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In re Horizon

United States Court of Appeals, Fifth Circuit

July 19, 2017

IN RE: DEEPWATER HORIZON
v.
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION COMPANY; BP, P.L.C., Defendants-Appellees, LAKE EUGENIE LAND & DEVELOPMENT, INCORPORATED; ET AL, Plaintiffs,
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 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 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.

         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 ...


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