Opinion ID: 622859
Heading Depth: 3
Heading Rank: 2

Heading: The Validity of the Lien

Text: This Court has subject matter jurisdiction over the instant matter pursuant to the Outer Continental Shelf Lands Act (OCSLA). See 43 U.S.C. § 1349(b)(1). In enacting that statute, Congress declared that the United States has jurisdiction over the seabed and subsoil of the OCS. See id. § 1332(1). Congress also extended the application of federal law to the OCS as if the [OCS] were an area of exclusive Federal jurisdiction located within a State. Id. § 1333(a)(1). Finally, Congress declared that [t]o the extent that they are applicable and not inconsistent with [federal law], the laws of the adjacent states are the law[s] of the United States on the OCS. Id. § 1333(a)(2)(A). As the Supreme Court has explained, this last provision reflects Congress's recognition that the Federal Code was never designed to be a complete body of law in and of itself, Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S. 352, 358, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969), and that as a consequence, there is a need to fill the substantial `gaps' in the coverage of federal law, Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 480, 101 S.Ct. 2870, 69 L.Ed.2d 784 (1981). Thus, under the OCSLA, state law may be applicable to disputes arising out of the OCS, albeit only as surrogate federal law. Rodrigue, 395 U.S. at 357, 89 S.Ct. 1835. The Louisiana Oil Well Lien Act (LOWLA) was significantly revised in 1995. See La.Rev.Stat. Ann. § 9:4861 historical and statutory notes; see also Patricia H. Chicoine, Lien on LOWLA; It's a Privilege: Recent Revisions to the Louisiana Oil Well Lien Act, 57 La. L.Rev. 1133, 1133 (1997). The revisions have not, however, disturbed the view of the Fifth Circuit that LOWLA is applicable as federal surrogate law under the OCSLA. Compare Wilson Indus., Inc. v. Aviva Am. Inc., 185 F.3d 492, 493-94 & nn. 1 & 3 (5th Cir.1999) (applying revised statute), with Gardes Directional Drilling v. U.S. Turnkey Exploration Co., 98 F.3d 860, 864-66 (5th Cir. 1996) (applying previous statute), and Union Tex. Petroleum Corp. v. PLT Eng'g, Inc., 895 F.2d 1043, 1050-51 (5th Cir.1990) (same). Both TBS and Eni have also assumed that LOWLA applies. Accordingly, the Court concludes that LOWLA is applicable as federal law in this case. Under LOWLA, a subcontractor may assert a lien over the property of an operator or lessee in order to secure the price of his contract for operations. La.Rev. Stat. Ann. § 9:4862(A)(1). [8] By making available this privilege, the statute aims to protect [subcontractors] from the default of those who engage them. Guichard Drilling Co. v. Alpine Energy Servs., Inc., 657 So.2d 1307, 1312 (La.1995). As the Louisiana Supreme Court has observed, the statute reflects the policy decision that the lease owners are in a far better position to ensure payment for the subcontractor's services than is the subcontractor, and that the onus should be on the lease owners to ensure that the contractor it hires is solvent and that it actually makes payment to the subcontractor. Id. at 1313. The statute clearly place[s] the risk of the contractor's insolvency or failure to pay on those with an interest in the lease. Id. at 1312-13. Of course, LOWLA applies only to operations encompassed by the statute. La. Rev.Stat. Ann. § 9:4862(A)(1). Here, the critical question is whether TBS has performed such operations. Id. The statute defines that term as including every activity conducted by or for a lessee on a well site for the purpose of drilling, completing, testing, producing, reworking, or abandoning a well. Id. § 9:4861(4)(a)(i). In this case, TBS and Eni dispute whether the work that TBS performed falls within this definition. In particular, Eni argues that the work that TBS performed was neither done for the purpose of . . . abandoning a well nor performed on a well site. Id. TBS rejects this contention. It asserts that the work it performed was done for the purpose of . . . abandoning a well and done on a well site. Id. The Court will address these issues in turn.