BP Exploration & Prodn, Inc. v. ID

Case: 18-30394 Document: 00514881236 Page: 1 Date Filed: 03/20/2019

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

March 20, 2019

No. 18-30394

Lyle W. Cayce

Clerk

BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA

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

Requesting Parties-Appellants,

v.

CLAIMANT ID 100281817,

Objecting Party-Appellee.

Appeal from the United States District Court

for the Eastern District of Louisiana

Before JONES, HAYNES, and OLDHAM, Circuit Judges.

ANDREW S. OLDHAM, Circuit Judge:

An NBA player named David West negotiated a contract with the New

Orleans Hornets before the Deepwater Horizon oil spill. He received every

penny specified in that contract both before and after the spill. Still, the

Claims Administrator for the Deepwater Horizon Economic and Property

Damages Settlement Agreement awarded West almost $1.5 million in “lost”

earnings. The Settlement Appeal Panel affirmed, and the district court denied

discretionary review. We reverse.

I.

The Deepwater Horizon oil rig exploded on April 20, 2010. At that time,

David West played professional basketball for the New Orleans Hornets (now

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known as the New Orleans Pelicans). He was four years into a five-year

contract. That contract paid West a total of $45 million. But it was “front-

loaded,” meaning West’s annual salary decreased every year of the contract—

including from 2009 to 2010. West received all $45 million owed to him under

the contract.

Still, he submitted an “Individual Economic Loss Claim” under the

Deepwater Horizon Economic and Property Damages Settlement Agreement

(“Settlement”). 1 These claims can be submitted only by individuals “who seek

compensation for lost earnings from employment due to or resulting from the

[Deepwater Horizon] Spill.” Settlement Agreement Ex. 8A at 1 (emphasis

added). And the Individual Economic Loss Claim form states, on its very first

page, that it covers only “individuals who have experienced income losses

caused by the Spill.” Individual Economic Loss Claim Form 1 (emphasis

added). It also required West to certify “that the information provided in [his]

Claim Form [was] true and accurate to the best of [his] knowledge.” Id. at 15.

Based on that attestation, the Claims Administrator used West’s tax forms to

calculate his “lost earnings.” The Claims Administrator determined West was

entitled to $1,412,673.06. BP contested that determination because West “lost”

nothing—he received all the money promised by the front-loaded terms of his

pre-spill contract.

BP first sought reversal before the Appeal Panel. It argued West was

not entitled to any award under the Agreement because (1) Individual

Economic Loss Claimants can recover only if they experienced a loss caused by

the spill, and (2) West cannot satisfy the Settlement’s attestation

1In previous cases, we have discussed the Deepwater Horizon oil spill and resulting

settlement at great length. See, e.g., In re Deepwater Horizon (Deepwater Horizon III ), 744

F.3d 370 (5th Cir. 2014); In re Deepwater Horizon (Deepwater Horizon II ), 739 F.3d 790 (5th

Cir. 2014); In re Deepwater Horizon (Deepwater Horizon I ), 732 F.3d 326 (5th Cir. 2013). We

therefore need not recount that history here.

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requirements. The Appeal Panel affirmed West’s award. It concluded West

established causation because his employer—the Hornets—benefited from

presumed causation under the Settlement. It therefore held West needed

nothing more to claim “lost” earnings.

BP asked the district court to review the award decision. But the court

denied discretionary review without explanation. BP timely appealed.

II.

Our review is for abuse of discretion. Holmes Motors, Inc. v. BP Expl. &

Prod., Inc., 829 F.3d 313, 315 (5th Cir. 2016). The district court abuses its

discretion when “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.” Ibid.

(quotation omitted). It’s likewise “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.” Claimant ID 100212278 v. BP Expl. & Prod., Inc., 848 F.3d 407,

410 (5th Cir. 2017) (per curiam) (quotation omitted). In contrast, denying “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,” does not amount to an abuse of discretion. Ibid. (quotation

omitted) (alterations in original).

That said, the Settlement Agreement is a contract. The proper

interpretation of it “is a question of law.” In re Deepwater Horizon (Deepwater

Horizon I ), 732 F.3d 326, 345 (5th Cir. 2013). And making “an error of law

constitutes an abuse of discretion.” In re Deepwater Horizon, 785 F.3d 986, 999

(5th Cir. 2015). Accordingly, when the district court is “presented with purely

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legal questions of contract interpretation,” our review is de novo. In re

Deepwater Horizon, 785 F.3d 1003, 1011 (5th Cir. 2015).

A.

We start with the contractual provisions governing West’s claim. West

submitted a specific type of claim—an “Individual Economic Loss Claim.” It is

defined to include a claim brought by an individual described in Exhibit 8A.

Exhibit 8A, in turn, provides the following description for Individual Economic

Loss Claims:

Individual economic loss claims are claims by Individuals, who

shall be defined as (i) Natural Persons who (a) satisfy (or whose

employers satisfy) the Class Definition and (b) whose losses are not

excluded from the Class and (ii) who seek compensation for lost

earnings from employment due to or resulting from the [Deepwater

Horizon oil spill] . . . .

Settlement Agreement Ex. 8A at 1 (emphases added). The claim form that

West submitted similarly stated: “The Individual Economic Loss Claim is for

individuals who have experienced income losses caused by the Spill.”

Individual Economic Loss Claim Form 1 (emphasis added). Thus, these types

of claims may be brought only by individuals who experienced losses and seek

compensation for lost earnings caused by the oil spill. We’ve previously

interpreted the Agreement as allowing “proof of loss as a substitute for proof

of causation.” In re Deepwater (Deepwater Horizon III ), 744 F.3d 370, 375 (5th

Cir. 2014). But what do “loss” and “lost earnings” mean?

They are undefined in the Settlement, so we look to their plain meaning.

See BP Expl. & Prod., Inc. v. Claimant ID 100094497, 910 F.3d 797, 801 (5th

Cir. 2018). “Loss” typically means “the disappearance or diminution of

value . . . in an unexpected or relatively unpredictable way.” Loss, BLACK’S

LAW DICTIONARY (10th ed. 2014); see also Economic Loss, BLACK’S LAW

DICTIONARY (10th ed. 2014) (explaining “economic loss” means “monetary loss

such as lost wages or lost profits” and usually “refers to a type of damages

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recoverable in a lawsuit”). And “lost earnings” refers to “[w]ages, salary, or

other income that a person could have earned if he or she had not lost a job,

suffered a disabling injury, or died.” Earnings, BLACK’S LAW DICTIONARY (10th

ed. 2014). These definitions suggest “loss” or “lost earnings” are unexpected

diminutions in wages or other income that could otherwise support a claim for

civil damages.

West argues these plain meanings of “loss” and “lost earnings” do not

apply. Instead, he says, his “loss” is proved by the seven-step mathematical

equation that appears in Exhibit 8A. But that puts the cart before the horse.

Only claimants who suffer unexpected damages can submit an Individual

Economic Loss Claim; then they use Exhibit 8A’s equation to determine the

value of that claim. The defined terms in the seven-step equation make that

clear. “Claimant Lost Earnings” is defined as “[t]he claimant’s Expected

Earnings from all Claiming Jobs minus the claimant’s Actual Earnings

from all Claiming Jobs during the Compensation Period, minus any

Offsetting Earnings.” Settlement Agreement Ex. 8A at 4. “Expected

Earnings” refers to the “[c]laimant’s earnings in the Compensation Period

in the Claiming Job that would have been expected in the absence of the

[Deepwater Horizon] Spill.” Id. at 5 (emphasis added). West expected to earn

in the absence of the spill precisely what he did earn after it. He therefore did

not suffer unexpected damages, and Exhibit 8A does not apply to him. 2

2 Because West’s expected earnings equal his actual earnings based on Exhibit 8A’s

definitions, West ignores them. (Indeed, he does not even include the Agreement’s definition

of “Expected Earnings” in his brief.) He instead implies “Expected Earnings” is defined in

Exhibit 8A as a calculation based on what he earned in previous time periods, not what his

five-year contract provided. And applying that “definition,” West’s expected earnings would

be higher than his actual earnings. But we cannot focus exclusively on Exhibit 8A’s

calculations and ignore its list of defined terms and accompanying definitions. Instead, we

must read the Agreement’s provisions “as a whole,” Claimant ID 100094497, 910 F.3d at 801,

and harmonize the Agreement—giving effect to all its terms “without rendering any of them

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This interpretation comports not only with the Agreement’s text, but also

with our precedent. As we explained in Deepwater Horizon I, when

interpreting the Agreement, we must give “some weight” to “what damages

recoverable in civil litigation actually are.” 732 F.3d at 339. And in civil

litigation, the plaintiff can recover damages only after suffering actual losses.

See Lewis v. Casey, 518 U.S. 343, 349 (1996) (explaining the court’s role is

limited to “provid[ing] relief to claimants, in individual or class actions, who

have suffered, or will imminently suffer, actual harm”).

B.

West did not suffer actual and unexpected “losses” or damages. In 2010,

he earned exactly what he was entitled to receive under his contract. The fact

that West received less money in 2010 than in 2009 does not mean he “lost”

anything or was “damaged” in any way. It means only he agreed to a front-

loaded contract. And he did so many years before the Deepwater Horizon

catastrophe.

The decision to give money to West “actually contradicted or misapplied

the Settlement Agreement.” Holmes Motors, 829 F.3d at 315 (quotation

omitted). Our holding to that effect answers a “purely legal question[ ] of

contract interpretation.” In re Deepwater Horizon, 785 F.3d at 1011.

Accordingly, “remand is unnecessary.” Aransas Project v. Shaw, 775 F.3d 641,

658 (5th Cir. 2014) (per curiam); cf. United States v. Douglas, 696 F. App’x 666,

669 (5th Cir. 2017) (per curiam) (“In certain circumstances, however, the

appellate court may determine that remand of a particular case is unnecessary

and instead, simply reverse and render.”); United States v. Hernandez-

meaningless or superfluous,” Chembulk Trading LLC v. Chemex Ltd., 393 F.3d 550, 555 (5th

Cir. 2004). The fact that the definition of “Expected Earnings” cannot be squared with the

calculation as applied to West’s claim further illustrates the compensation formula does not

apply to him. It applies only to eligible individuals—those who suffered unexpected damages.

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Guevara, 162 F.3d 863, 878 (5th Cir. 1998) (“[W]e need not waste judicial

resources by remanding for what undoubtedly would be a rote resentencing.”).

The judgment of the district court is REVERSED.

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HAYNES, Circuit Judge, concurring and dissenting:

I concur in the portion of the judgment reversing the district

court’s denial of review and the determination by the majority opinion that the

particular sums awarded, which rely upon the contractual losses, reflect a

“loss” that was not caused by the oil spill. However, I would stop there and

remand the case to the district court.

As the majority opinion explains, the question before us is whether the

district court abused its discretion in not reviewing the Appeal Panel’s decision

because there was an erroneous interpretation of the Settlement Agreement

impacting the settlement as a whole. Holmes Motors, Inc. v. BP Expl. & Prod.,

829 F.3d 313, 315 (5th Cir. 2016). We answer that “yes.” The remedy, then, is

to send it back to the district court to review the case consistent with our

analysis. BP Expl. & Prod. Inc. v. Claimant ID 100094497, 910 F.3d 797, 803

(5th Cir. 2018) (remanding to the district court even though the majority

opinion (in the face of a dissenting opinion) decided a legal question); see also

In re Deepwater Horizon, 632 F. App’x 199, 204 (5th Cir. 2015) (per curiam)

(remanding where district court refused to review issues that would arise

repeatedly); cf. Claimant ID 100227611 v. BP Expl. & Prod., No. 18-30396,

2018 U.S. App. LEXIS 33357, at *6 (5th Cir. Nov. 28, 2018) (per curiam)

(declining to overturn the refusal of discretionary review 1 when the case

involved a decision on “the facts of a single claimant’s case”); see generally

1 While the legal question may be reviewed “de novo,” even a “legal error” should not

cause us to reverse a denial of discretionary review that involves just a single claim or does

not negate relevant portions of the Settlement Agreement. In other words, whether a legal

error is made is not discretionary but whether to grant discretionary review of a legal error

is discretionary. Here, however, the district court’s failure to address this glaring legal error

involves the very heart of the Settlement Agreement, so denial of review was an abuse of

discretion.

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Sanchez v. Young Cty., 866 F.3d 274, 279 (5th Cir. 2017) (per curiam) (“In

deference to the trial court’s responsibility to review the record in the first

instance, we vacate and remand . . . .”). Yet the majority opinion does not.

Would a remand be based upon a mere technicality and, in turn, be a

waste of time here because it is a purely legal question? No.

There are additional factual questions here. The question of whether the

particular contractual “loss” approved by the Claims Administrator is fundable

under the Settlement Agreement is, perhaps, a pure legal question. But West

raises arguments concerning losses beyond the “do the math” arguments we

rejected. If I were a factfinder, I would be unpersuaded by his arguments. But,

as appellate judges, we are not factfinders in this case. Accordingly, we should

remand to the district court to review and make any necessary determinations

in the first instance (or, in turn, remand for factual investigation by the Claims

Administrator), including determination of whether arguments were properly

raised or forfeited.

The decision not to remand ignores the reality of how these Settlement

Agreement cases proceed and the history of this specific case. Throughout the

proceedings below, the question was whether the Claims Administrator,

Appeals Panel, and District Court can or should “pierce the veil” of the

claimant’s application which, on its face, undeniably demonstrated a loss. At

each stage, West successfully argued, “No, there should be no piercing,”

meaning he had no reason to provide evidence of any other theory of recovery;

the whole point was that the document to which he attested stands as is. He

prevailed repeatedly on that theory as numerous others had and still do. We

have now, for the first time, found a case that we only theorized about in earlier

decisions, the “implausible” causation case (“implausible” being a nice way of

putting it here). See In re Deepwater Horizon, 744 F.3d 370, 377–78 (5th Cir.

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2014). But that case specifically stated: “The claims administrator, parties,

and district court can resolve real examples of implausible claims as they

resolve other questions that arise in the handling of specific claims.” Id.

(emphasis added). Nothing in that opinion suggested making the Fifth Circuit

the factfinder.

Indeed, BP has stipulated that causation arguments are preserved in

this context. The stipulation states: “BP and Class counsel further agree that,

for any Deepwater Horizon Court-Supervised Settlement Program appeal,

request for discretionary review, or appeal to the Fifth Circuit Court in which

the attestation issue is raised, the Claimant will be deemed to have preserved,

and not waived, any argument that BP is estopped from challenging the

attestation . . . , as well as any other appropriate argument and/or objection

relevant to the question of causation.” (emphasis added). BP acknowledged that

stipulation in its briefing to the Appeals Panel in this very case: “Pursuant to

the stipulation entered into between BP and the Class . . . , BP is preserving

[the attestation requirement] issue for further review but does not brief it

further herein.” BP’s footnote to that statement suggests that it did not expect

West to address this argument. This case is thus not one of the “mine-run” of

forfeiture or waiver cases where a litigant should have raised an issue sooner

but failed to do so. 2

Finally, perhaps for the above reasons, BP did not request that we

“reverse and render.” It only asked for a remand: “For the foregoing reasons,

the district court’s denial of discretionary review should be reversed and

2 Indeed, the entire record on appeal is very thinly developed beyond BP citing to

articles about the contract in question, and West not denying the fact of the contract but

arguing its irrelevance. BP itself put into evidence the article West relies upon to show that

he had a potential for a future lucrative contract. Thus, the thin record provides some

support for West’s argument.

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remanded.” “[A] party is bound by, or limited to, the relief it seeks on appeal.”

Whitehead v. Food Max, Inc., 163 F.3d 265, 270 (5th Cir. 1998); see also

Holloway v. Purvis, 680 F. App’x 282, 286 (5th Cir. 2017) (“[O]ur precedent

states that parties are limited to the relief requested in their briefs.”) Thus,

we must remand, not render.

In sum, our usual course is to remand to the district court to resolve

outstanding factual issues and failing to do so on this procedural history is

particularly inappropriate. Our precedent also requires that we not grant

more relief than requested by rendering when only remand was sought. I

would reverse and remand to the district court. Because the majority opinion

leaves out this important step, I respectfully dissent from that portion of the

opinion and resulting judgment.

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