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BP Exploration & Production Inc. v. Claimant ID

United States Court of Appeals, Fifth Circuit

March 26, 2019

CLAIMANT ID, Objecting Party - Appellee.

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

          Before HIGGINBOTHAM, ELROD, and DUNCAN, Circuit Judges.

          PER CURIAM

         This case presents another appeal arising out of the Deepwater Horizon disaster and the resulting BP Deepwater Horizon Economic and Property Damages Settlement (Settlement Agreement). Here, BP contends that Claimant was not entitled to the $65 million award it received pursuant to the Settlement Agreement because it did not suffer a loss that was caused by the oil spill despite submitting a claim form certifying that it did. Because the district court did not abuse its discretion in declining discretionary review, we AFFIRM.


         Claimant is a manufacturer of electrical transformers and other industrial products. In November 2012, it filed a Business Economic Loss Claim Form (Claim Form) pursuant to the Settlement Agreement. The Claim Form explains that Business Economic Loss (BEL) Claims are for businesses "that assert economic loss due to the Spill," and instructs claimants to "submit certain Supporting Documentation to prove [their claims]." The Claim Form also requires claimants to certify under penalty of perjury that the information provided is "true and accurate" and that the supporting documents are "true, accurate, and complete." Prior decisions of this court have referred to this certification as the "attestation." E.g., In re Deepwater Horizon (Deepwater Horizon III), 744 F.3d 370, 376-77 (5th Cir. 2014).

         As a class member located in economic loss Zone D, Claimant also had to satisfy one of the causation tests set out in Exhibit 4B to the Settlement Agreement to recover on its economic loss claim. The parties do not dispute that Claimant satisfied one of these tests: the V-shaped revenue pattern test.

         After reviewing the Claim Form, the Claims Administrator awarded Claimant $65 million. BP appealed to a three-member Appeal Panel, arguing inter alia that "the claim does not comply with the attestation requirement as recognized in" this court's opinion in Deepwater Horizon III. BP also noted the following in its recitation of the facts: (1) due to the economic recession and regulatory changes, Claimant's revenue decreased significantly from 2007 to 2009 and increased in 2010; and (2) in 2009, Claimant entered into an unfavorable take-and-pay contract which required it to purchase more steel than it needed at above-market prices. While BP did not brief the issue fully before the Appeal Panel due to a stipulation by the parties, its briefs on appeal make clear that it believes these facts prove that Claimant did not suffer any post-spill "loss" that was "caused by" the oil spill despite filing a certified Claim Form indicating that it had.

         The Appeal Panel unanimously ruled in favor of Claimant. Rejecting BP's attestation argument, the Panel emphasized that "[t]his position has been rejected by every Panel that has considered it and it will be rejected here as well," although the issue was preserved for appeal. It further noted that the information BP provided regarding market factors that affected Claimant's business was not "material to the assessment of this appeal." BP sought discretionary review by the district court, [1] which the district court denied. BP now appeals.


         We review the district court's denial of discretionary review for an abuse of discretion. Claimant ID 100250022 v. BP Expl. & Prod., Inc., 847 F.3d 167, 169 (5th Cir. 2017). The district court abuses its discretion if the underlying Appeal Panel 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." Id. (quoting Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313, 315 (5th Cir. 2016)). It is also 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) (quoting In re Deepwater Horizon, 632 Fed.Appx. 199, 203-04 (5th Cir. 2015)).


         BP contends that the district court erred in denying discretionary review for two reasons: (1) Claimant did not suffer a post-spill "loss," a "threshold requirement" separate from the Exhibit 4C loss compensation formula; and (2) Claimant's attestation that its loss was "due to the Spill" ...

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