Court Opinion

ID: 2754533
Source: CourtListenerOpinion
Date Created: 2014-11-24 19:00:57.07238+00
Date Added: 2024-06-11T12:25:41.239397
License: Public Domain

Case: 13-30299     Document: 00512846860      Page: 1   Date Filed: 11/24/2014

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                  United States Court of Appeals
                                                                           Fifth Circuit

                                  No. 13-30299                           FILED
                                                                  November 24, 2014
                                                                    Lyle W. Cayce
                                                                         Clerk
In Re:
LOUISIANA CRAWFISH PRODUCERS

Consolidated with:
Nos. 13-30338, 13-30341, 13-30345, 13-30346, 13-30347, 13-30349, 13-30352,
13-30353, 13-30354, 13-30355, 13-30356, 13-30367, 13-30370, 13-30371, 13-30372,
13-30375, 13-30376, 13-30382, 13-30383, 13-30385, 13-30387, 13-30393, 13-30394,
13-30395, 13-30397, 13-30399, 13-30400, 13-30401, 13-30403, 13-30404, 13-30405,
13-30406, 13-30407, 13-30408, 13-30409, 13-30410, 13-30419, 13-30420, 13-30421,
13-30424, 13-30426, 13-30428, 13-30425, 13-30430, 13-30432, 13-30433, 13-30434,
13-30435, 13-30436, 13-30437, 13-30439, 13-30440, 13-30441, 13-30442, 13-30443,
13-30444, 13-30446, 13-30447, 13-30448, 13-30454, 13-30456, 13-30460, 13-30462,
13-30463, 13-30465, 13-30466, 13-30467, 13-30468, 13-30469, 13-30470, 13-30482,
13-30485, 13-30486, 13-30487, 13-30497, 13-30499, 13-30506, 13-30523, 13-30525,
13-30526, 13-30533, 13-30535, 13-30539

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

Before SMITH, BARKSDALE, and HAYNES, Circuit Judges.
PER CURIAM:

      The Louisiana Crawfish Producers Association–West and some of its
    Case: 13-30299    Document: 00512846860     Page: 2   Date Filed: 11/24/2014

                                 No. 13-30299
members, commercial fishermen operating in the Atchafalaya Basin in Louisi-
ana, sued a number of oil and gas companies and their insurers, claiming
aspects of the companies’ pipeline activities impeded water flows and commer-
cial navigation, causing economic damages. The plaintiffs appeal a dismissal
for failure to state a claim in favor of two defendants, Dow Intrastate Gas Com-
pany (“DIGC”) and Willbros RPI, Inc. (“Willbros”). We affirm.

                                       I.
      The plaintiffs sued in Louisiana state court under state law and general
maritime law. After dismissal of the state-law claims, one of the defendants
removed to federal court. That court denied a Rule 12(b)(6) motion to dismiss
maritime tort claims against the defendants alleged to have engaged in dredg-
ing. It dismissed maritime tort claims against the defendants alleged to have
engaged in oil and gas exploration but not dredging, which included DIGC and
Willbros. The court declined to dismiss successor-in-interest claims against
most of the defendants alleged to be successors of entities that had engaged in
dredging. Inconsistently with its treatment of some other defendants, how-
ever, the court did not discuss successor-in-interest claims against DIGC even
though the complaint claimed that DIGC is the successor to Dow Chemical
Company (“Dow”), a defendant alleged to have engaged in dredging. Neverthe-
less, having dismissed the maritime tort claims against DIGC, the court dis-
missed DIGC as a defendant.
      The plaintiffs appealed. While the appeal was pending, most of the dis-
missed defendants settled. The only defendants that remain parties to the
appeal are DIGC and Willbros.
      The specific allegations against DIGC and Willbros fall into two categor-
ies. First, the plaintiffs claim DIGC and Willbros engaged in activities that
constitute maritime torts. They allege DIGC placed cement mats on exposed
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                                  No. 13-30299
sections of an existing pipeline, impeding water flows and commercial naviga-
tion. They claim Willbros built a pipeline on an existing spoil bank that it had
leveled using bulldozers, obstructing gaps in the spoil bank and thereby
impeding water flows and commercial navigation. In the plaintiffs’ view, both
defendants’ activities violated the applicable Army Corps of Engineers (“Army
Corps”) permits. The plaintiffs do not contend DIGC or Willbros used vessels
in any of these projects.
      Second, the plaintiffs claim that Dow is the “predecessor” to DIGC and
that DIGC operated under an Army Corps permit originally issued to Dow.
Plaintiffs provide no further information about the relationship between DIGC
and Dow, but the defendants acknowledge in their brief that Dow and DIGC
have a corporate parent-subsidiary relationship.

                                        II.
      We review de novo a dismissal for failure to state a claim, “accepting all
well-pleaded facts as true and viewing those facts in the light most favorable
to the plaintiff.” Stokes v. Gann, 498 F.3d 483, 484 (5th Cir. 2007) (per curiam).
The plaintiff must plead “enough facts to state a claim to relief that is plausible
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “Factual
allegations must be enough to raise a right to relief above the speculative level
on the assumption that all the allegations in the complaint are true (even if
doubtful in fact).” Id. at 555 (footnote and citations omitted). Mere “labels and
conclusions” or “a formulaic recitation of the elements of a cause of action” are
insufficient. Id.

                                       III.
      To state a claim for a maritime tort, the plaintiff must allege facts

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                                       No. 13-30299
sufficient to satisfy the “location test” and “connection test.” 1 The location test
is satisfied if the tort occurred on navigable waters or if the injury occurred on
land but was caused by a vessel on navigable waters. Grubart, 513 U.S. at 534.
The tort “occurred on” navigable waters if the harm “took effect” there. Ego-
rov, Puchinsky, Afanasiev & Juring v. Terriberry, Carroll & Yancey, 183 F.3d
453, 456 (5th Cir. 1999) (per curiam). The connection test is satisfied if two
conditions are met. Grubart, 513 U.S. at 534. First, “the general features of
the type of incident involved” must have “a potentially disruptive impact on
maritime commerce.” Id. (quoting Sisson v. Ruby, 497 U.S. 358, 363, 364 n.2
(1990)). The court uses “a description of the incident at an intermediate level
of possible generality,” id. at 538, that is neither too broad to distinguish
among cases nor too narrow to recognize potential effects on maritime com-
merce, id. at 538–39. Second, “the general character of the activity giving rise
to the incident” must show “a substantial relationship to traditional maritime
activity.” Id. at 534 (quoting Sisson, 497 U.S. at 365, 364 & n.2) (internal quo-
tation marks omitted). The court considers “whether a tortfeasor’s activity,
commercial or noncommercial, on navigable waters is so closely related to
activity traditionally subject to admiralty law that the reasons for applying
special admiralty rules would apply in the suit at hand.” Id. at 539–40.
       The location test is easily satisfied: The plaintiffs allege the defendants’
activities impeded water flows and commercial navigation, meaning the harm
“took effect” on navigable waters. See Egorov, 183 F.3d at 456. Likewise, the

       1 See Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527, 534
(1995) (announcing test for admiralty jurisdiction); May v. Transworld Drilling Co., 786 F.2d
1261, 1265 (5th Cir. 1986) (“The test to determine the existence of a cause of action in mari-
time tort is identical with that applied to determine jurisdiction in admiralty.”). Jurisdiction
is not at issue here: One of the original defendants removed under the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, see 9 U.S.C. § 203, so there is juris-
diction regardless of whether there would be admiralty jurisdiction over the claims against
DIGC and Willbros.
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                                         No. 13-30299
first prong of the connection test is met: “[T]he general feature[] of the type of
incident involved,” Grubart, 513 U.S. at 534 (quoting Sisson, 497 U.S. at 363),
is the obstruction of water flows. Although such obstruction does not always
disrupt maritime commerce, it has the potential to do so, which is all that is
required. See id.
       The plaintiffs have not alleged facts sufficient to satisfy the second prong
of the connection test, however. The key issue is the appropriate level of gen-
erality at which to describe “the general character of the activity giving rise to
the incident,” id. (quoting Sisson, 497 U.S. at 365, 364) (internal quotation
marks omitted). The plaintiffs urge the general character of the activity is
“negligent/intentional construction activity resulting in the obstruction of
navigable waters with spoil,” while the defendants maintain it is “pipeline
construction and repair,” as the court found.
       The latter description is the better one. The plaintiffs’ characterization
conflicts with Sisson’s instruction, 497 U.S. at 364, “that the relevant ‘activity’
is defined not by the particular circumstances of the incident, but by the
general conduct from which the incident arose,” and warning not “to focus more
particularly on the causes of the harm,” id. at 365. Plaintiffs’ description is
merely a statement of the cause of the harm. Were we to use the characteri-
zation “negligent/intentional construction activity resulting in the obstruction
of navigable waters with spoil,” there would be no more specific cause. 2 As a
result, “the general character of the activity giving rise to the incident” 3 is
“pipeline construction and repair.” 4

       2 Cf. Exec. Jet Aviation, Inc. v. City of Cleveland, Ohio, 409 U.S. 249, 268–74 (1972)
(finding that general character was air travel, not aircraft crashing into navigable waters).
       Grubart, 513 U.S. at 534 (quoting Sisson, 497 U.S. at 365, 364) (internal quotation
       3

marks omitted).
       4   The only case the plaintiffs cite in support, Apache Corp. v. Global Santa Fe Drilling
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                                       No. 13-30299
       The only remaining issue is whether “pipeline construction and repair”
shows “a substantial relationship to traditional maritime activity.” 5 The case-
law shows it does not, 6 so the plaintiffs have failed to state a claim for a mari-
time tort against DIGC and Willbros.

                                             IV.
       The general rule of corporate-successor liability is that a corporation that
purchases another corporation “is not responsible for the seller’s debts or liabil-
ities, except where (1) the purchaser expressly or impliedly agrees to assume
the obligations; (2) the purchaser is merely a continuation of the selling cor-
poration; or (3) the transaction is entered into to escape liability.” Golden State
Bottling Co. v. NLRB, 414 U.S. 168, 182 n.5 (1973). We have not addressed
which test should govern corporate-successor liability in maritime-tort cases,
but the plaintiffs have offered no reason to depart from the Golden State rule, 7

Co., 832 F. Supp. 2d 678 (W.D. La. 2010), aff’d sub nom. Apache Corp. v. Global Santa Fe
Drilling Co., 435 F. App’x 322 (5th Cir. 2011) (per curiam), is distinguishable. There, the
plaintiff alleged the defendant had negligently secured its drilling rig during a hurricane,
causing it to allide with the plaintiff’s platform. Id. at 682–83. The court described the gen-
eral character of the activity as “the activities necessary to secure a vessel during a storm,”
not “oil and gas activities.” Id. at 688. That characterization was appropriate because the
oil and gas activity did not “giv[e] rise to the incident.” Grubart, 513 U.S. at 534 (quoting
Sisson, 497 U.S. at 364) (internal quotation marks omitted). The outcome would have been
the same had the rig been, say, a fishing vessel. In the instant case, the oil and gas activity
was a link in the causal chain even though it was not the ultimate cause of the harm.
       Grubart, 513 U.S. at 534 (quoting Sisson, 497 U.S. at 364 n.2) (internal quotation
       5

mark omitted).
       6 See Herb’s Welding, Inc. v. Gray, 470 U.S. 414, 425 (1985); cf. Hufnagel v. Omega
Serv. Indus., Inc., 182 F.3d 340, 352 (5th Cir. 1999) (platform construction and repair).
       7  The plaintiffs’ reliance on Sperry Rand Corp. v. Radio Corp. of Am., 618 F.2d 319
(5th Cir. 1980), is misplaced. There, the owners of a vessel involved in a grounding and
collision caused by a defective steering system sued its manufacturer, Sperry Rand, which
then sued the manufacturers of component parts. Id. at 320. There were no claims based on
corporate-successor liability. The owners brought a tort claim against Sperry Rand, whose
claim against the manufacturers was based on an express indemnification agreement. See
id.
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                                     No. 13-30299
and other courts considering the issue have used that general approach. 8
Accordingly, we adopt the Golden State rule where a defendant is alleged to be
a corporate successor to a maritime tortfeasor but is not accused of having
engaged in tortious conduct.
      The plaintiffs’ allegations that Dow is the “predecessor” to DIGC and
that DIGC operated under an Army Corps permit originally issued to Dow do
not show that an exception to Golden State’s default rule of nonliability plaus-
ibly applies. Without more, they have failed to state a claim for successor lia-
bility against DIGC.
      AFFIRMED.

      8  See Lyons v. Rienzi & Sons, Inc., 863 F. Supp. 2d 213, 225–26 (E.D.N.Y. 2012),
reconsidered in part, No. 09-CV-4253, 2012 WL 1339442 (E.D.N.Y. Apr. 17, 2012); Royal Ins.
Co. v. Smatco Indus. Inc., 201 B.R. 755, 757 (E.D. La. 1996).
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