mr robinson good afternoon your honor may please the court i'm john robinson from arnold and porter and i represent b p in two recent cases would all refer to as the foundation case and the basketball team case this court has reversed and remanded to the district court to consider in the st instance whether an award under the deepwater horizon settlement program complied with the standards that this court set forth the david west and electrical transformer cases this court should do the same for the district court to address two questions st whether the settlement program erred by issu award to a claimant who did not suffer a loss within the meaning of david west and nd whether the settlement program erred in failing to investigate claimants at test station even though that test ation is at a minimum suspicious and there is credible evidence here of a sole superseding call which this court in the electrical transformers case said may warrant further investigation so st on the issue of l this court should vacate and remand for the district court to consider whether claimant can establish a loss within the meaning of david west here as in west the claimant entered into a contract before the spill that specified that the claimant would be up fixed sum of money fifty one million dollars as in west the claimant received everything that it was promised under that contract while the settlement programs formulas yielded and ward for both  west and for johnson brothers here this was only because their contracts were structured structured so that the claimants happened to earn different amounts of money at different points under the contracts now isn't their claim that case and west but let me explain why for a few reasons that's not a difference that matters so st of all the standard that this court has articulated in electrical transformers and then both the foundation case and the basket case which all came after the appeal panel in the district court had an opportunity to review this case was whether the test ation gives rise to suspicion or whether there's credible evidence of a sole superseding cause and even if that's their  because this claim is so similar to west it at least gives rise to suspicion nd if that's their claim is it hasn't been developed the claims administrator has never had an opportunity to investigate it which this court deepwater horizon three said could happen in the cases of suspicions that test ations so they'll have every opportunity on remand to to make that case if it if that's the case that they think they can make but it hasn't been addressed yet by either the district do have their p and l statements in the record but what they reveal is is the opposite of what they're asserting in their briefs so for them to rely on the fact that their expenses were responsible for their last year they would have to show that their expenses the costs went up in the period closest to the spill and they did just the opposite they were lower in the compensate in the in the compensation period than there they were in the period postville at the used as a reference point so it's totally statement just to see the numbers so i just don't want to you know mysteries up misrepresent what's in the record means you haven't know we i have and they show that there are expenses went down by three million dollars in the years the thousand dollars and the only reason it generated this quote unquote loss which again is a fictional loss there was no real loss here from our perspective somebody came up with a number right there are can run the numbers through the formula and you will get a compensation amount let's call it the reason why this is the formulas will yield that amount is simply because they received more revenue toward the end of the project in twenty million one hundred and twelve thousand and twelve then they did when the project began in twenty million ninety two thousand and ten that's the only reason just like in west his contract was front so he was earning more money you know in two thousand and nine before the spill and he didn't two thousand and ten in this case in a sense the contract was was backlit that the claimants were receiving more revenue in twenty million seventy two thousand and twelve that's the only reason and again in fairness to the district court and the appeal panel they did not have the benefit of west or  transformers when it reviewed this came this case david west came out on march th two thousand and nineteen i'm sorry the district court denied discretionary view on march th two hundred one thousand david west was decided either the last requirement or the station arm and so what this court has done in similar cases in the basketball team case in the foundation case is it has reversed and remanded for the district court to address these two questions in the st instance and that's all we're asking for here is it remained in the foundation case the district court took that that case on remand looked at it that's now with the claims administrator so we will soon be getting guidance from the claims in a straight or on what the claims in a straight or thinks is appropriate cases will also have guidance from from the appeal panel there are at least three other cases pending before this court where these issues these legal issues at best ation and loss are being are being raised so we will have guidance on these questions soon but what this court has done in two very similar cases has said that the appropriate thing to do is is reversing remand and just to just to get into briefly how similar those cases are in the foundation case on the settlement program it worth twenty million dollars to a nonprofit organization after received a one time twenty million dollars donation in two thousand and nine b p argued that the foundation cannot attest to a loss caused by the spill because there was no nexus between the oil spill and the alleged twenty million dollars loss this court reversed and remanded for the district court to consider in the st instance whether the claim can satisfy the standard set forth in west and electrical transformers similarly in the basketball team case b p argued that the claimant could not possibly attest to a loss because the claimants purported losses were due simply to the fact that the team had made the playoffs in the two years prior to th spill and then didn't make the playoffs after again a reverse and remand from this court and at a minimum the court should do the same here now one of the other distinctions that i expect counsel on the other side to try and draw me explaining our brief claim ignores the fact that these two sections of the settlement agreement use exactly the same language in the same context to describe the last requirement just like under the individual economic laws framework at issue and last the framework for startup businesses such as johnson brothers determines a claimant's compensation by comparing the difference between the claimants expected profit and loss and actual profit loss similarly the claim form that a claimants admits in an individual economic loss claim or a start up business economic last game contains the same language in the same context the claim form that david west signed states that it is for individuals who have experienced losses caused by the spill in the claim form that johnson brothers signed states to start up business economic loss claims for businesses who prove economic loss as a result of the spill so while yes it's true that individual economic loss claims are addressed in a different section of the settlement agreement all the terms of the settlement agreement claim forms that the west court relied on are equally present and applicable in the business economic loss context the simply no reason for this court to treat businesses differently than individuals when it comes to the last requirement and on the related issue of act test station under this court's precedents including deepwater horizon three each and every claimant must plausibly attest to a lost cause by the spill and in the same two recent decisions the foundation case in the basketball team case the court specifically ordered an assessment of the claimants act station the standards set by this court in west and electrical transformers again importantly the court stressed that when the district court denied review of the at station issue the court did not have the benefit of west and electrical transformers all the same is true here even if johnson brothers could establish some of walts within the meaning of west some unexpected diminution in earnings which it can't it's access station that its loss was caused by the  minimum suspicious johnson brothers entered into a contract for fifty one million dollars and received every penny of that fifty one million dollars they completed its project on time the only reason its revenues varied because it completed more work toward the end of the contract because of the spill they haven't made that argument that that that's the reason why the revenues changed and even so that's not the type of l is supposed to compensate it's exactly like west they received all fifty one million dollars and what why did they have to spend extra money thereby losing profit to finish the bridge on time so again we don't know that that's the case that's an assertion that they've made on appeal the claims investigator hasn't hasn't looked at it and we think that even with that assertion this act estimation is adam minimum implausible i mean west made a similar argument he made the argument that well if it weren't for the spill maybe i would have gotten a lucrative contract extension who knows in the court just rejected that said that you got everything that you were entitled to west had expenses to he had you know costs that conceivably could have been affected by the spill but he entered into a contract for a fixed amount and received everything that he was entitled to under that amount and this court in in two recent cases has said that in those circumstances the appropriate thing is to send it back to the district court who can then decide whether to send it to the claims ministry or not the district court hasn't even made that threshold the terminations here because it didn't have the benefit of west or electrical transformers at the time off topic question and how many more of these cases are not many so i've been told that there are between twenty and thirty so you know of hundreds of thousands of claims were certainly winding down that being from from the c s s p up to the th circuit all status now you know one argument that that opposing counsel could make is welfare only twenty claims left why why bother but these are some of the biggest  claims and there are claims that go to the heart of the settlement you know what how does this court have article three jurisdiction over these claims one of my colleagues argued or not to station case yesterday with seventy seven million dollars at stake and there are three or four cases left to raise not to station issues at least each worth millions of dollars so this remains an important issue an important issue to the administration of the settlement agreement and all we ask is that this court do what it's done twice in the last few months and suspicious i have not seen anything that makes this claim suspicious or implausible the standard set out in all these recent cases you have the basketball team owner foundation david west  transformers is maybe we shouldn't guess best to get further if the ad test taishan is implausible what makes something implausible well this case is clearly different than a lot of those other cases and i'll tell you specifically why we're talking about johnson brothers and a little background about johnson brothers as admitted it's a contractor building the bridge to get from the mainland of louisiana onto grand isle they start work in two thousand and nine before the spill fifty one million dollars project the site is located on the island they do their staging operations which is where you kind of get ready and start the process on the island side of the project right by the bridge b p spill happens what happens next well all the cleanup operations going on in grand isle take over the staging operations and in i think the record page is seven hundred and fifty five we were asked some questions and we advised them they took over our staging area not b p but one of the cleanup operations one of those companies took over the staging area so what happens to a contract a contractor when somebody takes over staging and we're not talking about building a house where you've got to move your salt horse from one into the lot to your other we're talking a fifty one million dollar project involving one hundred foot concrete pilings you order materials based on where you plan to start and where you plan to finish so when they take over the staging area judge of others just can't sit back and say wow i asked the state of louisiana for a contract extension because it doesn't happen so what happens well the schedule has to change there's inefficiencies in there delay and when i say delay it doesn't mean necessarily that they did not finish the project on time it just means that at some point further down the line they have to take action to make up for that the way whether it's now we've got to start working overtime saturday sundays more than eight hours a day all that costs money now we have to accelerate which is speed up the pace so we can meet the deadline and that's what happened so how can a construction contractor in grand isle where the cleanup operations are taken how can a loss associated with the spill be implausible it's not it's reasonable now the standards don't say well if you think it's implausible now you have to go further investigate this court in other precedents in deepwater horizon three the policy for ninety five decision and the transformer case all make it clear b p made a contractual concession in the settlement agreement  ok we're not going to require people to put on trial type evidence to establish their loss they're going to sign a nat test ation and then the proof of the loss will basically count as causation well the loss is determined by the specific formulas in the settlement agreement no claim it has to go and provide evidence that they suffered a loss the loss is determined by the settlement agreement if i was actually in trial the evidence that i would have to put on from a contraction belay matter would involve experts it would involve a ton more evidence we actually filed suit before the settlement agreement and i want to say it's  on record page three hundred and nine we did a five the suit we filed in the eastern district so the settlement process comes along my client says you know i'd rather up into the settlement so we do now under this settlement we only have to provide certain guidelines to establish the claim that's what we did we are starting a business economic loss exhibit seven establishes the framework under what our loss is that's exactly what we did now this going back and forth about how settlement program fill out the claim form and then you provide the information they determine the loss if you just spewed their calculation then you can go back and forth there they're the semi remit does it require you to put on trial type it's an extreme situation which is clearly different from the claim in here johnson brothers they were building a bridge in construction was interrupted it's clearly distinguishable from a basketball  foundation case was sent back because it's pacifically dealt with a split among appeal painters as to whether that nonprofit foundation was just a flow to it through entity or not so it was remanded back the basketball team owner specifically dealt with accounting issues the sale of a draft pick was classified as a negative selling expense in some regular expenses were classified as fixed versus variable so you had those accounting issues that resulted in it being reminded back we don't have any accounting issues here we don't have any split in the appeal there it's all based on the test taishan is implausible and it's implausible because we receive the entire value of the contract they're trying to equate revenue with profit it's not the same thing while we did receive the entire value of the contract that has no bearing or makes no determination of whether or not we lost profit because we had to incur further expenses down the line it's all based on revenue and the fact that the revenue started to decrease at the end the last compensation period is outside of the decrease in revenue we were prevented from normally constructing the project because of the delay is that tied to a loss related spill absolutely it is the fact that david west in the transformer case say well if we think thank you just a couple of points on rebuttal on judge graves i think the question that you are asking which i didn't hear an answer to you was what was your loss in the real world as you think it was based on you know the extra costs that she would say you had and i didn't hear an answer i haven't seen an answer in anything in the record and the reason i suspect we haven't seen an answer is that it would make no sense if you look at the claimants profit and loss statements you see that their expenses were lower in the period after the spill so the only factor driving this award was the fact that revenues increased over the course of the project because as they were nearing completion they were doing more work the way this contract worked was an engineer for the state of louisiana would see how much work was done every month and then estimate how much should be paid so their revenues went up toward the end just under the formulas they just look at two variables one of them is revenue and one of them is variable expenses and the revenue numbers went up and that's why there was a compensation amount under the settlement agreement but that doesn't mean there is an actual real world loss within the meaning of west and for the same reason it means that their act has station is at a minimum suspicious just a suspicious as the active stations at this court sent back to the district court for consideration after last an electrical transformers  cases where there is a suspicious or implausible act to station or evidence of a sole superseding cause the claims and mistreat or does serve a gate keeping function and how the claims administrator goes about  doing the function can be resolved just as the claims in a straight are resolves any other issues that come come before it but but in an unusual situation like this like west where you have a business whose whole business  one trailer whose whole business was this one contract and the business received everything it was entitle to under the contract that at a minimum warrants just the question being asked what was your loss explain to us how