In Re: Deepwater Horizon

Case: 13-30843 Document: 00513036264 Page: 1 Date Filed: 05/08/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-30843 FILED
May 8, 2015
Lyle W. Cayce
IN RE: DEEPWATER HORIZON Clerk
________________________________________
LAKE EUGENIE LAND DEVELOPMENT, INCORPORATED; BON
SECOUR FISHERIES, INCORPORATED; FORT MORGAN REALTY,
INCORPORATED; LFBP 1, L.L.C., doing business as GW Fins; PANAMA
CITY BEACH DOLPHIN TOURS & MORE, L.L.C.; ZEKES CHARTER
FLEET, L.L.C.; WILLIAM SELLERS; KATHLEEN IRWIN; RONALD
LUNDY; CORLISS GALLO; JOHN TESVICH; MICHAEL GUIDRY, on
behalf of themselves and all others similarly situated; HENRY HUTTO;
BRAD FRILOUX; JERRY J. KEE,
Plaintiffs - Appellees
v.
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,
Defendants - Appellants
Appeal from the United States District Court
for the Eastern District of Louisiana
Before BENAVIDES, PRADO, and GRAVES, Circuit Judges.
FORTUNATO P. BENAVIDES, Circuit Judge:
This action involves the Economic and Property Damages Settlement
Agreement (“Settlement Agreement”) approved by the district court on
December 21, 2012, between Appellants BP Exploration & Production, Inc., BP
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America Production Company, and BP p.l.c. (collectively, “BP”), and Appellees,
the certified Economic and Property Damages Class, in connection with the
Deepwater Horizon oil spill of April 20, 2010. The Court Supervised Settlement
Program (“Settlement Program” or “CSSP”) was set up to compensate parties
with economic losses caused by the oil spill. This specific dispute arises from
the district court’s order of May 20, 2013 (“May 20 Order”), approving the Final
Rules Governing Discretionary Court Review of Appeal Determinations (“Final
Rules”) for claims processed through the Settlement Program, which has been
challenged by BP.
I. INTRODUCTION
Under the Settlement Agreement, class members may submit claims to
the Settlement Program, overseen and managed by a Claims Administrator
whose decisions may be reviewed upon request by an Appeal Panel. The Appeal
Panel reviews, inter alia, briefs from the parties, the Settlement Agreement,
relevant district court rulings, the claim file, the parties’ submissions, and the
Claims Administrator’s decision. See Appeal Panel Rule 13 (Feb. 4, 2013)
(“Appeal Panel Rules”), available at
http://www.deepwaterhorizoneconomicsettlement.com/docs/Rules_Governing_
the_Appeals_Process_-_Final.pdf. The materials presented to the Claims
Administrator and Appeal Panel are not posted to the district court’s civil
docket but rather to a non-public Settlement Program website known as the
DWH Portal. See, e.g., Appeal Panel Rules 10(b), 11(b), 15, 17, 18, 23. Redacted
versions of Appeal Panel decisions are made available to the public through
the Settlement Program website. Appeal Panel Rule 24. Appeals in which the
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compensation amount is at issue go through a baseball arbitration process, 1
and the Appeal Panel decision is considered “final.” Agreement § 6.2.
The Settlement Agreement confers “continuing and exclusive
jurisdiction over the Parties and their Counsel for the purpose of enforcing,
implementing and interpreting” the Agreement on “the Court.” Agreement
§ 18.1. The Agreement defines “Court” as “the United States District Court for
the Eastern District of Louisiana, Judge Carl Barbier, presiding.” Agreement
§ 38.40. The Settlement Agreement provides that “[t]he Court maintains the
discretionary right to review any Appeal determination to consider whether
the determination was in compliance with the Agreement. Upon reviewing
such a determination, the Court shall treat the Appeal determination as if it
were a recommendation by a Magistrate Judge.” Agreement § 6.6.
Section 6 of the Settlement Agreement governs the claims appeal
process. It leaves room for the Settlement Program to “establish additional
procedures for the Appeal Process not inconsistent with Exhibit 25.”
Agreement § 6.3. Exhibit 25, in turn, sets out procedures for filing and briefing
appeals. Exhibit 25 allows the Appeals Coordinator, with the concurrence of
the Claims Administrator, to “amend and/or adopt procedures as necessary to
implement Section 6 of the Agreement after providing notice and a right to
comment by the BP Parties and Lead Class Counsel.” Agreement, Exhibit 25.
On April 29, 2013, the Claims Administrator released Draft Rules
governing the district court’s review of Appeal Panel decisions, and BP
responded with comments objecting to the Draft Rules’ limits on appellate
1 Under the baseball process, “the Claimant and the BP Parties exchange and submit
in writing to the Appeal Panelist or Appeal Panel their respective proposals . . . for the base
Compensation Amount they propose the Claimant should receive” and if the parties do not
reach an agreement, “the Appeal Panelist or Appeal Panel must choose to award the
Claimant either the Final Proposal by the Claimant or the Final Proposal by the BP Parties
but no other amount.” Agreement § 6.2.
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review by the Court of Appeals and the lack of provisions requiring documents
and orders to be filed on the civil docket—similar arguments to the ones made
in this appeal. Class Counsel also submitted comments.
The Final Rules that were adopted by the district court through its May
20 Order are at issue before us. BP challenges the Final Rules for not providing
for the docketing of requests for district court review or district court orders
regarding such requests, which, it argues, compromises a right to appeal from
the district court to this court and violates Federal Rule of Civil Procedure
(“FRCP”) 79’s provisions regarding the clerk’s maintenance of the civil docket.
Final Rule 12 states, “The Settlement Agreement provides no right of
automatic appeal to the Court. Whether the determination of an Appeal Panel
will be reviewed by the Court lies solely within the Court’s discretion. Review
of an Appeal Panel determination will be granted only in exceptional
circumstances.” Several provisions of the Final Rules implicate the question of
whether there is a right to appeal claim determinations from the district court
to this court under the Settlement Agreement. The Final Rules provide that
requests for judicial review and related documents be posted to the DWH
Portal rather than on the civil docket, and that the Appeals Coordinator be
responsible for sending materials to and from the district court. See Final Rules
7, 8, 19, 21-22. BP also challenges the Final Rules for preventing it from
seeking judicial review of certain categories of awards. Final Rule 16, which
was not in the Draft Rules, provides that for certain cases, 2 “no Request or
Objection may be submitted and the processing of claims will not be suspended
in such cases unless there is a further order of the Court.” Under Final Rule
19, the Appeals Coordinator is not to submit any requests or objections for
2 These cases include those identified as “Contributions/Grant Revenue for Non-
Profits issue” (a.k.a. “Non-Profit Policy”), “Alternative Causation issue” (a.k.a. “Alternative
Causation Policy”), or “Matching of Revenue and Expenses issue” (a.k.a. “Matching Policy”).
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these cases to the district court. District court decisions are posted to the DWH
Portal and in redacted form on the Settlement Program’s website. Final Rule
27.
To challenge the Final Rules, on June 17, 2013, BP filed a motion under
FRCP 59(e) to amend the May 20 Order and the Final Rules. BP requested the
court to amend the Rules to clarify (1) “that all requests for discretionary
review, objections thereto, and Court orders regarding such requests will be
entered into the appropriate Court docket”; (2)
that a party may file a request for discretionary review on issues
previously ruled on by the Court, that such requests must contain
a clear notation that they are governed by [Final] Rule 16, that
such requests will be filed in the appropriate Court docket, and
that the clerk will promptly enter an order denying such
requests[;]
and (3) “that a party filing a Request for Discretionary Review may append
exhibits and attachments containing record evidence to requests for
discretionary review.” 3 The district court denied BP’s motion on July 16, 2013,
without elaboration, and BP then filed a Notice of Appeal on August 2, 2013,
under Federal Rule of Appellate Procedure (“FRAP”) 4(a)(4)(A)(iv). Class
Counsel moved to dismiss the appeal. This court carried the motion to dismiss
the appeal with the case.
On September 4, 2013, the Appeals Coordinator notified BP that the
district court had denied BP’s requests for review of three awards to non-profit
organizations. In accordance with Final Rules 16 and 19, the district court did
not docket the requests for review, the underlying record, or the orders denying
review. These denials are the subject of the appeals in Nos. 13-31296, 13-
3According to BP, the Appeals Coordinator told BP via email that the district court
would not accept requests that included any exhibits or documents attached.
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31299, and 13-31302 (“Non-Profit Appeals”). Class Counsel and the Non-Profit
Appeals claimants moved to dismiss those appeals. Because jurisdiction over
the Non-Profit Appeals hinges on our decision with respect to the Final Rules
and the availability of further review by this court of individual claim
determinations that have been reviewed or denied review by the district court,
we consolidated the three Non-Profit Appeals and directed all four cases to be
heard and decided by the same panel. In this specific appeal, we address
(1) whether we have jurisdiction over the appeal of the May 20 Order that
approved the Final Rules, (2) whether there is a right to appeal claim
determinations from the district court to this court under the Settlement
Agreement, (3) whether the Final Rules violate any right to appeal under the
Settlement Agreement, and (4) whether the district court erred in categorically
precluding certain categories of cases from its review through the Final Rules.
II. JURISDICTION OVER THIS APPEAL
As an initial matter, we must determine whether BP’s notice of appeal
was timely and whether we have jurisdiction over this appeal.
Under FRCP 59(e), a party may request “to alter or amend a judgment.”
FED. R. CIV. P. 59(e). “Such motions serve the narrow purpose of allowing a
party to correct manifest errors of law or fact or to present newly discovered
evidence.” Waltman v. Int’l Paper Co., 875 F.2d 468, 473 (5th Cir. 1989)
(internal quotations omitted). Class Counsel argue that BP’s appeal was
untimely because it did not file its notice of appeal 30 days after the May 20
Order as required by FRAP 4(a)(1)(A), and because it did not make a proper
FRCP 59(e) motion to fall under the exception of FRAP 4(a)(4)(A)(iv). They
argue that BP’s motion was not properly brought under FRCP 59(e) because it
“focused on amending the [Final] Rules themselves, not the district court’s
order approving them,” and because it raised arguments that had already been
brought before the Appeals Coordinator.
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We find that these arguments lack merit. While it is true that BP sought
to amend the Final Rules, the district court had incorporated and attached the
Final Rules as part of its decision to adopt them in its May 20 Order. Thus, it
was proper under FRCP 59(e) for BP to request the court to alter or amend the
Final Rules, which BP believed offended its rights and violated the Settlement
Agreement. While an FRCP 59(e) motion “is not the proper vehicle for
rehashing evidence, legal theories, or arguments that could have been offered
or raised before the entry of judgment,” Templet v. HydroChem Inc., 367 F.3d
473, 479 (5th Cir. 2004), and BP’s motion did bring forth some of the arguments
that had been presented to the Appeals Coordinator, 4 the motion was the first
opportunity to present arguments regarding the Rules directly to the district
court. It was also the first opportunity to address the alleged manifest error of
law in Final Rule 16, which was not in the Draft Rules, and the new provision
in Final Rule 19, which together preclude certain cases from any further review
by the district court. Thus, we conclude that BP’s motion to amend was proper.
As noted above, the district court adopted the Final Rules on May 20,
2013, and BP filed its motion to amend on June 17, 2013, which was timely.
See FED. R. CIV. P. 59(e) (“A motion to alter or amend a judgment must be filed
no later than 28 days after the entry of the judgment.”). Under FRAP
4(a)(4)(A)(iv), the time to file a notice of appeal—within thirty days under
FRAP 4(a)(1)(A)—started to run on July 16, 2013, when the district court
issued its order denying the FRCP 59(e) motion. Thus, BP’s notice of appeal
filed on August 2, 2013, was timely.
4 Compare ROA.17974-ROA.17975 (comments to Appeals Coordinator about civil
docket provisions), with ROA.17966 (seeking the district court “to clarify that all requests for
discretionary review, objections thereto, and Court orders regarding such requests will be
docketed in the appropriate docket of the Court”).
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Having found that the appeal was timely, we next turn to whether we
have jurisdiction over the appeal. BP invokes jurisdiction under the collateral
order doctrine and 28 U.S.C. § 1292(a)(3). We find that jurisdiction is proper
under the collateral order doctrine. To fall under the collateral order doctrine,
“an ‘order must (1) conclusively determine the disputed question, (2) resolve
an important issue completely separate from the merits of the action, and (3) be
effectively unreviewable on appeal from a final judgment.’” Henry v. Lake
Charles Am. Press, L.L.C., 566 F.3d 164, 171 (5th Cir. 2009) (quoting Coopers
& Lybrand v. Livesay, 437 U.S. 463, 468 (1978) (numbering added)).
This court recently invoked the collateral order doctrine to hear an
appeal involving an interpretation dispute over the same Settlement
Agreement. In In re Deepwater Horizon, 732 F.3d 326 (5th Cir. 2013)
(“Deepwater Horizon I”), the Claims Administrator had issued a Policy
Announcement regarding the consideration of revenues and expenses in the
calculation of reduction in variable profit and claimants’ compensation (the
Matching Policy noted in Final Rules 16 and 19 and further discussed in Part
V.A, infra), 732 F.3d at 330-31. BP alleged that the Claims Administrator
misinterpreted the Settlement Agreement. Id. at 331. The matter was brought
before a Claims Administration Panel and eventually the district court, which
affirmed the Policy Announcement. Id. BP filed a motion to reconsider, the
district court upheld the Administrator’s interpretation and denied BP’s
motion, and BP appealed. Id. at 331-32. 5 This court stated that it had
5 BP also “filed a breach of contract claim against the Administrator and an emergency
motion for a preliminary injunction to enjoin the Administrator from implementing the
Settlement in accordance with the March 5 order and instead to require the Administrator
to implement BP’s proposed interpretation.” Deepwater Horizon I, 732 F.3d at 331. The
district court granted the Administrator’s motion to dismiss BP’s contract claim, and denied
BP’s request for injunctive relief. Id. at 331-32.
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jurisdiction over BP’s appeal of the district court’s order under the collateral
order doctrine with the following reasoning:
The order conclusively determined the interpretation dispute,
which is completely separate from the merits of BP’s liability for
the oil spill, and it will be effectively unreviewable on appeal from
final judgment because, at that point, the improper awards will
have been distributed to potentially thousands of claimants and
BP will have no practical way of recovering these funds should it
prevail.
Id. at 332 n.3 (citing Walker v. U.S. Dep’t of Hous. & Urban Dev., 99 F.3d 761,
766-67 (5th Cir. 1996)). Like Deepwater Horizon I, the adoption of the Final
Rules governing the district court’s discretionary review of Appeal Panel
decisions was a final decision by the district court with respect to the Rules,
and is separate from the merits of BP’s liability. The Final Rules affect the rest
of the Settlement Program’s administration, given that they will govern all
future reviews by the district court. Because the Final Rules preclude appeals
of certain cases to the district court, and because they are silent as to appeals
to this court and lack requirements to file requests or docket orders on the civil
docket, they would be unreviewable from a final judgment of claim
determinations were we not to review them in this case. Thus, jurisdiction over
this appeal exists under the collateral order doctrine. The motion to dismiss
the appeal is DENIED. 6
III. RIGHT TO APPEAL TO THIS COURT UNDER THE
SETTLEMENT AGREEMENT
We now turn to the question of whether there is a right to appeal claim
determinations from the district court to this court under the Settlement
Agreement. While Class Counsel insist that the Final Rules are merely
6Because we conclude that jurisdiction is proper under the collateral order doctrine,
we pretermit a determination as to whether there is also jurisdiction under § 1292(a)(3).
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operational rules for administering the Settlement Program that should be
reviewed for abuse of discretion, see Mullen v. Treasure Chest Casino, LLC, 186
F.3d 620, 624 (5th Cir. 1999), the dispute before us results from a disagreement
in how the Settlement Agreement should be interpreted as to appellate review.
After all, BP claims that the Final Rules do not provide for appellate review by
this court, which it argues it is entitled to under the Agreement absent an
express waiver. It argues that this right to appeal has been violated by the
Final Rules limiting the ability to file submissions regarding judicial review on
the civil docket, as well as the Final Rules categorically precluding any judicial
review for certain categories of cases. Class Counsel, on the other hand, argue
that there is no right of appeal of individual claim determinations under the
Agreement and that the Final Rules comply with the Agreement. The crux of
the problem is that the Settlement Agreement is not clear one way or another,
and our circuit has not yet specifically addressed the question of how to treat
a settlement agreement’s silence on whether there is a right to appeal from
district court decisions on individual claims to this court.
We review issues related to interpreting settlement agreements de novo.
Waterfowl Ltd. Liab. Co. v. United States, 473 F.3d 135, 141 (5th Cir. 2006). It
is a “well-settled rule that the construction and enforcement of settlement
agreements are governed by principles of local law applicable to contracts
generally.” Fla. Educ. Ass’n, Inc. v. Atkinson, 481 F.2d 662, 663 (5th Cir. 1973).
The Settlement Agreement provides that it “shall be interpreted in accordance
with General Maritime Law.” Agreement § 36.1. “A basic principle of contract
interpretation in admiralty law is to interpret, to the extent possible, all the
terms in a contract without rendering any of them meaningless or
superfluous.” Chembulk Trading LLC v. Chemex Ltd., 393 F.3d 550, 555 (5th
Cir. 2004).
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In Deepwater Horizon I, this court interpreted the Settlement Agreement
as preserving the parties’ right to appeal to this court, but did so in dictum.
After finding jurisdiction to hear the appeal under the collateral order doctrine,
the court opined,
Moreover, the procedures for resolving disputes concerning the
Administrator’s administration of the Settlement specify that a
disagreement is “referred to the Court for resolution” if it is not
resolved by the Claims Administration Panel. Based on its use
throughout the Settlement, the term “the Court” appears to refer
to the district court. Such an interpretation of the parties’
agreement would render the district court’s ruling final. However,
the parties clearly intended a broader interpretation of the term—
one that retained their right to appeal to this court—as shown by
BP’s appeal and Class Counsel’s failure to object.
Deepwater Horizon I, 732 F.3d at 332 n.3. BP relies on this heavily to argue
that it has a right to appellate review of claim determinations. Class Counsel,
on the other hand, claim that the conclusion was faulty, noting that
[w]hile [they] are mindful of [the] observation that Class Counsel
did not explicitly make this argument [that district court reviews
are discretionary and not appealable] in response to the original
appeal of [Deepwater Horizon I], Class Counsel did specifically
raise this issue in the District Court[] [in its opposition to the
motion for injunction and during the motion hearing], and strongly
suggested that this Court had no jurisdiction to hear that appeal
[in its brief].
After examining each of these references, we find that Class Counsel did argue
that the court did not have jurisdiction over that appeal. BP asserted appellate
jurisdiction under 28 U.S.C. §§ 1291, 1292, and the collateral order doctrine
for the appeal of the district court’s decision to uphold the Claims
Administrator’s interpretation. Class Counsel addressed each of these in turn
to argue that there was no appealable order under these bases, and argued
that jurisdiction was only proper over the dismissal of BP’s separate suit
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against the Claims Administrator pursuant to FRCP 12(b)(6). While Class
Counsel did not make any arguments specific to whether there was appellate
review by this court of claim determinations under the Settlement Agreement,
it did not have to as the issue was not relevant in that case. We are not
persuaded to follow the Deepwater Horizon I interpretation for the purpose of
deciding the issue at hand because dictum by one panel does not bind future
panels. See Gochicoa v. Johnson, 238 F.3d 278, 286 n.11 (5th Cir. 2000). In any
event, the rationale for that dictum does not apply here given that Class
Counsel have clearly objected to BP’s appeal.
To support its position that there must be an express waiver of what is
otherwise a right to appeal, BP relies on criminal and other unrelated cases for
the proposition that waivers require proof of an “‘intentional relinquishment
or abandonment of’ a ‘known right,’ and cannot be inferred from silence or by
implication.” Appellants’ Br. 38 (quoting United States v. Knowles, 29 F.3d 947,
951 n.2 (5th Cir. 1994) (internal quotation omitted) (defining waiver in the
context of conducting plain error review of the constitutionality of the Gun Free
School Zones Act and noting that deviation from a legal rule is error unless
there has been a waiver)) (citing Harris v. Dallas Indep. Sch. Dist., 435 F. App’x
389, 396 (5th Cir. 2011) (finding that plaintiff waived discovery issue by
withdrawing motion to compel discovery); United States v. Dodson, 288 F.3d
153, 160 (5th Cir. 2002) (considering waiver of rights under 21 U.S.C. § 851);
Wells Fargo Bus. Credit v. Ben Kozloff, Inc., 695 F.2d 940, 947 (5th Cir. 1983)
(applying this concept of waiver to question of whether party waived its rights
to no-offset agreement)). None of these cases directly address the question of
whether there is a known right to appeal from district court decisions
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regarding claims from settlement agreements, and thus whether this concept
of waiver would apply in that context. 7
On the other hand, Class Counsel do not show convincing authority that
parties may waive appellate rights without an express waiver in the context of
settlement agreements. Instead, they summarize the appeals process to show
that the rules regarding appeals are “exhaustive” and that the district court’s
review “serves as the last step in a multi-layered claims process.” They then
contrast this to the relative lack of guidelines regarding the district court’s
discretionary review to argue that this “clearly demonstrates that the
Settlement Program, not the parties, were to enact the administrative rules”
and that
[t]his deference clearly evidences that the parties intended the
Claims Administrator, through the Claims Coordinator, pursuant
to Section 8 of Exhibit 25 of the Settlement Agreement, to amend
and/or adopt procedures as necessary for administrative rules of
timing, length of appeal documents, record evidence, and filing
related to discretionary review.
They also argue that “parties to a settlement are free to contract away
appellate review, especially when the parties privately contract for a
separately detailed appellate review within the settlement program itself.”
However, they cite to no source for the proposition that parties may do so
7 BP also relies on Federal Practice & Procedure, which states, “The most likely
occasion for waiver [of the right to Court of Appeals review] arises from a settlement
agreement that calls for resolution of some disputed matter by the district court, coupled with
an explicit agreement that the district court decision shall be final and that all rights of
appeal are waived.” 15A Charles Alan Wright et al., Federal Practice and Procedure § 3901
(2d ed. 2014). However, the idea that this is “the most likely occasion” is not an indication of
an express waiver requirement.
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without an express waiver. 8 In their motion to dismiss the appeal, Class
Counsel argue,
It is settled in this Court that a negotiated settlement that limits
appellate review may be binding, and that by failing to negotiate
for the inclusion of appellate review before the signing of the
Settlement Agreement, BP has waived its right of appeal beyond
that provided for in the Settlement Agreement; thus its appeal
here is barred and should be dismissed.
For support, they cite to Hill v. Schilling, 495 F. App’x 480 (5th Cir. 2012) (per
curiam), in which this court applied criminal cases dealing with appeal waivers
in plea agreements to an interpretation of a settlement agreement, id. at 487
(citing United States v. Palmer, 456 F.3d 484, 488 (5th Cir. 2006); United States
v. Bond, 414 F.3d 542, 546 (5th Cir. 2005); Charles Alan Wright et al., Federal
Practice and Procedure § 3901 (2012)). The Hill panel dismissed the appeal as
barred by the appeal waiver. Id. at 487-88. Yet Hill is not as helpful to Class
Counsel as they wish because, unlike in Hill, see id. at 487, the instant case
does not involve an express waiver. Favorably for the class, the court did not
say that the waiver had to be an express one. Nevertheless, Hill was an
unpublished opinion and therefore not binding precedent with respect to
whether this panel should also apply criminal cases dealing with appeal
8 Citing to another class action settlement, Class Counsel assert that “the rule for
settling parties is to exclude any right to court appellate review on claimant-specific issues.
Typically, the claims administrator’s determinations are final; there may be limited review
by a special master.” Appellees’ Br. 36-37 (citing In re Vioxx Prods. Liab. Litig., 760 F. Supp.
2d 640, 644-45 (E.D. La. 2010)). However, that settlement agreement expressly stated that
certain determinations of the Claims Administrator, Gate Committee, Chief Administrator,
and Special Master were “final, binding and Non-Appealable.” E.g., Vioxx Settlement
Agreement §§ 2.6.1, 2.8, 3.2.3, 3.2.4, 4.2.7, 8.1.2, available at
http://www.officialvioxxsettlement.com/documents/Master%20Settlement%20Agreement%2
0-%20new.pdf; see id. § 17.1.62 (defining “Non-Appealable” to include, inter alia, “any right
of appeal to the MDL Court, any other Coordinated Proceedings court or any other court”).
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waivers in plea agreements to the settlement agreement context. See 5th Cir.
R. 47.5.4.
We find that similar cases from other circuits provide guidance in
relation to this question. Class Counsel seek to emphasize the Settlement
Agreement’s use of the word “exclusive” in § 18.1 to refer to the district court’s
jurisdiction, but we find that a district court having such authority in the
Settlement Program does not necessarily preclude further review by this court.
In United States v. International Brotherhood of Teamsters, 905 F.2d 610 (2d
Cir. 1990), a consent decree provided that the court-appointed administrator’s
decisions be “‘final and binding, subject to the [district] Court’s review as
provided herein,’ and . . . further provide[d] that the district court ‘shall have
exclusive jurisdiction to decide any and all issues relating to the
Administrator’s actions or authority’ under the Consent Decree,” id. at 615(alteration in original). The Second Circuit found that it had jurisdiction to
hear the appeal because “the phrase ‘exclusive jurisdiction,’ read in the context
of the Consent Decree, [did] not unambiguously exclude appellate review” and
was instead a venue requirement. Id.; see also DeLoach v. Lorillard Tobacco
Co., 391 F.3d 551, 558 (4th Cir. 2004) (“The district court’s maintenance of
‘continuing and exclusive jurisdiction’ over an agreement is not inconsistent
with this court’s exercise of appellate jurisdiction to review the district court’s
orders.”). We interpret the “exclusive” jurisdiction conferred on the district
court by the Settlement Agreement to also leave open the possibility of further
review by this court.
In Montez v. Hickenlooper, 640 F.3d 1126 (10th Cir. 2011), a class action
alleging violations of disabled prisoners’ rights resulted in a consent decree
that set forth a plan for the defendants to bring the state prison system into
compliance and established a claims procedure for injured inmates in which
claims would be reviewed by a special master, subject to review by the district
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court, id. at 1129. Like the instant case, the consent decree was silent about
further review by the Court of Appeals after review by the district court. Id.Building off International Brotherhood, the Tenth Circuit stated,
We simply hold that, when a consent decree does not resolve claims
itself but instead simply establishes a mechanism under which the
district court will resolve claims, the parties may appeal the
district court’s final resolution of such claims to this court unless
the consent decree contains a clear and unequivocal waiver of the
right to appellate review.
Id. at 1132. 9 Addressing whether there was appellate jurisdiction despite the
fact that litigation was still ongoing and the district court’s decision was not a
final judgment as to all parties, the Tenth Circuit found that it had jurisdiction
over the appeal of the district court’s claim determination under the collateral
order doctrine. Id. at 1132-33. We choose to follow these other circuits’
decisions in similar cases involving consent decrees to hold that, where a
settlement agreement does not resolve claims itself but instead establishes a
mechanism pursuant to which the district court will resolve claims, parties
must expressly waive what is otherwise a right to appeal from claim
determination decisions by a district court. Given that there has been no such
express waiver in the instant case, the parties have preserved their right to
appeal from the district court to this court. Having found this, we next consider
whether the Final Rules are in violation of this right to appeal by reviewing
the Rules’ lack of docketing provisions.
9 The Montez court also relied on “the somewhat analogous situation of appeals from
district court orders reviewing arbitration decisions.” 640 F.3d at 1132 (citing MACTEC, Inc.
v. Gorelick, 427 F.3d 821, 830 (10th Cir. 2005) (holding that “contractual provisions limiting
the right to appeal from a district court’s judgment confirming or vacating an arbitration
award are permissible, so long as the intent to do so is clear and unequivocal”)).
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IV. FEDERAL RULE OF CIVIL PROCEDURE 79
The record for the district court’s review, as determined by the Final
Rules, consists of:
(a) The Claims Administrator’s Summary of Review, if one was
prepared;
(b) The decision of the Appeal Panel and its written opinion, if one
was prepared;
(c) The Initial and Final Proposals and supporting memoranda, as
well as any amicus filings by Class Counsel submitted under the
Rules Governing the Appeals Process; and
(d) Any additional portions of the claim file specifically requested
by the Court for review.
Final Rule 23. Under the Rules, requests for review are to be submitted to the
Appeals Coordinator rather than to the district court clerk. Final Rule 13. The
Rules also provide that the district court’s decisions to deny or grant a request
for review, as well as final decisions upon review, are to be communicated to
the parties by the Appeals Coordinator. Final Rules 21, 22, 27. As noted above,
under the process set out in the Final Rules, the records for the district court’s
review are not placed on the civil docket but rather on the DWH Portal and in
redacted form (without personally identifying information) on the Settlement
Program website.
BP argues that the district court’s failure to provide for the docketing of
its orders regarding requests for review jeopardizes the right to appeal to this
court and violates FRCP 79, which provides for the maintenance of a civil
docket by the clerk. See FED. R. CIV. P. 79. Class Counsel argue, on the other
hand, that FRCP 79 is merely ministerial in nature and not something that
should interfere with the district court’s administration of a private settlement
agreement.
This court has recognized that undocketed orders cannot be appealed. In
re Am. Precision Vibrator Co., 863 F.2d 428, 429 (5th Cir. 1989). Entry of an
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order on the civil docket is a prerequisite for the clock to start running for an
appeal. See FED. R. APP. P. 4(a)(1)(A) (“In a civil case, . . . the notice of appeal
required by Rule 3 must be filed with the district clerk within 30 days after
entry of the judgment or order appealed from.”); FED. R. CIV. P. 58(c)(2) (noting
that judgment is entered “if a separate document is required, when the
judgment is entered in the civil docket under Rule 79(a) and the earlier of these
events occurs: (A) it is set out in a separate document; or (B) 150 days have run
from the entry in the civil docket”). Class Counsel, after arguing that there is
no right to appeal under the Settlement Agreement, argue in the alternative
that the Final Rules have no bearing on BP’s ability to appeal to this court
given BP’s ability to pursue the Non-Profit Appeals, in which BP docketed the
district court’s order denying review and then moved to supplement the record
on appeal. However, leaving it to the appealing party to docket the district
court’s order grants that party the ability to determine the point at which the
clock starts to run for the time to file a notice of appeal. We decline to endorse
this approach. Instead, we conclude that the Final Rules violate the right for
parties to appeal claim determinations to this court.
On this basis, we VACATE the district court’s order adopting the Final
Rules, and REMAND with instructions to adjust the Rules to comply with this
opinion. The point at which a party seeks the district court’s discretionary
review is the point at which further review by this court becomes a possibility.
Thus, it is at this point that requests should be docketed by the clerk so that a
proper record is available in the event the case comes before this court. 10
10We find no error in what comprises the record on district court review, as delineated
by Final Rule 23.
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V. DISTRICT COURT’S DECISION TO CATEGORICALLY
PRECLUDE CERTAIN CASES FROM ITS REVIEW
We next consider the question of whether the district court erred in
including provisions in the Final Rules that prevent judicial review of several
categories of cases. As noted above, Final Rules 16 and 19 preclude certain
categories of cases from review by the district court. Specifically, requests for
review and objections thereto for cases involving the Non-Profit Policy,
Alternative Causation Issue, or Matching Policy are not submitted to the
district court. Final Rules 16 and 19 provide that “the processing of claims will
not be suspended in such cases unless there is a further order” by the district
court. BP objects to Final Rules 16 and 19 on three grounds: (1) that these rules
jeopardize BP’s right to request judicial review of awards, (2) that the rules
encumber the ability to appeal to this court, and (3) that the rules “wrongly
insulate from review awards predicated on policy announcements that have
been repudiated or not yet fully reviewed by this Court.”
We review the district court’s decision to preclude these cases from
review—as part of its decision to adopt the Final Rules—for abuse of discretion
since it was decided as part of its duties to manage the Settlement Program.
See Mullen, 186 F.3d at 624. A decision premised on an error of law constitutes
an abuse of discretion. See Jethroe v. Omnova Solutions, Inc., 412 F.3d 598,
600 (5th Cir. 2005).
As to the first objection, we do not agree with BP’s contention that the
Final Rules improperly strip BP of its right to request judicial review of
awards. Despite our holding above that there is a right to appellate review by
this court of district court decisions regarding individual claims under the
Settlement Agreement, this does not necessarily translate into the right of a
party to obtain the district court’s review of claim determinations. Under § 18.1
of the Settlement Agreement, parties may request review by the district court
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to settle “[a]ny disputes or controversies arising out of or related to the
interpretation, enforcement or implementation of the Agreement.” However, it
is clear from § 6.6 that “[t]he Court maintains the discretionary right to review
any Appeal determination,” which is not a right for the parties to be granted
such review. We recognize that categorically precluding certain cases may
frustrate the right to seek review in that an appealing party will know before
filing a request for review that the district court will not grant review over the
claim determination. However, we seek to preserve the district court’s
discretion under the Settlement Agreement—as agreed to by the parties—to
decide which cases to review. We do not intend any part of this opinion to turn
the district court’s discretionary review into a mandatory review. To do so
would frustrate the clear purpose of the Settlement Agreement to curtail
litigation.
With respect to its second contention, BP argues that the Rules “preclude
the parties from requesting relief from the district court, and thus from
receiving any claim-specific order—docketed or not.” Our holding above with
respect to the docketing provisions addresses this objection. When the Rules
are modified in accordance with this opinion so that requests for district court
review are docketed, we expect the district court’s decisions to grant or deny
review to also be docketed. The parties will then receive a docketed claim-
specific order and their ability to appeal to this court will be preserved.
To address BP’s third contention, we consider developments to the three
policies subsequent to the May 20 Order, which BP contends undermines the
Rules’ limitations on seeking review of awards involving the three policies.
A. Categorical Preclusion of Cases Involving the Matching
Policy
BP’s objection to the preclusion from judicial review of cases involving
the Matching Policy is that the Final Rules have not been modified to reflect
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the recent developments regarding the Matching Policy—namely, that the
policy was set aside in Deepwater Horizon I, and has since been effectively
superseded by a new policy approved by the district court. Recent
developments regarding the Matching Policy muddy the waters for our review.
We briefly summarize those recent developments.
In Deepwater Horizon I, this court set aside the Matching Policy 11 and
remanded to the district court for further proceedings on the basis that the
district court’s interpretation of Exhibit 4C 12 of the Settlement Agreement was
in need of further consideration. 732 F.3d at 339. Shortly after that ruling, per
the order to issue a “narrowly-tailored” preliminary injunction, id. at 346, the
district court ordered the Claims Administrator “to immediately suspend the
issuance of any final determination notices or any payments with respect to
those [business economic loss (“BEL”)] claims in which the Claims
Administrator determines that the matching of revenues and expenses is an
11 In the Matching Policy, the Claims Administrator
stated that, for both calculation of Variable Profit and purposes of causation,
he would “typically consider both revenues and expenses in the periods in
which those revenues and expenses were recorded at the time,” and would “not
typically re-allocate such revenues or expenses to different periods,” but would
“however, reserve the right to adjust the financial statements in certain
circumstances, including but not limited to, inconsistent basis of accounting
between benchmark and compensation periods, errors in previously recorded
transactions and flawed or inconsistent treatment of accounting estimates.”
Deepwater Horizon I, 732 F.3d at 330-31.
12 Exhibit 4C, which sets the compensation framework for business economic loss
(“BEL”) claims, lays out the calculation of variable profit for purposes of calculating
compensation: (1) “Sum the monthly revenue over the period,” then (2) “Subtract the
corresponding variable expenses from revenue over the same time period.” Agreement,
Exhibit 4C. The interpretation issue arose from the difference in accounting methods used
by claimants. Accrual-basis claimants recognize revenue “when the entity becomes entitled
to receive payment, as opposed to when the payment is actually received,” which “is
sometimes referred to as ‘matching’ revenues and expenses.” 732 F.3d at 333. Cash-basis
claimants, on the other hand, “recognize revenue when cash from a given transaction is
received and expenses when cash is paid.” Id.
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issue.” In re Deepwater Horizon, MDL No. 2179, 2013 WL 5495266, at *1 (E.D.
La. Oct. 3, 2013). Following further input from the parties, the district court
ordered the Claims Administrator and Settlement Program to continue to
process and pay BEL claims presented on the basis of matched, accrual-basis
records. See Order 4, In re Deepwater Horizon, MDL 2179 (E.D. La. Oct. 18,
2013), ECF No. 11697. As for other BEL claims, the district court ordered the
continued temporary suspension of final determination notices and payments
“unless the Claims Administrator determines that the matching of revenues
and expenses is not an issue with respect to any such claim.” Id. at 5. 13
After revisiting the issue of whether the Claims Administrator correctly
interpreted the Settlement Agreement in the calculation of variable profit, the
district court found that “the provision [in Exhibit 4C] for subtracting
corresponding variable expenses requires that revenue must be matched with
the variable expenses incurred by a claimant in conducting its business, and
that does not necessarily coincide with when revenue and variable expenses
are recorded.” Order 5, In re Deepwater Horizon, MDL 2179 (E.D. La. Dec. 24,
2013), ECF No. 12055. On this basis, the court reversed its earlier ruling
affirming the Matching Policy and remanded to the Claims Administrator
“with instructions to adopt and implement an appropriate protocol or policy for
handling BEL claims in which the claimant’s financial records do not match
13 The preliminary injunction was eventually extended to stay other BEL claims,
including those involving the Alternative Causation and Non-Profit Policies. See Order 2, In
re Deepwater Horizon, MDL 2179 (E.D. La. Dec. 5, 2013) ECF No. 11928 (amending the
preliminary injunction and instructing the Claims Administrator to “continue to accept BEL
claims and process said claims, but [to] temporarily suspend the issuance of final
determination notices and payments of BEL claims, pending resolution of the BEL issues
that are the subject of the pending remand [of Deepwater Horizon I]”). Class Counsel point
out the extent of the stay, seemingly in response to BP’s argument that Final Rules 16 and
19 wrongly enforce policies, but the stay has no bearing on whether it was an abuse of
discretion for the district court to adopt Final Rules that allow for the categorical preclusion
of cases involving the policies from its review.
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revenue with corresponding variable expenses.” Id. No party appealed this
instruction.
On May 28, 2014, the district court dissolved the injunction involving
BEL claims and ordered that a new policy—the Claims Administrator’s Policy
495 (“Business Economic Loss Claims: Matching of Revenue and Expenses”)—
“be applied to all BEL Claims currently in the claims process at any point short
of final payment.” Order 2, In re Deepwater Horizon, MDL 2179 (E.D. La. May
28, 2014), ECF No. 12948. On June 27, 2014, in an order clarifying the
application of this new policy, the district court held, inter alia, that a
determination by the Appeals Coordinator in “appeals when the issue of
matching is contested” under Policy 495 would be “final and non-appealable.”
Order 2, In re Deepwater Horizon, MDL 2179 (E.D. La. June 27, 2014), ECF
No. 13076. This seems to bring Policy 495 in line with Final Rules 16 and 19—
by categorically precluding these cases from district court review.
In light of the recent developments highlighted above, we are unable to
decide whether the district court’s decision to categorically preclude review of
cases involving the Matching Policy constituted an abuse of discretion. On
remand, the district court should reconsider its decision to categorically
preclude these cases from its review. In doing so, the district court should
consider what effect, if any, the Final Rules have on cases involving Policy 495.
In the event the court is of the view that these cases should be categorically
precluded from review, the court should provide a rationale for such a finding.
B. Categorical Preclusion of Cases Involving the
Alternative Causation Issue
With respect to the preclusion of cases involving the Alternative
Causation Policy 14 from judicial review, BP argues that the Final Rules should
14 The Alternative Causation Policy, released October 10, 2012, states as follows:
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be modified to account for this court’s recent holding in In re Deepwater
Horizon, 744 F.3d 370 (5th Cir. 2014), cert. denied, 135 S. Ct. 754 (2014)
(“Deepwater Horizon III”). At issue in Deepwater Horizon III was whether the
implementation of the Settlement Agreement was defective with respect to the
Settlement Agreement’s causation framework. Id. at 374-75. Deepwater
Horizon III arose from the remand of Deepwater Horizon I. On remand, after
analyzing the Settlement Agreement and Alternative Causation Policy, the
district court concluded that “the language of the Settlement Agreement did
not require extrinsic inquiry into causation and that the Settlement
Agreement had not violated Article III, Rule 23, or the Rules Enabling Act by
eschewing the need for evidence of causation.” Id. at 374. After BP appealed
this order, the Deepwater Horizon III majority found that “the parties explicitly
contracted that traceability between the defendant’s conduct and a claimant’s
injury would be satisfied at the proof stage, that is, in the submission of a claim,
by a certification on the document that the claimant was injured by the
Deepwater Horizon disaster.” Id. at 376. It thus concluded that “the Settlement
Agreement does not require a claimant to submit evidence that the claim arose
as a result of the oil spill,” id. at 376-77, and affirmed the district court’s order,
id. at 378.
The Settlement Agreement does not contemplate that the Claims
Administrator will undertake additional analysis of causation issues beyond
those criteria that are specifically set out in the Settlement Agreement. Both
Class Counsel and BP have in response to the Claims Administrator’s inquiry
confirmed that this is in fact a correct statement of their intent and of the terms
of the Settlement Agreement. The Claims Administrator will thus compensate
eligible Business Economic Loss and Individual Economic Loss claimants for
all losses payable under the terms of the Economic Loss frameworks in the
Settlement Agreement, without regard to whether such losses resulted or may
have resulted from a cause other than the Deepwater Horizon oil spill provided
such claimants have satisfied the specific causation requirements set out in
the Settlement Agreement.
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BP argues that the Final Rules should be modified to reflect the holding
in Deepwater Horizon III that the Settlement Agreement contains a causal-
nexus requirement—that a class member’s injury be plausibly traceable to the
oil spill—and that “implausible claims” that do not satisfy that requirement
should be addressed as they arise. Rather than argue against the policy itself, 15
BP seems to argue that the Claims Administrator has refused to enforce the
Settlement Agreement’s causal-nexus requirement due to a misapplication of
the Alternative Causation Policy. However, this argument does not show how
the district court’s decision to preclude from its review cases based on the
Alternative Causation Policy is an abuse of discretion.
Though BP does not raise this as part of its argument, the Alternative
Causation Policy was also at issue in In re Deepwater Horizon, 739 F.3d 790(5th Cir. 2014), cert. denied, 135 S. Ct. 754 (2014) (“Deepwater Horizon II”). In
Deepwater Horizon II, BP appealed from the district court’s order certifying
the class action and approving the settlement. Id. at 795. In its appeal, BP
argued, inter alia, that the Matching Policy and Alternative Causation Issue
“permit[ted] claimants without any actual injuries caused by the oil spill to
participate in the class settlement and receive payments,” causing the
Settlement Agreement to be in violation of Rule 23, the Rules Enabling Act,
and Article III of the U.S. Constitution. Id. at 798. This court rejected this
argument and held that the district court did not abuse its discretion in
certifying the class and affirmed the class certification order. Id. at 821.
Considering how Deepwater Horizon II and Deepwater Horizon III did
nothing to nullify or call into question the Alternative Causation Policy, but
15 Indeed, as this court has previously observed, no party ever formally objected to the
Policy Announcement, and the district court order that adopted the Policy Announcement
was never independently appealed. In re Deepwater Horizon, 739 F.3d 790, 797 (5th Cir.
2014), cert. denied, 135 S. Ct. 754 (2014) (“Deepwater Horizon II”).
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actually substantiated the policy, we find no error of law underlying the district
court’s decision to preclude cases involving the Alternative Causation Policy
from its discretionary review. We thus find no abuse of discretion here.
C. Categorical Preclusion of Cases Involving the
Non-Profit Policy
BP appears to argue that we should vacate the Final Rules with respect
to the Non-Profit Policy 16 because the policy was not yet definitively reviewed
by this court at the time of the May 20 Order. We find no merit to this
argument. The district court may adopt rules regarding the administration of
a settlement agreement before the basis has been definitively reviewed by this
court. BP provides no authority for a rule to the contrary. In any event, we
uphold the Non-Profit Policy in the Non-Profit Appeals, 17 also decided today.
VI. CONCLUSION
In sum, finding that we have jurisdiction over this appeal, we hold that
the parties have a right under the Settlement Agreement to appeal claim
determinations from the district court to this court. We also hold that the Final
Rules violate this right with its lack of docketing provisions providing for a
proper appeal to this court, and remand on that basis. On remand, we instruct
the district court to reconsider its decision to categorically preclude cases
involving the Matching Policy from its review in light of recent developments.
We find no error in the decision to categorically preclude cases involving the
Alternative Causation Issue from judicial review. We also find no error in the
decision to categorically preclude cases involving the Non-Profit Policy. For the
16 On November 30, 2012, the Claims Administrator announced the following policy:
“Income received by not-for-profit entities in the form of grant monies or contributions shall
typically be treated as revenue for that entity for purposes of the various required
calculations under the terms of the Settlement Agreement.”
17 In the Non-Profit Appeals, the district court denied review of three claims in which
awards were determined through the application of the Non-Profit Policy.
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foregoing reasons, we VACATE in part and AFFIRM in part the district court’s
May 20 Order adopting the Final Rules, and we REMAND for further
proceedings consistent with this opinion.
27