     Case: 18-30676      Document: 00515025234         Page: 1    Date Filed: 07/08/2019




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                      No. 18-30676                      United States Court of Appeals
                                                                                 Fifth Circuit

                                                                               FILED
                                                                            July 8, 2019
CLAIMANT ID 100025887,
                                                                          Lyle W. Cayce
              Requesting Party - Appellant                                     Clerk


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-3786


Before OWEN, SOUTHWICK, and HIGGINSON, Circuit Judges
PER CURIAM:*
       This is a claim under the Settlement Program created in the wake of the
Deepwater Horizon disaster. The district court denied discretionary review of
an appeal panel decision. The district court’s interpretation of the Settlement
Agreement in a prior request for review controls and there are no
circumstances that warranted that court’s review. AFFIRMED.



       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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. 18-30676
              FACTUAL AND PROCEDURAL BACKGROUND
      We have previously detailed the facts surrounding the Deepwater
Horizon disaster that discharged enormous volumes of oil into the Gulf, the
Settlement Agreement that was laboriously negotiated, and the claims process
for business economic loss claimants. See In re Deepwater Horizon (Deepwater
Horizon I), 732 F.3d 326, 329-30 (5th Cir. 2013); see also In re Deepwater
Horizon, 785 F.3d 1003, 1007 (5th Cir. 2015) (explaining the claims
administration process). The claimant here, SJM Investment, LLC operated a
hotel on the Mississippi Gulf Coast at the time of the Deepwater Horizon
incident.   It submitted a business economic loss claim to the Settlement
Program in June 2015.
      The Settlement Agreement divides the areas affected by the disaster into
zones that are labeled A-D. SJM is located in Zone C. To recover under the
Settlement Agreement, SJM was required to meet one of multiple causation
tests that compare a Zone C claimant’s revenue from specific pre- and post-
disaster periods, referred to as the Benchmark and Compensation Periods,
respectively. The Claims Administrator found SJM did not satisfy any of the
relevant tests and denied the claim. An appeal panel affirmed that denial, and
the district court refused discretionary review.
      SJM’s appeal concerns only one of the steps under one of the failed
causation tests. The particular causation test at issue is called the Decline-
Only Revenue Pattern Test. The particular step we are concerned with is the
Customer Mix test. The Settlement Agreement describes the Customer Mix
test as requiring a claimant to show either (1) “a decline of 10% in the share of
total revenue generated by non-local customers” from the Benchmark Period
to the Compensation Period or (2) “a decline of 10% in the share of total revenue
generated by customers located in Zones A-C” from the Benchmark Period to
the Compensation Period if the claimant has customers in those zones.
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                                 No. 18-30676
      Because both evaluations under the Customer Mix test rely on the
geographic classification of a claimant’s customers, it is critical to the test’s
administration that a claimant identify its customers’ addresses. To deal with
instances in which a claimant is unable to provide addresses for its customers,
the Claims Administrator adopted Policy 345 v.3. It states:
      For the purposes of performing the Customer Mix Test, revenue
      generated during the Benchmark Period from customers whose
      address is considered unknown will be excluded from the
      claimant’s share of revenue generated by non-local customers or
      customers located in Zones A-C; conversely, revenue generated
      during the Compensation Period from customers whose address is
      considered unknown will be included in the claimant’s share of
      revenue generated by non-local customers or customers located in
      Zones A-C.
      Here, SJM gave the Claims Administrator addresses and revenues
associated with over 4,000 customers who transacted business with SJM in
and around the relevant Benchmark and Compensation Periods. We will call
this data the “Customer Mix information.”          The Claims Administrator
conducted a “Matching Review” in which it compared SJM’s Customer Mix
information with its profit and loss statements (“P&Ls”).           The Claims
Administrator found P&Ls indicating transactions that were not reflected in
the Customer Mix information. The Claims Administrator considered these
transactions as unknown for the Customer Mix test and treated them as the
above-quoted Policy required for unknown addresses.                The Claims
Administrator also analyzed SJM’s Customer Mix information using a
mapping software to verify addresses. It was unable to verify some of the
addresses of SJM’s customers and it considered them as unknown for the
Customer Mix test also. These are the two actions with which SJM takes issue.




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                                 No. 18-30676
                                DISCUSSION
      We review the district court’s denial of discretionary review of
Settlement Program claims for abuse of discretion. BP Expl. & Prod., Inc., v.
Claimant ID 100281817, 919 F.3d 284, 287 (5th Cir. 2019). The district court
abuses its discretion when the case “raises a recurring issue on which the
Appeal Panels are split [and] the resolution of the question will substantially
impact the administration of the Agreement” or “the decision not reviewed . . .
actually contradicted or misapplied the Settlement Agreement, or had the clear
potential to [do so].” Id. (citations omitted). When the determination involves
a “purely legal question[] of contract interpretation” of the Settlement
Agreement, our “review is effectively de novo” because errors of law are
necessarily abuses of discretion. In re Deepwater Horizon, 785 F.3d 1003, 1011
(5th Cir. 2015).
      There is some tension between the effectively-de-novo standard and our
statement elsewhere “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.’” Claimant ID 100212278 v. BP Expl. & Prod.,
Inc., 848 F.3d 407, 410 (5th Cir. 2017) (citation omitted). It is clear, though,
that the district court does not abuse its discretion to deny review where there
is “no pressing question of how the Settlement Agreement should be
interpreted” or where review would be of “a discretionary administrative
decision” that turns on “the facts of a single claimant’s case.” Id. (citation
omitted).


I.    The Matching Review Process
      SJM argues the Matching Review process is not “part of the Settlement
Agreement or any applicable policy.” Further, “[n]owhere in the text of the
Settlement nor Policy 345 [v.3] does it read that the amounts in the Customer
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                                    No. 18-30676
Mix information need to match those of the Claimant’s P&Ls.” SJM describes
multiple appeal panels that have agreed with its assertion that the Customer
Mix information does not have to reconcile with a claimant’s P&Ls. SJM is
correct that appeal panel decisions from June 2015 and March 2017 sustain its
position, and when considered in relation to the January 2018 appeal panel in
the instant case, create a split.
         The appeal panel here, however, followed a May 2017 decision by the
district court in which it answered SJM’s arguments in the review of another
claim. See In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of
Mexico, on April 20, 2010, MDL No. 2179, slip op. at 5 n4 (E.D. La. May 5,
2017). 1     The district court held that “‘[t]otal revenue’ means the revenue
recorded on the claimant’s profit and loss statements for the selected period,
not just the revenue for which the claimant is able to produce Customer Mix
data.”       Id.   The district court interpreted this to permit the Claims
Administrator to treat revenues associated with customers of unverifiable
locations as unknown.       See id. at 4-5.     Thus, the district court already
interpreted the Settlement Agreement with regard to this issue. We will
examine that interpretation.
         Despite the complexity and many parties involved, the Settlement
Agreement is a maritime contract to which we apply the familiar rules. See In
re Deepwater Horizon (Policy 495 Decision), 858 F.3d 298, 302-03 (5th Cir.
2017).       A panel of this court held that the Settlement Agreement’s
contemplation of total revenue means “‘total revenue’ full stop.” Claimant ID
100227611 v. BP Expl. & Prod., Inc., 757 F. App’x 295, 299 (5th Cir. 2018). We
accept that as an accurate interpretation. We see no error in the district court’s



         http://www.deepwaterhorizoneconomicsettlement.com/docs/Discretionary_Review.p
         1

df (navigate to page 443).
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                                    No. 18-30676
determination that total revenue can be measured by the revenue recorded on
a claimant’s P&Ls.
       Further, the Settlement Agreement does not expressly contemplate the
treatment to be given a claimant’s Customer Mix information when that data
does not correspond to the claimant’s total revenues. It is consistent with the
Settlement Agreement, though, to hold the absence of evidence about revenues
against the claimant. Indeed, “[w]ithout this safeguard, a party could cherry
pick customer information in order to satisfy the test.” Claimant ID 100187576
v. BP Expl. & Prod., Inc., 760 F. App’x 349, 352 (5th Cir. 2019). SJM presents
only unsupported statements that this will, in the usual case, preclude
recovery. We agree “that adverse treatment based on discrepancies between
P&Ls and Customer Mix Data is permissible under the Settlement
Agreement.” Claimant ID 100241914 v. BP Expl. & Prod., Inc., 766 F. App’x
5, 12 (5th Cir. 2019).
       SJM also argues the Matching Review process is inconsistent with Policy
345 v.3. That Policy, though, provides examples of how the Customer Mix test
is to be applied. It indicates that “Total Revenues Reported in P&Ls” form the
basis of the Customer Mix test with differences between the P&Ls and
Customer Mix information to be considered as unknown.
       There is no operative split between panels, and the Appeal Panel here
did not misapply the Settlement Agreement nor Policy 345 v.3 when it
permitted the Matching Review process.


II.    Settlement Program Verification of Customer Mix Information
       SJM’s second contention is that the Claims Administrator undertook “an
incomplete    and      deficient   analysis   of   the   provided   customer    mix
documentation” by “gerrymander[ing]” and “ignor[ing] or overlook[ing] dozens
of transactions which were later recorded as unknown.” SJM complains of, for
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                                 No. 18-30676
instance, the Claims Administrator’s treatment of “minor typographical
errors” and “deficient location software.”
      In our view, the Claims Administrator validly followed Policy 345 v.3.
SJM suggests that the verification process does not comport with the
Settlement Agreement and its implementing documents, but SJM does not
specify how other than to refer to “the claimant friendly principles of the
Settlement” and the relevant review guidelines. We do not characterize the
Settlement Agreement as claimant-friendly or otherwise.         Our task is to
determine whether there was something in the decision-making that required
the district court to grant review. To the extent SJM contests the Claims
Administrator’s handling of its Customer Mix information in the adjudication
of this particular claim, it “simply raise[s] the correctness of a discretionary
administrative decision in the facts of a single claimant’s case.” Claimant ID
100212278, 848 F.3d at 410 (alteration in original) (citation omitted). That is
precisely the sort of dispute for which the district court has discretion to deny
review. See id.
      AFFIRMED.




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