good afternoon may it please the court i'm standing jones from arnold and porter and i represent b p this is an extreme case where the claimant a nationwide power line contractor headquartered one hundred and fifty miles from the gulf received a compensation award of more than eleven million four hundred thousand dollars despite being entitle to no award at all under the settlement agreement the district court abused its discretion by denying review of this massive windfall award for two reasons and both of the issues in this appeal the facilities allocation issue and the attestation requirement both stem from the same fundamental problem and that is this claimants purported losses have no basis in economic reality and they certainly have nothing to do with this bill instead this claimant used accounting gamesmanship to come up with a fictional loss in the compensation period after previously declaring a substantial gain in the same period after several denials of its claim by the settlement program the claimants submitted new p n l's created for the st time in twenty eight team in those pianos just portray a fundamentally different company i won't get into some of the specific numbers in those pianos which are staggering but essentially what happened is that in twenty eight shifted a large amount of money from its right pocket to its left pocket showed the claims administrator its newly empty right pocket when the pocket was in the right to go sue the other pocket was where in milwaukee yes yes so essentially that's exactly right so from the perspective of a club from a claimant's perspective it's advantages to have more revenue to have better financial in two thousand and nine and worst financials in two thousand and ten because it's that delta is the decrease in revenue from two thousand and nine to two thousand and ten that drives up the compensation awards and so what the claimant d here in its twenty eight newly created p n l's was for two thousand and nine the p and l the new p l z allocate this enormous amount of money tens of millions of dollars from out of zone projects in texas and oklahoma to the claiming facilities in mississippi so it makes it look like the claiming facilities are doing well financially in of just skip ahead and give me that but i believe are the most important numbers under the the original p and l is the consolidated company wide panels to start with those they reported two thousand million dollars decrease in revenue the new pianos show a massive nearly fifty million dollars decrease in reckoning and that will i'm sure repeatedly pointed out during the claims process to the erred in affirming the award and the district court erred in denying discretionary review i will note that although b p is not present during the claims administrator phase the claims administrator did acknowledge this extraordinary anomaly where all of a sudden side years after having insisted that the corporate headquarters manages all of the work nationwide all of a e the claims administrators attempts to explain how the claim was calculated and it specifically notes this extreme anomaly and says no further inquiry was made no further came from two out of zone projects that were attributed on the new p n l's two out of zone facilities but that's no explanation at all because the same is true  mississippi headquarters and the the new piano it's a sign the similar out of zone revenues from two thousand and ten to out of zone facilities which makes it look like the headquarters is losing money just a couple of other figures which are striking the original p n l's showed up at twelve a nearly thirteen percent profit in two thousand and ten whereas the newly created pianos report negative profit that they report that the company's headquarters the headquarters of a substantially profitable company was actually siphoning money in two thousand and ten it's to say that it's implausible really understates and it's hard to swallow or agree with you and we were to run telling the district court you should have reviewed the appeal  and in in those two decisions those are the foundation case and the basketball team case this court vacated the district court's decision and remanded for either the district court or more likely the claims west case which you're thinking of and there's a separate case a more recent case that involved the basketball team i believe it was that players t m in the in both of these recent cases discussed in our twenty eight dollars j letter the foundation case and the basketball team case this court specifically order on remain and an assessment of the claimants attestation under the standards that this court adopted into other decisions earlier this year those are the david west case and the howard industry's case west and howard establish standards for implausible or suspicious claimant attestations and importantly in both case and the basketball team case this court emphasized that when the district court had denied review it did so without the benefit of this court's decisions in david west and howard industries and all the same is true here when the district court denied review here it was before david west and howard industries the district court did not have the benefit of this court's guidance on implausible and suspicious at test ations and for the different from another argument you're making which is whether these trailers and where ever they were are the philippi s under the meaning of the settlement agreement was incorrect we don't know exactly i would be a separate ground right correct and not some recent cases i think the council opposite from twenty j literal those that seem to say well that's a factual determination so the court in those other cases did conclude that it's a factual determination this case we believe is different than the fox the relevant facts here are not in dispute in terms of the claimant as construction trailers for job sites across the country and there was no investigation by the settlement program into the nature of those construction trailers some of them are on site for jobs that bring in tens of millions of dollars per year so there was certainly a basis to investigate but yes the facilities and allocation issue is independent of the attestation issue that i started with and the settlement a program independently misapplied the settlement agreement by failing to investigate the claimants allocation of revenue and the identification of which business locations constitute facilities that is the construction trailers issue there should have been investigation of whether the trailers are separate facilities for purposes of exhibit five and policy for sixty seven and then additionally the settlement program should have investigated even for the business locations that claim in deed count as separate facilities the headquarters and the five other regional offices that this settlement program simply rubber stamped the claimants allocation system very suspicious allocation of revenues among them without conducting any relevant investigation whatsoever even though under these circumstances such an investigation was clearly warranted unless there are further questions over serve the balance of my time a court good afternoon matthew mcdade on behalf of the claimant in the apple a in this matter irby construction yawners what we have before the court today is an appeal on factual determinations that were made performed by the appeal panel and a unanimous decision reached by that panel what the court needs to understand st and foremost is that b p is appealing the district court's decision to deny discretionary review what is this what it was going back to the standard by which the district court has if you look at the rules that the district court adopted by the standard by which judge bar b a must determine whether or not he's going to grant discretionary review the rules that were adopted by that court in approved say that it's only for extraordinary and highly unusual situations so that's the bar that b p has to meet oh you heard him story mr mr  jones is pretty detailed explanation of why this is a really suspicious situation with respect to the accounting i've got the figures right here and i'm sure you do too so why is he wrong about that yes your honor going south of jackson and it believed it was a single facility coin at the time it followed that claim your honor it also presented a claim estimate prepared by professional accountants and that claim estimate valued this claim that fourteen something one million dollars and it was followed with that consolidated p n l's that mr jones keeps referring to as only show in this five million dollars difference between non until you are if they were gamesmanship why would they not of exercise that gamesmanship in two thousand and thirteen they didn't game the program what happened after that claim was filed is it proceed through the claims process and as i'm sure the court is aware sometimes that process was painstakingly slow as we sit here today six years and irby responded and provided the claims in a shredder with a list of its regional offices that are included in that it included the main headquarters in jackson it included a regional office or he's made the main headquarters in richland it included a regional headquarters and jackson which mainly services energy and it included four other regional offices that were outside the claims and after that they've been asked to provide an explanation ok what are these regional offices and what are these job site trailers tell us what these on and they provided that explanation your honor and they provided it to the claims administrator the claims administrator took that information and presumably laid it down against policy for sixty seven and exhibit five the claims administrator made the decision that these four regional offices should not be included as these were separate facilities the claims administrator went back urbin and said we need you to remove revenues and expenses for these four regional offices and that's what they did so when b p tries to frame this as irby went back and recreated its paean else that's not exactly what happened irby went back and created the p n l's that the claims administrator indicated they need needed to recreate because of the fact that it had four facilities and it's consolidated p n l's that were not within the  that they will ward is based on two thousand and nine priest spill in zone facilities made sixty eight million dollars all other facilities fifty eight million dollars for a total of one hundred and twenty seven million dollars right that's correct and then if we go so that's priest bill post bill two thousand and ten we have end zone facilities with nineteen million dollars a substantial drop all of the facilities one hundred and two million dollars for a total of one  dollars so what is the explanation for that the discrepancy between those two columns sure i think st and foremost is b p s tried to cast this as all of the projects we did or the vast majority of the projects good were all outside the claims and i think if you actually look through the record your honor you're going to see a different picture and in fact if you look at two thousand and nine if you look what was required by the claims administrator was for irby to provide the receipt detail ledgers for the actual payments that it received for specific jobs and your honor that is in the record of off the record cited from me but that is in the record it is a a ledger of all the receipts from where these these funds came from the names of the customers if you look at two thousand and nine there are multiple receipts for alabama power company cellular south in three g services in mississippi and in louisiana not only was irby managing jobs out of its home office and its mississippi regional office these were projects that were being performed in two thousand and nine within the claims in two thousand and ten when you look at that same ledger those jobs are things that work isn't there and so it shows a loss within the claiming facilities those two facilities being the mississippi that were managed by regional offices that started during that time for it was too large projects which were managed overseen out of one of those outside regional offices i think one of them was the lower colorado river authority that particular customer and so those two big projects made up the bulk of those out of zone revenues and your honor that that shows that there was a decrease in regardless of whether there was an uptick in out about the company wide pianos from one year to the next quite frankly that's a red herring quite frankly they want you to look at something that the claims of ministries are shouldn't even consider you know where these things these discrepancies or whatever they are was this something that was investigated by the appeal pam in other words arguments made one way or the other people panel renders the decision is that what happened that's correct your honor in fact these exact issues were briefed on a very smaller scale just like they were brief before this court and the appeal panel noted in its unanimous decision that it did its own independent investigation in fact the appeal panel with us for us to say that it had the consolidated paean else it had the separate  did not include the out of zone facilities and it had the relevant backup documentation so that it could lay those two down and make those comparisons and that's in the appeal panel decision you're on a record of leave it page two  three you honor all this all this dovetails back into the most important question before the court today and that is whether or not the claims administrator misapplied the settlement agreement or as this court has said blatantly disregarded any particular provision of the settlement agreement if you review the cases from this court not only is it looking at a misapplication of the settlement agreement or a blatant disregard for any particular provision it goes a step further and says we need to look at whether or not this misapplication or this alleged blatant disregard has any effect on the future administration of the settlement it looks at the bigger eighteen claims administrators final report if you look at how many claims are actually left to be processed it's less than one percent of the one hundred and thirty thousand  to show how making this ruling is going to or that this particular misapplication or this particular blatant disregard is going to affect the administration and that you know we believe that that is a harder thing to prove when quite frankly at this point there's so very little left to actually administer on the settlement agreement  came out of this court june i believe in of this year it made it very clear that the failure to continue to investigate even when more information might be available that loon was not grounds for an abuse of discretion review that particular case the youngest case is a water and sewer line construction company very similar to what our vetoes irby is a electrical transmission line construction company and in fact the same facilities question was a play in the uncle's case as to whether or not the claims administrator in the appeal panel had done enough investigation to determine whether or not these on site drop trailers were in fact facilities and that court or this court made the determination that that is a factual one by one case determination and it is not an abuse of discretion that involved in the south occasion or involves the blatant disregard that was an agreed to bargain provision that b p agreed to now be peace tried ever since to get out of it but that is what establishes calls ation there's been a lot of cases that discuss what is called the ad test ation which boils down to causation b p submitted in its supplemental authorities letter pointing to two cases that have come down since the west case discussing briefly the worst case the west case is about as extreme as it gets you have a professional basketball player who contracted with his team to make more than twenty nine that he would make in two thousand and ten there was a singular sole intervening calls for his losses in two thousand and ten and it wasn't all spill to bore reported opinions came out of this court the same week as the west case and one of those was the howard opinion that mr jones reference if you look at what howard was howard is a manufacturer of  electrical transmission equipment and it was a sixty five million dollars coin that equipment is sold across the nation and even in light of that decision in west being a week before the howard case looked at it and came to the same conclusion that it didn't come to in all of the other cases and that is the question before the district court in the question for the appeal panel is whether or not it was implausible that any of the claimants losses were attributable to the old spill not all of their losses i don't think it's possible under the settlement agreements calculation of damages to assure that all the losses and in fact that howard decision confirmed and even gave a hypothetical of when you would have alternative causes for the loss included with calls as related to the spill as a reference earlier erb you did substantial work within the states of mississippi received by early during the relevant time for the question before the court is whether or not it was implausible that b p s me that the claimants losses were at port even if i can they possibly attest to having a claim but they will spill again with this court when back to the test for whether or not the attestation issue is at play is whether or not it was implausible that any of their didn't investigate these revenue issues the fact that this is a multi facility claim rebuts that it was the claims that ministre are who determined that this was a multi facility claim as it was originally followed as a single facility so the fact that they investigated it to begin with shows that they did in fact perform an investigation not only do they perform an investigation as to what facilities were included in our business they didn't drill down and said ok we need to know what your revenues and expenses were in these four non claiming facilities they made irby submit to additional pianos and backup documentation including that job costs detail report a reference earlier and they even when they went to the appeal panel the appeal panel referenced that it said not only do we have the p and l as for the claiming facility we have the combine p n l's in the source documentation so that we can compare those two this is show that there was a soul intervening call us that explains why herbs losses were not caused by the whole spill much like in the west case you had a soul intervening calls it was his contract alternatively they have to show that it was not plausible at all and quite frankly your honour's based on what's in the record based on the work performed in mississippi and alabama and in the easy entering the time frame they simply have not met that under an abuse of discretion standard originally submitting its claim the claimant created and submitted new p l s to turn the company's financial performance upside down it is undisputed that this entire eleven million four thousand dollars of war results exclusively from assigning out of zone revenues to the mississippi headquarters for two thousand and nine but assigning similar out of zone revenues to other ten the explanation given by mr mcdaid was that in two thousand and nine there were certain projects that were in zone projects that were creating revenue and in two thousand and ten those went away in two thousand and for that all of the facilities there were additional out of zone projects that cause the uptick in real will uptick the doubling of revenue from two thousand and nine to two thousand and ten i mean is that accurate if it's accurate one isn't rebut what you're saying or sue the history of this case and the numbers alone raise extraordinary suspicion about that that this claimant claimed for five years that it managed all of its projects nationwide exclusively from the mississippi headquarters and it was only in response to inquiries from the settlement program that the claimant finally changed its position and said that it has these five other regional offices but  no others it gets even worse the police explain it this way so in two thousand and nine the new p n l's allocate tens of millions of dollars in revenue from two projects in texas  oklahoma to the mississippi headquarters even though the claimant has a regional office in texas and then in two thousand and ten the new pianos allocate again tens of millions of dollars in revenue out of zone regional offices for projects in colorado and maine even though the claimant doesn't have any regional offices anywhere near colorado or mean so in two thousand and nine a company with the texas headquarters is operating texas and oklahoma a multimillion dollar project from mississippi and in the next year the regional offices in far flung sue the ledgers do not identify which says syllabi is should be assigned the revenue and that's consistent frankly with what the claim said for many years which is that its corporate headquarters in mississippi manages all the programs everywhere it was only in two thousand and ten i'm sorry in twenty eight he in that the claimant reversed course and developed this very selective specific allocation of revenue from projects around the country in a way that maximized the claim but hasn't but there's no connection to the economic reality for this  ttention there are additional claims but in any event this is a class action settlement this claimant is a class member and there's certainly no rule that allows class members coming at the end of settlement administration to be treated differently in class members that came before it we ask that the test that the district court's decision the reverse thank you conclude the argument for this panel and the cases here under his mission