water horizon namely whether the settlement program is required to obtain accurate and complete information to determine make the critical determination about whether the same accounts are classified as fixed or variable in both the benchmark compensation periods after a claimant makes a change in its accounting systems here even though the claimant made that change in the critical month of may tw which resulted in a significant increase in the number of accounts in the compensation period relative to the benchmark the settlement program never obtained information that would allow it to map or reconcile those accounts because of the two different time periods as a result of that failure the settlement program had no way to know how and where accounts that were listed in the made to december two thousand and ten time period were accounted for in the priest spill benchmark period and as a result of that there is no way either for b p or the settlement program to know whether the difference in variable profit was properly calculated between the benchmark and compensation periods and therefore whether or not the settlement program accurately calculated the award to this particular claimant approximately three million dollars the reason we are helping with this you the point is certainly an important one and we do have a very strong   the listing of the expenses but as i understand at least the presentation that your friends on the other side are making is that this is was looked at at least by some of the appeal panels that this was a dress that ultimately there is some a sense that i'm having is that the argument is that whatever problems some of the lines that you're raising are fairly minor and applied only a few accounts in the scheme of things  do not make the kind of significant difference or even really important difference in this case as you did texas go see food coming or that's wrong or your honor so it is absolutely not the case that that settlement program had before the information it needed to reconcile the accounts and i'm happy to run through that and i will do so that the know but the problem here is that the change that occurred in may two thousand and ten when the claim adopted this new accounting system had a profound impact on the green tea of reporting of accounts and you can see this in very stark terms for each of the five stores there is roughly a doubling in the number of accounts in the compensation period as compared to the benchmark and so the question is for each one of those accounts in the priest spill benchmark period where are the substantive part accounts where those expenses actually going in the post spill compensation period that's what we don't know so we have the example of these tire accounts and i think it's just useful to to have something in mind and then i'm i will run through the specific pieces of information that the claimant contends that the settlement program had before it so let's take these three tire accounts as our examples in the priest spill benchmark periods you have two account there's a tire account and then the the other one is a trailer parts account in the compensation period those two accounts are gone and we now have a brand new account called trailer tires so the question that we have here is did all of the expenses that originally were of course were recorded in those two priests bill accounts tires and trailer parts did they all go into this new trailer tires account we just don't know and and b p was able to highlight this set of accounts because there was that a very stark aspect to it which is that the priest spill tire look we don't agree or disagree but let's just agree to treat these two priests bill accounts as variable and the whole problem will go away so even today we still don't know whether for example the entirety of the trailer parts account from the preschool period was moved into the trailer tires account it's possible that that's what happened we don't know we don't know what size of the impact if any that would have on the overall calculation of the award it's possible that there are some other post spill accountant other than trailer tires that has some of the expenses from the trailer parts or tires account we simply don't know let me ask you and the problem is how more how pervasive the overall effects were of this chain right so what happened there as i said is that the claimant said well we don't agree or disagree with b p s characterization and to be clear b p doesn't actually know if those are all the same expenses we don't have that information to be able to do that but by saying by that by the claimant saying let's agree to treat these preschool accounts as variable that essentially means that on both sides of the may twenty and date the accounts are being treated the same we suspect it probably resolves as to those but we're actually not certain because you can't be certain unless there is a comprehensive mapping or reconciliation of all the expense accounts and that hasn't happened so i think as a as a as a principle of settlement interpretation in application the claimant doesn't dispute the idea that the accounts have to be treated the scene they have to be classified the scene on both sides in other words if you classify something as fixed in the preschool period it also that seem account has to be fixed in the post bill period otherwise you're not comparing apples apples so at that principle level i don't think there's disagreement between the parties there are only arguments number one is that b p hasn't identified other examples other than these tire accounts that puts the cart the horse before the horse we simply don't have that information neither does the sullivan program the only one who has that information is the claimant and there is no doubt that they have it it's sitting on their servers in their corporate headquarters and we know that because their account had to figure out how they were going to migrate these accounts from april two thousand and ten to when they unveiled this new accounting system in may two thousand and ten they must have hundreds of accountants probably just about as many who as who are working on th horizon settlement to figure these things out and this is so they have this information so that's one of their arguments being that do they disagree it's one thing to have the data and they can respond to this or two but it's part of what was presented in the process and i'm an appeal panel is that after this change we really came put humpty dumpty back together again we can't show you what all this would have looked like on our previous accounting or show  what you think i'm trying to say is that been an argument that's been our of been from the people panel and i want to know that feasibility has really been argued i think it's more an issue b p has an identified anything and that than the tire accounts and if that's going to be the standard then what they're really advocating for is essentially a one way ratchet where when you have a change in accounting systems it can only benefit claimants and it can only hurt b p because b p is never going to be in a position where it has the information needed to be able to challenge specific accounts to show where the accounting change resulted in a misclassification the only other arguments they have as your honor alluded to is this contention that the settlement program actually considered this but when you look at the specific documents they're relying upon that's not at all what those show so you can start for example with these calculation knows these are the notes that the program accountan used with their calculation to explain some of the decisions that they made and and this is out in the b p record this is that starts at page ninety and it's just a couple of pages of notes and notes seven israel is where things sort of start off and this note indicates that that the claimant brought this change to the attention of the settlement program and then it essentially just says we find that due to the b e l methodology that there's no impact but they don't explain how they reach that conclusion you you follow down and you've got the other calculation news they've got one new that talks about the colleagues and says well we looked at the coggs and we think everything is fine but with respect to that of course if they had done a comprehensive analysis reconciling the accounts on both sides of the time horizon it begs the question of why the settlement program accountants didn't identify these tire accounts where the not only were changes in accounts but one of them ended up being treated as as colleagues and being treated as variable on one side and fixed on the other we get to calculation new ten and this is one of the ones that they rely on very heavily because it talks to civically about non expense accounts but what what this note actually indicates is that the settlement program accountants identified four or five sets of accounts in the bill period that had similar sounding names and so the accountants said well we're going to group these together and treat them as the same these sets of four or five accounts so number one this doesn't indicate that the accountants actually went to the claimant to figure out if these things are the same number two it does not reflect the global analysis of accounts that we contend is required in order to accurately calculate what happened that leaves the remaining calculation nodes i think it's maybe eleven through fourteen or fifteen and all that these do is they just perform the type of analysis that essentially is required under texas which is to say its program accountants reaching out to the cl saying here is this category explain to us what this is so we can determine if it's fixed or variable but what it does not do is make any attempt to identify whether a particular account in the post bill period came from a nother particular account in the preschool preschool period to then conclude that they are being treated in the same way on both sides so these calculation nodes don't remotely come close to addressing the analysis or providing the information that was required to accurately make an assessment of the impact of the accounting change the other document that they rely very heavily on is this memorandum a chart that they submitted to the program i think it was at reconciliation or mapping of expenses that is required and i think the chart itself is the starkest example of it because what the chart actually shows is that the claimant was trying to group accounts into different categories are they variable costs are they revenue what are they of course the settlement program accountants are the ones who are supposed to be making those determinations not the claimant but the more important point is is that this chart has col showing the priest spill the postville periods and i think if you look at this chart and you look at for example the section on repair expenses in the priest bill period they have five expenses five accounts in the postville period they have something like twenty eight or twenty nine accounts and what again what this does not do is to provide an explanation or analysis to show are they saying that these five repair categories migrated into these twenty eight categories after the spill we simply don't know it certainly doesn't say it in that document one of the categories in the post bill period is like pest control expenses well where was that before the spill in the preschool period that document doesn't tell us that the settlement program never had that information the final thing that they point to are the e mail colloquy between claimants council and c auditors once again this is really just fulfilling the texas gulf analysis it's providing detailed information about expense accounts without actually addressing how they were accounted for in the preschool period as compared to the post still we think that there was a significant misapplication there is a panel split with two hundred and eighty one thousand three hundred and sixty one both of those reasons are sufficient grounds for this court to conclude that the district court was required to extra exercise review the unsubstantiated claim it is important to note that in their original brief b p admitted that what they were asking for was to require wal mart to provide tracing information for each substantive expense that's a page nineteen of their brief and that has already been done your honour's as i will explain in a bit more detail shortly ninety eight to ninety nine percent of the variable expenses in these stores comes from cost of goods sold which is essentially one dollar account in both the pre and post may two thousand and ten period the remaining one to two  percent of variable expenses are spread across several dozen expense categories many of which are small or even zero b p is not arguing as best we understand that there was error in the cost of good calculation and they cannot because even as mr weiner just noted p w sees work papers show that wal mart provided a tracing for the handful of accounts involved in cost of goods and that p w c reviewed and documented its work on that point in seven there is no substantive expense category which is the standard they see that wasn't already reviewed by process waterhouse coopers in detail and that was and gives me in detail on that account was provided by wal mart instead what b p is arguing for is a level of reconciliation detail that finds no support in the settlement agreement and the standard they seek to impose of substantial expense has in fact already been satisfied because of the unique and specific claims for these five wal mart stores it's not surprising if you simply step back and think of a wal mart store that the largest category of expense or the goods they buy and place on the shelf for their customers to purchase council with what specificity was the accounting information turned over to the claims handling process at the outset pursuant to exhibit four d your honor of the settlement agreement the one setting aside some federal tax returns and sales tax issues as related to financials wal mart was obligated to provide the settlement administrator with monthly and annual profit and loss statements that showed at the expense and revenue category level and we did that in full and there's no question we did that you can look at all through exhibit d as far as the a lot is it four d and you will find nothing regarding the requirement they now seek to impose upon us of detailed reconciliation of every single account you will find no support for that in the settlement agreement that would be a simply a new grafting a requirement upon us as a claim and don't you have that support to some extent in texas gulf seafood they do not use the kind of specificity make sure that we are comparing apples to apples we're talking about cost yes and that it's the claims the its claims administrator is are quote to use their independent judgment and classify expenses as fixed or variable according to their substantive nature and it is clear if you go and look at the work papers that they in fact did that they asked us a lot of about a lot of what are incredibly small accounts as to what they made up a work was there any tie to variability based on sales where they fixed in exhibits four and five there's a whole series of questions back and forth in exhibit two in our regular tattoo of our record excerpts there's the calculations and i'm going to come back to those in a minute because of something  my opponent said but also there is the actual work papers you can go through there are very extensive documents in the record there laid out at page eleven in our brief but pricewaterhouse coopers took our financials row by row for every single expense category and made the independent judgment that is required under texas call seeth and looked at it and categorized said it was variable said it was variable for cost of goods said it was fixed said it was payroll all of the categories as required in exhibit four to the settlement agreement and de applied their independent judgment as they were acquired to and they made their decisions but when you go and look at those underlying documents you will find it's one category you can look at it total for two thousand and nine total for two thousand and ten in our find in the financial one of the stores the total cost of goods in a given wal mart store ranges between seventy and eighty five million dollars and that subs is it unique or was it not a problem the st place he conceded it sort of respond to how is an example or why is that not an example or a broader problem several reasons st the fact that they those and the fact that they identified there were others they identified that we agreed to in the appeals process when they raised it on those three they identified those and we accepted them more importantly when they raised those they said nothing to satisfy the standard now seek a subsidy in the us by addressing what was the impact they say they can't do it they could absolutely do they have the spreadsheets and they can do exactly what we did to the appeals panels we said without agreeing or disagreeing because these accounts are so small some of them are one in one year for one store there is nothing for trailer parts it's an account but it's zero is the effect of the changes when we ran the calculations and gave them back the piece had every opportunity to look at the spreadsheet they have not suggested there was and here the effect of those changes for those three accounts range from one hundred dollars to five thousand dollars less than th in the largest case of one percent of the total war those accounts are not substantive ninety eight and ninety nine percent is in one account so either it's going to be a new stand a standard where they say you have to trace every single expense there is no support for that in the settlement in the cases that they have relied your honour's pointed out texas gulf seafood there is nothing in that opinion involving that in both texas gulf seafood and this case that i have to usually very long claim number four from examples brought to the attention of the court that had specific and significant impacts but they had been identified in texas gulf seafood it was that there was a supply category where both sides did not dispute that something like forty percent of that number was variable and the question was well they didn't call it they call it supplies and the court ruled you look at the substantive nature of the expenses which is exactly what the claims administrator pricewaterhouse coopers in this case did with us on a series of accounts if you look at the calculation does they include some larger number of items in the tens of thousands of dollars for allowance for accidents or credit card charges that they wanted to understand how it compared across periods in the motor vehicles case the question again was they sold a purchase where they purchased vehicles and treated that as a cost and then sold them and didn't match the revenues in that case once again a specific example with a specific known impact that represented a pressing issue under the settlement agreement that they were perfectly able to identify and that the court determined working off of the actual language in the settlement agreement required matching of expenses to read here there is no such example it is purely hypothetical and conjectural and there is no articulable standard that we can understand that aid to rise from the settlement and be what actually be a meaningful standard th wouldn't result in anything other than an endless cycle of we need more detail we give them more detail b p comes right back again and says still not enough and that goes back to the initial point what did we did we were only obligated to the settlement agreement to provide the financial statements we did that we on our own volition to did not come to us and asked for this initially we did it to provide some helpful guidance voluntarily to the panel and prepared the three page memo on reconciliation in their initial briefing b p make quite a point of saying we gave them nothing but that wasn't true they also argued that the administrator didn't do this that's also not and now they say well they didn't do every single account and we don't dispute that we did not provide reconciliation for every single account there are many accounts that are zeroes there are many accounts that are the settlement agreement aren't part of the analysis what we attempted to do at our best as we could looking back so it's deed has the categories of expenses and we did our best to provide a road map of which ones matched up to which revenue cost of goods variable expenses so we went out of our way to do that and then once we did that the administrators were paper show st they asked a lot of questions i personally participated in several phone calls with wal mart financial individuals where they asked us questions pricewaterhouse coopers  about various accounts and how they changed over periods and what made them up and did they have variability in them or not and that is reflected both in the e mail exchanges that we've included attempts four and five it's also in their work papers and i want to talk about one misstatement i believe that was made and it's important because it's made throughout the belief there's been a lot of talk about taps us seven in the calculations and a particular sentence they point to i believe out of context where the price waterhouse coopers wrote changes in presentation made to those accounts would not have an impact on the calculation and they point to that and say there's no basis and they didn't look at what they were supposed to do you actually need to read the two sentences before that what the price waterhouse coopers wrote is company the claimant contributed the largest changes to the presentation of revenue and cost of goods so which of the st two dollars sections on the reconciliation memo we sent with every single claim the nd since a separate review of the changes made to these accounts are included in the calculation notes below and they go on to say changes in presentation made to those accounts would have an impact the only thing the price her house coopers was docking about in seven dollars were cost of goods accounts and the revenue accounts which they proceed to discuss in those eighty nine and ten it doesn't say anything about them the other variable expense categories but the notes make clear notes eleven through sixteen that there's a whole variety of accounts that they looked at across periods and if you look at those no and you look at the e mail exchanges back and forth there is a correlation there they were asking us the hard questions determine the substantive nature of the expense we provided them information in response to that and they made their decisions and they were not always the decisions that we had made they were frequently different but they made the decision and that's the obligation that they are vested with the last area i want to briefly discuss your honour's is what st is because we're talking about something that is so small and in fact conjecture this does not raise into the st prong for this court review the standard of review that this creates a pressing issue of interpretation implementation of the settlement it has to be something it has to be something significant in pressing and here they even the tiny three accounts they did identify were in the fin testimony small in the scheme of this calculation infinitesimally small assuming they were even mishandle which you may be wondering why didn't we try to cipher that out but under the program that they set up you only get a handful of pages and it's five double spaced pages to address all the issues they raise there were a number of other issues we had less than a page to address this issue it was simpler simply say we'll give it to you without getting into it then to go through the detailed analysis that that would have required but they've also suggested that there's a nd basis which is a split in the appeals  acknowledged that there are plenty of appeal decisions where the court has the panels have acknowledged that the level of reconciliation they're seeking has no support in the settlement but instead what they suggest is that there's a split on that question by citing the one thousand three hundred and sixty one decision but if you go and look at that decision there's nothing about you must go and reconcile every single account there's something that says that so there is no split but it's also consistent with what has happened in texas gulf seafood and the motor vehicle cases which is if you've identified specific examples and you can raise be issue and identify and they're significant your honor in this case it builds on the principle the court identified in texas school texas school as the court knows stands for the proposition that program accountants must classify expenses not based on how they are categorize claimants but based on their substantive nature and using their independent judgment almost everything that the claimant is talking about here there colloquy is with the program accountants the calculation it's the reconciliation ledger all of these things are addressing the almost all of them are addressing the texas gulf issue they're addressing what are the substantive natures of these specific expense accounts so that program accountants can determine are they fixed or are they very evil what they continue to overlook and what the settlement program never did was make any attempt to figure out what happened after the accounting change in may two thousand and ten you have these expense accounts in in in the priest spill period before may two thousand and ten you have for each store about seventy two to seventy four accounts after the spill in the may to december two thousand and ten period the amount the centrally doubles in size for each store and the question that they still have no answer for is what happened with each of those accounts where did the expenses actually go from tires in trailer parts before the spill to trailer tires after the spill we still don't have the answers to any of those questions they say well this isn't substantive because it's all colleagues anyway well a gleek for this particular claimant a large portion of expenses are found in the coggs category i don't know how that you don't you agree you're talking about  correct oh you want to ministry to as regards one claimant in one case you know what we're talking about so i don't i would disagree with the characterization of it being the correctness of a single classification and this is and i think the easiest way to see that your honor is we have no idea what outcome will be with you and we were talking about when clinton well there are five claims they don't as they were when i identified specifically the accounts that they think were misclassified of course they did that was an appeal by a clean and the claimant has the information and that i think gets to the heart of why what we're identifying here is has ever said that just because it is a single claim and and there's a single issue that that would be grounds to say that the district court doesn't have to exercise review and i refer your honor to this court's decision so that also means it is not likely to a lurking issue and number two when this court has analyzed that prong of the standard it has i wouldn't speculating that it could be but that's always the case your honor that's how this court has always done it just last week or two weeks ago this court reversed in favor of a claimant and read me ended without the tempting to predict whether the issue was going to arise again and here while it's true that a large number of the expenses are in the cobs category i don't know where they get the figure that it's ninety nine percent we have it we have different calculations and i guess that gets back to the point that the settlement program they're the ones who should be making this determination will this have an impact on the bottom line i don't know the settlement program doesn't know presumably the claimant knows because they have the information but when you look at the documents that they're referring to at best they address the texas gulf issue they do not address the reconciliation of accounts from before and after they change and w understand your honour's question that this may seem like a narrow issue it can't be the case that we're just going to throw up our arms and say it's close enough that's not how this court has approached these interpretive questions when they have arisen in the past there are no further questions we w last case of the more