     Case: 19-30264   Document: 00515329840    Page: 1   Date Filed: 03/03/2020




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

                                                             FILED
                                                          March 3, 2020
                                No. 19-30264
                                                          Lyle W. Cayce
                                                               Clerk
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,

             Requesting Parties - Appellants

v.

CLAIMANT ID 100191715,

             Objecting Party - Appellee




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


Before CLEMENT, HIGGINSON, ENGELHARDT, Circuit Judges.
KURT D. ENGELHARDT, Circuit Judge.
      This appeal stems from the protracted Deepwater Horizon litigation. BP
challenges the district court’s order granting discretionary review and
affirming a $77 million award against it. Because the district court did not
consider investigating credible evidence of a sole, superseding cause for the
Claimant’s loss, we reverse and remand.
                                      I.
      After the April 20, 2010 Deepwater Horizon Oil Spill, BP negotiated and
entered into the Economic and Property Damages Class Action Settlement
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                                  No. 19-30264
Agreement (“Settlement Agreement”) to resolve the claims of those individuals
and businesses who suffered damages as a result of the spill.
      Relevant Provisions of the Settlement Agreement
      To participate in the Settlement Agreement, a claimant must first
submit a “claim form.” The claim form is signed under penalty of perjury and
requires claimants to attest that their damage was due to the Deepwater
Horizon disaster. See In re Deepwater Horizon (Deepwater Horizon III), 744
F.3d 370, 377 (5th Cir. 2014). Claimants who suffered a Business Economic
Loss (“BEL”) are classified into one of four geographic zones, which range from
most impacted (Zone A) to least impacted (Zone D).           Exhibit 4B to the
Settlement Agreement addresses the causation requirements claimants must
meet according to their assigned zone. It “provides for the use of proof of loss
as a substitute for proof of causation.” Id. at 375.
      Some claimants are entirely exempt from presenting any evidence that
their loss was caused by the spill. Claimants located in Zone D, such as the
claimant here, must pass one of seven qualitative tests to demonstrate that
their loss was caused by the oil spill. One of those tests is the “V-Shaped
Revenue Pattern,” which is demonstrated by: (a) a 15% or more drop in revenue
in three consecutive months between May-December 2010 compared to the
same months in other benchmark year(s), and (b) a 10% upturn in the same
months in 2011 compared to 2010. Once causation is proved under Exhibit 4B,
the Claims Administrator, as part of the Court Supervised Settlement
Program (“CSSP”), calculates the amount of the award due under the formulae
set forth in Exhibit 4C.
      Claimant’s award and BP’s appeal
      Appellee, Trammo, Inc. (“Claimant”), filed its BEL claim under the
Settlement Agreement on March 8, 2013. Claimant is a global commodities
merchandiser that purchases and supplies ammonia and fertilizers around the
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world. It has a distribution port in Zone D in Tampa, Florida, and its claim
was based on alleged damages it suffered at that location. After it satisfied the
“V-Shaped Revenue Pattern” in Exhibit 4B, Claimant was allotted
$77,688,762.55 under the Settlement Agreement’s award calculations.
       BP unsuccessfully appealed the award to an appeals panel. It then
sought discretionary review from the district court, which granted review but
affirmed Claimant’s award. Striking out below, BP finally appealed to this
court. BP argues that Claimant passed the V-Shaped Revenue Pattern due
solely to a price spike and drop in the price of fertilizer that was unrelated to
the oil spill. According to BP, the spike caused Claimant’s revenues to soar
and crash back down to normal rates thereafter. And, only because Claimant
used months during the price spike as its benchmark period was it able to
satisfy the “V-Shape Revenue Pattern” test in Exhibit 4B. In other words,
Claimant’s loss was not due to the spill; rather, the price spike in fertilizer was
the sole, superseding cause for its loss.1 Claimant disputes BP’s interpretation
of the Settlement Agreement and maintains that because its revenue curve
passed one of the tests in Exhibit 4B, it was not required to proffer any
additional evidence that its loss was caused by the oil spill.2




       1  BP also argues that Claimant cannot recover because it cannot prove that it suffered
a “loss,” as defined in BP Expl. & Prod., Inc. v. Claimant ID 100281817 (West), 919 F.3d 284
(5th Cir. 2019). West’s majority opinion found that because the Settlement Agreement did
not define the word “loss,” the word’s plain meaning controlled. Id. at 287. Thus, before the
individual economic loss (“IEL”) claimant in West was entitled to recompense, he was
required to show that he suffered “unexpected diminutions in wages or other income that
could otherwise support a claim for civil damages.” Id. at 288. We decline to extend this
“plain meaning” requirement beyond the type of IEL claim that was before this court in West.
Therefore, BP’s argument in this regard has no merit.
        2 After oral argument, Claimant filed a letter with the court purporting to identify

instances where it sought to prove causation during proceedings before the Claims
Administrator. The record cites are less than clear examples, and Claimant has otherwise
consistently maintained that it “need not show any causal nexus under the Settlement
Agreement” because it “fully met the requirements of Exhibit 4B.”
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                                       II.
      The interpretation of a settlement agreement is a question of contract
law that is reviewed de novo. Deepwater Horizon III, 744 F.3d at 374 (citing
Waterfowl L.L.C. v. United States, 473 F.3d 135, 141 (5th Cir. 2006)). We
recently confirmed that when the district court grants discretionary review
and affirms the appeal panel, we review interpretive issues de novo. Claimant
ID 100081155 v. BP Expl. & Prod., Inc., 920 F.3d 925, 928 (5th Cir. 2019).
While the standard of review is less clear for factual findings, we need not
address that issue because this appeal turns on matters of legal interpretation
only. Claimant ID 100222322 v. BP Expl. & Prod., Inc., 773 F. App’x 775, 777
(5th Cir. 2019) (per curiam).
                                       III.
      The issue before us is a narrow one: is an investigation into a claimant’s
attestation required when BP presents credible evidence that the purported
loss is not due to the spill but a sole, superseding cause?
      The appeals panel answered in the negative. The district court did not
specifically consider the issue but affirmed without qualification the appeals
panel decision, which found that (1) Claimant “satisfied the requirements of
Exhibit 4B of the Settlement agreement and that is all that [was] required of
it”; and (2) BP’s “alternative causation argument [has been] soundly rejected
in recent federal court pronouncements interpreting the requirements of the
Settlement Agreement.”
      To the contrary, we recognized that such an investigation may be
warranted in one of our earliest decisions in the Deepwater Horizon progeny,
Deepwater Horizon III. 744 F.3d at 377―78. There, we held that causation
was “certainly subordinated” in the Settlement Agreement and we therefore
refused to impose a gatekeeping function on the CSSP. Id. However, we also
caveated that not “all claims must be accepted no matter how clear the absence
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of the required nexus may be.” Id. at 378. We left open the possibility that
“real examples of implausible claims” could be resolved by “[t]he claims
administrator, parties and district court… as they resolve other questions that
arise in the handling of specific claims.” Id.
      But it was not until 2019, in West, that we found an example of such an
“implausible claim.” 919 F.3d at 288. We vacated the award in West after
finding that the “loss” the claimant suffered was not caused by the spill but
was instead due solely to the front-loaded compensation scheme in his
employment contract. Id. at 288―89. West was followed shortly thereafter by
BP Expl. & Prod., Inc. v. Claimant ID 100141850 (Howard Industries), 919
F.3d 887 (5th Cir. 2019) (per curiam). Though it did not exist in Howard
Industries, we advised that “credible evidence of a sole, superseding cause for
a claimant’s loss” may warrant “an investigation into the plausibility of the
attestation.” Id. at 891. Since Howard Industries, we have remanded two
other claims for consideration of whether there was a sole, superseding cause
of the claimant’s purported loss.     BP Expl. & Prod., Inc. v. Claimant ID
100238083, 778 F. App’x 296, 297 (5th Cir. 2019) (per curiam); BP Expl. &
Prod., Inc. v. Claimant ID 100296061, 777 F. App’x 772 (5th Cir. 2019) (per
curiam).
      Thus, reversal is warranted because the appeal panel’s categorical
rejection of credible evidence of a sole, superseding cause stands in conflict with
this court’s precedent. In addition, the district court’s decision was made
without the benefit of our recent guidance on causation in West and Howard
Industries. Because the district court has not considered whether there was
credible evidence of a sole, superseding cause and because we are not the
factfinder, the district court should review this argument in the first instance
and determine whether to remand to the Claims Administrator for additional
factfinding.
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                                      IV.
      Finally, we emphasize that the reach of today’s holding is limited: an
investigation into the plausibility of a claimant’s attestation is required only
when BP presents credible evidence of a sole, superseding cause. Accordingly,
we REVERSE the district court’s order and REMAND for proceedings
consistent with this opinion.




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