Appellate Jurisdiction Denied for BP's Fraud Prevention Efforts: Fifth Circuit | Practical Law

Appellate Jurisdiction Denied for BP's Fraud Prevention Efforts: Fifth Circuit | Practical Law

In In re Deepwater Horizon, the US Court of Appeals for the Fifth Circuit held that it lacked jurisdiction to hear an appeal regarding BP's access to confidential information about pending claims to its $9.9 billion oil spill settlement in its ongoing effort to root out fraud, despite having permitted three previous BP appeals.

Appellate Jurisdiction Denied for BP's Fraud Prevention Efforts: Fifth Circuit

Practical Law Legal Update w-000-4769 (Approx. 3 pages)

Appellate Jurisdiction Denied for BP's Fraud Prevention Efforts: Fifth Circuit

by Practical Law Litigation
Law stated as of 20 Jul 2015USA (National/Federal)
In In re Deepwater Horizon, the US Court of Appeals for the Fifth Circuit held that it lacked jurisdiction to hear an appeal regarding BP's access to confidential information about pending claims to its $9.9 billion oil spill settlement in its ongoing effort to root out fraud, despite having permitted three previous BP appeals.
On July 16, 2015, in In re Deepwater Horizon, the US Court of Appeals for the Fifth Circuit held that it lacked jurisdiction to hear an appeal regarding BP's access to confidential information about pending claims to its $9.9 billion oil spill settlement in its ongoing effort to root out fraud, despite having permitted three previous BP appeals (No. 14–30823, (5th Cir. July 16, 2015)).
In May 2012, BP Exploration & Production Inc. (BP) reached a settlement agreement with a class of individuals who suffered economic and property damage after the Deepwater Horizon oil spill. A settlement fund and a multi-tiered claims process was established pursuant to the agreement, which included a provision governing the scope and timing of the parties' access to confidential information about particular claims as they advanced through the settlement process. Class counsel alleged that BP violated the provision by accessing claim-specific information on an internal site run by the claims administrator. The district court determined that neither BP nor class counsel should be permitted to access claim-specific information before the settlement program made an initial determination about a claim's eligibility status. BP appealed.
The Fifth Circuit dismissed for lack of jurisdiction. The court rejected BP's contention that the court had jurisdiction under the collateral order doctrine, which permits a party to appeal an interlocutory ruling immediately without waiting for a final determination of the underlying case if an order:
  • Conclusively determines the disputed question.
  • Resolves an important issue completely separate from the merits of the action.
  • Would be unreviewable on appeal from a final judgment.
Here, the appellate court stressed the "stringent" conditions needed for appeal under the collateral order doctrine and found that the disputed issue did not rise to the level of an appealable order under the doctrine. The court distinguished the disputed issue here from three prior appeals it had allowed BP to pursue under the collateral order doctrine by noting that the previous interpretations at issue unavoidably impacted either thousands of claims or all the claims in the settlement. The court noted that the issue here possibly only affected five fraudulent claims and did not rise to the requisite level of disruption necessary to permit an appeal. The court also pointed to the preexisting framework within the settlement agreement to address fraud, including the fact that BP would eventually gain access to the confidential claim-specific data at issue and could then challenge an award. The court further noted the deference owed to the trial judge, the general rule that only serious and unsettled questions of law come within the collateral order doctrine, and that appellate review of orders interpreting the settlement agreement could be achieved by other means (such as an appeal under 28 U.S.C. § 1292(b)).