Court Opinion

ID: 4819
Source: CourtListenerOpinion
Date Created: 2010-04-25 04:59:32+00
Date Added: 2024-06-11T13:25:47.838198
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                             FOR THE FIFTH CIRCUIT

                                 _______________

                                   No. 91-3103
                                 _______________

                                 BRUCE SMITH,
                         Husband of/and TERESA SMITH,

                                             Plaintiffs,

                                      VERSUS

                        PENROD DRILLING CORP., et al.,

                                             Defendants.

                              * * * * * * * * * *

                             CHEVRON U.S.A., INC.,

                                             Third-Party
                                             Plaintiff-Appellee,

                                      VERSUS

                   CERTAIN UNDERWRITERS AT LLOYD'S LONDON
                            and Various Insurers,

                                             Third-Party
                                             Defendants-Appellants.

                           _________________________

               Appeal from the United States District Court
                   for the Eastern District of Louisiana
                         _________________________

                         April 30, 1992
Before POLITZ, Chief Judge, SMITH, Circuit Judge, and FITZWATER,*
District Judge.

JERRY E. SMITH, Circuit Judge:

        *
            District Judge of the Northern District of Texas, sitting by designa-
tion.
                                     I.

     The original claim, which has been settled, was a Jones Act,

general maritime law, and Louisiana tort law action brought by a

Penrod Drilling Corporation (Penrod) employee and his wife to

recover damages for injuries sustained in the course of work on a

Chevron U.S.A., Inc. (Chevron), platform situated on the outer

continental shelf.        Penrod and appellee Chevron were named as

defendants.     Chevron     filed   a       third-party     complaint    against

Appellant, Underwriters at Lloyd's, London (the underwriters), to

recover pursuant to liability insurance policies issued by the

underwriters to Penrod.      The underwriters filed a cross-motion for

summary   judgment   on    the   theory      that   the    Louisiana    Oilfield

Indemnity Act of 1981, La. Rev. Stat. 9:2780 (LOIA), applies and

that under LOIA, any insurance to Penrod purportedly extending

coverage to Chevron was void.

     The primary issue in this case is whether maritime law applies

or whether, instead, Louisiana law applies as surrogate federal law

under the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C.

§§ 1331-1356.   Penrod and Chevron contracted, in a letter agree-

ment, for Penrod to "workover" a well on a Chevron platform

situated on the outer continental shelf.                  The letter agreement

incorporates by reference all of the provisions of a drilling

contract between Chevron and Penrod.

     The drilling contract contains reciprocal indemnity provisions

requiring each party to indemnify the other for personal injury

claims brought by their respective employees. Penrod was obligated

                                        2
to obtain and maintain insurance and name Chevron as an additional

assured.   Pursuant to this obligation, Penrod obtained insurance

from the underwriters.

     The drilling contract, incorporated by reference in the letter

agreement, provides that Penrod will furnish and use a specific

jackup drilling   vessel   to   be    used   in   performing    its   service

obligations.   At the time of the accident, the deck of this jackup

barge was positioned over Chevron's fixed platform.            The plaintiff

was trying to reach a safety valve assembly (a "blowout preventer

hoist block") attached to the jackup barge.          Instead of using the

ladder attached to the jackup, he stood on top of horizontal

fencing on the platform.        The fencing pulled apart, and the

plaintiff fell.

     The district court found that the contract was maritime,

granted summary judgment in favor of Chevron, and ordered that the

underwriters defend and indemnify Chevron in accordance with the

indemnity and insurance provisions contained in a workover contract

between Chevron and Penrod.      The district court entered a final

judgment, pursuant to Fed. R. Civ. P. 54(b), which the underwriters

appeal.

                                     II.

     The underwriters contend that Louisiana law applies to this

accident through OCSLA; Chevron argues that maritime law controls.

OCSLA provides, in relevant part, as follows:

     To the extent that they are applicable and not inconsis-
     tent with this Act or with other Federal laws and

                                      3
      regulations of the Secretary now in effect or hereafter
      adopted, the civil and criminal laws of each adjacent
      State now in effect or hereafter adopted, amended, or
      repealed are hereby declared to be the law of the United
      States for that portion of the subsoil and seabed of the
      outer Continental Shelf, and artificial islands and fixed
      structures erected thereon, which would be within the
      area of the State if its boundaries were extended seaward
      to   the   outer   margin   of  the   outer   Continental
      Shelf . . . .

43 U.S.C. § 1333(a)(2)(A).         Subsection (a)(1) explicitly places

"artificial    islands,   and   all   installations     and   other   devices

permanently or temporarily attached to the seabed" under OCSLA's

coverage. 43 U.S.C. § 1333(a)(1).

      In deciding whether a case is governed by OCSLA, this court

has articulated the following test:

      [F]or adjacent state law to apply as surrogate federal
      law under OCSLA, three conditions are significant.
      (1) The controversy must arise on a situs covered by
      OCSLA (i.e. the subsoil, seabed, or artificial structures
      permanently    or    temporarily    attached    thereto).
      (2) Federal maritime law must not apply of its own force.
      (3) The state law must not be inconsistent with Federal
      law.

Union Texas Petroleum Corp. v. PLT Eng'g, 895 F.2d 1043, 1047 (5th

Cir.), cert. denied, 111 S. Ct. 136 (1990);           see also Rodrigue v.

Aetna Cas. & Surety Co., 395 U.S. 352, 355-66 (1969).1           The parties

agree that the pertinent Louisiana law is not inconsistent with

federal law.    See also Matte v. Zapata Offshore Co., 784 F.2d 628,

      1
         The Rodrigue Court was rather sanguine in its belief that factors one
and two would rarely conflict, i.e., that maritime law would rarely apply to
controversies on a situs covered by OCSLA. 395 U.S. at 359-62. The past ten
years of caselaw in this circuit illustrate that maritime contracts often are
carried out on the outer continental shelf. See, e.g., Laredo Offshore
Constr. v. Hunt Oil Co., 754 F.2d 1223 (5th Cir. 1985); Lefler v. Atlantic
Richfield Co., 785 F.2d 1341 (5th Cir. 1986); Lewis v. Glendel Drilling Co.,
898 F.2d 1083 (5th Cir. 1990), cert. denied, 112 S. Ct. 171 (1991).

                                      4
630 (5th Cir.), cert. denied, 479 U.S. 872 (1986).             We therefore

analyze only the issues of situs and applicability of maritime law.

     When an event occurs on an OCSLA situs but also is governed by

maritime law, maritime law controls.        Laredo Offshore, 754 F.2d at

1229.   But see Matte, 784 F.2d at 630 (state law applies on fixed

platforms to the exclusion of maritime law).         We apply the earlier2

Laredo Offshore rule in this case and hold that maritime law

applies.

                                     A.

     This accident took place on an OCSLA situs.                 The injury

occurred when the plaintiff, who was standing on some horizontal

fencing on the platform, reached for some equipment fastened to the

jackup barge;      the fencing collapsed, and the plaintiff fell.

Drilling platforms constitute "artificial islands" under section

1333(a)(1).     Rodrigue, 395 U.S. at 363.       Thus, the accident took

place on an OCSLA situs.

     Chevron notes that the contract provided that work would be

done from the jackup boat.        Therefore, Chevron concludes that we

should find that the accident occurred on the jackup boat, not on

the platform.    We find no support for this assertion.

      2
         In the event of conflicting panel opinions from this court, the
earlier one controls, as one panel of this court may not overrule another.
Heitkamp v. Dyke (In re Dyke), 943 F.2d 1435, 1442-43 (5th Cir. 1991).

                                      5
                                 B.

     Deciding whether the contract at issue is a maritime contract

fortunately does not require us to traverse the now-familiar maze

of cases interpreting similar contracts.   In Corbitt v. Diamond M.

Drilling Co., 654 F.2d 329, 332 (5th Cir. Unit A Aug. 1981), the

court held that a contract for drilling and workover services was

a maritime contract. See also Transcontinental Gas Pipe Line Corp.

v. Mobile Drilling Barge "Mr. Charlie," 424 F.2d 684, 691 (5th

Cir.), cert. denied, 400 U.S. 832 (1970) (drilling and workover

contract obviously maritime).     The contract at issue here is a

contract for drilling and, later, workovers.

     In determining whether a contract is maritime, this court in

Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313, 316 (5th Cir.

1990), outlined the following test:

     We consider six factors in characterizing the contract:
     (1) what does the specific work order in effect at the
     time of the 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? (5) what was the
     principal work of the injured worker? and (6) what work
     was the injured worker actually doing at the time of the
     injury?

See also Domingue v. Ocean Drilling & Exploration Co., 923 F.2d

393, 395-96 (5th Cir. 1991) (also adopting this analysis), cert.

denied, 112 S. Ct. 874 (1992).   Application of these factors to the

instant case is unenlightening, as each factor simply turns on the

question   of   whether   workover     operations   are   maritime.

Nevertheless, we briefly summarize our analysis of each factor.

                                  6
1)   Provisions of Work Order

     The original contract was for drilling services, and the

specific agreement was for workover operations of wells on a fixed

platform.   The workover contract should be read with the original

drilling contract.   See Davis, 919 F.2d at 315.     Since a drilling

and workover contract is maritime, this contract is maritime.

2)   Actual Work Assigned

     Both parties agree that at the time of the accident, the

plaintiff's crew was assigned to workover activities.

3)   Assigned to Work on a Vessel

     The crew was assigned to work on the Penrod jackup, which is

a vessel.   The underwriters argue that the jackup was not a vessel

at the time of the accident;    since the jackup was attached to the

platform, it was thus a "device temporarily attached to the seabed"

under the OCSLA.     A very long series of cases, beginning with

Offshore Co. v. Robison, 266 F.2d 769 (5th Cir. 1959), has held

that jackup boats are vessels.          Even if the underwriters are

correct that OCSLA is intended to apply to attached jackup boats,

we are bound by our circuit precedent.

4)   Relationship of the Work to Vessel Mission

     The service at issue, the workover of a well, was the very

mission of the Penrod jackup.

                                    7
5)   Principal Work of the Injured Employee

     The employee's principal work was to perform workovers from

the jackup vessel.      Our caselaw designates it as maritime. See,

e.g., Corbitt, 654 F.2d at 332.

6)   Work of the Injured Employee at Time of Accident

     The plaintiff was injured while standing on a fixed platform,

but this one factor does not alter our characterization of the

contract as maritime.

                                 III.

     Although we have been able to resolve the case at hand by

relying upon explicit precedent, we note that our caselaw arguably

conflicts with OCSLA.    As explained in Rodrigue, Congress intended

that, after the passage of OCSLA, the oil and gas exploration

industries would be governed by state law.     Several of our cases

recognize Congress's intention to limit the application of maritime

law in oil and gas industry cases.      See Matte, 784 F.2d at 630;

Thurmond, 836 F.2d at 954-55; Union Texas Petroleum, 895 F.2d at

1048-49.   The Supreme Court has criticized our "expansive" view of

maritime employment in Herb's Welding v. Gray, 470 U.S. 414, 422-23

(1985).    Only our en banc court, however, can consider whether our

expansive view of maritime contracts similarly should be narrowed.

     After Herb's Welding, our cases that propound the maritime

nature of offshore drilling-related contracts have been limited to

their facts.    See Union Texas Petroleum, 895 F.2d at 1049; Lewis,

                                  8
898 F.2d at 1086.      In each new case, a panel of this court must

comb    through   a   bewildering   array    of   cases   that    rely   upon

inconsistent reasoning in the hope of finding an identical fact

situation.3   Absent en banc reconciliation, cases thus are decided

on what seems to be a random factual basis.        See Lewis, 898 F.2d at

1084 ("[B]ecause of an apparently contradictory line of cases in

our circuit and the uncertain policy underpinning our result, the

appellant would justly ask "why?".)

                                    IV.

       Although the accident occurred on an OCSLA situs, maritime law

applies of its own force.      The employee was acting in the scope of

his employment pursuant to a maritime contract.                  The summary

judgment in favor of Chevron therefore is AFFIRMED.

      3
         The following summary of caselaw demonstrates the lack of a
consistent approach for dealing with these cases. A drilling contract is
maritime. Lewis, 898 F.2d at 1086; Theriot v. Bay Drilling Corp., 783 F.2d
527 (5th Cir. 1986). A contract for the construction of drilling platforms is
non-maritime. Laredo Offshore, 754 F.2d at 1232. A contract for the
construction of gathering lines is non-maritime. Union Texas Petroleum, 895
F.2d at 1050. A contract for providing wireline services to drilling
platforms is non-maritime. Domingue, 923 F.2d at 398; Thurmond, 836 F.2d at
955. A contract for maintenance of oil wells using a non-jackup barge is
maritime. Davis, 919 F.2d at 317. A drilling and workover contract is
maritime. Corbitt, 654 F.2d at 332.

                                     9