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ID 100028922 v. BP Exploration & Prodn, I, 17-30190 (2017)

Court: Court of Appeals for the Fifth Circuit Number: 17-30190 Visitors: 64
Filed: Oct. 13, 2017
Latest Update: Mar. 03, 2020
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals No. 17-30190 Fifth Circuit FILED Summary Calendar September 27, 2017 Lyle W. Cayce CLAIMANT ID 100028922, Clerk Requesting Party–Appellant, v. BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION COMPANY; BP, P.L.C., Objecting Parties–Appellees. Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 2:17-CV-690 Before JOLLY, OWEN, and HAYNES, Circuit Judges.
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           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                        United States Court of Appeals

                                    No. 17-30190
                                                                                 Fifth Circuit

                                                                               FILED
                                  Summary Calendar                     September 27, 2017
                                                                          Lyle W. Cayce
CLAIMANT ID 100028922,                                                         Clerk


              Requesting Party–Appellant,

v.

BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,

              Objecting Parties–Appellees.




                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:17-CV-690


Before JOLLY, OWEN, and HAYNES, Circuit Judges.
PER CURIAM:*
       This case comes to us from the Deepwater Horizon Economic & Property
Damages Settlement Agreement (Settlement Agreement). Claimant sought
recovery under the Settlement Agreement, but the Claims Administrator
denied the claim. The Appeal Panel upheld the denial. Claimant then sought
discretionary review in the Eastern District of Louisiana, but the district court


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
                                  No. 17-30190
denied review. Claimant has appealed that denial. Because the district court
acted within its discretion when it declined to review Claimant’s case, we
affirm.
                                        I
         Since July 2008, Claimant has operated an extended-stay motel in
Beaumont, Texas. Four years after the Deepwater Horizon oil spill, Claimant
filed a Business Economic Loss Claim to the Court Supervised Settlement
Program (Program) under the Settlement Agreement.               Claimant sought
recovery for spill-related business economic losses.
         Under Exhibit B of the Settlement Agreement, a claimant may recover
only for spill-related losses. Depending on a claimant’s location, Exhibit 4B
requires that certain claimants satisfy any one of three possible revenue tests:
the v-shaped revenue test, the modified v-shaped revenue test, or the decline-
only revenue test. Because of its location, Claimant had to satisfy one of these
tests.
         Each revenue test, at a minimum, compares the claimant’s revenue
during a pre-spill Benchmark Period to the claimant’s revenue during
particular post-spill periods. The claimant can satisfy either v-shaped revenue
test by showing that its post-spill revenue decline and subsequent recovery
followed one of two v-shaped patterns. If a claimant fails both v-shaped tests,
it might still satisfy the decline-only test. That test requires demonstrating:
(1) a post-spill revenue decrease of 15% or more compared to the Benchmark
Period; (2) that factors outside a claimant’s control prevented revenue recovery
in 2011; and (3) that the claimant lost certain kinds of customers after the spill.
         On initial review, the Claims Administrator determined that Claimant
failed all three revenue tests and denied the claim. Claimant failed both
v-shaped revenue tests, no matter which Benchmark Period it used.


                                        2
                                 No. 17-30190
      Claimant also failed the decline-only test. Program accountants used
the 2008–2009 Benchmark Period to find that Claimant satisfied the test’s first
step. They also concluded Claimant would not have satisfied the first step
using the 2009-only Benchmark Period. Claimant did not, however, satisfy the
test’s second step, because it could not identify factors beyond its control that
prevented revenue recovery in 2011.        The accountants documented these
results in the Accountant Calculation Schedules’ Causation Results section,
which Claimant could access.      Concluding that Claimant failed all three
possible revenue tests, the Claims Administrator denied the claim.
      Claimant next sought re-review.         During that process, Program
accountants discovered a mistake in their earlier calculations. They found that
Claimant could not use 2008 in its Benchmark Period. A claimant may include
a particular year in the Benchmark Period only if the claimant operated its
business for six months or more during that year. But Claimant provided
accounting statements for only five months of 2008—August through
December. When Program accountants asked Claimant for pre-August 2008
operating history, Claimant explained that it had no pre-August 2008
statements because August was its first full month of business. Accordingly,
the accountants determined that the 2009-only Benchmark Period was the
only eligible period. The accountants explained—both in a new note to the
supporting schedules (Note 10) and on the Calculation Summary—that the
2008–2009 Benchmark Period was unavailable.            Without the 2008–2009
Benchmark Period, Claimant no longer satisfied step one of the decline-only
revenue test. The accountants failed to update the Causation Results section—
it continued (erroneously) to conclude that Claimant satisfied the first step of
the decline-only test and failed the second.      After re-review, the Claims
Administrator maintained that Claimant could not satisfy any of Exhibit 4B’s
revenue tests and denied the claim.
                                       3
                                No. 17-30190
      Following re-review, Claimant asked for reconsideration. Claimant’s
arguments during reconsideration focused only on the decline-only test’s
second step. Claimant provided no pre-August 2008 operating history and did
not dispute that the 2008–2009 Benchmark Period was unavailable.
Accordingly, the accountants continued to note that, without more
documentation from Claimant, the 2008–2009 Benchmark Period remained
unavailable. Again, they failed to update the Causation Results section to
reflect that Claimant now failed—instead of passed—step one of the
decline-only test.    The Claims Administrator denied the claim after
reconsideration.
      Claimant brought the claim to the Appeal Panel. The Appeal Panel
focused at first on the decline-only test’s third step, and it asked the Claims
Administrator to explain how Claimant had failed that step. In its Summary
of Review, the Claims Administrator told the Appeal Panel that Program
accountants did not analyze step three of the decline-only test because
Claimant had so clearly failed step one. Satisfied with this explanation, the
Appeal Panel denied the claim. The Appeal Panel regretted that the Program
didn’t better communicate to Claimant why it failed Exhibit 4B’s causation
requirements. But the Appeal Panel concluded that the Program’s imperfect
communication was also harmless because Claimant failed all revenue
causation tests under the 2009-only Benchmark Period, the only period it was
entitled to use.
      After the Appeal Panel’s decision, Claimant petitioned for discretionary
review in the Eastern District of Louisiana, and the district court declined to
review the appeal. Claimant now appeals the district court’s decision.




                                      4
                                       No. 17-30190
                                              II
       The district court has discretion to deny review of the Appeal Panel’s
decision, and we review the district court’s decision for abuse of discretion. 1
       While we have not defined the exact limits of a district court’s discretion
to deny review, 2 we have said that a district court abuses its discretion when
it denies review and one of the following factors exist: (1) the request for review
raises an issue that has split the Appeal Panels and would substantially
impact the Settlement Agreement’s administration once resolved; 3 (2) the
dispute concerns a pressing question about how to interpret the Settlement
Agreement’s rules; 4 or (3) the Appeal Panel misapplied or contradicted the
Settlement Agreement, or had the clear potential to do so. 5
       We have also been careful not to transform discretionary review into
mandatory review. 6 Accordingly, the district court need not review a claim
that raises a non-pressing Settlement Agreement interpretation issue 7 or
merely challenges “the correctness of a discretionary administrative decision
in the facts of a single claimant’s case.” 8




       1  Claimant ID 100212278 v. BP Expl. & Prod., Inc., 
848 F.3d 407
, 410 (5th Cir. 2017)
(per curiam).
        2 See 
id. 3 Id.
        4 
Id. 5 Id.;
Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 
829 F.3d 313
, 315 (5th Cir. 2016).
        6 See, e.g., Claimant ID 
100212278, 848 F.3d at 410
; In re Deepwater Horizon, 
785 F.3d 986
, 999 (5th Cir. 2015) (“We do not intend any part of this opinion to turn the district
court's discretionary review into a mandatory review. To do so would frustrate the clear
purpose of the Settlement Agreement to curtail litigation.”).
        7 Holmes Motors, 
Inc., 829 F.3d at 316
.
        8 Claimant ID 
100212278, 848 F.3d at 410
(quoting In re Deepwater Horizon (Sexton),

641 F. App’x 405, 410 (5th Cir. 2016) (per curiam)).
                                               5
                                 No. 17-30190
                                      III
      The district court did not abuse its discretion when it declined to review
the Appeal Panel’s decision, because Claimant has not shown that any of the
abuse-of-discretion factors are present.
                                       A
      First, Claimant’s request for review does not raise an issue that has split
the Appeal Panel and that would, once resolved, substantially impact the
administration of the Settlement Agreement.
      According to Claimant, the Appeal Panel split from two past Appeal
Panel interpretations of the Settlement Agreement when it declined to remand
the case back to the Claims Administrator. But the purported split doesn’t
exist, because the decisions that Claimant cites turn only on their facts.
      In those decisions, the Claims Administrator had found that the
claimants’ documentation did not satisfy Exhibit 4B. In both cases, the Appeal
Panel remanded the case to the Claims Administrator. In one case, the Appeal
Panel decided to remand because the Claims Administrator never gave
claimant notice about the specific documentation that the claimant lacked.
The Appeal Panel chose to remand the other case because the Claims
Administrator never gave the claimant a chance to provide the necessary
documentation.
      But in this case, the Program notified Claimant more than once about
the documentation deficiency, and it gave Claimant several opportunities to
provide the missing documentation. Claimant’s first notice and opportunity to
respond came nine months before the final Appeal Panel decision when the
Program asked Claimant for evidence of pre-August 2008 operations.
Claimant’s attorney responded, explaining that pre-August 2008 operating
history was unavailable.     Claimant received additional notice and more
opportunities to respond during the re-review and reconsideration process.
                                       6
                                    No. 17-30190
During both re-review and reconsideration, the Program’s supporting
documents (which Claimant could access) explained that the 2008–2009
Benchmark Period remained ineligible without pre-August 2008 operating
history.    There is no split: the Appeal Panels reached different decisions
because they faced different facts.
      Claimant’s alleged split would also not concern an issue that
“substantially impact[s] the administration of the Agreement.” 9               Because
review is discretionary, district courts are not required to review every
potential Appeal Panel disagreement.                 Only those splits that would
substantially impact the Settlement Agreement’s administration merit
review. 10 Claimant has not identified a split over a question so impactful that
a district court must review it.
                                            B
      This dispute does not concern a pressing question about how to interpret
the Settlement Agreement’s rules.
      The     parties   disagree    about       facts,   not   Settlement   Agreement
interpretation. Neither party disputes which Settlement Agreement rules
apply or what the rules provide. In fact, both parties agree that the Settlement
Agreement requires that Claims Administrators provide claimants with notice
and opportunities to be heard. Instead, Claimant and BP disagree about
whether the Program gave Claimant (1) notice that the 2008–2009 Benchmark
Period was ineligible and (2) an opportunity to respond.               Those are not
questions about how the Settlement Agreement should be interpreted or
implemented, they are questions about what happened during the process.




      9  Claimant ID 
100212278, 848 F.3d at 410
(quoting In re Deepwater Horizon (Smith),
632 F. App’x. 199, 203-04 (5th Cir. 2015) (per curiam)).
       10 See Claimant ID 
100212278, 848 F.3d at 410
.

                                            7
                                       No. 17-30190
       Even if the Appeal Panel had interpreted the Settlement Agreement’s
notice requirements, that still would not present a pressing interpretive
question. We do not ask district courts to review every claim that poses an
interpretive issue. We require review only when the Appeal Panel’s decision
involves a non-isolated or substantial error of interpretation. 11 This Appeal
Panel decision does not contain a non-isolated or substantial error of
interpretation.
                                             C
       Finally, the Appeal Panel’s decision did not misapply or contradict the
Settlement Agreement, nor did it have the clear potential to do so.
       We consider not whether there is a disagreement about what the
Settlement Agreement means, but instead whether the Appeal Panel erred in
applying it. Nor do we ask district courts to consider every claim that involves
a possible misapplication or contradiction. We instead require review only if
the Appeal Panel’s decision was “incongruent with the language of the
Settlement Agreement.” 12            We cannot say that the Appeal Panel acted
incongruently with the Settlement Agreement when it concluded that
Claimant received all the notice that the Settlement Agreement requires.
                                 *           *           *
       Claimant’s request for review raises none of the abuse-of-discretion
factors. Thus, the district court acted within its discretion when it denied
Claimant’s request. On that basis, we AFFIRM the district court’s decision.




       11 See 
id. 12 Claimant
ID 100250022 v. BP Expl. & Prod., Inc., 
847 F.3d 167
, 170 (5th Cir. 2017)
(per curiam).
                                             8

Source:  CourtListener

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