IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 16-31086 FILED
Summary Calendar June 9, 2017
Lyle W. Cayce
Clerk
CLAIMANT ID 100051301,
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. 2:16-CV-13931
Before KING, DENNIS, and COSTA, Circuit Judges.
PER CURIAM:*
In this appeal, we address a claim stemming from the Deepwater
Horizon Economic and Property Damages Settlement Agreement (Settlement
Agreement) between Appellees BP Exploration & Production, Inc., BP America
Production Co., and BP, P.L.C. (collectively, BP) and the settlement class. The
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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. 16-31086
claimant in this case, Appellant Laxmi Southaven Enterprises, Inc. (Laxmi),
appeals from the district court’s denial of discretionary review.
Laxmi operates a motel in Southaven, Mississippi. In February 2013,
Laxmi submitted a Business Economic Loss (BEL) claim to the Court
Supervised Settlement Program (CSSP). The Settlement Agreement uses
geographic zones to sort BEL claimants depending on their locations. Laxmi’s
location places it in Zone D, which requires a BEL claimant to establish
causation in order to recover on a claim. To establish causation, Laxmi was
required to satisfy one of the six tests included in Exhibit 4B to the Settlement
Agreement. Notably, most of the causation tests potentially applicable to
Laxmi’s claim required certain changes in a claimant’s revenue following the
oil spill.
In January 2016, the Claims Administrator determined that Laxmi was
eligible to receive more than $500,000 in compensation. At the center of this
appeal is an accounting entry for $34,823.61. Specifically, for December 2010
(which is post-oil spill), Laxmi had a revenue variance of $34,823.61 between
its profit and loss statement and its tax return. Laxmi explained that the
difference was due to a year-end adjustment to decrease annual revenue by
$34,823.61 for revenue that was not paid and written off. The Claims
Administrator treated the $34,823.61 as a contra revenue adjustment (i.e.,
decreasing Laxmi’s revenue) rather than as a bad debt expense (i.e., increasing
Laxmi’s expenses and leaving revenue unchanged). This decision was
important because whether the revenue-based causation tests in the
Settlement Agreement were met depended, in part, on how much Laxmi’s
revenue decreased following the oil spill.
BP appealed the Claims Administrator’s determination to the CSSP’s
Appeal Panel, arguing that the Claims Administrator made two errors. First,
BP argued that the Claims Administrator improperly classified the $34,823.61
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as a contra revenue adjustment rather than a bad debt expense. According to
BP, if the Claims Administrator had properly classified the $34,823.61 as a
bad debt expense, Laxmi would have failed to establish causation because its
post-oil spill revenue would have been too high. Second, BP contended that
Laxmi inconsistently classified its expenses related to supplies, which resulted
in an overstated compensation award. In response, Laxmi argued that,
because it is a cash-basis taxpayer, the $34,823.61 was properly classified as a
contra revenue adjustment rather than a bad debt expense. Laxmi also argued
that its supplies were properly sorted between fixed and variable expenses.
Prior to issuing its ruling, the Appeal Panel requested a summary of
review from the Claims Administrator. Under Rule 13(f) of the Rules
Governing the Appeals Process, a “Summary of Review is intended to provide
the Appeal Panel with an understanding of what occurred in the underlying
processing of the claim, including the basis for the determination(s) made by
the Claims Administrator.” Rule 13(f) further provides, inter alia, that the
“Appeal Panel may grant the Claimant, Class Counsel and BP the right to file
a response to the Claims Administrator’s Summary of Review, but such
response shall be limited to a correction of facts recited in the Summary of
Review and shall not include any argument.” 1 In this case, the Appeal Panel
1 In full, Rule 13(f) provides the following:
The record on appeal shall consist of: . . . (f) The Claims Administrator’s
Summary of Review, as requested by the Appeal Panel. The Summary of
Review is intended to provide the Appeal Panel with an understanding of what
occurred in the underlying processing of the claim, including the basis for the
determination(s) made by the Claims Administrator. It shall include reference
to and a factual explanation of any formal policies or procedures adopted by
the Claims Administrator that are applicable to the issue(s) raised by the
appeal, referring the Appeal Panelist to the formal policies that are part of the
Record of Appeal, as described in Rule 13 (c). The Summary of Review is not
to be a document that advocates one position or the other but rather is to be a
narrative that simply explains how the Claims Administrator processed the
claim. The Summary of Review is for informational purposes only and is to be
made available to the Appeal Panel, the Claimant, Class Counsel and BP. The
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asked the Claims Administrator why it had treated the $34,823.61 as a contra
revenue adjustment rather than a bad debt expense. In the summary of
review, the Claims Administer explained that the CSSP accountant had
“inadvertently classified [Laxmi’s] December 2010 revenue adjustment as a
Contra Revenue account rather than Bad Debt Expense. If the 2010 contra
revenue was treated as Bad Debt Expense, the claimant does not pass
causation under Exhibit 4B of the Settlement Agreement.”
In June 2016, the Appeal Panel held that Laxmi was not entitled to
compensation under the Settlement Agreement. The Appeal Panel explained
that, after a summary of review was requested, the Claims Administrator had
“conceded that the . . . accountant inadvertently classified [Laxmi’s] December
2010 revenue adjustment as a contra revenue account rather than a bad debt
expense,” and once this mistake is corrected, Laxmi “would not pass
causation.” The Appeal Panel then found that, “[a]fter a full consideration of
the record,” “the December 2010 revenue adjustment should have [been]
considered a bad debt expense.” Thus, the Appeal Panel held that Laxmi failed
to establish causation and could not recover. 2
Following the Appeal Panel’s decision, Laxmi requested discretionary
review from the district court. In its brief, Laxmi urged the district court to
grant discretionary review because the Appeal Panel had relied on the Claims
Administrator’s flawed summary of review. Laxmi claimed that the Appeal
Panel (based on the summary of review) had improperly concluded that Laxmi
Appeal Panel may grant the Claimant, Class Counsel and BP the right to file
a response to the Claims Administrator’s Summary of Review, but such
response shall be limited to a correction of facts recited in the Summary of
Review and shall not include any argument.
2 Because the Appeal Panel held that Laxmi failed to establish causation, the Appeal
Panel did not reach whether Laxmi’s purported inconsistent treatment of its supply expenses
resulted in an artificially inflated award.
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No. 16-31086
used the accrual basis of accounting. Laxmi also highlighted the fact that the
Claims Administrator did not present any calculations in its summary of
review showing that Laxmi failed to establish causation, nor did it appear to
consider other benchmark periods and whether Laxmi could pass other
causation tests. The district court, however, declined to exercise its discretion
to review the claim. Laxmi timely appealed to this court.
Our review of the district court’s denial of discretionary review is for
abuse of discretion. Claimant ID 100250022 v. BP Expl. & Prod., Inc., 847 F.3d
167, 169 (5th Cir. 2017) (per curiam). In determining whether the district
court abused its discretion, we generally look to “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. (quoting Holmes Motors, Inc. v. BP Expl. & Prod.,
Inc., 829 F.3d 313, 315 (5th Cir. 2016)). “However, we have been careful to
note that 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.’” Claimant ID 100212278 v. BP Expl. & Prod., Inc., 848 F.3d 407,
410 (5th Cir. 2017) (per curiam) (quoting Holmes Motors, 829 F.3d at 316); see
also Claimant ID 100217021 v. BP Expl. & Prod., Inc., -- F. App’x --, 2017 WL
2210505, at *1 (5th Cir. 2017) (per curiam) (“Not all contradictions or
misapplications, however, warrant review.”).
Here, Laxmi has failed to show that the district court abused its
discretion in declining to review the claim. At base, Laxmi’s argument is that
the Claims Administrator’s initial determination that the $34,823.61 should
be treated as contra revenue was correct, and the Appeal Panel erred by
concluding that this amount was properly treated instead as a bad debt
expense. However, whether this amount should be a bad debt expense or a
contra revenue adjustment under these circumstances is the type of factbound
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and claimant-specific question that the district court does not abuse its
discretion by declining to review. See Claimant ID 100217021, -- F. App’x --,
2017 WL 2210505, at *3 (“Whatever the merit of [the claimant’s]
contention . . . it resembles a factbound attack on a decision about a single
claimant as opposed to a recurring issue about the meaning of the Settlement
Agreement that will substantially impact other cases.”). Indeed, Laxmi argues
that this court must reverse because the Appeal Panel made “a clearly
erroneous factual finding,” which only serves to highlight why the district court
did not abuse its discretion in declining to review this claim. Regardless of the
merits of Laxmi’s arguments, the district court cannot be required to exercise
its discretion to review such a factbound and claimant-specific appeal “[i]f the
discretionary nature of the district court’s review is to have any meaning.” See
Holmes Motors, 829 F.3d at 317 (quoting In re Deepwater Horizon, 641 F. App’x
405, 410 (5th Cir. 2016) (per curiam)).
Laxmi’s arguments to the contrary and attempts to reframe the issue to
avoid the appropriate standard of review are unavailing—Laxmi simply does
not point to any misapplication or contradiction of the Settlement Agreement
that would require review by the district court. For example, Laxmi argues
that the Appeal Panel should have required the production of additional
calculations showing that Laxmi failed every causation test or remanded the
claim for further proceedings, but this is the type of discretionary
administrative decision for a claimant-specific situation that the district court
need not review. See Claimant ID 100110725 v. BP Expl. & Prod., Inc., -- F.
App’x --, 2017 WL 1826174, at *2 (5th Cir. 2017) (per curiam) (“[T]he
[claimant’s] argument ultimately turns on ‘the correctness of a discretionary
administrative decision in the facts of a single claimant’s case,’ and does not
show that the Panel’s determination ‘actually contradicted or misapplied the
Settlement Agreement.’” (citations omitted)). Laxmi also contends that there
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are a number of Appeal Panel decisions reaching different conclusions
regarding whether an adjustment should be treated as contra revenue or bad
debt, and thus, the district court abused its discretion by declining to review
the issue. See Claimant ID 100212278, 848 F.3d at 410 (“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 [Settlement] Agreement.’” (quoting In re
Deepwater Horizon, 632 F. App’x 199, 203–04 (5th Cir. 2015) (per curiam))).
However, the fact that Appeal Panels have reached different conclusions for
this issue depending on the circumstances of each case does not represent the
type of Appeal Panel split that would require the district court’s review. It
makes sense that sometimes a contra revenue adjustment is appropriate on
the facts of a given case and other times a bad debt expense is appropriate on
the facts of another. Whether the facts here dictate that the $34,823.61 is more
appropriately classified as contra revenue or bad debt will not “substantially
impact the administration of the [Settlement] Agreement.” See id. (quoting In
re Deepwater Horizon, 632 F. App’x at 203–04). Finally, Laxmi argues that the
CSSP accountant’s initial determination that the $34,823.61 was properly
classified as contra revenue was entitled to deference and the facts here were
insufficient to justify the Appeal Panel’s reversal. Yet once again, this
argument is merely a reframing of the merits issue of how the $34,823.61
should have been classified in this specific case. It does not implicate a
misapplication or contradiction of the Settlement Agreement that would
require review by the district court. 3
3Laxmi also advances a somewhat convoluted argument that its due process rights
were violated by the Appeal Panel’s decision. For example, Laxmi appears to argue that its
due process rights were violated because it was not able to respond to the summary of review.
Laxmi, however, did not raise a due process argument before the district court, and thus, this
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For the foregoing reasons, the judgment of the district court is
AFFIRMED.
argument is forfeited. See In re Deepwater Horizon, 814 F.3d 748, 752 (5th Cir. 2016) (per
curiam); Claimant ID 100217021, -- F. App’x --, 2017 WL 2210505, at *3 n.4.
8