     Case: 18-30838      Document: 00514919148         Page: 1    Date Filed: 04/16/2019




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


                                    No. 18-30838
                                                                                 FILED
                                                                             April 16, 2019
                                  Summary Calendar
                                                                            Lyle W. Cayce
                                                                                 Clerk
CLAIMANT ID 100299037,

              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. 2:18-CV-5595


Before DENNIS, OWEN and ENGELHARDT, Circuit Judges.
PER CURIAM:*
       Alabama      Association     of   Habitat    for   Humanity       Affiliates,          Inc.
(Association) appeals the district court’s denial of the Association’s request for
discretionary review of a decision by the Claims Administrator for the
Deepwater Horizon Settlement Program. The district court did not abuse its
discretion in denying review. We affirm.


       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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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                                          No. 18-30838
                                                  I
         In April 2010, an explosion on the Deepwater Horizon, a mobile offshore
drilling unit leased by BP Exploration & Production, Inc., BP America
Production Company, and BP, P.L.C. (collectively, BP), caused the discharge
of millions of gallons of oil into the Gulf of Mexico. 1 BP entered into the
Deepwater Horizon Economic and Property Damages Settlement Agreement
(Settlement Agreement) with a class of individuals and entities allegedly
injured by the oil spill. The Settlement Agreement created the Settlement
Program under which claims for settlement benefits are reviewed by the
Claims Administrator, whose decisions can be appealed to an Appeal Panel.
         Businesses seeking settlement benefits as compensation for economic
losses “must establish that their loss was due to or resulting from the
Deepwater          Horizon      Incident”    by    meeting     the    applicable    “causation
requirement[].”          Once causation is established, claimants must prove an
economic loss using the formula in Exhibit 4C of the Settlement Agreement.
Under Step 1 of the formula, claimants compare their variable profit in the
Compensation Period—a consecutive three-month period of their choosing
between May and December 2010—to their variable profit during the
comparable months of the Benchmark Period—either 2009, the average of
2008 and 2009, or the average of 2007, 2008, and 2009. Variable profit is
determined by calculating the total monthly revenue over the period in
question then subtracting the corresponding variable expenses over the same
time period, including variable costs, variable portions of salaries, and other
expenses. If the claimant has less variable profit in the Compensation Period
than in the Benchmark Period, it is entitled to compensation for that



         1   Ctr. for Biological Diversity, Inc. v. BP Am. Prod. Co., 704 F.3d 413, 418 (5th Cir.
2013).
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                                      No. 18-30838
difference. Under Step 2 of the compensation formula, claimants are also
compensated for incremental profits the claimant might have expected to
generate in 2010 in absence of the spill, based on the claimant’s revenue trend
before the spill.
       The Association is a non-profit that supports Habitat for Humanity
affiliates throughout Alabama.         The Association services the affiliates by
“providing training opportunities, resource development, [and] a variety of
programs and services to grow capacity.” The Association also solicits grants
on behalf of the affiliates. Pertinent to this appeal, the Association receives
grants from the Neighborhood Stabilization Fund (NSF). The Association
described NSF as
       a grant from the state of Alabama to three of our larger affiliates
       in Alabama-Southwest AL HFH (Mobile), Greater Birmingham
       HFH (Birmingham) & Madison HFH (Huntsville). . . . [T]his
       was . . . a pass-through grant, with most of the funds going to
       affiliates, but AAHA retaining a portion for administering the
       program & writing the grant on the affiliate’s behalf.
       The Association filed a claim with the Settlement Program. Relying on
the    Association’s   description,     the       Settlement   Program’s   accountants
determined that NSF funds were pass-through and not revenue. The Claims
Administrator initially denied the Association’s claim. After the Appeal Panel
remanded, the Association was granted an award, but the Claims
Administrator again determined that NSF funds should be excluded from
revenue and expenses. The Association appealed to the Appeal Panel a second
time, arguing that the NSF funds should have been included in revenue and
therefore, the award should have been greater. The Appeal Panel affirmed the
Claims Administrator’s decision. The Association sought discretionary review
in the Eastern District of Louisiana, which the district court denied. The
Association appeals.


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                                       No. 18-30838
                                             II
       We review the district court’s denial of discretionary review of an Appeal
Panel decision for abuse of discretion. 2 It is generally an abuse of discretion
not to review a decision that “actually contradicted or misapplied the
Settlement Agreement, or had the clear potential to” do so. 3 However, it is
“wrong to suggest that the district court must grant review of all claims that
raise a question about the proper interpretation of the Settlement
Agreement.” 4 A district court may deny 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.” 5 “It may be 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.’” 6
       The Association argues that the district court abused its discretion by
denying review because (1) Fifth Circuit precedent requires grant money to be
considered revenue, (2) the NSF funds were not pass-through, and
(3) pass-through funds are revenue.
       We need not address these arguments. Even if the NSF funds should
have been included in revenue, the corresponding variable expenses would




       2  Claimant ID 100212278 v. BP Expl. & Prod., Inc., 848 F.3d 407, 410 (5th Cir. 2017)
(citing Holmes Motors, Inc. v. BP Expl. & Prod., 829 F.3d 313, 315 (5th Cir. 2016)).
        3 Id. (quoting Holmes Motors, 829 F.3d at 315).
        4 Id. (quoting Holmes Motors, 829 F.3d at 316); see also 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.”).
        5 Claimant ID 100212278, 848 F.3d at 410 (alterations in original) (quoting In re

Deepwater Horizon, 641 F. App’x 405, 410 (5th Cir. 2016)).
        6 Id. (quoting In re Deepwater Horizon, 631 F. App’x 199, 203-04 (5th Cir. 2015)).

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                                   No. 18-30838
have to be “matched” to determine variable profit. 7             As we have said,
“[e]xpenses that can be readily traced to the recognized revenues are
themselves recognized at the same time as those revenues.” 8 By its own
admission, the Association’s “NSP Activities” account is an expense account for
NSF.       When the Association received NSF funds, it would retain an
administration fee for its service, which was included in calculating the
Association’s revenue.     The remaining NSF funds would subsequently be
distributed to Habitat for Humanity affiliates.          These distributions were
recorded as “NSP Activities” expenses.           For all of the months in the
Compensation Period and the Benchmark Period, the amount of NSF funds
received by the Association, less the administration fees, equaled the amount
of NSP Activities expenses. Accordingly, even if the NSF funds should have
been considered revenue, those funds would have had to be matched with the
NSP Activities expenses, leaving only the administration fees as the
Association’s variable profit from the NSF grant. If the Claims Administrator
erred, that error was harmless.
       The Association argues that matching the NSF revenues and expenses
would be contrary to the Settlement Agreement’s purpose. However, matching
is precisely what the Settlement Agreement calls for in a case like this, as
confirmed by this court. 9 Claimants are to be compensated for a reduction in
variable profit, not a reduction in revenue. The Association argues that this
result precludes nonprofits from recovering under the Settlement Agreement
because by definition, they do not generate profits. As we have explained,
however, “modern nonprofits are commercial entities that seek to generate


       7In re Deepwater Horizon, 732 F.3d 326, 335 (5th Cir. 2013).
       8Id. at 333.
      9 In re Deepwater Horizon, 858 F.3d 298, 302 (5th Cir. 2017) (“[T]he Claims

Administrator must ensure that costs are registered in the same month as corresponding
revenue, regardless of when those costs were incurred.”).
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                                          No. 18-30838
cash surpluses.” 10 Those surpluses, like the administration fees in this case,
are included in calculating a claimant’s variable profit.
      Assuming, arguendo, that NSF funds should be considered revenue, the
district court still did not abuse its discretion in denying review.
                                      *        *         *
      AFFIRMED.




      10   In re Deepwater Horizon, 785 F.3d 1003, 1012 (5th Cir. 2015).
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