5th Circuit in Doiron case says flow-back job was under a maritime contract*

by Matthew H. Ammerman on April 29th, 2017

This case may go to the en banc Fifth Circuit at the urging Judge Eugene Davis. The judge seeks to cure the lack of predictability arising from the fact-parsing required by the Davis & Sons maritime contract-or-not test. Recall Judge Davis authored 2009's Grand Isle opinion that sought to do the same - leave behind a messy, fact-specific, maritime-contract-or-not test relevant to work on the Outer Continental Shelf. And that case changed the law such that offshore shelf contracts are now interpreted by the locus of the contract rather than the location of the injury. And, taking their cue from Judge Davis, several losing parties indeed filed a motion for hearing en banc in the Doiron case on March 9, 2017, that is currently pending.

Now to the meat of the Doiron case. The issue was whether maritime or Louisiana law applied to the master service contract (MSC) under which the work was conducted. If Louisiana's law applied, the Louisiana Oilfield Indemnity Act would void the indemnity agreement. Indemnity, however, would be valid under maritime law.

Apache contracted with Specialty Rental Tools & Supply (STS) to perform a flow-back operation to clear out debris from a well situated on a fixed platform in the inland waters of West Lake Verret. STS employee Peter Savoie was hurt on a crane barge owned by Larry Doiron while rigging down the crane during the flow-back job. Doiron's crane barge was needed to help lift heavy equipment needed for the flow-back operation. Savoie sued Doiron and others for his injuries. Doiron sought indemnity from STS, which STS rejected.

Judge Southwick applied the Davis & Sons test, assessing the first prong that there was no case on all fours with a flow-back job. Next, the judge moves on to the next prong, analyzing the six Davis & Sons factors and holds that the contract was maritime. The crux of that holding was whether execution of the contract "required the use of a vessel," which it did. Savoie and his co-worker were unable to pull off the job the day earlier without heavy equipment. That is why the crane barge was hired -- to move the heavy equipment on and around the fixed platform.

Four of the six Davis & Sons factors support finding the MSC, and, more specifically, the oral work order arising out of the MSC, was a maritime contract. The MSC includes language that contemplated the use of a vessel, the STS workers relied on Doiron's crane barge to do their work, the operation at issue related to the mission of the vessel of lifting heavy equipment, and Savoie was hurt while working on the crane affixed to the barge. Therefore, the contract was maritime and Doiron's indemnity claim against STS was not voided by LOIA.

Judges Davis and Southwick concurred in the result but urged re-hearing en banc because "It is time to abandon the Davis & Sons test ... " that engenders a lack of predictability and consistency. The losers in the panel opinion, STS and others, took them up on it a few weeks later. We wait to see if the court grants re-hearing en banc.

Larry Doiron, Inc. v. Specialty Rental Tools & Supply, L.L.P. (In re Larry Doiron, Inc.), 849 F.3d 602, 603 (5th Cir. February 23, 2017)(pet. en banc pending).

Posted in Contracts    Tagged with maritime contract, doiron, indemnity



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