you your honor and may it please the court george hicks for the appellants in a sewer sponsored order the district court categorically prohibited settlement program accountants from ever reallocating revenue in order to achieve matching under policy for ninety five annual variable margin methodology that order should be reversed for three separate reasons none of which class council seriously disputes first in its previous policy four ninety five decision this court affirmed the eighty and in its entirety it is undisputed however that policy for ninety five and the a v m and actually permits program accountants to engage in limited revenue reallocation on a claimants by claimant basis in order to apply the a v m and indeed it is undisputed that this practice is a necessary component of the a t m and that without it the a t m and actually worsens the mismatching problem it was designed to remedy and it's undisputed that in the previous appeal class council challenge revenue reallocation under the a v m and and yet this court upheld the a v m and in its entirety accordingly the district court's order on sue sponte prohibiting that concededly necessary component of policy for ninety five and the a v m and violates this court's decision affirming the a v m and in toto second this the district court's order violates this co two thousand and thirteen matching decision which recognize that number one claimants should receive settlement compensation based on actual economic losses not windfalls based on idiosyncratically maintained records and number two that like claimants must be treated alike the a t m and is the methodology used to satisfy those requirements but it is undisputed that the a t m then cannot function properly unless revenue is recorded in the month in which the relevant economic activity took place otherwise the a t m then actually makes things worse the district court's order prohibiting even a limited claimant by claiming revenue reallocation in order to properly apply the a thus exacerbates the very problems associated with mismatched profit and loss statements that this court identified in the matching decision the third at a minimum the limited ave reallocation that is necessary for the then and matching to work should be permitted under the rubric of error correction which policy for ninety five also recognizes and that even the district court's order permits class council does not seriously dispute any of this indeed the list of what they don't dispute is remarkable and essentially dispositive they don't dispute that the a v end doesn't work and actually causes more problems if you don't get the revenues right in the first place they don't  policy for ninety five permits limited revenue reallocation in order to apply the a v and they don't dispute that the claims administrator and the district court previously allowed limited revenue reallocation under the a and they don't dispute that during the last appeal they raise to this court that the eighty and permits a limited revenue reallocation and they challenge this aspect of the a v m n and yet this court still upheld the  in its entirety rather than dispute any of this class counsel largely relies on rehashed arguments that either have already been rejected or are wholly in apas it here at the end of the day settlement program accountants have to be able to exercise their professional judgment on a limited claimant by claiming basis to reallocate revenue when necessary so that the aviom am works as intended matching properly takes place settlement claims reflect economic reality rather than unjustified windfalls and like claimants are treated alike the district courts sue a sponsor order to the contrary up ends all this and should be reversed came with much on the nation right attached to that motion for reconsideration there is a fairly lengthy and detailed declaration by an experienced accountant who has experience with the claims administrator and he walks through very straightforwardly for those of us who are not accountants which i imagine is most of the people in this room to explain why the a t m and has to have this limited ability to reallocate revenue why it makes things worse if you don't do that certain situations where if you don't do it you're going to end up with these windfall claims and compensation and also how it actually it what we're asking for is an even handed rule mr spargo declares actually points out paragraph paragraph eighteen he gives an example where failure to do this actually hurt the claimant so this is by no means a you know a d p friendly rule this is an even handed rule because of course it c ports with economic reality which is the watchword of this court's decisions particularly the matching decision the idea here is to provide settlements compensation consistent with economic reality and rather than sort of idiosyncratically maintain records so i would if you haven't seen or read mr gaspard's declaration i strongly encourage that you do so because it lays all this out in a very straightforward manner and it is also unrebutted undisputed and an mentions in class counsels brief so i think mr goss sparta's examples run into the same sort of issues that judge davis explains in the policy for ninety five decision rightly would you would you agree that do you recall in the policy for ninety five decision there's the the former with the two hundred thousand dollars that he receives once on october thirty first and then the next year on november first awarding a two hundred thousand dollar loss in that circumstance i would take it under your theory is a windfall right well it's a windfall but i think what the court was discussing in that particular section of course was the industry specific methodology and the problem with the industry specific methodology s which are dramatically different in kind from the limited case by case situation we're looking at here that of course that was a categorical industrywide formula that applied to every claimants who fell within the umbrella regardless of the specific facts of that claim and so what you would end up having are claimants where you might have a p an statement that didn't comport with economic reality or a claim is chosen period that didn't comport with economic reality which you know is a very different situation than the kind of necessary limited revenue reallocation we're talking about here where you would be looking at a specific claimants individual eyes to facts and you know in order to apply the e b m them which is necessary to make the matching work so it is explains in the reason that i assumed bail in the in the policy for ninety five decision is that the settlement that the parties agreed to allow the claimants to pick their months right there three consecutive months within that whatever seven month period of two thousand and ten and so if you happen to choose a month obviously they would do this honor that choice behalf of the claimants of some of the examples that the accountants report that you referenced seem to run company long into this distinction where you're moving money for obvious for the economic realism reasons but you seem to be moving it in ways are even more extreme than moving the two hundred thousand dollars in judge davis is example from that from mick from november one two to october thirty first a couple responses when i think that for example in the i ascend sort of agricultural example i mean it i think it was a simplified version that appeared in that decision because what the i assume actually did was it would take that revenue and just spread it over the entire year so it wasn't even a mat you know whether or not there was actually relevant economic activity that was occurring in a particular month and so i think it was sort of a a much broader example than what you know we are talking about here where you've got a landlord who clearly has three went to renting out three months of rents and happens to see the check you know for triple rents but you know but the other thing i would also point out is that nobody under the rule that we're arguing nobody is deprived of their choice of months this is done before there's any choice by the claimant who of course gets to choose it's months under the settlement they get to choose different periods not for purposes of you know you have to choose the same months in each but you get to choose one of three different benchmark periods so all of that happens after this occurs so the claimant there may actually be made into my next question which is with the and i don't mean to avoid the question it would depend on the facts precisely because what we're talking about here is a necessarily fact dependent and claimant specific rule if you will so you know but what i can say is that certainly whatever would happen number one of the farmer still gets to choose his or her own compensation period to whatever you know maximum recovery the farmer gets under you know whatever choice he or she wants but then also whatever that choice is is going to be far more consistent with economic reality and awarding compensation based on actual real economic loss as the matching decision you know essentially strongly encouraged and then on  district court of course looked at all the evidence including the prolife and ins and essentially codified if you will what the court was talking about in the matching decision saying that yes the parties did agree in the settlement agreement to have the sort of matching to make sure that like train like claimants are treated alike that the settlement awards comport with economic reality and so i think that in another respect also and judge davis was specific methodology s and i think that's important because if you go back and look at what class counsel was arguing in that appeal they were arguing they were challenging all revenue reallocation under both the eighty m and and the i as is where they set out the issue presented for their appeal and the issue is quote whether the district court erred in approving a final matching policy that allows and in the case of the for specialized frameworks requires s p was actually engaging in this and that the district court actually at upheld this and that's a two six eight five five to five seven of the record is a three examples where the district court upheld this reasonable exercise of discretion by the accountants where for example one of them was the rental situation where the the court said the accountants quote reasonably exercise their discretion in addressing an obvious mismatch of revenue expenses even in the absence of an actual accounting error and even in this court in this appeal class counsel still doesn't dispute that policy for ninety five in the a v m and permit revenue reallocation so you can see this at page nine  brief where they actually say the accountants under the original matching policy and i note that they used the word original because they are essentially conceding that it's been changed by the riemann order they said accountants quote retain discretion to reallocate revenues even for claims subject to the general a v and n and then again in footnote thirty account the accountants made changes to revenues under the a v n methodology so there's really no dispute at all in this case that that is what has been be because we didn't have the benefit of briefing i mean i think maybe he just could have overread or you know he was trying to implement you know this this is a busy n d l there's a lot going on and you know he's  best you know he may have just entered this order without really kind of understanding the consequences or perhaps the the long history behind some of this you know we tried to point it out in the motion for reconsideration court what i think that opposing counsel may be missing is that the policy for ninety five is really separated into several different segments some completely aren't issue here one of the segments was the a v m methodology several of the segments were the four specialized frameworks which were the i sounds all of that was preceded by in or duction introduction set forth underlying issues in principles that gave guidance to the program accountants as to what to do with the p n l's before you either replied the a methodology or one of the highest sounds and as we pointed out in the footnote that opposing counsel cited on that really comes from the underlying principle so when this court affirmed a v m what it was really affirming was a process to reallocate expenses because a v m is really an expense reallocation process so the court really didn't say to judge bar me a this is what you do with the preliminary steps with these underlying principles like principle seven so judge barbie i think very reasonably said ok i'm supposed to apply a v m which is a expense reallocation process that's been a firm and i need to apply it but what do i do with these pullin ery steps and he said with respect to errors and there is no dispute about this that the settlement program accountants still look at the  when they find errors they correct them or at least in their professional judgment sometimes b p disagrees with that sometimes the claimants disagree with that in that usually ends up here on with respect to revenue reallocation that was discretionary says you shouldn't be moving around revenues which was argument from the very beginning at most you should only be reallocating expenses and that's where i think the admonition comes from as as we discuss right now on him and before and after this order the settlement program accountants still have the authority to review for what they consider to be errors and that is when they think that people have improperly recorded revenues they still retain the discretion to reallocate those revenues and they still do and that happens all the time it's not surprising to me that with one hundred thirty five thousand claims settlement program accounts we're actually making these decisions on the front lines who used to reallocate revenues under a v m or still reallocating revenues in most cases and they just consider it to be an error i'm looking at policy one hundred five yesterday as obviously you're going to restate the p n l's if there's a mismatch of revenue variable expenses so that revenue and expenses in the next sentences if matching issues remain after such restatements revenue end or variable expenses will really reallocated as per cetera et cetera et cetera including a t m so right in that one in that limits it to revenue or expenses it seems to be talking about both of them being reallocated to affect you eat the the mismatch i believe that's correct and i believe we're on a reading from is one of those proceeding principles got it so you're not saying that a b m is limited to restating either revenue or expenses a v m include the methodology includes restating both the methodology of the a d m was from or point of view in expense reallocation however before you apply that expense reallocation the court gave discretion in policy for ninety five to the program accountants and this is true under whether it's i s m s whether it was a d m or whether it was the what we call the old foreseen methodology to correct the p and l s on either because of an error or for matching purposes and as a practical matter that's what happened and that's what continues to happen except for just you agree the judge bar b restated the a b m right but you agree that he  everybody is subject a b m it a v m includes the language i just read that says after such restatements if there are still mismatches we reallocate one the other or both to make sure that we believe it the mismatch and then barby comes behind and says no that's turns out you can't reallocate the revenue how is that in a remotely consistent with either the policy or the board's mandate well i think what the court said before was you have discretion you're not required to move anything in terms of revenue at least you're required to move expenses but on revenue side you have the discretion to reallocate for either an error or a political mismatch and now you only have the discretion to do it for what error but as it is a change a federal court judgment and the federal court judgment varies both from the mandate of this court of the policy for ninety five decision in the text opposing one of the five or at least i don't know how you count that the language i'm reading you're calling it preamble or language correct these are meaningful legal distinction between whether it's in the policy or the preamble or language to it is still part of the well oh i'm i'm not sure and judge barring i assume faced the same potential element of confusion on i think it's certainly reasonable for him to read the four ninety five decision as and frankly there's been some other decisions like the non profits decision and and some other decisions months which is arguably obvious options or from the practical matter and so on when you have an agreement where they've agreed we're going to use the contemporaneous p n l's for at least revenue purposes and was changed to a number of decisions we're going to move the expenses that's kind of where we are unless it's so it reaches are so outrageous or just it's a it's coming or that is considered an error in that case then we would have still would allow for and the court still allows for and it still happens that they are reallocate on the revenue side in the accounts discretion which is the same thing that happened before and at this point unfortunately seven years on with only a handful of cases left designed or stand it whoever's aggrieved by what the accounts either allocate or fail to allocate is usually bringing it all the way to here with an appeal and so on policy grounds i would ask the question of why the court would do this on an across the board standpoint now there's only a handful of cases left all of the cases it seems to me are coming up here on a case by case basis it would seem to make more sense from a policy standpoint to just take them as they come and say did the program accountants do what was called for in this particular circumstance are you saying that the part that the program accountants can reallocate the revenues not the steaming judge bar b s order that the the street are shall not reallocate revenues except for errors put a pin in errors just party it specifically says you shall not reallocate revenues will stop and is your position that that that they can still in as a practical matter do still reallocate revenues i haven't really studied all of the decisions what the what the program accounts do but my impression from communicating with other claimants class counsel and c p a s is that the program when they see things that are out of whack for lack of a better word they will for applying a v m reallocate revenues as a quote unquote error and in fact there has been cases at least one that i know of where that was altered in it done out of the claim it went to the program appeal unless they read the language that you read and said on wait a second you're not supposed to move revenue around so we're going to reinstate this claim they don't want to judge barbara and he granted but what is the line between she you think that the revenue when the revenue and the expenses get mismatched they can be reallocated as an error which of course their second question presented are you i take it you're not agreeing with them you're just saying that there's some line between an ordinary mismatch in and out of which it had to stay out of whack mismatch is that what you're saying is the distinction between when things can be got a kid i think that whether it's a benefit or a weakness of the settlement especially over how the sentiment has been changed because of the b p s arguments of the past seven years that at the end of the day what you're left to is not mom this court or even judge barbie a making these decisions and ninety nine out of hundred cases it's it's a it's an employee of price waterhouse cooper who is using his or her independent professional accounting judgment to decide whether a p and  in air and what with the with all of the matching stuff that has been done from this court's very first opinion in deepwater horizon one and we respect we disagree with that but but we have agreed with and what has been done is that matching in this is in you know that's repeat the record but it's prevalent in the record that matching is an expenses she was not a revolution and so there really is no no accounting basis for messing with the revenues when you're talking about matching and in fact it's not consistent with the waves i'm is negotiating what was between all that but nevertheless you've got a situation where you still have a program accountant and he or she says well look at some of the things that mystery is perilous pointing out and some of the nominees got through the cracks and some of those accounts are saying i'm going to restate these p n l's because i think that's an error even on the revenue side before we apply this is not going on the expense side and some other accounts would look at that and they would say we're not supposed to be moving revenues and so we're going to keep them where they are or i don't think it's an error i just think it's that's what happens a cash bas a cause these accountants are looking at them the big picture maybe it's not an accounting error but it's not an accurate representation of revenue but i would respectfully disagree with that because i think that  solutions after explaining how the settlement really works and then the people agree to the film and go away eventually and how can you say that that has tagging on only an hour is correct if that's what's not happening well i think that is what's happening it's just that people have a different sense of what an error is and different accounts would apply that term in different ways on and that's part of the reason why so much due process is built into the system because if you're beat by that whether you're b p or the claimant then you have an intermediate appeals process then you go to discretionary view to barbie and then ultimately for better or worse circuit with it on and so i mean i firmly believe based on all the evidence based on being involved in negotiations based on all of the decisions that i have lived through for the past seven years that it matching is that the expenses don't match the revenues and so would our expert economist and c p a s have said throughout our record at service and to some extent with the fist circuit is that in various different cases is that the settlement was intended whether it was right or wrong smart or stupid good or bad the settlement intended to use contemporaneous pianos even cash basis p l c which b p knew would be used they have these spikes in revenue on and that's just a function of the way people keep their accounting because of your honor's decision in deepwater horizon one which was put there is something the b p didn't agree to and that is that you would have these issues where those spikes in revenue don't have corresponding expenses attributed to him and so it makes an artificial makes the difference the v between revenue and expenses greater than it should be and so what we're going to do to correct that problem is not move revenue around but take the expenses figure him out for an entire year take the average of that and create a in will or average variable margin so that expenses are matched to the revenue  only when it's three three of the going well it depends on what their accounting system is under under cash basis accounting yes you record the revenue when you receive it and most businesses and particularly small businesses keep theirs business it's book which is different from one in three three well if you're on cash basis it's blocked when it's received are and everybody knew that we were going to be using cash basis p n l's and that was part of what everybody agreed to and maybe b p regrets that now but it made sense at the time because theoretically b p was going to save a bunch of money because instead of paying accountants to go through all these pew nels and fix them and change more around they were going to accept the claimants that were made in the were very coarse a business and it was going to be easier to administrate and faster to administer on i mean i assume that that was part of their calculus on i know what they agreed to i don't know exactly what it be to but i know what they agreed to and you know unfortunately seven years later now we have a much different settlement than what we agreed to but everybody's doing their best leaving through these issues and these appeals and these things that that if indeed go on that's going to be you know whether or not  kind of i'm here's class counsel i'm not here for any claimant so what i guess they're asking your honour's to do is have another across the board policy change then the program would have to shut down again and they would have to go and revisit and see which ones had to be reprocessed and which ones didn't on to me that doesn't make a lot of sense given the fact that one hundred thirty five thousand claims and i think there's i don't know how many are left but maybe a hundred and they're already working their way up through the system so if the court this court has a problem with what was done in any particular case because revenue should have been moved either as an error or for a matching issue then there's an ability for this court or the district board or the summer program appeal panelist even though mark within you don't know system but from a monetary perspective it's significant and we on our pilton that page of our reply brief we have a footnote that points out just a few of the cases that are on appeal to this court's i don't know whether they're being held for this and they go back down all we're asking for is that this as a settlement account is at the discretion to be able to tell me you're arguing from a position that could result in the claimants receiving a lot more money i don't know if they'll receive more but i can't say that b p is going to absolutely prevail in the in these claims all we're asking for is that the settlement program accountants have the ability to be at the discretion on a claimant by claimant basis to reallocate the revenue consistent with economic reality and you know that the main point i want to of think that that's the beginning and the end here and i'll just go for quick responses to something i heard about that number one you know of course as juggling pointed out it is not responsive that the practical effect might be no different because maybe the accountants are engaged an  correction in it's it's decorah language by this court it's the violation of the mandate and it doesn't matter if judge permeate inadvertently did it or you know no one saying that he was trying to circumvent anything but that's how the mandate will work it's number two this idea that the practical effect to be no different it with all respect that's that's completely unsupported there's nothing in their brief saying that there's no declarations or anything saying that so you know i don't think that we can just go on that number three it at least according to his declaration it is not correct he points out a number of examples where after the district court's decision that we're looking at right now the program accountants have not engaged in the same thing that they were doing before which is the discretionary movement of revenue based on matching not based on error correction and there are in fact cases before this court the ones that i mentioned before that are being held for that very purpose so you know it's unsupported but i think it's also not borne out by the actual record and then number for many cases that being that were and between when the market issued his change and now i don't have an exact number your honor but i do effect argument is that as judge on point out it is completely in administer bowl to have this line between well they can make the change for error correction but not for matching it because you know you're just going to have just as many arguments over well did it fall into the matching bucket or did it fall into the error correction bucket and you know is there a different standard of review and what's judge barbie is supposed to do with those that a very clean way to address all this and to dispose of all this is through the mandate rule which is that this court upheld the eighty and then in its entirety it is undisputed that as part of the a t m then the accountants can engage in limited revenue reallocation to get the revenues right in the first place and to make sure that the a t m works to ensure matching and