it please the court i'm stanton jones from arnold and porter and that represent the district court abused its discretion by denying review of the ten million dollar compensation award here under the deepwater settlement and there are two main issues i'd like to focus on today first the settlement program aired in calculating this award by mis classifying claimants vehicle expenses as entirely fixed based on the label assigned by the claimant despite evidence that the substantive nature of those expenses includes a variable component as this court recently held in two cases texas gulf seafood and claimant id one zero zero one eight five three one five by focusing on the label given to an expense rather than its substantive nature the appeal panel  misapplied the settlement agreement and the district court err in failing to correct this error of law so at a bare minimum today we believe this court should vacate and remand for proper consideration of and classification according to the substantive nature of the vehicle expenses and the second issue that i'll talk about today is on an even more fundamental level the settlement program misapplied the settlement agreement here by by failing to give adequate consideration to powerful evidence that this claimant is an oil and gas business excluded from the settlement class all together and therefore not entitled to any award at all and including notably or honors there is here an impartial prior determination of a federal agency the occupational safety and health administration or osha that claimant is a business in the oil and gas industry without adequately considering that evidence the settlement program assigned a different nakes code to this claimant that all parties agree is not correct and so in those circumstances this court should remand for proper consideration of the evidence including osha's in perth impartial determination to decide properly that claimant isn't excluded oil bass oil and gas business so on the first issue before you get to the first on the second because that seemed to be the that the central thrust and it would justify the baseball situation of zero regardless that it bleeds into the other but therefore you know what i do focus on these greece really closely and on page two you quote young crist's website that they dig deep injection wells and then you add in the sentence quote which are used in the oil and gas industry and the supporting site is record to sixty seven so the implication to the reader is their own website says they did dig deep wells which are used in the oil and gas when you go to their website and when you look at the records that you g is there any reference to which are used in the oil and gas or is that your supplemental point the website does not say that they did wells in oil and gas but it is undisputed  that that this claim and young quest does do work in the oil and gas industry so to stand when you give record cites with a sentence that has two compound points the second point is the essential one your get giving implying that their own website says they do oil and gas it's difficult to for me to move past that i look at the record side and it doesn't say that so that's your opinion that this type of well always are frequently means oil and gas i  the during the proceedings before the claims administrator they attempted to remove their oil and gas revenues from their financial statements but the claims administrator nonetheless included those oil and gas revenues in the calculation of its award here so i don't believe there is any dispute that that this claimant does do work in the oil and gas industry there are two other significant pieces of evidence that i would point the court to is a company called earn energy partners which is quote an independent oil and gas master limited partnership focused on the exploitation development and production of oil and gas properties in the united states that set the record in appeal page two seventy five and claimant has admitted in these proceedings that it's were for this client to get one of  thirty one and those are their oil wells the women but the appeals panel wasn't oblivious to this they purported to look at the talladega of the business interests they said when we've looked we think it's class one and class five wells those are government wells not class two so it seems like they looked at it and they made a factual determination which could be wrong but why isn't this fact determination that can be argued over but not something that we would reverse so the appeals panel decision doesn't doesn't acknowledge any of the specific evidence any particular evidence on the other side it doesn't consider it doesn't it doesn't explicitly mention or acknowledge or distinguish are arguing the way any of what i think are the three key pieces of evidence and i'll get to the third one the first was the oil and gas revenues on the claimants p n l's the second is  undisputed fact that the claimants lart one of their largest clients by revenue is an oil and gas company and they do repair and servicing of oil wells for that company the third and perhaps most significant piece of evidence here ocean's determination so the federal agency osha assigned claimant that nakes code to one point three one one one for drilling oil and gas wells and ocean did that ocean assigned that oil and gas nakes code to the claimant as part of oceans investigation into a tragic accident where one of the claimants employees was quote working from the rod basket of an oil rig this is significant i do want to hear their answer this the next code which i didn't even know this classifications existed it's both to the i r s as well as osha so osha gave them precisely the code that would exclude them yes but then in their taxes for two thousand and ten they didn't use it could you clarify who used what codes osha use the one that would is the excluded code i will add in the seam inspection detail from this same accident also listed of the claimants standard industrial classification which is just a different type of code as one three eight one also titled drilling oil and gas wells that was osha's impartial independent designation of this claimants business in connection with its investigation into an accident that occurred on an oil rig with claimants employees claimant in its tax return assigned a different code makes code for some sort of specialty contractors are a relatively undefined specialty contractors without a specific there's a specific industry tied to it in the title that's what the claim and that's what claimant put it it's down to the claims administrator do the claims administrator assigned a completely different makes code which neither side of this appeal to my knowledge is advocating we certainly aren't and i don't believe the claimant will say that the claims administrators makes code designation was correct the claims administrator assigned nikos code to three seven one one zero which is for quote water and sewer line and related structures contractors and the appeal panel u how that makes code designation by the claims administrator and it's wrong and i believe all parties here agree that it's wrong so we have a situation where there's clearly a dispute the tox return does not match either osha's impartial designation or what we believe is a subsist a powerful set of additional evidence that this claimants a primary activities are in the oil and and they didn't explain how they were coming out the way you go should judge barbier he was obligated you must be harming to to deal with that that the absence of sufficient explanation or perhaps it's the absence of strong enough evidence to support that they're not all in gas related it's an issue the judge barbie had to take or be a had i'm not sure that fits with our when both sides agree that the claims administrator and the appeal panel have gotten it wrong no to my knowledge no one is here today advocating that the claims administrator and appeal panels nico designation is accurate the claim says that they're willing to accept it but that's just because it results in them getting a ten million dollar award rather than being excluded from the settlement class altogether so there is something wrong here and it's a it's a potentially ten million dollar error secondly you have the again the impartial designation determination by an independent federal agency as to the appropriate nakes code designation and the one that again that osha chose was the specific excluded oil and gas next code and thirdly the this goes to an exclusion from the settlement class right unlike the other issues we raised in this appeal about  oil and gas business as osha found goes to whether this claimant is even a member of this settlement class or if they're an excluded oil and gas business they shouldn't be here at all that they're not entitled to any recovery whatsoever under this settlement because they aren't even in the settlement class and i think that those those three factors together sufficiently raised the stakes that we believe that this is a a significant substantial and serious misapplication of the settlement agreements and not to give proper consideration and to adequately address the evidence which again the settlement agreement explicitly requires consideration of this other evidence so in exhibit seventeen well go back to section two point two point four point five of the settlement agreement expressly excludes from the settlement class businesses that are in the oil and gas industry asics as identified by nakes codes in exhibit seventeen and exhibit seventeen says that the claims administrator shall determine shall determine the appropriate next code based on three things the tax return a business license and quote any other evidence of the business activities any other evidence of the business activities necessary to determine the appropriate next code and the other evidence here  is is is we and was worthy of careful consideration including the osha designation the there will be undeniable oil and gas revenues listed in claimants p n l's as well as the fact that again one of this claimants largest clients by revenue is undisputedly an oil and gas business and it's also undisputed that the work that the claimant does for that company is repair and set a little context and then get into the substantive matter the the apple e here is family owned business they've grown from you know zero to nothing in fifty years and they are the largest driller of class one  class five deep injection wells they do not do class to oil and gas injection wells have not and never intend representations to the contrary advanced by  process that would result in us being precisely here with these arguments and a determination was made that we are not a member of the excluded class and in fact they assigned what they believed was a more appropriate  c s code which does comport with the work that we do it isn't the one that you used in your tax forms that is correct in the point i would present there is that whether it was the one that the mor wrong and the related questions are is that oil and gas company the largest client of yours those i've just got right there i mean that's just where you get the doubt seeps in and an answer to those questions no bright burn energy partners is not the largest clients of my clients has never been the nature of the work that is done for that company is field maintenance it's not drilling it's not a lawyer well down home work it is above ground equipment maintenance repair osha was on the site of the bright burn what kind of wells are you maintain we have for for someone like s i know i'm not suggesting to the contrary do you do maintain we do work for that company and some of the work that we do is on equipment that they utilize in some of their well d wells we do not we we do not you know and just while we're talking about specifics all the work that has ever been done for breitbart has only always been on land i would say that as to any work that this company has ever done and any point there's never been any offshore work of any of the code relevant to the exclusion that b p is arguing it only covers drilling it wouldn't cover maintenance of oil and gas equipment or rather necessary aspects of the drilling operation under the settlement agreement i believe there are categories in designations as to some that are barred is a member of a preclude class and there are others which can be considered in reviews or not in my words per se but are that is my understanding of what the moratorium team is designed to do to review the actual record that exists to review the facts there are a political and then make a recommendation to the claims administrator as to whether or not this claimant is in fact a member of an excluded class or is engaged in work that would be preventative from asserting the claim the a well be in the priest but is it if you do any you're excluded or if you do some small fraction those amounts are excluded and is that that has been issued has absolutely no monetary component that relates to any oil and gas work of any time that's been done there was some minor amount of w that was stripped out and that was all reported disclosed and looked at very carefully for looking at five years and thousands of pages of county records that was never part of any c ation the suggestion that bright burn is our largest client by any measure is simply wrong that is and consistent with the settlement agreement th claims administrator is tasked to find the predominant work just having a touch of something that may be unpalatable does not effect the entire claim if your predominant work i believe required in the sense that they have the discretion to do that is i believe council presented to the court that the claims industry has authority to look at everything that's relevant to that issue and in fact they did and that is how they result and in their own summary findings at or prior to the time when they published the award they make specific notes and findings to that and specifically referenced there in that there are no oil and gas components in these calculations so i don't believe that it is i don't see any reason why under the settlement agreement or excluded but fortunately it's not my opinion it's a claims administrator supported by the moratoria panel and then the appeals panel which reviewed the record itself in accordance with the more recent teachings of texas gulf seafood that's and that came down in in the middle of the yes that's correct but but b p is in a bit of a bind at least with the appeals panel logic if we jump to the vehicle situation in the specific context of texas gulf because they have a good faith basis to say we can't have excluded interest there's some oddity the codes osha therefore we say zero the appeals panel then it seems jumping to the vehicles question and you  your briefing say well sure there must have been some variable some fuel some repair but the appeals panel goes on to say well b p said zero so we're going to go with the top amount but b p was saying zero because they don't think you're a qualifying entity at all so to to give you a question on the vehicle texas gulf seafood situation and whether there was an uncritical acceptance of the label of these as fixed costs beat to the extent the appeals panel says we don't need to appeal process applies to only those six scenarios where the issue in dispute is is compensation now in the broader sense being excluded is of course a compensation because it's zero if you're exclude member but i believe that process is designed more appropriately for those where you do have the issues that were also in this case which are is it a fixed or is a variable cost it was it missing i was in this characterize or classify did they look at the bigger labels or did they raised i believe under the under the principle that it is that somehow the claims administrator or appeals panels misapplied the settlement agreement by not making us in excluded members i think that's their the thrust of their argument to which the only point hadn't responded yet was the osha because i believe that there the court perceived some weight to that and i would just like to dispel that osha's report is a report of an accident they weren't there determining anything and in fact the the accident occurred in two thousand and seventeen just to show it's pretty remote in terms of the baseline periods are involved in this claim but nevertheless it's and not attributable to my client and the claimant in this case it is concededly a novel argument to take an unrelated and minute straight of department of this government and say that their casual as to a very important fact in this case is binding in this case but it is distinguishable and most importantly the settlement agreement does not empower other governmental agencies to make that determination they empower only the claims in ministry or to make that decision which is who made it in this case  question that is usually subject to the abuse of discretion standard that is the question before the court and an analogy is cases is presuming you were traveling under a mis application of the settlement agreement theory advanced by b p what if there is no conflict between appeals panels on this issue in fact i w submit there's probably no other water well driller of this nature and character that's brought before the claims in a straighter or the appeals panel there's no opportunity or concern that resolution of this issue will give guidance because again the uniqueness of it it is in and it's this court is being asked to as you have said in some of the more recent cases april second cases one example  review an administrative discretionary decision that applies to the unique facts of the single claimants case and that is not what the abuse of discretion procedure is designed to p has not established the predicate by which to even obtain the relief they're asking for it as to the other matter that was presented to argument today on fixed versus variable expenses if i could just briefly touch on that the fact is fixed costs are not fixed meaning without any kind of variation the settlement agreement under its own exhibit four d and the list of their contemplates that there can be crossovers you can have exist you can have costs that are both fixed and variable in this case fortunately the vehicle issue which has been present is an example our records that were submitted very clearly identify both vehicles and fuel in the corresponding fixed and variable categories that match with the exhibit d we now that i am and i concede an agreed that under the texas gulf seafood case that is not the be all end all of the analysis but we have submitted more than several  three thousand pages worth of financial records including baseline general journals which have been reviewed and confirmed they've been reviewed by the language of both the can the appeals and new straighter fields panel and the claims really i don't think you want me to read to you but the fact of the matter is that the appeals panel said based reviewed the record and they specifically found that those arguments were either without merit or they had not been presented sufficient evidence to find the contrary more particularly those arguments fall within the very clear edicts of the abuse of discretion predicates that this court has established must exist you know the pressing issue and the conflict of appeals panels the need to if you resolve it it will prevent future reoccurring issues none of those exist in in the facts that are presented here that issues again nothing more to administrative discretionary decisions need the facts in this case and to some extent i think result by the very clear language of the texas gulf seafood that has come out between authority to the court to represent the subsequent of things are coming out and i'm happy entertain the other questions or i'll stand thank you thank you your honors one quick factual point the bright bird oil and gas company and i'll start on the oil and gas exclusion issue right burn the record shows is one of the claimants the largest clients by revenue it we didn't say in our briefs and i certainly didn't intend to indicate that it is the single largest customer but it is one of the claimants largest clients by revenue i don't have this specific percentage to the record is that break byrne is one of the claimants the largest clients by revenue on the osho report i think is really critical here my opposing counsel referred to it as a tool report suggesting that maybe osha wasn't really paying close attention i respectfully disagree osha was investigating the death of one of the claimants employees in the rod basket on an oil rig the conclusion of the o report says employee number one's body hit the shot of the rod basket causing severe internal organ damage resulting in his death there was nothing casual about the work that osha did investigating this and the fact that osha assigned the specific excluded oil and gas nakes code as well as the oil and gas standard industrial classification in connection with an investigation of this magnitude into a person's death warrants careful attention in the analogy sounds like they're disputing that that company would get that code that is what they do so if it's going to their work site why wouldn't that know no assignment of the need code with two young brothers it's on page two seventy seven of the record it was an investigation into an accident that occurred at a bright burn site but it was a young quist employee who died the claimant's employee who died it was an investigation into that death of claimants employee and the nakes code assignment very clearly and undisputedly was assigning  relevant i haven't ever heard or seen anything to indicate that there was any material change in the nature of the claimant's business with respect to oil or gas or otherwise between two thousand and seven frankly and today that the cl focuses narrowly on the fact that they don't have real the oil wells but the excluded oil and gas business is under this settlement agreement are explicitly not limited to those who actually drill and if you look at page  fifty ninety eight of the record on appeal this is section two point two point four point five of the settlement agreement it identifies the oil and gas industry exclusion and in addition to those who drill wells it also excludes those who are involved in preparing or maintaining wells sites or other extraction sites as well as those involved in maintaining a pipeline or distribution facilities the exclusion is broader than just those who panel applied is it goes to companies that are involved in quote the construction of water and sewer lines mains pumping stations treatment plants and storage tanks totally sure whether what the claim its position was on that but my understanding is that that is not what this company does at all it's not what they put on their tax returns they're willing to accept it because it means they get money but i don't know them to be saying it's right very briefly on the expense misclassification issue before my time runs out the classification of of claimants of vehicle expenses as one hundred percent fixed i believe is clearly wrong substantively wrong under texas gulf seafood and this court subsequent decision applying texas gulf so we believe that at a minimum of a concern remand for not and on the baseball process i believe judge higginson's questions had it just right b s zero dollar baseball offer here was obviously because b p was pressing a whether it's meritorious or not and we believe that it is but at a minimum it was a good faith plausible legitimate argument but if you reject your position that they are excluded this is what we think is the most should be entitled to is you know opportunity to make that kind of final offer to the final suggestion to the if you do think in pretty good argument for zero but you don't you don't want the baseball here to apply there if we don't accept there is no we're not aware of any way to get around that standing here today i don't know whether that would work  it's an interesting suggestion even if it was possible i could see some legitimate strategic reasons why particularly in a case like this where we believe that the evidence supporting exclusion is so strong that b p shouldn't be forced to even even in an alternative argument with a you know multimillion dollar offer b p shouldn't be forced to accept  possibility at the appeal panel stage that the claimant is entitle to some multimillion dollar war when b p has this very strong argument that they're excluded so even if that sort of you know if excluded then zero alternatively some multimillion dollar award were feasible and i don't know that it is in circumstances like the ones here when b p makes zero dollar or more clearly based on a strong argument we believe meritorious but at a minimum a strong good faith argument that the claim is totally excluded as a class member zero dollar offer the settlement says if you get ten assign the appropriate makes code and then the claims administrators policy for eighty eight says that the claims administrator would choose the nakes code that quote most accurately describes the company's primary or you can't tell us what percentage of the claimants revenue comes from oil and gas related activity i cannot but what do you want us to do i believe i don't believe that that the claims administrator level because the claims administrator assigned this other nakes code that is simply all wrong unless you tell him you know we think it's seventy percent ten percent fifty percent how are they supposed to make them now so it's so b p is not you're not telling us that if we send it back it'll come out differently only i believe it will come out different tell me why because if it's only two percent of their business why will it come out differently because i believe that there's good reason to think that show was correct when you haven't given us the evidence to much to other than you just haven't given us the evidence on how much of their revenue is from gas property so the proceedings before the tell me appeals panel i don't believe we have that information from the claims administrator proceedings where b p is not present so i don't i'm not sure that the record as it stands today is sufficient to to know a specific percentage certainly that work was not done at the claims administrator level again because the claims administrator assigned this other nakes code for water and sewer lines it's just totally wrong w