Source: https://caselaw.findlaw.com/us-5th-circuit/1885307.html
Timestamp: 2019-04-23 01:02:16+00:00

Document:
IN RE: IN RE: 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.
Before STEWART, Chief Judge, and JOLLY *, DAVIS **, JONES, SMITH, DENNIS, CLEMENT, PRADO, OWEN, ELROD, SOUTHWICK, HAYNES, GRAVES, HIGGINSON and COSTA, Circuit Judges. *** Alan David Ezkovich, Attorney, New Orleans, LA, Clarence William Emory, Georges M. Legrand, Mouledoux, Bland, Legrand & Brackett, L.L.C., New Orleans, LA, Kristin M. Lausten, Ezkovich & Company, LLC, New Orleans, LA, for Plaintiffs–Appellees. Mark Lynn Clark, Robert Jeffrey Bridger, Esq., Thompson, Coe, Cousins & Irons, L.L.P., New Orleans, LA, for Defendants–Appellants. Harold Kemler Watson, Alan R. Davis, Ivan Mauricio Rodriguez, Chaffe McCall, L.L.P., Houston, TX, as Amicus Curiae for Liberty Mutual Insurance Company and Liberty International Underwriters. Richard K. Leefe, Attorney, Leefe, Gibbs, Sullivan, Dupre' & Aldous, L.L.C., Metairie, LA, as Amicus Curiae for Crescent Energy Services, L.L.C.
On October 12, 2005, Apache Corporation (“Apache”) entered into a blanket master services contract (“MSC”) with Specialty Rental Tools & Supply, L.L.P. (“STS”). The MSC included an indemnity provision running in favor of Apache and its contractors.3 In early 2011, Apache issued an oral work order directing STS to perform “flow-back” services on a gas well in navigable waters in Louisiana in order to remove obstructions hampering the well's flow. A stationary production platform provided the only access to the gas well. The work order did not require a vessel, and neither Apache nor STS anticipated that a vessel would be necessary to perform the job.
On February 24, 2011, STS dispatched a two-man crew to perform the work required by the work order. After an unsuccessful day of work, the STS crew determined that some heavy equipment was needed to complete the job and that a crane would be required to lift the equipment into place. Because the production platform was too small to accommodate a crane, the crew suggested to Apache that it engage a barge equipped with a crane to lift the equipment. Apache agreed and contracted with Plaintiff Larry Doiron, Inc. (“LDI”), to provide a crane barge.
The next day, the LDI crew proceeded to the job site on the crane barge POGO and unloaded the equipment requested by the STS crew. After being unsuccessful, however, the STS crew discovered that it needed yet a different piece of equipment, so, with the aid of the crane, both crews began removing the heavy equipment previously unloaded. During this process, the LDI crane operator struck and injured one of the STS crewmembers, Peter Savoie, with the equipment.
Anticipating a claim from Mr. Savoie, LDI filed a limitation of liability proceeding as owner of the crane barge POGO. Savoie filed a claim in the limitation proceeding. LDI, as Apache's contractor, then filed a third-party complaint against STS, seeking indemnity under the terms of the MSC.
LDI filed a motion for summary judgment seeking a declaration that it was entitled to indemnity from STS under the MSC. STS filed a cross-motion for summary judgment seeking a determination that it owed no indemnity. The narrow issue presented was whether the MSC was a maritime contract. If so, general maritime law permitted enforcement of the indemnity provision. If not, Louisiana law controlled, and the Louisiana Oilfield Indemnity Act (“LOIA”) precluded indemnity.4 The district court concluded that maritime law applied and awarded LDI indemnity from STS. Our panel affirmed that judgment on appeal. A majority of the active judges then voted to take the case en banc.
We review de novo a district court's grant of summary judgment.5 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.” 6 A genuine dispute exists if a reasonable jury could find in favor of the nonmoving party.7 All facts and evidence are viewed in the light most favorable to the nonmovant.8 We turn first to the existing law on maritime contracts in this circuit.
The second prong asks: What did the crew actually do? 24 Analyzing this prong required the panel to parse the precise facts related to the services performed under the contract and determine whether those services were inherently maritime. Because none of our previous case law had considered the flow-back services at issue here and whether they were inherently maritime, the panel attempted to analogize flow-back services to other services considered in previous opinions.25 This required the panel to give a detailed description of both this case and the analogous cases, comparing flow-back services to casing, wireline, and welding services.26 In doing so, the panel added to the many pages dedicated to similar painstaking analyses in the Federal Reporter.27 The fact is, none of these services are inherently maritime. As discussed below, the focus should be on whether the contract calls for substantial work to be performed from a vessel.
The third and fourth Davis & Sons prongs ask: Was the crew assigned to a vessel in navigable waters, and to what extent was the crew's work related to the mission of the vessel? 28 These facts would be relevant if we were required to decide whether the crew members were seamen but not relevant to whether the employer of the crewmembers entered into a maritime contract. The fifth prong asks: What was the principal work of the injured worker? 29 Again, this is not relevant to whether the injured worker's employer entered into a maritime contract.
The sixth prong asks: What was the injured worker doing when injured? 30 The facts surrounding the accident are relevant to whether the worker was injured in a maritime tort, but they are immaterial in determining whether the worker's employer entered into a maritime contract.
This test places the focus on the contract and the expectations of the parties. This is the proper approach in a contract case and assists the parties in evaluating their risks, particularly their liability under indemnification clauses in the contract.51 This test also removes from the calculus those prongs of the Davis & Sons test that are irrelevant, such as whether the service work itself is inherently maritime and whether the injury occurred following a maritime tort. Courts need not determine whether this service work has a more or less salty flavor than other service work when neither type is inherently salty.
Applying this new test to this case, the oral work order called for STS to perform downhole work on a gas well that had access only from a platform. After the STS crew began work down hole, the crew encountered an unexpected problem that required a vessel and a crane to lift equipment needed to resolve this problem. The use of the vessel to lift the equipment was an insubstantial part of the job and not work the parties expected to be performed. Therefore, the contract is nonmaritime and controlled by Louisiana law. The LOIA bars indemnity. Accordingly, we reverse the summary judgment in favor of LDI and grant summary judgment in favor of STS, render judgment in favor of STS, and dismiss LDI's third-party complaint against STS.
1. See 919 F.2d 313 (5th Cir. 1990).
2. See 543 U.S. 14 (2004).
3. A more exhaustive factual background can be found in the panel opinion. See In re Larry Doiron, Inc., 869 F.3d 338, 340–41 (5th Cir. 2017).
4. See La. Rev. Stat. § 9:2780(A).
5. James v. State Farm Mut. Auto. Ins. Co., 743 F.3d 65, 68 (5th Cir. 2014).
6. Fed. R. Civ. P. 56(a).
7. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
8. James, 743 F.3d at 68.
9. See La. Rev. Stat. § 9:2780(A).
10. See Hoda v. Rowan Cos., 419 F.3d 379, 380 (5th Cir. 2005).LDI also argues that the choice-of-law clause in the MSC, which specifies general maritime law as the applicable law under which to construe the contract, should be enforced even if the contract is nonmaritime in nature.Our case law makes clear that, if the contract is nonmaritime, Louisiana law will govern its construction even in the face of a choice-of-law clause. This is so because enforcement of the choice-of-law clause would violate Louisiana's public policy and directly contravene LOIA. See Verdine v. Ensco Offshore Co., 255 F.3d 246, 254 (5th Cir. 2001).
11. 836 F.2d 952, 957 (5th Cir. 1988) (Garwood, J., concurring).
12. See id. (quoting Kossick v. United Fruit Co., 365 U.S. 731, 738 (1961)).
13. 919 F.2d at 316.
15. Id. at 315–16 (internal quotation marks, brackets, and citations omitted).
16. Id. at 316 (internal quotation marks and citations omitted).
18. See, e.g., Hodgen v. Forest Oil Corp., 87 F.3d 1512, 1523 n.8 (5th Cir. 1996), (collecting cases expressing frustration with the inconsistent analysis of maritime contracts), overruled on other grounds by Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778, 788 (5th Cir. 2009) (en banc); Hoda, 419 F.3d at 380.
19. 419 F.3d at 380.
20. 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, 545 (2007). For a more detailed criticism of the Davis & Sons test, see id. at 540–45.
21. See generally In re Doiron, 869 F.3d.
22. Davis & Sons, 919 F.2d at 316.
23. STS argues that the following provision in the MSC contemplates the use of a vessel: “IF CONTRACTOR [STS] USES ANY VESSELS IN CONNECTION WITH ITS WORK FOR COMPANY OR COMPANY GROUP,” additional vessel-related insurance is required. (emphasis added).This insurance provision on its face has no application because STS did not provide or use a vessel—the vessel and crew were provided by LDI. This provision requiring vessel-related insurance applied to contractors such as LDI.
24. Davis & Sons, 919 F.2d at 316.
25. See In re Doiron, 869 F.3d at 343.
26. See id. at 344–46.
27. Compare Thurmond, 836 F.2d at 956 (finding wireline services nonmaritime in nature); Domingue v. Ocean Drilling & Expl. Co., 923 F.2d 393, 398 (5th Cir. 1991) (same), with Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 332 (5th Cir. Unit A Aug. 1981) (finding casing services to be maritime in nature), and Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115, 1124–25 (5th Cir. 1992) (same); 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 service contracts are considered maritime in nature, including drilling and workover, casing, catering, repair, and well-site supervision, while other services contracts are traditionally nonmaritime in nature, including wireline work, testing and completion operations).
28. Davis & Sons, 919 F.2d at 316.
31. In re Doiron, 869 F.3d at 345–47.
32. See 543 U.S. at 22–27.
33. See id. at 18.
34. See id. at 18–21.
35. See id. at 22–24.
36. See id. at 24.
38. Id. (second alteration in original) (quoting N. Pac. S.S. Co. v. Hall Bros. Marine Ry. & Shipbuilding Co., 249 U.S. 119, 125 (1919)); 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.”).
39. Kirby, 543 U.S. at 25 (emphasis removed) (internal quotation marks and citations omitted).
41. Id. at 24. The Court explained that “[g]eography ․ is useful in a conceptual inquiry only in a limited sense: If a bill's sea components are insubstantial, then the bill is not a maritime contract.” Id. at 27.
42. See Davis & Sons, 919 F.2d at 315–16 (footnote omitted).
43. See, e.g., Kuehne & Nagel (AG & Co.) v. Geosource, Inc., 874 F.2d 283, 290 (5th Cir. 1989).
44. Kirby, 543 U.S. at 27 (emphasis added) (internal citation omitted).
45. 783 F.2d 527, 538–39 (5th Cir. 1986).
46. 745 F.3d 157, 166 (5th Cir. 2014); see also Boudreaux v. Am. Workover, Inc., 664 F.2d 463, 466 (5th Cir. Unit A Dec. 1981) (noting that vessel-related oil and gas drilling and production “is a major industry with peculiar maritime-related problems,” and, further, that because it is “an industry that provides approximately 40,000 jobs, and untold millions of dollars in revenues and that takes place primarily upon the navigable waters of the United States,” it “bears ‘a significant relationship to ․ commerce on navigable waters' ”) (alteration in original) (footnote and internal citation omitted); Pippen v. Shell Oil Co., 661 F.2d 378, 384 (5th Cir. Unit A Nov. 1981) (“[O]ffshore drilling the discovery, recovery, and sale of oil and natural gas from the sea bottom is maritime commerce ․”); Corbitt, 654 F.2d at 332 (finding that a contract requiring the furnishing of a casing crew to a submersible drilling barge was a maritime contract); Transcon. Gas Pipe Line Corp. v. Mobile Drilling Barge, 424 F.2d 684, 688–91 (5th Cir. 1970) (finding that a drilling and re-work contract requiring the operation and “survey” of a submersible drilling barge was maritime in nature).
47. When work is performed in part on a vessel and in part on a platform or on land, we should consider not only time spent on the vessel but also the relative importance and value of the vessel-based work to completing the contract. In Chandris, Inc. v. Latsis, in formulating the test for whether a worker's connection to a vessel was substantial enough to qualify him as a seaman under the Jones Act, 46 U.S.C. § 30104, the Supreme Court noted:[S]ubstantiality in this context is determined by reference to the period covered by the Jones Act plaintiff's maritime employment, rather than by some absolute measure. Generally, the Fifth Circuit seems to have identified an appropriate rule of thumb for the ordinary case: A worker who spends less than about 30 percent of his time in the service of a vessel in navigation should not qualify as a seaman under the Jones Act. This figure of course serves as no more than a guideline established by years of experience, and departure from it will certainly be justified in appropriate cases.515 U.S. 347, 371 (1995). The district courts may develop a similar rule of thumb in evaluating substantiality in this context. However, we leave this for further development below. The calculus would not include transportation to and from the job site.
48. See Robertson, supra note 20, at 547–48.
49. See Kirby, 543 U.S. at 27. Six other circuits have applied Kirby to determine whether a contract is a maritime one in various circumstances; though none of those decisions addressed a factual situation similar to that in this case, the approaches in those decision are not inconsistent with this test. See Fireman's Fund Ins. Co. v. Great Am. Ins. Co., 822 F.3d 620, 631–36 (2d Cir. 2016) (analyzing whether an insurance contract was maritime); N.H. Ins. Co. v. Home Sav. & Loan Co., 581 F.3d 420, 424–27 (6th Cir. 2009) (same); Sentry Select Ins. Co. v. Royal Ins. Co., 481 F.3d 1208, 1218–20 (9th Cir. 2007) (same); Flame S.A. v. Freight Bulk Pte. Ltd., 762 F.3d 352, 361–63 (4th Cir. 2014) (analyzing whether forward freight agreements were maritime contracts); Odyssey Marine Expl., Inc. v. Unidentified Shipwrecked Vessel, 636 F.3d 1338, 1340–41 (11th Cir. 2011) (analyzing whether a contract to conduct research pertaining to a shipwrecked vessel was maritime); Puerto Rico Ports Auth. v. Umpierre-Solares, 456 F.3d 220, 224–26 (1st Cir. 2006) (analyzing whether a contract to remove a sunken ship from navigable waters was maritime); see also Robert Force & Martin J. Norris, The Law of Maritime Personal Injuries § 1:22 (5th ed. 2017) (discussing Kirby's approach to analyzing maritime contracts).
50. See Kirby, 543 U.S. at 19.
51. We applied a similar analysis in Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, where we held that the focus of the contract, rather than the situs of the injury, was the relevant consideration for the purposes of evaluating the applicability of an indemnity agreement. See 589 F.3d at 786–89; see also Force & Norris, supra note 49, § 13:9 (discussing cases applying the rule emanating from Grand Isle Shipyard).
52. We deal today only with determining the maritime or nonmaritime nature of contracts involving the exploration, drilling, and production of oil and gas. If an activity in a non-oil and gas sector involves maritime commerce and work from a vessel, we would expect that this test would be helpful in determining whether a contract is maritime.
W. EUGENE DAVIS, Circuit Judge.

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