ID 100051301 v. BP Exploration & Production, Inc.
694 F. App'x 236
| 5th Cir. | 2017Background
- Laxmi Southaven Enterprises (motel in Southaven, MS) submitted a Business Economic Loss (BEL) claim under the Deepwater Horizon Settlement; it was in Zone D where claimants must prove causation under Exhibit 4B.
- The Claims Administrator initially awarded Laxmi over $500,000 but classified a $34,823.61 December 2010 accounting item as a contra-revenue adjustment (reducing revenue).
- BP appealed, arguing the $34,823.61 should have been recorded as a bad-debt expense (increasing expenses), which would raise post-spill revenue and defeat causation; BP also challenged Laxmi’s treatment of supply expenses.
- The Appeal Panel requested a Claims Administrator Summary of Review; the Summary said the CSSP accountant had “inadvertently” classified the item as contra revenue and that reclassifying it to bad debt would cause Laxmi to fail causation.
- The Appeal Panel reversed, treating the $34,823.61 as bad debt and denying recovery; Laxmi sought discretionary review in district court, which declined to review; Laxmi appealed the denial to this court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the $34,823.61 item should be contra revenue or bad-debt expense | Laxmi: as a cash-basis taxpayer the item is a contra-revenue adjustment; Appeal Panel’s reclassification was factually wrong | BP: item was improperly classified and should be bad-debt expense, which defeats causation | Court: factual, claimant-specific dispute; district court did not abuse discretion in denying review; affirmed |
| Whether the Appeal Panel erred by relying on the Claims Administrator’s Summary of Review | Laxmi: Summary was flawed and the Panel improperly treated it as concession of error | BP: Summary accurately explained processing and supported the Panel’s factual conclusion | Court: Summary use was permissible; issue remains factbound and not a misapplication of the Settlement Agreement |
| Whether the Panel should have required additional calculations or remanded for further proceedings | Laxmi: Panel should have produced calculations or considered other benchmarks/causation tests | BP: procedural discretion to decide sufficiency of record; no rule requiring extra calculations | Court: administrative discretion; no abuse in not ordering more calculations or remand |
| Whether inconsistent Appeal Panel decisions on similar classifications require district review | Laxmi: split panels create recurring issue needing district review | BP: differing outcomes reflect case-specific facts, not a governing split | Court: differences are fact-dependent and not likely to substantially affect administration; no abuse in declining review |
Key Cases Cited
- Claimant ID 100250022 v. BP Expl. & Prod., Inc., 847 F.3d 167 (5th Cir. 2017) (standard for reviewing district court denial of discretionary review)
- Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313 (5th Cir. 2016) (district court need not grant review of every question about Settlement interpretation)
- In re Deepwater Horizon, [citation="632 F. App'x 199"] (5th Cir. 2015) (recurring-issue/split-panel guidance impacting review discretion)