Court Opinion

ID: 4118643
Source: CourtListenerOpinion
Date Created: 2017-01-26 01:00:59.946184+00
Date Added: 2024-06-11T07:46:19.799178
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                FOR THE FIFTH CIRCUIT
                                                               United States Court of Appeals
                                                                        Fifth Circuit
                               No. 16-30258                           FILED
                                                               January 25, 2017

CLAIMANT ID 100250022,
                                                                 Lyle W. Cayce
                                                                      Clerk

            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

Before JOLLY, HIGGINBOTHAM and PRADO, Circuit Judges.
PER CURIAM:
     Alabama Coastal Radiology, P.C. (“ACR”), filed a claim under the
Business Economic Loss (“BEL”) Framework of the Deepwater Horizon
Economic Loss and Property Damage Settlement Agreement.                The Court
Supervised Settlement Program (“CSSP”) denied the claim, and an Appeal
Panel affirmed the CSSP’s denial. ACR requested that the district court grant
review of the CSSP’s decision, but ACR’s request was denied.             ACR now
appeals the district court’s denial of discretionary review. We AFFIRM.
                                     I.
     This case relates to the Deepwater Horizon Economic Loss and Property
Damage Settlement Agreement (“Settlement Agreement”), which was reached
                                       No. 16-30258
in the wake of the 2010 Deepwater Horizon oil spill incident. 1 As a result of
its obligations under the Settlement Agreement, BP has distributed millions
of dollars in damages to affected entities. In re Deepwater Horizon, 910 F.
Supp. 2d 891, 903-04 (E.D. La. 2012), aff’d, 739 F.3d 790 (5th Cir. 2014).
       ACR attempted to obtain compensation as a Multi-Facility Business
under the BEL Framework of the Settlement Agreement. ACR is a group of
sixteen radiologists. Infirmary Health Services (“IHS”), a separate entity from
ACR, owns several hospitals where ACR provides radiology services. In each
hospital, the ACR radiologists interpret imaging scans taken by the hospital;
the scans are reviewed in a designated location referred to as a “reading room.”
According to ACR’s certified public accountant, ACR does not have a physical
office and outsources all of its administrative tasks. IHS contracted with ACR
to provide the radiology services; IHS owns the “reading room” space and all of
the equipment ACR uses to carry out its imaging scan review services.
       ACR submitted a BEL claim under the Multi-Facility Business
Framework for a reading room located inside Infirmary 65, a hospital situated
in Mobile, Alabama.        The Settlement Agreement allows for business claims
that “include separate specialized frameworks addressing Business Economic
Loss Claims by MULTI-FACILITY BUSINESSES.”                              Exhibit 5 of the
Agreement defines “multi-facility business” as “[a] business entity that, during
the period April 1, 2010 through December 31, 2010, maintained Facilities in
more than one location and had at least one Facility within the Gulf Coast
Areas.” A “Facility” is then defined as “[a] separate and distinct physical
location of a Multi-Facility Business at which it performs or manages its
operations.” Policy 467, enacted by the CSSP, expands upon the definition of

       1 See In re Deepwater Horizon, 910 F. Supp. 2d 891 (E.D. La. 2012), aff’d, 739 F.3d 790
(5th Cir. 2014) (describing the oil spill and development of the Settlement Agreement).
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                                  No. 16-30258
“Facility” and provides that an entity must satisfy three elements to be
classified as a “Facility” under the Agreement: It must be (1) “[a] separate and
distinct physical structure or premises”; (2) “[o]wned, leased or operated by the
Business Entity”; and (3) “[a]t which the Business Entity performs and/or
manages its operations.” Under the “Overall Criterion” section of Policy 467,
the CSSP explains that “[a]n Entity does not ‘perform’ or ‘manage’ operations
at a location unless it can identify the expenses and revenues, if any, associated
with the operations at that location separately from the expenses and revenues
of other locations owned, leased or operated by the Entity.”
      The CSSP denied ACR’s claim. It explained in its denial notice that ACR
had failed to meet all three elements of the definition of “Facility.” ACR then
requested a denial summary from the CSSP for additional explanation. It
received the following summary:
      [ACR] only has a contract to provide radiology services at the
      facilities. The Claimant’s Attorney also explained that the
      Claimant does not have an office space at the facilities for which
      they pay rent or lease expenses. . . . According to Policy 467, this
      Claimant does not have the option of filing a separate claim for
      operations performed at one of the hospitals. The claim should be
      closed, as the Claimant has filed a separate claim for a location
      that is not a facility.
ACR requested re-review of the denial after submitting a statement from its
CPA and photographs of the reading room. The CSSP denied the claim again
after re-review, and again after ACR requested reconsideration of the post-re-
review denial notice. ACR appealed to an Appeal Panel. The Appeal Panel
affirmed the denial of ACR’s claim, explaining that “Claimant does not pay
rent or lease expenses on the reading room . . . [and] [t]here is not evidence
that Claimant pays for janitorial services, electricity, or other items a tenant
normally has.” The Panel also announced that its decision “[would] stand as
the Settlement Program’s final determination on this claim.”

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                                  No. 16-30258
      Pursuant to the procedure for appeals to federal court arising out of the
application of the Settlement Agreement, ACR appealed to Judge Barbier of
the Eastern District of Louisiana. See In re Deepwater Horizon, 785 F.3d 1003,
1007 (5th Cir. 2015) (“A party may then appeal the Appeal Panel’s
determination to the district court of Judge Barbier in the Eastern District of
Louisiana, which has discretion to hear such appeals.”). The district court
denied discretionary review of the decision by the Appeal Panel. ACR timely
appealed.
                                       II.
      The standard of review that we apply to the district court’s denial of
discretionary review is abuse of discretion.         Holmes Motors, Inc. v. BP
Exploration & Prod., Inc., 829 F.3d 313, 315 (5th Cir. 2016) (citing In re
Deepwater Horizon, 785 F.3d at 1011). Our unpublished decisions addressing
actions pursuant to the Settlement Agreement have expounded upon our abuse
of discretion inquiry, “ask[ing] ‘whether the decision not reviewed by the
district court actually contradicted or misapplied the Settlement Agreement,
or had the clear potential to contradict or misapply the Settlement
Agreement.’”    Id. (citing series of cases).    In the event that we find a
contradiction or misapplication of the Settlement Agreement, we will agree
that the district court abused its discretion. Id.
                                       III.
      ACR argues that the Infirmary 65 reading room constitutes a “Facility”
of ACR because ACR has a contract with IHS to use the location as a “separate
and distinct office space under ACR’s exclusive use and control.” BP counters
that the reading room is a “Facility” of IHS, and thus that it cannot also be a
“Facility” of ACR. The focus of the Settlement Agreement BEL Framework,
BP explains, is upon remedying actual economic loss caused by the oil spill.
Further, BP argues that the costs of maintaining the equipment and reading
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                                  No. 16-30258
room space are those of IHS, not ACR. Thus, BP contends, “Infirmary 65 is an
IHS ‘facility.’”
      In reaching our decision that the district court did not abuse its
discretion in denying discretionary review of the Appeal Panel decision in the
instant case, we need not examine whether the CSSP was actually correct in
refusing to classify Infirmary 65’s reading room as a “Facility” of ACR. Rather,
we look to whether the Appeal Panel decision contradicts or misapplies the
Settlement Agreement, and we find that it does not.           The Appeal Panel
explains in its decision that not only does ACR “not pay rent or lease expenses
on the reading room,” there is also “no evidence that [ACR] pays for janitorial
services, electricity, or other items” that normally accompany a lease-like
relationship.      The Appeal Panel further observed that the “only service
provided” in the reading room “is the contracted for radiology service.” It
concluded that the provision of the radiology service is not sufficient to meet
the three-part definition of a “Facility.”
      The Appeal Panel’s conclusion hardly contradicts or misapplies the
Settlement Agreement. The Agreement’s Multi-Facility Business Framework
functions as a subpart of the larger BEL Framework, which operates to
compensate for business economic losses.         Furthermore, the definition of
“Facility” as it is found in Policy 467 contains language with which the Appeal
Panel’s decision is consistent. In particular, the “Overall Criterion” provision
explains that a business must be able to identify the “expenses and revenues,
if any, associated with the operations at that location” in order to establish that
it “performs” or “manages” operations there. ACR argues that the “if any”
language contemplates situations in which a location may constitute a
“Facility” within the meaning of the Agreement notwithstanding a lack of
rental and lease expenses associated with the location.

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                               No. 16-30258
     Even if we were to agree with ACR’s interpretation of the “Overall
Criterion” provision and Policy 467 as a whole, the CSSP’s finding is not
incongruent with the language of the Settlement Agreement and the Multi-
Facility Business Framework’s function within the BEL Framework. Thus,
the CSSP and the Appeal Panel did not contradict or misapply the Settlement
Agreement.
                                     IV.
     In sum, because the district court’s denial of discretionary review does
not result in a contradiction or misapplication of the Settlement Agreement,
we hold that it is not an abuse of discretion and AFFIRM.

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