     Case: 18-30786      Document: 00514933383         Page: 1    Date Filed: 04/29/2019




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

                                                                                   FILED
                                                                                April 29, 2019
                                      No. 18-30786
                                                                                Lyle W. Cayce
                                                                                     Clerk
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,

               Requesting Parties - Appellants

v.

CLAIMANT ID 100126024,

               Objecting Party - Appellee




                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:18-CV-4977


Before STEWART, Chief Judge, and DAVIS and ELROD, Circuit Judges.
PER CURIAM:*
       In this appeal, the BP-appellants 1 challenge the claimant’s Business
Economic Loss award under the Deepwater Horizon Economic and Property
Damages Settlement Agreement (“Settlement Agreement”).                          Claimant-
appellee Burkhalter Rigging, Inc. (“Burkhalter”) is a provider of heavy rigging,



       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
      We refer to appellants BP Exploration & Production, Inc., BP America Production
       1

Company, and BP, P.L.C. collectively as “BP.”
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                                     No. 18-30786
heavy lifting, and multi-modal transportation services with its headquarters
in Columbus, Mississippi.        Burkhalter filed a claim under the Settlement
Agreement for business losses following the Deepwater Horizon disaster. BP
challenges the claimant’s award on two grounds: (1) claimant should have been
excluded from the settlement class under the Oil and Gas Industry Exclusion;
and (2) the calculation of claimant’s compensation should have excluded
revenues and expenses derived from its two sales offices outside the Gulf Coast
Areas. The district court denied BP’s request for discretionary review. As
discussed below, we conclude that the district court did not abuse its discretion.
We therefore AFFIRM.
                        I. History of Burkhalter’s Claim
       Burkhalter filed its claim in November 2012. In Burkhalter’s claim form,
it provided the NAICS code 238900 for its business. 2 Burkhalter’s 2010 federal
income tax return listed the same code for its business activity.
      Burkhalter’s claim form stated that it had one- or two-person sales
offices in Murfreesboro, Tennessee and Houston, Texas during the months of
May to December 2010.          Burkhalter denied that these locations met “the
definition of ‘Facility’ as found in Exhibit 5 of the settlement agreement
[because Burkhalter] did not and does not ‘perform or manage its operations’
at any location other than . . . Columbus, Mississippi.”
      The Court Supervised Settlement Program (“Program”) requested
additional information from the claimant about the nature of its business and



       2  “‘NAICS’ is an initialism for ‘North American Industry Classification System.’
NAICS consists of numeric codes that federal statistical agencies use to classify business
establishments in order to collect, analyze, and publish data related to the U.S. economy.”
Claimant ID 100153748 v. BP Expl. & Prod., Inc., 708 F. App’x 812, 815 n.1 (5th Cir. 2017)
(per curiam) (citation omitted). While our unpublished opinions are not controlling
precedent, they may be persuasive authority. See Ballard v. Burton, 444 F.3d 391, 401 & n.7
(5th Cir. 2006) (citation omitted). The United States Department of Labor’s Bureau of Labor
Statistics website defines code 238900 as “Other Specialty Trade Contractors.”
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its various office locations. In response, the claimant stated that it offered
rigging, lifting, and transport services; it did not have any other Facilities
where it performed or managed its operations in 2010; its most recent Houston
office opened in 2013; and its most recent sales offices opened in 2014 (Mobile,
Alabama) and 2016 (San Francisco, California). The Program also requested
and obtained supporting documentation for revenues during the months of
May to November in 2009, 2010, and 2011, which included the names of some
of Burkhalter’s customers.
      On August 2, 2017, the Claims Administrator issued an Eligibility Notice
stating that the claimant was eligible for an award of approximately $9
million. 3 The Program noted the existence of multiple office locations when it
reviewed the claimant’s website, but the claimant’s counsel’s responses to the
Program’s inquiries apparently satisfied the Program that the claimant did not
have any office locations constituting “Facilities” in 2010, other than its
headquarters in Columbus. The Program’s calculation notes did not discuss
its determination of the claimant’s appropriate NAICS code.
      On August 22, 2017, BP appealed the award to an administrative appeal
panel. BP challenged the Program’s classification of the claimant under the
NAICS code 238990 (All Other Specialty Trade Contractors) and argued that
the claimant’s proper NAICS code was 237120 (Oil and Gas Pipeline and
Related Structures Construction). BP argued that the customers listed in the
claimant’s revenue documentation showed that its primary business was
providing specialty construction services to the oil and gas industry.              BP
further argued that the claimant’s provision of incomplete information to the




      3 The Benchmark (pre-spill) and Compensation (post-spill) Periods for Burkhalter’s
claim were May to November 2009 and 2010, respectively.
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                                 No. 18-30786
Program about its sales offices outside the Gulf Coast Areas prevented the
Program from fully evaluating whether those offices constituted “Facilities.”
      In response, the claimant submitted an affidavit from its CEO stating:
      I    have    reviewed     [Burkhalter]’s     financial   documents.
      Approximately 90% of [Burkhalter]’s revenues in 2009 and 2010
      were for clients unrelated to the oil and gas industry. These clients
      were primarily in the industrial and manufacturing industries. . .
      . [Burkhalter] did not, does not, and cannot identify its revenues
      and job-related expenses associated with any sales office
      (including the sales offices in Murfreesboro, Tennessee and
      Houston, Texas) separately from the Columbus, MS office.
      On February 26, 2018, the administrative appeal panel issued its
decision, which upheld the award to Burkhalter. The appeal panel noted that
the exclusion issue turned on the claimant’s proper NAICS code, which was
based on its primary business activity. It referenced the parties’ citations to
the claimant’s website, the portion of the claimant’s work (based on the
revenue documentation in the record) associated with customers in the oil and
gas industry, and the claimant’s CEO’s affidavit. The appeal panel then stated
that its “de novo review of the record shows that, while Claimant is certainly a
specialty trade contractor, there’s no support for BP’s contention that Claimant
[sic] activities are ‘primarily related to oil and gas pipeline and related
structures construction.’” The panel upheld the Program’s code assignment.
      As to the facilities issue, the appeal panel cited the claimant’s arguments
that it disclosed the sales offices’ existence and that the Program inquired
about those offices and found that they did not constitute “Facilities.” The
panel also referenced the CEO’s affidavit. The panel concluded: “A de novo
review of the record does not support BP’s contention, nor does this Panel find
it necessary to remand this matter for further inquiry.”




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       BP requested discretionary review by the federal district court
supervising the Program, which the district court denied. BP timely filed this
appeal challenging that judgment.
                               II. Standard of Review
       This court reviews the district court's denial of discretionary review for
abuse of discretion. 4 “We generally assess whether the district court abused
its discretion by looking to ‘whether the 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.’” 5
Also, “[i]t 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
       “However, we have been careful to note that 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.’” 7 “It is not an abuse
of discretion to 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.’” 8
       We have recently stated that the “‘clear purpose of the Settlement
Agreement [is] to curtail litigation’ and, as a practical matter, these claims



       4 Claimant ID 100212278 v. BP Expl. & Prod., Inc., 848 F.3d 407, 410 (5th Cir. 2017)
(per curiam) (citation omitted).
       5 Id. (quoting Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313, 315 (5th

Cir. 2016)).
       6 Id. (quoting In re Deepwater Horizon, 632 F. App’x 199, 203-04 (5th Cir. 2015) (per

curiam)).
       7 Id. (citation omitted) (quoting Holmes Motors, 829 F.3d at 316).
       8 Id. (alterations in original) (quoting In re Deepwater Horizon, 641 F. App’x 405, 410

(5th Cir. 2016) (per curiam)).
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must be handled by the settlement process.              In the absence of a blatant
violation of or disregard for the Settlement Agreement, a third review of an
award is inappropriate.” 9
                                     III. Analysis
      BP argues that the district court abused its discretion in denying review
of the appeal panel’s decision. For the reasons that follow, we conclude that
the district court did not abuse its discretion in denying review.
                       i. Oil and Gas Industry Exclusion
          The Settlement Agreement excludes certain types of individuals and
entities from the settlement class, including Oil and Gas Industry entities
identified in the NAICS codes listed on Settlement Agreement Exhibit 17. 10
Exhibit 17 lists NAICS code 237120, “Oil and Gas Pipeline and Related
Structures Construction,” which includes “establishments primarily engaged
in the construction [including new work, reconstruction, rehabilitation, and
repairs] of oil and gas lines, mains, refineries, and storage tanks.” 11 The code
definition states further that “[s]pecialty trade contractors are included in this
group if they are engaged in activities primarily related to oil and gas pipeline
and related structures construction.” 12
      The      Settlement     Agreement         instructs   the    Program’s      Claims
Administrator to determine an entity’s NAICS code by reviewing: (1) “the
NAICS code shown on a Business Entity claimant’s 2010 tax return,” (2) “2010
business permits or license(s), and/or” (3) “other evidence of the business’s



      9   BP Expl. & Prod., Inc. v. Claimant ID 100224371, No. 18-30595, 2019 WL 1299925,
at *3 (5th Cir. Mar. 12, 2019) (alteration in original) (quoting Holmes Motors, 829 F.3d at
317).
        10 Economic and Property Damages Settlement Agreement, Section 2.2.4.5,

http://www.deepwaterhorizoneconomicsettlement.com/docs/Amended_Settlement_Agreeme
nt_5.2.12_optimized.pdf#search [hereinafter Settlement Agreement].
        11 Id. at Oil & Gas Industry Exclusions (Exhibit 17).
        12 Id.

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activities necessary for the Claims Administrator to determine the appropriate
NAICS code.” 13 Burkhalter’s 2010 tax return listed its business activity code
number as 238900, a non-excluded code. 14
       Claims Administrator’s Approved Policy 480, which governs the
determination of an entity’s NAICS code, provides: “The appropriate NAICS
Code for an Entity shall be the NAICS Code that most accurately describes the
Entity’s primary business activities, which are the activities in which the
Entity      was   primarily     engaged      during      the    operative     Benchmark,
Compensation, and Class Periods.” 15 The policy adds that the NAICS code
used on an entity’s 2010 tax return or business license is not conclusive. 16
       We have held that “the determination of the appropriate NAICS code for
a single entity claimant is not the type of ‘pressing question’ that warrants
district court review” but is rather “precisely the type of discretionary factual
determination that . . . the district court need not review.” 17
       This issue does not involve any misapplication or contradiction of the
Settlement Agreement, nor does it involve any pressing question of how the
Settlement Agreement should be interpreted or implemented.                      Rather, it


       13 Id.; see also id. at Section 4.4.7.1.
       14 Burkhalter’s tax returns before the spill, in 2007, 2008, and 2009, listed the same
code number.
       15 Claims Administrator’s Approved Policy 480 v2: Determination of NAICS Code of

an Entity, DEEPWATER HORIZON CLAIMS CENTER: ECONOMIC & PROPERTY DAMAGE CLAIMS
(2014), https://www2.deepwaterhorizoneconomicsettlement.com/un-secure/pkpolicysearch.
aspx (search Policy ID field for “480” and click “Create PDF”); Final Policy, Policy 480 v.2:
Determination of NAICS Code of an Entity, https://www2.deepwaterhorizoneconomicsettle
ment.com/un-secure/pkpolicysearch.aspx (search Policy ID field for “480” and click “View”)
[hereinafter Policy 480]. The Settlement Agreement defines “Class Period” as “April 20, 2010
until the date of the filing of the Action, which is April 16, 2012.” Settlement Agreement,
supra note 10, at Section 38.28.
       16 Policy 480, supra note 15, at 3.
       17 Claimant ID 100153748, 708 F. App’x at 819 (citations omitted); see also BP Expl.

& Prod., Inc. v. Claimant ID 100217946, 919 F.3d 258, 264 (5th Cir. 2019) (per curiam)
(noting that the district court does not abuse its discretion by deferring to the Claims
Administrator’s discretionary administrative decisions).
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involves only the correctness of a discretionary factual determination (as to
Burkhalter’s NAICS code) that the district court need not review.
       This is particularly true in this case, given the record evidence. In
addition to Burkhalter’s tax return, the Program also reviewed Burkhalter’s
website, questioned it about the nature of its business, and requested revenue
documentation that included information about some of Burkhalter’s
customers. 18 The appeal panel conducted a de novo review of the record and
considered the affidavit from Burkhalter’s CEO. Based on this information,
the Claims Administrator and appeal panel had a reasonable basis to find that
Burkhalter was not primarily engaged in oil and gas industry activities and
was properly assigned a non-excluded NAICS code.
       Because of the record developed by the Claims Administrator, the
district court was not required to remand this claim to obtain more information
about the claimant’s customers. 19 Accordingly, we find that the district court
did not abuse its discretion by denying review of this issue. 20
                  ii. Facilities Outside the Gulf Coast Areas
       Under      the     Settlement       Agreement,       a    multi-facility      business
headquartered within the Gulf Coast Areas may recover payment for losses
suffered by its facilities within the Gulf Coast Areas, but not those outside the




       18 The parties have not provided evidence of any 2010 business permits or licenses.
       19 See BP Expl. & Prod., Inc. v. Claimant ID 100204031, No. 18-30586, 2019 WL
1281203, at *2 (5th Cir. Mar. 18, 2019) (per curiam) (“Even if more information could have
been obtained . . . , we see nothing arising from the level of scrutiny given to th[is] issue to
require the district court’s discretionary review.”).
       20 BP has not argued that this issue has split the administrative appeal panels.

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Gulf Coast Areas. 21 A “Facility” is “[a] separate and distinct physical location
of a Multi-Facility Business at which it performs or manages its operations.” 22
       To find that a remote business location is a “Facility,” Policy 467 requires
that the location be:
       (a)    A separate and distinct physical structure or premises;
       (b)    Owned, leased or operated by the Business Entity;
       (c)    At which the Business Entity performs and/or manages its
              operations. 23
       The policy states as an “overall criterion” that “[a]n Entity does not
‘perform’ or ‘manage’ operations at a location unless it can identify the
expenses and revenues, if any, associated with the operations at that location
separately from the expenses and revenues of other locations owned, leased or
operated by the Entity.” 24
       BP argues that the Claims Administrator erred in finding that the sales
offices were not “Facilities” and the district court, in turn, abused its discretion
in failing to review this factual finding. We are satisfied that the appeal panel
decision on this issue did not contradict or misapply the Settlement
Agreement, nor did it involve any pressing question of how the Settlement
Agreement should be interpreted or implemented.



       21   See Settlement Agreement, supra note 10, at Compensation for Multi-Facility
Businesses (Exhibit 5). Under the Settlement Agreement, the Gulf Coast Areas are the states
of Louisiana, Mississippi, and Alabama, and certain Texas and Florida counties. Id. at
Section 38.80. The sales offices at issue are undisputedly outside the Gulf Coast Areas.
        22 Id. at Compensation for Multi-Facility Businesses (Exhibit 5).
        23 Claims Administrator’s Approved Policy 467: Economic Loss Claims: The Definition

of “Facility,” DEEPWATER HORIZON CLAIMS CENTER: ECONOMIC & PROPERTY DAMAGE CLAIMS
(2014), https://www2.deepwaterhorizoneconomicsettlement.com/un-secure/pkpolicysearch
.aspx (search Policy ID field for “467” and click “Create PDF”); Final Policy, Policy 467:
Economic Loss: The Definition of “Facility,” https://www2.deepwaterhorizoneconomicsett
lement.com/un-secure/pkpolicysearch.aspx (search Policy ID field for “467” and click “View”)
[hereinafter Policy 467]. “An entity ‘performs’ operations at a location if, in the normal course
of its business, it has employees or agents who perform their work at that location and/or it
provides services or products at that location.” Policy 467, supra, at 5.
        24 Id.

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                                      No. 18-30786
       The Claims Administrator and the appeal panel each considered the
issue of whether the claimant’s sales offices constituted “Facilities” under the
Settlement Agreement. The claim form informed the Program about the sales
offices, and the Program reviewed the claimant’s website and made multiple
inquiries about these offices during its investigation before concluding that the
claimant did not have any other “Facilities” in 2010. The appeal panel also
conducted a de novo review of the record, considered the claimant’s CEO’s
affidavit, and upheld the Claims Administrator’s determination.                    We find
plausible the CEO’s assertion that Burkhalter could not identify the revenues
and expenses associated with its sales offices separately from those associated
with its headquarters. BP does not explain how Burkhalter could determine
the portion of a project’s revenue that is attributable to the salesperson’s
efforts, separate from the efforts of the employees who supervised and
performed the contracted-for work. The parties have not presented evidence
of an established accounting method for doing so.
       The district court did not abuse its discretion by declining to require a
remand for the Program to consider additional information about the sales
offices. 25 The court was entitled to defer to the Claims Administrator’s and the
appeal panel’s judgment in making this factual determination 26 and did not
abuse its discretion by denying review. 27




       25  See Claimant ID 100204031, 2019 WL 1281203, at *2.
       26  See BP Expl. & Prod., Inc. v. Claimant ID 100237661, No. 18-30724, 2019 WL
1511007, at *3 (5th Cir. Apr. 5, 2019) (citation omitted); Claimant ID 100217946, 919 F.3d at
264. This is also consistent with our recent unpublished, sealed opinion in BP Expl. & Prod.,
Inc. v. Claimant ID 100214656, No. 18-30887, slip op. at 3 (5th Cir. Apr. 16, 2019) (per
curiam).
        27 BP has not argued that this issue has split the administrative appeal panels.

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                              IV. Conclusion
      For these reasons, we conclude that the district court did not abuse its
discretion by denying review of this claim.    Accordingly, we AFFIRM the
district court’s judgment.




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