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In re Deepwater Horizon

United States Court of Appeals, Fifth Circuit

August 13, 2019

IN RE: DEEPWATER HORIZON
v.
HALLIBURTON ENERGY SERVICES, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C., Defendants - Appellees, LAKE EUGENIE LAND & DEVELOPMENT, INCORPORATED; ET AL, Plaintiffs,
v.
JULIUS BARBOUR; EDWARD BARNHILL, JR.; EDWARD BARNHILL, SR.; KAREN BARNHILL; SCOTT BLACK; ET AL, Movants - Appellants. JOHN M. PETITJEAN, individually and on behalf of a putative class; ET AL, Plaintiffs,
v.
HALLIBURTON ENERGY SERVICES, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C., Defendants - Appellees,
v.
JULIUS BARBOUR; EDWARD BARNHILL, JR.; EDWARD BARNHILL, SR.; KAREN BARNHILL; SCOTT BLACK; ET AL, Movants - Appellants. ECONOMIC and PROPERTY DAMAGES SETTLEMENT CLASS, in the matter of Bon Secour Fisheries
v.
BP Exploration & Production, Incorporated 12cv970, Plaintiff,
v.
HALLIBURTON ENERGY SERVICES, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C., Defendants - Appellees,
v.
JULIUS BARBOUR; EDWARD BARNHILL, JR.; EDWARD BARNHILL, SR.; KAREN BARNHILL; SCOTT BLACK; ET AL, Movants - Appellants. IN RE: DEEPWATER HORIZON LAKE EUGENIE LAND & DEVELOPMENT, INCORPORATED; ET AL, Plaintiffs,
v.
HALLIBURTON ENERGY SERVICES, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C., Defendants - Appellees,
v.
JULIUS BARBOUR; EDWARD BARNHILL, JR.; EDWARD BARNHILL, SR.; KAREN BARNHILL; SCOTT BLACK; ET AL, Movants - Appellants. JOHN M. PETITJEAN, individually and on behalf of a putative class; ET AL, Plaintiffs,
v.
HALLIBURTON ENERGY SERVICES, INCORPORATED; HALLIBURTON COMPANY, Defendants - Appellees,
v.
JULIUS BARBOUR; EDWARD BARNHILL, JR.; EDWARD BARNHILL, SR.; KAREN BARNHILL; SCOTT BLACK; ET AL, Movants - Appellants. JOHN M. PETITJEAN, individually and on behalf of a putative class; ET AL, Plaintiffs,
v.
TRITON ASSET LEASING GmbH; TRANSOCEAN DEEPWATER, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C.; TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED, Defendants - Appellees,
v.
JULIUS BARBOUR; EDWARD BARNHILL, JR.; EDWARD BARNHILL, SR.; KAREN BARNHILL; SCOTT BLACK; ET AL, Movants - Appellants. ECONOMIC and PROPERTY DAMAGES SETTLEMENT CLASS, in the matter of Bon Secour Fisheries
v.
BP Exploration & Production, Incorporated 12cv970, Plaintiff,
v.
HALLIBURTON ENERGY SERVICES, INCORPORATED, Defendant - Appellee,
v.
JULIUS BARBOUR; EDWARD BARNHILL, JR.; EDWARD BARNHILL, SR.; KAREN BARNHILL; SCOTT BLACK; ET AL, Movants - Appellants. In re: Deepwater Horizon DOBBY DARNA; DARRIN COVERT; RICHARD DELACEY; JOSEPH WILLIAMSON; GEORGE ZIRLOTT, Plaintiffs - Appellants,
v.
HALLIBURTON ENERGY SERVICES, INCORPORATED; HALLIBURTON COMPANY; TRANSOCEAN HOLDINGS, L.L.C.; TRITON ASSET LEASING GMBH; TRANSOCEAN DEEPWATER, INCORPORATED; TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED, Defendants - Appellees.

          Appeals from the United States District Court for the Eastern District of Louisiana Nos. 2:10-MD-2179, 2:12-CV-970, 2:15-CV-4143, 2:15-CV-4146, and 2:15-CV-4654

          Before KING, ELROD, and ENGELHARDT, Circuit Judges.

          PER CURIAM.

         Following the Deepwater Horizon disaster, Halliburton Energy Services, Inc. and Transocean Holdings, L.L.C. each entered into a punitive damages settlement agreement with a class of claimants who alleged that they were harmed by the oil spill. In these consolidated appeals, a group of menhaden fishermen challenge the denial of their claims pursuant to those settlements. Because the magistrate judge properly affirmed the denial of the claims and the district court properly declined review, we AFFIRM.

         I.

         Appellants are commercial menhaden fishermen (the Fishermen) who allegedly suffered economic loss due to the Deepwater Horizon oil spill. The Fishermen did not file separate lawsuits against BP or any of the other entities involved in the spill. However, they fell within the class definition in the class-action portion of the B1 Master Complaint filed in the Deepwater Horizon MDL.[1] The B1 Master Complaint sought compensatory and punitive damages on behalf of the B1 plaintiffs and class members.

         The familiar Deepwater Horizon Economic and Property Damages Settlement (E&P Settlement) eventually resolved the majority of the claims asserted in the B1 Master Complaint. However, the terms of that agreement specifically excluded the Fishermen. Instead, the Fishermen entered into settlement agreements with the Appellees, Halliburton Energy Services, Inc. (HESI) and Transocean Holdings, L.L.C. (Transocean). These class settlement agreements (the HESI Settlements) created a fund to distribute among the claimants for punitive damages arising out of the oil spill, and the parties agree that the Fishermen fit within the class definition set out in the settlements.[2]The HESI Settlements also include a provision limiting the claimants' rights to appeal to this court. The HESI Settlements were entered into and filed with the district court on September 2, 2014 (HESI) and May 29, 2015 (Transocean).[3]

         While these settlements were awaiting district court approval, the district court issued Pretrial Order 60 (PTO 60) on March 29, 2016, which applied to all claims in the B1 pleading bundle. Foreseeing "no further administrative or procedural benefit to maintaining" the B1 Master Complaint, PTO 60 first dismissed that complaint. It then instructed "[p]laintiffs [who] did not file an individual lawsuit, but instead filed a [short-form joinder] and/or were part of a complaint with more than one plaintiff" to file an individual lawsuit with the district court by May 2, 2016. PTO 60 warned that plaintiffs who failed to comply would "have their claims deemed dismissed with prejudice without further notice."

         On April 12, 2016, the district court preliminarily approved the HESI Settlements, and notice of their terms was given to class members, including the Fishermen. The April 12, 2016 order, inter alia, set deadlines for objecting to (September 23, 2016) and opting out of (October 16, 2016) the proposed settlements and scheduled a fairness hearing to be held on October 20, 2016. A few weeks later, on May 2, 2016, the deadline to comply with PTO 60 expired. The Fishermen did not file individual lawsuits, nor did they seek relief from PTO 60 or additional time to comply. On June 7, 2016, the district court issued a show cause order to B1 plaintiffs who had failed to comply with PTO 60. The Fishermen did not respond to the order. Thereafter, on July 14, 2016, the district court found that "[a]ll remaining Plaintiffs in the B1 bundle . . . [were] deemed noncompliant with PTO 60" and dismissed their claims with prejudice. Order Re: Compliance with PTO 60 at 5, In re Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mex. on Apr. 20, 2010, No. 2:10-md-2179-CJB-JCW (E.D. La. July 14, 2016), ECF No. 20996.

         After the issuance of the June 7, 2016 show cause order but before the June 28, 2016 deadline to respond, the Claims Administrator for the HESI Settlements filed a proposed Distribution Model on June 13, 2016 detailing how claims would be processed under the agreements. The Distribution Model specified that commercial fishermen, including menhaden fishermen, would be required to provide "proof of [their] timely preservation of [their] rights to a claim for damages by compliance with [PTO 60]." Both the Distribution Model and the attached Claim Form warned that claims would be assigned a value of $0 if the claimant had failed to comply with PTO 60. Although other class members filed objections to the Distribution Model on the ground that it improperly required claimants to comply with PTO 60, the Fishermen did not object. Nor did the Fishermen attend the "fairness hearing" that the district court held in November 2016 to address objections to the Distribution Model.

         On February 15, 2017, the district court gave its final approval of the HESI Settlements and the Claims Administrator's Distribution Model. In its approval order, the district court declined to comment on the propriety of the Claims Administrator's interpretation of the HESI Settlements as requiring compliance with PTO 60. Instead, the district court observed that "[t]his objection [was] most properly considered in an appeal to [the district court] after claim determinations [were] concluded." On February 14, 2018, a year after the district court issued the approval order, the Fishermen filed a Federal Rule of Civil Procedure 60(b) motion for relief from that order, arguing that the Distribution Model was contrary to the terms of the HESI Settlements and that they had not received adequate notice of PTO 60 or its applicability to their claims. The district court denied the motion.

         The Fishermen submitted claims pursuant to the HESI Settlements, but the Claims Administrator denied them because the Fishermen had failed to comply with PTO 60. The Fishermen then appealed to the district court, which had referred "all appeals of claim determinations by the HESI/Transocean settlements claims administrator" to the magistrate judge pursuant to an agreement between the parties. The magistrate judge affirmed the denial, holding that requiring the Fishermen to comply with PTO 60 was consistent with the terms of the HESI Settlements and "the general maritime law precept that a claimant may obtain punitive damages only if that claimant has underlying compensatory damages."

         The Fishermen objected to the magistrate judge's determination, complaining that his reliance on PTO 60 was contrary to the terms of the HESI Settlements and violated their due process rights. The district court overruled the objection on the ground that the claimants had waived their right to appeal the magistrate judge's determination to any other court, including the Fifth Circuit. The Fishermen then appealed to this court.

         II.

         As an initial matter, we address the Fishermen's pending motion to take judicial notice of the docket and complaint in Bruhmuller v. BP Exploration & Production Inc. Complaint, Bruhmuller v. BP Expl. & Prod. Inc., No. 2:13-CV-97 (E.D. La. Jan. 18, 2013), ECF No. 1. We may take judicial notice of prior court proceedings as matters of public record. ITT Rayonier Inc. v. United States, 651 F.2d 343, 345 n.2 (5th Cir. 1981) ("A court may . . . take judicial notice of its own records or of those of inferior courts."). We GRANT the motion, and we have considered these materials in our review of the case.

         III.

         The Fishermen raise four issues on appeal: (1) whether this appeal is barred by the appeal waiver in the HESI Settlements; (2) whether the magistrate judge erred in affirming the denial of their claims; (3) whether the district court erred by declining to review the magistrate judge's ...


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