      Case: 16-30547          Document: 00514079710         Page: 1   Date Filed: 07/19/2017




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


                                             No. 16-30547
                                                                                   FILED
                                                                               July 19, 2017
                                                                              Lyle W. Cayce
IN RE: DEEPWATER HORIZON                                                           Clerk

------------------------------------------

LAKE EUGENIE LAND & DEVELOPMENT, INCORPORATED; ET AL,

                 Plaintiffs,

v.

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

                 Defendants–Appellees,

v.

KEVIN S. SMITH; SOLOMON J. FLEISCHMAN; JOHN C. KELLY,

                 Claimants–Appellants.




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


Before STEWART, Chief Judge, and JONES and OWEN, Circuit Judges.
PRISCILLA R. OWEN, Circuit Judge:
        This is an appeal from the denial of civil claims under the Settlement
Program that was established following the Deepwater Horizon oil spill. Kevin
S. Smith, Solomon J. Fleischman, and John C. Kelly (Claimants) are officers
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                                      No. 16-30547
and the sole owners of an architectural firm that received a Business and
Economic Loss (BEL) award under the Settlement Program. The Claimants
also submitted Individual Economic Loss (IEL) claims for lost wages as
employees of the firm. We agree with the district court that the Settlement
Program does not contemplate the requested compensation, and we affirm the
district court’s judgment.
                                             I
       In the aftermath of the Deepwater Horizon oil spill, BP Exploration &
Production, Inc., BP America Production Co., and BP, PLC negotiated with
representatives of a proposed class action.             The accord that was reached
resulted in the Economic and Property Damages Settlement Agreement
(Settlement Agreement or Agreement), which the district court approved. 1 The
Settlement Agreement designates an Economic and Property Damages Class,
consisting of varying individuals and entities within certain geographic areas
who suffered damages in varying categories. One damage category is the
Economic Damage Category, which compensates the “[l]oss of income, earnings
or profits suffered by Natural Persons or Entities as a result of the Deepwater
Horizon Incident.”
       The Agreement divides the Economic Damage Category into Business
Economic Loss (BEL) claims and Individual Economic Loss (IEL) claims.
Business claimants file BEL claims for lost business profits, and individuals
file IEL claims for lost employment earnings. Both BEL and IEL claimants
must be within the class and satisfy certain causation requirements.
       Claimants are owners and employees of the architectural firm,
Fleischman & Garcia, located within a geographic area covered by the


       1In re Oil Spill by the Oil Rig “Deepwater Horizon” in Gulf of Mex., on Apr. 20, 2010,
910 F. Supp. 2d 891, 964 (E.D. La. 2012), aff’d sub nom. In re Deepwater Horizon, 739 F.3d
790 (5th Cir. 2014).
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                                     No. 16-30547
Settlement. They are the sole owners of the firm. Fleischman, the firm’s chief
executive officer and chairman, submitted a BEL claim for lost profits on behalf
of the firm, and each Claimant also submitted separate IEL claims for lost
wages. The Court-Supervised Settlement Program (CSSP), which administers
the Agreement, awarded the firm a substantial amount. The CSSP later
denied each Claimant’s IEL claim, stating:
      Our records reflect that you submitted an Economic Loss claim for
      your business in addition to this Individual Economic Loss claim.
      You cannot recover employment losses from a job at a business for
      which you have submitted an Economic Loss Claim.
The Claimants appealed to the internal Appeal Panel established by the
Agreement, which also denied relief.               The Claimants then requested
discretionary review by the district court, pursuant to the Settlement
Agreement.      The district court denied the request for review, and the
Claimants appealed to this court, which consolidated the appeals. 2
      This court, in an unpublished per curiam opinion, concluded that the
district court had abused its discretion by denying review. 3 We noted that “the
issues in this case have and will come up repeatedly” and that Appeal Panels
had reached “varying conclusions” on the question. 4 Because we determined
that the “question of contract interpretation presented in these appeals would
be best addressed first by the district court charged with administering the
Agreement,” 5 we vacated and remanded the case. 6
      On remand, the district court affirmed the decisions of the Appeal Panels
to deny Claimants’ IEL claims. Claimants again appealed.



      2 In re Deepwater Horizon, 632 F. App’x 199, 201-02 (5th Cir. 2015) (per curiam).
      3 Id. at 204.
      4 Id. at 203-04.
      5 Id. at 204.
      6 Id.



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                                              II
      Resolution of this appeal turns on the Settlement Agreement’s
provisions. “The interpretation of a settlement agreement is a question of
contract law that this Court reviews de novo.” 7 The Agreement provides that
it “shall be interpreted in accordance with General Maritime Law.” 8
      Claimants argue that nothing in the Settlement Agreement bars the
CSSP from compensating a business’s owners and officers through IEL claims
after their business has received compensation through a BEL claim. We
disagree.
      The Settlement Agreement calculates the value of BEL claims by
comparing the “actual profit of a business during a defined post-spill period in
2010 to the profit that the claimant might have expected to earn” during the
period. The calculation compares “Variable Profit” in a post-spill compensation
period with that of an earlier benchmark period. Variable profit “reflects the
claimant’s revenue less its variable costs.” Then, the formula applies a growth
factor to account for lost growth potentially due to the spill.
      This method excludes from the calculation all “fixed” costs, which the
framework assumes do not change between the post-spill period and the
benchmark period. Excluding fixed costs is favorable to business claimants
because, even if claimants reduced these costs in the post-spill period, the
Settlement Agreement awards the claimants for lost profit as if the cost
reduction had not occurred.
      The Settlement Agreement specifically addresses “Owner/Officer
Compensation.”          The Agreement provides a separate methodology for
determining which payroll expenses are fixed or variable, but the Agreement



      7   In re Deepwater Horizon, 785 F.3d 1003, 1011 (5th Cir. 2015).
      8   Id. at 1011 n.6.
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excludes “Owner/Officer Compensation” from that methodology. Instead, the
CSSP treats “Owner/Officer Compensation” as a fixed cost, and the parties do
not argue otherwise.
     By treating owner/officer compensation as a fixed cost, the Agreement’s
framework does not recognize any reduction in owner compensation as cost
savings for the business claimant. Accordingly, the calculation awards any
reduced owner compensation to the business claimant through a BEL claim.
For this reason, the district court found that the BEL framework “inherently”
compensates the business claimant for reduced owner/officer compensation,
and the owners of the firm benefit from this compensation.
     Claimants ask that the CSSP compensate not only their business
through a BEL claim, but also the Claimant’s themselves as employees
through an IEL claim. The Settlement Agreement, when read as a whole, 9
does not allow this double compensation.                    The BEL framework, by
compensating the business for the owners’ lost wages through the fixed-cost
designation of their wages, precludes compensating those same owners for the
same wages through an IEL claim.
     As an alternative contention, Claimants assert that the CSSP should
devise a formula for determining the extent to which a business owner’s IEL
claim overlaps with the business’s BEL claim compensation and then simply
offset the IEL claim by the amount already awarded through the BEL claim.
The Agreement does not provide for such a calculation or set off, and we are
not empowered to judicially amend that agreement.
     Claimants’ final argument, that our interpretation of the Settlement
Agreement violates their due process rights, is waived because they did not



     9   Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313, 315 (5th Cir. 2016).

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raise it on their previous appeal to this court. 10 We nevertheless consider the
merits of the argument and conclude that there has been no violation of the
due process clause.
                                    *        *         *
       For the foregoing reasons, we AFFIRM the judgment of the district court.




       10See Ward v. Santa Fe Indep. Sch. Dist., 393 F.3d 599, 607 (5th Cir. 2004) (“We have
held that a party cannot raise an issue on appeal that could have been raised in an earlier
appeal in the same case.”).
                                             6
