IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 16-30283

Summary Calendar

CLAIMANT ID 100197593; CLAIMANT ID 100200179; CLAIMANT ID 

100195755, 

 Requesting Parties–Appellants,

v.

BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA 

PRODUCTION COMPANY; BP, P.L.C., 

 Objecting Parties–Appellees.

Appeal from the United States District Court

for the Eastern District of Louisiana

USDC No. 2:16-CV-1355

Before REAVLEY, OWEN, and ELROD, Circuit Judges.

PER CURIAM:*

This case arises from the Court Supervised Settlement Program

(Settlement Program) established following the Deepwater Horizon incident.

Three claimants, [redacted] (collectively, Claimants), are fast-food restaurant 

franchisors seeking to recover franchise royalty fees they claim to have lost due 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

November 16, 2016

Lyle W. Cayce

Clerk
No. 16-30283

2

to their franchisees’ reduced business following the Deepwater Horizon oil spill. 

After the Settlement Program and the Appeal Panel ruled against each 

claimant, Claimants sought discretionary review in the Eastern District of 

Louisiana. The district court allowed the claimants to consolidate their claims. 

The district court granted the request for discretionary review, and affirmed 

the Appeal Panel. We also affirm. 

I

The background of this case has been previously described at length by 

this court and the district court.1 At issue in this case is the interpretation of 

the Economic and Property Damages Settlement Agreement (Settlement 

Agreement), which the district court approved between the Economic and 

Property Damages Settlement Class and BP Exploration & Production, Inc., 

BP America Production Co., and BP p.l.c. (BP). Entities “doing business or 

operating in the Gulf Coast Areas” are considered part of the class if they meet 

one of four criteria outlined in the Settlement Agreement. Section 1.2.1

requires, among other things, that the entity “owned, operated, or leased a 

physical facility in the Gulf Coast Areas.” Section 1.2.2 requires the entities 

be “service businesses with one or more full-time employees (including owneroperators) who performed their full-time services while physically present in 

the Gulf Coast Areas” during the specified times. The third and fourth criteria

are not at issue here.

The Settlement Agreement sets out the procedures for filing and 

appealing a claim. A claimant must first file its claim with the Claim 

Administrator of the Settlement Program. The claimant may then appeal a 

decision by the Settlement Program to the Appeal Panel. The United States 

 

1 See, e.g., In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of Mex., on Apr. 20, 

2010, 910 F. Supp. 2d 891, 901-02 (E.D. La. 2012), aff’d sub nom. In re Deepwater Horizon, 

739 F.3d 790 (5th Cir. 2014).
No. 16-30283

3

District Court for the Eastern District of Louisiana has the discretionary right 

to review any appeal that follows the Appeal Panel decision. Following review 

by the district court, parties may appeal to this court.

In this case, the Appeal Panel heard [redacted] appeal during its full en 

banc session and unanimously rejected [redacted] argument. The Appeal

Panel denied 226 other claims from [redacted] on identical grounds. The 

district court granted discretionary review over all 226 claims upon stipulation 

by the parties that “the facts, circumstances and issues presented by all 226 

claims are identical.” The district court then affirmed the Appeal Panel’s 

decision, and Claimants appealed to this court. 

II

Initially, the parties dispute the proper standard of review. BP argues 

that this court should use the abuse of discretion standard when reviewing all 

district court orders “disposing of requests for review.” “However, the standard 

of review is effectively de novo” when the district court is “presented with 

purely legal questions of contract interpretation.”2 Because the interpretation 

of a settlement agreement is a question of contract law, we review de novo. 3

III

Claimants argue that they should recover franchisee royalty payments 

that were lost as a result of the Deepwater Horizon oil spill. The Settlement 

Program originally denied [redacted] claim for lost royalties, stating that, as a 

franchisor, it was not part of the class because it did not meet the requirements 

of Section 1.2.1 of the Settlement Agreement. Specifically, Section 1.2.1 

requires entities to have “owned, operated, or leased a physical facility in the 

Gulf Coast Areas.” The Settlement Program defines “Facility” as a “(a) 

 

2 In re Deepwater Horizon, 785 F.3d 1003, 1011 (5th Cir. 2015) (citing United States v. 

Delgado-Nuñez, 295 F.3d 494, 496 (5th Cir. 2002).

3 Id.
No. 16-30283

4

separate and distinct physical structure or premise; (b) [o]wned, leased or 

operated by the Business Entity; (c) [a]t which the Business Entity performs 

and/or manages its operations.” The Settlement Program determined that 

[redacted] claim did not meet all three requirements of the facility definition. 

[redacted] appealed to the Appeal Panel, forgoing the argument that it 

was a class member under Section 1.2.1, and instead alleged that it was a class

member under Section 1.2.2. This section includes in the class “service 

businesses with one or more full-time employees (including owner-operators) 

who performed their full-time services while physically present in the Gulf 

Coast Areas” during specified times. [redacted] argued to the Appeal Panel, 

and Claimants continue to argue to this court, that Section 1.2.2 includes 

franchisors that have franchisees within the Gulf Coast Areas, regardless of 

the location of the franchisor.

In asserting that franchisors are included in Section 1.2.2, Claimants

contend that 

“the Settlement Agreement’s choice to ‘includ[e] owneroperators’ in Section 1.2.2 must have been an affirmative 

statement that a service business with owner-operators, such as 

franchisees, in the Gulf Coast Areas is included in the class, 

regardless of whether that service business also had traditional 

employees in the Gulf.”

Claimants reach this conclusion through several interpretive steps.

First, as [redacted] argued to the Appeal Panel, “service businesses” in Section 

1.2.2 can refer to the franchisors, as they “provide vital services to the 

restaurants that bear its brand.” Second, Claimants reject the Appeal Panel’s 

conclusion that “full-time employees (including owner-operators)” refers to 

owner-operators as a sub-set of employees. Rather, they argue that owneroperators are “persons other than employees who perform services on behalf of 

the claimant in the Gulf, such as appellant’s franchisees.” Third, the claimants 
No. 16-30283

5

seem to assert that the franchisors own or control franchisees who are owneroperators of Gulf franchises. (“Appellants . . . are class members under Section 

1.2.2 because they had franchisees (i.e., owner-operators) in the Gulf Coast 

Areas . . . .”). Finally, claimants argue that the requirement to perform 

services while “physically present in the Gulf Coast Areas” is satisfied by the

franchise owner-operators in the Gulf. In sum, the claimants ask this court to 

read Section 1.2.2 as “service businesses with . . . owner-operators” that are in 

the Gulf Coast Areas, which should include franchisors with franchisees that 

are in the Gulf Coast Areas.

The Appeal Panel rejected this argument, stating that the “word 

‘including’ in the phrase ‘full-time employees (including owner-operators)’ 

necessarily refers to a sub-set of employees.” It reasoned that “words coming 

after ‘including’ are to be understood as relating back to the class or category 

which preceded it, so as to provide a sub-set, or one or more examples, of the 

larger whole.” The district court’s decision did not address this argument, but 

affirmed the Appeal Panel based on the franchisors being located outside the 

Gulf Coast, noting that the local franchisees could assert claims, but the 

national franchisor could not.

For its part, BP argues that the “more natural reading is that ‘owneroperator’ refers to a business with no workers other than the owner his or 

herself” so that “one-person outfits” can be included in the settlement class.

This court need not rely on the Appeal Panel’s precise interpretation of 

“including owner-operators.” Rather, we may affirm on any grounds supported 

by the record, even if not relied upon by the district court.4

 

4 Doctor’s Hosp. of Jefferson, Inc. v. Se. Med. All., Inc., 123 F.3d 301, 307 (5th Cir. 

1997); Sojourner T v. Edwards, 974 F.2d 27, 30 (5th Cir. 1992).
No. 16-30283

6

The Settlement Agreement’s four categories of entities each impose a 

geographic restriction on putative class members. Each requires some physical 

presence in the Gulf Coast. Claimants try to satisfy this requirement through 

their franchisees. However, franchisees are generally third-party operators, 

not part of the larger franchisor.5 Indeed, BP argued before the Appeal Panel, 

the district court, and this court, that the franchisees are legally independent 

businesses, and thus that Claimants cannot rely on them to satisfy the 

geographic requirement. At no point have Claimants denied the franchisees’

independence. Instead, they linguistically connect the franchisors and 

franchisees by stating that “Appellants are in the class because their

franchisees” are owner-operators, and because “they had franchisees” in the 

Gulf Coast. Claimants emphasize this connection throughout their brief, but 

they never address the legal relationship between the franchisors and the 

franchisees.

Section 1.2.2’s geographic restriction cannot be satisfied by relying on 

legally independent businesses. The phrase “service businesses with one or 

more full-time employees (including owner-operators)” at a minimum requires 

that the employees or owner-operators are part of the service business. 

This conclusion is buttressed by looking at other parts of the Settlement 

Agreement. Exhibit 5 of the Settlement Agreement specifically contemplates 

compensating a “Multi-Facility Business,” defined as a business entity that 

“maintained Facilities in more than one location and had at least one Facility 

within the Gulf Coast Areas.” The exhibit further specifies details about 

compensating multi-facility businesses whose headquarters are outside the 

Gulf Coast. Claimants cannot avail themselves of this part of the Settlement 

 

5 See Commercial franchise, BLACK’S LAW DICTIONARY 773 (10th ed. 2014) (“A 

franchise using local capital and management by contracting with third parties to operate a 

facility identified as offering a particular brand of goods or services.”).
No. 16-30283

7

Agreement because the Settlement Program determined that they did not have 

a “facility” in the Gulf Coast, a finding that Claimants did not appeal. 

The Settlement Program has even more specifically addressed 

franchisors in a Final Policy statement defining “Facility,” stating that “a 

franchise location is not a Facility of the franchisor Entity if the franchisor does 

not own or lease the real property on which the franchise is located.” 

Claimants contend that this does not limit their ability to join the class, 

because “facility” appears in Section 1.2.1, and they seek inclusion under 

Section 1.2.2. However, that the Settlement Program specifically addressed 

franchises weighs against Claimants’ interpretation of 1.2.2.

In their reply brief, Claimants contend that BP is judicially estopped 

from arguing that franchisors “who ‘do not operate the restaurants’ managed 

by their franchisees must be excluded from the Economic Class.” Claimants 

rely on a redacted Appeal Panel decision in which BP did not appeal an award 

to a franchisor. The decision is not in the record. Even if we were to consider 

the decision, we could not evaluate its factual context. “Judicial estoppel is an 

equitable doctrine invoked by a court at its discretion.”6 For this circuit to 

apply judicial estoppel, “the estopped party’s position must be ‘clearly 

inconsistent with its previous one,’ and second, ‘that party must have 

convinced the court to accept that previous position.’”7 Neither requirement is 

satisfied here, as the lack of a record prevents this court from reaching either 

conclusion.

Franchisees located in the Gulf Coast Areas are free to seek recovery

under the Settlement Agreement. However, Section 1.2.2 cannot be read to 

 

6 New Hampshire v. Maine, 532 U.S. 743, 750 (2001) (internal quotation marks 

omitted) (citation omitted); accord Hall v. GE Plastic Pac. PTE Ltd., 327 F.3d 391, 396 (5th 

Cir. 2003).

7 Gabarick v. Laurin Mar. (Am.) Inc., 753 F.3d 550, 553 (5th Cir. 2014) (quoting Hall, 

327 F.3d at 396).
No. 16-30283

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allow franchisors outside of the Gulf to join the class by relying on independent 

franchisees that are located in the Gulf. Claimants’ interpretation of Section 

1.2.2 is foreclosed by the Settlement Agreement language.

IV

Claimants also argue that [redacted] in particular should receive lost 

franchise royalty fees because [redacted], unlike [redacted] and [redacted],

owns and operates at least one non-franchised location in the settlement area.

Claimants contend that this location makes [redacted] a “member of the class 

under Section 1.2.1.” As a member of the class, they continue, [redacted] can 

claim entitlement to all damages described in the Settlement Agreement: 

“[l]oss of income, earnings or profits suffered” as a result of the Deepwater 

Horizon incident. Claimants argue that this loss of income should include the 

loss of royalty payments from franchised [redacted] locations.

Claimants support this argument with an Eligibility Notice issued by the 

Settlement Program that awards [redacted] $83,216.34 for losses associated 

with the location it owns and operates. The claimants argue that this 

Eligibility Notice “undisputedly” makes [redacted] a member of the Economic 

Class. The Eligibility Notice at issue is not in the record. The Settlement 

Program issued the Eligibility Notice on April 1, 2016, nearly one month after 

the district court issued its order. Claimants have moved to take judicial notice 

of the Eligibility Notice or, in the alternative, supplement the appellate record. 

This court carried that motion with the case. 

Claimants did not make this argument at either the Appeal Panel or

district court, but instead raise it for the first time on appeal to this court. As 

the Appeal Panel noted, [redacted] relied “exclusively on the contention that it 

satisfie[d] the alternative definition of a qualifying Entity set out in Section 

1.2.2 of the Settlement Agreement.” Similarly, Claimants’ brief to the district 

court relies exclusively on its interpretation of Section 1.2.2. Moreover, the 
No. 16-30283

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district court, when consolidating the cases, required that the parties stipulate 

that the 226 claims presented identical issues. Throughout the process, this 

case has focused on the correct interpretation of Section 1.2.2. Claimants 

contend that they could not have raised the argument earlier because the 

Settlement Program did not release the Eligibility Notice until after the 

district court’s decision, and thus, they were not aware that [redacted] was a 

member of the Economic Class.

This court does “not consider issues raised for the first time on appeal 

except in extraordinary instances when such consideration is required to avoid 

a miscarriage of justice.”8 This is not such a case. [redacted] theory does not 

depend on the recently issued Eligibility Notice; [redacted] could have 

maintained the argument that it operates at least one Gulf Location 

throughout the proceedings. 

Because we do not consider the issue, we deny Claimants’ motion to take 

judicial notice, or in the alternative, for supplemental designation. 

* * *

For the foregoing reasons, the judgment of the district court is 

AFFIRMED.

 

8 Bayou Liberty Ass’n, Inc. v. U.S. Army Corps of Eng’rs, 217 F.3d 393, 398 (5th Cir. 

2000).