Plains Pipeline, L.P. v. Great Lakes Dredge & Dock Co.

Case: 14-31046 Document: 00513151021 Page: 1 Date Filed: 08/12/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-31046 United States Court of Appeals
Fifth Circuit
FILED
PLAINS PIPELINE, L.P.; PHILLIPS 66 PIPELINE, L.L.C., August 12, 2015
Lyle W. Cayce
Plaintiffs - Appellants Clerk
v.
GREAT LAKES DREDGE & DOCK COMPANY; GREAT LAKES DREDGE
& DOCK COMPANY, L.L.C. OF LOUISIANA,
Defendants - Appellees
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:13-CV-398
Before STEWART, Chief Judge, and JOLLY and GRAVES, Circuit Judges.
PER CURIAM:*
This interlocutory admiralty appeal involves an allision between a
dredge owned and operated by Great Lakes Dredge & Dock Company, LLC,
and an underwater oil pipeline owned by Plains Pipeline, L.P., and used by
Phillips66 Pipeline, LLC. The alleged allision occurred in the early morning of
March 17, 2012, when the dredge, seeking to secure its position for anchoring,
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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lowered its dredge ladder and cutter head 1 into the seabed, striking the
pipeline. Following the allision, Plains and Phillips sued Great Lakes,
claiming, among other things, that Great Lakes acted negligently in failing to
discharge its notification responsibilities under the Louisiana Underground
Utilities and Facilities Protection Law, La. Rev. Stat. Ann. § 40:1749.11 et seq.
(referred to as “the One-Call Statute”), before engaging in the anchoring
procedure.
At issue in this appeal are the district court’s orders with respect to two
motions for partial summary judgment. In July 2014, Great Lakes moved for
partial summary judgment on Phillips’s claims seeking recovery for “economic
loss,” asserting that Phillips lacked a proprietary interest in the pipeline and
thus that its claims were barred under the rule set out by the Supreme Court
in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927). On the same
day, the plaintiffs moved for partial summary judgment, seeking a ruling that
Great Lakes had engaged in “excavation” the morning of the incident and
therefore was required to provide advance notice under the One-Call Statute.
See La. Rev. Stat. Ann. § 40:179.12(6). The district court granted Great Lakes’s
motion and denied the plaintiffs’ motion. Reviewing these decisions de novo,
see, e.g., Alexander v. Express Energy Servs. Operating, L.P., 784 F.3d 1032,
1033 (5th Cir. 2015), we AFFIRM.
I.
We begin with the district court’s determination that Great Lakes’s
conduct on the morning of the incident did not subject it to the One-Call
Statute.
1 Although the cutter head is ordinarily a dredging tool, it is undisputed that, at the
time of the incident, the cutter head was being used, not to dredge, but to bring the vessel to
a stop and secure its position for anchoring. See also infra pp. 4–5.
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A.
Under the One-Call Statute, persons planning to “excavate” near an
underground utility or facility must first give at least 48 hours’ notice to the
appropriate regional notification center. La Rev. Stat. Ann. §§ 40:1749.13(A)–
(B). Once notice of excavation is given, the notification center, in turn, notifies
the owners and operators of nearby underground facilities, id. § 1749.14(B),
who then must mark the location of their facilities on the surface (or otherwise
inform the excavator of their facilities’ locations) before excavation begins. Id.
§ 1749.14(C). The purpose of this process is “to promote the protection of
property” and persons “in the immediate vicinity of an underground facility . .
. from damage, death, or injury.” Id. § 1749.11(B). Accordingly, excavators
who fail to give the requisite notice are subject to civil penalties enforced by
the Louisiana Department of Public Safety and Corrections (the Department)
or by local law enforcement. Id. § 1749.23. 2
Because it is “excavation” that triggers the notification requirement, the
critical question is whether Great Lakes’s anchoring procedure constitutes
“excavation.” 3 The statute defines “excavation” as follows:
2 The Department fined Great Lakes $3,000 for the events at issue here. Great Lakes,
expressing its view that the One-Call Statute did not apply, pleaded nolo contendere and paid
the fine.
3 The plaintiffs vigorously dispute this characterization of Great Lakes’s activity,
asserting that the dredge’s use of the cutter head amounted to “much more than
‘anchor[ing].’” For support, they direct us to (1) statements from Great Lakes’s site manager
to the Department investigator that the dredge was still moving at the time the cutter head
penetrated the seabed, such that the cutter head itself is what stopped the dredge; and (2) a
hydrographic survey of the pipeline area showing that the cutter head created a “scour area”
several feet deeper than the one later created by the dredge’s permanent anchors.
Even viewed in the light most favorable to the plaintiffs, however, this evidence is
insufficient to remove Great Lakes’s activity from the realm of “anchoring.” For one thing,
the plaintiffs have given no reason to think that a vessel must be at a complete stop for one
to “anchor” it, and no such requirement seems inherent in the ordinary meaning of the word
“anchor.” See Oxford English Dictionary (online ed. 2015) (defining the verb “anchor” as “[t]o
secure (the ship) with an anchor; to place at, or bring to, anchor”). Furthermore, although
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“Excavation” or “excavate” means any operation for the purpose of
movement or removal of earth, rock, or other materials in or on the
ground by the use of powered or mechanical or manual means,
including pile driving, digging, blasting, auguring, boring, back
filling, dredging, compressing, plowing-in, trenching, ditching,
tunneling, land-leveling, grading, and mechanical probing.
“Excavation” or “excavate” shall not include manual probing.
§ 1749.12(6). The Louisiana Supreme Court has never interpreted the One-
Call Statute’s definition of “excavation.” Our task, then, is to “make an Erie
guess and determine, in our best judgment, how that court would resolve the
issue if presented with the same case.” Six Flags Inc. v. Westchester Surplus
Lines Ins. Co., 565 F.3d 948, 954 (5th Cir. 2009).
B.
We think it clear that anchoring does not fall within the statutory
definition of “excavation.” As an initial matter, the plaintiffs concede that none
of the explicitly listed examples of “excavation” is implicated here. See
§ 1749.12(6) (listing as examples of “excavation” “pile driving, digging,
blasting,” etc.). They argue, however, that Great Lakes’s anchoring activity
was an “operation for the purpose of movement . . . of earth,” and thus
constitutes “excavation” under § 1749.12(6)’s general definition of the term.
Specifically, they argue that Great Lakes’s activity had “the purpose of” moving
earth because, “to accomplish” the objective of stopping the movement of the
the cutter head may indeed have penetrated deeper into the seabed than did the dredge’s
permanent anchors, this fact suggests a difference only in degree, not in kind.
More to the point than the evidence relied on by the plaintiffs, we think, is the
deposition testimony from witnesses who were present at the time of the incident and who
are familiar with the dredge’s cutter-head technique. Those witnesses uniformly testified
that (1) when a dredge uses the cutter head as part of its anchoring process, it does so in
order to maintain position after coming nearly to a complete stop; and (2) the cutter-head
technique is necessary for the dredge to anchor in anything other than perfect weather and
current conditions. In the light of this undisputed testimony, we agree with the district court
that the dredge’s use of the cutter head on the morning of the incident is properly
characterized as “anchoring.”
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dredge, “the cutter head would have to dig into the seabed and displace the
earth.”
This argument fails to persuade, however, because it overlooks the basic
legal distinction between purpose and knowledge. See generally Restatement
(Third) of Torts: Liability for Physical and Emotional Harm § 1(a) & cmt. a
(2011). Again, under § 1749.12(6), an activity constitutes “excavation” if it has
“the purpose of movement . . . of earth.” § 1749.12(6) (emphasis added).
Persons have the “purpose” of causing a particular result only if that is their
“conscious object.” Model Penal Code § 2.02(2)(a)(i); see also Black’s Law
Dictionary (10th ed. 2014) (defining “purpose” as “[a]n objective, goal, or end”).
By contrast, persons act “knowingly” with respect to a result if they are
“practically certain” the result will follow from their conduct. Model Penal
Code § 2.02(2)(b)(ii); see also Black’s Law Dictionary (10th ed. 2014) (defining
“knowledge” as “a state of mind in which a person has no substantial doubt
about the existence of a fact”). The plaintiffs may well be right that the
movement of earth is an inevitable result of anchoring, and thus that a person
who engages in anchoring does so knowing that he will cause the movement of
earth. But under the One-Call Statute, an activity constitutes “excavation”
only if the “purpose”—the actual object—of engaging in it is the “movement . .
. of earth.” § 1749.12(6). And the object of “anchoring” is, unmistakably, the
securing of a ship, not the movement of earth. 4
4 The Louisiana Supreme Court has recognized this distinction between “purpose” and
“knowledge” in other contexts. See, e.g., Bazley v. Tortorich, 397 So. 2d 475, 481–82 (La.
1981) (holding that a person acts “intentionally” for the purposes of the intentional-tort
exception to Louisiana’s worker’s-compensation law if “the person . . . either (1) consciously
desires the physical result of his act, whatever the likelihood of that result happening from
his conduct; or (2) knows that that result is substantially certain to follow from his conduct,
whatever his desire may be as to that result” and explaining that these two prongs are
disjunctive (emphasis added) (citing Restatement (Second) of Torts § 8 (1965)). Given the
distinction’s ubiquity, the Louisiana legislature’s express choice of the word “purpose” in
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This plain-language reading of § 1749.12(6)’s “purpose” requirement
accords with the statutory context. Under “the commonsense canon of noscitur
a sociis[,] a word is given more precise content by the neighboring words with
which it is associated.” United States v. Williams, 553 U.S. 285, 294 (2008);
see, e.g., State v. Jones, 2007-1052 (La. 6/3/08); 983 So. 2d 95, 105 (“Because
the word [at issue] is accompanied by . . . specific words . . . , all of which are
capable of analogous meaning, the principle of noscitur a sociis is appropriately
invoked in determining the scope of this statutory proscription.”). Here, the
“neighboring words” of § 1749.12(6)’s general definition of “excavation” confirm
that in the general definition, “purpose” means purpose. First, each of the
examples explicitly listed as an “excavation” activity is an activity in which the
movement of earth is the object, not just a side effect. See § 1749.12(6)
(“‘Excavation’ . . . includ[es] pile driving, digging, blasting, auguring, boring,
back filling, dredging, compressing, plowing-in, trenching, ditching, tunneling,
land-leveling, grading, and mechanical probing.”). Similarly, the word
“excavation” itself connotes an activity that not only incidentally results in the
movement of earth, but is actually aimed at it: this is why no one would say,
for instance, that raking leaves constitutes “excavation.” See, e.g., Oxford
English Dictionary (online ed. 2015) (defining “excavate” as “[t]o make hollow
by removing the inside” or “to dig out (soil) leaving a hollow”). Thus, the
noscitur canon confirms what plain language indicates: an activity falls into
§ 1749.12(6)’s general definition of “excavation” only if—unlike anchoring—its
actual goal is the movement of earth.
Finally, we note that, even if there were ambiguity in the statute’s
“purpose” requirement, our interpretation would not change. Under the rule
§ 1749.12(6), and the other interpretive canons discussed infra pp. 6–7, our Erie guess is that
the Louisiana Supreme Court would recognize the distinction here also.
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of lenity, Louisiana courts resolve ambiguities in “penal” statutes (such as this
one) in the defendant’s favor. See, e.g., Gibbs Constr. Co. v. Dep’t of Labor, 540
So. 2d 268, 269 (La. 1989). Thus, assuming arguendo that § 1749.12(6) could
be stretched to include activities in which the movement of earth is only a
substantially certain result, the rule of lenity would nonetheless require us to
adopt the narrow reading of “purpose” set out above.
* * *
In sum, § 1749.12(6), in relevant part, defines “excavation” to mean “any
operation for the purpose of movement . . . of earth.” Because the purpose of
Great Lakes’s activity here—anchoring—is not the movement of earth, the
district court did not err in concluding that the One-Call Statute was not
triggered.
II.
We turn next to the district court’s determination that Phillips’s claims
for economic damages were barred by the Robins Dry Dock rule.
A.
Under the well settled rule set out by the Supreme Court in Robins Dry
Dock, a plaintiff may not recover in an unintentional maritime tort suit “for
economic loss if that loss resulted from physical damage to property in which
he had no proprietary interest.” Louisiana ex rel. Guste v. M/V Testbank, 752
F.2d 1019, 1022 (5th Cir. 1985) (en banc). The purpose of the Robins Dry Dock
rule, we have said, is to serve as a “pragmatic limitation on the doctrine of
foreseeability,” giving judges an easily administrable rule of decision and
allowing parties to order their affairs in view of predictable outcomes. Id. at
1022, 1028–30. Accordingly, this court has enforced Robins Dry Dock—and in
particular, its requirement that the plaintiff have a “proprietary interest” in
the damaged property—as a “bright line,” “hard-edged” rule. See State of
Veracruz v. B.P., P.L.C. (In re Deepwater Horizon), 784 F.3d 1019, 1023 (5th
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Cir. 2015); IMTT-Gretna v. Robert E. Lee SS, 993 F.2d 1193, 1194 (5th Cir.
1993). In particular, this court has held that a plaintiff has a sufficient
“proprietary interest” to recover under Robins Dry Dock only if he is the actual
owner of the physically damaged property or one who is “tantamount” to an
owner, Veracruz, 784 F.3d at 1026 (internal quotation marks omitted); that is,
only if he has “taken over the property at issue ‘lock, stock and barrel.’” Id. at
1031 (quoting Louisville & N.R. Co. v. M/V Bayou Lacombe, 597 F.2d 469, 473
n.3 (5th Cir. 1979) (Wisdom, J.)); see also Texas E. Transmission Corp. v.
McMoran Offshore Exploration Co., 877 F.2d 1214, 1225 (5th Cir. 1989)
(identifying as incidents of ownership “actual possession or control,
responsibility for repair, and responsibility for maintenance”).
B.
Citing Robins Dry Dock, Great Lakes argues that Phillips cannot recover
some of its claimed damages (specifically, the costs it incurred in transporting
its oil by alternative means during the period following the allision). According
to Great Lakes, those costs represent economic losses resulting from physical
damage to the pipeline—property in which Phillips lacks a “proprietary
interest” because the pipeline is owned by Plains, not Phillips. For its part,
Phillips does not dispute that these costs represent economic losses, nor does
it contend that it is the actual owner of the pipeline. Instead, it argues that
the contractual relationship between it and Plains—a relationship governed
by two contracts, a Service Agreement and an Operating Agreement—gives it
a sufficient “proprietary interest” in the Pipeline to recover its economic losses
even under Robins Dry Dock. This is so, Phillips says, because the Service
Agreement gives Phillips exclusive use of the full capacity of the Pipeline, and
because the Operating Agreement makes Phillips “almost totally responsible
for all of the expense associated with the ownership of the pipeline including
insurance and taxes.”
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In our view, however, the district court did not err in concluding that
Robins Dry Dock barred Phillips’s recovery on its economic-loss claims. Even
if Phillips indeed does have exclusive use of the full capacity of the pipeline,
exclusive use, standing alone, does not create a “proprietary interest” within
the meaning of Robins Dry Dock. See Veracruz, 784 F.3d at 1026. Instead, as
noted, the plaintiff must have “complete control” over the property—control
“tantamount to full ownership.” Id. (internal quotation marks omitted). Here,
the Service and Operating Agreements show that Plains retained significant
control over and responsibility for the pipeline, such that “[i]t could not be said
that [Phillips] ha[s] taken over the [pipeline] ‘lock, stock and barrel.’” Id.
(quoting Bayou Lacombe, 597 F.2d at 473 n.3).
For one thing, under the agreements, Plains maintained the right as
owner to sell all or substantially all assets of the pipeline. Furthermore, Plains
retained the responsibility to “manage, operate, . . . maintain,” and “repair” the
pipeline using its own employees, as well as to obtain insurance for and pay
taxes on the pipeline. Finally, Plains paid all pipeline-related costs in the first
instance, and was obligated to pay maintenance-and-repair costs without
reimbursement by Phillips to the extent that those costs, when combined with
other contractually defined “Fixed Costs,” exceeded $2.6 million annually. 5 For
Phillips to have a “proprietary interest” in the pipeline sufficient to withstand
the Robins Dry Dock rule, the interest left in Plains must amount to nothing
more than “a right of reversion.” Bayou Lacombe, 597 F.2d at 473–74. As the
5 The plaintiffs argue that maintenance-and-repair costs are not “Fixed Costs” subject
to the $2.6 million cap. This argument, however, is inconsistent with the Operating
Agreement, under which “Fixed Costs” is the “catchall” category that includes “[a]ll amounts
paid . . . for the provision of . . . services described in” the Operating Agreement that are not
defined as “Direct Costs.” Because Plains’s maintenance-and-repair obligations are plainly
“services described in” the Operating Agreement, and because maintenance-and-repair costs
are not defined as “Direct Costs,” maintenance-and-repair costs are “Fixed Costs” by virtue
of the catchall clause.
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district court rightly concluded, Plains’s retained interest in the pipeline under
the Service and Operating Agreements was much more than that.
* * *
Because Phillips lacked a sufficient “proprietary interest” in the pipeline
under this court’s Robins Dry Dock jurisprudence, the district court did not err
in dismissing Phillips’s claims for economic damages.
AFFIRMED.
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