Opinion ID: 6104644
Heading Depth: 3
Heading Rank: 2

Heading: BP-O’Brien’s Contract Opt-Out B3 Claims

Text: We disagree, however, with the district court’s conclusion that BP materially breached the notice and control-of-defense provisions of the BP- O’Brien’s indemnity agreement for opt-out B3 claims at this stage. Opt-out B3 claims are those that were not settled by the Medical Settlement and therefore remained for individual plaintiffs to litigate against BP. The district court’s reasoning rested almost entirely on the length of time—over six years—between the opt-out deadline and the tendering of claims to O’Brien’s. Contrary to the court’s reasoning, it is far from clear that BP 23 See Berkley Reg’l Ins. v. Phila. Indem. Ins., 690 F.3d 342, 351 (5th Cir. 2012) (finding prejudice in a late-notice case in the insurance context even though “we cannot fully know what effect, if any, [a party’s] participation would have had on [the mediation] process”). 21 Case: 20-30364 Document: 00516171755 Page: 22 Date Filed: 01/19/2022 No. 20-30364 breached the notice provision for all of the opt-out B3 claims, and even less obvious that any such breach was material. Although BP had a list of 1,638 valid opt-outs by the deadline prescribed by the Medical Settlement, it needed employer information to tender the claims to O’Brien’s. The district court provided minimal support for concluding that this “information was almost certainly available to BP for all of these workers.” 24 Although the short form joinders that plaintiffs could file to join the B3 Master Complaint required employer information, the district court recognized “there [was] no guarantee that all cleanup workers would have filed a short form joinder or filled out the employer information.” No party seems to dispute that at least some of the plaintiffs either omitted or erroneously provided their employer information on the short form joinder. Yet, such information was essential to connecting the claimants with BP’s contractors for purposes like investigation and assessing indemnity duties. Resolving the question of BP’s breach requires separate inquiry as to what information BP possessed about each claim, what notice was reasonable under the circumstances, and whether BP could have provided notice to O’Brien’s for that claim. 25 Accordingly, we cannot conclude that opt-out B3 claims were materially compromised by the purported delay in notice. O’Brien’s 24 The district court generally referenced databases that BP could have utilized. BP disputes this point, and O’Brien’s does not engage on this factual issue in its briefing. 25 To be clear, BP’s post hoc argument that the claims were “in no shape to be litigated[]” has no mooring in the text of the BP-O’Brien’s Contract. Its obligation under the Contract was only to “promptly give to the other party notice in writing of any claim made or proceedings commenced for which [BP] claim[ed] to be entitled to indemnification . . . .” And the notice was required to “state with as much detail as [was] reasonably practicable the facts and circumstances giving rise to the claim and [had to] be given as soon as possible after [BP] bec[ame] aware of such claim or proceeding.” This did not create a right for BP to organize the litigation before giving notice. 22 Case: 20-30364 Document: 00516171755 Page: 23 Date Filed: 01/19/2022 No. 20-30364 concedes that “these claims and proceedings were initially stayed against BP and then further sorted out by [Pretrial Order] 63 and 66 . . . .” And, as the district court recognized, this multi-faceted litigation has implicated numerous claims, including B3 claims that “were asserted directly against the Responders.” Whether O’Brien’s was prejudiced, pursuant to Texas law, with respect to a given claim due to delayed notice is a fact-bound question. See Bartush-Schnitzius, 518 S.W.3d at 436 (recognizing that, “[g]enerally, materiality is an issue to be determined by the trier of facts[]” (internal quotation marks and citation omitted)). Developing the factual record is a task for the district court in the first instance.