BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA PRODUCTION COMPANY; BP, P.L.C., Requesting Parties - Appellants,
CLAIMANT ID 100166533, Objecting Party - Appellee.
from the United States District Court for the Eastern
District of Louisiana
STEWART, Chief Judge, and DAVIS and ELROD, Circuit Judges.
JENNIFER WALKER ELROD, CIRCUIT JUDGE
Deepwater Horizon case involves the fixed vs.
variable cost issue that has arisen frequently in appeals of
claims submitted pursuant to BP's Economic and Property
Damages Settlement Agreement (Settlement Agreement). Because
the reviews conducted by the Claims Administrator and Appeal
Panel were consistent with our recent decision in Texas
Gulf Seafood, and because BP's arguments regarding
the substantive accuracy of the "fixed"
classification only raise the correctness of a fact-dependent
decision in a single claimant's case, we AFFIRM the
district court's judgment.
claimant here, Ordes Services LLC (Ordes), is an electrical
contractor that provides installation, maintenance, and
repair services in southeast Louisiana. Ordes submitted a
claim pursuant to the Settlement Agreement in March 2013.
Relevant here, in the profit-and-loss statements Ordes
submitted with its claim, Ordes recorded an expense labeled
"Management Fee." The Claims Administrator
requested additional information about this expense during
the processing of Ordes's claim.
October 2017, the Claims Administrator determined that Ordes
was entitled to $2.1 million under the Settlement Agreement.
In calculating the award, the Claims Administrator classified
Ordes's Management Fee as a "fixed" cost rather
than a "variable" cost under the Settlement
Agreement. BP appealed to a three-member Appeal
Panel, challenging the Claims Administrator's treatment
of the Management Fee. The Appeal Panel concluded that the
Claims Administrator had properly categorized the expense as
fixed and affirmed Ordes's award. The district court
denied BP's request for discretionary review.
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 the decision it declined to review
"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 (Texas Gulf Seafood),
910 F.3d 797, 800 (5th Cir. 2018) (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
appeal, BP contends that the district court's denial of
discretionary review was an abuse of discretion for two
reasons: (1) the district court failed to resolve an Appeal
Panel split regarding the proper approach to classifying
fixed vs. variable expenses; and (2) classifying the
Management Fee as "fixed" was substantively
recently resolved the Appeal Panel split that BP complains of
in our decision in Texas Gulf Seafood. There, we set
out the proper approach for
Administrators and Appeal Panels in classifying fixed vs.