Larry Doiron, Incorporated v. Spclt Rntl To ( 2017 )

REVISED February 27, 2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
February 23, 2017
No. 16-30217
Lyle W. Cayce
Clerk
In Re: In the Matter of the Complaint of Larry Doiron, Incorporated as
Owner and Operator of the Barge Pogo and M/V Billy Joe for Exoneration
from or Limitation of Liability
LARRY DOIRON, INCORPORATED,
Plaintiff - Appellee
ROBERT JACKSON,
Intervenor Plaintiff - Appellee
v.
SPECIALTY RENTAL TOOLS & SUPPLY, L.L.P.; OIL STATES ENERGY
SERVICES, L.L.C.; ZURICH AMERICAN INSURANCE COMPANY,
Defendants - Appellants
Appeal from the United States District Court
for the Western District of Louisiana
Before DAVIS, DENNIS, and SOUTHWICK, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
We are yet again required to determine whether a contract is a maritime
one. Here, the focus is on a contract to perform flow-back services to improve
No. 16-30217
the performance of an offshore natural-gas well when performance eventually
required the use of a crane barge. Plaintiffs Larry Doiron, Inc. and Robert
Jackson argue that maritime law applies. Defendants Specialty Rental Tools
& Supply, Oil States Energy Services, and Zurich American Insurance
Company (collectively, “STS”) argue that state law, specifically that of
Louisiana, applies. The district court determined the contract was maritime
in nature. We conclude the question is close but agree that the specific contract
at issue, which was an oral work order in effect at the time of injury, should be
considered maritime. AFFIRMED.
FACTUAL AND PROCEDURAL BACKGROUND
On October 12, 2005, Apache Corporation and STS entered into a master
services contract (“MSC”). The MSC does not describe individual tasks but
operates as a “broadform blanket agreement” that contemplates future tasks
to be performed under subsequent work orders to be agreed upon as
necessary. 1 The MSC contains an indemnification provision that requires STS
to defend and indemnify Apache and its “Company Group” against all claims
for property damage or bodily injury. On appeal, the parties do not dispute
that Larry Doiron, Inc. (“LDI”) and Jackson are part of Apache’s Company
Group and are covered by the terms of the MSC. 2
1 The MSC provides: Apache “may, from time to time, request Contractor [STS] to
perform work or render services hereunder (‘Work’) including but not limited to the following
types of services: Chemicals, Equipment Rental.”
2 Before the district court, STS argued that VAS Gauging, Inc. — and not Apache —
contacted LDI to procure the crane barge. As such, it argues, LDI was not in contractual
privity with Apache, so “STS would not owe LDI and Mr. Jackson defense and indemnity
even if the general maritime law is held to apply to the MSC.” Neither party briefed this
issue on appeal, so we need not address it here. See United States v. Martinez, 263 F.3d 436,
438 (5th Cir. 2001).
2
No. 16-30217
In early 2011, Apache hired Specialty Rental Tools & Supply (“STS”) to
perform flow-back services on its offshore well, located in West Lake Verret in
the Atchafalaya Basin. The flow-back process is designed to dislodge solid
objects from inside the well to “get it to produce gas again.” The work was to
be performed on Apache’s fixed production platform. The flow-back services
were arranged by an oral work order; neither party produced a written
agreement for these particular services.
On February 24, 2011, STS sent its employees Peter Savoie and Matt
Delahoussaye to perform the flow-back operation. After being unsuccessful
that day, Savoie informed Brandon LePretre, Apache’s representative, that
STS would need additional equipment to perform the operation, including a
flow-back iron, a hydraulic choke manifold, and a hydraulic gate valve. In
Savoie’s estimation, STS would also need a crane barge because the additional
equipment was too heavy for the workers to remove from the wellhead.
LePretre contacted VAS Gauging, Inc., which arranged for LDI to provide the
crane barge POGO 3 for use at the Apache well. Robert Jackson was the crane
operator. LePretre testified that he knew LDI owned the barge and that it was
used at the well site with Apache’s consent.
On the second day of the flow-back operation, Savoie and Delahoussaye
were again unsuccessful, even with use of the crane. Savoie informed LePretre
that he needed a coiled tubing unit, so they terminated the operation until one
could be obtained. Savoie began “rigging down” and directed Jackson to lower
the crane. Instead, Savoie reported the crane came toward him and “knocked
3 We have previously recognized that a barge is a vessel if it is “equipped for use in
navigable waters, ha[s] traveled a considerable distance through such waters to its present
site and was, at the time of the accident, located in a navigable canal.” Producers Drilling
Co. v. Gray, 361 F.2d 432, 437 (5th Cir. 1966). Neither party disputes that the POGO
qualifies as a vessel, so we do not engage in any analysis of the barge’s classification.
3
No. 16-30217
[him] off balance.” He clutched the crane to avoid falling backward but
eventually lost his grip, which caused him to fall approximately eight feet onto
the deck of the barge. His accident resulted in “a crush type injury to the right
lower extremity.”
Later that year, LDI made a formal demand that STS defend and
indemnify LDI against any claims Savoie may bring. STS rejected the demand.
LDI then filed a Vessel Owner Limitation Action for exoneration from liability
on the basis of admiralty jurisdiction under 46 U.S.C. §§ 30501–30512. Savoie
answered the complaint, alleging he was injured by LDI’s negligence and
through no fault of his own. LDI then filed a third-party complaint against
STS and its affiliates. Jackson intervened in the Vessel Owner Limitation
Action, seeking protection under the MSC and the insurance policy issued by
Zurich. STS ultimately settled with Savoie, and the district court severed the
indemnity claims from the personal-injury case.
LDI and Jackson filed a motion for summary judgment to “enforce their
contractual right to defense and indemnity.” LDI and Jackson argued the MSC
obligated STS to indemnify LDI and Jackson against Savoie’s claims. In
response, STS filed a cross-motion for summary judgment, arguing that the
MSC “must be construed under Louisiana law and that the indemnity
provision contained therein is void and unenforceable under the Louisiana
Oilfield Indemnity Act.” The district court granted the motion submitted by
LDI and Jackson and denied the cross-motion submitted by STS.
Thereafter, the parties filed a joint motion to dismiss the claims not
resolved by summary judgment and for entry of final judgment on the others.
The parties reserved the right to appeal “the limited issue of whether
Defendants were contractually obligated to defend and indemnify
4
No. 16-30217
Plaintiffs . . . .” The court granted the motion and entered final judgment on
March 10, 2016. STS filed a timely notice of appeal.
DISCUSSION
We review de novo the district court’s grant of summary judgment.
James v. State Farm Mut. Auto. Ins. Co., 743 F.3d 65, 68 (5th Cir. 2014).
Summary judgment is proper “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” FED. R. CIV. P. 56(a). A genuine dispute exists if a reasonable
jury could find in favor of the nonmoving party. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). All facts and evidence are viewed in the light
most favorable to the non-movant. James, 743 F.3d at 68.
The issue here is whether maritime or state law should be applied to
determine the validity of the MSC’s indemnity clause. The MSC contains a
choice-of-law provision:
This contract shall be construed and enforced in accordance with
the general maritime law of the United States whenever any
performance is contemplated in, on or above navigable waters,
whether onshore or offshore. In the event that maritime law is
held inapplicable, the law of the state in which the work is
performed shall apply.
The district court correctly analyzed the conflict as being one between
Louisiana state law and general maritime principles. The Louisiana Oilfield
Indemnity Act provides that indemnity clauses in “agreements pertaining to
wells for oil, gas, or water” are void as violations of public policy. LA. REV.
STAT. § 9:2780. Maritime law “does not bar enforcement of [those] provisions.”
Hoda v. Rowan Cos., 419 F.3d 379, 380 (5th Cir. 2005). There are, though, no
5
No. 16-30217
“clean lines between maritime and nonmaritime contracts.” See Norfolk S. Ry.
Co. v. Kirby, 125 S. Ct. 385, 393 (2004).
We articulated the legal framework for deciding cases like this in Davis
& Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313 (5th Cir. 1990). Distinguishing
between maritime and non-maritime contracts “turns on a minute parsing of
the facts,” but we are bound by the Davis approach — however inexact it may
be. Hoda, 419 F.3d at 380–81. In Davis, the parties entered a Master Service
Agreement under which Gulf Oil would issue work orders directing Davis to
perform specific tasks related to its natural-gas and crude-oil wells. Davis, 919
F.2d at 314. The agreement contained an indemnity clause requiring Davis to
indemnify Gulf Oil against any claims that may arise out of their relationship.
Id. Under the work order at issue, Davis supplied land-based barges to
perform routine maintenance on the wells. Id. The work platforms around the
wells did not provide adequate workspace, so most of the work was done on the
barge itself. Id.
On the day of the accident in Davis, the barge employee supervising the
operation drowned. Id. His representatives sued both Davis and Gulf Oil, and
the parties settled. Id. at 315. Davis sought a declaratory judgment that
Louisiana law governed the contract and that the indemnity provision was
therefore void. Id. Gulf Oil argued that maritime law applied to validate the
indemnity provision. Id. The district court applied Louisiana law. Id.
On appeal, we held that when a contract involves two parts — “a blanket
contract followed by later work orders” — the two must be interpreted together
to determine whether maritime or state law applies. Id. We then articulated
a two-part analysis. Id. at 316. First, we determine the nature of the contract
by reference to its historical treatment. Id. If the historical treatment is
unclear, we must consider six factors:
6
No. 16-30217
1) [W]hat does the specific work order in effect at the time of injury
provide? 2) [W]hat work did the crew assigned under the work
order actually do? 3) [W]as the crew assigned to work aboard a
vessel in navigable waters[?] 4) [T]o what extent did the work
being done relate to the mission of that vessel? 5) [W]hat was the
principal work of the injured worker? and 6) [W]hat work was the
injured worker actually doing at the time of injury?
Id.; see also Hoda, 419 F.3d at 381. In Davis, the work being performed was
not historically maritime in nature. Davis, 919 F.2d at 316. Nonetheless, an
analysis of the factors revealed “[t]he work done by the crew of Barge 11171
was inextricably intertwined with maritime activities since it required the use
of a vessel and its crew.” Id. at 317.
Applying Davis, we find no clarity to the historical treatment of contracts
like because this court has not previously considered flow-back operations. We
have found contracts for the provision of wireline services to be non-maritime.
See, e.g., Domingue v. Ocean Drilling & Expl. Co., 923 F.2d 393, 397–98 (5th
Cir. 1991); Thurmond v. Delta Well Surveyors, 836 F.2d 952, 956 (5th Cir.
1988). Wireline services include providing maintenance for partially drilled oil
and gas wells and gathering “geophysical data relevant to production.”
Domingue, 923 F.2d at 394 n.3. On the other hand, contracts for casing
services are maritime in nature. See, e.g., Demette v. Falcon Drilling Co., 280
F.3d 492, 500 (5th Cir. 2002), overruled on other grounds by Grand Isle
Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778, 787 (5th Cir. 2009) (en
banc); Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115, 1123–24 (5th
Cir. 1992). Casing is “the welding together and hammering of pipe into the
subsurface of the earth to create a permanent construction.” Campbell, 979
F.2d at 1118 n.2. One distinction between the two is that wireline services
often do not require the use of a vessel; casing services do. Compare
7
No. 16-30217
Thurmond, 836 F.2d at 956, with Campbell, 979 F.2d at 1123. Whether that
distinction was sufficient to cause the different outcomes is unclear.
We now examine flow-back operations to see if they are comparable
either to wireline operations or to casing services. When providing flow-back
services, employees use whatever equipment is necessary to clear the well for
the resumption of production. The services themselves may be performed
exclusively on the well platform or may, as here, require a vessel to be
alongside the well. The district court was likely correct that “flow back services
have little to do with traditional maritime activity or commerce.” Even if flow-
back services in the main are not maritime, this is not a sufficient answer
under Davis. Because the historical treatment is unclear, we cannot rely on a
generic view of the work; instead, we must consider the circumstances
surrounding the injury. See Devon Louisiana Corp. v. Petra Consultants, Inc.,
247 F. App’x 539, 544 (5th Cir. 2007) (unpublished).
Under Davis. no single factor is dispositive. We find that four of the six
factors — one, two, four, and six — indicate this contract is maritime in nature.
The first factor concerns the specific work order in effect at the time of the
injury. Davis, 919 F.2d at 316. Neither party can produce a written document
to establish what the parties contemplated when this particular agreement
arose. The MSC references vessels by requiring insurance coverage when the
“contractor uses any vessels in connection with its work for Company or
Company Group.” While this factor concerns the specific work order and not
the MSC, the language of the MSC indicates the parties at least contemplated
the use of a vessel during the operations for which Apache would employ STS.
Imposing a maritime obligation would not cause unfair surprise.
The second factor examines the work the crew assigned under the work
order actually performed. Id. The STS crew performed a flow-back operation,
8
No. 16-30217
which is not primarily maritime. In fact, however, Savoie and Delahoussaye
relied on the crane barge to execute the flow-back operation, and Savoie was
injured as a result of its use. The district court noted that the operation “could
not have been completed without the use of a crane barge . . . .” We agree. STS
claims the barge was ancillary to the flow-back operation, but the presence of
the barge was a necessary predicate to Savoie’s using the hydraulic gate valve.
The fourth factor concerns the extent to which the work being done
related to the mission of the vessel. Id. The barge was sent to Apache’s well
site to serve STS in the execution of its flow-back job. STS notes that the barge
was forced to move away from the well during the flow-back process to avoid
safety concerns raised by having an ignition source near a gas well. Despite
its physical location at the time of the operation, though, the barge was still
tasked with assisting STS in its execution of the flow-back operation.
The sixth factor concerns what the injured worker was doing at the time
of his injury. Id. Savoie, at the time of injury, was preparing to disconnect the
hydraulic gate valve from the crane. During “rigging down,” Savoie clutched
the crane itself and fell onto the deck of the barge when he lost his grip. Thus,
Savoie was injured by equipment affixed to the vessel itself.
Only the third and fifth factors militate against applying maritime law.
The third factor concerns whether the crew was assigned to work aboard a
vessel in navigable waters. Id. Neither Savoie nor Delahoussaye was assigned
to work aboard the crane barge. Still, Savoie made use of the barge by loading
and unloading equipment from its deck, conducting safety meetings on board
the vessel, 4 and using the crane to install large equipment on the platform.
4 STS states neither Savoie nor Delahoussaye boarded the barge. Delahoussaye
testified that no one from STS went onto the barge “during the actual flow back services” but
made no representations as to whether he had boarded the barge at other times. The district
9
No. 16-30217
The fifth factor concerns the principal work of the injured person. Id. At the
time of his injury, Savoie was principally employed to perform the flow-back
operation at issue; he was not commissioned to be a seaman. Yet Savoie need
not be a sailor to give this work order a “peculiarly salty flavor.” See
Thurmond, 836 F.2d at 953, 956.
Some of the cases that have applied Davis assist us in our analysis. The
gravamen of our inquiry is not whether the contract required use of a vessel
but whether the execution of the contract required a vessel. Demette, 280 F.3d
at 500–01. STS correctly notes that “incidental or preparatory use of a vessel”
is not sufficient to render a contract maritime in nature. On the other hand,
when the work is “inextricably intertwined with maritime activities,” the
contract will be maritime. Davis, 919 F.2d at 317.
We find useful similarities between this case and Campbell, where a
worker performing casing services was injured when transferring from one
vessel to another. See Campbell, 979 F.2d at 1122–23. First, neither this
operation nor the operation in Campbell was intrinsically maritime; both may
have been performed on a fixed surface instead of a vessel. Second, a vessel at
some point became necessary to execute the operations in both cases. Also,
both Savoie and the injured worker in Campbell suffered their injuries while
transferring to a vessel that had been used during the operation. Finally, and
most importantly, the vessel’s equipment was used to accomplish the relevant
task both here and in Campbell. Given the similarities, Savoie’s work, like the
work in Campbell, was “inextricably intertwined with maritime activities . . . .”
See id. at 1123 (quoting Davis, 919 F.2d at 317).
court found that STS personnel had, at minimum, conducted safety meetings alongside the
barge’s crew.
10
No. 16-30217
We also find similarities between this case and Hoda, where a worker
was injured while working aboard a vessel. See Hoda, 419 F.3d at 380. His
primary job under that work order was to tighten the nuts on a blow-out
preventer on the wellhead. Id. at 381. The operation was performed using a
crane aboard the vessel because there was no well platform. Id. In this case,
Apache had a fixed well platform from which the flow-back operation could
have been executed. Regardless, the existence of the fixed platform is
immaterial because the use of a vessel eventually became necessary to
manipulate the heavy equipment used during the operation. Like the injured
worker in Hoda, Savoie would “have had nothing to do” had LDI not provided
the crane barge. See id. Savoie’s work depended on the barge’s direct
involvement, which strongly indicates a maritime contract. See id. at 383
Devon, an unpublished case from this court, is also analogous. There,
the worker was injured aboard a vessel during inclement weather. Devon, 247
F. App’x at 541–42. At the time of his injury, he was working to repair an
offshore well, and the operation required use of welding equipment. Id. Prior
to the operation, the workers failed to secure a “hot work” permit, which
precluded performance of welding operations on the well platform. Id. at 541.
Thus, the welding equipment remained on the vessel, and the procedures were
performed on the vessel itself. Id. On appeal, we decided the contract was
maritime in nature because the work at issue required the vessel’s direct
involvement. Id. at 544–45. We noted that, but for the employees’ failure to
secure a permit, the work could have been performed on a fixed platform. Id.
at 545. It was fair to say, then, that the operation in fact required a vessel. Id.
This case is similar. Although Apache had a fixed production platform from
which the work could have been done, Savoie relied on the crane barge to
11
No. 16-30217
perform the job when he realized he could not manipulate the heavy equipment
alone. This should thus be seen as a maritime operation.
STS relies on Thurmond and Domingue to support its position. In
Thurmond, decided before Davis, Gulf Oil contracted with P & S Well Services
for a barge bearing equipment for the performance of wireline services.
Thurmond, 836 F.2d at 953. Thurmond, a member of the barge’s crew, was
injured when he “stepped off the barge and on the wellhead[.]” Id. We held
the contract to be nonmaritime, noting that Thurmond was “not engaged in the
performance of a maritime obligation” at the time of his injury. Id. at 955. We
also found significant that the parties’ contract did not address the use of a
vessel. Id. In Domingue, also concerning wireline services, the injured worker
tripped over a piece of equipment the vessel’s crew had placed on the well
platform. Domingue, 923 F.2d at 394. We held that the vessel was “incidental
. . . [to] the execution of [the] particular service contract.” Id. at 397.
Thurmond and Domingue have been distinguished by this court under
circumstances similar to this case. See, e.g., Campbell, 979 F.2d at 1122; Davis,
919 F.2d at 316. Neither wireline nor flow-back services are themselves
maritime activities. The flow-back services in this case, though, could not have
been completed without a vessel that was more than ancillary to the operation.
Also, Savoie was not injured as a result of the flow-back operation but because
of Jackson’s operation of the crane, which was affixed to the vessel. Both
workers in Thurmond and Domingue were on the well platform at the time of
injury, but Savoie clutched the crane and fell onto the deck of the barge.
Further, unlike the contract in Thurmond, the MSC contemplated the
use of a vessel, showing that both Apache and STS recognized a vessel could
be necessary to the performance of its future work orders. The contract does
not mention the crane barge specifically, but the MSC was a blanket
12
No. 16-30217
agreement that did not create present obligations. Instead, it required STS to
accommodate Apache’s work orders at unspecified future dates. In addition,
“the Davis factors must be applied to the facts as they actually occurred” and
not “as the parties intended them” to occur. See Devon, 247 F. App’x at 545.
Even if the parties did not expect a vessel would be used during the flow-back
operation, one was.
STS also relies on one of our recent nonprecedential decisions, Riverside
Construction Company, Inc. v. Entergy Mississippi, Inc., 626 F. App’x 443 (5th
Cir. 2015). We analyzed a repair contract for Entergy’s Dolphin Fender System
located on a fuel dock in the Mississippi River. Id. at 444. Entergy removed
the suit to federal court, arguing the contract was maritime because it
“contemplated that [the] work would be performed from a floating barge . . . .”
Id. at 445. We found that federal law did not apply and that removal was
improper because the barge, which remained tethered to a bank during the
operation, was merely used as a platform from which the work could be done
— making it “auxiliary to the actual purpose of the contract[.]” Id. at 446.
Riverside is not factually analogous. No evidence exists to suggest the
barge in this case remained tethered to a bank during the operation. Instead,
it was close enough to the well platform — “located on navigable waters in
West Lake Verret” — to permit the crane to access the wellhead.
STS also argues there is no basis for applying federal law to claims
arising in Louisiana territorial waters, especially considering that state law
applies to claims arising on the Outer Continental Shelf. The Outer
Continental Shelf Lands Act extends the law of the adjacent state to the
“subsoil and seabed” off its coast. 43 U.S.C. § 1333(a)(1). The adjacent state’s
law, though, is incorporated into federal law and “does not supplant admiralty
and maritime law.” ROBERT FORCE & MARTIN J. NORRIS, THE LAW OF
13
No. 16-30217
MARITIME PERSONAL INJURIES § 3:15 (2016). Accordingly, once we determine
the contract is maritime, state law is irrelevant even on the Outer Continental
Shelf. The policy of applying the law of the situs may seem appealing, but
doing so would disrupt the “twin aims of maritime law”: “achieving uniformity
in the exercise of admiralty jurisdiction and providing special solicitude to
seamen.” Miles v. Melrose, 882 F.2d 976, 987 (5th Cir. 1989).
Finally, STS argues that “LDI’s maritime tort is irrelevant to STS’s
contract.” STS implies that Savoie’s injury as a result of the barge is maritime,
while the contract governing Apache’s relationship with STS is not. In support,
it notes that the personal injury lawsuit has been severed from this action,
leaving us no tort issues to decide. As a result, it argues that LDI and Jackson
are “attempt[ing] to cloud the nature and character of the [MSC] by
emphasizing LDI’s own maritime tort against Mr. Savoie.” Peeling the
maritime tort away from an ostensibly non-maritime contract is imaginative
enough, but it is inconsistent with our prior treatment of analogous situations.
The fact that Savoie brought an action in tort has no effect on our
interpretation of the choice-of-law provision or our analysis of the relevant
facts. The tort suit also has no bearing on the application of the indemnity
provision, which is the direct subject of this appeal. In fact, the tort suit only
bears passing relevance because LDI and Jackson would not be seeking
indemnification otherwise. We recognize the basic distinction between tort
and contract claims, but that distinction is immaterial here because our
outcome holds regardless of the doctrinal lens through which the facts are
viewed.
Our holding is confined to the facts before us. See Hoda, 419 F.3d at 383.
14
No. 16-30217
* * *
We conclude that the oral work order is the relevant contract and that it
is a maritime contract. The district court did not err by determining maritime
law applies. AFFIRMED.
15
No. 16-30217
W. EUGENE DAVIS, Circuit Judge, joined by LESLIE H. SOUTHWICK,
Circuit Judge, specially concurring:
I concur in Judge Southwick’s careful opinion which faithfully follows
our precedent in Davis & Sons 1 and its progeny. I write separately to urge the
court to take this case en banc and simplify the test for determining whether
a contract is a maritime contract.
The multi-factor test in Davis & Sons, as set out in the majority opinion, 2
has been criticized by a number of judges of this court: in Hoda v. Rowan Cos., 3
Judge Jones began the opinion by stating:
This appeal requires us to sort once more through the authorities
distinguishing maritime and non-maritime contracts in the
offshore exploration and production industry. As is typical, the
final result turns on a minute parsing of the facts. Whether this
is the soundest jurisprudential approach may be doubted,
inasmuch as it creates uncertainty, spawns litigation, and hinders
the rational calculation of costs and risks by companies
participating in this industry. Nevertheless, we are bound by the
approach this court has followed for more than two decades.
1 Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313 (5th Cir. 1990).
2 The six factors are:
(1) [W]hat does the specific work order in effect at the time of the injury
provide? (2) [W]hat work did the crew assigned under the work order actually
do? (3) [W]as the crew assigned to work aboard a vessel in navigable waters?
(4) [T]o what extent did the work being done relate to the mission of that
vessel? (5) [W]hat was the principal work of the injured worker? and (6)[W]hat
work was the injured worker actually doing at the time of injury?
Id. at 316.
3 419 F.3d 379 (5th Cir. 2005) (concerning an indemnity claim on a contract to install a
blowout preventer from a jack-up drilling rig).
16
No. 16-30217
In Thurmond, 4 Judge Garwood concurred in the opinion holding that a
contract to provide wireline services that required use of a vessel was not a
maritime contract. In his concurring opinion, however, he stated, “I am
generally in agreement with Judge Wisdom’s persuasive opinion, but am
troubled by the tension, or perhaps outright inconsistency, between many of
our opinions in this area.” 5 And later,
However, it seems to me that it may be desirable to consider this
issue en banc, in order that we may take a more consistent
approach to the question of whether and in what circumstances
activities in connection with mineral development in state
territorial waters are maritime (or perhaps “maritime and
local”). 6
Professor David W. Robertson, in his article, pointed out some of the
flaws in the Davis & Sons test: 7
The “historical treatment” reference does no more than remind
courts and counsel to look for close analogies in the jurisprudence.
This is what courts must always do when there is no clear
governing general rule or principle. The six factors are too
pointillistic: they have led Fifth Circuit panels down such odd
lines of thought as “whether drilling mud services are more akin
to wireline work [which has sometimes been viewed as
quintessentially nonmaritime] or to casing services [which can be
maritime if done on a vessel-type drilling rig.]” 8
4 Thurmond v. Delta Well Surveyors, 836 F.2d 952 (5th Cir. 1988).
5 Id. at 957 (Garwood, J., concurring).
6 Id. (citing Kossick v. United Fruit Co., 365 U.S. 731, 738 (1960)).
7 For a more detailed criticism of the Davis & Sons test, see David W. Robertson, The Outer
Continental Shelf Lands Act’s Provisions on Jurisdiction, Remedies, and Choice of Law:
Correcting the Fifth Circuit’s Mistakes, 38 J. MAR. L. & COM. 487, 540-45 (2007).
8 Id. at 545 (alteration in Robertson).
17
No. 16-30217
One problem with the multi-factor test in Davis & Sons is the lack of
guidance about what weight to give each factor. A number of our cases seem
to give the most weight to the Davis & Sons prong that requires examination
of the precise work to be performed, e.g., wireline service, welding, casing
service, or drilling. Most of our cases hold that a contract to provide any of
these services on a vessel on navigable waters is a maritime contract, but
panels have held that contracts to provide wireline services are non-maritime
in nature whether the contractor contemplates that the services are to be
performed from a vessel or not. 9 On the other hand, we have held that
contracts to perform casing services are maritime because of the nature of
casing work. 10
A 2004 Supreme Court case, Norfolk Southern Railway Co. v. Kirby, 11
supports my view that the en banc court should abandon the Davis & Sons
test. In Kirby, the Court was called upon to determine whether a bill of lading
for a shipment of goods by sea from Australia to Charleston, South Carolina,
9 See Hollier v. Union Tex. Petroleum Corp., 972 F.2d 662, 665 (5th Cir. 1992) (holding that a
contract for well testing on fixed platforms on the OCS is non-maritime); Domingue v. Ocean
Drilling & Expl. Co., 923 F.2d 393, 397-98 (5th Cir. 1991) (holding that a contract to provide
wireline services to a jack-up rig operating on the OCS off the coast of Louisiana is non-
maritime); Thurmond, 836 F.2d at 956-57 (holding that a contract to provide wireline services
to a fixed platform in Louisiana state waters is non-maritime).
10 See Demette v. Falcon Drilling Co., 280 F.3d 492, 501 (5th Cir. 2002) (finding that because
casing work “is an integral part of drilling,” which is a “the primary purpose of the vessel” a
contract for casing services is maritime); Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d
1115, 1121 (5th Cir. 1992) (holding that a contract to provide casing services is maritime);
Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 332 (5th Cir. 1981) (finding that circuit
precedent compels the conclusion that a contract for casing services is maritime); see also
Kenneth G. Engerrand, Primer of Remedies on the Outer Continental Shelf, 4 LOY. MAR. L.J.
19, 61-63 (2005) (noting that historically, some services contracts are considered maritime in
nature, including drilling and workover, casing, catering, repair, and well-site supervision,
while other services contracts are traditionally non-maritime in nature, including wireline
work, testing and completion operations).
11 543 U.S. 14 (2004).
18
No. 16-30217
then by rail to Huntsville, Alabama was a maritime contract. 12 The goods were
damaged in a train wreck during the land leg of the trip and the question was
whether the suit to recover damages for property that was damaged on this leg
of the trip fell within admiralty jurisdiction. 13 The Court concluded that both
the land and water portions of the bills of lading constituted maritime
contracts because their primary objective was to accomplish the transportation
of goods by sea from Australia to the eastern coast of the United States. 14
Although the facts of this case are not closely analogous to those in today’s
case, the Court provided important guidance to assist us in determining
whether a contract is a maritime contract:
To ascertain whether a contract is a maritime one, we cannot
look to whether a ship or other vessel was involved in the dispute,
as we would in a putative maritime tort case. . . . Nor can we
simply look to the place of the contract’s formation or performance.
Instead, the answer “depends upon . . . the nature and character of
the contract,” and the true criterion is whether it has “reference to
maritime service or maritime transactions.” 15
And further “the fundamental interest giving rise to maritime jurisdiction is
the protection of maritime commerce.” 16
Thus, in determining whether a contract being sued upon is a maritime
contract, we should use contract principles rather than tort principles: We look
12 Id. at 18-19.
13 Id. at 21-22.
14 Id. at 24.
15 Id. (second alteration in original) (quoting N. Pac. S.S. Co v. Hall Bros. Marine Ry. &
Shipbuilding Co., 249 U.S. 119, 125 (1919) (citing Ins. Co v. Dunham, 78 U.S. 1, 16 (1870)));
see also Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603, 611 (1991) (“[T]he trend in modern
admiralty case law . . . is to focus the jurisdictional inquiry upon whether the nature of the
transaction was maritime.”).
16 Id. at 25 (emphasis removed) (internal quotation marks omitted) (quoting Exxon, 500 U.S.
at 608 (quoting Sisson v. Ruby, 497 U.S. 358, 367 (1990), in turn quoting Foremost Ins. Co. v.
Richardson, 457 U.S. 668, 674 (1982))).
19
No. 16-30217
to “the nature and character of the contract,” “whether it has ‘reference to
maritime service or maritime transaction.’” 17 The Court called for a conceptual
approach to the inquiry and the focus of the inquiry is the protection of
maritime commerce. 18
The six-prong test in Davis & Sons for determining whether the contract
being sued upon is a maritime contract includes two prongs that are
appropriate in a contract case: (1) what does the work order provide and (2)
was the work to be performed on navigable water. The remaining factors are
more appropriate in analyzing whether maritime tort jurisdiction can be
exercised. In Grand Isle Shipyard, the en banc court encountered a similar
question. 19
In that case, another action to recover indemnity under a contract, we
were faced with identifying the “situs of the controversy” under the Outer
Continental Shelf Lands Act (“OCSLA”). 20 If the situs was the Outer
Continental Shelf (“OCS”), state law (Louisiana) applied and the indemnity
agreement was unenforceable because of the Louisiana Oilfield Indemnity
Act. 21 We overruled a number of our cases applying tort principles that held
that the situs of the controversy for purposes of the OCSLA was the place of
injury. 22 In Grand Isle Shipyard, the injury occurred on a vessel and the
appellant argued that this was the situs of the controversy. 23 We disagreed
17 Id. at 24-25.
18 Id. at 25.
19 Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778 (5th Cir. 2009) (en banc).
20 Id. at 781.
21 Id.
22 Id. at 787-88 (overruling Diamond Offshore Co. v. A&B Builders, Inc., 302 F.3d 531, 546
(5th Cir. 2002); Demette, 280 F.3d at 500; Hodgen v. Forest Oil Corp., 87 F.3d 1512, 1527 (5th
Cir. 1996); Smith v. Penrod Drilling Corp., 960 F.2d 456, 459 (5th Cir. 1992); and Hollier, 972
F.2d at 664).
23 Id. at 781-82.
20
No. 16-30217
and concluded that we should apply contract principles and determine where
the majority of the work was to be performed under the contract. 24 Because
most of the work contemplated under the contract was on stationary platforms
on the OCS, we concluded that this location was the focus of the contract and
the situs of the controversy. 25 This resulted in the application of state law as
required under OCSLA. 26
The same reasoning applies here. This is a suit on a contract for
indemnity. We look to the blanket contract and the verbal work order for the
nature and character of the contract; that is, what was the work STS was
engaged to do on the well in West Lake Verret in the state of Louisiana. The
answer is clear: they were engaged to work downhole from a stationary
platform to dislodge downhole obstructions and get the gas well back on
production. The contract did not call for any work on a vessel.
As it turned out, an unexpected problem developed that required a vessel
equipped with a crane to complete the job. Apache engaged another party,
LDI, to provide the vessel and crew for this work.
Considering all of the above, what is an appropriate test for determining
whether a contract to provide oilfield services is maritime or non-maritime?
Based on the Supreme Court’s opinion in Kirby, our opinion in Grand Isle
Shipyard, and the weight of our decisions in this area, I would substitute the
following test for determining whether a contract for services to facilitate the
drilling or production of oil and gas on state waters or the OCS is a maritime
contract.
24 Id. at 787.
25 Id. at 787-88; see also ROBERT FORCE & MARTIN J. NORRIS, THE LAW OF MARITIME
PERSONAL INJURIES § 13:9 (2016) (discussing cases applying the rule emanating from Grand
Isle Shipyard).
26 Id. at 789.
21
No. 16-30217
So long as a contract’s primary purpose is to provide services to promote
or assist in oil or gas drilling or production on navigable waters aboard a vessel,
it is a maritime contract. Its character as a maritime contract is not defeated
simply because the contract calls for incidental or insubstantial work unrelated
to the use of a vessel. 27
Under this test, a contract or work order to provide specialized services
to promote the drilling and production of an oil or gas well from a vessel should
be considered a maritime contract. If such a contract also provides for work on
land or platforms that is incidental to the work on vessels or insubstantial in
relation to the vessel-related work, this does not defeat the character of the
contract as a maritime contract. Under this test and consistent with most of
our cases, specialized services to promote drilling or production of oil or gas to
be performed solely from a stationary platform should not be considered a
maritime contract.
Our cases have consistently held that oil and gas drilling on navigable
waters from a vessel is considered maritime commerce. 28 It follows that other
services performed on a vessel in navigable waters to facilitate the drilling and
production of oil and gas constitutes maritime commerce. Determining
whether the contract is maritime should not depend on the nature of the
particular oilfield services contracted for.
Applying this test to today’s case, the verbal Apache work order called
for STS to perform downhole work from a stationary platform to clear an
obstruction in a gas well and get it back on production. This downhole work
27Professor Robertson recommends a similar test, see Robertson, supra note 7 at 548.
28Theriot v. Bay Drilling Corp., 783 F.2d 527, 538-39 (5th Cir. 1986) (“Oil and gas drilling on
navigable waters aboard a vessel is recognized to be maritime commerce.”); Pippen v. Shell
Oil Co., 661 F.2d 378, 384 (5th Cir. 1981) (“[O]ffshore drilling the discovery, recovery, and
sale of oil and natural gas from the sea bottom is maritime commerce . . . .”).
22
No. 16-30217
on a stationary platform has no maritime or “salty” flavor that would qualify
it as a maritime contract.
The fact that during the course of performing the work from the
platform, a problem was encountered that required Apache to engage a vessel
with a crane to assist in the job, does not alter the nature of Apache’s contract
with STS even though the STS crew performed incidental work to assist in
connecting the vessel’s crane to a load to be lifted.
CONCLUSION
It is time to abandon the Davis & Sons test for determining whether or
not a contract is a maritime contract. The test relies more on tort principles
than contract principles to decide a contract case. It is too flexible to allow
parties or their attorneys to predict whether a court will decide if a contract is
maritime or non-maritime or for judges to decide the cases consistently. The
Supreme Court’s decision in Kirby reinforces this conclusion. Just as
important, the above test will allow all parties to the contract to more
accurately allocate risks and determine their insurance needs more reliably.
23