BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION COMPANY; BP, P.L.C., Requesting Parties - Appellants,
CLAIMANT ID 100261922, Objecting Party - Appellee.
from the United States District Court for the Eastern
District of Louisiana
HIGGINBOTHAM, ELROD, and DUNCAN, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge
Deepwater Horizon appeal, BP challenges the $2
million award Claimant received pursuant to the Economic and
Property Damages Settlement (Settlement Agreement). Because
the district court properly denied discretionary review, we
an Alabama-based manufacturer of commercial signs, submitted
a claim to the Settlement Program in November 2013. While
processing the claim, the Claims Administrator requested
additional information from Claimant on several occasions,
including information pertaining to a $900, 000
"Research & Development" expense that Claimant
classified as a "variable" cost on its profit and
loss statements. Claimant complied, explaining the purpose of
the R&D effort and listing the types of costs included,
and provided a month-by-month breakout demonstrating that the
costs had been incurred periodically between February 2010
and June 2011.
this exchange, the Claims Administrator rejected
Claimant's claim twice, and Claimant requested re-review
each time. In its explanation of the second denial, the
Claims Administrator noted that it had adjusted
Claimant's accounting data to record the R&D costs in
the months in which they were incurred rather than as a lump
sum in June 2011. Finally, after a third review of the claim,
the Claims Administrator determined that Claimant was
entitled to approximately $2 million under the Settlement
Agreement. This time, the Claims Administrator's analysis
did not include the adjustments to the R&D expense.
appealed the award to an Appeal Panel on three grounds: (1)
Claimant's attestation on its claim form that the oil
spill caused its losses was implausible; (2) the Claims
Administrator improperly characterized the R&D expense as
"variable" rather than "fixed"; and (3)
the Claims Administrator erroneously omitted its adjustments
that "matched" the R&D costs to the months in
which they were incurred. The Appeal Panel declined to consider
the attestation issue but noted that it was preserved for
further review. On the fixed vs. variable costs issue, the
Appeal Panel affirmed the Claims Administrator's
classification of the R&D expense as a variable cost.
Finally, turning to the matching issue, the Appeal Panel
found the issue mooted because, even if it was error to omit
the R&D expense adjustments, the correct value would be
closer to the $2 million award amount than BP's final
proposal of $0. Thus, the Appeal Panel denied the appeal.
sought discretionary review in the district court, raising
the same issues it raised before the Appeal Panel. The
district court denied review in June 2018, and BP now
court reviews the district court's denial of
discretionary review for an abuse of discretion. Holmes
Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d
313, 315 (5th Cir. 2016). The district court abuses its
discretion if it declines to review a decision that
"actually contradicted or misapplied the Settlement
Agreement, or had the clear potential to contradict or
misapply the Settlement Agreement." Id.
(quoting In re Deepwater Horizon, 641 Fed.Appx. 405,
409-10 (5th Cir. 2016)). It is also 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.'" BP Expl. & Prod., Inc.
v. Claimant ID 100094497, 910 F.3d 797, 800 (5th Cir.
2018) (Texas Gulf Seafood) (quoting Claimant ID
100212278 v. BP Expl. & Prod., Inc., 848 F.3d 407,
410 (5th Cir. 2017)). In contrast, the district court does
not abuse its discretion if it denies a request for review
that "involve[s] no pressing question of how the
Settlement Agreement should be interpreted and implemented,
but simply raise[s] the correctness of a discretionary
administrative decision in the facts of a single
claimant's case." Id. (alterations in
original) (quoting Claimant ID 100212278, 848 F.3d
contends that the district court abused its discretion
because the Claims Administrator: (1) failed to investigate
Claimant's implausible attestation that the oil spill
caused its losses; (2) improperly classified Claimant's
R&D expense as variable rather than fixed; and (3) ...