Justia Energy, Oil & Gas Law Opinion SummariesArticles Posted in US Court of Appeals for the Fifth Circuit
BP Exploration & Production, Inc. v. Claimant ID 100354107
The Fifth Circuit affirmed the district court's denial of discretionary review of five awards made to Walmart under the Settlement Agreement arising from the 2010 Deepwater Horizon disaster. The court held that there was no showing of a misapplication or contradiction of the Settlement Agreement requiring the district court's review. In this case, the Claims Administrator conducted a searching review of the financial statements Walmart provided from both its old and new accounting system, and the PWC accountants brought specific clarification questions to Walmart regarding the changes. Furthermore, Walmart responded to the satisfaction of the Claims Administrator. The court rejected BP's claim that there was a split Appeal Panels on how to address changes in accounting systems like the one at issue here. The court saw BP's claim as one challenging the Appeal Panels' discretionary decision that raises the correctness of a discretionary administrative decision on the facts of a single claimant's case, and held that the district court's denial of a request for discretionary review of such a decision was not an abuse of discretion. View "BP Exploration & Production, Inc. v. Claimant ID 100354107" on Justia Law
W & T Offshore, Inc. v. Bernhardt
At issue in this oil and gas royalty case were orders to pay issued by the Department of the Interior to W&T in order to resolve volumetric gas delivery imbalances. The district court granted partial summary judgment on each of the parties' motions. The Fifth Circuit held that the Department of the Interior permissibly required resolution of delivery imbalances via cash payment, but that it improperly promulgated a substantive rule without subjecting it to notice and comment. The court also held that the Department of the Interior should have credited all W&T’s deliveries under the doctrine of equitable recoupment. Accordingly, the court affirmed the district court's partial grant of summary judgment in part, reversed in part, and remanded for further proceedings. View "W & T Offshore, Inc. v. Bernhardt" on Justia Law
Claimant ID 100235033 v. BP Exploration & Production, Inc.
The Fifth Circuit reversed the district court's decision to decline discretionary review of the denial of claimant's claim for damages resulting from the Deepwater Horizon oil spill. At issue was whether a claimant's alleged unlawful conduct wholly or partially disqualifies it from the Settlement Program and, if so, what evidence is adequate to show that the claimant engaged in such conduct. The court held that the parties have been unable to give the court clear answers that were rooted in the Settlement Agreement or other law. The court found a three-way split among appeal panels on the significance of wrongdoing, and the parties have neither agreed nor persuaded the court as to what the legal framework ought to be. Therefore, and in light of the recurrence of the issues this appeal implicated, the court remanded for further proceedings. View "Claimant ID 100235033 v. BP Exploration & Production, Inc." on Justia Law
Lake Eugenie Land & Development, Inc. v. Halliburton Energy Services, Inc.
A group of menhaden fishermen challenged the denial of their claims pursuant to a punitive damages settlement agreement between a class of claimants, who alleged that they were harmed by the Deepwater Horizon oil spill, and defendants. As a preliminary matter, the Fifth Circuit granted the Fishermen's motion to take judicial notice of the docket and complaint in Bruhmuller v. BP Exploration & Production Inc. The court held that the magistrate judge did not err by affirming the denial of Fishermen's claims, because the Fishermen did not attempt to comply with Pretrial Order 60 at any point throughout these proceedings. The court also held that the district court did not err in declining to review the magistrate judge's decision, and the district court did not err in denying the Fishermen's Rule 60(b) motion. Accordingly, the court affirmed the judgment. View "Lake Eugenie Land & Development, Inc. v. Halliburton Energy Services, Inc." on Justia Law
Nabors Offshore Corp. v. Whistler Energy II, LLC
After Whistler entered into a drilling contract with Nabors, Whistler entered into bankruptcy proceedings and rejected the contract. Nabors subsequently sought administrative priority in the bankruptcy proceeding for expenses incurred after the rejection of its contract, and the bankruptcy court granted the request in part and denied in part. The Fifth Circuit held that a creditor can establish that its expenses are attributable to the actions of the bankruptcy estate through evidence of either a direct request from the debtor-in-possession or other inducement via the knowing and voluntary post-petition acceptance of desired goods or services. The court clarified that when the debtor-in-possession induces availability and the bankruptcy estate derives a benefit from it, the ordinary cost of ensuring such availability qualifies as an administrative expense. The court remanded for the bankruptcy court to determine (1) whether Whistler induced Nabors to stay on the platform; (2) the length of time Nabors stayed on the platform because of Whistler's post-petition needs; and (3) the actual and necessary costs of staying on the platform during this time period. The court left it to the bankruptcy court to clarify its own findings regarding Nabors's provision of services. Finally, the court affirmed the bankruptcy court's denial of Nabors' requests for administrative priority in full. View "Nabors Offshore Corp. v. Whistler Energy II, LLC" on Justia Law
Lake Eugenie Land & Development, Inc. v. BP Exploration, Inc.
This appeal arose from a dispute over a Business Economic Loss claim stemming from the Deepwater Horizon Class Action Settlement Agreement. In Policy 495, the Claims Administrator established different methods for correcting unmatched financial statements. The first method created an Annual Variable Margin Methodology (AVMM), and the second method created Industry-Specific Methodologies (ISMs) for claimants working in construction, agriculture, education, and professional services. The Fifth Circuit upheld the AVMM but rejected the ISMs in In re Deepwater Horizon (Policy 495 Decision), 858 F.3d 298, 304 (5th Cir. 2017). The court held that the AVMM appropriately required the Claims Administrator to ensure that costs were registered in the same month as corresponding revenue, regardless of when those costs were incurred. However, the ISMs went too far by requiring smoothing profits in addition to matching revenues and expenses. Therefore, the court held that all claimants must be subject to the AVMM. On remand, the district court issued orders to implement the court's decision. However, the court held that the district court's orders were inconsistent with the court's mandate in the Policy 495 Decision. Accordingly, the court reversed and remanded for further proceedings. View "Lake Eugenie Land & Development, Inc. v. BP Exploration, Inc." on Justia Law
Glassell Non-Operated Interests Ltd. v. Enerquest Oil & Gas, LLC
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
Graham v. BP Exploration & Production, Inc.
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
Claimant ID 100081155 v. BP Exploration & Production, Inc.
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
BP Exploration & Production, Inc. v. Claimant ID 100166533
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