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BP Exploration & Production, Inc. v. Claimant ID 100281817

United States Court of Appeals, Fifth Circuit

March 20, 2019

BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION COMPANY; BP, P.L.C., Requesting Parties-Appellants,
v.
CLAIMANT ID 100281817, Objecting Party-Appellee.

          Appeal from the United States District Court for the Eastern District of Louisiana

          Before JONES, HAYNES, and OLDHAM, Circuit Judges.

          ANDREW S. OLDHAM, CIRCUIT JUDGE.

         An NBA player named David West negotiated a contract with the New Orleans Hornets before the Deepwater Horizon oil spill. He received every penny specified in that contract both before and after the spill. Still, the Claims Administrator for the Deepwater Horizon Economic and Property Damages Settlement Agreement awarded West almost $1.5 million in "lost" earnings. The Settlement Appeal Panel affirmed, and the district court denied discretionary review. We reverse.

         I.

         The Deepwater Horizon oil rig exploded on April 20, 2010. At that time, David West played professional basketball for the New Orleans Hornets (now known as the New Orleans Pelicans). He was four years into a five-year contract. That contract paid West a total of $45 million. But it was "front-loaded," meaning West's annual salary decreased every year of the contract- including from 2009 to 2010. West received all $45 million owed to him under the contract.

         Still, he submitted an "Individual Economic Loss Claim" under the Deepwater Horizon Economic and Property Damages Settlement Agreement ("Settlement").[1] These claims can be submitted only by individuals "who seek compensation for lost earnings from employment due to or resulting from the [Deepwater Horizon] Spill." Settlement Agreement Ex. 8A at 1 (emphasis added). And the Individual Economic Loss Claim form states, on its very first page, that it covers only "individuals who have experienced income losses caused by the Spill." Individual Economic Loss Claim Form 1 (emphasis added). It also required West to certify "that the information provided in [his] Claim Form [was] true and accurate to the best of [his] knowledge." Id. at 15. Based on that attestation, the Claims Administrator used West's tax forms to calculate his "lost earnings." The Claims Administrator determined West was entitled to $1, 412, 673.06. BP contested that determination because West "lost" nothing-he received all the money promised by the front-loaded terms of his pre-spill contract.

         BP first sought reversal before the Appeal Panel. It argued West was not entitled to any award under the Agreement because (1) Individual Economic Loss Claimants can recover only if they experienced a loss caused by the spill, and (2) West cannot satisfy the Settlement's attestation requirements. The Appeal Panel affirmed West's award. It concluded West established causation because his employer-the Hornets-benefited from presumed causation under the Settlement. It therefore held West needed nothing more to claim "lost" earnings.

         BP asked the district court to review the award decision. But the court denied discretionary review without explanation. BP timely appealed.

         II.

         Our review is for abuse of discretion. Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313, 315 (5th Cir. 2016). The district court abuses its discretion when "the decision not reviewed by the district court actually contradicted or misapplied the Settlement Agreement, or had the clear potential to contradict or misapply the Settlement Agreement." Ibid. (quotation omitted). It's likewise "an abuse of discretion to deny a request for review that raises a recurring issue on which the Appeal Panels are split if the resolution of the question will substantially impact the administration of the Agreement." Claimant ID 100212278 v. BP Expl. & Prod., Inc., 848 F.3d 407, 410 (5th Cir. 2017) (per curiam) (quotation omitted). In contrast, denying "a request for review that involve[s] no pressing question of how the Settlement Agreement should be interpreted or implemented, but simply raise[s] the correctness of a discretionary administrative decision in the facts of a single claimant's case," does not amount to an abuse of discretion. Ibid. (quotation omitted) (alterations in original).

         That said, the Settlement Agreement is a contract. The proper interpretation of it "is a question of law." In re Deepwater Horizon (Deepwater Horizon I), 732 F.3d 326, 345 (5th Cir. 2013). And making "an error of law constitutes an abuse of discretion." In re Deepwater Horizon, 785 F.3d 986, 999 (5th Cir. 2015). Accordingly, when the district court is "presented with purely legal questions of contract interpretation," our review is de novo. In re Deepwater Horizon, 785 F.3d 1003, 1011 (5th Cir. 2015).

         A.

         We start with the contractual provisions governing West's claim. West submitted a specific type of claim-an "Individual Economic Loss Claim." It is defined to include a claim brought by an individual described in Exhibit 8A. Exhibit 8A, in turn, ...


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