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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 APPEARANCES: FOR THE PLAINTIFFS:

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA ******************************************************************* IN RE: OIL SPILL BY THE OIL RIG DEEPWATER HORIZON IN THE GULF OF MEXICO ON APRIL 20, 2010 Docket No. MDL-2179 New Orleans, Louisiana Friday, April 5, 2013

******************************************************************* BON SECOUR FISHERIES, INC. VS. Docket No. 12-CV-970 Section "J" New Orleans, Louisiana Friday, April 5, 2013

BP EXPLORATION & PRODUCTION, INC, ET AL ******************************************************************* BP EXPLORATION & PRODUCTION, INC, ET AL Docket No. 13-CV-492 VS. Section "J" New Orleans, Louisiana Friday, April 5, 2013 DEEPWATER HORIZON COURT SUPERVISED SETTLEMENT PROGRAM, ET AL ******************************************************************* TRANSCRIPT OF MOTION PROCEEDINGS HEARD BEFORE THE HONORABLE CARL J. BARBIER UNITED STATES DISTRICT JUDGE

HERMAN, HERMAN, KATZ & COTLAR, LLP BY: STEPHEN J. HERMAN, ESQ. SOREN GISELSON, ESQ. 820 O'Keefe Avenue New Orleans, LA 70113 DOMENGEAUX, WRIGHT, ROY & EDWARDS BY: JAMES P. ROY, ESQ. P. O. BOX 3668 556 JEFFERSON ST. LAFAYETTE, LA 70502-3668

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LEWIS KULLMAN STERBCOW & ABRAMSON BY: PAUL M. STERBCOW, ESQ. 601 POYDRAS STREET, SUITE 2615 NEW ORLEANS, LA 70130 IRPINO LAW FIRM BY: ANTHONY IRPINO, ESQ. 2216 Magazine St. New Orleans, LA 70130 WILLIAMS LAW GROUP BY: CONRAD "DUKE" WILLIAMS, ESQ. 435 Corporate Drive, Suite 101 Maison Grand Caillou Houma, LA 70360 BREIT DRESCHER IMPREVENTO & WALKER BY: JEFFREY A. BREIT, ESQ. 1000 Dominion Tower 999 Waterside Drive Norfolk, VA 23510 CUNNINGHAM BOUNDS, LLC BY: ROBERT T. CUNNINGHAM, ESQ. 1601 Dauphin St. Mobile, AB 33604 WILLIAMSON & RUSNAK BY: JIMMY WILLIAMSON, ESQ. 4310 Yoakum Blvd. Houston, TX 77006 MOTLEY RICE BY JOSEPH D. RICE, ESQ. 28 Bridgeside Blvd. Mount Pleasant, SC 29464 BRADLEY, MURCHISON, KELLY & SHEA BY: JOEL A. RICE, ESQ. 401 Edwards St., 10th Floor Shreveport, LA 71101 FAYARD & HONEYCUTT BY: CALVIN C. FAYARD, JR., ESQ. 519 Florida Ave., SW Denham Springs, LA 70726

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 FOR BP EXPLORATION & PRODUCTION INC., ET AT: FOR THE STATE OF ALABAMA:

LIEFF CABRASER HEIMANN & BERNSTEIN BY: ELIZABETH J. CABRASER, ESQ. 275 Battery St., 29th Floor San Francisco, CA 94111 ATTORNEY GENERAL OF ALABAMA BY: COREY L. MAZE, ESQ. 500 Dexter Ave. Montgomery, AB 36130

KIRKLAND & ELLIS BY: RICHARD C. GODFREY, ESQ. ANDREW B. BLOOMER, ESQ. 300 N. LaSalle Chicago, IL 60654 LISKOW & LEWIS BY: S. GENE FENDLER, ESQ. R. KEITH JARRETT, ESQ. One Shell Square, Suite 5000 701 Poydras St. New Orleans, LA 70139 KIRKLAND & ELLIS BY: JEFFREY B. CLARK, ESQ. 655 Fifteenth St., N.W. Washington, D.C. 20005 DENTONS US BY: JEFFREY LENNARD, ESQ. 7800 Sears Tower 233 South Wacker Dr. Chicago, IL 60606

FOR PATRICK JUNEAU AND DEEPWATER HORIZON COURT SUPERVISED SETTLEMENT PROGRAM: STANLEY, REUTER, ROSS, THORNTON & ALFORD BY: RICHARD C. STANLEY, ESQ. JENNIFER L. THORNTON, ESQ. 909 Poydras St., Suite 2500 LL&E Tower New Orleans, LA 70112

uscourts. LA 70130 (504) 589-7776 Karen_ibos@laed. CRR.. . produced by computer. RMR. Ibos. CCR 500 Poydras St.4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 OFFICIAL COURT REPORTER: Karen A. Room HB-406 New Orleans.gov Transcript Proceedings recorded by mechanical stenography.

THE DEPUTY CLERK: MDL 10-2179. THE COURT: All right. Bon Secour Fisheries. All rise. Jeff Lennard. Counsel. Godfrey? MR GODFREY: MR. 2013) (MOTION PROCEEDINGS) (OPEN COURT. All right.. et al. Civil Action 12-970. Please be seated. Incorporated et al. make your appearances. In re: Oil spill by the oil rig Deepwater Horizon in the Gulf of Mexico on April 20th. APRIL 5. et al. MR.) THE DEPUTY CLERK: THE COURT: Okay. GODFREY: Richard Godfrey on behalf of BP. and the Gene Fendler. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 please. Jeff Clark. With me is Andrew Bloomer. . 2010. Steve Herman for the class. Incorporated. BP Exploration and Production. and with me is Are you going to be doing the argument. Keith Jarrett.. et al. everyone. HERMAN: Yes. Stephanie.5 1 2 3 4 5 09:34:24 09:34:26 09:34:29 09:34:32 09:34:37 09:34:41 09:34:48 09:34:52 09:34:58 09:35:02 09:35:04 09:35:07 09:35:09 09:35:13 09:35:20 09:35:20 09:35:22 09:35:22 09:35:24 09:35:27 P R O C E E D I N G S (FRIDAY. Call this matter. sir. Incorporated. Civil Action 13-492. THE COURT: Mr. most of the PSC class counsel I believe.. versus Deepwater Horizon Court Supervised Settlement Program. versus BP Exploration and Production.

is duplicative of the Motion For Preliminary Injunction. seeking to enjoin Mr. see it. Your Honor. et cetera. which essentially is. injunctive relief as I see it. Juneau from interpreting the business economic loss claim provisions in the settlement in the manner in which he has interpreted them. Second motion. Thank you.6 09:35:30 09:35:31 09:35:33 09:35:33 09:35:34 09:35:36 09:35:40 09:35:47 09:35:52 09:35:59 09:36:10 09:36:18 09:36:24 09:36:28 09:36:38 09:36:55 09:37:03 09:37:08 09:37:17 09:37:23 09:37:31 09:37:34 09:37:38 09:37:41 09:37:50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Mr. as I Court this morning. we have a Motion to Dismiss filed by the defendants in 13-492. thirdly. HERMAN: THE COURT: MR STANLEY: And you will be doing the argument. Looks like we have several matters before the First. Okay. Jennifer Thornton here for Pat Juneau and the settlement program. motion filed by Mr. et al. which is Civil Action 12-970. there is a motion -. Herman? MR. Yes. 13-492. Juneau as claims . THE COURT: All right. versus Deepwater Horizon Court Supervised Settlement Program. Okay. In fact.. the second matter is a completely new lawsuit filed by BP. Thanks. BP has filed a motion for preliminary injunction against Mr. although they're filed in two different matters. but they're all really related.BP filed a motion in the Bon Secour class action case. which is BP. Juneau in his official capacity as the claims administrator and against the settlement program itself. Rick Stanley and Good morning. as I see. Your Honor. it asks for the identical So they're really one and the same. And then.

obviously. I would like to talk about the Motion to Dismiss because I think that precedes your Motion For Preliminary Injunction. so it's a growing. which is voluminous. Finally. Mr. but I want to finally resolve it here today. by the way. memoranda. That is I have probably the biggest understatement I've made in a while. living thing. and so forth either in support or opposition to these matters. represented by class counsel here today. all of those parties. And I don't know when or what it's going to take to finally resolve it. fourth time -. This is at least the third time. I am going to give each side 20 minutes. The Court is very familiar with this issue. a Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim.I'm losing track of how many times I've dealt with this same identical issue. the economic and property damage class. Godfrey. I have gone through what you all have filed. there are more documents. and that's a grand understatement in itself.7 09:37:57 09:38:03 09:38:06 09:38:11 09:38:19 09:38:28 09:38:34 09:38:38 09:38:40 09:38:46 09:38:49 09:38:52 09:38:55 09:38:59 09:39:02 09:39:05 09:39:11 09:39:16 09:39:20 09:39:29 09:39:32 09:39:34 09:39:38 09:39:42 09:39:45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 administrator and by the settlement program. so I do not want to rehash everything that's been said before. have formally intervened in the new lawsuit as defendants in 13-492 and everyone. So with that said. I will hear from you. more exhibits. so it's now 20 minutes to . dealt with this issue. more declarations that are filed. it seems. each of those parties have filed pleadings. Seems like every time this matter rears its head again.

a spot where perhaps we can all agree and then see whether. my batteries are dead. THE COURT: MR GODFREY: THE COURT: you. Your Honor. and I deeply I know appreciate the Court's taking the time to visit this issue. Mr. We are in sequestration. Assume that a business prepares. that has implications for whether or not BP should be granted the relief that we seek. I don't have a clock up here. I would like to step back and see if we can find common ground. Your Honor. if we agree on that spot. Godfrey. I would like to try to reserve three minutes. MR GODFREY: THE COURT: a Court of Appeal. Thank you. think. Godfrey MR GODFREY: Thank you. MR GODFREY: I can't solve that problem. I The Court knows we have two motions for preliminary injunction. Lennard will keep the count. Mr.8 09:39:51 09:39:52 09:39:54 09:39:56 09:40:00 09:40:01 09:40:04 09:40:04 09:40:09 09:40:09 09:40:12 09:40:14 09:40:19 09:40:24 09:40:24 09:40:25 09:40:28 09:40:30 09:40:34 09:40:36 09:40:41 09:40:44 09:40:48 09:40:53 09:40:55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ten. give me a clock. It's not like You can do that if you would like. Mr. Just have someone on your side keep count for I doubt they will The one I have up here. The Court is intimately familiar with the issue. the Court has spent a great deal of time on it. a business claimant prepares monthly financials in the ordinary course -THE COURT: Well. but we'll see how it goes. I really want you to talk about the Motion to Dismiss first because I think that . I'm sorry.

the most -I want to know why I should not -. the fact that I know this settlement was negotiated over a long period of time.9 09:40:59 09:41:00 09:41:02 09:41:05 09:41:10 09:41:14 09:41:16 09:41:20 09:41:23 09:41:25 09:41:29 09:41:32 09:41:33 09:41:36 09:41:41 09:41:46 09:41:52 09:42:00 09:42:04 09:42:16 09:42:19 09:42:21 09:42:23 09:42:30 09:42:33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 has to precede everything else. first argument that they raise is there's judicial immunity. laid out in our brief that he is not entitled to judicial immunity. GODFREY: THE COURT: Do you agree with that? That is correct. as with anything that you put in writing. that -. Your Honor.000-page document that spelled out in great detail the settlement agreement program. MR GODFREY: THE COURT: Well. has authority in the circumstance we're in to interpret and decide how that is . If that's the case. I think about a year as I recall. roughly 1. MR GODFREY: Well. and resulted in a.I want to hear from you why I should not grant the Motion to Dismiss filed by Mr. a regulation or a contract. MR. He is not a special master. is not a judicial officer. Juneau and the program. I don't think that he is We laid that out in our brief. I want to think Despite He is not appointed about the practical implications of what you're saying. pursuant to Rule -THE COURT: Let me ask you about that. who is it in your view that is empowered in this situation. there will from time to time be disagreements about how that should be interpreted or applied. he is not exercising a judicial function. So the We've He entitled to judicial immunity. whether it be a statute. number one.

correct? MR. THE COURT: Okay.actually. Is that accurate? MR. Juneau was and his staff were wrongly interpreting the business economic claim matrix. not that the issue may not be simple. GODFREY: THE COURT: is pretty clear and pretty simple. correct? . We reached the conclusion after we started to see awards that we could not reconcile with the data underlying the awards. GODFREY: Your Honor. GODFREY: THE COURT: We did bring that to his attention. whatever way that was done. You agree with that? I would agree with that. I'll call it. As a result. he -. THE COURT: Okay.not every question comes to me immediately. And you brought that to his attention in some fashion. But somebody has to do it in the first Mr. interpret. And Your Honor alone is empowered to interpret it because it's a question of law in terms of contract interpretation. GODFREY: That is correct. Juneau is to implement.10 09:42:39 09:42:40 09:42:45 09:42:45 09:42:49 09:42:50 09:42:52 09:42:54 09:42:55 09:42:57 09:42:59 09:43:06 09:43:11 09:43:18 09:43:30 09:43:34 09:43:35 09:43:37 09:43:40 09:43:42 09:43:44 09:43:45 09:43:47 09:43:51 09:43:56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 interpreted and applied? MR. at some point BP came to the conclusion that they believed Mr. Your Honor. letters. and then he heard from both sides in some fashion. but the -.procedurally is pretty simple in that there was a disagreement at some point. not instance before it gets -. So it seems to me what happened in this case MR. invited memoranda.

By that point in time. You're getting way ahead of MR.we were engaged in discussions. And the three-person panel is envisioned -- designed in the settlement program to be the claims administrator. GODFREY: THE COURT: That is correct. as I recall. we briefed -THE COURT: Wait a minute. a representative of class counsel. . GODFREY: THE COURT: That is correct. hundreds of That's neither here nor there. MR. So after he heard from both sides where each side could not agree.I don't know if he did it on his own. Class counsel on December the 16th asked for a policy decision. almost immediately thereafter. GODFREY: Yes. Your Honor. which apparently there's been a number -. MR. there was a procedure. and a representative of BP. not that it matters. MR.three-person panel shortly thereafter. but somebody requested or invoked the three panel -. Your Honor. did not agree on how this should be interpreted or applied.11 09:43:58 09:44:01 09:44:02 09:44:05 09:44:07 09:44:08 09:44:11 09:44:14 09:44:15 09:44:16 09:44:17 09:44:19 09:44:25 09:44:29 09:44:34 09:44:38 09:44:40 09:44:41 09:44:47 09:44:51 09:44:57 09:45:00 09:45:01 09:45:07 09:45:12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 me here. GODFREY: THE COURT: My 20 minutes are short.this is not the first "policy statement" issued since the settlement. BP requested -. I'm trying to get to procedurally what happened here. class counsel -. MR. GODFREY: awards had been made -THE COURT: Yes.or somebody requested -. Your Honor. On December 16th. he issued what he calls a policy statement.

We had -. . there have been instances where that has worked in that fashion. GODFREY: THE COURT: That is correct. Although. Your Honor. whoever is not happy with it can bring it to the attention of the Court. THE COURT: Okay. the procedure that we had used and everyone agreed on is we handled it informally. And you did that? That is entirely correct. GODFREY: THE COURT: MR. MR. Your Honor. GODFREY: THE COURT: as I recall. Your Honor. initially at least. correct? MR.this is only the second one we've ever handled like this. right? The parties -Once in here and once in my conference room MR. which I know they have in other instances. I met with you all at least twice. GODFREY: THE COURT: That is correct. And the way it's designed to work is they meet. that has gotten up to my level at least. try to see if they can reach consensus. Fortunately. correct? MR. yes.12 09:45:16 09:45:16 09:45:17 09:45:19 09:45:24 09:45:27 09:45:28 09:45:31 09:45:32 09:45:37 09:45:45 09:45:48 09:45:50 09:45:51 09:45:52 09:45:54 09:45:59 09:46:03 09:46:05 09:46:08 09:46:12 09:46:17 09:46:20 09:46:21 09:46:23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 correct? MR. Your Honor. Your Honor. GODFREY: It in general has worked. as I've said. the settlement agreement provides that it then comes up to the Court. It did not in this instance. I've now dealt with But when it comes to me. GODFREY: THE COURT: this multiple times. So after that was done and it didn't result in a consensus.

we had just about started this trial that we've been in now for six weeks. BP. that's correct. and I spent.you or someone. I Of course. So then it was back in my lap.13 09:46:23 09:46:25 09:46:29 09:46:33 09:46:37 09:46:44 09:46:48 09:46:53 09:46:57 09:47:01 09:47:05 09:47:17 09:47:21 09:47:27 09:47:28 09:47:31 09:47:34 09:47:39 09:47:39 09:47:41 09:47:50 09:47:54 09:47:58 09:48:00 09:48:03 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 February. I think it was. So I did that. the parties met with Your Honor twice." correct? MR. it. who already was a Court-appointed neutral for other purposes. I got a report from him that he didn't see any way that the parties were going to reach a resolution. yes. right -. suggested that "We think maybe there is a way to resolve this amicably if you give us time and send us back to talk to a mediator. right around that time. MR. you came And I back and said. and you all met with him. informal ruling. Mr. We went to a mediator and it failed. GODFREY: I think the trial started the 25th of I think. Dan Balhoff. And after the first meeting. GODFREY: THE COURT: Yes. Your Honor. . I designated Mr. "Would you reconsider and vacate your order?" am pretty sure BP -. by this time -. I issued an -. Is that fair? MR. At some point thereafter. I set aside my January 30th. a couple of weeks. Juneau's interpretation.I think I am There was no way to amicably resolve think. GODFREY: THE COURT: Yes. And at some point within the couple of weeks or so. GODFREY: THE COURT: That is a fair statement. which both sides as I recall agreed to. MR.I I said I agree with guess I'd call it an informal ruling.

Each time this matter has come back up. GODFREY: THE COURT: Well. So I've reviewed all of that And then I issued my March 5th. again. and it.I am just being honest with you. my own interpretation of the settlement agreement provisions in question and said that my interpretation agreed with Mr. Juneau. ruling.14 09:48:05 09:48:08 09:48:13 09:48:18 09:48:21 09:48:26 09:48:28 09:48:32 09:48:36 09:48:41 09:48:50 09:48:58 09:49:06 09:49:12 09:49:16 09:49:22 09:49:27 09:49:34 09:49:37 09:49:47 09:49:53 09:49:53 09:49:54 09:49:57 09:49:59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of it. THE COURT: Right around that time. was voluminous even back at that time because by this time you all had submitted more documents. I spent time as I could over the next couple of weeks re-reviewing everything that everybody had submitted. I am having a real hard time -. 2013. quick summary of what has led us to where we are today. and then in front of me a second time. Godfrey. I am having a real hard time understanding how BP is now asking me to enjoin Mr. then in front of me informally.that's the rough background. So my question is. Juneau from following my order. So in the midst of trying to get this trial up and running and doing this. not quite. So that led us up to -. me. Mr. where I set out my reasons and my interpretation. it seems to How else can I view it? MR. again. Not quite. the record grows. Juneau's interpretation. GODFREY: I think the Court knows we filed a notice . I think that would be the effect Basically you're asking me to enjoin myself. MR. first in front of Mr. Your Honor. which is Record Document 8812.

the status quo is that awards for large amounts of money to people who had suffered no loss whatsoever -THE COURT: MR. GODFREY: I know that. THE COURT: MR. And it seems to me the fundamental issue -. Yes. I want to understand: How is it that you think -. 2013? . MR.15 09:50:01 09:50:04 09:50:07 09:50:11 09:50:17 09:50:20 09:50:21 09:50:23 09:50:26 09:50:26 09:50:28 09:50:31 09:50:33 09:50:38 09:50:45 09:50:49 09:50:52 09:50:55 09:50:59 09:51:02 09:51:06 09:51:10 09:51:13 09:51:20 09:51:28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of appeal. as I see it. they suffered no loss. According to -Not according to the parties who made the on file.or BP believes that I can enjoin a claims administrator from obeying and following an explicit order of the Court dated March 5th. The whole point here. this is not like we're litigating individual claims. THE COURT: The problem with that argument. and that's what the settlement is intended to avoid. Yesterday. GODFREY: THE COURT: claim. GODFREY: Well. then they've sustained a loss. And as we've outlined in our papers. is whether someone has sustained a loss is defined by the agreement. or whether I think. according to you. And if the plain terms of the agreement says someone has -. whether you think they sustained a loss in some real sense or other sense. two weeks ago.passes the causation test and has sustained a loss.and I don't want to get too far into the underlying merits today because I don't think we need to go there. according to the expert declarations What they're getting -Well. as I'd indicated in chambers.

-. BP filed an appeal from my March 5th order. and now you've asked me to stay my ruling based on your appeal. Your Honor.you're trying to get this issue to the Fifth Circuit. and I explained in chambers when we went in chambers that it was a belt-and-suspenders based on some guidance that Fifth Circuit precedent had provided. MR. But it's all related because it's essentially the same test that you would have to -. yesterday you finally.it's all the same thing. it's quite obvious -. So we're back -- you know. and I'll just cover them in the order in which we filed them. THE COURT: Seems like this whole exercise is a belt-and-suspenders operation. I have no idea. after 30 days. and whether you have a right to do that or not and whether they'll review it or not. GODFREY: THE COURT: Not quite. We're back to my fundamental .you know. That's not for me to decide. As to the preliminary injunction motions themselves -and you're correct that they are seeking identical relief. That's the second issue. GODFREY: THE COURT: That is the second issue. But I am trying to understand. it's essentially an injunction so -MR. MR. Well.16 09:51:30 09:51:33 09:51:36 09:51:39 09:51:42 09:51:45 09:51:48 09:51:49 09:51:53 09:51:54 09:51:55 09:51:58 09:52:03 09:52:06 09:52:09 09:52:10 09:52:14 09:52:20 09:52:27 09:52:28 09:52:30 09:52:34 09:52:39 09:52:40 09:52:42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR.there's no subtlety here -. what you're really trying to do. this is all circular here. GODFREY: There are two separate bases. you know. GODFREY: THE COURT: Yes. Your Honor.

and it is typical.17 09:52:49 09:52:52 09:52:55 09:53:01 09:53:05 09:53:09 09:53:11 09:53:12 09:53:14 09:53:16 09:53:19 09:53:23 09:53:23 09:53:26 09:53:30 09:53:30 09:53:33 09:53:36 09:53:38 09:53:42 09:53:44 09:53:47 09:53:48 09:53:51 09:53:55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 problem with what you're doing here. This is a typical proceeding -If I enjoin Mr. a Court rules and a party disagrees with a ruling. it is entitled to seek a preliminary injunction if there is a substantial likelihood of success on the merits that raises a serious question of law according to the Janus case in the Fifth Circuit. right? MR. Juneau. then he is in contempt of my Court order which says he's got to -MR. And then if I sanction him for that. that is an independent basis. GODFREY: THE COURT: No. what we have done. then you're asking me to enjoin myself -MR. GODFREY: THE COURT: MR. As to the stay motion. and that is you're either asking me one of two things: This is either a third motion for me to consider this. Or if you're not asking me to reconsider and change my mind. are not asking for that.by enjoining Mr. which it essentially is. Juneau. GODFREY: THE COURT: BP would have to pay. Your Honor. second motion for reconsideration. GODFREY: But Your Honor fully understands that we What we're doing is we're asking for when No. it is routine in this country in every circuit of this country -That is . I think I think you would to have indemnify him. That's what you're really asking me to do. -.

GODFREY: Wait. I don't know why we're going through all these other machinations. But if you believe you have a right to appeal. But that's what not we're here You filed that yesterday. Now. Reconsider what? But The underlying merits of the dispute.1. I know that. this. how it works. you can take that up with the Circuit. MR. we have asked for a stay and an It's a pretty simple straightforward way to approach injunction pending appeal. we would embrace that. and here what we were seeking to do is preserve the status quo. certainly. GODFREY: Reconsider what? If you were willing to reconsider. you can take that to the Circuit. GODFREY: Appeal the night before. THE COURT: on this morning. and I'll decide whether to stay it or not. And then you can ask me to stay my And then if I That's order. GODFREY: Well. you know. That's correct. decide not to stay it. you have a right -. But we did not see Your Honor as likely to -THE COURT: MR.18 09:53:55 09:53:56 09:53:58 09:54:01 09:54:05 09:54:10 09:54:12 09:54:13 09:54:16 09:54:16 09:54:22 09:54:23 09:54:24 09:54:27 09:54:29 09:54:30 09:54:32 09:54:35 09:54:38 09:54:39 09:54:42 09:54:44 09:54:47 09:54:49 09:54:49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: Oh. THE COURT: MR. I'm not going to say you have a right to appeal because I don't know. we filed the Notice of MR.well. we did not see Your Honor as likely -THE COURT: That would be a second Motion For . if Your Honor were willing to reconsider it under Rule 62.

THE COURT: MR. but we understood that Your Honor obviously had other commitments including the trial in this case. and we do not see that as likely for Your Honor -THE COURT: And then you have a tough hurdle there because you have to show the law has changed. Your Honor. it was with the hope. So we narrowly filed this and drafted this based upon our reading that we would be seeking a preliminary injunction. MR. MR. Your Honor. You did. you have to have not been able to make arguments that you're making now.you know. And I'm not complaining about I gave you a pretty expedited hearing . MR. Your Honor. I indicated in chambers we would probably be filing a notice of appeal.19 09:54:50 09:54:50 09:54:50 09:54:51 09:54:53 09:54:56 09:54:59 09:55:02 09:55:02 09:55:04 09:55:07 09:55:07 09:55:08 09:55:11 09:55:14 09:55:18 09:55:20 09:55:23 09:55:26 09:55:29 09:55:31 09:55:32 09:55:35 09:55:35 09:55:36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Reconsideration. GODFREY: that. But we are now here before -THE COURT: considering. it would. suggestion about reconsideration. When we sat down for this on emergency hearing. and in addition we -. that we would be able to have this heard before that. which I was responding to Your Honor's And I don't think you can get there under that is why we did not ask that. GODFREY: Well. I understand that. GODFREY: Yes. GODFREY: Okay. hurdle. the evidence has changed.

that may be a dis -. if the Court of Appeals affirms MR. irreparable injury.asking a different -.20 09:55:37 09:55:40 09:55:43 09:55:45 09:55:50 09:55:50 09:55:52 09:55:55 09:55:59 09:56:03 09:56:06 09:56:09 09:56:09 09:56:12 09:56:13 09:56:17 09:56:24 09:56:32 09:56:37 09:56:42 09:56:44 09:56:52 09:56:58 09:57:00 09:57:02 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 yourself..that is a disagreement. But we are following Fifth Circuit guidance that suggests . THE COURT: MR. I'm going into a seventh week of a trial that you're involved in -. then it is not a breach of contract and we recognize that. how can a claims administrator be in breach of his contract if all he is doing is applying it as he believes it should be applied and now as ordered by the Court? How can that possibly be a breach of contract? Ultimately. GODFREY: All right. I am across the street every day so I am fully cognizant of that. These are not losses whatsoever. So Your Honor's indicated you don't want to discuss the merits on that this morning. GODFREY: Yes. the claims administrator is correct. GODFREY: the March 5th order that claims interpretation adopted by the claims administrator and affirmed by this Court that BP is wrong on that. obviously. THE COURT: Well.. and we do not agree that there are losses as calculated by the agreement. THE COURT: I mean.maybe the same question in a different way: As a matter of law. But getting back -. But we are not asking you to enjoin What we are asking to is to enjoin the continued We've laid out the implementation of the BEL policy decisions. I am aware of that.or your client's involved in. Your Honor. MR. so.

papers in response. MR. We disagree with the decision respectfully. then that is the decision which will govern the claims administrator and BP as well. I know Your Honor has considered the merits. We think it That's why We think it awards people who have no But you're entirely correct. I know I've interrupted you a great deal. I would like to ask the question about common ground. finds that it had recorded things wrong. Go ahead.21 09:57:05 09:57:11 09:57:14 09:57:16 09:57:19 09:57:25 09:57:29 09:57:33 09:57:36 09:57:39 09:57:43 09:57:47 09:57:48 09:57:50 09:57:55 09:57:57 09:58:00 09:58:02 09:58:06 09:58:09 09:58:14 09:58:15 09:58:20 09:58:24 09:58:27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that when you are seeking to enforce your rights under a settlement agreement. finds errors. I can't quarrel And we've indicated that in our with the question you've asked. for judges to be able to interrupt lawyers. that in terms of the BEL policy decisions. But you are entirely correct that if the March 5th order is the final word. losses. either by the Court of Appeals or by this Court. rewrites the contract. but I think. this is a procedure that you should follow. makes cumulative errors dated December 31st relating to the earlier . we need to understand what is actually happening in the bowels of the administration. I said it was a belt-and-suspenders. GODFREY: Your Honor. I actually embrace that because it helps to frame the issue. THE COURT: All right. Your Honor. But that's what oral argument is for. in fairness to the Court. Assume that a business claimant prepares monthly financials that at year-end makes cumulative changes to those financials.

22 09:58:32 09:58:35 09:58:38 09:58:42 09:58:47 09:58:50 09:58:55 09:58:58 09:59:01 09:59:02 09:59:07 09:59:11 09:59:18 09:59:24 09:59:31 09:59:35 09:59:43 09:59:46 09:59:49 09:59:54 09:59:58 10:00:03 10:00:08 10:00:11 10:00:16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 periods. that is the monthly financials as corrected at year-end. Happens every day. if you use the wrong data. What financial information The should be used to calculate compensation under this agreement? correct monthly financials. claim in this settlement. That's what the declarations before the Courts reflect. Nothing wrong about that. . even when claimants point out that it's inaccurate. because that's what they're required to do. On page 26 and 27 of our brief. we outline two specific examples of simple recordation errors where even under the interpretation adopted by the claims administrator. which everyone now knows what those should be. have examples of erroneously recorded data that were corrected at quarter or year-end. the Finch declaration. examples of negative revenue that were corrected at year-end. It's not a random event. they are using the incorrect data from the monthly financials as recorded. or the monthly financials as prepared originally and as written down. which we now know contained inaccurate. But the administration's interpretation is whatever is recorded at the time is used now. So in our declarations we have We have We examples of overbilling that were corrected at year-end. the Crider declaration. erroneous and even false information? Under the BEL policy decisions at issue. Time passes and now that business claimant seeks to make a claim. significant examples of Hall declaration. you get the wrong result.

in fact. What you're talking about is not where somebody made mistakes and went back and corrected. GODFREY: THE COURT: We've never said the word "smooth.and. I know you use a fancy accounting term." I know you didn't use the word "smoothing. I am not saying. you may have a different term.somehow you want to match expenses.23 10:00:18 10:00:20 10:00:23 10:00:26 10:00:28 10:00:31 10:00:35 10:00:43 10:00:46 10:00:49 10:00:54 10:00:55 10:00:56 10:01:01 10:01:03 10:01:03 10:01:06 10:01:09 10:01:12 10:01:16 10:01:21 10:01:24 10:01:29 10:01:33 10:01:38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: That's not what we're talking about. It's a larger issue than You're talking about a -. when But I am not you're talking about tens of thousands of cases. and that's the only way I can understand it. match revenues -. Godfrey. but -. It was kind of a moving target. talking about the outliers.what this is at bottom is a disagreement over whether revenues -. GODFREY: THE COURT: No. MR.I've been dealing with this for months. that's -. somehow you have a theory or a formula -. but I am calling it you want a smooth revenues and match expenses to revenues. Well. as I recall when we met with you all." You want to smooth out revenues and I mean. that.I am going to call it this. You may have found some cases like that. But you want to take. correct? MR. but that's the effect of it. you know. Mr. you couldn't explain how this would work under BP's proposal. somehow take expenses that were incurred in different periods and bring them up and apply it to .and I'm not sure what it is because I think it's changed several times.

So why don't you tell me -. exactly. So you don't want to use cash accounting -. that's somewhere in between there. but you're not really using accrual accounting. IRS accepts it. You use cash accounting. GODFREY: agreement. I'm not talking about when I'm talking about here's the way they keep the books. people made mistakes. So there's some animal.24 10:01:42 10:01:47 10:01:51 10:01:51 10:01:53 10:01:54 10:01:56 10:02:00 10:02:04 10:02:08 10:02:13 10:02:16 10:02:21 10:02:26 10:02:30 10:02:35 10:02:36 10:02:39 10:02:44 10:02:47 10:02:49 10:02:51 10:02:55 10:02:58 10:03:02 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 when the revenue is received under -. and that. here's the way expenses were incurred or paid. as you say. which of course a lot of businesses. including me when I was in business. I call it smoothing and But that's some amorphous standard is what I I know you don't agree with that. Your Honor. perfectly legal. is not required by the agreement. you don't want to rely strictly on cash accounting and you don't want to adopt pure accrual or have everybody would have to convert to accrual accounting. I don't know what you call it. Right. use. but envision you're proposing. here's the way revenues were received. THE COURT: accounting. I am going to call it. are you? MR. how would you propose to do it? . matching or whatever. that's the way I am viewing it. particularly small businesses. So it's not accrual Accrual accounting is not required by the You don't want to use strict cash accounting.I'm not talking about people that made mistakes and have to correct.would be somewhat similar to accrual accounting.I mean.

but you admit it does not. THE COURT: That's assuming that the agreement called for some standardized. in some other sense. it means something else." mean what the treatises. MR. revenue does not equal cash received and recorded in a month. Your Honor. No. That's a specialized definition that is unknowing to the profession and it leads to absurd results." then that's how you calculate it and that's a loss. economists and financial professionals. That's the way I'm looking at it. But if the program.25 10:03:07 10:03:09 10:03:11 10:03:15 10:03:18 10:03:21 10:03:25 10:03:29 10:03:33 10:03:37 10:03:42 10:03:46 10:03:50 10:03:53 10:03:55 10:03:58 10:04:02 10:04:03 10:04:08 10:04:15 10:04:20 10:04:25 10:04:28 10:04:33 10:04:33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. then it's not defined in the agreement that way. the 19 of them that we've put before the Court. "Do not confuse cash If the suggestion is that revenue does not receipts with revenue. It doesn't matter if you would consider it a loss in some other world. to me. lost profits -THE COURT: The results are only absurd if -. MR." Those terms are well understood Monthly by accountants. GODFREY: Your Honor. . GODFREY: accrual accounting. it does not depend upon The treatises all say. GODFREY: Let me simplify it. the expert declarations mean.in your You cannot calculate view because you don't agree with how the outcome is coming out and the way it's being interpreted. generally accepted accounting methodology such as accrual accounting. "This is how you calculate it. the language of the contract says. "Sum the monthly revenues over the period and subtract the corresponding variable expenses. if the agreement says.

Carroll. the claims administrator.have well-recognized and understood definitions.these accounting issues.and the stated purpose of the agreement is to determine lost profits. profits -. The only way you They're can determine lost profits is by recording those terms. And so there are accountants who apparently. He has a is not. or deals with these accounting issues. THE COURT: Well. What the claims administrator has done is adopt unique definitions that are not only rejected by the professions. just like lawyers. This Court found a finding of this Court that the program and the settlement adopts standardized.26 10:04:35 10:04:36 10:04:41 10:04:45 10:04:51 10:04:59 10:05:04 10:05:04 10:05:08 10:05:11 10:05:15 10:05:17 10:05:21 10:05:25 10:05:29 10:05:33 10:05:37 10:05:39 10:05:47 10:06:00 10:06:11 10:06:16 10:06:26 10:06:32 10:06:36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: MR. amazingly enough. And. The terms used in the contract. Mr. there's a declaration of Mr. who I am not sure if he is in Mr. The only way you can determine -. which was standard. for example. staff of accountants who works with him and apparently he relies on and has relied on in how he applies this -. expenses.revenue. you know. well recognized lost profit methodologies. corresponding. well-recognized lost profit methodologies. recognized and well understood definitions. Juneau's office or not. is not there by himself in his office. but just for . comparable. Juneau. but cannot possibly meet the stated terms of the contract or satisfy what the Court found in its findings as the parties presented to it. GODFREY: Okay. the five key terms -. you know. accountants sometimes disagree.

depending upon the industry. Your Honor. That's obvious that that occurs. raised or pointed out to the Court as a problem when we had our . as I recall. should have been anticipated. am a little bit -THE COURT: These claims were being -. this was -. So I have to assume that that is something that was known or should have been known. But. there's also something in this record where that this was or should have -. GODFREY: We didn't. another question. it shouldn't make a difference.the fact that you would have businesses. And this was well-known. you know. there's a declaration in here somewhere where that was pointed out while the settlement was being finalized. And secondly. and nothing was changed in the settlement agreement apparently.there was sampling This wasn't done. but that. disagrees with what you just said. there were claims being paid since last summer. how is it that BP just came to the So that's realization late last year that this was a problem? MR. certain businesses or professions that would have swings of revenues and expenses up and down from month to month or year to year is not something that would just suddenly be recognized by BP. It's not as obvious as what you just said. that this is something that you all might want to look at. If revenue is properly defined or I expenses are properly defined.in fact.27 10:06:41 10:06:53 10:06:56 10:07:01 10:07:07 10:07:12 10:07:15 10:07:20 10:07:26 10:07:32 10:07:37 10:07:41 10:07:47 10:07:47 10:07:50 10:07:54 10:07:58 10:08:01 10:08:03 10:08:06 10:08:09 10:08:13 10:08:14 10:08:19 10:08:24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 example. shouldn't make a difference. The agreement has a standardized methodology where.

20 minutes. The failure to adjust or correct for that is a direct result of the wooden adherence to the notion whatever is recorded at the time is used at the time even though we know that the data is incorrect. THE COURT: disagree with that. but I -THE COURT: MR. well. not test anything other than assume the data is correct.28 10:08:27 10:08:32 10:08:33 10:08:35 10:08:39 10:08:43 10:08:47 10:08:50 10:08:51 10:08:52 10:08:56 10:09:00 10:09:01 10:09:03 10:09:07 10:09:13 10:09:17 10:09:21 10:09:25 10:09:28 10:09:33 10:09:35 10:09:39 10:09:43 10:09:46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 final fairness hearing in November. and it just became a problem in December apparently. Point one. So that's not an outlier. common occurrence Those aren't outliers. more than my Well. there are other declarations that corrections are not outliers. MR. That is a common. Roman Weil. and get the same result. Crider's declaration. paragraphs 89 through 93. GODFREY: number of your points. run it through the systems. that's a common occurrence. Your Honor. and we submitted his declaration. the example of the But. Godfrey" -And you would say. as Mr. he points out that the interpretation that leads to this doesn't produce a variable profit analysis. GODFREY: I've given you a little extra time. Number two: The leading accounting professor in this country. Your Honor. in the construction industry in particular. MR. . Thank you. let me try to respond to a I've taken up. I think. "Mr. GODFREY: We did not recognize what was taking place The tests that took place in July did in the facility. Your Honor.

Fair enough. MR. THE COURT: MR. it was the most profitable year by almost . but we've had similar declarations before. but the expenses and the revenue match because of the nature of their business. isn't some unique or bizarre or unknown definition.or he has some very general statements. Read all about Problem is in 2010. it. or where they're an accrual basis or cash basis taxpayer. One of the examples in the plaintiff's brief used this week. given a lot of press. was the alligator farm. but I doubt you want it. it's a proper lost profits calculation. but he doesn't get grand to understand exactly what's going on. GODFREY: raise the issue. GODFREY: Is that one of the new declarations that you No. Carroll doesn't give grand -. But you go back to what was This I was going to say. to determine lost profits. and we can file something about that if the Court wanted. THE COURT: tell you that. GODFREY: Or not even another page of brief. I'm hesitant to even I don't want any more declarations. that was a prior declaration. The terms here understandably lead to either an absurd result where people are getting money that has nothing to do with the profits they made based on net cash flow differences. I can the purpose of the agreement. Mr.29 10:09:46 10:09:48 10:09:48 10:09:51 10:09:52 10:09:55 10:09:59 10:10:01 10:10:05 10:10:05 10:10:05 10:10:05 10:10:07 10:10:09 10:10:12 10:10:16 10:10:21 10:10:26 10:10:28 10:10:34 10:10:38 10:10:41 10:10:43 10:10:47 10:10:51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: submitted? MR.

THE COURT: MR. GODFREY: It's a different issue. and that may not be fair to ask you about -MR.he is being disqualified because he doesn't process seafood. which is not what the agreement provided. remember the test is a revenue . Your Honor. and he's shown with his little BP sticker on his chef's vest -MR.and now he's saying he's not -. but based upon the difference of differential cash flows.but it said he was denied. not based upon the difference between revenue and corresponding variable expenses in the two periods. all I know is what I read in the media. No. Well. MR. Is BP seriously saying he's not a seafood processor and not eligible for an award. which doesn't make a lot of sense to most people down here. GODFREY: causation test. number two. number one.30 10:10:56 10:11:00 10:11:04 10:11:08 10:11:12 10:11:17 10:11:20 10:11:22 10:11:25 10:11:30 10:11:32 10:11:34 10:11:37 10:11:40 10:11:40 10:11:43 10:11:45 10:11:45 10:11:48 10:11:51 10:11:55 10:11:57 10:11:59 10:12:00 10:12:03 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 five times in its history. THE COURT: Well. and it's a location of headquarters issue. THE COURT: seafood processor. as I understand it. year. GODFREY: THE COURT: What about Chef Folse? That's a different issue. GODFREY: THE COURT: There were some --. 2011 was the second most profitable And yet it gets an award for alleged lost profit. or is it a BEL issue? MR. I'm just talking about why he is not a That sounds strange to me. GODFREY: THE COURT: I understand what --. It's a causation passing issue.

. It's a fundamentally unfair proposition. Let me be I'm caught between the sword and the shield There's a lot of of confidentiality here. the Rule 408 stuff. So I don't know all of the answers. as the Court knows. GODFREY: I think people can -- I read the declaration of his attorney. Well. I imagine. I think. and I am bound by the confidentiality provisions but my colleagues to the left are not. I think I can say that he has designated himself on tax returns something different than what he claims to be now. The same with the facility. it seems to be a little bit unfair to have a confidential process where the claims information is submitted confidentially and then stuff is spread of record selectively. I think I can say that there's a question about where his headquarters is located. of the Court in terms of 408 and other things.31 10:12:05 10:12:09 10:12:12 10:12:15 10:12:18 10:12:20 10:12:25 10:12:26 10:12:28 10:12:31 10:12:32 10:12:35 10:12:37 10:12:40 10:12:43 10:12:47 10:12:49 10:12:51 10:12:54 10:12:57 10:13:00 10:13:04 10:13:06 10:13:09 10:13:12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. But in terms of what the issue is. I don't know that they spread that to the -- THE COURT: Chef Folse. and I spent time on the alligator farm claim this week. GODFREY: blunt about something. I have to think about it. GODFREY: They put the affidavit in before the Court. which determines about whether or not he can pass the causation test. THE COURT: MR. stuff I could tell the Court about negotiations otherwise that are quite different than the presentation being made. But I am bound by the Rules. on that claim. I am not an expert I'm a data-driven person. MR. I think I can say this about the chef. spread that.

pretty simple. GODFREY: I appreciate the Court's time. Your Honor. Mr. and I'm not going to spend a whole lot of time on that. STANLEY: All right. I would ask that the Court enter the injunction. And I appreciate the Court's time. for what I hope is a cameo appearance in this matter. Godfrey correctly. that if there is a possible claim for relief. we don't believe that BP has alleged facts to support a claim for relief in this Court.or. reversed this Court's March 5th ruling that there would be a misinterpretation to the settlement agreement. Juneau was sued before any appeal was lodged. MR. that judicial immunity would apply. First. 2013. if I heard Mr. Stanley. here for Pat Juneau and for the settlement program. Let me first talk about the Motion to Dismiss. he stated that it wouldn't be until the Fifth Circuit affirmed -. rather. THE COURT: MR. Our position is First. And second. THE COURT: But you're not arguing the Court doesn't have -.I wouldn't have jurisdiction or authority to enjoin him or if I found he was wrongly interpreting or applying the contract? .32 10:13:14 10:13:17 10:13:20 10:13:22 10:13:24 10:13:26 10:13:37 10:13:39 10:13:43 10:13:47 10:13:51 10:13:55 10:14:00 10:14:04 10:14:06 10:14:10 10:14:14 10:14:18 10:14:21 10:14:25 10:14:28 10:14:33 10:14:39 10:14:41 10:14:47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: I need to give the other side a chance to respond because I have a time limit to get out of here today. Juneau was Mr. The problem is that Mr. and I believe that the argument I just heard confirms that. fictitious awards are being awarded. not a party to anything on March 5th. Good morning. Rick Stanley Thank you very much.

We don't think those facts support a claim for a breach of any contract. There is no doubt that as he grants some claims and denies others. essentially. If there is a precedent that the thing to do is to file a complaint against Mr. But second. he is simply accused of following the ultimate process that was provided for in the settlement agreement and the ultimate order of this Court. directs. with respect to who is right. And here is why we think that matters: Mr. STANLEY: No. someone is going to be displeased. Juneau and just sue him every time someone disagrees with a determination that he makes of eligibility or something else. Juneau will faithfully follow this Court's directive. And I think the immunity doctrines that we have pointed out in our briefs fully support the fact that Mr. In fact. sir. Mr. Juneau is immune from those claims because the authority he is . I am here to say that whatever He doesn't take a position Whatever this Court this Court decides. who is wrong. Juneau is engaged in quasi judicial functions trying to administer this settlement agreement.33 10:14:53 10:14:54 10:14:58 10:15:03 10:15:07 10:15:12 10:15:15 10:15:18 10:15:22 10:15:27 10:15:30 10:15:33 10:15:36 10:15:40 10:15:46 10:15:51 10:15:55 10:15:58 10:16:03 10:16:07 10:16:11 10:16:16 10:16:21 10:16:26 10:16:29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. it's as Your Honor pointed out. Mr. But we don't think that a complaint and injunction was the appropriate way to proceed. Juneau will do. we're also asking for it to be dismissed on the grounds of immunity. and we don't believe the facts that have been alleged allege a claim for relief because. I am suggesting that the complaint is unnecessary. then we have just created an entire new set of litigation against the claims administrator that I don't think has any place anywhere.

MR. handle disputes in the first instance about the agreement to . there's no judicial immunity for prospective injunctive relief. STANLEY: We don't. STANLEY: incorrect. And what we have argued by We don't have a Bivens action here or a 1983 analogy is that the doctrine of judicial immunity which protects decision makers like Mr. We looked. as we pointed out in our reply brief. Hypothetically. THE COURT: action. As the law stands today in Bivens actions and in 1983 actions. the authority they have for saying that prospective injunctive relief is not available was a Supreme Court case that was legislatively overruled in the context of 1983 actions.let's see how I I guess the other side argues that he is not immune because he is just performing a ministerial administrative function. interpret the agreement when disputes arise. he is not really exercising a judicial function -.quasi judicial function. should apply in this case. We But we think that the functions that he is being asked to perform. decide whether someone is eligible or not eligible for a claim. MR. We think both of those points are We think. Your Honor. THE COURT: can put this. And beyond that.34 10:16:33 10:16:37 10:16:43 10:16:52 10:16:56 10:17:01 10:17:09 10:17:14 10:17:17 10:17:20 10:17:24 10:17:28 10:17:33 10:17:38 10:17:39 10:17:42 10:17:43 10:17:45 10:17:50 10:17:55 10:17:59 10:18:04 10:18:08 10:18:14 10:18:18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 acting under is derived from the order of this Court. whether it be a trustee or receiver or anybody of the sort. state eligibility for claims. if he was -. injunctive relief is barred by judicial immunity. can't find a case directly on point. Juneau.

We think the function he is performing would entitle him to immunity from the suit. I am going to start and finish by saying that he is absolutely subject to your authority at all times.35 10:18:23 10:18:29 10:18:29 10:18:32 10:18:35 10:18:41 10:18:41 10:18:44 10:18:48 10:18:52 10:18:55 10:18:59 10:19:03 10:19:04 10:19:07 10:19:11 10:19:17 10:19:22 10:19:26 10:19:31 10:19:35 10:19:42 10:19:43 10:19:47 10:19:50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 see if some kind of accommodation can be reached. he could be held in contempt. those are all quasi judicial. The Courts would grind to a halt if all of those claims had to be processed through a Court. Juneau to adjudicate complicated claims. the thing to do when your claims process isn't working the way you wanted it to is to sue the claims administrator to get the Court to intervene. we think is the wrong way to go. And so that's our position on the motion to dismiss. Juneau wants to do is what this Court directs him to do. and I will begin and end this argument also by saying all Mr. he could be dismissed. do think it matters as a matter of policy. gee. So to have a precedent that. Let me move quickly to the response to the preliminary injunction. We There are MDLs all over the country that have to use people like Mr. If he deviates from what this Court orders him to do.000 plus claims here. whether it be the one party to the agreement or another party to the agreement or a disappointed claimant. We have 150. but I don't think the remedy is for someone to sue him. Whether you call him a special master or don't call him a special master. we don't think is here or there. .

There are two procedural points. we think that the record belies that claim. that BP claims it had no input on Mr. First of all. repeated a couple of times in the brief. even though we all know. How are you booking these revenues? What are you doing with cash basis folks?" On October 2nd there was a conference call . looking at it. And both parties said. record Mr. "We We understand that's going to happen in this And so that was asked to BP in a specific settlement agreement." hypothetical and a specific response was given. He just wants to do his job as claims administrator. that it's not caused by the spill?" understand that.36 10:19:54 10:19:57 10:20:01 10:20:05 10:20:09 10:20:12 10:20:16 10:20:22 10:20:24 10:20:29 10:20:32 10:20:35 10:20:40 10:20:45 10:20:49 10:20:53 10:20:57 10:21:03 10:21:07 10:21:09 10:21:14 10:21:17 10:21:22 10:21:25 10:21:28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 He wants to interpret this and move this process forward according to the settlement agreement.Mike Juneau sent a hypothetical to both parties saying. Juneau -. On September 28th. "We want to understand how you accountants are looking at these claims. There is a contention That is and I want to be sure the record is clear. He really has no position about the wisdom of the settlement agreement or how it came to be. He did not draft it. "Do you understand that there are instances under the way this settlement program is going to be applied where you could have causation met. There was a blind test of 62 blinded claims in the On September 25th we put in the summer to see how they came out. He did not participate in the negotiation of it. BP sent four questions over saying. Your Honor. Juneau's decision. The only points that I really want to address for the Court are procedural in nature.

37 10:21:33 10:21:38 10:21:40 10:21:46 10:21:50 10:21:55 10:22:00 10:22:06 10:22:11 10:22:12 10:22:15 10:22:16 10:22:17 10:22:20 10:22:23 10:22:24 10:22:26 10:22:28 10:22:31 10:22:35 10:22:39 10:22:42 10:22:47 10:22:52 10:22:56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 to address those claims. In fact.appointed by the Court. feel that there is an erroneous determination. 70 of those have been appealed. And they have all of the information that they could want to decide whether to appeal those eligibility determinations. the first time that process was suggested by BP. and then there's a Actually. It was the first time we understood or were told exactly how they were reading the agreement and what they thought that agreement called for in terms of process. BP's questions were In terms of the right of review. both sides are And if they entitled to look at that and appeal his determination. STANLEY: There is a review. STANLEY: THE COURT: Correct. Juneau's office issues a certificate of eligibility. STANLEY: THE COURT: MR. 2013. with respect to the process that's being suggested. was January 8th. answered. At that point. they can argue that to this Court and bring that claim up. And within . -. so they do have input. that four-step process. Right. of the 201 claims listed in Exhibit B to their brief by our count. THE COURT: appeal panel -MR. I think they'd appeal first to an discretionary appeal to the Court. BP participated. MR. Mr. And we also want to point out to the Court that.

STANLEY: That is correct. Your Honor. didn't issue this policy announcement solely on his own. and issued his policy announcement. Mr. the policy Am I correct announcement uses the word "error. Juneau made his policy announcement and then. that is. THE COURT: MR. everything proceeded from there." and if there is an error and it's identified. And in fact. STANLEY: You're absolutely correct. without consulting with people that work for him. there is some implication That's that the claims administrator used some unusual process in this instance and did not follow the pattern that existed for other . they will ask the claimant to correct it. THE COURT: Am I correct that Mr. Also. In fact. BP's response on January 8th. the policy that they use. as Your Honor is familiar. considered all of it. STANLEY: Okay. I'm assuming? MR. the claims program or claims administrator will ask people to correct misinformation in the financials? about that? MR. made a statement in there that there are three instances where they would look at information and ask the claimant to correct it if they thought there was an error. THE COURT: So there are instances where. No. he met with his team.38 10:22:59 10:23:04 10:23:07 10:23:15 10:23:19 10:23:23 10:23:23 10:23:26 10:23:31 10:23:35 10:23:39 10:23:43 10:23:46 10:23:47 10:23:49 10:23:56 10:24:04 10:24:04 10:24:06 10:24:09 10:24:13 10:24:14 10:24:15 10:24:19 10:24:24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 one week. he had the position paper of the PSC from December 16th. under some circumstances. Juneau didn't make this policy.

Juneau even had until responding to the preliminary injunction motion in this matter. And then finally. frankly. and that was pointed out to both sides. Juneau thought it was fairly clear what the agreement said and how to do it. Herman. Thank you. which is why this didn't -. So Mr. the question came from one of the parties to the settlement agreement. We don't believe that's the case. Steve Herman for the I have a short presentation. Mr. memorandum where the program accountants were asked to review the settlement agreement in advance and alerted both sides to the fact that using a short time period to assess compensation might lead to a matching problem between revenues and expenses. . Juneau didn't have the question.39 10:24:28 10:24:32 10:24:37 10:24:42 10:24:45 10:24:48 10:24:54 10:24:57 10:25:01 10:25:03 10:25:08 10:25:09 10:25:12 10:25:15 10:25:19 10:25:24 10:25:29 10:25:34 10:25:38 10:25:43 10:25:45 10:25:49 10:25:53 10:25:58 10:26:01 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 policy interpretations. the settlement program accountants and Mr. that the question was put forward. that there is an April 4. The claims administrator simply did not have a question about the way these claims were being viewed because. It was only after BP raised the question about do you think you're doing it the right way.wasn't initiated in the first instance from Mr. THE COURT: MR. Juneau. Your Honor alluded to the fact that. That was not a memorandum Mr. Your Honor. Thank you very much. I'll sit down. 2012. which I think I am going to Provided a make a lot shorter in light of the Court's comments. Unless Your Honor has any questions. HERMAN: class. All right. as we discovered as preparing for this hearing.

It occurs to me that BP sued the claims Don't even know what that They're administrator claiming ultra vires. it was known to all of the parties that ." And I thought Mr. Very quickly. Mr. Godfrey says -. but there is one thing I do want to address very quickly. so I won't belabor the points. the whole reason we're here today is to go to the Fifth Circuit. As I think Your Honor noted. And I would submit that if anybody is ultra vires of the Settlement Agreement it's BP. about the third bullet point from the bottom because this is something Mr. Had to look it up in Black's Law Dictionary.I think he was talking about the gator farm. Judge Carl Barbier presiding.40 10:26:05 10:26:09 10:26:16 10:26:19 10:26:23 10:26:26 10:26:29 10:26:33 10:26:36 10:26:40 10:26:43 10:26:45 10:26:49 10:26:53 10:26:58 10:27:02 10:27:03 10:27:06 10:27:10 10:27:14 10:27:18 10:27:21 10:27:24 10:27:28 10:27:30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 couple of copies to Ben and copies to all counsel. Well. A lot of these claims And that they are now attacking are based on annual revenue. Godfrey said Your Honor and Your Honor alone. saying he's trying to do something the Settlement Agreement doesn't allow. Well. "The Court shall mean the United States Which District Court for the Eastern District of Louisiana. there is a process for issues of disagreements that can't be unanimously resolved by the claims administration will be referred to the Court for resolution. but as Your Honor pointed out. Court? This Court. Godfrey touched upon. their annual profit in 2010 is greater than it was in the past. means. not the claims administrator. Your Honor has seen a lot of this before. BP -First of all.

Correct? MR. Yes. And this really had a very easy fix. but as a secondary test. that's one of the main arguments that they use. And some of the examples that I know -. MR. sir. Your Honor. THE COURT: MR. largely fall within three industries or the three categories. that's why you focused on a three-month period. and construction. HERMAN: THE COURT: Goes all the way to Arkansas -- Let me ask you this. never suggested by BP. according to what I've understood and the number of times we've dealt with this issue. I don't know necessarily would have agreed to it. agriculture. which would be attorneys. this is a blown up Louisiana. "Why don't we say you have the causation test. but a number of the examples they cite are. . we're just going to say that doesn't pass causation. And those are: Professional services. if your annual revenue is bigger in 2010 by some margin than it was in the past. and Alabama." That's nowhere in the document. Are the vast majority of the claims that are at issue -. like.I know. engineers. so forth. professional services. but BP never even suggested.I am not suggesting all of them by any means. Mississippi. HERMAN: Right. in these claims that they're attacking. way up by the Arkansas border. Just very briefly. was never discussed.41 10:27:33 10:27:38 10:27:42 10:27:47 10:27:51 10:27:54 10:27:59 10:28:02 10:28:06 10:28:09 10:28:12 10:28:17 10:28:20 10:28:22 10:28:24 10:28:29 10:28:35 10:28:38 10:28:41 10:28:48 10:28:48 10:28:49 10:28:52 10:28:55 10:28:59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that might happen. HERMAN: THE COURT: Correct. But now.

and there was a lot of thought to we need to make sure that construction companies. HERMAN: Correct. in the class. it's kind of I initially thought it was just limited to those They seem to be suggesting at certain points in But the time that it should apply to everyone across the board.these types of industries be excluded from the agreement or that they operate under a different framework. Your Honor. an intentional decision by BP to put them in the class and include them in the settlement as opposed to real estate developers. And there was a lot of discussion about construction companies in particular because real estate developers were excluded. both parties intended and did put the entire states of Louisiana. And now they have your final judgment which gives them a class-wide release for this entire area. three industries. general contractors. but they're . HERMAN: a moving target. I didn't have time to specifically correctly delineate the zones that have presumptions in them. and Alabama in the settlement. subcontractors are included. MR. reason I backed up to the previous thing is they never suggested that these three types of services -. as Your Honor mentioned.42 10:29:00 10:29:04 10:29:08 10:29:11 10:29:14 10:29:17 10:29:21 10:29:24 10:29:28 10:29:33 10:29:35 10:29:36 10:29:37 10:29:40 10:29:43 10:29:46 10:29:50 10:29:54 10:29:54 10:29:58 10:30:02 10:30:04 10:30:06 10:30:10 10:30:13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: But is their argument limited to people that are remote we'd say from the Gulf Coast or would this -. Well. THE COURT: And obviously. Mississippi.does this issue apply even to people along the Gulf Coast? MR.

HERMAN: Right. One chronology is this matching/smoothing issue which I think really is the issue before Your Honor today. you maybe only need to have a U. it's a higher standard the farther you get away from the coast because there has to be a greater deviation in your revenue in other words? MR. the objective criteria how you would decide if there was a loss caused by the spill. 90 percent probably of this class. or BP . MR.43 10:30:16 10:30:21 10:30:26 10:30:31 10:30:35 10:30:39 10:30:44 10:30:47 10:30:47 10:31:09 10:31:14 10:31:15 10:31:16 10:31:19 10:31:25 10:31:29 10:31:32 10:31:35 10:31:37 10:31:39 10:31:44 10:31:46 10:31:49 10:31:52 10:31:55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 really along I-10. Your Honor. but they're a little bit separate but they kind of mix together. So all of this is set forward in our briefs and I won't belabor it. as I appreciate it. HERMAN: Okay. what we call a Zone D claim. you need to have a V. HERMAN: THE COURT: Correct. and that's what they agreed to. THE COURT: Generally a so-called V test. THE COURT: MR. your revenue goes down and goes back up. and two or three different ways you can prove that. if you're down south. But the difference. But there are three kinds of chronologies that sometimes get overlapped.the percentages are different. You have to have a sharper V. but the causation structure that BP agreed to. If you're in Monroe. and that has the exact same causation structure -. is the same structure in Zone D for 90 percent of the cases as it is for the people along the Coast. or a modified V. So everything above I-10. is a Zone D claim.

is the claimant entitled to recovery of all losses as per the formula set out in Exhibit 4C. does the Settlement Agreement mandate and/or allow the claims administrator to separate out losses attributable to the oil spill vs those that are not?" "Stated another way. And the issue there is that with that issue BP took the exact contrary position because they said you shouldn't match or smooth. or is some consideration to be given so as to exclude those losses clearly unrelated to the spill?" Now. financial records satisfy the causation standard set out in Exhibit 4B. Mr." "A small accounting Accounting corporation is a professional services corporation. once a claimant passes the causation threshold. you should use the actual monthly P&Ls that were created. but this is just trying to touch the salient points. corporation firm is located in Zone B. well you already have. Juneau to the "As to BEL claims. on monthly P&Ls. Stanley brought up. he puts in a hypothetical. There is also another chronology that went along. But this is the e-mail from Mr.44 10:32:01 10:32:04 10:32:07 10:32:12 10:32:16 10:32:21 10:32:21 10:32:23 10:32:27 10:32:31 10:32:36 10:32:39 10:32:44 10:32:47 10:32:51 10:32:55 10:32:57 10:33:01 10:33:05 10:33:10 10:33:14 10:33:14 10:33:18 10:33:22 10:33:26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 wants it to be. so he is giving them a hypo for one of the exact industries that BP is now attacking. once a claimant's parties in September. and you'll see a lot of this in the briefing. And this is something that There's lots of things in this chronology. "They . Then you have this the third issue. and we briefed it extensively. this is what we call the alternative causation issue.

income went back up six months later when the partner comes back. BP is coming to the Such court. along with class counsel. all . the accounting firm can calculate fairly substantial loss. Applying the compensation formula under Exhibit 4C. response from BP counsel. if applicable) satisfies the causation test. false positives are inevitable. concomitant of an objective quantitative database test. Then they say.3 and Exhibits 4C and 19 of the Settlement Agreement are presumed to be attributable to the oil spill. provides for an offset where the claimant firm's revenue declined (and recovery. The explanation for the drop is that one of the three partners went out on medical leave. "If proper application of the Is that full loss methodology with accurate financial data yields a determination that causation is satisfied. trying to get the release for that whole area that we saw. not causation framework or compensation framework. BP agrees with class counsel that all losses calculated in accordance with Section 3. recoverable?" Here is the answer. And they submit joint proposed statements "Once the causation tests are satisfied. on November 19th." So then skipping ahead a couple of months.45 10:33:30 10:33:33 10:33:38 10:33:42 10:33:45 10:33:48 10:33:49 10:33:53 10:33:57 10:33:59 10:34:04 10:34:09 10:34:12 10:34:16 10:34:19 10:34:23 10:34:28 10:34:32 10:34:37 10:34:41 10:34:44 10:34:47 10:34:51 10:34:54 10:34:58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 meet the V-shaped curve causation test. but extraneous non-financial data is indicative that the decline was attributable to a factor wholly unrelated to the oil spill. on their letterhead with the little sundial. now the claims administrator has issued a formal policy." They kind of restate that. "Nothing.

we agree with that.46 10:35:02 10:35:06 10:35:12 10:35:15 10:35:21 10:35:25 10:35:30 10:35:34 10:35:38 10:35:40 10:35:43 10:35:46 10:35:49 10:35:54 10:35:58 10:36:01 10:36:06 10:36:09 10:36:12 10:36:16 10:36:19 10:36:20 10:36:21 10:36:27 10:36:34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 revenue and variable profit declines during the compensation period are presumed to be caused entirely by the spill. Let me ask you this. or five months later -THE COURT: this. And Your Honor confirmed that. So they're kind of going along. I think they were over there at the time. class counsel were alerted that BP believed there was a problem. some people have called it a "bait and switch" or "laying in wait" or whatever you want to say. pulling everybody along. Well. you may be getting to But when is the first time that you knew. but the reality is this is all the way November 19th." And they cite two BP experts. this issue of alternative causation. said. trying to get the class approved. here we are four months later. now. yes. with no analysis of whether such declines were also traceable to other factors unrelated to the spill. confirmed that agreement. from that very bench asked BP counsel: And Your Honor Do you agree with the claims administrator's policy that once you satisfy causation under the objective formula in the Settlement Agreement. all of the losses under the compensation framework are deemed to be caused by the spill and are recoverable?" And BP's counsel. Your Honor. Fishkind and Sharp who submitted declarations in support of the settlement. voiced the complaint that they're voicing now in fact? Was it after or before . you know. Your Honor will recall we appeared here in this very courtroom on December 12th to talk about the nonprofits and this issue came up.

because they were objecting to the supplemental information program and they were saying that if a claimant subjectively didn't know or believe that they had a loss caused by the spill that it was "fraudulent" to file a claim. So when it came up to Your Honor. I don't know. it came up around that same. I have to answer this in a couple of I had some indication of their -. let's talk about the November 8th fairness hearing. I think we had a conference call with BP counsel from Thanksgiving. As far as I knew for awhile they were okay with that.47 10:36:43 10:36:46 10:36:48 10:36:51 10:36:57 10:37:00 10:37:03 10:37:08 10:37:09 10:37:14 10:37:20 10:37:23 10:37:26 10:37:28 10:37:31 10:37:31 10:37:34 10:37:37 10:37:43 10:37:47 10:37:53 10:37:57 10:38:00 10:38:03 10:38:06 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the. for example? MR. However. at least class counsel was appreciative that the claims We . about. I think everybody. of statements like they have made here of their answer. not on the matching/smoothing issue but on alternative causation. got in a huge disagreement about that because of things. They weren't raising it. And the way it came up to me was right around Thanksgiving. from home.of what happened in October because I think I was on that conference call that Mr. Stanley referred to where they were asking the accountants questions. Really didn't have anything to do with it. HERMAN: ways. Well. well. final fairness hearing. but just happened to come up at the same time. as Your Honor will recall -THE COURT: MR. HERMAN: Did that deal with the nonprofits? Well. around the time of Thanksgiving. a week or two after this.

but what they're really talking about in a lot of these cases is alternative causation. the award is being driven not by a decrease in economic activity after the spill. Nevertheless. we said let's get the alternative causation issue done once and for all. we didn't want to put too much detail -. not to the Fifth Circuit. but now they've objected to this advertisement saying that it's going to encourage "fraudulent" claims. and they agreed and Your Honor confirmed that.but the bottom line is by some alternative cause during the post compensation period. These are the same claims that they agreed would be compensated under objective formula.and we've protected the confidentiality. wait. purportedly on matching/smoothing." some other time they said they were "absurd". They're going to these appeal panelists and they're saying. Claimant's own economic data shows that claimant is not a class member and thus may not file a claim . the big problem that the class has right now is that BP is now appealing virtually everything. BP keeps saying that you don't look at alternative causation. And not only that. But what they're saying in their appeal. these are claims that they now say are "fictitious. Now. So when we were before Your Honor on the nonprofits. but rather -. and these are the appeals that Your Honor mentioned to the appeal panelists within the settlement program. here we are again a few months later with a slightly different motion for reconsideration.48 10:38:11 10:38:16 10:38:20 10:38:23 10:38:28 10:38:33 10:38:36 10:38:38 10:38:39 10:38:43 10:38:46 10:38:51 10:38:56 10:38:59 10:39:00 10:39:03 10:39:07 10:39:10 10:39:14 10:39:17 10:39:21 10:39:25 10:39:29 10:39:32 10:39:36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 administrator brought it up because they said.

I can't confirm. but beyond the geographic category.I can probably tell you. There's no indication in the record as to what possible basis a. But this is what they say. businesses. a necessary prerequisite to class membership and recovery. it's unclear what basis this type of company -. but I understand that there's hundreds. So that's the position they're talking in all of these appeals right now. frankly. I think financial institutions. maybe even thousands of these things being appealed and being held up right now. the position that BP is taking right now. boundaries. This is This is a better example I understand. could have any losses associated with the spill class membership and the right to recover are limited to those who had a loss due to the spill. that they now have a class release against.1. In other words. this type of company that's not excluded. Again. And here is another example.3. I remember casinos. They continuously cite 1. dealers -You can probably remind me who else. the Settlement Agreement is defined by basically who is excluded. but I was being overly cautious -. The class definition issue I thought was put to rest before. things like that. that's included.49 10:39:39 10:39:42 10:39:44 10:39:48 10:39:51 10:39:55 10:39:58 10:40:02 10:40:05 10:40:09 10:40:12 10:40:15 10:40:20 10:40:23 10:40:26 10:40:29 10:40:32 10:40:35 10:40:42 10:40:45 10:40:53 10:41:00 10:41:06 10:41:11 10:41:16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 or receive compensation under the Settlement Agreement. but BP .that some type of company can assert a spill related loss. there are express exclusions of certain industries. I haven't looked at that recently.2 where it talks about -THE COURT: As I recall.

50

10:41:17 10:41:18 10:41:21 10:41:32 10:41:34 10:41:38 10:41:40 10:41:42 10:41:45 10:41:47 10:41:48 10:41:51 10:41:54 10:41:58 10:41:58 10:42:00 10:42:01 10:42:03 10:42:05 10:42:09 10:42:12 10:42:15 10:42:19 10:42:22 10:42:27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 test. excluded.

MR. HERMAN: THE COURT:

Yes. -- people like that are expressly excluded.

Are you saying that the appeals -- I noticed one of them said this company, whatever it is, is not a member of the class. Is it that

kind of argument they're making that it falls within an excluded category or what is -MR. HERMAN: I don't believe so, Your Honor. There are

basically three requirements for class membership. meet the geographical descriptions. THE COURT: MR. HERMAN: Right.

One is that you

The second is that you are not expressly

And what I think is relevant here is they never said we

should exclude agricultural firms, construction firms or special services companies. THE COURT: And then thirdly that you pass the causation

MR. HERMAN:

Well, basically.

But the way the class

definition works, and I think Your Honor will recall, for Rule 23 purposes and they submitted expert reports on this, you have to have objectively ascertainable criteria. You can't be on some

subjective standard where people don't know whether they're in or not based on whether they passed causation. definition does is it says: So what the class

"The following are summaries," and BP

keeps citing the summary without citing what it's summarizing, "of the damage categories which are fully described in the attached

51

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

exhibits." THE COURT: And there are about six different categories

of business economic claims, property damage, things like that. MR. HERMAN: Correct. And the economic damage category And, yes, the summary says it has

is the one we're talking about.

to be caused as a result of the incident; but the way that you find out whether it's caused by the incident is you go to the exhibit, which is Exhibit 4B which as Your Honor correctly identified before, is the objective test by which we determine under this settlement whether things are caused by the spill. And BP is

continuing to, as Your Honor noted, just come back and say, well, we don't think that it's caused by the spill, so we don't think they're a class member and they don't have a right to recover. Even though they meet the causation under 4B. THE COURT: Try to wrap it up because I need to give

Mr. Godfrey a few minutes of time. MR. HERMAN: briefly. Yes, Your Honor, just two things very

They put in this footnote in these appeals, "We're aware Blah, blah, blah.

of the court's order but respectfully disagree."

The problem that's created for the class members here is that the March 5th order that Your Honor is I guess here today on for the fifth time, is talking about matching and smoothing. They're

really challenging alternative causation, and alternative causation is not something that is supposed to be still a live issue. That's

something that they agreed to in this very courtroom several months

52

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

ago. And what is very, I'll just say, offensive is, you know, they put in here: "Claimant executed a registration form and a

claim form, both under penalties of perjury, seeking recovery from business economic losses arising from or due to the spill." So

they're here filing a piece of paper that they agreed wasn't valid several months ago in this courtroom before Your Honor, and they have the nerve to imply or bully or intimidate or threaten class members with "perjury" for filing the claims that they agreed by objective standards would be compensated under the formula. And I know the last thing Your Honor wants is another motion or anything about what to do about this problem, but it's a big problem for the class, and I think it just goes to the disingenuinty with which BP is here today. I'll be happy to answer questions. Also, Your Honor, on the motion to stay that they filed yesterday, I know Your Honor said that you didn't want any more briefing, I've never read it, but I feel pretty comfortable saying that it should be denied for all of the reasons that we've already submitted. THE COURT: It's really intertwined with what we're

talking about here today. MR. HERMAN: THE COURT: MR. GODFREY: Thank you, Your Honor. Thank you. Mr. Godfrey.

Thank you, Your Honor.

I am not aware of any settlement program accountant who has filed a declaration or affidavit saying that they agree with the interpretation of the claims administrator. They did file declarations but they studiously So unless I missed it. GODFREY: I only need two minutes I think. the program was analyzing and paying these claims in the same manner. correct? MR. GODFREY: Okay. because I have to be off the bench in about five minutes. in which case I avoided that issue. First. Is it correct. GODFREY: It came to our attention when the portal opened up in September where we had access to the underlying claim data. Second. I want to make sure I have the sequence. Your THE COURT: MR. MR. Juneau issued his January 15th policy statement on this issue. I am not aware of anyone from Price Waterhouse who said that this is the way you interpret the word revenue or expense or corresponding variable expenses. we started to see some aberrations that led to the October 2nd call. the April 4 memo. and that's what brought it to your attention.53 10:45:15 10:45:17 10:45:19 10:45:22 10:45:22 10:45:23 10:45:25 10:45:28 10:45:31 10:45:35 10:45:39 10:45:42 10:45:44 10:45:47 10:45:52 10:45:52 10:45:54 10:46:01 10:46:05 10:46:13 10:46:16 10:46:17 10:46:19 10:46:23 10:46:25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 wants -Honor. to the extent the Court THE COURT: Let me ask you this. apologize. I would encourage Your Honor to carefully read . but I don't think I did. THE COURT: I'll give you about three minutes. that this came to your attention because long before Mr.

but we did not understand what he was doing in October if that's the question. GODFREY: apologize. that ultimately led to the January 15. We are ships passing in the night then. THE COURT: MR. program was routinely. that's how they were interpreting and applying the program before -. to the January 15. THE COURT: That's not my question. "official" policy statement. We had a call in October. that it came to your attention because the claims facility. that's not my question. GODFREY: That's not quite correct. after some back and forth. is it correct that it came to your attention. Mr. I . we thought we understood them.this wasn't a change in what he did as of January 15th? MR. I think it's obvious. MR. Hacker's declaration as compared to the arguments in the briefs. Godfrey. GODFREY: The chronology is that it came to our attention before January 15th. My question is. We started seeing awards we couldn't understand. And this issue arose after the fairness hearing -THE COURT: I still think you're not answering any It came to your attention because that's question. THE COURT: I think this could be answered yes or no. therefore. I No. and. how they were applying it and it came to your attention that they were applying it in a manner that you think was wrong. and then we saw more awards in November.54 10:46:28 10:46:30 10:46:31 10:46:35 10:46:39 10:46:48 10:46:51 10:46:55 10:46:59 10:47:02 10:47:05 10:47:08 10:47:12 10:47:14 10:47:18 10:47:21 10:47:23 10:47:27 10:47:30 10:47:33 10:47:37 10:47:38 10:47:40 10:47:43 10:47:44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. I guess I would say.

GODFREY: No. judicial power over . oh. they use the word matching. We figured out what they were doing in November. argument being made. and that's what brought it to your attention in the first place? MR.55 10:47:47 10:47:50 10:47:53 10:47:57 10:48:03 10:48:06 10:48:07 10:48:08 10:48:09 10:48:11 10:48:15 10:48:17 10:48:23 10:48:29 10:48:30 10:48:32 10:48:36 10:48:39 10:48:44 10:48:46 10:48:49 10:48:51 10:48:54 10:48:55 10:48:58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 feel like I am cross-examining a witness with all due respect. Second point. MR. GODFREY: THE COURT: MR. saying. is it true that it came to your attention because But that's how they were applying. that's how they were applying the BEL provisions before. THE COURT: Okay. isn't it true. early December. they're trying to figure out how to do it. setting aside the Rule 408 problem. long before the January 15 policy statement. Your Honor. GODFREY: We discovered that they were -Can you answer that question? Yes. before January 15th. The accounts They're not there are trying to match. you're not matching under the agreement. I encourage Your Honor to read that. they being the program. Juneau issues a January 15 policy statement that all of a sudden changed what he and his team accountants and all were doing long before that. So I just wanted to understand that it wasn't that Mr. Third: This court and this district court is the It proves just the opposite of the supervisory agent or supervisory power. December time frame that led to the December 16th exchange and then the January 15th issue. we figured this out sometime late November. the April 4 memo.

never anticipated this problem coming up. it has the final word in the district court sense like every other district court and we respect that. we supervises what this court does.I am troubled by the implications or . I am simply saying that in answer to Mr. GODFREY: Correct. that's an issue I will let you all decide somewhere else. THE COURT: You're certainly not suggesting that people are subject to my orders and judgments don't have to follow them unless and until they're affirmed by the Fifth Circuit? MR. I am bound by it unless the Fifth Circuit tells me something differently. GODFREY: Not at all. That decision was decided years ago by the Supreme Court. Your Honor. Juneau. Obviously this court has an appellate court to which This court. but we have to take an appeal. MR. not at all.56 10:49:02 10:49:06 10:49:10 10:49:15 10:49:18 10:49:22 10:49:25 10:49:27 10:49:28 10:49:30 10:49:35 10:49:37 10:49:38 10:49:41 10:49:45 10:49:50 10:49:52 10:49:53 10:49:53 10:49:56 10:49:57 10:49:58 10:50:01 10:50:02 10:50:05 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. respectfully. although we disagree with the court in this instance. Herman's point that suggested you have the final word -. So not at all.you have the final word -THE COURT: Well. I think there was a man from the UAW who took the opposite position and learned the hard way that that is not a proper approach. ultimately the Court of appeals will decide. THE COURT: Let me ask you this real quick. I am troubled by something that -. There's no question that once Your Honor has ruled. But it is not true to say that this court has the final word.

There are consequences though to Mr. mean. I think for the benefit -. There are a couple of answers to that. GODFREY: No. I mean to my claim? MR. the agreement as he sees and as I've agreed with him at this point. If you can sue him for that. which as I see it he is applying and interpreting a contract. Your If the Court were to be concerned about that issue. GODFREY: THE COURT: No -- Any And say we disagree with his interpretation of how he's applied the contract. why I can't anybody else sue him that's not happy with what he did? claimant that's turned down can file a suit here and say he is breaching the contract by not honoring my claim? MR. With us he has a direct contract that has to mean something. if you have the right to sue the claims administrator for essentially doing his job. GODFREY: Honor.the beneficiaries of the trust are the . there are benefits and there are certain limitations about who want he can and cannot do. Juneau with that appointment. Stanley alluded to. THE COURT: What about somebody who is a beneficiary. if the contract says and the program says he is to interpret it. the agreement. THE COURT: So unless I appoint him under Rule 53 he is subject to being sued by anybody who wants to sue him? MR. no. then the solution is that some courts have done to appoint him as a real special master under Rule 53.57 10:50:13 10:50:21 10:50:25 10:50:29 10:50:34 10:50:39 10:50:43 10:50:46 10:50:48 10:50:49 10:50:53 10:50:56 10:50:56 10:50:58 10:51:02 10:51:06 10:51:10 10:51:13 10:51:16 10:51:19 10:51:23 10:51:25 10:51:30 10:51:31 10:51:35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the potential fallout of something that Mr. otherwise the contract means nothing.

Your Honor. they can sue Mr. It would only apply to BP. I don't think -They certainly have rights. GODFREY: THE COURT: Yeah. MR.58 10:51:40 10:51:41 10:51:44 10:51:47 10:51:49 10:51:51 10:51:53 10:51:57 10:52:00 10:52:02 10:52:06 10:52:08 10:52:13 10:52:18 10:52:22 10:52:25 10:52:31 10:52:32 10:52:34 10:52:37 10:52:39 10:52:40 10:52:43 10:52:46 10:52:48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 class members. I don't agree with that proposition. too. the class members have rights under the Settlement Agreement. GODFREY: actually -We looked at the case law on this before we . THE COURT: Maybe that's your rights. What if I had ruled in your favor and they were here telling me I should enjoin the administrator from applying it the way BP wants it applied? I suspect you might be here saying they don't have a right to do that. THE COURT: MR. GODFREY: I think class counsel has separate rights that are different from the class in this instance. Juneau? MR. so I don't know whether we talk about them as third-party beneficiaries or whatever. right? MR. MR. argument to just you. GODFREY: I think as a technical matter their rights are to appear before the court seeking relief before this court. as the other But I am having trouble limiting your side would say you've done. solution to this issue -THE COURT: So any time they don't agree they can do the But I would say that the same thing you've done. GODFREY: The beneficiaries of the -.well.

Your Honor. yes. that's why they can't find cases for the motion to dismiss. Just BP and the class? I believe so. GODFREY: I'm not sure about that. GODFREY: And who else could sue him? I think that's it. GODFREY: THE COURT: MR. Your Honor. says the solution is if you want to avoid this. GODFREY: THE COURT: MR. that you The law does not address this. I think it's limited. MR. THE COURT: in this case. GODFREY: There is no question. GODFREY: Could they sue Mr. but I think the answer is -THE COURT: It's a big problem if he's subject to lawsuits by anybody that's not happy with something he does. MR. the law raise a policy question. not just class counsel? No. but I Maybe nobody's ever sued them like you have can tell you that I know what the solution to the issue is if the court would want me to do that. class members I think are entitled to seek relief from the court. THE COURT: MR.59 10:52:48 10:52:50 10:52:52 10:52:53 10:52:54 10:52:56 10:52:58 10:52:59 10:53:01 10:53:02 10:53:04 10:53:06 10:53:08 10:53:08 10:53:11 10:53:13 10:53:16 10:53:19 10:53:24 10:53:26 10:53:28 10:53:32 10:53:33 10:53:35 10:53:36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: MR. Your Honor. but there are limitations upon . Members of the class. Juneau? I think if they wanted to seek an enforcement they would have a right to do that. appoint him as a special master pursuant to Rule 53. GODFREY: Why couldn't they see sue him? I haven't actually looked at that. THE COURT: MR.

I would ask the Court There's no reason for me to repeat that. well. variable profits calculation is being done properly. not based upon the variable profits analysis that we thought we had agreed to and that we think that the agreement plainly says we did agree to. And that goes back to whether or not the Exhibit 4C.60 10:53:38 10:53:38 10:53:42 10:53:42 10:53:45 10:53:47 10:53:50 10:53:55 10:53:58 10:54:01 10:54:05 10:54:09 10:54:13 10:54:16 10:54:22 10:54:24 10:54:28 10:54:31 10:54:34 10:54:38 10:54:43 10:54:47 10:54:50 10:54:54 10:54:55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Mr. GODFREY: No. Holstein's letter said: Accurate data. and we will set aside some of the argument. but everything we said. is that it as it is not being done properly. fictitious awards. monthly revenue. But in answer to your question about where are most of these claims coming from. Class counsel continue to want to talk about causation. think the Court knows our position on that. variable expenses. setting I aside causation. this court is the parties and the Court knows. where people are making claims from Zone D based upon differential cash flows. maybe that's for a later day. I did that to the court. One final point. THE COURT: Rule 53? MR. including when we quoted from Mr. We think that the problem here. economists call it. 50 percent of the new claims are now coming from Zone D. On the Exhibit 4B versus Exhibit 4C. It is true. The Are you suggesting I should appoint him under supervisor of this settlement in the first instance is the court. This is a feedback effect. Juneau. to consider that. it is true that in the And at least the .

Mr. And some cases the claimants submit it wasn't caused . And many times the claimants point them out themselves that they use the monthly financials as submitted. not by the oil spill. GODFREY: I am not on the appellate side of the But I can tell you what Is that accurate? Is BP now taking that house. Let me ask you one more thing before you sit Mr. I know. but on I'll call it the underlying causation. It is a direct result of the application of the BEL policy decisions.61 10:54:58 10:55:04 10:55:08 10:55:13 10:55:15 10:55:20 10:55:23 10:55:26 10:55:30 10:55:32 10:55:35 10:55:37 10:55:43 10:55:49 10:55:54 10:56:00 10:56:06 10:56:11 10:56:16 10:56:16 10:56:18 10:56:21 10:56:26 10:56:30 10:56:35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 January 15th BEL policy decisions. made daily. It is not true that the adjustments are being Every day they're awarding claimants which have year-end adjustments. THE COURT: down. Herman mentioned something that And I do have to leave. I had not heard before that BP is appealing some of these awards not solely on the BEL. that's another firm that runs that. in other words. arguing that basically the business. position? MR. Juneau said we will make some adjustments. and if the Court thinks that that is incorrect at a minimum. the losses must have been caused by something else. that is a reason for the injunction to stop these fictitious awards from being issued. There's a definition that the Court affirmed in the class agreement that says people who have suffered damages caused by the spill where the objective data shows that the damage was not caused by the spill. not the issue that we're here on today and that's the subject of the March 5th order. whether they have negative revenue or overbilling or errors of any type.

but that's neither here nor there because that's not the issue before the Court. THE COURT: Thank you. Thank you very much. more in favor of BP than the other side. but I also think that we should have an injunction to protect us against us in the interim these continued awards that in our view. based upon hard. That's not what I understood Mr.8 percent of the awards. I know you've visited this issue before. cold economic data are fictitious for people who have no actual losses whatsoever. I believe appeals are being taken on that ground. So the notion that somehow the appellate process is being abused. BP thus far of all appeals that either side has taken has won 79 percent of the appeal and a bunch of other appeals and certain percent have been resolved amicably by the parties. Herman to THE COURT: say. but I think that's available from the settlement claims administrator as well. I greatly appreciate your time this morning. The Court has spent. as I said. but I just wanted to give you a chance. however measured. Your Honor. With that. we'd do it. It's not just they have some loss and it's an exaggerated award. Your Honor. . I should point out though one point about We've appealed as of Monday 2. I think the data is really to the contrary. GODFREY: appeals. I think our position is clear on the record. they have no losses whatsoever. If the Court wanted the data in the form of a declaration.62 10:56:39 10:56:42 10:56:46 10:56:48 10:56:50 10:56:53 10:56:57 10:57:02 10:57:05 10:57:08 10:57:11 10:57:14 10:57:18 10:57:19 10:57:21 10:57:24 10:57:26 10:57:28 10:57:32 10:57:37 10:57:41 10:57:43 10:57:46 10:57:46 10:57:47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 by the spill. MR.

I'll say that to the extent this is a motion for reconsideration. it's filed against the claims administrator Mr. 2013. which I guess I could construe it as before the Court. there is a motion to dismiss filed by the defendants in Civil Action 13-492. but in going back to -. what's before the Court this morning as a procedural matter are the following: As I said.no. And despite the fact that the record has continued to grow. I see no basis on which I would consider changing my view of that. I agree essentially with the reasons advanced by counsel for the claims administrator and the settlement program. order where I set forth in some detail the reasons why I interpreted the Settlement Agreement in the same way that the claims administrator had interpreted it in his January 15th policy decision. not just today and in preparation for this hearing this morning. first of all. must have been January I guess. Juneau is that he is . I guess it was in February -.I'm not sure when I first got involved. for those same reasons. As a consequence of that. this is at least the third time that the curt has had to review and look at this issue. of my March 5th. that is that they failed to state a claim against either defendant because in essence what is alleged against Mr. I don't think it changes the fundamental issue before the Court. Juneau and the settlement program itself. of that order. And as I said.63 10:57:52 10:57:55 10:57:59 10:58:03 10:58:08 10:58:13 10:58:16 10:58:20 10:58:28 10:58:34 10:58:38 10:58:47 10:58:52 10:58:56 10:59:01 10:59:09 10:59:10 10:59:15 10:59:24 10:59:29 10:59:33 10:59:40 10:59:44 10:59:56 11:00:04 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 an enormous amount of time dealing with this issue. And. that the claims alleged by BP in 13-492 do not.

this is nothing more than. and the third and fourth factors deal with weighing the harm or injury to be caused by. as Mr. and so as class counsel and for the reasons I've stated here today.64 11:00:10 11:00:16 11:00:23 11:00:31 11:00:37 11:00:40 11:00:45 11:00:52 11:00:56 11:01:01 11:01:10 11:01:14 11:01:21 11:01:26 11:01:33 11:01:40 11:01:49 11:01:55 11:02:04 11:02:09 11:02:13 11:02:17 11:02:24 11:02:30 11:02:38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 complying with an order of the court. that cannot be a situation where he is breaching the agreement. that lawsuit under Rule 12(b)(6). Civil Action 12-970. In essence. Third matter before the Court is a related practically identical motion for preliminary motion for the Bon Secour class action. In that case the claims administrator and settlement program are not parties to the lawsuit. Second matter before the Court in that same lawsuit there is a motion for preliminary injunction. in consequence of the court's either granting or denying the request for injunctive relief. likelihood of success on the merits by the moving party. that is. As a matter of law.appellate rights that apparently is not entirely . I find that BP's motion for preliminary injunction should be denied. So I am granting the motion to dismiss 13-492. When I consider those factors. moot because the court's now dismissed that lawsuit. but nonetheless they have opposed the preliminary injunction. as I see it. a belt-and-suspenders procedural maneuver by BP to attempt to gain some appellate right that apparently -. there's no basis on which if I consider the four factors that are required for granting a preliminary injunction: First of all. second factor being irreparable harm. as he put it. Godfrey candidly admitted.

filed a notice of appeal and filed a request for a stay. So I think that covers everything. do hereby certify that the foregoing is a true and correct transcript. RMR Official Court Reporter . which was filed sometime yesterday I believe. CCR. THE PROCEEDINGS WERE CONCLUDED. I saw it this morning for the first time. the analysis would be essentially the same for the same reason that I am not revisiting my March 5th order and not granting preliminary injunction. Official Court Reporter. THE DEPUTY CLERK: All rise.) * * * * * * REPORTER'S CERTIFICATE I. insofar as the request for a stay of my March 5th order. from the record of the proceedings in the above-entitled and numbered matter. Since they have now appealed my order. I am also not going to stay my order. CCR. And finally. to the best of my ability and understanding. RPR. ______ Karen A. United States District Court. Ibos. Karen A. CRR. Eastern District of Louisiana. Have a good day. so I am denying the motion for preliminary injunction in Bon Secour. (WHEREUPON.65 11:02:45 11:02:48 11:02:56 11:03:00 11:03:04 11:03:09 11:03:12 11:03:15 11:03:21 11:03:27 11:03:31 11:03:36 11:03:40 11:03:41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 convinced that it has otherwise because otherwise there would have been no need to file a motion for preliminary injunction. Ibos.