Simar v. Tetra Technologies Inc et al
MEMORANDUM RULING re 47 MOTION for Summary Judgment filed by C B & I Offshore Services Inc, Starr Indemnity & Liability Co. Because LOIA applies to the Agreement, CB&Is obligations to defend and indemnify provisions of the MSA are voided. La.Rev.Stat. Ann. § 9:2780(B), (G). Accordingly, for the above reasons, CB&I's Motion For Summary Judgment will be GRANTED. Signed by Magistrate Judge Carol B Whitehurst on 9/26/2017. (crt,Chicola, C)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
Civil Action 15-01950
Magistrate Judge Carol B. Whitehurst
Tetra Technologies Inc, et al
By Consent of the Parties
Before the Court are a Motion For Summary Judgment filed by Third Party
Defendants, CB&I Offshore Services, Inc. (“CB&I”) and Starr Indemnity and
Liability Company (“Starr”) [Rec. Doc. 47-2], a Memorandum In Opposition filed by
Defendants, Tetra Technologies, Inc. (“Tetra”) and Maritech Resources, LLC’s
(“Maritech”) (referred to collectively as “Tetra/Maritech”)[Rec. Doc. 63] , CB&I and
Starr’s Reply [Rec. Doc. 71] and a Sur-reply filed by Tetra and Maritech [Rec. Doc.
I. Factual Background
This matter arises from injuries allegedly sustained by Plaintiff, Wendell Simar,
on June 24, 2014, while employed by CB&I as a rigger assigned to perform
construction work on a production platform designated as Vermilion VR 250-C
(referred to as “VR 250-C ” or “Platform”). R. 47-3, Plaintiff’s Depo., p. 22; R. 1,
¶¶7-8. The VR 250-C is a fixed platform located approximately 66 miles from the
nearest Louisiana shoreline owned/operated by Tetra/Maritech. R. 1, ¶¶7-9. Plaintiff
alleges he was injured during an attempted swing rope transfer from the platform to
a nearby vessel when the steel cable section of the swing rope parted causing him to
fall into the water. R. 18, p. 3.
Tetra/Maritech and CB&I entered into a Master Service Agreement (the
“MSA”) dated March 22, 2013, under which Tetra/Maritech would periodically
contact CB&I to discuss a particular operation and request personnel for that specific
operation. R. 1. The MSA required CB&I to indemnify Tetra/Maritech for injuries
sustained by CB&I’s employees while working for Tetra/Maritech. R. 47-4. Prior to
June 24, 2014, CB&I was contacted by Tetra/Maritech and asked to provide
personnel to perform general construction services on the VR 250-C Platform . R. 477, Barousse Aff. CB&I agreed to provide personnel for this operation pursuant to a
verbal “callout” agreement (sometimes referred to as “the Agreement”) and the terms
of the blanket MSA. R. 47-7. CB&I personnel were contracted to engage in welding,
rigging, setting up and handling equipment, buffing, fabricating, repairing and
replacing handrails and grating. R. 47-3, p. 131. Tetra/Maritech advised CB&I that
this work was necessary to bring the platform into regulatory compliance following
a series of regulatory citations so that it could be removed. Id., pp. 42-43, 141, 162;
R. 47-7,¶ 51; 47-11, p. 2.
In order to transport and house the CB&I personnel and stage equipment at the
fixed platform worksite, Tetra/Maritech chartered a vessel from Supreme Offshore
Services (the “Supreme vessel”). R. 47-10. CB&I personnel were not assigned to the
vessel, R. 42-7, and did not participate in vessel safety drills, R. 47-8, or assist in
vessel operations, R. 47-3, p. 181. CB&I personnel made use of the vessel to transport
and house personnel and stage equipment at the fixed platform worksite. R. 47-3, p.
At the time of his Affidavit, Rusty Barousse had been the Vice President of CB&I since
July 2001. R. 47-7.
181. Ninety-five percent of the work was performed on the fixed platform. R. 47-3,
pp. 134, 141, 144, R. 23, ¶9.
Plaintiff, Wendell Simar, filed this action on June 23, 2015. In his Complaint,
Plaintiff named as defendants, Tetra/Maritech, the platform owner, and Supreme, the
owner/operator of the vessel involved in the transfer. Tetra/Maritech filed a ThirdParty demand seeking defense, indemnity and/or insurance coverage from Plaintiff’s
employer, CB&I, and its insurer, Starr. R. 23. Tetra/Maritech’s demand is based in the
contractual defense, indemnification and/or insurance coverage provisions contained
in a Master Service Agreement dated March 22, 2013, between Shaw Global Offshore
Services and Tetra/Maritech (“MSA”). R. 47-4, Master Service Agreement.2 The
MSA provided in pertinent part:
Contractor [i.e., CB&I Offshore Services, Inc.] shall
release, defend, indemnify and hold harmless Company
Group3 from and against any and all Claims for
personal or bodily injury to, sickness, disease or death
of any member of Contractor Group arising out of the
performance of this Agreement or any Order, REGARDLESS OF FAULT.
The MSA also required CB&I to furnish primary liability insurance endorsed to name
Tetra/Maritech as additional insureds and to provide insurance protection for all risks,
liabilities, and obligations assumed. R. 23, ¶ 12. CB&I filed this motion for summary
judgment asking the Court to dismiss the complaint because the Louisiana Oilfield
Anti-Indemnity Act (“LOIA”) voids coverage.
The MSA was subsequently amended to include CB&I as the successor of Shaw.
CB&I stipulated Tetra/Maritech are members of the Company Group referenced above.
R. 47-2, p. 7.
II. Summary Judgment Standard
Pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, summary
judgment shall be granted “if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to a judgment as a matter of law.”
Fed.R.Civ.P. 56(a). If the dispositive issue is one on which the nonmoving party will
bear the burden of proof at trial, the moving party may satisfy its summary judgment
burden by merely pointing out that the evidence in the record contains insufficient
proof concerning an essential element of the nonmoving party’s claim. See
Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 325, (1986); see also
Lavespere v. Liberty Mut. Ins. Co., 910 F.2d 167, 178 (5th Cir.1990). Once the
moving party carries its burden pursuant to Rule 56(a), the nonmoving party must “go
beyond the pleadings and by [his] own affidavits, or by the ‘depositions, answers to
interrogatories, and admissions on file,’ designate ‘specific facts showing that there
is a genuine issue for trial.’” Celotex, 477 U.S. at 324; Auguster v. Vermillion Parish
School Bd., 249 F.3d 400, 402 (5th Cir.2001). In determining whether the movant is
entitled to summary judgment, the Court views facts in the light most favorable to the
non-movant and draws all reasonable inferences in his favor. Coleman v. Houston
Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir. 1997). The Court does “not ... in the
absence of any proof, assume that the nonmoving party could or would prove the
necessary facts.” Badon v. R J R Nabisco, Inc., 224 F.3d 382, 393–94 (5th Cir. 2000).
Additionally, “[t]he mere argued existence of a factual dispute will not defeat an
otherwise properly supported motion.” Boudreaux v. Banctec, Inc., 366 F. Supp. 2d
425, 430 (E.D. La. 2005) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
In the Indemnity provision of the MSA, CB&I agreed to indemnify and defend
Tetra/Maritech for claims such as Simar’s. CB&I now asserts that the indemnity
provision is barred under LOIA. In particular CB&I contends that because the MSA
involved activities aboard fixed Outer Continental Shelf (“OCS”) platforms adjacent
to the Louisiana coast, and pertained to a well, Tetra/Maritech’s demand for defense
and indemnity and insurance coverage under the MSA is unenforceable under LOIA.
Tetra/Maritech argues that issues of fact preclude summary judgment.
Tetra/Maritech enumerates those issues as: (1) whether CB&I’s work was primarily
performed on the OCS as opposed to state territorial waters4; (2) whether the work
under the MSA was governed by maritime law of its own force based on the use of
the vessel; and (3) whether the work pursuant to the MSA pertained to a well within
the meaning of the LOIA. The Court will consider these issues as follows.
Whether Louisiana Law Applies As Surrogate Law Under The Outer
Continental Shelf Lands Act (“OCSLA”)
In its Motion, CB&I asserts that by virtue of the Outer Continental Shelf Lands
Act, 43 U.S.C. § 1331 et seq. (“OCSLA”), the law of the adjacent state (Louisiana)
applies to this controversy. CB&I argues that Louisiana law, specifically the
Louisiana Oilfield Indemnity Statute, La.Rev.Stat. § 9:2780 (“LOIA”), renders
The MSA includes a choice of law provision reciting that controversies arising under the
contract shall be governed by Texas law. Thus, subjecting the MSA to Louisiana law and the
LOIA is through the OCSLA.
invalid the indemnity provisions contained within the MSA. To determine when
“adjacent state” law applies, the Court utilizes the test employed in Union Texas
Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d 1043, 1047 (5th Cir.1990) (“PLT
test”). Under the PLT test three requirements must be met for state law to apply as
surrogate federal law under the OCSLA: (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; and (3) the state law must not be inconsistent with federal law. See Tetra
Technologies, Inc. v. Continental Ins. Co., 814 F.3d 733, 738 (5th Cir. 2016).
In this case, the controversy is the plaintiff’s claim for injuries he sustained
while working for CB&I on the VR 230-C platform. CB&I contends that all the work
was performed on the Platform which was located on the Outer Continental Shelf
(OCS), 66 miles off the coast of Louisiana. Tetra/Maritech argues that genuine issues
are in dispute as to whether the majority of the work was performed on the OCS.
1. Whether There is an OCSLA Situs
“Under the first requirement of the PLT test, “the controversy at issue must
arise on an OCSLA situs, namely the seabed, subsoil, and fixed structures of the outer
Continental Shelf.” Tetra Technologies, Inc. v. Continental Ins. Co., 814 F.3d 733,
738 (C.A.5 (La.),2016). When the dispute pertains to a contractual demand for
defense and indemnity, the Fifth Circuit applies a focus-of-the-contract test to
determine whether a controversy arises on an OCSLA situs. Id. citing Grand Isle
Shipyard. Under the focus-of-the-contract test, “a contractual indemnity claim (or any
other contractual dispute) arises on an OCSLA situs if a majority of the performance
called for under the contract is to be performed on stationary platforms or other
OCSLA situses enumerated in 43 U.S.C. § 1333(a)(2)(A).” Id. at 878-88.
“[I]t is a common practice for companies contracting for work in the oilfield
to enter into contracts in two stages,” first signing a blanket contract and then
“issu[ing] work orders for the performance of specific work.” Id. Here, Tetra and
CB&I followed this common practice: first entering into the MSA, which functions
as a “blanket agreement” between the parties, and then Tetra issuing specific work
orders for the completion of particular tasks. In a situation “where the contract
consists of two parts, a blanket contract followed by later work order, the two must
be interpreted together.” Id. But generally, “in determining situs in a contract case
such as this, courts should ordinarily look to the location where the work is to be
performed pursuant to the specific work order rather than the long term blanket
CB&I asserts that ninety-five percent (95%) of the work was performed on the
platform.5 R. 47-3, Simar Depo, pp. 134, 141, 144; R. 23,¶ 9. Specifically, CB&I
personnel were contracted to engage in welding, rigging, setting up and handling
equipment, buffing, fabricating, repairing and replacing handrails and grating. Id. at
p. 131. Tetra/Maritech advised CB&I that this work was necessary to bring the
“Probably ninety-five percent on the platform. Hardly anything on the boat.” R. 47-3,
Simar Depo, p. 134.
platform into regulatory compliance following a series of regulatory citations6 and so
that salvage and removal operations of the oil well platform could continue. Id., pp.
42-43, 141, 162; R. 42-7, Barousse Aff., ¶ 5; 47-11, p.2.
Tetra/Maritech states “[t]here is no dispute about the fact that the majority of
the work contemplated by the  MSA was to be performed on fixed platforms.” R.
63, p. 9. Tetra/Maritech disputes, however, that CB&I has established that the
majority of the work on the platforms was on the OCS rather than in state territorial
waters. Id. The Court disagrees. As provided by the evidence cited above, the
Agreement specifically pertained to the particular job in which CB&I’s personnel
were required to provide necessary repairs preparatory to the removal of the VR 250C, a fixed platform 66 miles from the Louisiana coast on the OCS. R. 47-7, Barousse
Aff., ¶ 5; 47-11.7 This evidence is substantiated by the Department of the Interior,
Bureau of Ocean Energy Management, Environment Documents Prepared for Oil,
Gas and Mineral Operations by the Gulf of Mexico Outer Continental Shelf (OCS)
Region, 77 FR 74215 (Dec. 13, 2012) which notices “Maritech Resources, Inc.,
Structure Removal ... on Vermilion, Block 250, Lease OCS_G 23670, located 66
miles from the nearest Louisiana shoreline.” R. 47-14. The Court finds that the focus
of the contract at issue pertains to work performed on an OCSLA situs in compliance
“MMS had gone and written up some issues concerning stairwell treads
and handrails and grating” R. 47-7, p.
The correspondence from counsel for Tetra/Maritech to counsel for CB&I
refers to “a contract for general construction activities on a fixed OCS platform
with Grand Isle Shipyard.
2. Whether Maritime Law Applies Of Its Own Force
To determine whether federal maritime law applies of its own force the Fifth
Circuit employs the two-pronged test of Davis & Sons, Inc. v. Gulf Oil Corp, 919
F.2d 313, 315 (5th Cir. 1990). The first prong examines the historical treatment
of the particular type of contract at issue. The second prong is a six-factor
inquiry into the nature of the work actually performed.8
a. Historical Treatment
CB&I contends that the historical treatment is that general construction
activities on fixed OCS platforms are non-maritime in nature. R. 47-2, p. 11, citing
Herb's Welding, Inc. v. Gray, 470 U.S. 414, 421 (U.S.La.,1985); Laredo Offshore
Constructors, Inc. v. Hunt Oil Co., 754 F.2d 1223, 1231 (5th Cir. 1985); Wagner v.
McDermott, Inc., 79 F.3d 20 (5th Cir. 1996). The Court agrees. See Hufnagel v.
Omega Serv. Indus., Inc., 182 F.3d 340, 352 (5th Cir.1999),(“Construction work on
fixed offshore platforms bears no significant relation to traditional maritime
activity.”); see also ACE American Ins. Co. v. Freeport Welding & Fabricating, Inc.,
699 F.3d 832 (5th Cir. 2012) (holding that maritime law did not apply of its own force
where “the relevant contract ... was performed on a stationary platform”); Grand Isle,
589 F.3d at 789 (agreeing with the district court’s conclusion that contract, “which
(l) 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? (6) What work
was the injured worker actually doing at the time of his injury? Tetra at 741.
called for maintenance work on a stationary platform located on the OCS,” was not
a maritime contract).
Here, it is undisputed that all of the work contracted under the MSA and the
oral callout order (the “Agreement”) was for repair and construction work to bring the
fixed platform to code in order to continue the removal of the platform. It appears
self-evident that these services have little if anything to do with traditional maritime
activity or commerce, but rather are services peculiar to the oil and gas industry,
whether conducted on or offshore. The Court, however, must also consider the use
of the Supreme vessel in making this determination. CB&I contends that the only use
of a vessel contemplated by the parties was the “incidental” use as a means for
transporting and housing personnel, material and welding equipment adjacent to the
fixed OCS platform where the work was performed. R. 47-7, Barousse Aff., ¶ 9.
Tetra/Maritech argues that the plaintiff’s deposition testimony disputes CB&I’s
position that the vessel was only chartered for incidental use. Citing the plaintiff’s
testimony that pieces of grating were cut on the vessel and transferred to the platform
for installation, Tetra/Maritech suggests that work was, in fact, done on the vessel.
R. 47-3, pp. 159-160. Tetra/Maritech also suggests that one of the vessel’s purposes
was to have a place to put the equipment in order for the work to be done on the
platform. Id. In his deposition, the plaintiff, Wendell Simar, confirmed there was a
welding machine on the vessel which was used to do the welding on the platform:
Q: And would one of the reasons the work boat was out there was to
have a place to put the equipment so that whatever work you did on the
platform could be done, correct?
Q: All right. And it was very, very common for the welders to drag their
leads from the vessel over to the platform and then use the welding
machine while it was located on the vessel to do the welding on the
Tetra/Maritech further points to the recent Fifth Circuit decision, In re Larry
Doiron, Incorporated, 2017 WL 3638406 (5th Cir. 2017), a revised and superceded
opinion on which the court granted a rehearing en banc which remains pending. In
Doiron, the platform owner hired the contractor to provide employees to perform
flow-back services on its offshore well. The work was to be performed on the fixed
production platform. Shortly after the work began, it was determined that larger
equipment would be necessary to perform the operation. In order to remove the larger
equipment from the wellhead, the platform owner was required to contract for a crane
barge to remove the heavy equipment. After the flow-back was completed, during the
rigging down process, a worker was injured when he fell from the crane onto the deck
of the crane barge.
The court concluded that the contract was maritime in nature, even though a
majority of the injured worker’s duties were to be performed on the platform. The
court’s opinion turned on the fact that even though the workers were not assigned to
work aboard the crane barge, they “made use of the barge by loading and unloading
equipment from its deck, conducting safety meetings on board the vessel, and using
the crane to install large equipment on the platform.” Id. at *4. The court stated that
the gravamen of their inquiry was not whether the contract required use of a vessel
but whether the execution of the contract required a vessel. Id. at *5 (emphasis in
CB&I cites BJ Services Co., USA v. Thompson, 2010 WL 2024725 (E.D. La.,
2014) in support of its position that the contract in this case is non-maritime. There,
the owner/operator of the fixed OCS platform contracted for a lift boat which
provided a “necessary” crane and living quarters. Id at *1. The court concluded that
the MSA was not maritime in nature and LOIA applied despite the necessary use of
a vessel. Because BJ Services was decided before the Fifth Circuit decided Doiron
and involved a scenario similar to that in Doiron, it does not assist the Court.
Accordingly, the Court will examine the cases cited in the analysis in Doiron
regarding the historical treatment in this case.
In Devon Louisiana Corporation v. Petra Consultants, Inc., the Fifth Circuit
undertook an examination of whether a contract to repair a fixed platform was a
maritime contract. 247 Fed.Appx. 539 (5th Cir.2007). Because the Court had not
previously considered that question, it found the first prong of the Davis analysis (i.e.
an examination of the “historical treatment”) to be “inconclusive.” Id. at 544; see also
Hoda v. Rowan Companies, Inc., 419 F.3d 379, 381 (5th Cir.2005) (“in some
circumstances, though not here, the historical treatment is clear enough to make the
second part of the test ‘unimportant.’ ”). In conducting its analysis, the Devon Court
provided the following overview of the pertinent jurisprudence:
We ... held in Domingue v. Ocean Drilling & Exploration Co., 923 F.2d
393, 397 (5th Cir.1991), that where a contract is only incidentally
related to a vessel’s mission, it is not maritime. Domingue involved a
contract for wireline services on an offshore well. The work order
required the crew to use a jack-up drilling rig. Although a jack-up rig
has been classified as a vessel for maritime law purposes, in Domingue
the use of a vessel was purely incidental to the execution of the contract,
and nothing about the contract required that the contractor use a vessel
instead of a mere work platform.
In contrast, the work in Campbell v. Sonat Offshore Drilling, Inc., 979
F.2d 1115, 1123 (5th Cir.1992), required the use of a vessel as such.
Campbell involved casing work that required the use of a vessel such as
a jack-up rig, along with its derrick and draw works, because there was
no fixed platform or derrick at the work site. Similarly, in Davis we
noted that the “particular nature of the terrain and production equipment
required” the use of a vessel. Davis involved a work crew that traveled
from one offshore job site to another and made various repairs to the
offshore facilities and thus required a vessel “that could function as a
mobile work platform.”
In Hoda, ... we addressed an analogous situation in which the crew's
“exact work did not require the use of [a] vessel,” but the work “could
not be performed without the [vessel's] direct involvement.” Hoda
involved the torquing up and down of the bolts on blowout preventer
stacks, a task that by itself did not require the use of the vessel or its
crew but that would have been irrelevant and impossible if the vessel's
crew had not used the vessel's rig to set the stacks and bolts in place.
Devon at 544–45.
The Devon court ultimately determined the contract before it was a maritime contract,
Although the “exact work” on the punch list did not require the use of
a vessel per se, the failure of the parties to obtain a hot work permit
meant that the welding work, which was a prerequisite for completing
some of the tasks on the punch list, had to be completed on a vessel, not
the fixed platform .... The contract here required that the parties provide
a vessel per se, because only a vessel working alongside the already
existing fixed platform could provide a suitable place to perform the hot
work. As was the case in Davis, Campbell, and Hoda, the instant
contract required that a vessel be provided.
It is undisputed that the hot work could have been completed on the oil
and gas platform if the appropriate permit had been obtained. The
inability to perform the hot work on the vessel was not caused by any
physical or technical limitations but by the legal limitations resulting
from the absence of a permit. That is, however, a distinction without a
legal difference. Hoda, Davis, and Campbell do not require that the need
for a vessel be caused by physical or technical limitations. There is no
practical difference between having to use a vessel because of physical
realities and having to use one because of legal restrictions. A vessel is
required in both situations.
The jurisprudence therefore indicates that where the use of a vessel as
such is required for completion of the contract, maritime law appropriately governs.
Id. at 545.
The Court finds that the facts of Domingue are more analogous to this case than
the other cases cited above. Because Domingue involved wire line services and a
jack-up drilling rig, however, it is not historically clear to make the second part of the
Davis test unimportant.
b. Davis Factors
Based on the undisputed evidence provided in the foregoing, the Court will
address the six factor test set forth in Davis as follows.
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?
The parties agree that Tetra/Maritech hired CB&I to perform general
construction and/or welding services in a repair operation on a fixed platform on the
OCS preparatory to removal of the platform structures. R. 47-1, ¶ 6; R. 47-11.
Additionally, it is undisputed that the work crew was contractually tasked with
“welding, rigging, setting up and handling equipment, buffing, fabricating, repairing
and replacing handrails and grating on the production platform stairs and performing
similar general safety work preparatory to the removal of platform structures.” Id., R.
47-2, p. 9; R. 47-3, pp. 131, 135, 137.
3. Was the crew assigned to work aboard a vessel in navigable waters?
The CB&I work crew was assigned to work aboard VR 250-C a fixed platform
in the OCS. The CB&I work crew was not assigned to work aboard a vessel in
navigable waters. The plaintiff testified that CB&I employees performed no more
than 5% of their work on or from the Supreme vessel. 47-3, pp. 134, 142,144. Citing
the plaintiff’s testimony that “[workers] would cut grating on the deck of the vessel
and they would hand them to us [on the platform]” and “a couple of welding
machines [were on the vessel]. We had a spare,” 63-2, p159, Tetra contends that the
vessel was used to perform work and as a place to put equipment so that the work
could be done on the platform.
4. To what extent did the work being done relate to the mission of that vessel?
According to CB&I, the services provided by his crew did not relate to the
mission of any vessel, including the Supreme vessel. That vessel was for the
transportation, housing and staging of equipment and personnel at the fixed platform
worksite. CB&I was not tasked with providing vessel crew members and no CB&I
employee was assigned to a vessel. R. 47-7, Barousse Aff, ¶ 8. No CB&I personnel
participated in vessel safety drills or safety meetings, R. 47-9, Safety Meeting
Details–6/10/14-7/6/14, pp. 42-43.
5. What was the principal work of the injured worker?
Wendell Simon’s principal work as a rigger was to perform general repairs on
the fixed platform in order to bring it into compliance so that dismantling could be
6. What work was the injured worker actually doing at the time of injury?
At the time of his injury, Wendell Simar was in the process of transferring via
swing rope from the platform to the Supreme vessel when the steel cable section of
the swing rope parted causing him to fall into the water. R. 1.
The Court concludes, after a review of the historical treatment, applicable
jurisprudence, and evidence in the record, that the contract between Tetra/Maritech
and CB&I is a non-maritime contract. The work for which CB&I was retained—to
perform general construction and/or welding services—was one that did not require
the use of the Supreme vessel nor any vessel. The crew’s use of the vessel constituted
no more than 5% of the work performed. The vessel could have been completely
eliminated and the crew would still have been able to do their work. There is no
evidence that the workers were prevented from cutting grating on the platform nor
that the welding machine could not have been placed on the platform. Even with the
welding machine on the vessel, however, the workers performed their welding jobs
on the platform. The Supreme vessel was chartered to transport, house and stage the
equipment and personnel at the fixed platform worksite where 95% of the work was
conducted. Because certain workers chose to cut grating on the vessel and then use
it to make repairs on the platform does not make the contract maritime.
The Court therefore finds in this case, as did the court in Domingue, that the
use of the vessel was purely incidental to the execution of the contract, and nothing
about the contract nor the circumstances surrounding the Agreement required that the
contractor use the vessel instead of the work platform. Domingue, 923 F.2d at 397.
3. Whether the State Law is Consistent With Federal Law
As the Court has determined the first two prongs of PLT are met, the Court
must consider PLT’s third prong,“[t]he state law must not be inconsistent with
Federal law.” PLT, 895 F.2d at 1047. Nothing in LOIA is inconsistent with federal
law, see Grand Isle, 589 F.3d at 789 (agreeing with district court’s conclusion that
this court “has specifically held that nothing in LOIA is inconsistent with federal
law”) and Tetra/Maritech does not argue otherwise. See Strong v. B.P. Expl. & Prod.,
Inc., 440 F.3d 665, 668 (5th Cir.2006) (“By not contesting [plaintiff’s] arguments that
[PLT’s second and third requirements] are satisfied, B.P. implicitly concedes that
those conditions have been met.”).
Thus, the Court concludes that PLT’s third prong is satisfied and the law of
Louisiana applies to this controversy. Because all three parts of the PLT test regarding
the applicability of State law under OCSLA are met in this case, the Court must apply
the law of the adjacent State to this controversy. It is undisputed that Louisiana is the
adjacent state to platform VR 250-C; therefore, its law shall guide this Court in its
decision. The Court looks to Louisiana law despite the Texas choice of law clause in
the MSA. While a contractual choice of law provision is one factor that the Court
considers in determining applicable law, the jurisprudence holds that OCSLA is a
trump card in the game of choice of law. See PLT, 895 F.2d at 1050 (“We find it
beyond any doubt that OCSLA is itself a Congressionally mandated choice of law
provision requiring that the substantive law of the adjacent state is to apply even in
the presence of a choice of law provision in the contract to the contrary.”); Matte, 784
F.2d at 631 (concluding that a choice of law provision in a Master Service Agreement
“violates federal policy expressed in the Lands Act, which seeks to apply the
substantive law of the adjacent state to problems arising on the Shelf”).
B. The Louisiana Oilfield Indemnity Act (“LOIA”) La.R.S. § 9:2780
1. Whether The Agreement “Pertains to a Well” Within the Meaning of LOIA
Since OCSLA requires the adoption of Louisiana law as surrogate federal law,
the next question is whether LOIA applies to this dispute. LOIA provides, in relevant
A. The legislature finds that an inequity is foisted on certain contractors
and their employees by the defense or indemnity provisions, either or
both, contained in some agreements pertaining to wells for oil, gas, or
water, or drilling for minerals which occur in a solid, liquid, gaseous, or
other state, to the extent those provisions apply to death or bodily injury
to persons. It is the intent of the legislature by this Section to 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.
B. Any provision contained in, collateral to, or affecting an agreement
pertaining to a well for oil, gas, or water, or drilling for minerals which
occur in a solid, liquid, gaseous, or other state, is void and unenforceable to the extent that it purports to or does provide for defense or
indemnity, or either, to the indemnitee against loss or liability for
damages arising out of or resulting from death or bodily injury to
persons, which is caused by or results from the sole or concurrent
negligence or fault (strict liability) of the indemnitee, or an agent,
employee, or an independent contractor who is directly responsible to
C. The term “agreement,” as it pertains to a well for oil, gas, or water,
or drilling for minerals which occur in a solid, liquid, gaseous, or other
state, as used in this Section, means any agreement or understanding,
written or oral, concerning any operations related to the exploration,
development, production, or transportation of oil, gas, or water, or
drilling for minerals which occur in a solid, liquid, gaseous, or other
state, including but not limited to drilling, deepening, reworking,
repairing, improving, testing, treating, perforating, acidizing, logging,
conditioning, altering, plugging, or otherwise rendering services in or in
connection with any well....
G. Any provision in any agreement arising out of the operations,
services, or activities listed in Subsection C of this Section of the
Louisiana Revised Statutes of 1950 which requires waivers of
subrogation, additional named insured endorsements, or any other form
of insurance protection which would frustrate or circumvent the
prohibitions of this Section, shall be null and void and of no force and
Thus, if LOIA applies, it will void CB&I’s defense, indemnity and/or insurance
“The Fifth Circuit has adopted a two-part test to determine if LOIA applies.
First, there must be an agreement that pertains to an oil, gas or water well. If the
contract does not pertain to a well, the inquiry ends. In determining whether an
agreement pertains to a well, the decisive factor in most cases has been the functional
nexus between an agreement and a well or wells.
If the agreement has the required nexus to a well, the court examines the
contract’s involvement with operations related to the exploration, development,
production, or transportation of oil, gas, or water. Thus, if (but only if) the agreement
(1) pertains to a well and (2) is related to exploration, development, production, or
transportation of oil, gas, or water, will the Act invalidate any indemnity provision
contained in or collateral to that agreement. This inquiry requires a fact intensive case
by case analysis.” Tetra Technologies, Inc. v. Continental Ins. Co., 814 F.3d 733, 743
(5th Cir. 2016)
In Tetra Technologies, Tetra entered into an agreement to salvage a decommissioned oil production platform. Tetra retained Vertex to perform some aspects of the
salvage operation. One of Vertex’s workers was injured working from a Tetra-owned
barge. The Fifth Circuit dismissed the “fact intensive” inquiry and held that the
question of whether an agreement for work on a dismantled drilling platform has a
sufficient nexus to a well for LOIA to apply, was “one of law.” The court recognized
that LOIA applies to “agreements to perform work in connection with plugging and
abandoning the wells at issue” and therefore must “apply to a nonproducing well.”
Id. at 746 (citing La.Rev.Stat. Ann. § 9:2780(C) (including plugging or “any act
collateral thereto” as activities pertaining to a well)). Ultimately, the court concluded
that a contract for salvaging a decommissioned platform is collateral to plugging or
decommissioning the well because the regulations generally require the removal of
an oil platform in connection with a decommissioning operation. See 30 C.F.R. §
250.1703 (listing general requirements for decommissioning) (“When your facilities
are no longer useful for operations, you must ... [r]emove all platforms and other
facilities, except as provided in §§ 250.1725(a) and 250.1730....”). Id. Thus, the court
held that because the contract for salvaging the platform from a decommissioned oil
well has a sufficient nexus to a well under LOIA, the indemnity obligations at issue
would be voided.
CB&I contends that Tetra Technologies’ rule that a contract for salvaging a
platform related to a decommissioned oil well has a sufficient nexus to a well under
LOIA also covers the contract in this case. Here, Tetra/Maritech advised CB&I that
the work it was hired to perform on the VR 250-C Platform was necessary to bring
the platform into regulatory compliance, following a series of regulatory citations,
before it could be removed. R. 47-1, Undisputed Fact No. 10.9 None-the-less,
Tetra/Maritech contends that genuine disputes of facts exist as to whether the work
done by CB&I was required by regulations and whether such work was related to the
deconstruction or removal of a platform or a well. Tetra/Maritech maintains that Tetra
Technologies, does not apply in this case because CB&I was engaged to perform
repair work, not to deconstruct or remove the structures. Tetra/Maritech argues that
the Court should conduct an analysis using the ten specific factors of Transcontinental Gas Pipe Line Corp. v. Transportation Insurance Company, 953 F.2d 985, 991
(5th Cir. 1992).
The record clearly confirms that at the time CB&I was engaged to work on the
VR 250-C Platform it was ready to be disassembled pursuant to the applicable federal
regulations. The U.S. Department of the Interior, Bureau of Ocean Energy Manage9
Tetra/Maritech did not object to CB&I’s statement of fact No. 10. Tetra/Maritech made
the general statement as to the issue of whether the contract pertained to a well: “Whether the
contract work in question had a functional and geographic nexus with an identifiable well.” R.
63-1, undisputed Fact in Opposition No. 3.
ment’s Final Environmental Assessment, Structure-Removal Applications of
Vermilion 250-C Platform dated August 2012 states in pertinent part:
Maritech Resources, Inc. proposes to remove Platform  C .... The
operator will remove all casing, wellhead equipment, and piling....
Maritech Resources, Inc.’s structure removal permit applications include
additional information about the proposed activities and is incorporated
herein by reference....
The proposed action is needed to allow Maritech Resources, Inc.
to comply with OCSLA regulations 30 CFR § 250.1703 and §
250.1725.... According to the operator, the structures will be removed
because reserves are depleted and there is no further utility. Maritech
Resources, Inc. , 2012.
The alternative to the proposed structure removals as originally
submitted is non-removal. Non-removal of the structures would
represent a conflict with federal legal and regulatory requirement, which
mandate the timely removal of obsolete or abandoned structures within
a period of one year after terminations of the lease, or upon termination
of a right-of-use and casements. Therefore, non-removal is not an
R. 47-15. In the December 13, 2012 Federal Register, public notice was given that the
VR 250-C was scheduled for “Structure Removal.” Federal Register, Vol. 77, No.
240, December 13, 2012, Notices. R. 47-14. Hence, there is no question that by
December 2012, Tetra/Maritech’s VR 250-C Platform was permitted by federal
regulations to be decommissioned and removed.
In correspondence from Maritech to the U.S. Department of the Interior,
Bureau of Safety and Environmental Enforcement “BSEE”, dated June 13, 2014 (one
week before the CB&I work crew arrived on June 20, 2014), Maritech requested that
the daily pollution inspection of the Vermilion 250-C Platform required under 30
CFR 250.301(a), be waived and inspections be performed on a monthly basis because
“[t]he platform is out of service. The wells have been plugged and abandoned. All
hydrocarbons have been drained from tanks and vessels.” R. 47-6. Also, correspondence from counsel for Tetra/Maritech to counsel for CB&I states, “the platform was
out of service and the wells had been plugged and abandoned prior to the accident
date.” R.47-11. Thus, there is no question that the VR 250-C Platform had been
involved in exploration /production activities and was designed for use on particular
Tetra/Maritech argues that Tetra Technologies, does not apply to this case
because CB&I’s MSA and work order did not call for the deconstruction or removal
of a platform or a well by CB&I. In support of its position, Tetra/Maritech states that
the affidavit of Rusty Barousse, Vice President of CB&I, contains nothing “that
suggests he has any personal knowledge of Tetra/Maritech’s internal business
discussions or its motive for calling out CB&I.” R. 82, p. 3. Barousse’s affidavit,
however, clearly states that he has been the Vice President of CB&I since July 2001
and has the authority to make statements concerning the business operations of the
company and to do so based on his “own personal knowledge and belief.” R. 47-7.
As to Tetra/Maritech unsupported assertions, Barousse attests:
That CB&I was contacted by Tetra prior to June 24, 2014 and asked to
provide personnel to perform general construction services on the
Vermilion VR 250-C Platform to include repair and replacement work
as to the platform’s grating and hand railings in order to bring the
platform into regulatory compliance so that salvage and removal
operations of the oil well platform could continue.
Id., No. 5.
The deposition testimony of the plaintiff supports Barousse’s testimony. The
plaintiff testified that the Platform was to be “removed from the water” —“the
heliport had already been torn down”—but “MMS had gone and written up some
issues concerning stairwell treads and handrails and grating.... It had bad spots that
they were written up for that needed to be replaced... we were going to fix it up to
where they had access until they went back to remove it.....” R. 47-3, pp. 42-43. The
plaintiff confirmed that the CB&I crew were there “to make the platform safe for the
workers who were going to follow.” Id. at p. 99. He further confirmed that the CB&I
work was part of a bigger plan of Maritech or Tetra to decommission the platform:
Because BSEE went over there and wrote them up, because of the hand
– because that, they had to have access and egress until that platform got
pulled from the water. And that’s why we were there. Because – to make
that accessible until it did get pulled.
Id. at p. 141. Finally, Tetra/Maritech own correspondence states that the CB&I crew
were performing “work preparatory to removal of the platform structures.” R. 47-11.
In Verdine, a platform owner hired a contractor to refurbish a platform that was
not participating in the exploration, production, or transportation of oil or gas and was
instead sitting idle. Verdine, 255 F.3d at 253. The Fifth Circuit rejected the argument
that the parties’ agreement did not “pertain to a well,” and concluded that a sufficient
nexus to a well arose because the platform was being refurbished for use in future oil
exploration. The court explained,
The Louisiana legislature clearly envisioned the Act’s application to
agreements for services on structures that were not developing,
producing or transporting oil or gas or geographically connected to a
specific well. We do not interpret the legislature's requirement that an
agreement pertain to a well in such a restrictive manner that we overlook
agreements to which the Act was intended to apply. The Act encompasses agreements for services on structures intended for the use in the
oil and gas industry, so long as the agreement pertains to a well or wells.
Id. at 253. While the platform was decommissioned at the time of the contract
performance, it was nevertheless “designated for use on particular wells” and
“intended for use in the exploration of oil and gas production.” Id. at 254. See Labove
v. Candy Fleet, L.L.C., 2012 WL 3043168, at *6 (E.D.La. July 20, 2012) (characterizing Verdine as “holding that a contract for repairs on a dismantled fixed oil platform
rig pertained to a well because services rendered were performed on a structure
intended for future use in the exploration and production of oil and gas”). Just as the
decommissioned platform in Verdine pertained to a well because refurbishing or
repairs were being done to reinstate its use in oil and gas exploration and production,
the repairs on the decommissioned Platform in this case were being done to comply
with regulations allowing the dismantling process to be completed.
Howell v. Avante Servs., LLC, 2013 WL 1681436, at *3–7 (E.D.La. Apr. 17,
2013) involved an agreement to cut and pull casings from the wellbores on an oil
platform in which the well head had been removed. The work was part of a plan to
“plug and abandon” the oil well and the “plugging” was a separate phase of the
operation that was already completed when the work was carried out. Id. at *1, *4.
The court held that removing the casings from the wellbore was “collateral to
plugging the well” and covered under a straightforward reading of LOIA. Id. The
court also observed that removing the casings could not be “logically severed from
the overall plug and abandonment operation.” Id. at *8. Here too, when the work at
issue was being done the plugging had been completed in a separate phase of the
operation and the oral order to make repairs to the decommissioned Platform was part
of the preparation for its dismantling. Just as in Howell, this was an act “collateral”
to “repairing, improving, testing ... altering, plugging, or otherwise rendering services
in or in connection with any well” and such required action could not be completed
without such repairs.
The evidence reveals that the repair and replacing of handrails required for the
removal crew to continue dismantling of the VR 250-C Platform was a necessary part
of the overall operation required under the OCSLA regulations and Tetra/Maritech’s
structure removal permit. Applying the analysis of the court in Tetra Technology, as
well as the reasoning of Verdine and Howell to the oral agreement and work in this
case, the Court finds that the Tetra/Maritech–CB&I Agreement pertains to a well.
Tetra/Maritech argues that the holding in Tetra Technologies does not
eliminate the relevancy of the Transcontinental test to the agreement in this case.
Tetra/Maritech provides nothing to dispute CB&I’s statement that “the agreement
pertains to a well under the Transcontinental analysis” other than its own statement
that “there is no evidence of a functional nexus between CB&I’s work and a
particular well or wells.” R. 71, p. 3. The Court finds that application of the factors
results in the determination that the agreement between Maritech and CB&I pertained
to a particular well.
The Fifth Circuit has noted that when, as here, the contract at issue does not
concern the transportation of oil or gas, some of the Transcontinental factors are not
relevant. Broussard v. Conoco, Inc., 959 F.2d 42, 44–45 (5th Cir.1992); see also
Verdine, at 253, Howell, at *5. Some factors remain relevant, such as: (1) whether
the structures or facilities to which the contract applies are part of an in-field gas
gathering system; (2) the geographical location of the facility or system relative to the
well or wells; (3) the function of the facility or structure in question; (4) who owns
and operates the facility or structure in question; and (5) any number of other details
affecting the functional and geographic nexus between a well and the structure or
facility that is the object of the agreement. Id. at 253. The record supports: (1) the VR
250-C Platform was part of oil and gas producing wells/in-filed gas gathering
system10 ; (2) the well(s) was/were located on the VR 250-C Platform11; (3) the
function of the VR 250-C was as a fixed platform for oil and gas exploration and
production12; (4) the VR 250-C was owned by Maritech, a subsidiary of Tetra13; and
(5) CB&I personnel were repairing and replacing handrails on the VR 250-C Platform
stairs and performing similar general safety work preparatory to removal of the
These factors support finding that the agreement pertained to a well.
Tetra/Maritech, an exploration and production company, owned the VR 250-C
R. 47-6 (“The wells have been plugged and abandoned. All hydrocarbons have been
drained from tanks and vessels.”); R. 47-11 (“the platform was out of service and the wells had
been plugged and abandoned”); R. 47-15 (“The operator will remove all casing, wellhead
equipment, and piling ....”)
R. 47-11, p. 2.
Platform which had been out of service and the wells had been plugged and
abandoned. Pursuant to OCSLA regulations 30 CFR § 250.1703 and § 250.1725,
Tetra/Maritech was required to remove the decommissioned/obsolete Platform. R. 4715. Thus, as the Platform is related to wells, albeit wells which had been plugged and
abandoned, there is a functional nexus between the object of the agreement, repairing
and replacing handrails on the Platform preparatory to its removal, and the well itself.
Accordingly, the agreement related to a well under the Transcontinental test.
Because LOIA applies to the Agreement, CB&I’s obligations to defend and
indemnify provisions of the MSA are voided. La.Rev.Stat. Ann. § 9:2780(B), (G).
Accordingly, for the above reasons, CB&I’s Motion For Summary Judgment will be
THUS DONE AND SIGNED this 26th day of September, 2017.
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