     Case: 18-31113       Document: 00514957344         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
                                    No. 18-31113
                                                                            May 15, 2019
                                  Summary Calendar                         Lyle W. Cayce
                                                                                Clerk

BP EXPLORATION & PRODUCTION, INCOPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,

               Requesting Parties – Appellants,

v.

CLAIMANT ID 100283067,

               Objecting Party – Appellee.




                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:18-CV-8131


Before HIGGINBOTHAM, ELROD, and DUNCAN, Circuit Judges.
PER CURIAM:*
       This case involves a business economic loss claim under the Deepwater
Horizon Economic and Property Damages Settlement Agreement (Settlement
Agreement). Here, BP asserts that Claimant is not entitled to the $1.59 million
award it received pursuant to the Settlement Agreement because Claimant
failed to establish causation and the Claims Administrator erroneously


       * Pursuant to Fifth Circuit Rule 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should not be published and is not precedent except under the limited circumstances set forth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 Fifth Circuit Rule 47.5.4.
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classified certain expenses as “fixed.” Because the district court did not abuse
its discretion in declining discretionary review, we AFFIRM.
                                         I.
      Claimant is a construction contractor located in Naples, Florida. As a
class member in economic loss Zone D, Claimant must satisfy one of the
causation tests set out in Exhibit 4B to the Settlement Agreement to recover
on its economic loss claim. Because Claimant has relied on the “Decline-Only
Revenue Pattern” test, it must show both a decline in revenue in 2010 and one
of six factors which prevented its recovery of revenue in 2011. If Claimant can
demonstrate these causation requirements, it may be compensated for the
profit it might have earned during the designated post-spill period.
      To   determine    a   claimant’s    compensation     amount,   the   Claims
Administrator compares pre-spill and post-spill profits. For the purposes of
the Settlement Agreement, profit is the difference between revenue and
“variable” costs. In contrast, “fixed” costs are incurred by a company regardless
of its level of business activity and therefore should not be subtracted from
revenues when calculating profit. BP Expl. & Prod., Inc. v. Claimant ID
100094497 (Texas Gulf Seafood), 910 F.3d 797, 799, 802 n.2 (5th Cir. 2018).
      Claimant filed its claim on March 15, 2014. In April 2016, the Claims
Administrator denied the claim for failure to provide documents sufficient to
establish that Claimant had lost revenue as a result of the spill in accordance
with Exhibit 4B of the Settlement Agreement.             After Claimant filed a
memorandum in opposition to the denial notice, the Appeal Panel reversed the
Claims Administrator’s decision, finding that Claimant had produced enough
evidence demonstrating a factor which prevented its recovery of revenue, and
remanded the case back to the Claims Administrator. The factor relied on by
the Appeal Panel was not listed in Exhibit 4B. After Claimant ID 100128765

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was decided, the Claims Administrator requested additional documentation
and ultimately found that Claimant satisfied the Decline-Only Revenue
Pattern test based on a listed factor, “entrance of competitors in 2011,” and
was therefore entitled to an award. 1
      BP appealed this award to the Appeal Panel, which affirmed the award.
The Appeal Panel also rejected BP’s argument that Claimant must show how
much revenue Claimant lost from competitors who entered the marketplace.
The district court denied BP’s request for discretionary review.             BP now
appeals.
                                          II.
      This court reviews the district court’s denial of discretionary review for
an abuse of discretion. Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d
313, 315 (5th Cir. 2016). There is an abuse of discretion when the decision the
district court declined to review “actually contradicted or misapplied the
Settlement Agreement, or had the clear potential to contradict or misapply the
Settlement Agreement.” Id. (quoting In re Deepwater Horizon, 641 F. App’x
405, 409–10 (5th Cir. 2016)). An abuse of discretion also occurs if a district
court denies 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.’” Texas Gulf Seafood, 910 F.3d
at 800 (quoting Claimant ID 100212278 v. BP Expl. & Prod., Inc., 848 F.3d
407, 410 (5th Cir. 2017)).      However, the district court does not abuse its
discretion if it denies a request for review that “involve[s] no pressing question
of how the Settlement Agreement should be interpreted and implemented, but



      1  In Claimant ID 100128765, we held that the list of factors in Exhibit 4B is
exhaustive. Claimant ID 100128765 v. BP Expl. & Prod., Inc., 709 F. App’x 771, 774 (5th
Cir. 2017). A claimant must rely on a factor included on the list. Id.
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simply raise[s] the correctness of a discretionary administrative decision in the
facts of a single claimant’s case.” Id. (alterations in original) (quoting Claimant
ID 100212278, 848 F.3d at 410).
                                       III.
      BP argues that the district court abused its discretion in denying review
for two reasons: 1) the Appeal Panel misconstrued the Settlement Agreement
when it concluded that Claimant satisfied the Decline-Only Revenue Pattern
test; and 2) the Appeal Panel misapplied the Settlement Agreement when it
classified “Shop Supplies” and “Tools and Small Equipment” as fixed expenses
instead of variable expenses.      Claimant argues that because the issues
appealed to the district court were factual and apply only to this specific case,
it was within the district court’s discretion to decline review.
                                        A.
      Regarding causation, BP asserts that the Appeal Panel and Claims
Administrator actually relied on a factor not on Exhibit 4B’s exhaustive list.
Specifically, it states that, contrary to Claimant’s arguments, general
contractors electing to complete their own work instead of hiring Claimant as
a subcontractor does not amount to “The entry of a competitor in 2011” under
Exhibit 4B; rather, it is simply a customer deciding not to hire Claimant.
      BP further argues that even if Claimant manages to satisfy the factor,
the district court abused its discretion by declining to review an award that
misapplies the Settlement Agreement by using a factor that, while on the list,
is not capable of explaining Claimant’s failure to recover revenue in 2011. In
other words, the aim of the causation tests is to limit recovery to businesses
that realistically may have suffered a loss caused by the spill, and Claimant’s
contractor customers electing to complete their own projects cannot satisfy that
requirement given that 1) two out of the four contractors did not retain

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                                 No. 18-31113

Claimant in 2010; and 2) combined, the contractors only account for 2% of
Claimant’s revenue.
      In response, Claimant points out that the Appeal Panel found that it was
not necessary for a claimant to establish an exact amount of lost profit and that
the Decline-Only Revenue Pattern test requires only that Claimant
demonstrate a specific factor out of its control and not the amount of revenue
it would have collected absent that factor. Claimant states that requiring it to
demonstrate that one of the factors resulted in a threshold amount of revenue
decline amounts to adding an additional test outside the scope of the
Settlement Agreement.      It also maintains that it has provided sufficient
evidence to satisfy “The entry of a competitor in 2011” factor in Exhibit 4B.
      Whether or not the Claims Administrator and Appeal Panel were correct,
the question of whether the Claimant demonstrated that “The entry of a
competitor in 2011” prevented it from recovering revenues is a fact-bound,
discretionary administrative decision in the facts of a single claimant’s case.
Texas Gulf Seafood, 910 F.3d at 800. Further, it is the causation tests in
Exhibit 4B of the Settlement Agreement that determine whether a claimant is
entitled to an award. See In re Deepwater Horizon, 744 F.3d 370, 375–77 (5th
Cir. 2014). Because BP cannot rely on financial information not considered in
those causation tests to demonstrate that Claimant did not suffer a loss caused
by the spill, the Appeal Panel did not contradict or misapply the Settlement
Agreement when it determined that Claimant did not have to demonstrate the
amount of revenue it would have collected absent a factor in Exhibit 4B. See
id. The district court therefore did not err in declining discretionary review on
this issue.




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                                              B.
       We turn next to the second issue on appeal: whether the district court
abused its discretion by denying review of the classification of Claimant’s
“Shop Supplies” and “Tools and Small Equipment” expenses as fixed. BP
argues that the Appeal Panel failed to classify Claimant’s expenses according
to their substantive nature and instead relied on the labels provided by
Claimant in contravention of Texas Gulf Seafood. 2 See 910 F.3d at 802. In
addition, BP asserts that the award Claimant received was too high because
the expenses should have been classified as variable and subtracted from
Claimant’s revenue.
       After reviewing the record, we conclude that the Appeal Panel’s analysis
did not run afoul of Texas Gulf Seafood, and we need not determine whether
the Claims Administrator and Appeal Panel correctly classified the expenses
because, in challenging this classification, BP simply raises the correctness of
a discretionary administrative decision in the facts of a single claimant’s case.
See id. at 800. Therefore, the district court did not abuse its discretion by
denying review of the expense classification.
                                             IV.
       For the reasons described, we AFFIRM the denial of discretionary review
by the district court.




       2This court held in Texas Gulf Seafood that Claims Administrators and Appeal Panels
must use their “independent judgment and classify expenses as ‘fixed’ or ‘variable’ according
to their substantive nature, rather than rational basis review of the claimants’ own
descriptions.” 910 F.3d at 802. The court further held that the district court erred in failing
to review and correct the Appeal Panel’s error of law. Id at 803.
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