the claim, 

the NPFC may adjudicate such a claim to determine whether it may be compensable. Where 

appropriate, such a claim may be denied.

NPFC Determination

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 NPFC considered all documentation presented by the 

Claimant.

This claim is denied because the Claimant failed to prove that he experienced a financial loss due 

to the Deepwater Horizon oil spill. The Claimant provided a letter from API confirming the 

Claimant’s assertions that the Claimant’s job was relocated due to a decline in business at API 

caused by the Deepwater Horizon oil spill. 10 On 19 March 2012, the NPFC contacted API to 

confirm the authenticity of the submitted letter as well as procure additional information 

regarding the effects of the Deepwater Horizon oil spill on API’s business. API confirmed the 

validity of the submitted letter to the NPFC. Further, the NPFC was informed that there were 

two reasons for the losses experience by API; one being the moratorium on drilling.11 

The second reason offered by API for their losses was that API provides navigation tools for oil 

platforms that are not in production and, due to the Deepwater Horizon oil spill, the oil 

companies dismantled these platforms and took them out of service; thus there was no need for 

API’s services.12 Information gathered by the NPFC indicates that the dismantling of unused oil 

equipment in the Gulf of Mexico by oil and gas companies was enacted due to a Notice to 

Lessees issued by the Department of the Interior and the Bureau of Ocean Energy Management, 

Regulation and Enforcement on 15 September 2010, to be effective on 15 October 2010.13 The 

rationale offered for this notice was that it was “part of a sustained effort to improve the safety of 

10Letter from API to the GCCF, dated 18 August 2011.

11 PHONECON between API and the GCCF on 19 March 2012. 12 PHONECON between API and the GCCF on 19 March 2012. 13 News Release from the U.S. Department of the Interior on 15 September 2010 - “Notice Updates Procedures for 

Decommissioning Offshore Wells, Platforms.” Accessed on 24 April 2012 at: 

http://www.doi.gov/news/pressreleases/Interior-Department-Issues-Idle-Iron-Guidance.cfm

 
energy production on the Outer Continental Shelf and strengthen environmental protections.”14 

Elsewhere, the NPFC found information indicating that this notice “was triggered by the findings 

of a 2008 MMS review on the presence of idle infrastructure in the GoM.”15 

Consequently, the Claimant failed to prove that his alleged loss was a result of the Deepwater 

Horizon oil spill as opposed to other factors such as the drilling moratorium, which is considered 

an intervening factor and thus not a consequence of the oil spill, or the Notice to Lessees issued 

for oil rig dismantling, which is also not a consequence of the oil spill. 

This claim is denied because the Claimant failed to demonstrate that the alleged loss is due to the 

injury, destruction or loss of property or natural resources as a result of a discharge or substantial 

threat of a discharge of oil

Claims Supervisor: NPFC Claims Adjudication Division

Date of Supervisor’s Review: 4/25/12

Supervisor’s Action: Denial approved

Supervisor’s Comments: 

14 News Release from the U.S. Department of the Interior on 15 September 2010 - “Notice Updates Procedures for 

Decommissioning Offshore Wells, Platforms.” Accessed on 24 April 2012 at: 

http://www.doi.gov/news/pressreleases/Interior-Department-Issues-Idle-Iron-Guidance.cfm 15 News Article written by DecomWorld - “DecomWorld Findings Reveal US Idle Iron Mandate puts £3.5bn Price 

Tag on GoM Decommissioning Market.” Accessed on 24 April 2012 at: 

http://www.prweb.com/releases/2010/09/prweb4552314.htm