Court Opinion

ID: 38990
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:18:05+00
Date Added: 2024-06-11T17:16:08.416116
License: Public Domain

United States Court of Appeals
                                                              Fifth Circuit
                                                            F I L E D
                 UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT                   July 29, 2005

                      _______________________            Charles R. Fulbruge III
                                                                 Clerk
                            No. 04-30080
                      _______________________

                            BILLY HODA,

                                                          Plaintiff,

                              versus

                 ROWAN COMPANIES, INC., ET AL.,

                                                         Defendants;

                     ROWAN DRILLING CO., INC.,

                         Defendant-Third Party-Plaintiff-Appellee,

                              versus

           GREENE’S PRESSURE TESTING AND RENTALS INC.;
                        ATLANTIC INS. CO.,

                                Third Party-Defendants-Appellants.

          Appeals from the United States District Court
              for the Eastern District of Louisiana

Before GARWOOD, JONES, and PRADO, Circuit Judges.

BY EDITH H. JONES:

          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 partici-

pating in this industry.           Nevertheless, we are bound by the

approach this court has followed for more than two decades.

            Billy Hoda, an employee of Appellant Greene’s Pressure

Testing and Rentals Inc. (“Greene”), was injured while working

onboard the Rowan Gorilla II, a jack-up drilling rig owned by

Appellee Rowan Drilling Co., Inc. and operating on the Outer

Continental Shelf.       Hoda sued Rowan, which filed a third party

complaint    against    Greene    and   Atlantic    Insurance    Company    for

defense, indemnity, and additional assured status based on the

parties’    Master   Service     Agreement.1       The   indemnity   provision

required Greene to indemnify Westport and Westport’s contractors,

including Rowan, from claims by Greene’s employees.

            The corporate parties moved for summary judgment over the

enforceability of the indemnity provision.2 The Louisiana Oilfield

Anti-Indemnity Act, applicable if the contract is “non-maritime,”

invalidates just such indemnity provisions.3             On the other hand, if

      1
            Greene’s original contract was with Equitable Resources Energy
Company, which changed its name to Equitable Production Company.      Equitable
Production Company later merged with Westport. The parties refer to the various
contracts and work orders as being with Westport, however.
      2
            Hoda settled, but the parties’ contractual dispute was preserved.
      3
            LA. REV. STAT. ANN. § 9:2780. Curiously, the parties only mention in
passing the Master Service Agreement’s choice of law clause (¶ 14), which
stipulates the application of general maritime law, but “if maritime law is held
inapplicable by a court of competent jurisdiction,” then Texas law applies.
Moreover, the contract calls solely for the performance of offshore services.
Our conclusion that the contract is maritime is consistent with the contract.

                                        2
the contract is a “maritime” agreement, federal maritime law does

not bar enforcement of that provision.

           Following a hearing on a developed but undisputed factual

record, the district court concluded that the contract was maritime

and granted Rowan’s motion, requiring indemnification.                  Greene’s

timely appealed.    We affirm.

                                DISCUSSION

           This court reviews a summary judgment de novo, using the

same standards as the district court.           Green v. Vermilion Corp.,

144 F.3d 332, 334 (5th Cir. 1998).           A careful description of the

facts is a necessary predicate to further analysis.

           The   Master     Service   Agreement      covered     “hydrostatic

testing, hydraulic torque wrench service, nut splitters, casing

cutting,   pipeline/production        and    miscellaneous       rental       tool

equipment.” With this agreement in place, Greene’s performed under

individual work orders.      When Hoda tripped over hoses on the deck

of the Gorilla II, he was engaged in torquing (or tightening) nuts

on the blow-out preventers on Westport’s wellhead.

           The   Greene’s    employees      worked   on   the   decks    of   the

Gorilla II as there was no fixed platform at the wellhead.                    The

torquing constituted part of a project to install and change

blow-out preventers, a project accomplished in conjunction with

Rowan personnel who operated the crane and other equipment on the

rig.   Greene’s employees torqued down and torqued up the bolts on

                                      3
the blow-out preventers as they were installed on or removed from

the wellhead riser.    Greene’s exact work did not require the use of

the vessel, her personnel or equipment, but Greene’s would have had

nothing to do had Rowan personnel not used the rig’s equipment to

set the blow-out preventers in place, align them, place the bolts

on them, and place the nuts on the bolts for tightening (or

performed the same functions in reverse order). Moreover, Greene’s

work was sequenced with and delayed by Rowan with gravel packing

operations that Rowan was separately undertaking on the well.

             The legal framework for determining whether a contract is

maritime is set out in Davis & Sons, Inc. v. Gulf Oil Corp., 919
F.2d 313 (5th Cir. 1990).     Under Davis, there are two parts to the

inquiry — an examination of the “historical treatment in the

jurisprudence” and a six-factor “fact-specific inquiry.”       Id. at

316.     In some circumstances, though not here, the historical

treatment is clear enough to make the second part of the test

“unimportant.” Demette v. Falcon Drilling Co., Inc., 280 F.3d 492,

500 (5th Cir. 2002).     The six factors are:

       (1)   what does the specific work order in effect at the
             time of injury provide?

       (2)   what work did the crew assigned under the work
             order actually do?

       (3)   was the crew assigned to work aboard a vessel in
             navigable waters?

       (4)   to what extent did the work being done relate to
             the mission of that vessel?

                                   4
      (5)    what was the principal work of the injured worker?
             and

      (6)    what work was the injured worker actually doing at
             the time of injury?

Davis, 919 F.2d at 316.        The maritime or non-maritime status of the

contract ultimately depends on its “nature and character,” not on

its place of execution or performance.            Id.

             No Fifth Circuit case has previously addressed whether

torquing bolts on a blow-out preventer from a jack-up drilling rig

used as a work platform constitutes a maritime contract.              Davis’s

initial     reference     to     the    “historical     treatment    in    the

jurisprudence,” while inconclusive, is nonetheless suggestive, for

present purposes.

             Arguing by analogy, Greene’s cites this court’s decisions

holding     that   contracts    for    wireline   services   performed    on   a

partially drilled offshore oil and gas well are “distinctly”

non-maritime, even when the services are partially performed from

a special-purpose boat4 or on a jack-up drilling rig.5               Domingue

described a jack-up drilling rig as a mere work platform for the

execution of the wireline services contract. Domingue, 923 F.2d at

397. This argument draws some force from the fact that the Supreme

Court has rejected, albeit in a different context, this court’s

      4
             Thurmond v. Delta Well Surveyors, 836 F.2d 952 (5th Cir. 1988).
      5
            Domingue v. Ocean Drilling & Exploration Co., 923 F.2d 393, 394 n.1
(5th Cir. 1991). A wireline operation assists on partially drilled oil and gas
wells and gathers relevant geophysical data.

                                         5
earlier, expansive equation of offshore drilling with “maritime

commerce.”    Herb’s Welding, Inc. v. Gray, 470 U.S. 414, 105 S. Ct.
1421, 1426 (1985) (LHWCA did not cover injuries of oil and gas

worker on a fixed production platform in state territorial waters).

Beyond doubt, the torquing services Greene’s provided pertain

solely to oil and gas development and, in and of themselves, have

nothing to do with traditional maritime activity or commerce.6

Greene’s relies on Domingue’s statement that a “contract does not

become maritime simply because the wireline services were performed

aboard the drilling rig vessel.             A specialty services contract

related to oil and gas exploration and drilling takes on a salty

flavor when [its] performance . . . is more than incidentally

related to the execution of the vessel’s mission.” 923 F.2d at

396.

            Rowan,     for   its    part,     broadly     characterizes      the

Westport/Greene’s contract as integral to and integrated with the

activities of its specialty purpose vessel:             by performing part of

the mission of the vessel, Greene’s contract is maritime.                 Rowan

relies on two cases in which contracts to provide casing services

on jack-up drilling rigs operating on the Outer Continental Shelf

were deemed maritime.        Demette, 280 F.3d 492; Campbell v. Sonat

       6
            See, e.g., Sohyde Drilling & Marine Co. v. Coastal States Gas
Producing Co., 644 F.2d 1132, 1137 (5th Cir. 1981), in which this court observed
that blow-out preventers are not connected with maritime activity. Sohyde’s
relevance, as a property damage tort case, to the interpretation of maritime/non-
maritime contracts was, however, discounted in Domingue, 923 F.2d at 397 n.9.
But cf. Thurmond, 836 F.2d at 956 (discussing Sohyde).

                                       6
Offshore Drilling, Inc., 979 F.2d 1115 (5th Cir. 1992).7                  Campbell

furnishes the critical reasoning. Because the casing crew required

the use of the rig’s derrick and draw works to accomplish its

tasks, the contract work was deemed “inextricably intertwined” with

the “maritime activities” of the rig and its crew.                Campbell, 979
F.2d at 1123, citing Davis, 919 F.2d at 317 (mission of “mobile

maintenance vessel” was “inextricably intertwined with maritime

activities”).8

            That the “jurisprudential history” alluded to in Davis

cuts both ways is a trite observation.9                This court’s decisions

have reflected the inherent tensions between the non-maritime

nature and concerns of traditional oil and gas drilling and those

of   the   salty   locale   in   which       such   exploration   often    occurs.

Greene’s position is supported by cases in which agreements for

self-contained oil and gas activities, that do not inherently

depend on a vessel and crew, are held not to constitute maritime

      7
            In Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 332 n.1 (5th
Cir. 1981), this court earlier held that federal maritime law controls
construction of an indemnity clause in a purchase order for casing services.
      8
            Rowan advances some other alleged connections of Greene’s work to
maritime activity that are wholly unpersuasive. These include the fact that
Greene’s personnel and equipment were loaded onto the Gorilla II by means of the
vessel’s cranes; that Greene’s personnel remained onboard the rig for a couple
of nights; and that the particular project involved a “repair” of the rig solely
because the blow-out preventers, which were installed on the wellhead riser
during drilling, were property of Rowan. The first two facts are descriptive,
not analytical, and the third is disingenuous.
      9
             See, e.g., Demette, 280 F.3d at 502 (DeMoss, J., dissenting); Davis,
919 F.2d at 315 (attempt to determine whether contract linked to offshore gas and
oil and production is maritime “has led to much confusion”); Lewis v. Glendel
Drilling Co., 898 F.2d 1083, 1087-88 (5th Cir. 1990) (suggesting en banc
treatment).

                                         7
contracts.       In this case, however, the torquing of the blow-out

preventers was not as independent and self-contained an activity as

Greene’s contends. “Even a contract for offshore drilling services

that does not mention any vessel is maritime if its execution

requires the use of a vessel.”                Demette, 280 F.3d at 500-01.             As

was noted above, the torquing up and torquing down of the blow-out

preventer    stacks      was    but    a    discrete    function    in    a   carefully

orchestrated series of actions conducted by Rowan during the

drilling    of    the   well.         Greene’s    services       were    “inextricably

intertwined” with the activity on the rig, were dependent on

Rowan’s placement of the equipment on which Greene’s employees

worked, and      could    not    be     performed      without    the    rig’s   direct

involvement.      The more analogous caselaw is found in Campbell and

Demette and leans strongly toward finding a maritime contract.

            This    suggestion         is   confirmed    by   application        of   the

specific Davis factors.               The work order called for Greene’s to

torque up and torque down the blow-out preventer stacks, and

Greene’s crew performed their services aboard a vessel in navigable

waters, in coordination with and deference to the rig’s personnel.

Hoda was injured while performing the specified work.                     The only one

of the Davis factors plausibly in doubt is Factor no. 4, the

question whether Greene’s work was “related to the mission of the

vessel.”    We conclude, paraphrasing Demette, that torquing up and

torquing down blow-out preventers “is an integral part of drilling,

which is the primary purpose of the vessel.” 280 F.3d at 501.

                                             8
This conclusion is not merely descriptive, but derives from the

functional interrelationship of Greene’s work with the rig.

          It needs to be added that we do not accept Rowan’s broad

characterization   whereby   oil   and   gas   services   contracts   are

maritime whenever they contribute to the mission of the jack-up

drilling rig.   To do so would conflict with Davis and Thurmond and

would potentially be at odds with Herb’s Welding.         Our ruling is,

like others in this area, confined to the facts before us.

                             CONCLUSION

          For these reasons, the district court accurately applied

this court’s caselaw in concluding that the Greene’s/Westport

contract was on this occasion a maritime obligation. Consequently,

the contract’s indemnity provision is enforceable under general

maritime law.   The judgment of the district court is AFFIRMED.

                                   9