934 F.3d 434
5th Cir.2019Background
- Appellants are commercial menhaden fishermen who were included in the HESI/Transocean punitive-damages class settlements arising from the Deepwater Horizon spill but were excluded from the common E&P compensatory-damages settlement.
- District Court issued Pretrial Order 60 (PTO 60) requiring unnamed B1 plaintiffs (including class-action plaintiffs) to file individual lawsuits by May 2, 2016 or risk dismissal with prejudice.
- The HESI/Transocean settlements authorized a Claims Administrator to adopt a Distribution Model; the Model required claimants to show preservation of compensatory claims (e.g., compliance with PTO 60) to qualify for punitive-damages payments and warned noncompliance could yield a $0 assignment.
- Fishermen failed to file individual suits or respond to a show-cause order and did not object to the Distribution Model or attend the fairness hearing; district court dismissed their B1 claims with prejudice.
- Claims Administrator denied the Fishermen’s punitive-damage claims for failure to comply with PTO 60; a magistrate judge affirmed, the district court declined further review, and the Fishermen sought Rule 60(b) relief, which the court denied.
- Fifth Circuit AFFIRMED: magistrate judge properly upheld denial of claims; district court acted within its authority and did not abuse discretion in denying Rule 60(b) relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appeal is barred by settlement appeal waiver | Appellants say waiver does not bar this appeal because the denial was eligibility (no entitlement), not merely an amount; or fits the parenthetical exception | Appellees say $0 is plainly a determination of the amount of payment and thus waived | Court avoided resolving waiver because Fishermen lose on merits; waiver jurisdictional question unnecessary |
| Whether Claims Administrator properly required compliance with PTO 60 to establish compensatory claim (predicate for punitive recovery) | Fishermen argue settlements deem class membership sufficient for standing, so no separate PTO 60 compliance required | Appellees and Claims Administrator say maritime law ties punitive recovery to underlying compensatory damages; Distribution Model discretion permits requiring PTO 60 compliance | Held: Magistrate judge correct — HESI settlements, read with maritime law and settlement provisions, allow requiring proof of underlying compensatory claim (e.g., PTO 60) |
| Whether PTO 60 applied to unnamed class members / class actions | Fishermen contend PTO 60 applies to mass-joinder only and Perez was wrongly decided | Appellees say PTO 60 applies to class-action claimants and district court properly required individual filings | Held: PTO 60 application to unnamed class members was not error; court declines to revisit Perez and defers to MDL docket management |
| Whether requiring PTO 60 compliance violated due process / notice | Fishermen claim inadequate notice and a “notice gap”; Distribution Model filed after PTO 60 deadline so they lacked fair opportunity | Appellees point to multiple opportunities to learn of and object to the requirement (show-cause response, Distribution Model, objections, fairness hearing, appeal) | Held: No due-process violation — Fishermen had adequate notice/opportunities and failed to act; denial and Rule 60(b) denial not an abuse of discretion |
Key Cases Cited
- Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) (punitive maritime damages tied to underlying compensatory recovery)
- Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927) (economic-loss rule under maritime law)
- State of La. ex rel. Guste v. M/V Testbank, 752 F.2d 1019 (5th Cir. 1985) (discussion of potential commercial-fishermen exception to Robins Dry Dock)
- In re Deepwater Horizon, 785 F.3d 986 (5th Cir. 2015) (enforcement of claim-determination waiver in Deepwater Horizon context)
- In re Deepwater Horizon, 785 F.3d 1003 (5th Cir. 2015) (settlement-interpretation principles)
- In re Deepwater Horizon (Barrera), 907 F.3d 232 (5th Cir. 2018) (affirming dismissal for failure to comply with PTO 60)
- In re Deepwater Horizon (Bon Secour Fisheries), 744 F.3d 370 (5th Cir. 2014) (E&P Settlement causation proof discussed)