ID 100271726 v. BP Exploration & Prodn, I ( 2018 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 12, 2018
No. 17-30313
Lyle W. Cayce
Clerk
consolidated with 17-30314, 17-30315, 17-30317, 17-30318, 17-30320, 17-
30321, 17-30323, 17-30324, 17-30325, 17-30326, 17-30327, 17-30328, 17-
30329, 17-30331, 17-30332, 17-30334, 17-30335, 17-30336
CLAIMANT ID 100271726,
Requesting Party – Appellant
v.
BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICA
PRODUCTION COMPANY; BP, P.L.C.,
Objecting Parties – Appellees.
Appeals from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:17-CV-976
Before DAVIS, JONES, and HIGGINSON, Circuit Judges.
PER CURIAM:*
In these consolidated cases, PowerSouth Energy Cooperative
(“PowerSouth”) challenges the district court’s refusal to review a series of
Administrative Appeal Panel decisions pertaining to the proper application of
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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. 17-30313
the Deepwater Horizon Economic and Property Damages Settlement
Agreement (the “Settlement Agreement”). In each decision, the Appeal Panel
found that PowerSouth was not eligible to bring a claim under the Settlement
Agreement because its unmanned electrical substations did not constitute
“facilities” as that term is defined in the Agreement. For the reasons stated
below, we AFFIRM.
I. Factual and Procedural Background
“The Deepwater Horizon oil spill and the ensuing Settlement Agreement
‘are no strangers to this court.’” 1 Therefore, we only discuss the facts necessary
to resolve this appeal.
PowerSouth is an energy cooperative that generates electricity and
provides that electricity wholesale to 16 retail distributors, who, in turn,
deliver electricity to residential and business customers. As part of this
process, PowerSouth uses its substations to “step-down” the voltage of its
electricity to a safe level for residential and commercial use. The nineteen
substations in question are unoccupied, fenced-in areas containing equipment
necessary to complete the “step-down” process. PowerSouth does not have any
employees assigned to the substations; rather, PowerSouth remotely monitors
the substations from the company’s headquarters. If, through this remote
monitoring, PowerSouth detects a problem at a particular substation, it may
dispatch an employee to the substation. However, on most occasions,
PowerSouth is able to diagnose a problem and make necessary adjustments
using its remote capabilities.
On January 2, 2014, PowerSouth filed twenty business economic loss
claims with the Deepwater Horizon Court Supervised Settlement Program,
1 Claimant ID 100218776 v. BP Expl. & Prod., Inc., ---F. App’x---, 2017 WL 4708256,
at *1 (5th Cir. Oct. 17, 2017) (quoting Claimant ID 100128765 v. BP Expl. & Prod., Inc., ---F.
App’x---, 2017 WL 4310087, at *1 (5th Cir. Sept. 27, 2017)).
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No. 17-30313
which is directed by the Claims Administrator. The Claims Administrator has
not ruled on PowerSouth’s first claim, which pertains to its company
headquarters. The Claims Administrator, however, denied PowerSouth’s other
nineteen claims that related to PowerSouth’s individual substations.
PowerSouth appealed those denials to nineteen Appeal Panels, which
unanimously affirmed the Claims Administrator with nearly identical
reasoning. Each Panel found that the substations exist solely to “step-down”
the voltage of electricity and that the mere transporting of power does not
transform the isolated, unoccupied substations into “facilities” as that term is
defined by the Settlement Agreement. PowerSouth then filed multiple requests
for discretionary review with the district court. The district court denied those
requests, and PowerSouth appealed.
II. Jurisdiction and Standard of Review
The district court had admiralty jurisdiction over the underlying claims, 2
and we have jurisdiction over this consolidated appeal under the collateral
order doctrine. 3
We apply an abuse of discretion standard of review to the district court’s
denial of discretionary review of the Settlement Agreement. 4 We generally
assess whether the district court abused its discretion by asking “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.” 5
2 U.S. CONST., art. III, § 2; 28 U.S.C. § 1333; 33 U.S.C. § 2717(b); 43
U.S.C. § 1349(b); 46 U.S.C. § 30101.
3 In re Deepwater Horizon, 785 F.3d 1003, 1009 (5th Cir. 2015).
4 Claimant ID 100250022 v. BP Expl. & Prod., Inc., 847 F.3d 167, 169 (5th Cir. 2017)
(citing Holmes Motors, Inc. v. BP Expl. & Prod., Inc., 829 F.3d 313, 315 (5th Cir 2016)).
5 Holmes Motors, 829 F.3d at 315 (quoting In re Deepwater Horizon, 641 F. App’x 405,
409–10 (5th Cir. 2016)).
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No. 17-30313
III. Discussion
In order to dispose of this appeal, we only address PowerSouth’s
argument that the district court erred in denying discretionary review because
the Claims Administrator’s denials contradicted the Settlement Agreement. 6
To that end, PowerSouth argues that its substations qualify as “facilities”
under section 1.2.1 of the Settlement Agreement eligibility criteria and thus
its claims based on those substations should not have been denied. The
Settlement Agreement defines a “facility” as “[a] separate and distinct physical
location of a Multi-Facility Business at which it performs or manages its
operations.”
PowerSouth argues that it performs or manages its operations from its
substations because the substations are a necessary component of providing
electricity to consumers. The substations, however, are mere conduits for the
electricity that PowerSouth provides through its operations at company
headquarters. As PowerSouth’s CEO noted in his affidavit, “[w]hile
PowerSouth periodically is required to send personnel to its substations to
perform maintenance and repairs, the normal day-to-day function of
PowerSouth’s operations (the delivery of power to our member cooperatives) is
performed using the remote monitoring and control which is carried out by
PowerSouth personnel from its [company headquarters].” From the record, it
is abundantly clear that PowerSouth performs and manages its operations
from company headquarters—not from the isolated, unmanned substations.
6 PowerSouth also argues that the Claims Administrator’s passage of a “policy” that
purportedly re-defined the term “facility” after PowerSouth had submitted its claims violated
PowerSouth’s due process rights. This argument, however, presupposes that the substations
qualified as “facilities” under the original definition of that term in the Settlement
Agreement. Because we find that the substations do not satisfy the original definition, we do
not reach PowerSouth’s due process argument.
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No. 17-30313
The Claims Administrator’s decisions did not contradict or misapply the
Settlement Agreement, and, accordingly, the district court did not err in
denying discretionary review of those decisions.
AFFIRMED.
5