Court Opinion

ID: 8414898
Source: CourtListenerOpinion
Date Created: 2022-11-02 21:23:02.049021+00
Date Added: 2024-06-11T16:48:10.696722
License: Public Domain

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 & Sons1 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.
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 *348Davis & 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
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, 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 *349bills 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 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 ease, 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 arid 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 OCS-LA was the place of injury.22 In Grand Isle *350Shipyard, the injury occurred on a vessel and the appellant argued that this was the situs of the controversy.23 We disagreed 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,
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 *351facilitate 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 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.

. Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313 (5th Cir. 1990).

. 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.

. 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).

. Thurmond v. Delta Well Surveyors, 836 F.2d 952 (5th Cir. 1988).

. Id. at 957 (Garwood, J., concurring).

. Id. (citing Kossick v. United Fruit Co., 365 U.S. 731, 738, 81 S.Ct. 886, 6 L.Ed.2d 56 (1961)).

. 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).

. Id. at 545 (alteration in Robertson).

. 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 nonmaritime); 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).

. 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).

. 543 U.S. 14, 125 S.Ct. 385, 160 L.Ed.2d 283 (2004).

. Id. at 18-19, 125 S.Ct. 385.

. Id. at 21-22, 125 S.Ct. 385.

. Id. at 24, 125 S.Ct. 385.

. Id. (second alteration in original) (quoting N. Pac. S.S. Co v. Hall Bros. Marine Ry. & Shipbuilding Co., 249 U.S. 119, 125, 39 S.Ct. 221/63 L.Ed. 510 (1919) (citing Ins. Co v. Dunham, 78 U.S. 1, 16, 11 Wall. 1, 20 L.Ed. 90 (1870))); see also Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603, 611, 111 S.Ct. 2071, 114 L.Ed.2d 649 (1991) ("[T]he trend in modern admiralty case law ... is to focus the jurisdictional inquiry upon whether the nature of the transaction was maritime.”).

. Id. at 25, 125 S.Ct. 385 (emphasis removed) (internal quotation marks omitted) (quoting Exxon, 500 U.S. at 608, 111 S.Ct. 2071 (quoting Sisson v. Ruby, 497 U.S. 358, 367, 110 S.Ct. 2892, 111 L.Ed.2d 292 (1990), in turn quoting Foremost Ins. Co. v. Richardson, 457 U.S. 668, 674, 102 S.Ct. 2654, 73 L.Ed.2d 300 (1982))).

. Id. at 24-25, 125 S.Ct. 385.

. Id. at 25, 125 S.Ct. 385.

. Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778 (5th Cir. 2009) (en banc).

. Id. at 781.

. Id.

. 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; *350Hodgen 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).

. Id. at 781-82.

. Id. at 787.

. Id. at 787-88; see also Robert Force & Martin J. Norris, The Law of Maritime Personal Injuries § 13:9 (2016) (discussing cases apply-tag the rule emanating from Grand Isle Shipyard).

. Id. at 789.

. Professor Robertson recommends a similar test, see Robertson, supra note 7 at 548.

. Theriot v. Bay Drilling Corp., 783 F.2d 527, 538-39 (5th Cir. 1986) ("Oil and gas drilling on navigable waters aboard a vessel is recog*351nized to be maritime commerce.”); Pippen v. Shell Oil Co., 661 F.2d 378, 384 (5th Cir. 1981) ("[Ojffshore drilling the discovery, recovery, and sale of oil and natural gas from the sea bottom is maritime commerce....”).