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In re Oil Spill

United States District Court, E.D. Louisiana

March 29, 2018

In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010 This Document Relates to: Nos. 12-970, 18-435, 17-16366, 17-16241, 17-17789, 17-16248, 17-16266, 17-16245, 17-17790

         SECTION: J


          ORDER & REASONS

          BARBIER, JUDGE

         Before the Court are multiple Motions to Require Immediate Payment or a Supersedeas Bond, [1] BP's opposition (Rec. Doc. 24141), and Movants' replies (Rec. Docs. 24212, 24214). The Court, having considered the parties' arguments, the applicable law, and the relevant record, denies the motions for the reasons stated below.

         Movants are eight claimants in the Economic and Property Damages Settlement. (“Economic Settlement” or simply “Settlement, ” Rec. Doc. 6430), which is administered by the Court Supervised Settlement Program (“CSSP”). Movants each prevailed before the Settlement's Appeal Panel, and BP requested discretionary court review pursuant to § 6.6 of the Settlement. The Court denied review, and BP appealed to the Fifth Circuit. Those appeals are pending. Meanwhile, in this Court, Movants filed the instant motions.

         The CSSP's current practice is that it does not pay an eligible claim until all appeals relative to that claim, including appeals to the Fifth Circuit, are exhausted or the time for taking an appeal has expired. In accordance with this practice, the CSSP has not paid Movants' claims. Movants argue that the Court's “Order and Judgment” denying BP's request for discretionary review is effectively a final money judgment to which Fed.R.Civ.P. 62(d) and Local Rule 62.2 apply.[2]Therefore, Movants request that the Court either require the CSSP to immediately pay their claims or require BP to posts a supersedeas bond in the amount of the judgment plus 20%. Alternatively, Movants contend that the Court's Order and Judgment is an injunctive order-because it effectively directs the CSSP to pay Movants' claims-and BP should be required to post a supersedeas bond under Fed.R.Civ.P. 62(c) in order to stay the injunction pending appeal.

         BP responds with three arguments. First, BP contends that the denial of discretionary review is not the equivalent of a money judgment or even an injunction, so Fed.R.Civ.P. 62 does not apply and no bond is required. Second, BP argues that Economic Settlement governs here, not Fed.R.Civ.P. 62, and the Settlement does not require BP to post a bond when it appeals an individual claim. Third, assuming that a denial of discretionary review is a money judgment and the Economic Settlement does not waive Fed.R.Civ.P. 62, BP urges the Court to use its discretion to exempt BP from posting a bond.

         As to BP's second argument, the Court disagrees. As recognized by the Fifth Circuit, the Settlement is entirely silent about whether there is a right to appeal to the Fifth Circuit after the discretionary review stage. In Re Deepwater Horizon, 785 F.3d 986, 993-94, 997 (5th Cir. 2015). In fact, the Court of Appeals agreed with BP's position that because the Settlement did not expressly waive the ability to appeal, the parties had preserved that right. Id. at 997. Furthermore, the Court of Appeals found that Fed.R.Civ.P. 79 and Fed. R. App. P. 4 applied to this Court's rulings on requests for discretionary review and appeals therefrom. See Id. at 998; see also In Re Deepwater Horizon, 785 F.3d 1003, 1011 & n.5 (5th Cir. 2015). Just as the Settlement is silent with respect to the right to appeal, the Settlement also makes no mention of Fed.R.Civ.P. 62 or a supersedeas bond. Following the rationale of the Fifth Circuit's opinions, then, the Settlement does not waive or prohibit the application of Fed.R.Civ.P. 62.

         As to BP's first argument, the Court will simply assume that the denial of a request for discretionary review is equivalent to a final money judgment to which Fed.R.Civ.P. 62(d) applies and move on to whether the Court should exercise its discretion to waive the requirement for a supersedeas bond.

         “The purpose of a supersedeas bond is to preserve the status quo while protecting the non-appealing party's rights pending appeal.” Poplar Grove Planting & Ref. Co. v. Bache Halsey Stuart, Inc., 600 F.2d 1189, 1190-91 (5th Cir. 1979). “Rule 62(d) establishes a general rule that losing parties in the district court can obtain a stay pending appeal only by giving a supersedeas bond.” Enserch Corp. v. Shand Morahan & Co., Inc., 918 F.2d 462, 463-64 (5th Cir. 1990). This rule is not without exceptions, however. “If a court chooses to depart from the usual requirement of a full security supersedeas bond to suspend the operation of an unconditional money judgment, it should place the burden on the moving party to objectively demonstrate the reasons for such a departure.” Poplar Grove, 600 F.2d at 1191. The Fifth Circuit has “recognized an exception to this general rule for situations in which the losing party ‘objectively demonstrates a present financial ability to facilely respond to a money judgment and presents to the court a financially secure plan for maintaining the same degree of solvency during the period of the appeal.'” Enserch Corp., 918 F.2d at 464 (quoting Poplar Grove, 600 F.2d at 1191). This is not the only circumstance where an appellant may be relieved of the bond requirement. See Id. (citing Bronson v. La Crosse & Milwaukee R.R. Co., 68 U.S. (1 Wall.) 405, 410 (1864); N. Indiana Pub. Serv., Co. v. Carbon Cty. Coal Co., 799 F.2d 265, 281 (7th Cir. 1986)).

         The CSSP issues settlement payments from the Settlement Trust, which is funded by BP Exploration and Production Inc. (“BPXP”) and BP America Production Company (“BPAPC”), who are the “Primary Obligors” under the Economic Settlement. (Settlement §§ 5.12.1,, 38.14, Rec. Doc. 6430-1; Settlement, Ex. 24A, Rec. Doc. 6430-42). The Primary Obligors' promise to fund the Settlement Trust is backed by two guarantees-first by BP Corporation North America Inc. (“BPCNA”) and then by BP p.l.c. (Settlement, Ex. 24A & 24B, Rec. Doc. 6430-42, -43). As of December 31, 2017, the CSSP has issued over $11 billion in payments to 129, 000 claimants. (Status Report, Rec. Doc. 23875-1 at 2). According to a declaration by Michael T. Robertson, BP America's Finance Director and Controller, the Primary Obligors have thus far satisfied their duties to fund the Settlement Trust without needing BPCNA or BP p.l.c. to step in as guarantors. (Rec. Doc. 24141-1 ¶ 6). Mr. Robertson further states that BPXP, BPAPC, BPCNA, and BP p.l.c. are all financially sound and none are at risk of becoming insolvent in the foreseeable future. (Rec. Doc. 24141-1 ¶¶ 6-7). While these guarantees may not fit usual definition of a supersedeas bond and they are not specific to Movants' claims, the fact remains that BP has already provided two blanket financial protections for the benefit of the entire Settlement Class, which suggests that an additional supersedeas bond for each claim appealed would be redundant.

         Movants respond that “a single declarant's unsubstantiated belief that [BP] will be able to respond to any judgments in the future . . . . is a far cry from ‘a financially secure plan for maintaining the same degree of solvency during the period of the appeal' as required [by the Fifth Circuit in] Poplar Grove.” (Rec. Doc. 24212 at 5). Perhaps Mr. Robertson's declaration is not quite the plan Poplar Grove envisioned, but the Court does not rest its decision on the declaration alone. As noted above, Poplar Grove did not set forth the only exception to Rule 62's full supersedeas bond requirement. Here, the Court's decision to deny the instant motions is based on other considerations in addition to Mr. Robertson's declaration, as discussed below.

         As the Fifth Circuit has recognized, “this case is no ordinary class action.” In Re Deepwater Horizon, 819 F.3d 190, 197 (5th Cir. 2016). It is “particularly complex, even epic, ” “gargantuan, ” and “nearly unprecedented” in scope and size. Id.; In Re Deepwater Horizon, 793 F.3d 479, 490 (5th Cir. 2015). Consequently, this Court “has especially strong and flexible managerial power in this highly complex [multidistrict litigation].” In Re Deepwater Horizon, 819 F.3d at 198.

         Since at least July 2015, the CSSP's practice has been to withhold paying a claim until all appeals, including appeals to the Fifth Circuit, are fully resolved. (See Rec. Doc. 14812-1 at 7, amended by Rec. Docs. 15575, 15643). This Court approved of that process, and it was not challenged until recently. The Court has now ruled on approximately 3, 000 requests for discretionary review. More requests for discretionary review[3] and more appeals to the ...

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