Court Opinion

ID: 4365405
Source: CourtListenerOpinion
Date Created: 2019-02-07 01:00:28.745955+00
Date Added: 2024-06-11T14:48:09.568438
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
                                      No. 18-30491                       February 6, 2019
                                                                           Lyle W. Cayce
CLAIMANT ID 100187576,                                                          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
                             USDC No. 2:18-CV-2993

Before KING, HIGGINSON, and COSTA, Circuit Judges.
PER CURIAM:*
       In July 2013, Varicosis & Laser Center of Alabama, P.C. (“VLCA”) filed
a Business Economic Loss (“BEL”) claim under the Deepwater Horizon
Economic and Property Damages Settlement Agreement (“Settlement
Agreement”). See generally In re Oil Spill by Oil Rig Deepwater Horizon in
Gulf of Mexico, on Apr. 20, 2010, 910 F. Supp. 2d 891 (E.D. La. 2012) (final

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
                                 No. 18-30491
approval order), aff’d sub nom. In re Deepwater Horizon, 739 F.3d 790 (5th Cir.
2014). VLCA treats varicose, spider, and facial veins and is located in Hoover,
Alabama, within Economic Loss Zone D.
      In February 2017, the Claims Administrator denied VLCA’s claim,
finding that VLCA had failed to satisfy the causation requirements set out in
Exhibit 4B of the Settlement Agreement. In December 2017, the Settlement
Agreement Appeal Panel affirmed the Administrator’s denial of VLCA’s BEL
claim. The district court, which “maintains the discretionary right to review
any Appeal determination to consider whether the determination was in
compliance with the Agreement,” declined to review the Appeal Panel decision.
VLCA now appeals the district court’s denial of discretionary review. We have
jurisdiction under the collateral-order doctrine. See, e.g., In re Deepwater
Horizon, 632 F. App’x 199, 202–03 (5th Cir. 2015).
      The Settlement Agreement “grant[s] the district court a discretionary
right of review, which is not a right for the parties to be granted such
review.” Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313, 316–17
(5th Cir. 2016) (internal quotations omitted). We have noted that “the clear
purpose of the Settlement Agreement” is “to curtail litigation,” id., and that
the “Agreement was drafted against a backdrop of anticipated numerous
claims presenting potentially recurring issues,” In re Deepwater Horizon, 632
F. App’x at 203. We have therefore required the district court to review Appeal
Panel decisions that “actually” or “potentially” “contradicted or misapplied the
Settlement Agreement,” Claimant ID 100250022 v. BP Expl. & Prod., Inc., 847
F.3d 167, 169 (5th Cir. 2017), or that involved a question “aris[ing] in a number
of claims and the resolution of the question will substantially impact the
administration of the Agreement,” In re Deepwater Horizon, 632 F. App’x at
203–04. On the other hand, we have found no abuse of discretion where the
district court “den[ies] a request for review that involves no pressing question
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                                 No. 18-30491
of how the Settlement Agreement should be interpreted or implemented, but
simply raises the correctness of a discretionary administrative decision in the
facts of a single claimant’s case.” Claimant ID 100212278 v. BP Expl. & Prod.,
Inc., 848 F.3d 407, 410 (5th Cir. 2017) (internal quotations omitted).
      To qualify for compensation, VLCA had to show that it experienced a
“Decline-Only Revenue Pattern.” As relevant to this appeal, the “Customer
Mix” component of the Decline-Only Revenue Pattern required VLCA to
“demonstrate[] proof of a decline of 10% in the share of total revenue generated
by non-local customers over the . . . period of three consecutive months from
May-December 2010 as selected by the claimant . . . compared to the same
three consecutive month period in 2009.”
      “Non-local” customers are those that “reside more than 60 miles from a
claimant business location.” Customer location is determined from documents
such as “contemporaneously maintained records of payment,” “customer
registration logs,” or “documentation maintained in the ordinary course of
business that lists customers by location and monthly sales associated with
those customers.”   As these documentation requirements are “mandatory”
under the Settlement Agreement, the Administrator “assume[s] that the
revenue associated with ‘unknown’ customers would weigh against the
claimant for purposes of the Customer Mix Test.” Claimant ID 100123936 v.
BP Exploration & Production, Inc. et al, No. 17-02480, slip op. at 4 (E.D. La.
May 5, 2017). This treatment “prevents claimants from benefitting from their
failure to provide complete customer mix data.” Id.
      VLCA submitted (1) profit and loss (“P&L”) statements and (2)
contemporaneously maintained records associating services rendered with
patients’ addresses and total amount charged (“customer mix data”).
Settlement Program accountants noted that VLCA’s customer mix data could
not be completely reconciled with its P&L statements. In some months, the
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                                      No. 18-30491
customer mix data indicated more revenue than the figure reported in P&L
statements; in other months, the customer mix data totaled less than the
reported P&L figure.         Treating those variances adversely 1 to VLCA for
purposes of the Customer Mix Test, the Administrator concluded that total
revenue from non-local customers had increased by 75% rather than declining
by 10%, and denied VLCA’s BEL claim.                    The Appeal Panel affirmed,
explaining, “Customer Mix data that does not match the P and Ls is considered
‘unknown’ and treated in a manner adverse to the claimant and the District
Court has confirmed this as the correct approach. Without this safeguard, a
party could cherry pick customer information in order to satisfy the test.”
       On appeal, VLCA argues that the Administrator violated the Settlement
Agreement by adversely classifying the variances between VLCA’s customer
mix data and its P&L statements. To the extent that VLCA contends the
Customer Mix Test can only be applied to a claimant’s customer mix data
without considering other revenue records such as P&L’s, that argument was
persuasively rejected by this court in a decision that issued after the close of
principal briefing. In that case, our court concluded that the “only way to
reasonably interpret the customer mix test is that it requires the claims
administrator to compare the claimant’s ‘total revenue’ with its subset of
revenue ‘generated by [non-local] customers.’” Claimant Id 100227611 v. BP
Expl. & Prod., Inc., No. 18-30396, 2018 WL 6261854, at *3 (5th Cir. Nov. 28,

       1 The Claims Administrator explained that for months where the customer mix data
fell short of revenue reported on the P&L’s, the missing revenue was designated as local for
2009 and non-local for 2010. When the customer mix data exceeded revenues reported on
the P&L’s, the excess was treated as negative revenue designated non-local for 2009 and local
for 2010. This was “adverse” to VLCA because it decreased the share of revenue designated
as non-local in 2009 and increased the share of revenue designated as non-local in 2010.

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                                       No. 18-30491
2018). 2 The court found “simply no textual support for the [claimant’s] position
that the revenue generated by customers in the affected areas must be
compared to the ‘total revenue generated by customers’ as opposed to the ‘total
revenue’ full stop.” Id. In a response letter submitted by VLCA on December
5, 2018, VLCA does not challenge this interpretation of the Settlement
Agreement.
       VLCA’s response states that it disputes only the Claim Administrator’s
decision to calculate “total revenue” using VLCA’s P&L statements (rather
than VLCA’s customer mix data) and to adversely classify customer mix data
that was inconsistent with the P&L statements.                      Whether the Claims
Administrator should “deviate[] from its normal practice by analyzing the
[claimant’s] customer-mix data independent of the revenues it reported on its
P&Ls” is a “tougher question,” as our court said. Claimant Id 100227611, 2018
WL 6261854, at *4. But it is a question that the district court may properly
decline to answer. The Settlement Agreement does not require the district
court “to spend its limited time correcting all of the claims administrator’s
alleged accounting errors . . . unless those errors represent a recurring issue
on which the Appeal Panels are split and the resolution of the question will
substantially impact the administration of the Agreement.” Id. (quotations
omitted). Here, VLCA’s appeal raises nothing more than “the correctness of a
discretionary administrative decision in the facts of a single claimant’s case.”
Claimant ID 100212278, 848 F.3d at 410. VLCA’s discussion of other Appeal
Panel decisions fails to establish a recurring pattern of accounting errors over

       2 Consistent with our court’s November 2018 decision, the district court had clarified
in May 5, 2017, that “‘Total revenue’ means the revenue recorded on the claimant’s profit and
loss statements for the selected period, not just the revenue for which the claimant is able to
produce Customer Mix data.” Claimant ID 100123936 v. BP Exploration & Production, Inc.
et al, No. 17-02480, slip op. at 5 n.4 (E.D. La. May 5, 2017).
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                                  No. 18-30491
which the Appeal Panels are split. We therefore AFFIRM the district court’s
denial of discretionary review.

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