     Case: 18-30801      Document: 00514958147         Page: 1    Date Filed: 05/15/2019




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                          FILED
                                                                        May 15, 2019
                                      No. 18-30801
                                                                       Lyle W. Cayce
                                                                            Clerk
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,

               Requesting Parties - Appellees

v.

CLAIMANT ID 100315902,
         Objecting Party - Appellant



                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:18-CV-5083


Before HIGGINBOTHAM, JONES, and COSTA, Circuit Judges.
GREGG COSTA, Circuit Judge:*
       This is another appeal from the Deepwater Horizon settlement program.
Instead of the appeal we usually see challenging the district court’s refusal to
exercise its discretion to review a claim, this time the appellant contends that
the district court abused its discretion because it reviewed a claim.                  The
principal objection is that the district court rejected the claim on a ground that
BP did not raise when seeking review. Because the district court did not abuse




       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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its discretion in ensuring that the settlement agreement was followed, we
AFFIRM.
                                       I.
                                       A.
      The facts of the Deepwater Horizon explosion, and the flurry of lawsuits
that followed, are well known to this court. See In re Deepwater Horizon, 732
F.3d 326, 329–330 (5th Cir. 2013). After the lawsuits were consolidated in New
Orleans federal court, that court approved the parties’ Economic and Property
Damages Settlement Agreement.         In re Oil Spill by Oil Rig “Deepwater
Horizon”, 910 F. Supp. 2d 891 (E.D. La. 2012), aff’d sub nom. In re Deepwater
Horizon, 739 F.3d 790 (5th Cir. 2014). Qualified persons and entities can file
claims in the court-supervised settlement program.        The claims are then
reviewed by a court-appointed claims administrator.
      The claimant in this case, McWhorter & Company, is located in the
furthest zone from the spill, Zone D. It thus must show causation by satisfying
one of the six tests set forth in Exhibit 4B of the Settlement Agreement.
Claimant ID 100051301 v. BP Expl. & Prod., Inc., 694 F. App’x 236, 237 (5th
Cir. 2017).
      Claimant chose the “decline-only” causation test. The test requires three
showings. First, the claimant must show its revenue declined by at least 15%
in a three-month period following the spill when compared to that same period
before the spill.    Second, and central to the district court’s decision, the
claimant must provide “[s]pecific documentation” showing that one of six listed
factors outside the claimant’s control prevented its revenue from increasing
again after the spill. For example, the claimant could show the entry of a new
competitor, nearby road closures, or bankruptcy of a significant customer. The
idea is that such an event explains why revenues did not recover in 2011, which
would otherwise be expected if the spill caused the 2010 revenue decline.
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Third, and central to the Appeal Panel’s decision, the business must provide
what is known as “customer mix” data. This means the claimant must show a
sufficient decline in either the share of its total revenue from non-local
customers or the share of its total revenue from customers located near the
spill. See Claimant ID 100128765 v. BP Expl. & Prod., Inc., 709 F. App’x 771,
772–73 (5th Cir. 2017) (per curiam).
                                       B.
        Claimant is an Alabama-based construction company. Over the course
of 20 years before the Deepwater Horizon spill, it built around 200 Lowe’s
Home Improvement stores. It did not, however, contract directly with Lowe’s.
Instead, the company’s affiliate, McWhorter Properties, contracted with Lowe’s
and then subcontracted to Claimant. This affiliate oversaw the work, and
Claimant invoiced the affiliate for all work it completed. The year following
the spill, however, work on Lowe’s stores came to a halt when that company
stopped construction of most new stores nationwide.        As a result, Lowe’s
cancelled two contracts with the affiliate, for which Claimant was to do the
work.
        Claimant sought roughly $2.9 million from the Settlement Program. The
claims administrator denied the claim three times.        After the last denial,
Claimant appealed the decision to an Appeal Panel. Claimant’s brief discussed
all three causation requirements but focused on the last one—customer mix
data—based on its understanding that it was the reason the administrator had
denied the claim. The Panel vacated the denial and remanded the claim.
Consistent with Claimant’s brief, the Panel discussed only how the claims
administrator handled the third showing. On that question about customer
mix data, the Panel held that the administrator incorrectly categorized
Claimant’s invoices based on the location of the Lowe’s Stores. Instead, it
should have categorized the invoices based on the location of the affiliate,
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                                  No. 18-30801
because the affiliate was Claimant’s customer. The Panel thus remanded the
case with instructions that the customer mix data be recalculated based on the
affiliate’s residence, not location of the Lowe’s stores.
      BP sought district court review. The court granted review and reversed
the Panel decision. It addressed not customer mix data but whether Claimant
satisfied step two. It held that, because the Appeal Panel found Lowe’s was
not Claimant’s customer, Claimant could not show that one of the six exclusive
factors accounted for its continued revenue decrease. The relevant customer
(Claimant’s affiliate) may have lost customers in 2011, but that is not a listed
factor. Claimant appealed.
                                        II.
      When a party takes issue with the district court’s decision to review a
given claim—the thrust of Claimant’s appeal—we review only for abuse of
discretion. In re Deepwater Horizon, 785 F.3d 1003, 1011 (5th Cir. 2015). But
if we end up reviewing the settlement agreement in answering that question,
we follow the normal rule that questions of contract interpretation are
considered de novo. Id.
      Claimant argues that the district court abused its discretion by
considering an argument that BP allegedly failed to raise at any stage of the
proceeding: whether Claimant met the second requirement of the causation
test. BP forfeited this argument, Claimant contends, under both traditional
forfeiture law and the district court’s own rules for discretionary review. See
In re Goff, 812 F.2d 931, 933 (5th Cir. 1987) (per curiam); Rules Governing
Discretionary Court Review of Appeal Determinations, Rule 30 (Dec. 8, 2015).
                                        A.
      Although BP disputes this, we will assume that BP did not challenge the
second required element before the Appeal Panel or in its request for


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discretionary review. 1 But that does not mean it was reversible error for the
district court to consider the issue. Claimant views the forfeiture rules as
mandatory ones that prohibit the district court from considering an issue BP
did not raise. That is not the case. Andrew Spektor & Michael A. Zuckerman,
Ferrets and Truffles and Hounds, Oh My: Getting Beyond Waiver, 18 GREEN
BAG 2d 77, 82 (2014) (“Waiver is a prudential doctrine, which means it does
not deprive appellate courts of jurisdiction.”).             Although reviewing courts
usually do not pass on issues not raised below, they generally retain discretion
to do so. Singleton v. Wulff, 428 U.S. 106, 121 (1976). Two of these uncommon
situations when a court might look past forfeiture are when “the proper
resolution is beyond any doubt” and when “injustice might otherwise result.”
Id. at 121 (citing Turner v. City of Memphis, 369 U.S. 350 (1962); quoting
Hormel v. Helvering, 312 U.S. 552, 557 (1941)); see also Kamen v. Kemper Fin.
Servs., Inc., 500 U.S. 90, 99 (1991) (explaining that a court “retains the
independent power to identify and apply the proper construction of” the law
regardless of the “particular legal theories” advanced by the parties); Bradley
v. Allstate Ins. Co., 620 F.3d 509, 519 n.5 (5th Cir. 2010) (explaining that a
court was “not bound to overlook” a misapplication of an insurance policy “only
because the parties failed to point” it out). It was reasonable for the district
court to believe that either of those situations was present here.
       Courts have also recognized that relaxation of forfeiture rules may be
appropriate when an issue not identified by the parties is “antecedent to and
ultimately dispositive of the dispute before it.” U.S. Nat’l Bank of Oregon v.
Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 447 (1993) (cleaned up); cf. City
of Sherrill, N.Y. v. Oneida Indian Nation of N.Y., 544 U.S. 197, 214 n.8 (2005)

       1 BP’s district court filing noted that Claimant had relied on Lowe’s being its customer
for the second causation inquiry. Based on this, it argued that “a ‘customer’ cannot be treated
as a customer for one element of the Decline-Only revenue pattern test, and not for another
element.”
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(explaining that the court can consider issues that are “inextricably linked”
even when not briefed by the parties). That is true for the step two inquiry.
That question comes before the analysis of customer mix data. And both are
part of the ultimate question whether Claimant can establish causation using
the decline-only model. Because the Appeal Panel had to decide that Claimant
established all three causation elements before awarding a claim, it must have
at least implicitly determined that Claimant had shown a reason why revenue
did not recover in 2011.
      Aside from the general principles of forfeiture that we have just
explained do not help it, Claimant argues that the district court’s Rules
Governing Discretionary Court Review prevent it from considering claims not
raised below. It relies on Rule 30, which reads that the “issues for review by
the Court shall be limited to those issues that were properly raised before the
Appeal Panel.” But even if BP did not raise the second requirement before the
Appeal Panel, Claimant did. Two pages of its submission to the Appeal Panel
discussed its explanations for “Failure of Recovery in 2011.”         As already
mentioned, the Appeal Panel must have considered this issue to vacate the
claim denial. Plus, other rules emphasize the district court’s broad authority
to review claims decisions if it chooses to do so. Rule 3 states that the district
court has “inherent jurisdiction over the settlement as a whole” and a
“discretionary right to review any determination of the Appeal Panel.” At
bottom, the district court has authority to ensure that the settlement it
administers is being properly applied. It cannot be an abuse of discretion to
try and fulfill that goal.
                                       B.
      So the question becomes whether the district court was correct that
Claimant did not make the second required showing for causation. On this
question, Claimant does not put up much of a fight. Zone D claimants using
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                                    No. 18-30801
the decline-only test must identify “factors outside the control of the claimant
that prevented the recovery of revenues in 2011.” See Claimant ID 100128765
v. BP Expl. & Prod., Inc., 709 F. App’x 771, 774 (5th Cir. 2017) (per curiam).
There are only six such factors. 2 Id. Claimant points to Lowe’s decision to halt
construction of new stores. But the Appeal Panel found that Lowe’s was not
the customer, Claimant’s affiliate was. And loss of a customer’s customer is
not one of the six listed factors (it is not apparent how even loss of a direct
customer satisfies the criteria). While the new customer designation may have
helped Claimant meet one of the three requirements, it is fatal to the claim in
this other respect.
                                         ***
      The judgment of the district court is AFFIRMED.




      2  The six factors are: (1) The entry of a competitor in 2011; (2) Bankruptcy of a
significant customer in 2011; (3) Nearby road closures affecting the business; (4)
Unanticipated interruption resulting in closure of the business; (5) Produce or source
replacement by a customer; or (6) Loss of financing and/or reasonable terms of renewal.
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