Court Opinion

ID: 4700322
Source: CourtListenerOpinion
Date Created: 2021-07-01 15:00:41.262934+00
Date Added: 2024-06-11T09:16:18.048042
License: Public Domain

Case: 20-30552     Document: 00515920762           Page: 1    Date Filed: 06/30/2021

           United States Court of Appeals
                for the Fifth Circuit                                 United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                    No. 20-30552                         June 30, 2021
                                                                        Lyle W. Cayce
                                                                             Clerk
   Taylor Energy Company, L.L.C.,

                                                                         Plaintiff,

                                       versus

   Kristi M. Luttrell Captain, in her official capacity as
   Federal On-Scene Coordinator for the MC20 Unified
   Command; et al.,

                                                                      Defendant,

   ------------------------------

   Taylor Energy Company, L.L.C.,

                                                             Plaintiff—Appellant,

                                       versus

   Couvillion Group, L.L.C.,

                                                             Defendant—Appellee.

                Appeal from the United States District Court
                   for the Eastern District of Louisiana
              USDC No. 2:18-CV-14046 C/W No. 2:18-CV-14051
Case: 20-30552     Document: 00515920762           Page: 2   Date Filed: 06/30/2021

                                    No. 20-30552

   Before Smith, Stewart, and Ho, Circuit Judges.
   Carl E. Stewart, Circuit Judge:
          Taylor Energy Company, L.L.C. (“Taylor”) seeks reversal of the
   summary judgment for Couvillion Group, L.L.C. (“Couvillion”). We
   AFFIRM.
                    I. FACTUAL AND PROCEDURAL HISTORY
          Taylor leased and operated oil wells and production platforms
   including a platform in the Mississippi Canyon Block 20 Area. The area is
   located approximately ten miles offshore from the Louisiana coast at the
   mouth of the Mississippi River. Through 2008, Taylor leased and operated
   the MC20 Platform, wells, and associated facilities.
          In September 2004, Hurricane Ivan hit the Gulf Coast and caused a
   massive seafloor collapse, toppling the MC20 platform and jacket. The
   collapse buried the MC20 wells, and oil leaked across the ocean floor and
   surface for more than sixteen years (“the MC20 Incident”).
          Taylor responded to the MC20 Incident and notified the Coast Guard
   of the platform’s fall. The Coast Guard designated Taylor as the
   “Responsible Party” under the Oil Pollution Act of 1990. Taylor was also
   added to the Unified Command group, which was established to respond to
   the MC20 Incident and monitor the MC20 Site.
          After an oil spill, the Clean Water Act (“CWA”) requires a federal
   official to be designated the “On-Scene Coordinator.” 33 U.S.C. §
   1321(d)(2)(K). If a spill “poses or may present a substantial threat to public
   health or welfare of the United States,” the On-Scene Coordinator “shall
   direct all federal, state, or private actions to remove the discharge, as
   appropriate.” 40 C.F.R. § 300.322(b). Captain Kristi Luttrell of the Coast
   Guard served as the On-Scene Coordinator for the MC20 Response.
          After consulting with multiple government authorities and the Coast
   Guard, Taylor successfully drilled nine intervention wells to seal and reduce

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   the oil leak. For over a decade, Taylor and the Coast Guard worked together
   to respond to the MC20 Incident and monitor the remaining wells. Taylor
   spent more than $480 million to address the MC20 Incident.
          In October 2018, the Washington Post published an article about the
   MC20 Incident that negatively described Taylor and its remediation efforts.
   On October 23, 2018, the Coast Guard rescinded its previous administrative
   order with Taylor after determining that some wells were actively
   discharging and that hundreds of barrels were discharged each day. The
   Coast Guard issued a new administrative order that required Taylor to
   instate a containment system to capture, contain, and remove oil from the
   erosional pit near the former Dome C location. The new order warned that a
   failure to comply could lead to the Government’s full or partial assumption
   of the remediation efforts.
          In November 2018, Taylor submitted proposals pitching itself as a
   potential contractor to install the containment system. Captain Luttrell also
   solicited proposals from other contactors, including Couvillion. Captain
   Luttrell selected Couvillion over Taylor, citing Taylor’s previous failed
   efforts at containment. When selecting Couvillion, Luttrell issued a Notice
   of Federal Assumption, which meant that the Coast Guard would work
   directly with Couvillion to install the containment system and Taylor would
   be on the hook for the bill.
          Couvillion entered into a Basic Ordering Agreement with the Coast
   Guard. The agreement requires Couvillion to provide “[l]abor, [e]quipment,
   and materials to contain, cleanup, and/or mitigate the harmful effects of oil
   spills and hazardous substance incidents.” The Coast Guard also issued
   Authorization to Proceed Letters from November 2019 through April 2019
   that authorized Couvillion to “proceed with work as ordered by the Federal
   On-Scene Coordinator . . . .” The Statement of Work provides goals and

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   tasks for Couvillion to propose and accomplish with the approval of the On-
   Scene Coordinator.
           Captain Luttrell issued several memoranda that describe the
   Government’s oversight of Couvillion’s work. She described the meetings
   where various Government officials received progress reports on
   Couvillion’s progress. In particular, she assigned several personnel to
   oversee different parts of the project, and Coast Guard teams were available
   to consult and provide their expertise. Her documents and memoranda
   indicate where she approved and monitored Couvillion’s progress.
               Despite the evidence of Captain Luttrell’s and the Coast Guard’s
   involvement with Couvillion, Taylor argues that the Government did not
   actually exercise control over the project. According to Taylor, Couvillion’s
   contract with the Coast Guard lacks details and gives Couvillion leeway in
   deciding how to run the capture and cleanup operation. Taylor concludes
   that the “barebones contract” and lack of oversight by the Coast Guard
   allowed Couvillion to charge more than $40 million for its services (despite
   Couvillion’s proposal estimate that the work would cost no more than $3
   million). Taylor filed a notice to vacate the Coast Guard’s Administrative
   Order and all actions taken under it, including the Notice of Assumption and
   the agreement with Couvillion.
           At issue in this appeal is Taylor’s Declaratory Judgment Action
   against Couvillion.1 No contractual relationship exists between Taylor and
   Couvillion, but Taylor seeks tort damages and equitable relief for
   Couvillion’s trespass and “unauthorized activities at the MC20 Site.”

           1
            Taylor filed a separate suit (now consolidated with this appeal) against Captain
   Luttrell and the Coast Guard, arguing that the Administrative Orders violated the
   Administrative Procedure Act and its right to due process.

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   Couvillion moved to dismiss on several grounds, including lack of subject-
   matter jurisdiction because it is a government contractor. The court denied
   Couvillion’s Motion to Dismiss and ordered limited discovery on the
   jurisdictional issue. After discovery, Couvillion moved for summary
   judgment on two grounds: (1) because it was entitled to immunity under
   Yearsley v. W.A. Ross Construction Company, 309 U.S. 18 (1940), and (2)
   because Taylor’s claims were preempted. The district court granted
   Couvillion’s motion for summary judgment, concluding that Couvillion was
   immune under Yearsley. This appeal follows.
                            II. STANDARD OF REVIEW
          “We review a district court’s grant of summary judgment de novo,
   applying the same standard as the district court.” Fairmont Cash Mgmt.
   L.L.C. v. James, 858 F.3d 356, 360 (5th Cir. 2017). Summary judgment is
   warranted where “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.”
   Id. (quoting FED. R. CIV. P. 56(a)).
          Yearsley immunity is an affirmative defense, and Couvillion bore the
   burden of proof on the defense at trial. Accordingly, Couvillion must have
   demonstrated that there were no material factual disputes about whether the
   Coast Guard authorized and directed Couvillion’s work. See Rizzo v.
   Children’s World Learning Ctrs., 84 F.3d 758, 762 (5th Cir. 1996).
                                  III. DISCUSSION
          The district court determined that Couvillion was entitled to Yearsley
   immunity and granted Couvillion’s motion for summary judgment. In
   Yearsley, a group of plaintiffs sued a contractor after the contractor extended
   a river dike near the plaintiffs’ land and hastened the land’s erosion. 309 U.S.
   at 19–20. The contractor defended itself on the grounds that its work was
   authorized and directed by the Government of the United States. Id. at 20.

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   The Court agreed and held that where “it is clear that [] authority to carry
   out [a] project was validly conferred, that is, if what was done was within the
   constitutional power of Congress, there is no liability on the part of the
   contractor for executing its will.” Id. at 20–21.
          Yearsley immunity is “derivative sovereign immunity.” Campbell-
   Ewald Co. v. Gomez, 577 U.S. 153, 160 (2016). Such immunity shields
   contractors whose work was “authorized and directed by the Government of
   the United States” and “performed pursuant to [an] Act of Congress.” Id.
   at 167 (quoting Yearsley, 309 U.S. at 20).
          In Taylor’s view, Couvillion is not entitled to Yearsley immunity for
   two reasons: (1) because Couvillion’s actions were not authorized and
   directed by the Government, and (2) because Couvillion exceeded the
   bounds of the Coast Guard’s authority under federal law. Neither argument
   prevails.
                             A. Authorized and Directed
          Taylor argues that there were material factual disputes about whether
   the Government authorized and directed Couvillion’s work. Taylor points to
   the documents memorializing Couvillion’s agreement with the Government
   and Couvillion’s representative’s deposition testimony, contending that the
   evidence demonstrates the Government’s lack of control over Couvillion.
          For actions to be authorized and directed by the Government, the
   contractor’s actions should comply with federal directives. See Campbell-
   Ewald Co., 577 U.S. at 167 n.7.
          The Government’s directives to Couvillion are contained in three sets
   of documents—the Basic Ordering Agreement, Authorizations to Proceed,
   and the Statement of Work. Taylor argues that the documents lack specificity

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                                    No. 20-30552

   and thus indicate that the Government neither authorized nor directed
   Couvillion’s actions.
          The Statement of Work refutes Taylor’s argument. The Statement of
   Work describes the MC20 Incident, the MC20 Site, and the conditions
   surrounding the site like water depth and currents, condition of the seafloor,
   and the location of the fallen jackets. The Statement of Work says “[t]he
   purpose of this effort is [to] eliminate the surface sheen at Mississippi
   Canyon Block 20 (MC20).”
          The Statement of Work details the expectations of Couvillion and its
   subcontractors. It lists nine tasks and eleven deliverables (to be completed at
   various checkpoints during the life of the agreement). Tasks included, inter
   alia, mobilizing to create an MC20 Containment Project Management Plan,
   developing and implementing a Rapid Response Solution containment
   design, and working with the Source Control Support Coordinator and
   Branch Director to begin a review of relevant site data. The corresponding
   deliverables required Couvillion and the subcontractors to deliver the MC20
   Containment Project Management Plan, to present the Rapid Response
   Solution containment design, and to complete an assessment report of
   possible sub-surface control response options. All deliverables were due
   within a set number of days from mobilization.
          Given the specific expectations and due dates outlined in the
   Statement of Work, we agree with the district court’s conclusion that there
   was no material factual dispute about the Government’s authorization of and
   direction over Couvillion’s work.
          Taylor also argues that Couvillion’s representative’s deposition
   raised a genuine factual dispute. The representative testified that Couvillion
   (rather than the Coast Guard) designed various components of Couvillion’s
   containment system.

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                                    No. 20-30552

          Taylor misunderstands the Yearsley analysis. Yearsley did not focus on
   whether the Government designed the river dikes that led to the plaintiffs’
   injuries, but whether the contractor’s work was “done pursuant to a contract
   with the United States Government, and under the direction of the Secretary
   of War and the supervision of the Chief of Engineers of the United States . .
   . .” 309 U.S. at 19. The appropriate inquiry is whether Couvillion adhered to
   the Government’s instructions as described in the contract documents. See
   In re KBR, Inc., Burn Pit Litig., 744 F.3d 326, 345 (4th Cir. 2014) (“[T]he
   contractor must adhere to the government’s instructions to enjoy derivative
   sovereign immunity; staying within the thematic umbrella of the work that
   the government authorized is not enough to render the contractor’s activities
   the act[s] of the government.” (internal quotation marks omitted)).
          There are no genuine factual disputes about Couvillion’s adherence
   to the Government’s directives. The Government directed Couvillion to
   come up with an MC20 site assessment procedure for the Rapid Response
   Solution containment project. The Government authorized Couvillion’s
   plan, the design of the response system, and the installation of the system.
          The representative’s testimony supports this conclusion as well. He
   further testified that as designs and components changed throughout the life
   of the project, a Coast Guard officer and other Government officials (referred
   to as the “acceptance team”) approved various components of Couvillion’s
   design. The Coast Guard routinely met with Couvillion, and Couvillion went
   to the Coast Guard for approval before taking the next steps in the project.
          To the extent that Taylor argues that the Government could not have
   authorized and directed Couvillion because Couvillion failed to fully remove
   the oil sheen, we also disagree. The Statement of Work says that the
   “purpose of this effort is [to] eliminate the surface sheen at Mississippi
   Canyon Block 20 (MC20).” Couvillion’s actions eliminated at least some of

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                                    No. 20-30552

   the sheen, and this evidence does not create a genuine fact dispute as to
   whether the Government authorized and directed Couvillion’s work.
                   B. Validly Conferred Authority from Congress
          The second prong of Yearsley immunity requires a contractor’s
   authority to be validly conferred by Congress. See Yearsley, 309 U.S. at 20–
   21. (“[A]uthority to carry out the project was validly conferred . . . if what
   was done was within the constitutional power of Congress.”). Thus, we ask
   whether the On-Scene Coordinator’s delegation of work to Couvillion was
   valid. If not, then Couvillion’s actions are not immunized under Yearsley. See
   Cunningham v. Gen. Dynamics Info. Tech., Inc., 888 F.3d 640, 648 (4th Cir.
   2018) (explaining, in a suit against a contractor under the Telephone
   Consumer Protection Act, that “[t]he question is not whether informing
   applicants of their enrollment eligibility violated the [TCPA], but rather
   whether Congress had the authority to assign [the contractor] to complete
   that task.”).
          Taylor argues that the On-Scene Coordinator did not have authority
   to hire Couvillion. Relevant here, 33 U.S.C. § 1321(c)(1)(B) permits the
   President to
          (i)   remove or arrange for the removal of a discharge, and mitigate or
                prevent a substantial threat of a discharge, at any time;
          (ii) direct or monitor all Federal, State, and private actions to re-
                move a discharge; and
          (iii) remove and, if necessary, destroy a vessel discharging, or threat-
                ening to discharge, by whatever means are available.

          Further, 40 C.F.R. § 300.322(b) gives the On-Scene Coordinator
   similar abilities. Taylor maintains that Couvillion and the Coast Guard

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                                          No. 20-30552

   exceeded the limits of federal law by trespassing on the MC20 jacket since
   neither the jacket nor the other MC20 components are “vessels.”2
           We disagree with Taylor’s analysis of the relevant statutes. Section
   300.322(b)(1) and (2) empower the On-Scene Coordinator to remove
   discharges and mitigate substantial threats of discharge.3 When the
   Government contracted with Couvillion and Couvillion placed its
   containment system at the MC20 site, the site was either actively discharging
   or threatening to discharge. Couvillion’s actions on behalf of the
   Government fit within the language of the relevant federal statutes. Thus,
   Couvillion’s authority to carry out its actions was validly conferred by
   Congress.
                                      IV. CONCLUSION
           For the aforementioned reasons, we AFFIRM the summary
   judgment.

           2
             A vessel refers to “every description of watercraft or other artificial contrivance
   used, or capable of being used, as a means of transportation on water; and, as defined by
   section 311(a)(3) of the CWA, means every description of watercraft or other artificial
   contrivance used, or capable of being used, as a means of transportation on water other than
   a public vessel.” 40 C.F.R. § 300.5.
           3
            Section 1321(c)(1)(B)(i) similarly empowers the President to remove discharges
   and mitigate substantial threats of discharge.

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