IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-30838

Summary Calendar

CLAIMANT ID 100299037, 

 Requesting Party–Appellant,

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. 2:18-CV-5595

Before DENNIS, OWEN and ENGELHARDT, Circuit Judges.

PER CURIAM:*

Alabama Association of Habitat for Humanity Affiliates, Inc. 

(Association) appeals the district court’s denial of the Association’s request for 

discretionary review of a decision by the Claims Administrator for the 

Deepwater Horizon Settlement Program. The district court did not abuse its 

discretion in denying review. We affirm.

 

* 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

April 16, 2019

Lyle W. Cayce

Clerk

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No. 18-30838

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I

In April 2010, an explosion on the Deepwater Horizon, a mobile offshore 

drilling unit leased by BP Exploration & Production, Inc., BP America 

Production Company, and BP, P.L.C. (collectively, BP), caused the discharge 

of millions of gallons of oil into the Gulf of Mexico.1 BP entered into the 

Deepwater Horizon Economic and Property Damages Settlement Agreement

(Settlement Agreement) with a class of individuals and entities allegedly 

injured by the oil spill. The Settlement Agreement created the Settlement 

Program under which claims for settlement benefits are reviewed by the 

Claims Administrator, whose decisions can be appealed to an Appeal Panel.

Businesses seeking settlement benefits as compensation for economic 

losses “must establish that their loss was due to or resulting from the 

Deepwater Horizon Incident” by meeting the applicable “causation 

requirement[].” Once causation is established, claimants must prove an 

economic loss using the formula in Exhibit 4C of the Settlement Agreement. 

Under Step 1 of the formula, claimants compare their variable profit in the 

Compensation Period—a consecutive three-month period of their choosing 

between May and December 2010—to their variable profit during the 

comparable months of the Benchmark Period—either 2009, the average of 

2008 and 2009, or the average of 2007, 2008, and 2009. Variable profit is 

determined by calculating the total monthly revenue over the period in 

question then subtracting the corresponding variable expenses over the same 

time period, including variable costs, variable portions of salaries, and other 

expenses. If the claimant has less variable profit in the Compensation Period 

than in the Benchmark Period, it is entitled to compensation for that 

 

1 Ctr. for Biological Diversity, Inc. v. BP Am. Prod. Co., 704 F.3d 413, 418 (5th Cir. 

2013).

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difference. Under Step 2 of the compensation formula, claimants are also 

compensated for incremental profits the claimant might have expected to 

generate in 2010 in absence of the spill, based on the claimant’s revenue trend 

before the spill. 

The Association is a non-profit that supports Habitat for Humanity 

affiliates throughout Alabama. The Association services the affiliates by

“providing training opportunities, resource development, [and] a variety of 

programs and services to grow capacity.” The Association also solicits grants 

on behalf of the affiliates. Pertinent to this appeal, the Association receives 

grants from the Neighborhood Stabilization Fund (NSF). The Association 

described NSF as

a grant from the state of Alabama to three of our larger affiliates 

in Alabama-Southwest AL HFH (Mobile), Greater Birmingham 

HFH (Birmingham) & Madison HFH (Huntsville). . . . [T]his 

was . . . a pass-through grant, with most of the funds going to 

affiliates, but AAHA retaining a portion for administering the 

program & writing the grant on the affiliate’s behalf.

The Association filed a claim with the Settlement Program. Relying on 

the Association’s description, the Settlement Program’s accountants 

determined that NSF funds were pass-through and not revenue. The Claims 

Administrator initially denied the Association’s claim. After the Appeal Panel 

remanded, the Association was granted an award, but the Claims 

Administrator again determined that NSF funds should be excluded from 

revenue and expenses. The Association appealed to the Appeal Panel a second 

time, arguing that the NSF funds should have been included in revenue and 

therefore, the award should have been greater. The Appeal Panel affirmed the 

Claims Administrator’s decision. The Association sought discretionary review 

in the Eastern District of Louisiana, which the district court denied. The 

Association appeals.

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II

We review the district court’s denial of discretionary review of an Appeal 

Panel decision for abuse of discretion.2 It is generally an abuse of discretion 

not to review a decision that “actually contradicted or misapplied the 

Settlement Agreement, or had the clear potential to” do so.3 However, it is 

“wrong to suggest that the district court must grant review of all claims that 

raise a question about the proper interpretation of the Settlement 

Agreement.”4 A district court may deny a request for review that “involve[s] 

no pressing question of how the Settlement Agreement should be interpreted 

or implemented, but simply raise[s] the correctness of a discretionary 

administrative decision in the facts of a single claimant’s case.”5 “It may be an 

abuse of discretion to deny a request for review that raises a recurring issue 

on which the Appeal Panels are split if ‘the resolution of the question will 

substantially impact the administration of the Agreement.’”6

The Association argues that the district court abused its discretion by

denying review because (1) Fifth Circuit precedent requires grant money to be 

considered revenue, (2) the NSF funds were not pass-through, and 

(3) pass-through funds are revenue.

We need not address these arguments. Even if the NSF funds should 

have been included in revenue, the corresponding variable expenses would 

 

2 Claimant ID 100212278 v. BP Expl. & Prod., Inc., 848 F.3d 407, 410 (5th Cir. 2017) 

(citing Holmes Motors, Inc. v. BP Expl. & Prod., 829 F.3d 313, 315 (5th Cir. 2016)).

3 Id. (quoting Holmes Motors, 829 F.3d at 315). 

4 Id. (quoting Holmes Motors, 829 F.3d at 316); see also In re Deepwater Horizon, 785 

F.3d 986, 999 (5th Cir. 2015) (“We do not intend any part of this opinion to turn the district 

court's discretionary review into a mandatory review. To do so would frustrate the clear 

purpose of the Settlement Agreement to curtail litigation.”).

5 Claimant ID 100212278, 848 F.3d at 410 (alterations in original) (quoting In re 

Deepwater Horizon, 641 F. App’x 405, 410 (5th Cir. 2016)). 

6 Id. (quoting In re Deepwater Horizon, 631 F. App’x 199, 203-04 (5th Cir. 2015)). 

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have to be “matched” to determine variable profit.7 As we have said, 

“[e]xpenses that can be readily traced to the recognized revenues are 

themselves recognized at the same time as those revenues.”8 By its own 

admission, the Association’s “NSP Activities” account is an expense account for 

NSF. When the Association received NSF funds, it would retain an 

administration fee for its service, which was included in calculating the 

Association’s revenue. The remaining NSF funds would subsequently be 

distributed to Habitat for Humanity affiliates. These distributions were 

recorded as “NSP Activities” expenses. For all of the months in the 

Compensation Period and the Benchmark Period, the amount of NSF funds 

received by the Association, less the administration fees, equaled the amount 

of NSP Activities expenses. Accordingly, even if the NSF funds should have 

been considered revenue, those funds would have had to be matched with the 

NSP Activities expenses, leaving only the administration fees as the 

Association’s variable profit from the NSF grant. If the Claims Administrator 

erred, that error was harmless. 

The Association argues that matching the NSF revenues and expenses

would be contrary to the Settlement Agreement’s purpose. However, matching 

is precisely what the Settlement Agreement calls for in a case like this, as 

confirmed by this court.9 Claimants are to be compensated for a reduction in 

variable profit, not a reduction in revenue. The Association argues that this 

result precludes nonprofits from recovering under the Settlement Agreement 

because by definition, they do not generate profits. As we have explained, 

however, “modern nonprofits are commercial entities that seek to generate 

 

7 In re Deepwater Horizon, 732 F.3d 326, 335 (5th Cir. 2013).

8 Id. at 333.

9 In re Deepwater Horizon, 858 F.3d 298, 302 (5th Cir. 2017) (“[T]he Claims 

Administrator must ensure that costs are registered in the same month as corresponding 

revenue, regardless of when those costs were incurred.”).

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cash surpluses.”10 Those surpluses, like the administration fees in this case, 

are included in calculating a claimant’s variable profit. 

Assuming, arguendo, that NSF funds should be considered revenue, the 

district court still did not abuse its discretion in denying review.

* * *

AFFIRMED.

 

10 In re Deepwater Horizon, 785 F.3d 1003, 1012 (5th Cir. 2015).

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