Hewitt v. W&T Offshore, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

MICAH RENE HEWITT CIVIL ACTION

VERSUS NO. 22-461

W&T OFFSHORE, INC. SECTION: “G”(1)

ORDER AND REASONS

In this litigation, Plaintiff Micah Rene Hewitt (“Hewitt”) seeks damages from Defendant

W&T Offshore, Inc. (“W&T”) for injuries he suffered while working as a mechanic on W&T’s

oil platform.1 Hewitt brings claims under the Outer Continental Shelf Lands Act (the “OCSLA”)2

and the Longshore & Harbor Workers’ Compensation Act (the “LHWCA”),3 asserting that

W&T’s negligence was the cause of his injuries.4 Hewitt’s employer, Pelstar Mechanical Services,

LLC (“Pelstar”) was a contractor to W&T and obtained from Starstone National Insurance

Company (“Starstone”) a Workers Compensation Insurance Policy (“Starstone Policy”) that in

part, covered LHWCA claims brought by Pelstar’s employees.5 Starstone filed a complaint of

intervention, seeking from W&T full reimbursement of money it paid to Hewitt under the Starstone

Policy and a set-off of any settlement between Hewitt and W&T.6

1 Rec. Doc. 1.

2 43 U.S.C. § 1331.

3 33 U.S.C. § 901.

4 Rec. Doc. 1 at 2, 4–6.

5 Id. at 2–3; Rec. Doc. 10 at 3.

6 Rec. Doc. 10 at 3.

1

Pending before the Court are cross-motions for summary judgment.7 The parties seek

summary judgment on the issues of whether the waiver of subrogation agreed to by Starstone in

the Starstone Policy is enforceable and whether Starstone’s intervention should be entirely

dismissed.8 Having considered the motions, the memoranda in support and opposition, the

record, and the applicable law, the Court grants Hewitt and W&T’s motion and denies Starstone’s

motion because the waiver of subrogation in the Starstone Policy is enforceable and this Court is

not required to allow Starstone to intervene in this litigation to protect its rights under the LHWCA.

I. Background

A. Factual Background

In connection with its motion for summary judgment, the parties provide the following

uncontested material facts.9 Hewitt filed this lawsuit after an alleged accident on May 8, 2021,

when he was working as a mechanic for Pelstar on W&T’s oil platform in Main Pass 283 (“MP

283”).10 Hewitt worked on MP 283 as part of the Master Service Contract (“MSC”) that Pelstar

and W&T entered into on July 20, 2021.11 Section 5.1 of the MSC required Pelstar to indemnify

and defend W&T for any and all claims related to personal or bodily injury asserted against W&T

by Pelstar’s employees.12 Shortly after being sued by Hewitt, W&T demanded that Pelstar defend

7 Rec. Docs. 31, 33.

8 See Rec. Docs. 31, 33, 34, 35, 40, 42.

9 Rec. Docs. 31-2, 33-2.

10 Rec. Doc. 31-2 at 1; Rec. Doc. 33-2 at 1.

11 Rec. Doc. 31-2 at 1; Rec. Doc. 33-2 at 1.

12 Rec. Doc. 31-2 at 2; Rec. Doc. 33-2 at 1.

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and indemnify W&T for Hewitt’s claims pursuant to Section 5.1 of the MSC.13 Pelstar denied

W&T’s defense and indemnity demand because of the application of the Louisiana Oilfield Anti-

Indemnity Act (“LOAIA”) to the MSC.14 W&T has not pursued a defense and indemnity claim

against Pelstar since then.15

The MSC required Pelstar to carry workers compensation insurance with coverage against

liabilities under the LHWCA.16 Section 4.1 of the MSC provides in part that each insurance policy

Pelstar obtains “will contain a waiver of subrogation rights against W&T Group.”17 Section 4.1

references Exhibit A, which in part provides that “[a]ll policies … shall be endorsed with a waiver

of subrogation in favor of W&T Group, but only to the extent of the liabilities specifically assumed

by [Pelstar] under this Contract.”18 Subsequently, Pelstar obtained the Starstone Policy, which

contains the following Waiver of our Right to Recover from Others Endorsement:

We have the right to recover our payments from anyone liable for an injury covered

by this policy. We will not enforce our right against the person or organization

named in the Schedule. (This agreement applies only to the extent that you perform

work under a written contract that requires you to obtain this agreement from us.)19

The Schedule in turn provides that “[w]here required by written contract, provided the contract is

signed and dated prior to the date of loss to which this waiver applies.”20

13 Rec. Doc. 31-2 at 2; Rec. Doc. 33-2 at 2.

14 Rec. Doc. 31-2 at 2; Rec. Doc. 33-2 at 2.

15 Rec. Doc. 31-2 at 2; Rec. Doc. 33-2 at 2.

16 Rec. Doc. 31-2 at 2–3; Rec. Doc. 33-2 at 2.

17 Rec. Doc. 31-2 at 3 (citing Rec. Doc. 31-4 at 2); Rec. Doc. 33-2 at 2 (citing Rec. Doc. 33-5 at 2).

18 Rec. Doc. 31-2 at 3 (citing Rec. Doc. 31-4 at 11); Rec. Doc. 33-2 at 3 (citing Rec. Doc. 33-5 at 11).

19 Rec. Doc. 31-2 at 4 (citing Rec. Doc. 31-6 at 27); Rec. Doc. 33-2 at 3–4 (citing Rec. Doc. 33-7 at 28).

20 Rec. Doc. 31-2 at 4 (citing Rec. Doc. 31-6 at 27); Rec. Doc. 33-2 at 3–4 (citing Rec. Doc. 33-7 at 28).

3

B. Procedural Background

Hewitt filed his complaint against W&T in this Court on February 22, 2022.21 Starstone

then filed its complaint in intervention on October 26, 2022, alleging that “it is conventionally and

legally subrogated to plaintiff’s cause of action against Defendant, W&T Offshore, Inc. …”22

Starstone seeks (1) “full reimbursement of all payments made in the current amount of $82,691.08”

and (2) “a future credit in the amount of Plaintiff’s net recovery for all payments made in the

future, by preference and priority of any settlement or judgment with the defendants herein.”23

W&T filed an answer to Starstone’s intervenor complaint on November 16, 2022.24 W&T then

moved for summary judgment against Hewitt on January 18, 2023, arguing that Hewitt’s claims

are barred due to his status as a “borrowed employee.”25 The Court denied W&T’s motion for

summary judgment on March 13, 2023.26

Hewitt and W&T filed a joint motion for summary judgment to dismiss Starstone’s

intervenor complaint on August 22, 2023.27 Starstone filed a cross motion for summary judgment

on September 5, 2023, seeking a ruling that the contractual waiver of subrogation is inapplicable

so that it may remain as a party in this litigation.28 Starstone then filed a response opposing Hewitt

21 Rec. Doc. 1.

22 Rec. Doc. 10 at 3.

23 Id.

24 Rec. Doc. 11.

25 Rec. Doc. 12 at 1.

26 Rec. Doc. 25.

27 Rec. Doc. 31.

28 Rec. Doc. 33.

4

and W&T’s joint summary judgment motion on September 11, 2023.29 Hewitt and W&T also

filed a joint response opposing Starstone’s cross motion for summary judgment on September 11,

2023.30 Starstone then filed a reply on September 19, 2023.31 Hewitt and W&T filed a joint reply

on September 20, 2023.32

The main issue in these pending cross motions for summary judgment is whether Starstone

waived subrogation in the Starstone Policy.33 A related issue is whether Starstone’s intervenor

complaint should be dismissed entirely if the Court finds the waiver of subrogation enforceable or

if Starstone should be allowed to remain as an intervenor.34 Given that the cross motions raise the

same arguments, the Court analyzes them as one.

II. Parties’ Arguments

A. Hewitt and W&T’s Arguments in Support of Summary Judgment

In their motion, Hewitt and W&T argue that Starstone’s intervenor complaint should be

dismissed because “Starstone unequivocally waived its right of subrogation by virtue of a waiver

of subrogation endorsement in favor of W&T in the Starstone Policy.”35

As an initial matter, Hewitt and W&T acknowledge that while this case arises under

OCSLA, because Hewitt’s alleged injury occurred on an offshore oil platform located on the Outer

29 Rec. Doc. 34

30 Rec. Doc. 35.

31 Rec. Doc. 40.

32 Rec. Doc. 42.

33 Rec. Docs. 31, 33.

34 Rec. Docs. 40, 42.

35 Rec. Doc. 31 at 1.

5

Continental Shelf, Louisiana law applies to determine whether the waiver of subrogation in the

Starstone Policy is enforceable.36 Hewitt and W&T reason that this is because MP 283 where the

accident occurred is adjacent to Louisiana.37 Hewitt and W&T also acknowledge that the LOAIA

is one such Louisiana law that affects the enforceability of subrogation waivers – it voids such

waivers in certain circumstances.38

Hewitt and W&T then proceed to argue that the Starstone Policy contains an enforceable

subrogation waiver that LOAIA does not void.39 They reason that this is because in Fontenot v.

Chevron U.S.A., Inc., the Louisiana Supreme Court held that “such waivers are voided by LOAIA

only when then the oil company seeks to enforce the waiver clause in conjunction with the oil

company’s enforcement of an indemnification clause against a contractor.”40 Hewitt and W&T

also note that in Fontenot, the Louisiana Supreme Court conversely held that in situations where

the oil company only seeks to enforce the waiver of subrogation and does not pursue an indemnity

claim, “‘there is no shifting of liability’” from the oil company to the contractor so the purpose of

LOAIA is not frustrated.41 Here, they note, W&T is not seeking to enforce a demand for indemnity

against Pelstar, so LOAIA would not void the waiver of subrogation clause.42

Hewitt and W&T then point to several analogous cases where the Fifth Circuit and its

36 Rec. Doc. 31-1 at 7.

37 Id.

38 Id. at 2 (citing to La. Rev. Stat. § 9:2780).

39 Id. at 7–11.

40 Id. at 8 (emphasis in original) (citing Fontenot v. Chevron U.S.A., Inc., 95-1425, p.565 (La. 7/2/96); 676

So. 2d 557).

41 Id. (citing Fontenot, 676 So. 2d at 565).

42 Id. at 2 (emphasis in original).

6

district courts have applied Fontenot to find that a contractual subrogation waiver was

enforceable.43 Relying partly on these cases, Hewitt and W&T argue that “an oil company like

W&T can properly invoke a waiver of subrogation clause against an intervening LHWCA insurer”

because W&T here solely seeks to enforce the waiver of subrogation to defeat Starstone’s

intervention claim and is not also seeking to enforce the indemnity provision against Pelstar.44

Hewitt and W&T also argue that the limiting language found in the MSC, in which waivers

of subrogation in favor of W&T are only required “to the extent of the liabilities specifically

assumed by [Pelstar] under this Contract,” does not erode the enforceability of the subrogation

waiver in favor of W&T.45 They point to Delozier v. S2 Energy Operating, LLC where the court

rejected the insurer’s arguments that the subrogation waiver was unenforceable because the oil

company defendant did not seek indemnity from the contractor holding the insurance policy.46

They note that the court reasoned that this logic was unpersuasive because then a waiver of

subrogation would always be void under the language of the MSAs.47 They also cite Boudreaux

v. Scott’s Boat Rentals, LLC, where the court considered similar limiting language regarding the

43 Id. at 8–11 (citing Hudson v. Forest Oil Corp., 372 F.3d 742 (5th Cir. 2004) (affirming the district court’s

dismissal of an intervention complaint based on a subrogation waiver in the master services contract and endorsed in

the intervenor insurance company’s insurance company because the oil company did not also pursue indemnification

from its contractor); Bickham v. ATP Oil & Gas Corp., No. 10-2761, 2011 WL 5878139, at *3, *7 (E.D. La. Nov. 23,

2011) (Fallon, J.) (holding that the insurance company intervenor waived subrogation in its insurance policy because

the oil company defendant there pursued the subrogation waiver clause rather than the indemnity provision in the

master services contract)).

44 Id. at 11.

45 Id. at 11–14.

46 Id. at 12–13 (citing Delozier v. S2 Energy Operating, LLC, 500 F.Supp.3d. 514, 525 (E.D. La. 2020)

(Morgan, J.)).

47 Id. at 13 (citing Delozier, 500 F.Supp.3d at 526).

7

waiver of subrogation and found the subrogation waiver to be enforceable.48

B. Starstone’s Arguments in Support of Summary Judgment

Starstone argues that the subrogation waiver in the MSC only applies to liabilities Pelstar

assumed under the MSC, but Pelstar did not indemnify W&T for Pelstar to have assumed any

liability.49 Starstone clarifies that it “is not arguing in this case that [LOAIA] invalidates the

waiver of subrogation” but rather that “by the terms of the Contract, the waiver of subrogation

does not apply because no indemnity was assumed.”50 Starstone seems to argue that the limiting

language in the subrogation waiver provision of the MSC would be superfluous if it applied even

if Pelstar did not assume indemnity, postulating that “[i]f W&T Offshore had wanted a more

general waiver of subrogation that did not apply only if Pelstar assumed indemnity it could have

dropped this contractual limitation.”51

Starstone also notes that the cases Hewitt and W&T cite to, such as Fontenot, “do not

thoroughly examine[] contracts where the parties to the contract chose to specifically tie the waiver

of subrogation to the assumption of the contractual defense, indemnity, and additional insured

provisions.”52 Starstone asserts that “[c]ourts which have examined this language have ruled that

limiting a waiver of subrogation to liabilities assumed under the Contract means that the waiver of

48 Id. (citing Delozier, 500 F.Supp.3d at 526 (citing Boudreaux v. Scott’s Boat Rentals, LLC, 184 F.Supp.3d

343, 347 (E.D. La. 2016) (Barbier, J.)).

49 Rec. Doc. 33-3 at 1.

50 Id. at 7.

51 Id.

52 Id. at 3–4.

8

subrogation is invalid if there is no corresponding defense and indemnity obligation assumed.”53

Starstone points to Becker v. Tidewater, Inc., where the “Fifth Circuit examined whether

similar contractual language limiting the risk assumed under the contract applied to invalidate an

additional insured provision.”54 Starstone notes that the contract there stated that Tidewater’s

liability policy “shall include CHARTERER in its capacity as time charterer of the vessel, as an

additional insured, but only with respect to the risks assumed by OWNER [Tidewater] in this

Charter.”55 Starstone then notes that the “Fifth Circuit determined Tidewater did not assume the

risks of injury to the charterer’s employees and did not owe indemnity, and therefore did not owe

a duty to name the charterer as an additional insured.”56

Starstone then points to International Marine, LLC v. Atlantic Specialty Insurance

Company, where a district court followed Becker and the Fifth Circuit affirmed, finding that the

reference to “‘risks and liabilities assumed’” in the master services contract referred to the

indemnity provisions of the contract.57 Starstone also points to Tennessee Gas Pipeline v. Rowan

Companies, where the court interpreted a subrogation waiver clause with qualifying language

about the liabilities assumed by each party to mean that “‘all of the agreements to waive

subrogation … are tied to the liability assumed under the Contract.’”58

53 Id. at 4.

54 Id. (citing Becker v. Tidewater, Inc., 586 F.3d 358 (5th Cir. 2009)).

55 Id. (citing Becker, 586 F.3d at 370).

56 Id. (citing Becker, 586 F.3d at 371).

57 Id. at 4–5 (citing Int’l Marine, LLC v. Atl. Specialty Ins. Co., 761 Fed. Appx. 269, 273–74 (5th Cir. 2019)).

58 Id. at 5 (citing Tenn. Gas Pipeline v. Rowan Co., No. 94-3863, 1996 WL 547421, at *4 (E.D. La. Sept. 26,

1996) (Duval, J.)).

9

Finally, Starstone points to a Texas state appellate case, New Hampshire Insurance

Company v. Mora, where the court “followed several other Texas courts in determining if the

contract limits waivers of subrogation to ‘liabilities assumed’ by the insured, the court must

consider the indemnity provisions of the contract to determine which liabilities the insured

assumed.”59

C. Hewitt and W&T’s Response to Starstone’s Motion

In response to Starstone’s motion, Hewitt and W&T first argue that the subrogation waiver

in the MSC is applicable because “Pelstar unequivocally agreed to assume responsibility for any

and all claims arising out of personal or bodily injury that might be asserted against W&T by

Pelstar’s direct employees” in Sections 1.1 and 5.1 of the MSC.60

In response to the cases Starstone cites, Hewitt and W&T contend that they are

distinguishable from the case here because those “cases address the situation where a party

contractually agreed to defend and indemnify the counterparty for certain liabilities and was

required under the contract to procure insurance naming the counterparty as an additional insured

to the extent of its defense and indemnity obligations assumed under the contract.”61

Hewitt and W&T contend that Becker v. Tidewater is distinguishable because the relevant

contract there contained a reciprocal indemnity clause where Tidewater agreed to indemnify Baker

for any claims Tidewater’s employees brought against Baker and Baker agreed to indemnify

59 Id. at 5–6 (citing N.H. Ins. Co. v. Mora, 500 S.W.3d 132 (Tex. App. 2016)).

60 Rec. Doc. 35 at 3.

61 Id. at 4.

10

Tidewater for any claims Baker’s employees brought against Tidewater.62 Hewitt and W&T

further contend then, that it is logical that the Fifth Circuit held that Baker is not an “additional

assured” to Tidewater’s insurance when Baker’s employee brought a claim against both Baker and

Tidewater because under the parties’ reciprocal indemnity agreement, Baker assumed the risk of

injury to Baker’s employees, and not Tidewater.63

Hewitt and W&T also contend that International Marine is similarly distinguishable.64

They reason that in International Marine, Sea Eagle was required to obtain insurance to “‘protect

[Tesla] from third party claims arising out of or connected with the performance of Service

hereunder,’” but the third-party claim brought against Tesla was not related to the performance of

service in the contract.65 Therefore, Hewitt and W&T argue “the third-party claim at issue in Int’l

Marine was simply not a risk or liability that had been assumed under the contract by Sea Eagle

…”66

Hewitt and W&T also argue that while Mora is inapplicable because it concerns Texas

law, it actually supports their position.67 They reason that this is because the court stated that “[i]f

the indemnity provisions require the insured to indemnify another party for the accident … then

the insured has ‘assumed liability for the accident’” such that “the waiver-of-subrogation provision

62 Id. at 4–5 (citing Baker, 586 F.3d at 371).

63 Id. at 5 (citing Baker, 586 F.3d at 371).

64 Id. (citing Int’l Marine, 761 Fed. Appx. 269).

65 Id. (citing Int’l Marine, 761 Fed. Appx. at 272–73).

66 Id.

67 Id. (citing Mora, 500 S.W.3d at 132).

11

in the insurance policy is ‘required by contract …’”68

Second, Hewitt and W&T argue that even if LOAIA applied to void the subrogation

waiver, it could still pursue indemnification of Pelstar under Meloy v. Conoco, Inc.69 They reason

that this is because Meloy “only prohibits agreements to indemnify the indemnitee for defense

costs where there is negligence or fault on the part of the indemnitee” … but “does not prohibit[]

agreements to assume the indemnitee’s costs to defend a meritless suit.”70 W&T postulates then,

that if it is found to be not at fault for Hewitt’s injuries, it can seek defense costs from Pelstar.71

D. Starstone’s Reply

In its reply, Starstone argues that even if the Court finds that the waiver of subrogation

waiver is valid, the Court should not completely dismiss Starstone’s intervention complaint.72

Starstone reasons it has “independent rights under the LHWCA,” such as written consent for

settlement and a right of future credit for the net amount received by the employee in a third-party

action, as the workers compensation insurance company here.73

E. Hewitt and W&T’s Reply

In its reply, Hewitt and W&T argue that Starstone’s intervention complaint should be

dismissed in its entirety because the Court lacks jurisdiction to decide Hewitt’s right to

68 Id. (citing Mora, 500 S.W.3d at 132).

69 Id. at 7–8 (citing Meloy v. Conoco, Inc., 504 So. 2d 833 (La. 1987)).

70 Id. at 8 (citing Meloy, 504 So. 2d at 839).

71 Id.

72 Rec. Doc. 40 at 1.

73 Id. (citations omitted).

12

compensation from Starstone and Pelstar under the LHWCA.74 Hewitt and W&T reason that

Hewitt is receiving LHWCA benefits in an administrative proceeding before the U.S. Department

of Labor’s Office of Workers’ Compensation Program, so Starstone’s rights under the LHWCA

will be determined in that administrative proceeding rather than here in this case.75 Hewitt and

W&T also argue that while some district court cases have allowed a LHWCA insurance carrier to

remain as an intervenor even when that carrier has waived its subrogation rights,76 other district

court cases have “held that where a LHWCA carrier has waived rights of subrogation a full

dismissal with prejudice of the intervention complaint is proper.”77 Hewitt and W&T contend that

the cases where the intervention complaint was fully dismissed are better reasoned because

“statutory rights that Starstone seeks to assert and protect under the LHWCA will not be

determined by this Court” but rather in the Department of Labor’s administrative proceeding.78

Hewitt and W&T next argue in the alternative that if Starstone remains as an intervenor, it

“should be ordered to amend its Complaint-in-Intervention to confirm that its rights of intervention

are limited to protecting its statutory rights under the LHWCA as they relate to the instant third-

party tort lawsuit.”79 They note that Foret, which Starstone cites, supports that such an amendment

74 Rec. Doc. 42 at 4.

75 Id. (citing 33 U.S.C. §§ 933(f) and (g)).

76 Id. (citing Bickham, 2011 WL 5878139, at *5; Foret v. Transocean Offshore (USA), Inc., No. 9-4567,

2011 WL 4443527, at *2 (E.D. La. Sept. 23, 2011) (Lemelle, J.)).

77 Id. (citing Raynes v. McMoRan Expl. Co., No. 8-5018, 2011 WL 4403987, at *4 (E.D. La. Sept. 20, 2011)

(Africk, J.); Hudson, 372 F.3d at 742).

78 Id. at 4–5.

79 Id. at 5.

13

is appropriate.80

III. Legal Standard on Summary Judgment

Summary judgment is appropriate when the pleadings, the discovery, and any affidavits

show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.”81 When assessing whether a dispute as to any material fact exists, the court

considers “all of the evidence in the record but refrains from making credibility determinations or

weighing the evidence.”82 All reasonable inferences are drawn in favor of the nonmoving party,

but “unsupported allegations or affidavits setting forth ‘ultimate or conclusory facts and

conclusions of law’ are insufficient to either support or defeat a motion for summary judgment.”83

If the record, as a whole, “could not lead a rational trier of fact to find for the non-moving party,”

then no genuine issue of fact exists, and the moving party is entitled to judgment as a matter of

law.84 The nonmoving party may not rest upon the pleadings, but must identify specific facts in

the record and articulate the precise manner in which that evidence establishes a genuine issue for

trial.85

The party seeking summary judgment always bears the initial responsibility of informing

the Court of the basis for its motion and identifying those portions of the record that it believes

80 Id. (citing Foret, 2011 WL 4443527, at *2).

81 Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); Little v. Liquid Air

Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).

82 Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398–99 (5th Cir. 2008).

83 Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.

84 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

85 See Celotex, 477 U.S. at 325; Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998).

14

demonstrate the absence of a genuine issue of material fact.86 Thereafter, the nonmoving party

should “identify specific evidence in the record, and articulate” precisely how that evidence

supports his claims.87 To withstand a motion for summary judgment, the nonmoving party must

show that there is a genuine issue for trial by presenting evidence of specific facts.88 The

nonmovant’s burden of demonstrating a genuine issue of material fact is not satisfied merely by

creating “some metaphysical doubt as to the material facts,” “by conclusory allegations,” by

“unsubstantiated assertions,” or “by only a scintilla of evidence.”89 Rather, a factual dispute

precludes a grant of summary judgment only if the evidence is sufficient to permit a reasonable

trier of fact to find for the nonmoving party. Hearsay evidence and unsworn documents that cannot

be presented in a form that would be admissible in evidence at trial do not qualify as competent

opposing evidence.90

IV. Analysis

Hewitt and W&T move for summary judgment, arguing that Starstone’s intervenor

complaint should be dismissed because the waiver of subrogation in favor of W&T in the MSC

and the Starstone Policy is enforceable.91 Starstone also moves for summary judgment, arguing

that the Court should issue a declaratory judgment that the waiver of subrogation in the MSC is

86 Celotex, 477 U.S. at 323.

87 Forsyth v. Barr, 19 F.3d 1527, 1537 (5th Cir.), cert. denied, 513 U.S. 871 (1994).

88 Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 248–49 (1996)).

89 Little, 37 F.3d at 1075.

90 Fed. R. Civ. P. 56(c)(2); Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987).

91 Rec. Docs. 31, 35.

15

invalid because W&T did not indemnify Pelstar for Pelstar to have assumed liability for Hewitt’s

injuries under the MSC.92

A. Applicable Law

As an initial matter, the Court must determine the laws applicable to the issues the parties

have raised in their motions. Hewitt and W&T argue that while this case arises under OCSLA,

Louisiana law is applied to the extent that it is consistent with OCSLA.93 While Starstone did not

specifically brief which law applies to the issues here, it points to Fifth Circuit cases applying

federal maritime law and Louisiana law and a Texas state appellate case applying Texas law.94

Starstone also notes that “Louisiana state courts have not closely reviewed the same issue …”95

The Fifth Circuit has held that “for state law to apply as surrogate federal law” pursuant to

OCSLA, “three conditions must be met:” (1) “[t]he controversy must arise on a situs covered by

OCSLA (i.e. the subsoil seabed, or artificial structures permanently or temporarily attached

thereto” (2) “[f]ederal maritime law must not apply of its own force;” and (3) “[t]he state law must

not be inconsistent with federal law.”96 Here, Hewitt alleges that he was injured while working on

Main Pass 283, a production platform attached to the seabed of the Gulf of Mexico, on the Outer

92 Rec. Doc. 33, 34.

93 Rec. Doc. 31-1 at 7 (citing 43 U.S.C. § 1333(a)(2)(A)).

94 Rec. Doc. 33-3 at 1–6. Becker, 586 F.3d at 369, provides that “[a] maritime contract containing an

indemnity agreement, whether governed by federal maritime or Louisiana law, should be read as a whole and its words

given their plain meaning unless the provision is ambiguous.” Int’l Marine, 761 Fed. Appx. at 272, applied Louisiana

law to interpret a marine insurance contract. Mora, 500 S.W.3d at 132, reviewed Texas state law.

95 Id. at 5.

96 Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778, 782–83 (5th Cir. 2009) (en banc) (internal

citation omitted).

16

Continental Shelf of the United States, off the coast of Louisiana.97 The parties do not dispute that

the fixed offshore platform is a situs covered by OCSLA.98 Further, it is also undisputed that the

facts at issue here do not implicate federal maritime law.99 In addition, the parties do not argue

that Louisiana law is inconsistent with federal law, and the Court finds no inconsistencies that

would preclude the application of Louisiana law here. Therefore, OSCLA applies to this dispute,

and the applicable state law is that of Louisiana, because Louisiana is the state adjacent to where

Plaintiff was injured on the platform.100

The LHWCA is also applicable here, governing workers’ compensation rights and

obligations.101 The LHWCA requires the employer to pay compensation to its injured employees

irrespective of fault.102 “Where the employee is insured and the insurance carrier has assumed the

payment of the compensation, the insurance carrier shall be subrogated to all the rights of the

employer [under the LHWCA].”103

B. The Subrogation Waiver

Louisiana law provides insurance carriers a statutory right to recover workers’

compensation payments made to an injured worker from any third party that caused the worker’s

97 Rec. Doc. 1 at 2–8.

98 Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S. 352 (1969) (holding that OCSLA applied in an action arising

from deaths occurring on fixed offshore drilling structures).

99 See id. at 359 (“Drilling platforms are not within admiralty jurisdiction.”) (citation omitted).

100 Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 481 (1981).

101 See 42 U.S.C. § 1333(b).

102 See id. at § 904.

103 Id. at § 933.

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injury.104 An insurance carrier’s statutory right to reimbursement of compensation benefits paid

to an injured worker may be waived by the insurance carrier, if it chooses to do so through a waiver

of subrogation in the insurance policy or by a separate agreement.105 The Louisiana First Circuit

Court of Appeal and the U.S. Court of Appeals for the Fifth Circuit have both found an insurance

carrier’s contractual waiver of subrogation to be valid.106

In the oil and gas industry, waivers of subrogation are “designed to relieve oil companies

of the obligation to reimburse contractors or insurance companies for workers’ compensation

payments.”107 To protect insurance companies and contractors from the potentially unfair effects

of subrogation waivers in favor of oil companies, the Louisiana legislature enacted LOAIA to

alleviate the “inequity … foisted on certain contractors and their employees by the defense or

indemnity provisions … contained in some [oil and gas] agreements.”108 The LOAIA “null[s] and

void[s]” any “waivers of subrogation … or any other form of insurance protection which would

frustrate or circumvent the prohibitions of [La. Rev. Stat. Section 2780]” found in oil and gas

contracts.109 In Fontenot, the Louisiana Supreme Court clarified that LOAIA voids a waiver of

104 La. Rev. Stat. § 23:1101.

105 Delozier, 500 F.Supp.3d at 521 (citing H. Alton Johnson, WORKERS’ COMPENSATION AND

PRACTICE § 370, in 14 La. Civ. L. Treatise 17 (5th ed.)).

106 Sandbom v. BASF Wyandotte, Corp., 95-035, p. 363 (La. App. 1 Cir. 4/30/96); 674 So. 2d 349 (“An

employer may contractually waiver the employer’s right to reimbursement of compensation benefits paid an

employee. Additionally, the insurance carrier may waive such rights in its policy of insurance with the employer, or

by separate agreement with the third party.”); Capps v. Humble Oil & Refining Co., 536 F.2d 80, 81 (5th Cir. 1976)

(rejecting insurance carrier’s argument that it had an independent statutory right to subrogation and holding that the

insurance “carrier waived any claim to the settlement between the third party and the employee”).

107 Delozier, 500 F.Supp.3d at 524 (citing Fontenot, 676 So. 2d at 564; Hudson, 372 F.3d at 745–46).

108 La. Rev. Stat. § 9:2780(A).

109 Id. at § 9:2780(G).

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subrogation only when the oil company pursues both the waiver of subrogation and

indemnification.110

The parties dispute whether the qualifying language of “only to the extent of the liabilities

specifically assumed by [Pelstar] under this Contract” renders the subrogation waiver inapplicable.

Starstone argues that Pelstar as the contractor would only have assumed a liability to trigger the

subrogation waiver if Pelstar had indemnified W&T.111 Hewitt and W&T disagree, arguing that

Pelstar need not indemnify W&T for Pelstar to have assumed liability because Pelstar

“unequivocally agreed to assume responsibility for any and all claims arising out of personal or

bodily injury that might be asserted against W&T by Pelstar’s employees” in Sections 1.1 and 5.1

of the MSC.112

Here, the subrogation waiver is valid despite the qualifying language in the MSC. The MSC

provides that Pelstar “shall release, indemnify, protect, defend, and hold W&T Group harmless

from and against any and all claims in respect of personal or bodily injury to, sickness, disease or

death of … and member of contractor group, in any way, directly or indirectly, arising out of,

connected with, incident to, or resulting from or relating to the performance of the contract …”113

The MSC’s definition of “claims” is absolute, as it provides that “‘claims’ shall mean and any all

claims, liabilities, costs and expenses … and causes of action of whatsoever nature or character.”114

This language in which Pelstar must “release … and hold W&T Group harmless from any and all

110 Fontenot, 676 So. 2d at 565.

111 Rec. Doc. 33-3 at 3–8.

112 Rec. Doc. 35 at 3 (citing Rec. Doc. 31-4).

113 Rec. Doc. 31-4 at 3.

114 Id. at 1.

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claims” that Pelstar’s employees may bring and that claims are “causes of action of whatsoever

nature or character” is the extent of the liabilities Pelstar has assumed in the MSC. While this broad

language is contained in the “indemnity” section of the MSC, W&T has chosen to utilize the

waiver of subrogation rather than pursue indemnification so that its actions do not run afoul of the

LOAIA, as the Louisiana Supreme Court instructed in Fontenot.115

Courts interpreting master service contracts between oil companies and contractors

containing similar limiting language have found that subrogation waivers in the insurance policy

are enforceable despite that limiting language. In Boudreaux, the Master Service Agreement

between Black Elk, an oil company, and its contractor, Wood Group, stated in part that “all

insurance policies of CONTRACTOR … shall be endorsed to waive subrogation against BLACK

ELK GROUP to the extent of the liabilities and indemnity obligations assumed by CONTACTOR

under this Agreement.”116 A judge in the Eastern District of Louisiana first found that Wood

Group, the contractor, “waived the right of subrogation with respect to workers’ compensation

payments as to … Black Elk [the oil company].”117 Based on this language in the Master Service

Agreement, the court then concluded that “Wood Group’s insurer, ACE American Insurance

Company, agreed to waive its right of subrogation against ‘any person or organization against

whom [Wood Group] ha[d] agreed to waive [its] rights of recovery in a written contract, provided

such contract was executed prior to the date of loss.’”118 Having found that the subrogation waiver

115 See Fontenot, 676 So. 2d at 565.

116 Boudreaux, 184 F.Supp.3d at 346–47.

117 Id. at 347.

118 Id.

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was valid, the court dismissed Wood Group’s intervention.119

Similarly, a judge in the Western District of Louisiana has come to the same conclusion

regarding the limiting liability language in a Master Service Contract and whether it affects the

enforceability of the subrogation waiver. In Morgan v. Hercules Drilling Co., the Master Service

Agreement provided in part that the “Contractor’s obligation to have its insurance endorsed to

include a waiver of subrogation in favor of the Owner Indemnified parties and to name the owner

Indemnified Parties as additional insureds are applicable only to the extent of the liabilities and

obligations assumed by CONTRACTOR under this agreement.”120 The insurance carrier, Liberty

Mutual, acknowledged that the insurance policy contains a waiver of subrogation but nevertheless

argued that it had an independent statutory right under Louisiana law to recover the money it paid

out to an injured worker under a LHWCA workers compensation policy.121 The court found that

“Liberty Mutual’s policy contains an express waiver of its right to reimbursement. This waiver is

applicable and has not been limited in any way.”122

Furthermore, Starstone’s interpretation of the limiting liability language in the MSC would

produce absurd results. Requiring Pelstar to indemnify W&T for the subrogation waiver to apply

would be perpetually defeating, as Pelstar’s indemnification of W&T would void the subrogation

waiver under LOAIA. This is precisely what the court concluded in Delozier.123 In Delozier, the

119 Id.

120 Morgan v. Hercules Drilling Co., LLC, No. 9-2091, 2011 WL 3739053, at *2 (W.D. La. Aug. 22, 2011)

(Doherty, J.).

121 Id. at *5 (citing La. Rev. Stat. § 23:1101(B)).

122 Id. at *6 (citing Sandbom, 674 So.2d 349).

123 Delozier, 500 F.Supp.3d at 526.

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Master Service Agreement stated in part that the waiver of subrogation is “‘limited to the extent

of Contractor’s indemnity obligations assumed herein.’”124 The insurance carrier argued that “the

waiver of subrogation is enforceable only when [the contractors] are obligated to indemnify [the

oil company], but that the jurisprudence prohibits enforcement of the waiver of subrogation when

used in conjunction with the indemnity clause.”125 Citing to Boudreaux, another judge in the

Eastern District of Louisiana rejected the insurance company’s argument, reasoning that by this

logic, the waiver of subrogation would always be void under the language of the MSAs.126

Therefore, the court concluded that the MSA did not narrow the application of the waiver of

subrogation.127

The cases Starstone cites are inapposite, as neither Becker or International Marine address

the relationship between subrogation waivers in insurance contracts and LOAIA. In addition,

Mora, which applies Texas state law, is not binding authority. Starstone has not otherwise

identified authority providing that a contractor must indemnify the oil company for a waiver of

subrogation provision to apply. Therefore, the Court will follow Fontenot, Hudson, Delozier, and

other cases discussed above that are more factually and legally analogous to the instant care here

to find that the waiver of subrogation in favor of W&T is valid.

124 Id. at 525.

125 Id. at 525–26.

126 Id. at 526.

127 Id. at 525–26.

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C. Starstone’s rights under the LHWCA and its Intervention here

Starstone initially moved for summary judgment for the Court to find that its intervention

complaint should be retained in full, but argues in the alternative that “complete dismissal is

inappropriate because [Starstone] possesses independent rights under the LHWCA, particularly

written consent for settlement and a future credit for the net amount received by the employee in

a third-party action.”128 Hewitt and W&T oppose, arguing that “(1) Starstone’s right under 33

U.S.C. § 933(f) to a set-off or Starstone’s right under 33 U.S.C. § 933(g) to approve a settlement

between W&T and Hewitt” will not be determined by this Court but rather in an administrative

proceeding pending before the Department of Labor.129 Hewitt and W&T argue in the alternative

that Starstone should be required to amend its intervention complaint to specify that it seeks to

protect its rights under 33 U.SC. Sections 933(f) and (g).130

Although Starstone has statutory rights to approve a settlement and to a set-off under the

LHWCA, Starstone has not identified any authority providing that it has the right to intervene in

this litigation between Hewitt and W&T to protect those rights. Petroleum Helicopters, Inc. v.

Collier, which Starstone cites, does not mandate courts to allow an insurance company to intervene

to protect its LHWCA rights in a lawsuit between a worker and a third-party tortfeasor.131 Rather,

the contractor employer in Petroleum Helicopters asserted its rights under the LHWCA to approve

the settlement between the worker and the third party tortfeasor as a “complete defense to any

128 Rec. Doc. 40 at 1 (citations omitted).

129 Rec. Doc. 42 at 4.

130 Id. at 5.

131 Petroleum Helicopters, Inc. v. Collier, 784 F.2d 644 (5th Cir. 1986).

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liability for future compensation” in administrative proceedings before the Department of

Labor.132 After the Administrative Law Judge rejected the contractor employer’s argument that it

was not liable for any future payments to the worker because its Section 933(g) settlement approval

rights under the LHWCA and the Benefits Review Board of the Department of Labor affirmed,

the contractor employer sought judicial review of that final decision and order of the Benefits

Review Board.133 The Fifth Circuit reviewed an administrative agency’s final decision and order,

not a district court’s order in the worker’s lawsuit against the third party tortfeasor.134 This

suggests that administrative proceedings before the Department of Labor is the appropriate

proceeding for Starstone to protect its rights under the LHWCA.135 Because the Court is not

required to allow Starstone to intervene in this lawsuit between a worker and a third party tortfeasor

to protect its LHWCA rights, and because Starstone may protect its rights under LHWCA in

administrative proceedings before the Department of Labor, Starstone’s intervenor complaint must

be fully dismissed.136

V. Conclusion

Since there is no genuine issue of material fact in dispute, and the only issues in dispute

are questions of law regarding whether Starstone’s waiver of subrogation is valid and whether

Starstone may remain in this litigation to protect its rights under LHWCA, summary judgment is

132 Id. at 645–46.

133 Id. at 644–46.

134 See id.

135 See Jackson v. Land & Offshore Servs., Inc., 855 F.2d 244, 245 (5th Cir. 1988) (holding that it was proper

for the Department of Labor to deny an application for workers compensation under the LHWCA because the worker

failed to obtain the prior approval of his employer to the settlement with the third party tortfeasor).

136 Petroleum Helicopters, 784 F.2d at 645–46.

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appropriate. As discussed above, the Court finds that the waiver of subrogation is valid and the

Court is not required to allow Starstone to intervene in this litigation to protect its LHWCA rights.

Accordingly,

IT IS HEREBY ORDERED that Hewitt and W&T’s Joint Motion for Summary

Judgment!3’ is GRANTED and Starstone’s claims are DISMISSED WITH PREJUDICE.

IT IS FURTHER ORDERED that Starstone’s Motion for Summary Judgment!*® is

DENIED.

NEW ORLEANS, LOUISIANA, this Ist day of December, 2023.

NANNETTE JOLIVETTE BROWN

CHIEF JUDGE

UNITED STATES DISTRICT COURT

37 Rec. Doc. 31

88 Rec. Doc. 33.

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