In re White Tail Oilfield Services, LLC
Filing
95
ORDER AND REASONS denying 64 Motion for Summary Judgment by Superior Energy Services Inc. and Superior Energy Services, LLC; granting 73 Motion for Summary Judgment by White Tail Oilfield Services, LLC. Signed by Judge Helen G. Berrigan on 07/19/2012. (kac, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN THE MATTER OF THE COMPLAINT
OF WHITE TAIL OILFIELD SERVICES,
LLC, AS OWNER AND OPERATOR OF
M/V White Tail I, HER ENGINES,
TACKLE, APPURTENANCES,
FURNITURE, ETC., PRAYING FOR
EXONERATION FROM OR LIMITATION
OF LIABILITY
CIVIL ACTION
NO. 11-9 “C” (4)
SECTION "C" (1)
ORDER AND REASONS1
Before the Court is a Motion for Summary Judgment filed by Superior Energy Services,
Inc. and Superior Energy Services, LLC (“Superior”) and a Cross-Motion for Summary
Judgment filed by White Tail Oilfield Services, LLC (“White Tail”). Rec. Doc. 64; Rec. Doc.
73. Having considered the memoranda of counsel, the record, and the applicable law, the Court
finds that Superior’s Motion for Summary Judgment is DENIED and White Tail’s Cross-Motion
for Summary Judgment is GRANTED for the following reasons.
I. BACKGROUND
Superior seeks contractual defense and indemnity against White Tail regarding the
sinking of a spud barge, the M/V WHITETAIL I. Rec. Doc. 64-1 at 1. At the time the vessel
sank, Superior was providing services to Yuma Companies, Inc. (“Yuma”) pursuant to a
contractual agreement. Rec. Doc. 64-2 at 1. White Tail also had a Master Service Agreement
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Jason A. Danowsky, a second-year student at the University of Texas School of Law,
assisted in the preparation of this Order & Reasons.
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(“MSA”) with Yuma. Rec. Doc. 64-2 at 24. Superior seeks relief from negligence claims made
against it relating to the sinking. Rec. Doc. 25 at 3; Rec. Doc. 27 at 3. Superior seeks this relief
under the terms in White Tail’s MSA. Rec. Doc. 85-2 at 5-6. The following is the choice of law
provision in the MSA relevant to this motion:
THIS AGREEMENT AND THE LEGAL RELATIONS AMONG THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED UNDER
INTERNAL LAWS OF THE STATE IN WHICH THE WORK IS
PERFORMED, OR IF THE WORK IS PERFORMED IN FEDERAL
OFFSHORE WATERS, BY THE GENERAL MARITIME LAW OF THE
UNITED STATES.
Rec. Doc. 64-2 at 31.
The following is the indemnity provision in the MSA relevant to this Motion:
Contractor shall defend, protect, indemnify and hold harmless YUMA, its
employees, subsidiaries, affiliated companies, joint venturers, partners,
subcontractors, agents, invitees, and all of their respective officers, directors and
employers (collectively, the “YUMA Group”), from and against any claim
involving damage to or loss of any of the equipment or property of any of the
Contractor Group (as hereinafter defined), or for personal injury or death of
employees of the Contractor Group. . . and whether the loss or injury is caused in
whole or in part by the negligence or fault of any indemnitee, or the condition of
any vehicle, vessel, aircraft or equipment or by the defect in any equipment or
property of any indemnitee.
Rec. Doc. 64-2 at 36. Superior alleges that it is a subcontractor, invitee, or both subcontractor
and invitee under the indemnity provision in the MSA. Rec. Doc. 64-1 at 8.
Most of the facts relevant to the individual work order are uncontested. The M/V
WHITETAIL I was to deliver equipment from Venice, Louisiana to a tank battery next to a well
owned by Yuma. Rec. Doc. 83-1 at 5-6. The equipment included, among other things, fuel tanks,
pumps, compressors, and generators. Rec. Doc. 83-1 at 9.
II. SUMMARY JUDGMENT STANDARD
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Summary judgment is proper only when the record indicates that there is not a "genuine
issue as to any material fact and that the moving party is entitled to judgment as a matter of law."
Fed. R. Civ. P. 56. A genuine issue of fact exists if the evidence is such that a reasonable jury
could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247–48 (1996). When considering a motion for summary judgment, this Court "will review the
facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm
Mut. Auto Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986).
The party moving for summary judgment bears the initial burden of "informing the
district court of the basis for its motion, and identifying those portions [of the record] which it
believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. V. Catrett,
477 U.S. 317, 323 (1986). Once the moving party has met its initial burden, however, "the
burden shifts to the non-moving party to produce evidence or designate specific facts showing
the existence of a genuine issue for trial." Engstrom v. First Nat'l Bank of Eagle Lake, 47 F.3d
1459, 1462 (5th Cir. 1995). In order to satisfy its burden, the non-moving party must put forth
competent evidence and cannot rely on unsubstantiated assertions and conclusory allegations.
See Hopper v. Frank, 16 F.3d 92 (5th Cir. 1994).
III. CHOICE OF LAW
A. Law
Whether Louisiana law or maritime law applies to the contractual interpretation, courts
are to apply a plain-language interpretation when reading contracts. Louisiana Land and
Exploration Co. v. Offshore Tugs, Inc., 23 F.3d 967, 969 (5th Cir. 1994) (in maritime contracts,
“[a] court is entitled to take words spoken so clearly in their ordinary and plain sense.”);
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LSA-C.C. Art. 2047 (“The words of a contract must be given their generally prevailing
meaning.”).
Further, whether the contract is governed by maritime law or Louisiana state law, the
choice of law established by the contract will govern. Great Lakes Reinsurance (UK) PLC v.
Durham Auctions, Inc., 585 F.3d 236, 242 (“Under federal maritime choice of law rules,
contractual choice of law provisions are generally recognized as valid and enforceable.”); LSAC.C. Art. 3540 (“All other issues of conventional obligations are governed by the law expressly
chosen or clearly relied upon by the parties”).
B. Analysis
“Federal offshore waters” are those “in the Outer Continental Shelf area” (“OCS”).
Gardes Directional Drilling v. U.S. Turnkey Exploration Inc., 815 F.Supp. 956 (W.D.La. 1993);
See also English v. Apache Corp., 2011 WL 3352011 (E.D.La. 2011) (differentiating between
state waters and those on the OCS). The OCS refers to all submerged lands more than three
geographical miles from the coast of each state. 43 U.S.C.A. §1331; 43 U.S.C.A. §1301.
Conversely, the seaward boundary of a state extends to a line three geographical miles distant
from its coast line. 43 U.S.C.A. § 1312.
The contract explicitly provides that it will be “governed by and construed under the
internal laws of the state in which the work is performed” or by general maritime law “if the
work is performed in federal offshore waters.” Rec. Doc. 64-2 at 31. White Tail asserts that no
activities associated with M/V WHITETAIL I occurred on the OCS, or more than three
geographical miles from the coast of Louisiana. Rec. Doc. 86 at 8. Despite having notice to rebut
White Tail’s assertion of the location of the activities, Superior at no point disputes this
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assertion, but instead argues that “work not performed on land, but rather ‘offshore,’ should
include any waters off the coast of any state.” Rec. Doc. 85-2 at 13. This construction is
inconsistent with a plain-language interpretation of the contract, as it ascribes no meaning to the
word “federal.” This Court construes this construction and lack of denial that the incident
occurred within three miles of the coast of Louisiana as an admission that the incident occurred
within three miles of the state of Louisiana.
IV. LOUISIANA OILFIELD INDEMNITY ACT
A. Law
Because Louisiana law applies, this Court must determine if the Louisiana Oilfield AntiIndemnity Act (“LOAIA”) also applies. The LOAIA declares declare “null and void and against
public policy of the state of Louisiana any provision in any agreement which requires defense
and/or indemnification, for death or bodily injury to persons, where there is negligence or fault
(strict liability) on the part of the indemnitee, or an agent or employee of the indemnitee, or an
independent contractor who is directly responsible to the indemnitee.” LSA-R.S. 9:2780(A).
The LOAIA applies only if “the agreement (1) pertains to a well and (2) is related to
exploration, development, production, or transportation of oil, gas, or water.” Transcontinental
Gas Pipe Line Corp. v. Transportation Ins. Co., 953 F.2d 985, 991 (5th Cir.1992). An agreement
that “pertain[s] to a well” includes “the furnishing or rental of equipment, incidental
transportation, and other goods and services furnished” in connection with the service or
operation of a well. LSA-R.S. 9:2780(C)).
IV. ANALYSIS
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The LOAIA will render an indemnity agreement null and void only “where there is
negligence or fault (strict liability) on the part of the indemnitee, or an agent or employee of the
indemnitee, or an independent contractor who is directly responsible to the indemnitee.”
LSA-R.S. 9:2780(A). The claims from which Superior seeks relief accuse Superior of
negligence. Rec. Doc. 25 at 3; Rec. Doc. 27 at 3. Thus, the only claims for which Superior seeks
indemnity against White Tail are those which the LOAIA renders null and void. If the agreement
under which the work was done pertains to a well and relates to the exploration, development,
production, or transportation of oil, gas, or water, the LOAIA will void the indemnity agreement.
In Smith v. Enervest Operating, L.L.C., another district court held that the delivery of
essential equipment to a tank battery pertained to a well and related to the exploration,
development, production, or transportation of oil, gas, or water. Smith v. Enervest Operating,
L.L.C., 2005 WL 1630023, *5 (W.D.La 2005). In that case, the plaintiff was injured on a tank
battery while offloading lube oil from a vessel onto the platform. Id. at *1. The court explicitly
held that the platform on the tank battery pertained to a well because it was connected to that
well. Id. at *5. The court held that the equipment delivered “related to” the exploration,
development, production, or transportation of oil, gas, or water because it was “essential to the
operation of a gas compression platform such as [a tank battery].” Id. at *5.
The facts in Enervest are analogous to those here. Here, as in Enervest, a delivery of
equipment is being made to a tank battery “next to” a well. While the delivery here is not lube
oil, it does include fuel tanks, pumps, compressors, and generators. While the purposes of these
items were not enumerated in the record, they are certainly as “essential to the operation of a gas
compression platform such as [a tank battery]” as lube oil is. Thus, this Court finds that the
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activities of the M/V WHITETAIL I pertain to a well and relate to the exploration, development,
production, or transportation of oil, gas, or water, voiding the indemnity agreement.
Superior argues that the MSA between Whitetail and Yuma and the oral instructions
given to the crew members of M/V WHITETAIL I “clearly do not pertain to a well” because
they instead “pertain to the furnishing of a vessel and the carriage and transportation of
equipment and supplies over navigable waters.” Rec. Doc. 85-2 at 15. This conclusory allegation
is inconsistent with the facts in the record as well as the facts alleged by Superior elsewhere in
its memoranda. In Superior’s Memorandum in Support of Motion for Summary Judgment,
Superior states, “White Tail’s spud barge was loaded with Superior’s equipment at the White
Tail dock in Venice, Louisiana and transported to Yuma’s well by the crewmembers/employees
of White Tail.” Rec. Doc. 64-1 at 3.Superior’s Statement of Uncontested Material Facts states
that “[t]he presence of Superior equipment aboard the M/V WHITETAIL I was in connection
with the performance of services by Superior to a Yuma oil well.” Rec. Doc. 64-3 at 2.
Superior also argues that the LOAIA does not apply to “wholly maritime contracts.” Rec.
Doc. 91 at 16, citing Angelina Casualty Co. v. Exxon Corp., USA, Inc., 701 F.Supp. 556, 558
(E.D. La. 1988). While this may be true, Superior has not established that the MSA and oral
instructions were “wholly maritime.” In Angelina, the court stated only that one company
furnished vessels and personnel to another for “oil activities.” Angelina Casualty Co. v. Exxon
Corp., USA, Inc., 701 F.Supp. 556, 557.“Oil activities” do not necessarily pertain to a well or
relate to the exploration, development, production, or transportation of oil, gas, or water.
Without further facts, Angelina is of moot analogical value. Superior has failed to provide
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competent factual evidence or a legal argument that counters the analogous facts in Enervest.
Thus, the LOAIA applies to the contract.
V. CONCLUSION
Accordingly,
IT IS ORDERED that Superior's Motion for Summary Judgment is DENIED. (Rec. Doc.
64).
IT IS ORDERED that White Tail’s Cross-Motion for Summary Judgment is GRANTED.
(Rec. Doc. 73)
New Orleans, Louisiana, this 19th day of July, 2012.
____________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE
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