The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
RUSTY PELSIA CIVIL ACTION
VERSUS NO. 19-12295
SUPREME OFFSHORE SECTION: “B”(1)
SERVICES, INC., ET AL.
ORDER AND REASONS
Before the court are several motions including third-
party defendant Expro America, LLC’s motion to compel
arbitration (Rec. Doc. 36), defendant and third-party plaintiff
Oceaneering International, Inc.’s motion for summary judgment
against Expro America, LLC (Rec. Doc. 39), defendant and third-
party plaintiff Supreme Service and Specialty Company, Inc.’s
motion for summary judgment against Expro America, LLC (Rec.
Doc. 46), and Oceaneering International, Inc.’s motion for
summary judgment against plaintiff Rusty Pelsia (Rec. Doc. 79).
For the reasons discussed below, IT IS ORDERED that Expro
America, LLC’s motion to compel arbitration (Rec. Doc. 36) is
GRANTED. Third-party plaintiffs Oceaneering International, Inc.
and Supreme Service and Specialty Company, Inc. are hereby
compelled to arbitrate their claims against third-party
defendant Expro Americas, LLC for defense and indemnification.
IT IS FURTHER ORDERED that the third-party complaints
against Expro Americas, LLC (Rec. Docs. 26, 28) are hereby
DISMISSED WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that both motions for summary
judgment against third-party defendant Expro Americas, LLC (Rec.
Docs. 39, 46) are DISMISSED AS MOOT.
IT IS FURTHER ORDERED that the motion for summary judgment
against plaintiff Rusty Pelsia (Rec. Doc. 79) is GRANTED.
I. FACTS AND PROCEDURAL HISTORY
Chevron U.S.A. Inc., a nonparty to this lawsuit, engaged in
service contracts with third-party defendant Expro Americas, LLC
(“Expro”), defendant and third-party plaintiff Oceaneering
International, Inc. (“Oceaneering”), and defendant and third-
party plaintiff Supreme Service & Specialty Company, Inc.
(“Supreme”) for offshore work in the Gulf of Mexico. (Rec. Docs.
4 at 2, 26 at 2, 28 at 2). Chevron contracted with Expro in
December 2009 to conduct well maintenance on one of their wells
off the coast of Louisiana.1 (Rec. Docs. 4 at 2, 26 at 3, 28 at
3). Chevron contracted with Supreme in June 2016 to also conduct
well maintenance.2 (Rec. Docs. 4 at 2, 26 at 3, 28 at 3). Then,
in October 2017, Chevron contracted with Oceaneering to provide
the M/V CADE CANDIES and its crew to serve as a tooling station
and to facilitate the transport and housing of equipment, tools,
supplies, and personnel necessary for operation through a time
1 Master Well Services Contract No. C705669. See Rec. Doc. 36-2
2 Master Contractor Services and Equipment Lease Contract No. CW1456049. See
Rec. Doc. 36-4.
charter with Otto Candies, LLC.? (Rec. Docs. 4 at 2, 26 at 3, 28
at 3).
Expro employed plaintiff Rusty Pelsia as a high-pressure
choke technician. (Rec. Doc. 4 at 2). He was aboard the M/V CADE
CANDIES in September 2018 when he sustained injuries lifting and
passing a 1502 2” Chiksan iron to a Supreme employee above the
deck. (Rec. Doc. 4 at 3). A Chicksan iron is a common oilfield
tool used to connect various pieces of pipe.
PICTURED RIGHT. A similar rae a a □□
Chiksan (gray, u-shaped) that Pa | | ». if
Pelsia lifted while aboard the | a .y re
M/V CADE CANDIES. Rec. Doc. vA
79-1 at 2. The 1502 2” are 6 NON
Chicksan iron weighs ‘4 a I >
approximately 52 pounds. Id. <a
Plaintiff alleges that a Supreme employee requested his help,
but the deck was “cluttered and insufficient space was available
to move” and when he lifted the tool above his shoulders, the
tool shifted, injuring his neck and left arm (Rec. Doc. 4 at 3).
Plaintiff brought the instant suit in August 2019. In May
2020, Oceaneering and Supreme tendered its defense to and
demanded indemnity from Expro under the Chevron-Expro contract's
3 International Master Agreement No. IMA/132A. See Rec. Doc. 36-3. Otto
Candies, LLC was previously dismissed from this case.
mutual release and indemnity provision. (Rec. Docs. 26 at 5, 28
at 5). The pertinent contract provision states that the
Contractor defends and indemnifies each member of each
Released Contractor Group4 from Claims in respect of any
Claims for injury to or death of any employees or personnel
of a member of a Contractor Group where the injury or death
arises out of this Contract and the Released Contractor’s
contract referred to in Section 12.1.
Master Well Services Contract No. C705669, § 12.3. (Rec. Doc.
36-2 at 35). After Expro refused to accept the tender of defense
and refused to indemnify Oceaneering and Supreme, they each
filed third-party complaints against Expro in August 2020
demanding defense, indemnity, and attorneys’ fees and costs.
(Rec. Docs. 26, 28). However, the contract that gives rise to
Oceaneering and Supreme’s complaint also contains an arbitration
clause:
…the Dispute shall be finally settled by binding
arbitration and either Party may initiate such arbitration
by giving notice to the other Party.
Master Well Services Contract No. C705669, § 18.5. (Rec. Doc.
36-2 at 43). The single issue at the center of Expro’s motion to
compel and Supreme and Oceaneering’s motions for summary
judgment against Expro is whether the indemnifying provision of
4 “Released Contractor” means a contractor (other than Expro) that has entered
into a contract with Chevron that includes, or is supplemented by a separate
agreement that includes, release, defense and indemnity provisions that are
substantially similar to those set out in Section 12 of the Chevron-Expro
contract. Rec. Doc. 36-2 at 35.
the Chevron-Expro contract is subject to the contract’s
arbitration clause.
II. LAW AND ANALYSIS
a. The motion to compel arbitration
Under the Federal Arbitration Act, courts are limited to
determinations regarding whether a valid agreement to arbitrate
exists and the scope and enforcement of the agreement, including
the arbitrability of given underlying disputes under the
agreement. Gulf Guar. Life Ins. Co. v. Connecticut General Life
Ins. Co., 304 F.3d 476 (5th Cir. 2002). “The FAA expresses a strong
national policy favoring arbitration of disputes, and all doubts
concerning the arbitrability of claims should be resolved in favor
of arbitration.” Washington Mut. Finance Group LLC. v. Bailey, 364
F.3d 260, 263 (5th Cir. 2004) (quoting Primerica Life Ins. Co. v.
Brown, 304 F.3d 469, 471 (5th Cir. 2002)). Courts conduct a two-
step inquiry to determine whether parties should be compelled to
arbitrate. Id. First, the court must determine whether the parties
agreed to arbitrate the dispute. If so, then the court must
consider whether any federal statute or policy renders the claims
nonarbitrable. Id.
There are two considerations in determining whether parties
agreed to arbitrate: (1) whether there is a valid agreement to
arbitrate between the parties; and (2) whether the dispute in
question falls within the scope of that arbitration. JP Morgan
Chase & Co. v. Conegie ex rel. Lee, 492 F.3d 596, 598 (5th Cir.
2007). Principles of state contract law govern the question of
whether the parties formed a valid agreement to arbitrate. Id.
However, Fifth Circuit precedent has applied federal law to
determine whether a non-signatory is bound by an arbitration
clause, “because the determination of whether a non-signatory is
bound by an arbitration provision ‘presents no state law question
of contract formation or validity,’” and a court should “look to
the federal substantive law of arbitrability to resolve this
question.” Id. at n. 2 (citing Washington Mut. Finance Group LLC.
v. Bailey, 364 F.3d 260, 267-68 n.6 (5th Cir. 2004) (quoting Int’l
Paper v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 417
n. 4 (4th Cir. 2000).
Expro argues that Oceaneering and Supreme are required to
arbitrate as third-party beneficiaries of the Chevron-Expro
contract. The burden falls on Oceaneering and Supreme to
demonstrate that the claims should not be arbitrated. Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991). Oceaneering
and Supreme fail to meet this burden. Oceaneering is correct in
its assertion that it is a rare exception for arbitration
agreements to apply to non-signatories, but it misrepresents
precedent and makes a circular argument that in order for this
court to compel a non-signatory to arbitrate under a contract,
that Expro must first establish that there is a valid arbitration
agreement between Expro and Oceaneering. (Rec. Doc. 53 at 7-8).
“Federal courts have held that so long as there is some written
agreement to arbitrate, a third party may be bound to submit to
arbitration.” Bridas, 345 F.3d at 355 (emphasis included). The
Fifth Circuit has identified at least six theories that permit
non-signatories to be compelled to arbitration: (1) incorporation
by reference, (2) assumption, (3) agency, (4) veil piercing/alter
ego, (5) estoppel, and (6) third-party beneficiary. Hellenic Inv.
Fund, Inc. v. Det Norske Veritas, 464 F.3d 514, 517 (5th Cir. 2006)
(citing Bridas, 345 F.3d at 355-56).
Expro argues that direct-benefit estoppel is the theory most
applicable to this case. (Rec. Doc. 36-1 at 6). Direct-benefit
estoppel “involve[s] non-signatories who, during the life of the
contract, have embraced the contract despite their non-signatory
status but then, during litigation, attempt to repudiate the
arbitration clause in the contract.” Hellenic, 464 F.3d at 517-18
(quoting E.I. DuPont de Nemours & co. v. Rhone Poulenc Fiber &
Resin Intermediates, S.A.S., 269 F.3d 187, 200 (3d Cir. 2001)).
The Fifth Circuit has identified two specific ways in which a non-
signatory can be bound under the direct-benefit estoppel theory:
(1) the non-signatory can be bound “by knowingly seeking and
obtaining ‘direct benefits’ from that contract, Noble Drilling
Servs., Inc. v. Certex USA, Inc., 620 F.3d 469, 473 (5th Cir.
2010), and (2) “by seeking to enforce the terms of that contract
or asserting claims that must be determined by reference to that
contract.” Id. Notwithstanding section 18 of the Chevron-Expro
contract, the direct-benefits estoppel theory binds Oceaneering
and Supreme to the arbitration clause under the second method.
The Fourth Circuit found that the doctrine of equitable
estoppel applied in International Paper Co. v. Schwabedissen
Maschinen & Anlagen GMBH and concluded the plaintiff was estopped
from refusing to arbitrate its dispute with Schwabeddisen because
the contract between Schwabeddisen and a third company, Wood,
provided part of the factual foundation for every claim asserted
by plaintiff. 206 F.3d 411, 418 (4th Cir. 2000). The plaintiff
alleged Schwabeddisen failed to honor warranties in the Wood-
Schwabeddisen contract, and sought damages, revocation, and
rejection in accordance with that contract. Id. The Fourth Circuit
found the plaintiff’s entire case hinged on its asserted rights
under that contract. Id. As demonstrated by their respective third-
party complaints, Oceaneering and Supreme are seeking to enforce
the indemnification provisions of the Chevron-Expro contract. Like
the plaintiff in International Paper whose entire case relied on
rights asserted under that contract, neither Oceaneering nor
Supreme could enforce a claim against Expro without asserting
contractual rights under the Chevron-Expro contract. It would be
“manifestly inequitable” to permit Oceaneering and Supreme to
claim they are non-signatories to the Chevron-Expro contract to
sidestep arbitration and at the same time enforce the indemnity
provision of the contract against Expro in federal court. See
International Paper Co., 206 F.3d at 418 (quoting Hughes Masonry
Co. Inc. v. Greater Clark County School Bldg. Corp., 659 F.2d 836
(7th Cir. 1981)). Accordingly, whether Oceaneering and Supreme are
entitled to indemnification from Expro under the Chevron-Expro
contract is a question to be decided in arbitration.
b. The motion for summary judgment against plaintiff
Under Federal Rule of Civil Procedure 56, summary judgment is
appropriate when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (quoting Fed. R. Civ. P. 56(c)). See also TIG Ins. Co. v.
Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002). A
genuine issue of material fact exists if the evidence would allow
a reasonable jury to return a verdict for the nonmoving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
court should view all facts and evidence in the light most
favorable to the non-moving party. United Fire & Cas. Co. v. Hixson
Bros. Inc., 453 F.3d 283, 285 (5th Cir. 2006). Mere conclusory
allegations are insufficient to defeat summary judgment. Eason v.
Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996).
The movant must point to “portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any,’ which it believes
demonstrate the absence of a genuine issue of material fact.”
Celotex, 477 U.S. at 323. If and when the movant carries this
burden, the non-movant must then go beyond the pleadings and
present other evidence to establish a genuine issue. Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586
(1986). However, “where the non-movant bears the burden of proof
at trial, the movant may merely point to an absence of evidence,
thus shifting to the non-movant the burden of demonstrating by
competent summary judgment proof that there is an issue of material
fact warranting trial.” Lindsey v. Sears Roebuck & Co., 16 F.3d
616, 618 (5th Cir. 1994). “This court will not assume in the
absence of any proof that the nonmoving party could or would prove
the necessary facts, and will grant summary judgment in any case
where critical evidence is so weak or tenuous on an essential fact
that it could not support a judgment in favor of the [non-movant].”
McCarty v. Hillstone Rest. Grp., 864 F.3d 354, 357 (5th Cir. 2017).
To prevail on a maritime negligence claim, plaintiff must
prove that: (1) the defendant owed the plaintiff a duty of care;
(2) the defendant breached that duty; (3) the breach proximately
caused the damages; and (4) the plaintiff suffered actual damages.
Lloyd's Leasing Ltd. v. Conoco, 868 F.2d 1447, 1449 (5th
Cir.1989)); see also, In re Great Lakes Dredge & Dock Co., 624 F.
3d 201, 211 (5th Cir. 2010); see also, Canal Barge Co., Inc. v.
Torco Oil Co., 220 F. 3d 370, 376 (5th Cir. 2000).
The determination of duty is a question of law and thus the
function of this Court. See, Canal Barge Co., Inc. v. Torco Oil
Co., 220 F. 3d 370, 376 (5th Cir. 2000); see also, Miss. Dep't of
Transp. v. Signal Int'l LLC, 579 F. 3d 478, 490 (5th Cir. 2009).
“[T]he determination of whether a party owes a duty to another
depends on a variety of factors, ‘most notably the foreseeability
of the harm suffered by the complaining party.’” Consolidated
Aluminum Corp. v. C.F. Bean Corp., 833 F. 2d 65, 67 (5th Cir.
1987). “Duty ... is measured by the scope of the risk that
negligent conduct foreseeably entails.” Id. Further, “the general
rule in maritime law is that ‘[a] principal is not liable for the
torts of an independent contractor unless the principal exercises
operational control over or expressly or impliedly authorizes the
independent contractor's actions.’” Landry v. Huthnance Drilling
Co., 889 F. 2d 1469, 1471 (5th Cir. 1989) (emphasis added).
In the case at hand, there is no genuine issue of material
fact of whether Oceaneering owed a duty to the plaintiff or whether
that duty was breached. The plaintiff was not performing a task on
behalf of Oceaneering, nor did it involve Oceaneering equipment,
and the incident did not involve Oceaneering personnel. (Rec. Doc.
79-1 at 8). Further, the plaintiff was aware of the risk his work
posed and he disregarded the known safety policies and procedures.
(Rec. Doc. 79-1 at 11). Moreover, Pelsia testified that it was
Chevron, not Oceaneering, that coordinated the work on the M/V
CADE CANDIES, Id. at 7, and that he was “not really blaming”
Oceaneering, and that he did not “know what else they could have
[done].” The evidence of record does not demonstrate a
genuine issue of material fact; therefore, defendant
Oceaneering is entitled to a judgment as a matter of law.
New Orleans, Louisiana this 4th day of February 2021
___________________________________
SENIOR UNITED STATES DISTRICT JUDGE