Articles Posted in US Court of Appeals for the Fifth Circuit

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After a group of oil companies agreed to cooperatively develop oil prospects, EnerQuest acquired an interest in the specified area after the agreement took effect, but then refused to offer a share of those interests to the other parties. Other parties to the agreement filed suit against EnerQuest, alleging that it breached the contract by refusing to offer a pro-rata share of the newly acquired interests. The Fifth Circuit reversed the district court's judgment and rendered judgment for EnerQuest, holding that EnerQuest did not breach the agreement. The court held that, although the contract requires that the parties share interests acquired within the area of mutual interest (AMI), the contract excludes interests already owned by parties from the AMI. Therefore, what was excluded from the AMI at the outset may never be included without a new agreement. View "Glassell Non-Operated Interests Ltd. v. Enerquest Oil & Gas, LLC" on Justia Law

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More than eight hundred appellants, who assert various contract and tort claims arising out of the Deepwater Horizon oil clean-up, are divided into two groups: the Lindsay Appellants and the D'Amico Appellants. Both groups of appellants appealed their dismissals with prejudice for failure to follow the district court's order requiring they file individual complaints. The Fifth Circuit held that the district court had authority to issue the order as a sensible means of managing multi-district litigation and to dismiss the parties' claims with prejudice for disobeying docket management orders. However, the court did not find the clear record of delay or contumacious conduct by the D'Amico Appellants required to justify a dismissal-with-prejudice sanction. In this case, the D'Amico Appellants had a flawed understanding of PTO 63 and showed an absence of willful conduct. Accordingly, the court reversed as to the D'Amico Appellants and affirmed as to the Lindsay Appellants. The court remanded for further proceedings. View "Graham v. BP Exploration & Production, Inc." on Justia Law

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After JME filed five claims for compensation with the Settlement Program, the Settlement Program determined that JME was a "failed business" under the meaning of the Settlement Agreement and calculated JME's compensation according to the Failed Business Economic Loss framework. The district court then granted discretionary review and agreed that JME was a failed business under the Settlement Agreement. Applying de novo review, the Fifth Circuit vacated and remanded, holding that the district court misinterpreted the Settlement Agreement's first and third definition of a "failed business" and erroneously concluded that the Settlement Program correctly classified JME as a failed business because JME ceased operations and wound down, or otherwise initiated or completed a liquidation of substantially all of its assets. View "Claimant ID 100081155 v. BP Exploration & Production, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's denial of discretionary review in an appeal of claims submitted to BP's Economic and Property Damages Settlement Agreement. The court held that the reviews conducted by the Claims Administrator and Appeal Panel were consistent with the court's recent decision in Texas Gulf Seafood, BP Expl. & Prod., Inc. v. Claimant ID 100094497, 910 F.3d 797, 799 (5th Cir. 2018). In this case, the Appeal Panel did not defer to the claimant's "Management Fee" label as prohibited by Texas Gulf Seafood. Rather, the Appeal Panel conducted its own de novo review of the expense classification, considering the substantive nature of the Management Fee, and determined that the Management Fee was a fixed cost rather than a variable cost. The court also held that BP's arguments regarding the substantive accuracy of the "fixed" classification only raise the correctness of a fact-dependent decision in a single claimant's case. Therefore, the district court did not err in declining to grant discretionary review to determine whether the Claims Administrator and Appeal Panel accurately classified the Management Fee expense. View "BP Exploration & Production, Inc. v. Claimant ID 100166533" on Justia Law

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The Fifth Circuit affirmed the district court's denial of discretionary review of the $2 million award claimant, an manufacturer of signs, received pursuant to the Economic and Property Damages Settlement from the Deepwater Horizon oil spill. The court held that BP has not established that claimant's causation attestation was implausible. The court also held that, even if applying a variable classification to the research and development expenses was substantively inaccurate, it simply raised the correctness of a discretionary administrative decision in the facts of a single claimant's case and thus did not warrant discretionary review. Finally, the court held that even if the claims administrator erred in omitting the adjustments at issue, the error did not raise a recurring issue on which the appeal panels were split or involved a pressing question of how the settlement agreement should be interpreted. View "BP Exploration & Production, Inc. v. Claimant ID 100261922" on Justia Law

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This case stemmed from a contract dispute between two oil-drilling businesses, Eni and Transocean. The district court granted judgment in favor of Transocean and rejected Eni's claims surrounding Transocean's maintenance of its equipment, found that Eni had wrongfully repudiated the contract, and awarded damages to Transocean. The Fifth Circuit vacated the damages award and held that the district court erred by simply applying the Standby Rate because Eni never issued any instructions after repudiation. In this case, the district court should have attempted to determine, in the hypothetical nonbreach world, how many days the Deepwater Pathfinder would have spent at each applicable rate. Accordingly, the court remanded with instructions to recalculate the damages using the correct methodology. The court found Eni's remaining arguments lacking in merit and affirmed as to those claims. View "ENI US Operating Company, Inc. v. Transocean Offshore Deepwater Drilling, Inc." on Justia Law

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BP argued that claimant was not entitled to the $65 million award it received pursuant to the Deepwater Horizon oil spill Settlement Agreement because it did not suffer a loss that was caused by the oil spill despite submitting a claim form certifying that it did. The Fifth Circuit held that the district court did not abuse its discretion in declining discretionary review because BP has not demonstrated that claimant did not suffer a post-spill loss, and claimant satisfied the causation formula set out in Exhibit 4B of the Settlement Agreement and formally attested to the fact that its losses were caused by the oil spill. The court reasoned that, while the evidence BP presented may indicate additional, market-related causes for claimant's loss, the existence of these alternative causes did not eliminate the possibility that the oil spill contributed to cause claimant's loss, nor did it preclude claimant from recovering under the Settlement Agreement. Accordingly, the court affirmed the judgment of the district court. View "BP Exploration & Production, Inc. v. Claimant ID 100141850" on Justia Law

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NBA player David West negotiated a contract with the New Orleans Hornets before the Deepwater Horizon oil spill. West received the full $45 million amount specified in his contract, but still submitted an "Individual Economic Loss Claim" under the Deepwater Horizon Economic and Property Damages Settlement Agreement. The Claims Administrator for the Agreement awarded West almost $1.5 million in "lost" earnings. The Fifth Circuit reversed the district court's denial of discretionary review of the Settlement Appeal Panel's decision affirming the award and held that the district court abused its discretion in this case when the decision not reviewed actually contradicted or misapplied the Agreement. Under the circumstances, West expected to earn in the absence of the spill precisely what he did earn after it. Therefore, he did not suffer unexpected damages, and Exhibit 8A did not apply to him. The court also held that West did not suffer actual or unexpected "losses" or damages, because he earned exactly what he was entitled to receive under his contract. The court explained the fact that he received less money in 2010 than in 2009 did not mean he "lost" anything or was "damaged" in any way. Rather, it meant only that he agreed to a front-loaded contract, and he agreed to do so many years before the spill. View "BP Exploration & Production, Inc. v. Claimant ID 100281817" on Justia Law

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The Fifth Circuit affirmed the district court's dismissal of 104 plaintiffs' claims related to the Deepwater Horizon oil spill. Plaintiffs, individuals and associations located in Mexico that rely on the fishing industry as a primary source of income, argued that the district court abused its discretion in making dismissal with prejudice the remedy for failing to comply with pretrial order (PTO) 60. The court held that plaintiffs' failure to comply with PTO 60 constituted a clear record of delay considering the number of opportunities the district court gave plaintiffs to either comply with PTO 60, explain why they could not do so, or show documentation of their attorneys' efforts. The court also held that the district court's explicit warnings and second chances illustrated that lesser sanctions would not serve the best interests of justice. View "Barrera v. BP, PLC" on Justia Law

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The Fifth Circuit granted Nevada's motion to dismiss Texas' petitions for declaratory and injunctive relief in a dispute arising out of the government's struggle with nuclear waste disposal under the Nuclear Waste Policy Act of 1982. Texas sought equitable relief prohibiting the Department of Energy from conducting any other consent-based siting activity and ordering defendants to finish the Yucca licensure proceedings. The court held that the deadline in 42 U.S.C. 10139(c) was not jurisdictional, and thus proceeded to consider whether the continuing violations doctrine may apply to Texas' claims; applying either versions of the continuing violations doctrine, whether as a tolling mechanism or as an apparent shorthand for an exercise in statutory interpretation, Texas' claims were still untimely; the court lacked jurisdiction to consider the Department of Energy's 2017 consent-based siting activities because they were not sufficiently final under the statute; and thus Texas' claims did not satisfy the statutory requirements of timeliness or finality. View "Texas v. United States" on Justia Law