Appendix — Shell Oil Co. v. Olsen
Supreme Court brief1984
Ask Donna
What actually matters in this document.
Text
Office - Supreme Court, U.o
83-829 FILED
Nov 13 1983
tes Artaicibctntaee LY AS
a Joie a ae Ve a i CLERK
In the
Supreme Court of the United States
OCTOBER TERM, 1983
MOVIBLE OFFSHORE, INC.
Petitioner,
V.
MARY OLSEN, CHRISTINE W. CARVIN,
GORDON DAVIS WALLACE, and
ARGONAUT INSURANCE COMPANY
Respondents.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITES STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
APPENDIX TO
PETITION FOR WRiT OF CERTIORARI
VOL. I — APPENDIX A —G
W. K. CHRISTOVICH
MICHAEL M. CHRISTOVICH
CHRISTOVICH & KEARNEY
1900 American Bank Building
New Orleans, Louisiana 70130
(504) 561-5700
Counsel for Petitioners,
Movible Offshore, Inc.
A B Letter Service, Inc., 327 Chartres St., New Orleans, La. (504) 581-5555
INDEX
PAGE
Appendix A - Minute Entry of the United States District
Court of the Eastern District of Louisiana,
CENEMES + saa ¥es Odhucaeacwied A-1
Appendix B - Minute Entry of the United States Dis-
trict Court for the Eastern District of
Louisiana, July 15, 1975............ A-20
Appendix C - Opinion of the court of appeals,
Ee aii ahold aia 40s A-34
Appendix D - Denial of rehearing en banc by the
court of appeals, December 1,1977.... A-74
Appendix E - Opinion of the court of appeals
certifying questions to the Louisiana
Supreme Court, May 12,1978 ....... A-76
Appendix F - Opinion of the Louisiana Supreme
Court, January 26, 1979............ A-83
Appendix G - Opinion of the court of Appeals,
8... errr A-116
A-1
APPENDIX A
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Filed: June 6, 1974
Minute Entry
June 6, 1974
Heebe, J.
MARY OLSEN, et al. CIVIL ACTION
versus NO. 72-1240
SHELL OIL COMPANY, et al. SECTION B
CHRISTINE W. CARVIN, et al. CIVIL ACTION
versus NO. 70-2986
SHELL OIL COMPANY, et al. SECTION B
FRANK WINSTON BOOKER, et al. CIVIL ACTION
versus NO. 71-894
SHELL OIL COMPANY, et al. SECTION B
GORDON DAVIS WALLACE CIVIL ACTION
versus NO. 71-1144
SHELL OIL COMPANY, et al. SECTION B
ARGONAUT INSURANCE COMPANY CIVIL ACTION
versus NO 71-1265
SHELL OIL COMPANY, et al. SECTION B
(CONSOLIDATED CASES)
On a previous day this case came on for trial on the issue
of liability alone, and the Court, after hearing the evidence
A-2
and studying the briefs and memoranda filed by the parties,
makes the following findings of fact and conclusions of law.
FINDINGS OF FACT
1. On May 6, 1970, a hot water heater explosion occurred
aboard a fixed platform owned by Shell Oil Company located
in the Eugene Island Area, Block 259, in the Gulf of Mexico,
off of the coast of Louisiana. The individual plaintiffs in this
case are the legal representatives of men killed in the explo-
sion, except for Gordon Wallace who sues for injury. The
platform was designated as Shell’s ‘‘C’”’ platform and drilling
was being conducted from the platform by a drilling contrac-
tor known as Movible Offshore, Inc. The individual plaintiffs
were all employees of Movible Offshore, Inc. (Movible).
2. To conduct the drilling operations from the platform,
Movible had located its modular and movable drilling rig on
the platform. Movible designated the rig at this particular
location as Movible Rig No. 4. Movible Rig No. 4 consisted
of all equipment necessary to drill a well, including a derrick
or mast, drawworks, the very large engines which were nec-
essary to power the drilling equipment, and all normal appur-
tenances to a drilling operation. In addition to this, Movible
had its modular living quarters on the Shell platform which
provided a galley area for feeding the men, sleeping quarters,
shower and bathroom facilities and a lounge area. This
modular living unit was fully movable, and when the rig was
moved from one platform to another, it was picked up as a
unit by a derrick barge and then transported to the new site
and duly placed on the platform in such a way that cutting
and burning of metal would be required to remove it.
A-3
3. Under the working arrangement in effect between Shell
and Movible, two Movible drilling crews consisting of six men
each worked opposite shifts so that the drilling rig could be
kept in operation 24 hours a day. Of ihe twelve men com-
posing the two drilling crews, two were drillers, two were der-
rickmen, six were rotary helpers, and two were power plant
operators.
In addition to these men, Movible also provided three
roustabouts (charged with platform maintenance), one
welder, one crane operator, and a commissary crew, e.g.,
several people charged with the duty of providing for the
food service and the upkeep and maintenance of the interior
of the living quarters. Shell performed none of the actual
operations on the rig and had only one permanent represen-
tative there. He was provided quarters in the Movible modu-
lar living unit but concerned himself with observing the
drilling operations conducted by Movible.
4. The living quarters module which Movible brought to
the site was a complete and self-contained unit. It was built
on skids so that it could be picked up as one unit and moved
from platform to platform. The quartersunit was equipped
with a galley and related dining area and living area. Ad-
ditionally, the quarters unit was equipped with two electric
water heaters. One water heater was located in the galley
area and another was located in the pantry area. The pantry
heater provided water to the showers while the galley heater,
in the main, provided water to the galley equipment. These
water heaters were Movible equipment and were wholly
owned, as was the living quarters unit, by Movible Offshore,
Inc.
5. On November 1, 1968, Pacific Employers Insurance
Company (Pacific), an affiliate of the Insurance Company of
A-4
North America (INA), issued Standard Workman’s Compen-
sation and Employer’s Liability Policy No. PWC 06502 to
Movible Offshore, Inc. The policy period commenced at
12:01 a.m. on November 1, 1968 and terminated on Novem-
ber 1, 1969. The policy of insurance issued by Pacific to
Movible contained the following language with respect to
safety inspections:
“The Company and any rating authority having
jurisdiction by law shall each be permitted but not
obligated to inspect at any reasonable time the
work places, operations, machinery and equipment
covered by this Policy. Neither the right to make
inspections nor the making thereof nor any report
thereon shall constitute an undertaking on behalf
of or for the benefit of the insured or others, to
determine or warrant that such work places, opera-
tions, machinery or equipment are safe.”’
(emphasis supplied)
6. Shortly after commencement of the policy period,
INA officials, including its New Orleans Manager, Mr. H. K.
Dulaney, participated in discussions with representatives of
Movible, including the official responsible for its safety
program, Mr. J. H. Brazier. The discussions focused on the
services which would be rendered by INA in connection with
its coverage. Mr. Gilbert J. Stansbury was introduced as the
INA representative who would be handling the Movible ac-
count.
7. During this initial meeting, Dulaney informed Movible
regarding INA’s policy of “‘loss control,” i.e., INA under-
stood its obligation to be one of motivating the management
of its insured to undertake a complete safety program on
their own. INA would provide the company with brochures,
A-5
posters, films and information for use at safety meetings and
would also make visitations to rigs for the purpose of point-
ing out unsafe practices and making recommendations for
changes. Dulaney stated that INA was well aware that
Movible had its own extensive safety program. Brazier re-
plied that Movible was highly competent in promoting safety
within their operations and expected INA to work within
Movible’s program.
8. Brazier informed Dulaney that every man on a Movible
rig was considered a safety engineer and had safety responsi-
bilities. Dulaney had the impression that each toolpusher
had specific expertise in safety with respect to conditions
which existed on the rigs. To encourage safety practices by
the men and to prevent lost time accidents, Movible had an
incentive program, awarding various prizes to the men with
the best safety records. Movible held daily safety meetings
befcre each crew went to work and weekly safety meetings
in which all men on the rig participated. Movible officials
also performed safety inspections on its rigs. Daily inspec-
tions took place under the direction of the Movible tool-
pusher and weekly visitations to the rigs were made by
Movible’s Drilling Superintendent and his assitant. The pur-
pose of these inspections was to check machinery, safety
equipment, safety reports and to fill out safety inspection
reports. As a result of its extensive safety program, Movible
won first place in the American Oil Well Drillers Association
safety awards program during eight of the past nine years.
9. When Brazier inquired as to whether INA would in-
spect all of the rigs each month, Dulaney responded that INA
could not undertake this type of inspection but that it would
attempt to inspect the rigs on a periodic basis and transmit
A-6
its recommendations to Movible.
10. Throughout the policy period, Movible continued
to perform safety inspections on its rigs including Movible
Rig No. 4. The Court finds that INA represented to Movible
and its officials that it would conduct periodic inspections of
the rigs as a supplement or adjunct to Movible’s continuing
safety program.
11. INA’s usual procedure to follow up safety recommen-
dations made by its inspectors was to receive written replies
from the insured indicating whether suggested action had
been completed. Movible, however, never, or rarely, gave
INA the requisite written report. This conduct led to the
cancellation of INA’s safety services for Movible. The rou-
tine of INA and Gilbert Stansbury, as far as Movible was con-
cerned, was to make actual inspections to see whether pre-
vious safety recommendations had been complied with. In
at least one other case, Mr. Stansbury discovered, during a
follow up inspection, that his recommendations concerning
a hot water heater temperature pressure relief device had not
been followed. Thus, the evidence preponderates that INA
undertook to check, by inspection, on compliance with its
recommendations. The evidence further indicates that
Movible, contrary to its representations about its own safety
program, relied on INA to make actual inspections to secure
compliance with Stansbury’s safety recommendations instead
of undertaking to check and report compliance on its own.
12. On January 22-23, 1969, Mr. Stansbury visited
“Movible Rig No. 4 for the purpose of viewing Movible’s
safety practices on the rig, including making a safety inspec-
tion. During his inspection, Stansbury was accompanied by
the Movible toolpusher, Mr. Carroll Desormeaux.
A-7
13. Stansbury inspected the hot water heaters in the pan-
try and in the galley of the living quarters on the rig. Ata
safety meeting on the rig, Stansbury made several suggestions
with respect to safety practices, including specific recom-
mendations with respect to the heaters which recommen-
dations were given in writing to the toolpusher, Desormeaux,
and were later transmitted to Movible’s management.
14. Stansbury recommended that the fusible plug relief
valve be changed to a temperature pressure relief valve and
that a procedure be established for weekly activation of the
test lever on the temperature pressure relief valve to insure its
proper working condition. This was a sound recommen-
dation in accordance with standard manuals for plumbing
codes. He also suggested that the valve on the galley hot
water heater have its outlets piped to the outside to prevent
injury or property damage if it were activated. Stansbury did
not make any specific recommendations as to type or manu-
facturer other than to suggest that the valve was to be acom-
bination temperature pressure relief valve for a hot water
heater.
15. Movible failed to follow Stansbury’s recommendations
with respect to the valves. Movible’s management compre-
hended the nature of Stansbury’s recommendation. Prior
insurers had made the same or similar suggestions and Stans-
bury had made the same suggestions during visits to other
Movible rigs. However, those in charge of obtaining the
proper valve apparently did not understand the recommenda-
tion. Movible’s toolpusher, Desormeaux, had the impression
that Stansbury had simply suggested that the valve be chang-
ed to provide for a drain line in order to prevent someone
from being scalded in the event the valve were to ‘‘pop off.”
A-8
Desormeaux failed to comprehend what the insurer had sug-
gested although Stansbury’s written recommendation makes
it clear that INA wanted Movible to change to a combination
temperature pressure relief valve.
16. When Desormeaux instructed Movible’s purchasing
agent, Mr. Ray Brashear, to obtain new valves, he told Brash-
ear that he wanted a valve ‘‘with threads on the outside so !
could run a line outside the living quarters.’’ Desormeaux
told Brashear the pressure setting he wanted for the valve and
its size but did not give Brashear any temperature require-
ment for the valve. Most importantly, Desormeaux neglected
to inform Brashear that the valves he requested were to be
placed on hot water heaters. According to Brashear, the
Movible toolpusher probably requested a ‘‘Texsteam”’ relief
valve.
17. On January 29, 1969, Movible placed an order with
the New Iberia area Texsteam distributor, Pneumatic Service
& Equipment, Inc., (Pneumatic), for two 3/4 inch 5550
Texsteam relief valves set at 125 lbs. The relief valve which
Movible ordered was delivered that same day by Pneumatic.
18. The relief valve which Movible ordered was a pressure
relief valve only, not a temperature pressure relief valve as
Stansbury had recommended.
19. The valves were replaced on February 3, 1969. Desor-
meaux inspected the heaters after the installation of the
valves and concluded that “everything looked okay.” Desor-
meaux’s replacement, Mr. Wyman Haas, recalled being told
by Desormeaux that Stansbury had recommended changing
the pop-off valve. Haas looked at the heater after the install-
A-9
ation was completed and noted that the new valve was a Tex-
steam valve which had a little handle on the side. The valve
appeared to be just like the one found in his home, and it
looked all right to him.
20. On October 7, 1969, Stansbury returned to Rig No.
4 and interviewed the Movible toolpusher, Mr. Haas. At that
time, at Movible’s request, Stansbury was visiting the rigs via
helicopter, reviewing the safety practices on three to five
rigs per day. Stansbury reported that his previous twelve
recommendations, including the one respecting the hot water
heater valves, were completed. Stansbury could not recall
whether or not he examined the heaters on October 7, 1969.
Stansbury testified that if Toolpusher Haas had verbally
assured him that the proper valve had been installed, Stans-
bury would have taken his word for it. Also, Stansbury testi-
fied that if he had made a visual inspection, he probably
would have noticed that an improper relief valve had been
installed. Accordingly, the evidence preponderates that no
visual inspection was made but that, instead, Stansbury re-
lied on Haas’ verbal assurance that Stansbury’s recommenda-
tion had been followed.
21. INA lost the Teledyne account, including Movible
Offshore, Inc., during the year 1969. After the expiration of
the policy period on November 1, 1969, INA/Pacific no
longer provided coverage for Movible. Argonaut Insurance
Company was Movible’s insurer at the time of the casualty.
22. On May 6, 1970, the hot water heater located in the
pantry of the living quarters aboard Movible Rig No. 4 ex-
ploded, resulting in the deaths and injuries for which damages
are sought in this litigation. The evidence indicates that the
A-10
bottom of the hot water heater ruptured as a result of great
pressure which built up in the tank. Then, the great explo-
sive force was created when the water in the heater, which
was ‘‘superheated”’ to a temperature of above its boiling
point of 212 F., instantly ‘‘flashed”’ into steam when freed
from the pressured confines of the tank and just as instantly
expanded to more than 1,000 times its liquid volume.
“Superheated water” would have had to be present for an
explosion as powerful as this one to have occurred. Conse
quently, the evidence preponderates that, had a relief valve
with temperature relieving capabilities been installed in the
heater, it would not have exploded in such a fashion.
23. The heater was equipped with two heating elements,
one inserted into the heater through a hole near the top, the
other through a hole near the bottom. Each element was
attached to a flange about four inches square. Each flange
had holes through the corners by which the flange was in-
tended to be bolted to the heater. When the flange was
secured to the side of the heater, the protruding element
would be immersed in the water. The temperature of the
water was controlled by thermostats, one mounted near the
flange at the top to regulate the heat of that element, the
other mounted near the flange at the bottom to control the
heat of that element. There was found attached to the heater
after the accident a flange, mounted near the bottom hole,
manufactured by ‘‘Thermalink,’’ which was not a party to
any of the lawsuits. No element was attached to it. A
flange and element manufactured by defendant E. L.
Wiegand under the name of ‘‘Chromolux’”’ were found in the
debris after the accident. A control manufactured by the
‘defendant Therm-O-Disc was also found in the debris. Rem-
nants of another control were also found but its manufac-
A-11
turer was not identified.
24. The plaintiffs’ post trial brief admits, and the Court
finds, that there has not been sufficient proof to connect
either the Therm-O-Disc control or the Wiegand flange or
hearing element with the explosion at issue in this case.
25. The evidence in this case certainly preponderates that
this explosion could not have occurred had the Texsteam
5550 pressure relief valve properly relieved the pressure in
the heater tank at 125 lbs. There is, however, no direct evi-
dence that the valve was defective, and the Court is convinc-
ed that the circumstantial evidence in the case leaves open
the reasonable possibility that the valve may not have re-
lieved the pressure for reasons other than a defect in the
valve itself. The Court notes that Mr. Harold L. Flettrich,
the most credible expert to testify in the case, conceded that
the ‘‘blockage’’ of the pressure relief system in this case
could have been caused by 1) a defect in the piping; 2) scale
building in the valve, combined with lack of use of the test
lever by Movible personnel; 3) the misplacement of the valve
below the check valve which prevented hot water from es-
caping from the tank back down the cold water line; 4) al-
tered conditions in the functioning of the valve system due to
a great heat buildup, especially when combined with a
closed check valve and an opening reduced one half by scale
accumulation.
26. Argonaut Insurance Company, Movible’s compensa-
tion carrier at the time of the explosion, has intervened in
all of these consolidated cases and has also filed a separate
suit against the various defendants to recover monies paid on
A-12
behalf of injured parties who have filed no lawsuits against
third parties. No formal compensation awards were rendered
against Argonaut by the Commission.
CONCLUSIONS OF LAW
. |. The Court has jurisdiction over these consolidated cases
pursuant to the Outer Continental Shelf Lands Act, 43
U.S.C. § 1333.
2. There is no evidence in this case to indicate that any
negligence of Shell Oil Company was a proximate cause of
the explosion.
3. Of course, beuisiana law, insofar as it does not conflict
with federal law, is applicable to this case. Rodrigue v.
Aetna Cas. & Sur. Co., 395 U.S. 352 (1969).
4. Under the facts of this case, Shell Oil Company is not
liable to the plaintiffs pursuant to Art. 2322 of the Louisi-
ana Civil Code. See, this Court’s minute entry of May 14,
1973.
5. After much reflection, the Court is convinced that the
Secretary of the Interior’s regulations found at 30 C.F.R.
§ 250.45 and 30 C.F.R. §250.46 do not, under the facts of
this case, create an implied cause of action against Shell Oil
Company. Those regulations read as follow:
“The Outer Continental Shelf Lands Act enacted
on August 7, 1953, authorizes the Secretary of
the Interior at any time to prescribe and amend
such rules and regulations as are appropriate and
A-13
necessary for the regulation of oil leases on the
Outer Continental Shelf. Pursuant to this enabling
legislation, the Secretary has promulgated the
following rules:
‘*§ 250.45 Accidents, fires, and malfunctions.
‘In the conduct of all its operations, the lessee
shall take all steps necessary to prevent accidents
and fires, and the lessee shall immediately notify
the supervisor of all serious accidents and all fires
on the lease, and shall submit in writing a full re-
port thereon within 10 days. The lessee shall
notify the supervisor within 24 hours of any other
unusual condition, problem, or malfunction.
“*§ 250.46 Workmanlike operations.
‘The lessee shall perform all operations in a safe
and workmarilike manner and shall maintain equip-
ment for the protection of the lease and its im-
provements, for the health and safety of all per-
sons, and for the preservation and conservation of
the property and the environment. The lessee
shall take all necessary precautions to prevent and
shall immediately remove any hazardous oil and
gas accumulations or other health, safety or fire
hazards.”’
It is true, as a general proposition, that “‘a civil remedy
may be implied for those clearly within the protective realm
of legislation or regulations in the public interest.’’ Euresti
v. Stenner, 458 F.2d 1115, 1119 (10th Cir. 1972); Gomez v.
A-14
Florida State Employment Service, 417 F.2d 569 (5th Cir.
1969). See Note, Implying Civil Remedies from Federal
Regulatory Statutes, 77 Harv.L.Rev. 285 (1963). The work-
ers in this case were not clearly within that protective realm,
however, since it appears that the regulations in question
were not meant to apply to the housing module involved in
this case. The Outer Continental Shelf Lands Act, 43 U.S.C.
§ 1333(e)(1), provides that
‘The head of the Department in which the Coast
Guard is operating shall have authority to promul-
gate and enforce such reasonable regulations with
respect to lights and other warning devices, safety
equipment, and other matters relating to the pro-
motion of safety of life and property on the islands
and structures referred to in subsection (a) of this
section or on the waters adjacent thereto, as he
may deem necessary.”
The authority for the regulations involved in this case de-
rives from 43 U.S.C. § 1334 (a)(1), which provides:
“(a)(2)'The Secretary shall administer the pro-
visions of this subchapter relating to the leasing of
the outer Continental Shelf, and shall prescribe
such rules and regulations as may be necessary to
carry out such provisions. The Secretary may at
any time prescribe and amend such rules and regu-
lations as he determines to be necessary and proper
in order to provide for the prevention of waste
and conservation of the natural resources of the
outer Continental Shelf, and the protection of
correlative rights therein, and notwithstanding any
A-15
other provisions herein, such rules and regulations
shall apply to all operations conducted under a
lease issued or maintained under the provisions of
this subchapter. In the enforcement of conserva-
tion laws, rules, and regulations the Secretary is
authorized to cooperate with the conservation
agencies of the adjacent States. Without limiting
the generality of the foregoing provisions of this
section, the rules and regulations prescribed by the
Secretary thereunder may provide for the assign-
ment or relinquishment of leases, for the sale of
royalty oil and gas accruing or reserved to the
United States at not less than market value, and, in
the interest of conservation, for unitization, pool-
ing, drilling agreements, suspension of operations
or production, reduction of rentals or royalties,
compensatory royalty agreements, subsurface
storage of oil or gas in any of said submerged
lands, and drilling or other easements necessary
for operations or production."’
Both the wording of the statutes and regulations, and the
legislative history of the statutes, indicate that the authori-
ty of the Secretary of the Interior concerns drilling and pro-
duction operation practices and conservation. See, Hearings
Before the Senate Committee on Interior and Insular Affairs,
83rd Cong., lst Sess., on S.Bill 1901 (1953), p. 689; Senate
Report 411, 83rd Cong., lst Sess., p. 11. The Coast Guard,
on the other hand, is given the broad authority to regulate
safety practices which, in places other than fixed platforms,
is given by the Longshoremen’s and Harbor Workers’ Com-
pensation Act to the Secretary of Labor. 33 U.S.C. § 94la
Pure Oil Company v. Snipes, 293 F.2d 60, 67-68, n. 12 (5th
A-16
Cir. 1961). This conclusion is buttressed by the fact that the
platform safety regulations specifically exclude ‘operating
equipment used and employed, nor to the methods and
operations used, in the drilling for and the production of
oil, gas, petroleum, or other subsoil minerals, nor to the
transportation thereof by pipeline.” 33 C.F.R. § 140.05.5
(c). The Court finds that the operation of an independent
housing module on a platform is not a production or drilling
operation regulated by the Secretary of the Interior but is
rather a matter of gener2! platform safety properly supervis--
ed by the Coast Guard. For example, the Coast Guard regu-
lations provide for the nurnber of fire extinguishers to be
placed in all galleys, sleeping accommodations, etc. 33
C.F.R. Table 145.10(a). Armstrong v. Chambers & Kennedy,
340 F.Supp. 1220 (S.D.Tex. 1972), on which plaintiff relies,
concerned implied liability for violations of the Secretary
of the Interior’s Regulations but in that case the violations in
question resulted from oil drilling and storage operations,
and they were properly within the reach of the Secretary's
regulatory authority.
In passing, it should be noted that no violations of any
Coast Guard regulations have been alleged, and the Court,
after reading those regulations, has found none which might
apply to the facts as proven in this case.
6. Under Louisiana law, while a plaintiff's burden of
making out his case by a fair preponderance of the evidence
may be met through the use of circumstantial evidence, such
evidence must be of a nature to exclude with a reasonable
amount of certainty all other reasonable hypotheses. Hargis
v. Travelers Indem. Co., 248 So.2d 833 (La. App. 1971). As
indicated earlier in the Findings of Fact, plaintiffs’ in this
A-17
case have not met that burden with respect to E.L. Wiegand
Company, Therm-O-Disc, Inc., or Texsteam Corporation.
7. Louisiana law is not settled on the issue of whether its
tort law permits a Workmen’s Compensation carrier to be
sued for negligent inspection. One Louisiana appeals court
has stated that ‘‘A cause of action can lie against an insurer
for failure to inspect,”’ citing a Fifth Circuit case which noted
that such a cause of action did exist when not prohibited by
Workmen's Compensation Statutes. Rogers v. Highlands Ins.
Co., 270 So.2d 277 (La.App. 1972), citing Keller v. Dravo
Corp., 441 F.2d 1239, 1243 (Sth Cir. 1971); see also, Hill
v. U.S.F. & G. Co., 428 F.2d 112 (Sth Cir. 1970). Later,
another Louisiana appeals court first held that such liability
did indeed exist under general tort principles as expressed in
the Restatements of Torts, but on rehearing, reversed itself
over the dissent of one of the three judges). Kennard v.
Liberty Mutual Ins. Co., 277 So.2d 170, on rehearing 277
So.2d 174 (1973). It is the opinion of this Court that the
Louisiana Supreme Court would take the better of these two
views, that general tort principles do allow an action for
negligent inspection by a compensation carrier when not pro-
hibited by the compensation statute involved and when the
proper requirements are met.
8. The Court finds nothing in the Longshoremen’s and
Harbor Workers’ Compensation Act, 33 U.S.C. § 941, et seq.,
which would preclude an action against an insurer for negli-
gent inspection or which indicates that the insurance com-
pany stands in the shoes of the employer and is, therefore,
immune from suit by an injured employee. On the contrary,
the definition of ‘‘ernployer’’ is used in its normal sense in
the Act, 49 F.Supp. 605 (D.C.Md. 1943), aff’d 141 F.2d 324
A-18
(4th Cir. 1944). The Act is to be liberally construed, Pills-
bury v. United Eng. Co., 342 U.S. 197, 200 (1951), in favor
of the injured employee. Voris v. Eikel, 346 U.S. 328
(1953); Noleo Chem. Corp. v. Shea, 419 F.2d 572 (5th Cir.
1969). See also, Watson v. Gulf Stevedore Corp., 400 F.2d
649, reh. den. 404 F.2d 1059 (5th Cir. 1968), cert. den.
394 U.S. 976 (1969); Reed v. S.S. Yaka, 373 U.S. 410, reh.
den. 375 U.S.410, reh. den. 375 U.S. 872 (1963); Potomac
Elec. Power Co. v. Wynn, 343 F.2d 295 (D.C. Cir. 1965);
Int. Terminal Operator Co. v. Miller, 208 N.Y.S. 2d 813, 28
Misc. 2d 445 (1960).
There are many cases on each side of the compensation
carrier liability question. See. e.g., the cases listed in Keller
v. Dravo Corporation, 44) F.2d 1239, 1243, notes 3 & 4
(Sth Cir. 1971). It suffices to say that this Court believes
that neither the language of the compensation act in this
case nor public policy justifies immunizing insurers against
liability for their own negligence. See, Larson, Workmen's
Compensation Insurer as Suable Third Party, 1969 Duke
L.J. 1117.
9. According to the general principles of tort law appli-
cable to this case, an insurer is liable for a negligent inspec-
tion if 1) it has undertaken to perform the inspection or in-
spections in question, and 2) the evidence discloses an
actual reliance by the employer on those inspections to the
extent that the employer neglects his own safety inspection
program to the detriment of the plaintiff-employees. Stacy
v. Aetna Cas. & Sur. Co., 484 F.2d 289 (Sth Cir. 1973). As
indicated earlier in the Findings of Fact, Pacific Employers
Insurance Company (INA), undertook the duty of inspecting
to see if its earlier safety recommendations had been follow-
A-19
ed, and Movable relied on these inspections to the extent of
neglecting its own inspection followup program. The evi-
dence further indicates that Inspector Gilbert Stansbury
negligently performed his assumed duty to make a followup
inspection and that his negligence was a proximate cause of
the injuries and deaths which are the subject of this lawsuit.
10. Argonaut Insurance Company’s independent suit
against the defendants to recover compensation payments
made to parties other than plaintiffs in this case must be dis-
missed since those payments were not made pursuant to a
formal award. Joyner v. F. & B. Enterprises, Inc., 448 F.2d
1185 (D.C. Cir. 1971). Of course, this dismissal does not dis-
turb Argonaut's interventions in plaintiffs’ actions.
Accordingly, the parties are instructed to submit proposed
judgments consistent with these findings and conclusions.
s/ Frederick J.R. Heebe
WK. Christovich
William P. Rutledge Charles M. Steen
Wood Brown, III Joel Borrello
Mack Miller Kelly McKain
Frank Allen,Jr.
George B. Matthews
Donald Hoffman
Francis G. Weller
James E. Diaz
Alfred S. Landry
W. Eugene Davis
M.N. Grossel-Rossi
James Drury
A-20
APPENDIX ‘‘B”
Minute Entry
July 15, 1975
Heebe,J.
Filed: Jul 15, 1975
MARY OLSEN, et al. CIVIL ACTION
versus NO. 70-1240
SHELL OIL CO., et al. SECTION B
CHRISTINE W. CARVER, et al. CIVIL ACTION
versus NO"70-2986
SHELL OIL CO., et al. SECTION B
FRANK WINSTON BOOKER, et al. CIVIL ACTION
versus NO. 71894
SHELL OIL CO., et al. SECTION B
GORDON DAVIS WALLACE CIVIL ACTION
versus NO. 71-1144
SHELL OIL CO., et al. SECTION B
ARGONAUT INSURANCE CO. CIVIL ACTION
versus NO. 71-1265
SHELL OIL CO., et al. SECTION B
(CONSOLIDATED CASES)
This matter is before the Court on motions to amend the
Court’s Judgment of July 9, 1974, or alternatively, for a new
trial filed by Argonaut Insurance Company (Argonaut),
plaintiff in Civil Action No. 71-1265, the plaintiffs in the re-
A-21
maining consolidated cases, and defendants Shell Oil Com-
pany (Shell) and Pacific Employers Insurance Company, an
affiliate of the Insurance Company of North America (INA).
The question of liability was hotly contested at trial, and the
motions for a new trial likewise have been strenuously argued
by all parties. The Court was requested to reserve rulings on
the motions until a transcript of the testimony could be ob-
tained.
The Court has now had the benefit of a review of that
transcript, as well as the extensive memoranda filed by all
parties. The questions raised at trial and in the post-trial
briefs are serious ones, and the Court has taken this oppor-
tunity to make a thorough and fresh reconsideration of the
entire case. Upon much reflection, the Court is now convinc-
ed that the findings of fact and conclusions of law in the
Court's minute entry of June 6, 1974, should be amended to
reflect the following results: (1) INA is not liable to the
plaintiffs for any damages arising out of the explosion of the
hot water heater aboard Movible Rig No. 4 on May 6, 1970;
(2) Movible Offshore, Inc. (Movible) was negligent in failing
to obtain the temperature pressure relief valve recommended
by INA and that negligence was a proximate cause of the
plaintiffs’ injuries; and (3) Shell is entitled to indemnity from
Movible under the written indemnity contract between these
two parties for reasonable costs of defense and attorneys’
fees.
The Court’s findings of fact are set out in its minute entry
of June 6, 1974, and there is no reason to repeat what was
stated at length there. Instead, the Court will focus only on
those facts pertinent to the motions before the Court and on
the legal conclusions arising therefrom.
A-22
There is no doubt from the evidence introduced at trial,
particularly the deposition testimony, that INA had under-
taken to inspect Movible’s rigs on a periodic basis and to
transmit its recommendations to Movible regarding correc-
tion of any unsafe equipment or practices which it found.
Although the Louisiana law is not settled on the issue of
whether its tort law permits a Workmen’s Compensation
carrier to be sued for negligent inspection, compare Rogers v.
Highlands Ins. Co., 270 So.2d 277 (La.Ct. App. 1972) with
Kennard v. Liberty Mutual Ins. Co., 277 So.2d 174 (LaCt.
App. 1973) (on rehearing), we remain convinced that the
better view, and the one which the Louisiana Supreme Court
would adopt, is that a cause of action for negligent inspec-
tion by a compensation carrier does lie when not prohibited
by the compensation statute involved. Further, as the Court
noted in its earlier opinion, nothing in the Longshoremen’s
and Harbor Workers’ Compensation Act, 33 U.S.C. § 941,
et seq., either in its express terms or by implication, indicates
an intent to immunize the employer’s compensation carrier
from a claim of negligent inspection.
Thus, had INA neglected to discover possible safety haz-
ards existing on Movible’s Rig No. 4, which in the exercise
of due diligence it should have discovered, it would be held
negligent and would be liable for any damages proximately
caused by that negligence. This is not the case, however.
Gilbert Stansbury, INA’s safety inspector for the Movible
account, discovered that the valve then in place on the hot
water heater in question was improper and recommended
that Movible install a temperature pressure safety valve. All
the experts testifying in this case have agreed that this is the
proper type of valve for the particular hot water heater in
question. However, through its own misunderstanding,
Movible ordered and installed upon the hot water heater a
A-23
pressure relief valve only - an inferior, if not totally inap-
propriate, valve for hot water heaters.
Stansbury returned to Rig No. 4 on October 7, 1969, some
eight and a half months after his initial inspection, to check
whether Movible had complied with his earlier safety recom-
mendations. The Court found that Stansbury made no visual
inspection of the heater upon his return but relied instead on
the verbal assurance of Movible’s toolpusher that Stansbury’s
recommendation had been followed.
Thus, the only claim of negligence possible from these
facts is that INA breached a duty owed by it to Movible to
physically reinspect each area in which a safety recommenda-
tion had been made to ascertain firsthand whether those
recommendations were complied with. Upon careful recon-
sideration of this question, we conclude that no such duty
was owed by INA to Movible and that Stansbury acted
reasonably in accepting the asurance of Movible’s toolpusher
that the recommended valve was in place upon the heater.
Such a duty of reinspection would be beyond any duty pre-
sently imposed by the case law. Even those cases which
allow a cause of action for negligent inspection speak only
of the initial duty of the insurer to inspect the premises
anc discover hazardous conditions. See, e.g., Stacy v. Aetna
Casualty & Surety Co., 484 F.2d 289 (5th Cir. 1973); Keller
v. Dravo Corp., 441 F.2d 1239 (Sth Cir. 1971); Rogers v.
Highlands Ins. Co., supra.
There is, as the Court has earlier noted, evidence in the
record that INA had undertaken on-site compliance inspec-
tions of Movible’s rigs and that Movible had asked for and
relied on this service provided by INA. But there is no evi-
A-24
dence at all to indicate that INA was obligated to disregard
assurances by Movible’s own employees that INA’s recom-
mendations had been adopted. To the contrary, Movible
had an extensive safety program of its own, and INA was in-
formed by Movible that each toolpusher had specific exper-
tise in safety conditions existing on the rigs. Stansbury had
no reason to disbelieve the statements made by Movible’s
toolpusher regarding the hot water heater valve.
We emphasize that at the time of Stansbury’s return on
October 7, 1969, he was reviewing the safety practices on
three to five rigs per day at the request of Movible. The short
time required to perform these tasks is an additional reason
why Stansbury’s acceptance of Movible’s on-site assurances
was reasonable. The evidence preponderates that INA was
under no duty to visually inspect Movible’s rigs for compli-
ance with its prior safety recommendations after being
assured by a knowledgeable Movible employee that those
recommendations had been followed. In short, we think that
Stansbury acted reasonably under the circumstances and is
not chargeable with negligence.
We have again carefully considered the claim urged by
INA’ ‘in its motion for a new trial that Shell, as platform
owner, is strictly liable for violation of the Secretary of the
Interior’s regulations found at 30 C.F.R. §§250.45, 250.46.
This claim is based primarily on broad language contained in
Armstrong v. Chambers & Kennedy, S40 F.Supp. 1220
(S.D. Tex. 1972), aff'd in relevant part sub nom. In re Dear-
born Marine Service, Inc., 499 F.2d 263 (Sth Cir. 1974).
The Fifth Circuit's opinion affirming the portion of the
district court's judgment relevant here was issued subsequent
A-25
to our decision in the instance case. The regulations read as
follow:
Ҥ 250.45 Accidents, fires, and malfunctions.
“In the conduct of all its operations, the lessee
shall take all steps necessary to prevent accidents
and fires, and the lessee shall immediately notify
the supervisor of all serious accidents and all fires
on the lease, and shall submit in writing a full
report thereon within 10 days. The lessee shall
notify the supervisor within 24 hours of any other
unusual condition, problem, or malfunction.
““§ 250.46 Workmanlike operations.
‘The lessee shall perform all operations in a safe
and workmanlike manner and shall maintain equip-
ment for the protection of the lease and its im-
provements, for the health and safety of all per-
sons, and for the preservation and conservation of
the property and the environment. The lessee shall
take all necessary precautions to prevent and shall
immediately remove any hazardous oil and gas
accumulations or other health, safety or fire
hazards.”
The issue is whether these regulations impose strict liabili-
ty upon an oil or gas lessee for failure to maintain safe equip-
ment, even if only tangentially related to the improvement of
its lease, or whether they encompass only such hazards which
may fairly be said to be related to oil drilling and production
operations. The question is not entirely free from doubt.
The terms of the regulation, to be sure, provide that the
A-26
lessee shall maintain equipment, inter alia, ‘for the health
and safety of all persons.’’ Further, we recognize that there
is language in the district court’s opinion in Armstrong
which would support the broader reading of the regulations
in question. However, we remain cunvinced, for the reasons
stated in the Court’s minute entry of June 6, 1974, that the
regulations are inapplicable to the circumstances of this case.
We add here only a few additional comments in support of
that decision. The two regulations at issue are part of a
series of regulations (found at 30 C.F.R. §§250.1 - 250.100)
promulgated by the Secretary of the Interior, pursuant to
43 U.S.C. § 1334 (a)(1)? The Secretary is authorized by that
statute to prescribe ‘‘such rules and regulations as he deter-
mines to be necessary and proper in order to provide for the
prevention of waste and conservation of the natural re-
sources of the outer Continental Shelf, and the protection
of correlative rights therein... .’’ Nothing in this authoriz-
ing statute explicitly gives the Secretary the authority to pro-
mulgate regulations relating to safety. Certain safety regu-
lations relating directly to the maintenance and operation of
the lease may be justified as ‘‘correlative’’ to the primary
purpose underlying the legislation. If, however, the regula-
tions are construed broadly to require the lessee, under pain
of criminal penalties, see 43 U.S.C. § 1334(a)(2)2to main-
tain safe equipment, no matter how tenuously related to its
drilling operations, that would raise a serious question
whether the Secretary, in promulgating those regulations, had
exceeded the authority granted to him under the enabling
statute. We need not reach that question, however, because
we feel that the regulations in question, particularly 30
C.F.R. §250.46, should be more narrowly construed.
It is a familiar canon of statutory construction that a body
A-27
of statutes, or regulations, must be construed in pari materia.
So read, statutes often take on a narrower scope than their
broad terms would otherwise indicate. See, eg., Reid v.
Immigration and Naturalization Service, 95 S.Ct. 1164
(1975).
The body of regulations, found at 30 C.F.R.§§ 250.1 -
250.100, promulgated pursuant to 43 U.S.C. § 132A4(a)(1),
relates exclusively to the conduct of the drilling and produc-
tion of oil and gas. Even the regulation most heavily relied
on by the parties, 30 C.F.R. § 250.46, is not exclusively
designed as a safety measure, Rather, its purpose is to pro-
vide for ‘‘the protection of the lease and its improvements”
and the “preservation and conservation of the property and
the environment”’ as well as health and safety of individuals.
Considering the limited authority given to the Secretary to
promulgate regulations, the nature of the requlations as a
whole, and the clear dichotomy between the jurisdictions of
the Secretary of the Interior over drilling operations and the
Coast Guard over matters of platform safety (discussed in the
Court's earlier minute entry), we remain convinced that the
Secretary's regulations are inapplicable to matters relating to
the safety of hot water heaters involved in this case.
This conclusion is buttressed, we think, by the opinion of
the district court in Armstrong v. Chambers & Kennedy, 340
F.Supp. 1220 (S.D. Tex. 1972), affd in relevant part sub
nom. In re Dearborn Marine Service, Inc., 499 F.2d 263
(5th Cir. 1974). While holding the platform owner civilly
liable for violation of the Secretary’s regulation, the lower
court noted particularly, 340 F.Supp. at 1235, that the
failure to remove leaked oil from the platform was in direct
violation of 30 C.F.R. § 250.46, requiring the lessee to ‘‘re-
A-28
move any hazardous oil and gas accumulations.”’ This por-
tion of the regulation is not at issue here, and thus does not
control the present case. Further, in discussing the source
of the duty imposed upon the lessee, the c »urt noted that the
“exploration and development of offshore >i resources * * *
presents new and more dangerous challenges in its develop-
ment” and analogized the duty placed upon the oil lessee to
the traditional tort duty of one using an ultrahazardous sub-
stance. /d., at 1234. Thus, the underpinning for the court's
imposition of strict liability on the platform owner is the
peculiar dangers incident to oil exploration. Whatever the
dangers pr-~°nted by hot water heaters, they are not peculiar
to oil exploration, and the rationale of the Armstrong court
would not apply.
While Shell is thus not liable to plaintiffs for damages aris-
ing out of the explosion, it is entitled to indemnity from
Movible for the costs of its defense in this case, including
reasonable attorneys’ fees. It is clear that an agreement to
indemnify and hold harmless, if applicable to the facts of the
case, includes payment of costs and reasonable attorneys’
fees incurred by the indemnitee. Loffland Bros. Co. v.
Roberts, 386 F.2d 540 (5th Cir. 1967).
There is no doubt that the indemnity agreement involved
in this case'obligated Movible to indemnify Shell for damages
imposed upon it which resulted solely from the negligent acts
of Movible. See this Court's minute entry of May 14, 1973.
Movible’s sole opposition to Shell’s claim for attorneys’
fees is that this Court’s minute entry of June 6, 1974, did not
explicitly hold Movible to be negligent.
What is clearly implicit in the Court’s earlier opinion, we
make explicit now. The fact that the temperature pressure
A-29
a
\ 2.
relief valve, recommended by INA's safety inspector, was not
placed on the hot water heater, was due sdlely to the negli-
gence of Movible’s employees. ‘‘Desormeaux told Brashear
[both Movible employees] the pressure setting he wanted for
the valve and its size but did not give Brashear any tempera-
ture requirement for the valve. Most importantly, Desor-
meaux neglected to inform Brashear that the valves he re-
quested were to be placed on hot water heaters.’’ Opinion of
June 6, 1974, at 7. Movible makes no claim that it disagreed
with INA’s recommendations and reasonably felt that a
pressure relief valve was sufficient for the task. Instead,
through its own carelessness, it simply failed to obtain the
very type of valve which it intended to purchase.
Further, the fact that an improper valve was in use on the
heater was a proximate cause of the explosion. All the ex-
perts agreed that the pressure valve which Movible mistaken-
ly placed on the hot water heater was not specifically design-
ed for that use. While the exact cause of the explosion could
not be conclusively determined, there is no doubt that had
the temperature pressure relief valve been in place, the acci-
dent would have been prevented. The recommended type of
valve is designed to relieve excess pressure and temperature,
both of which contributed to the explosion of the hot water
heater. Since the explosion was proximately caused by
Movible’s negligi ace, Shell is entitled to indemnification
from Movible for reasonable attorneys’ fees and costs.
Finally, Argonaut Insurance Company seeks a reconsidera-
tion of the Court’s decision that it may not recover compen-
sation payments made to parties other than plaintiffs which
were not made pursuant to a formal award. Subsequent to
this Court’s decision, the United States Court of Appeals for
A30
the Fifth Circuit held that entry of a formal award is not a
condition of the carrier’s right to maintain suit. Louviere v.
Shell Oil Co., 509 F.2d 278 (5th Cir. 1975)® That decision,
of course, would govern the disposition of Argonaut’s inde-
pendent suit. However, in light of our present disposition
of these consolidated cases, there is no defendant from whom
Argonaut can recover its compensation payments, and its
suit must, on that ground, be dismissed.
We have carefully considered all the other claims made by
the parties in their motions for a new trial. They are all dis-
posed of by previous decisions by the Court, and we find no
reason to depart from those determinations. Accordingly,
IT IS ORDERED that the motion of Pacific Employers In-
surance Company, defendant in these consolidated cases, for
rehearing to amend judgment or, alternatively, for a new
trial, be, and the same is hereby, GRANTED.
IT IS FURTHER ORDERED that the motion of Shell Oil
Company, defendant in these consolidated cases, to amend
judgment, be, and the same is hereby, GRANTED.
IT IS FURTHER ORDERED that the motion of plaintiffs
in Civil Actions Nos. 72-1240, 70-2986, 71-894, and 71-
1144 for additional findings, be, and the same is hereby,
DENIED.
IT IS FURTHER ORDERED that the motion of Argonaut
Insurance Company, plaintiff in Civil Action No. 71-1265,
for modification of judgment and, alternatively, for a new
trial, be, and the same is hereby, DENIED.
A-31
The parties are instructed to submit proposed amended
judgments consistent with the findings of fact and conclu-
sions of law contained herein.
A-32
1, We note that this contention was not made in the post-trial memo-
randum filed by the plainintiffs in these consolidated cases.
2. 43 U.S.C, §1334(a)(1):
“The Secretary shall administer the provisions of this subchapter re-
lating to the leasing of the outer Continental Shelf, and shall pre-
scribe such rules and regulations as may be necessary to carry out such
provisions. The Secretary may at any time prescribe and amend such
rules and regulations as he determines to be necessary and proper in
order to provide for the prevention of waste and conservation of the
natural resources of the outer Continental Shelf, and the protection of
correlative rights therein, and notwithstanding any other provisions
herein, such rules and regulations shall apply to all operations conduct-
ed under a lease issued or maintained under the provisions of this sub-
chapter. In the enforcement of conservation laws, rules, and regula-
tions the Secretary is authorized to cooperate with the conservation
agencies of the adjacent States. Without limiting the generality of the
foregoing provisions of this section, the rules and regulations prescribed
by the Secretary thereunder may provide for the assignment or re-
linquishment of leases, for the sale of royalty oil and gas accruing or
reserved to the United States at not less than market value, and, in the
interest of conservation, for unitization, pooling, drilling agreements,
suspension of oerations or production, reduction of rentals or royalties,
compensatory royalty agreements, subsurface storage of oil or gas in
any of said submerged lands, and drilling or other easernents necessary
for operations or production.”
3. Further, under Armstrong v. Chambers & Kennedy, supra, the lessee
is liable as well for civil darnages on a theory of strict liability.
4. The indemnity agreement between Shel! and Movible reads as
follows:
“In the performance of the operations hereunder, contractor is an inde-
pendent contractor, Shel! being interested only in the results obtained.
Contractor agrees to protect, indemnify and save Shell, and where the
operations are rendered in a joint operation, such other parties in the
joint operation with Shell, harmiess from and against ali claims, de-
mands and causes of action of every kind and character, arising in favor
of third parties on account of personal injuries and/or deaths or
damages to property occurring, in anywise incident to, in connection
A-33
with, or arising out of, contractor's negligence in performing the oper-
ations under this contract.”’
5. The case decided by the Fifth Circuit, although arising in a more
complicated procedural context between different parties, involved the
very suit by Argonaut which is at issue here.
s/ Frederick J.R. Heebe
A-34
APPENDIX C
Mary OLSEN, Plaintiff-Appellant
Cross Appellee,
Vv.
SHELL OIL COMPANY et al., Defendants-
Appellees Cross Appellants,
Vv.
ARGONAUT INSURANCE COMPANY,
Intervenor-Appellant.
Christine W. CARVIN, Plaintiff-Appellant
Cross Appellee,
v.
SHELL OIL COMPANY et al., Defendants-
Third Party Plaintiffs Appellees-Cross Appellants,
v.
TELEDYNE MOVIBLE OFFSHORE, INC., et al.,
Third Party Defendants-Appellees Cross Appellants,
Vv.
ARGONAUT INSURANCE COMPANY,
Intervenor-Appellant.
Frank Winston BOOKER et al.,
Plaintiffs-Appellees,
v.
SHELL OIL COMPANY et al.,
Defendants-Appellants.
Gordon Davis WALLACE, Plaintiff-Appellant
Cross Appellee,
v.
SHELL OIL COMPANY et al., Defendants-
Appellees Cross Appellants,
v.
ARGONAUT INSURANCE COMPANY,
Intervenor-Appellant.
A-35
ARGONAUT INSURANCE COMPANY,
Plaintiff-Appellant Cross Appellee,
v.
SHELL OIL COMPANY et al., Defendants-
Appellees Cross Appellants.
No. 75-4019.
United States Court of Appeals
Fifth Circuit.
Oct. 26, 1977.
Rehearing and Rehearing En Banc
Denied Dec. 1, 1977.
Injured employee and representatives of deceased
employees of drilling contractor sued owner of drilling
platform and others for injuries and death caused by ex-
plosion of water heater in drilling contractor’s modular
living quarters which had been installed on the platform.
The United States District Court for the Eastern
District of Louisiana, at New Orleans, Frederick J. R.
Heebe, J., entered judgment in favor of platform owner,
and appeal was taken. The Court of Appeals, Fay, Cir-
cuit Judge, held that: (1) the Outer Continental Shelf
Lands Act did not create a private cause of action in
favor of plaintiffs against platform owner for breach of
regulation of the Secretary of Interior where there was
no negligence on the part of the platform owner, but (2)
certain questions as to Louisiana law under Louisiana
statute providing that owner of building is answerable
for damage occasioned by its ruin when this is caused by
neglect to repair it or as result of a vice in its original
construction would be certified to the Louisiana
Supreme Court.
Ordered accordingly.
A-36
1. Mines and Minerals 118
_ Outer Continental Shelf Lands Act did not create
private cause of action against owner of drilling platform
for breach of regulation of the Secretary of the Interior
in connection with explosion of electric heater in drilling
contractor’s housing module, in favor of employees or
representatives of employees of the contractor injured or
killed in the explosion, since: (1) protection of workers on
such platforms was not a motivating force behind the
legislation, (2) other civil remedies were provided by the
legislative scheme, (3) such remedies were not adequate
and it was not necessarily consistent with the legislative
goal of the Act to impose liability on platform owner
which had leased shelf land when such lessee was admit-
tedly free from fault, and (4) it appeared that the con-
troversy should be controlled by state law. Outer Con-
tinental Shelf Lands Act, §§ 2-15, 4, 4(a)(2), (c), 5, 5(a)(2),
43 U.S.C.A. §$§ 1331-1343, 1333, 1333(a)(2), (c), 1334,
1334(a)(2).
2. Negligence 44
Within Louisiana statute providing that owner of
building is answerable for damage occasioned by its ruin
when this is caused by neglect to repair it, ‘neglect to
repair’ means failure to keep in repair and does not re-
quire a showing of negligence. LSA—C.C. art. 2322.
See publication Words and Phrases for other
judicial constructions and definitions.
A-37
Wm. P. Rutledge, Lafayette, La., for Olsen, et al.
Joel L. Borrello, New Orleans, La. for Argonaut Ins.
Co.
Donald A. Hoffman, New Orleans, La., for Pacific
Employers Ins. Co.
John O. Charrier, Jr., New Orleans, La., for Shell Oil
Co.
W. K. Chirstovich, Charles W. Schmidt, III, New
Orleans, La., for Teledyne Movible.
Francis G. Weller, New Orleans, La., for Wiegand Co.
& Thermo-Disc, Inc., other interested parties.
Patrick T. Caffery, New Iberia, La., for Texsteam
Corp.
W. Eugene Davis, New Iberia, La., for plaintiff-
appellant cross appellee.
Before GOLDBERG and FAY, Circuit Judges, and
DUMBAULD, District Judge.*
* District Judge for the Western District of Pennsylvania, sitting by
designation.
A-38
FAY, Circuit Judge:
The controversy before this court is factually complex
and presents some novel questions of law. It pertains to
the explosion of electric water heater in the living
quarters on a drilling platform on the Outer Continental
Shelf. The question is whether there is liability of the
platform owner, Shell Oil Company, to some of those
people who were either injured or killed as a result of the
explosion. The plaintiffs set forth two theories of liabili-
ty. First, they contend that Shell is answerable for the
injuries which have occurred because it violated certain
regulations issued by the Secretary of the Interior pur-
suant to the authority granted to him by the Outer Con-
tinental Shelf Lands Act, 43 U.S.C. § 1334 — the viola-
tion of which was a direct cause of the plaintiffs’ injuries.
In the alternative, the plaintiffs contend that the Loui-
siana Civil Code Art. 2322' imposes a form of strict
liability on certain owners of buildings,’ and, as a result,
Shell is liable to the plaintiffs regardless of its lack of
personal negligence. We hold that Shell is not liable for
breach of the federal regulations because the Outer Con-
tinental Shelf Lands Act, 43 U.S.C. § 1331 et seq., does
not provide specifically for a civil remedy for violations
of the statute or regulations, and because we feel that
this is not the type of situation in which a cause of action
should be implied or created. See Cort v. Ash, 422 U.S.
' Louisiana Civil Code Art. 2322 provides:
The owner of a building is answerable for the damage occassioned
by its ruin, when this is caused by neglect to repair it, or when it is the
result of a vice in its original construction.
* The Louisiana courts have extended the definition of ‘‘buildings"’
to include oil platforms. See Vinton Petroleum Co. v. L. Seiss Oil Syn-
dicate, Inc., 19 La.App. 179, 139 So. 543 (1st Cir. 1932).
A-39
66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975). We also conclude
that it is impossible for us at the present time to rule on
the theory of liability based upon Louisiana Civil Code
Art. 2322. After an exhaustive study of Louisiana law,
we feel that there is no clear controlling precedent from
the highest court in that state, and, consequently, we are
compelled to certify the issue to the Lousiana Supreme
Court.
I. FACTS
On May 6, 1970, a hot water heater explosion occurred
aboard a fixed platform owned by Shell Oil Company in
the Gulf of Mexico off the coast of Louisiana. The plat-
form was designated as Shell’s ‘‘C”’ platform, and drill-
ing was being conducted from the platform by a drilling
contractor known as Movible Offshore, Inc. (Movible).
The individual plaintiffs in this case are the legal
representatives of men killed in the explosion, except for
Gordon Wallace who sues for personal injury. The plain-
tiffs were all employees of Movible.
To conduct the drilling operations from the platform,
Movible had located its modular and movable drilling rig
on the platform. The rig consisted of all equipment
necessary to drill a well, including a derrick or mast,
drawworks, the very large engines which were necessary
to power the drilling equipment, and all normal ap-
purtenances to a drilling operation. In addition, Movible
had its modular living quarters on the Shell platform
which provided a galley area for feeding the men, sleep-
ing quarters, shower and bathroom facilities, and a
lounge area. The living quarters unit was equipped with
two electric water heaters. One water heater was located
in the galley area, and another was located in the pantry
area. These water heaters were Movible equipment and
were wholly owned, as was the living quarters unit, by
A-40
Movable. The modular living unit was fully movable,
and when the rig was moved from one platform to
another, it was picked up as a unit by a derrick barge and
then transported to a new site and secured on a platform
in such a way that cutting and burning of metal would be
required to remove it.
Under the working arrangement in effect between
Shell and Movible, two Movible drilling crews consisting
of six men each worked opposite shifts so that the drill-
ing rig could be kept in operation 24 hours a day. Shell
performed none of the actual operations on the rig and
had only one permanent representative there.
At the time Movibi« began drilling for Shell from Plat-
form C or shortly thereafter, Movible took out liability
insurance with Pacific Employers Insurance Company
(Pacific), an affiliate of the Insurance Company of North
America. In addition to providing liability insurance to
Movible, Pacific agreed to provide a safety engineering
and safety inspection service to Movible. This service
was provided largely through one Gilbert Stansbury, a
safety and technical representative of Pacific.
In connection with the safety engineering and
technical service provided by Pacific, Mr. Stansbury was
to visit the Movible rig on a quarterly basis. Mr.
Stansbury first visited the rig on January 23, 1969, and
then he did not revisit the rig until October 7, 1969. On
his first visit, Stansbury inspected the water heaters in
the company of Movible’s toolpusher, ea Mr.
Desormeaux. At this time, he recommended (among
other things) that a pressure-temperature relief valve be
placed on the water heaters in question in place of the ex-
A-4]
isting pressure relief valves. Movible failed to accurately
follow the recommendation of Mr. Stansbury, although
they should have understood the recommendation since
prior insurers had made the same or similar suggestions
and Stansbury himself had made the same recommenda-
tion during inspections of other Movible rigs. Instead of
ordering the proper type of “pressure-temperature”’
relief valve, Movible ordered and installed another
pressure relief valve.
The valves were replaced on February 3, 1969. Mr.
Desormeaux inspected the heaters after the installation
of the valves and concluded that “everything looked
okay.’’ On October 7, 1969, Stansbury returned to the
rig and interviewed another Movible toolpusher who had
since replaced Mr. Desormeaux. Mr. Stansbury did not
make a visual inspection of the water heater but relied on
the toolpusher’s assurances that his recommendations
had been followed. As a result, Stansbury reported that
all his recommendations had been fulfilled.
On May 6, 1970, the hot water heater located in the
pantry of the living quarters exploded resulting in many
deaths and injuries. The trial judge found that the bot-
tom of the hot water heater ruptured as a result of great
pressure which built up in the tank. Then, the great ex-
plosive force was created when the water in the heater,
which was “‘superheated”’ to a temperature of above its
boiling point of 212° F., instantly ‘‘flashed”’ into steam
when freed from the pressured confines of the tank and
just as instantly expanded to more than 1,000 times its
liquid volume.
A-42
The trial judge further found that the fact that an im-
proper valve was in use on the heater was a proximate
cause of the explosion. All the experts agreed that the
pressure valve which Movible mistakenly placed on the
hot water heater was not specifically designed for that
use. While the exact cause of the explosion could not be
conclusively determined, there is no doubt that had a
working temperature pressure relief valve been in place,
the accident would have been prevented. The recom-
mended type of valve is designed to relieve excess
pressure and temperature, both of which contributed to
the explosion of the hot water heater.
On June 6, 1974, the trial judge entered his opinion
with respect to liability in the case. He found that there
was no negligence (as all parties admit) on the part of
Shell Oil Company; he held that Louisiana Civil Code
Act 2322 was inapplicable, and he held that certain
regulations of the Department of Ir erior did not create
strict liability as against Shell in the plaintiff's favor in
this case. In the same opinion Judge Heebe also held
that Pacific Employers Insurance Company was
negligent through one of its inspectors (Mr. Stansbury)
who faild to reinspect Movible’s premises after recom-
mending that the relief valve be changed on the water
heater which exploded. The trial judge also found that
the Texstream Corporation, the manufacturer of the
valve, was not liable. Judgment was entered according-
ly.
Thereafter, on motion to reconsider his judgment, the
trial judge issued another opinion in which he concluded
that the inspector for Pacific Employers Insurance Com-
pany was not negligent, but that his earlier opinion in all
other respects was correct. The court made explicit in
A-43
this opinion that the cause of the water heater explosion
was the negligence of Movible. The net result of this
decision, however, is that the plaintiffs recovered
nothing. Movible, who was originally a party to the ac-
tion, had earlier been granted a summary judgment on
the basis that the Longshoremen and Harbor Workers
Compensation Act made it immune from suit as the
employer of the dead and injured men. Movible is
presently in the litigation only as a third party defen-
dant to the claim of Shell Oil Company for indemnity.
From this final judgment of the district court, the plain-
tiffs appealed solely against Shell and solely on the basis
that Shell is strictly liable to them. Shell then lodged pro-
tective appeals against all of the codefendants and
Movible for indemnity purposes. Movible did likewise.
II. BREACH OF THE FEDERAL REGULATION
A. The Plaintiffs’ Theory and Shell's Rebuttal.
The plaintiffs’ theory of recovery is rather simple.
They argue that the Outer Continental Shelf Lands Act
empowers the Secretary of the Interior to make regula-
tions for operation upon platforms such as Shell’s.
Specifically, 43 U.S.C. § 1334(a)(1) provides:
The Secretary shall administer the provisions of this
subchapter relating to the leasing of the outer Continen-
tal Shelf, and shall prescribe such rules and regulations
as may be necessary to carry out such provisions. The
Secretary may at any time prescribe and amend such
rules and regulations as he determines to be necessary
and proper in order to provide for the prevention of
waste and conservation of the natural resources of the
outer Continental Shelf, and the protection of correlative
rights therein, and, notwithstanding any other provi-
A-44
sions herein, such rules and regulations shall apply to all
operations conducted under a lease issued or maintained
under the provisions of this subchapter.
The plaintiffs assert that pursuant to this statutory
authority the Secretary of the Interior issued the follow-
ing regulations which are applicable in our controversy:
1) 30 C.F.R. § 250.30 Lease Terms, Regulations,
Waste, Damage and Safety."’ The lessee shall comp-
ly with the terms of applicable laws and regulations,
the lease terms, OCS Orders and other written orders
and rules of the supervisor, and with oral orders of the
supervisor...The lessee shall take all necessary
precautions to prevent damage to or waste of any
natural resource or injury to life, or property, or the
aquatic life of the seas.
2) 30 C.F.R. § 250.45 Accidents, Fires, and Malfunc-
tions.
In the conduct of all its operations, the lessee shall
take all steps necessary to prevent accidents and fires.
3) 30 C.F.R. § 250.46 Workmanlike Operations.
The lessee shall perform all operations in a safe and
workmanlike manner and shall maintain equipment
for the protection of the lease and its improvements,
for the health and safety of all persons, and for the
preservation and conservation of the property and the
environment.
A-45
It is argued by the plaintiffs that the above regula-
tions are presumptively valid and that they are ap-
plicable to our factual situation. They further argue that
Shell fas a lessee of submerged land on the Outer Con-
tinental Shelf] breached these regulations, and that this
breach visits liability upon Shell regardless of whether
or not Shell was in fact negligent. In support of this
theory of liability, the plaintiffs cite to us Armstrong v.
Chambers & Kennedy, 340 F'.Supp. 1220 (S.D.Tex. 1972),
aff'd on other grounds sub nom. In Re Dearborn Marine
Service, Inc., 499 F.2d 263 (5th Cir. 1974). In Chambers
& Kennedy, the trial court approved a similar theory of
strict liability for breach of these regulations. The court
stated:
This court must interpret the congressional intent and
the Secretary's reasons for promulgating the regulations
as imposing certain nondelegable duties upon C & K, as
the lessee and owners of the platform. The public policy
indicated by these legislative and administrative acts
are imperative to the common good and protection of our
national community. Thus, any violation, even a
nonfeasance, of the guidelines set as preventive
measures to accidents must expose the lessee to
ultimate liability in tort.
Id. at 1233, 1234.
Shell counters this argument by asserting that the
Secretary's regulations are invalid. It contends that the
enabling statute give both the Secretary of the Interior
and the head of the department in which the Coast
A-4%
Guard is operating authority to issue regulations,’ and it
was the Coast Guard exclusively that was given the
authority to issue safety regulations. Shell specifically
contends that:
...the regulations upon which Judge Singleton relied
in Armstrong v. Chambers & Kennedy, 340 F.Supp.
1220 (S.D.Tex., 1972), being the same ones relied upon
by plaintiffs in this action (30 CFR 250.45--250.46), if
construed as safety and health regulations for the pro-
tection of life and property on the offshore platforms
so as to create strict liability in the lease owner, so ex-
tend and so modify the granting statute, 43 U.S.C.A.
1334, as to exceed the authority granted by the enabl-
ing legislation.
Brief for appellee at 31. To support this view, Shell
delves deeply into the legislative history of the Outer
Continental Shelf Lands Act only to emerge without
really proving their point. If the legislative history of the
statute shows anything, it is merely that nothing was
specifically said one way or the other as to whether or
not the Secretary of the Interior has the authority to
issue safety regulations. It does not necessarily follow,
as Shell alleges, that merely because the Coast Guard is
given the authority to regulate in the area of safety,
other agencies are devoid of this power.
* 43 U.S.C. § 1333(e)1) provides:
A-47
Shell, however, does not rest its case solely on the
delegation of power theory. In the alternative, they
adopt the position taken by the trial court. The trial
court held that the regulations were validly pro-
mulgated, but were inapplicable to this particular fac-
tual setting. The court states specifically:
It is true, as a general proposition, that “a civil
remedy may be implied for those clearly within the
protective realm of legislation or regulations in the
public interest.’ Euresti v. Stenner, 458 F.2d 1115,
1119 (10th Cir. 1972); Gomez v. Florida State Employ-
ment Service, 417 F.2d 569 (5th Cir. 1969). See Note,
Implying Civil Remedies from Federal Regulatory
Statutes, 77 Harv.L.Rev. 285 (1963). The workers in
this case were not clearly within the protective realm,
however, since it appears that the regulations in ques-
tion were not meant to apply to the housing module in
this case... Both the wording of the statutes and
regulations, and the legislative history of the statutes,
indicate that the authority of the Secretary of the In-
terior concerns drilling and operation practices and
conservation... .The Coast Guard, on the other hand,
is given the broad authority to regulate safety prac-
tices which, in places other than fixed platforms, is
given by the Longshoremen’s and Harbors Workers’
Compensation Act to the Secretary of Labor... The
Court finds that the operation of an independent hous-
ing module on a platform is not a production or drill-
ing operation regulated by the Secretary of the In-
terior but is rather a matter of general platform safety
properly supervised by the Coast Guard... .Arm-
strong v. Chambers & Kennedy, 340 F.Supp. 1220
(S.D.Tex. 1972), on which the plaintiff relies, concern-
ed implied liability for violations of the Secretary of
A-48
the Interior’s Regulations but in that case the viola-
tions in question resulted from oil drilling and storage
operations, and they were properly within the reach of
the Secretary's regulatory authority.
Minute Entry of Trial Court, June 6, 1974. (App.
729-731).
B. IMPLYING CIVIL REMEDIES
In our opinion, neither party touches on the point
which we feel is determinative of the legal effect of the
breach of these regulations by Shell Oil Company. That
is, even if we assume that the regulations were valid and
applicable to our factual setting, what, if any, is the legal
effect of their being breached by Shell? The trial court
touches on the issue in its above quoted conclusions of
law when it stated that civil remedies may be implied in
certain situations, but the Court erred in concluding that
a civil remedy may be extended to one injured by a
breach of a statute or regulation which does not
specifically provide for such relief as long as the person
injured is clearly within the protective realm of the
legislation or regulation. The inquiry which must be
made before implying a civil cause of action for a person
suffering injury as a result of another's conduct in viola-
tion of a regulatory statute which does not expressly
provide for a civil remedy is not nearly so simple.
In 1916, the Supreme Court announced the doctrine ci
implying private actions in the absence of specific
statutory authorization in Texas & Pacific Railway Co.
v. Rigsby, 241 U.S. 33, 36 S.Ct. 482, 60 L.Ed. 874 (1916).
Rigsby, a railroad employee, sought damages for in-
juries resulting from his employer’s violation of the
Federal Safety Appliance Act. The Court upheld his
recovery while recognizing that the Act did not express-
ly confer a private right of action. In broad language, the
Court stated:
A-49
A disregard of the command of the statute is a
wrongful act, and where it results in damage to one of
the class for whose especial benefit the statute was
enacted, the right to recover the damages from the
party in default is implied .. .
Id. at 39, 36 S.Ct. at 484.
This rather unique question of whether a court can or
wuld imply an action for an injured party who has no
. press statutory remedy has sparked a great deal ‘of
legal commentary, and a string of Supreme Court opi-
nions whose main virtues are not consistency of results.
The justification for implication most often proffered by
courts and commentators is that it merely furthers the
goals Congress was seeking to attain when it initially
enacted-the legislation.‘ Congress may accomplish these
goals through regulation or prohibition of specified con-
duct. Generally speaking, however, these regulations or
prohibitions are only as effective as the statutory sanc-
tions behind them, and, unfortunately, Congress must
often decide on these statutory sanctions without a prior
opportunity to evaluate their practical effectiveness. In
contrast, courts are charged with the duty of enforcing
the statute on a case by case basis, and have the oppor-
tunity to observe the effectiveness of the enforcement
mechanisms. Fully aware of this hindsight advantage,
the Supreme Court has sanctioned, in limited situations,
the implication of private civil remedies.
* See, e.g., Comment, Private Rights of Action under Amtrak and
Ash: Sone ingllestions for Implication. 123 U.Pa.L.Rev. 1392, 1393
(1975); Comment. Emerging Standards for Implied Actions Under
Federal Statutes, 9 U.Mich. J.L.Ref. 294, 296 (1976).
A-50
The criteria for courts to apply in deciding whether or
not to imply a civil cause of action have gone through
numerous changes since the implication doctrine was
first recognized in 1916. The Supreme Court's most re-
cent pronouncement on the matter, however, delineates
the factors which we must consider in making that deci-
sion. In Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45
L.Ed.2d 26 (1975), the Supreme Court held that a private
cause of action for damages against corporate directors
should not be implied in favor of a corporate stockholder
under 18 U.S.C. § 610 — a criminal statute prohibiting
corporations from making ‘‘a contribution or expen-
diture in connection with any election at which Presiden-
tial and Vice Presidentail electors.. are to be voted
for.’’ In making that decision, the court stated:
* For example, in Switchmen's Union v. National Meditation Bd.,
320 U.S. 297, 64 S.Ct. 95, 88 L.Ed. 61 (1943), the Supreme Court
i
baie
GEHL
erie
iy
ie
fetal
Hill
siieat
OEP
Bs
eee
a
7)
9
g
a
&
at:
g
5
:
8. Ed. 912 (1961).
In 1964, the Court returned to a more liberal position in J.J. Case
Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964) when
it
of false and misleading proxy statements, in violation of section 1 4(a)
of the Securities Exchange Act of 1934. In reaching this conclusion,
the Court emphasized the broad remedial purposes of the Act, and
A-51
Indetermining whether a private remedy is implicit
in a statute not expressly providing one, several fac-
tors are relevant. First, is the plaintiff ‘“‘one of the
class for whose especial benefit the statute was
enacted,” ‘Texas & Pacific R. Co. v. Rigsby, 241 U.S.
33, 39, [36 S.Ct. 482, 484, 60 L.Ed. 874] (1916) (em-
phasis supplied) — that is, does the statute create a
federal right in favor of the plaintiff? Second, is there
concluded that private enforcement was a necessary supplement to
effectuate the congressional purpose. In 1967, in Wyandotte
Transportation Co. v. United States, 389 U.S. 191, 88 S.Ct. 379, 19
L.Ed.2d 407 (1967), the Court reaffirmed its decision to Borak when it
held that the criminal sanction of section 15 of the Rivers and Har-
bors Act of 1899, 33 U.S.C. § 409, was not an exclusive remedy under
the statute. The Court articulated a set of three criteria for determin-
ing when an implied remedy should be found. First, the expressly pro-
vided criminal sanctions must be inadequate to ensure the full effec-
tiveness of the statute. Second, the interest of the plaintiff must be
within the protection of the statute. Finally, the injury must be of the
type that the statute was intended to forestall. These three criteria,
however, were not long-lived as the sole judicial test for implying
remedies. In National Railroad Passenger Corp. v. National Associa-
tion of Railroad Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d
646 (1974) (Amtrak), there was a return to a more restrictive attitude
about implying civil remedies. The Amtrak Ac’,, 45 U.S.C. § 301 et
seq. (1970), expressly provided that only the /,.ttorney General had
the right to institute a civil action except in .ases involving labor
agreements. The Court held that the express pr wision of the remedy
to the Attorney General precluded the inference of a civil action in
favor of the plaintiffs absent any clear indicaiion in the legislative
history that a right of action should be inferred. The Court also stated
that the legislative history evidenced an intent to preclude civil
remedies, and that an implied remedy would onflict with the Act's
policy of streamlining the proceses for eliminating unproductive rail
routes in order to save the overall passenger system.
The only other case of significance subsequent to Amtrak and
prior to Cort was Securies Investor Protection Corp. v. Barbour, 421
U.S. 412, 95 S.Ct. 1733, 44 L.Ed.2d 263 (1975). This controversy in-
volved whether a right of action by a private party was impliedly
created by the Securi Investor Protection Act of 1970 (SIPA), 15
U.S.C. § 78aaa et seq. The Court's opinion followed the reasoning of
Amtrak and denied implication mainly because there was a lack of ex-
trinsic evidence indicating that Congress intended to imply private
A-52
any indication of legislative intent, explicit or implicit,
either to create such a remedy or to deny one? See,
e.g., National Railroad Passenger Corp. v. National
Assn. of Railroad Passengers, 414 U.S. 453, 458, 460,
(94 S.Ct. 690, 693, 694, 38 L.Ed.2d 646] (1974) (Am-
trak). Third, is it consistent with the underlying pur-
poses of the legislative scheme to imply such a remedy
for the plaintiff? See, e.g., Amtrak, supra; Securities
Investor Prstection Corp. v. Barbour, 421 U.S. 412,
423, [95 S.Ct. 1733, 1740, 44 L.Ed.2d 263] (1975);
Calhoon v. Harvey, 379 U.S. 134, [85 S.Ct. 292, 13
This Court, not unlike the Supreme Court, has had a less than con-
sistent approach to implying civil remedies. The most oft cited case
concerning this issue is Gomez v. Florida State Employment Service,
417 F.2d 569 (5th Cir. 1969). In Gomez, the employers of migratory
workers and certain state officials had allegedly violated the Wagner-
unless more stringent enforcement standards were im-
The liberal approach taken in Gomez has not always been followed
by this court. One example is Breitwieser v. KMS Industries, Inc., 5
., 467 F.2d 1391 (1972), in which it was held that the child labor pro-
of the Fair Labor Standards Act, 29 U.S.C. § 212, and the
promulgated thereto, did not create a private cause of ac-
for wrongful death. The Court's rationale rested
substantial remedy is provided for by
e
a
hh
il
alt
ital
int
Mi
Hil
A-53
L.Ed.2d 190] (1964). And finally, is the cause of action
one traditionally relegated to state law, in an area
basically the concern of the States, so that it would be
inappropriate to infer a cause of action based solely on
federal law? See Wheeldin v. Wheeler, 373 U.S. 647,
652, (83 S.Ct. 1441, 1445, 10 L.Ed.2d 605] (1963); cf. J.
I. Case Co. v. Borak, 377 U.S. 426, 434, [84 S.Ct. 1555,
1560, 12 L.Ed.2d 423] (1964); Bivens v. Six Unknown
Federal Narcotics Agents, 403 U.S. 388, 394-395, [91
S.Ct. 1999, 2003-2004, 29 L.Ed.2d 619] (1971; id., at
400, [91 S.Ct. [1999] at 206] (Harlan, J., concurring in
judgment).
Id. at 78, 95 S.Ct. at 2088.
There is no question that the factors enunciated in
Cort must control the decision-making process in the
case before us, but fully understanding and properly ap-
plying these factors is no minor task. Our first step in
this inquiry must be to examine briefly the Outer Con-
tinental Shelf Lands Act since it would be fruitless to at-
tempt to deal with the Cort criteria without this
background.
In 1953 Congress enacted the Outer Continental Shelf
Lands Act, 43 U.S.C. § 1331 et seg. This Act asserted
United States’ ownership of and jurisdiction over
minerals in and under the Outer Continental Shelf.* It
:
&
|
f
:
is
A-54
also extended the Constitution and laws of the United
States to the shelf lands, and established an exclusive
system of mineral leasing on the Outer Continental
Shelf. Section 1332 of the Act asserts United States
jurisdiction over the Shelf while section 1333 provides
that federal law is applicable on the shelf, applying state
law only as federal law, and only when not inconsistent
with applicable federal law. Section 1334 deals with the
administration of leases, and it grants the Secretary of
the Interior the authority to promulgate regulations in
order to comply with the provisions of the Act relating
to leasing. Section 1334 also prescribes criminal
penalties for any person knowingly and willfully
violating the Act. The rest of the Act, §§ 1335-1343,
deals almost exclusively with the leasing system to be
applied on the Shelf.
[1] Given this brief background, we can now delve
deeper into the history and purpose of the Act as we
analyze it within the framework of the Cort criteria. The
first factor we must consider is whether the injured
employees on the platform should be considered “‘one of
the class for whose especial benefit the statute was
enacted.”’ The Cort opinion sheds little light on exactly
how to handle this factor. On the one hand, there is
language to the effect that the factor would be satisfied
if the statute created any federal right in favor of the
A-55
plaintiffs, or if there was any sort of pervasive legislative
scheme governing the relationship between the plain-
tiffs’ class (workers on the platforms) and the
defendant’s class (a lessee of rights to resources on or
under the Shelf). Given this interpretation of the
criterion, it would most likely be satisfied in our case.
Section 1333 of the Act deals with what law to apply in
controversies arising on the shelf, and specifically pro-
vides that with respect to disability or death of an
employee as the result of operations on the shelf, the
Longshoremen’s and Harbor Workers’ Compensation
Act shall apply. From this provision alone, it appears
that a federal right has been created in the plaintiffs’
class. However, a reading of the entire Cort opinion leads
one to question whether this is what the Supreme Court
meant when it stated that the plaintiff must be in the
class for whose especial benefit the statute was enacted.
The opinion seems to imply that a cause of action should
not be created unless the primary purpose of the Act (or
at least one of the primary purposes) is to benefit or pro-
tect the workers on offshore oil platforms.’ If this is the
proper interpretation of the Court’s language, then this
criterion would not be satisfied. A review of the
legislative history of the Act outlines specifically the
purposes behind the legislation. The House of Represen-
tatives Report on the bill stated:
’ This interpretation is based on two points. First, the Supreme
Court made an effort to examine the legislative history of 18 U.S.C. §
610 in order to find the purpose in enacting the legislation, and then
concluded that this legislative history “‘demonstrates that the protec-
tion of ordinary stockholders was at best a secondary concern."’ 422
U.S. 66, 81, 95 S.Ct. 2080, 2089, 45 L.Ed.2d 26 (1975. The second ra-
tionale for this interpretation
oc om Standing alone, this language would to
statute was -
scan that untuen tha guimany pampenn-el the lanegiien eas tobenet
the plaintiff, then no remedy should be implied.
A-56
The purpose of H.R.5134 is to amend the Submerg-
ed Lands Act in order that the area in the outer Con-
tinental Shelf beyond boundaries of the States may be
leased and developed by the Federal Government. At
the present time the Submerged Lands Act merely
established that the seabed and subsoil in the outer
Continental Shelf beyond State boundaries appertain-
ed in the United States and was subject to its jurisdic-
tion and control.
There are no provisions for the leasing and develop-
ment of the area by the Federal Government nor are
provisions made for the exchange of State leases for
Federal leases in the same area.
This bill contains provisions to accomplish those
very objectives.
H.R.Rep.No.413, 83d Cong., Ist Sess., 2 (1953). The
report then proceeded to explain the need behind the
legislation:
Representatives of the Federal departments, the
States, and the offshore operators all urged the impor-
tance and necessity for the enactment of legislation
enabling the Federal Government to lease for oil and
gas operations the vast areas of the Continental Shelf
outside the State boundaries. They are unanimously
of the opinion, in which this committee agrees, that no
law now exists whereby the Federal Government can
lease those submerged lands, the development and
operation of which are vital to our national economy
and security. It is, therfore, the duty of the Congress
to enact promptly a leasing policy for the purpose of
encouraging the discovery and development of the oil
potential of the Continental Shelf.
A-57
The committee is also of the opinion that legislative ac-
tion is necessary in order to confirm and give validity to
Presidential Proclamation 2667 of September 8, 1945,
wherein the President, by Executive declaration
asserted, in behalf of the United States, jurisdiction,
control, and power of disposition over the natural
resources of the subsoil and seabed of the Continental
Shelf. Many other nations have made assertions to a
similar effect with respect to their continental shelves,
and the committee believes it proper and necessary that
the Congress make such an assertion in behalf of the
United States.
Id. at 2, 3. Similar language was used in the Senate
Report. In explaining the resons why jurisdiction needed
to be asserted over the Shelf, the Report stated:
[Thhe discovery of extremely valuable deposits of oil
and gas and probably sulfur in the seabed of the Con-
tinental Shelf off the shores of the United States, as
well as its vast potential as a source for other raw
materials, gave rise to the necessity for protection and
control of the area and administration of the develop-
ment of its economic wealth, so essential to our
economy in peace or war.
S.Rep.No.411 of the Committee on Interior and Insular
Affairs, 83d Cong., 1st Sess., 7 (1953).
There can be no question that the primary purpose for
this legislation was to assert United States jurisdiction
over the shelf, and to set up a system for the full develop-
ment of its natural resources. Protection of the workers
on the platform, while no doubt a legitimate concern of
Congress, was not a motivating force behind the legisla-
tion, and, in fact, only became relevant if jurisdiction
A-58
was asserted. Therefore, it would not be unfair to say
that protection of these workers, like protection of the
“ordinary stockholder” in Cort,was ‘‘at best a secondary
concern”’ of the Act.
There is no language in Cort to the effect that all four
criteria must be met in order to imply a cause of action.
Rather, the Court simply said that several factors were
relevant and worthy of consideration. Consequently, it is
not necessary for us to decide which of the above inter-
pretations of the “especial benefit’’ language is correct.
We do consider it relevant that protection of these
workers was not the motivating force behind the legisla-
tion, but we also think that it is important that Congress
did feel it necessary to provide certain rights in the Act
to these workers.
The fact that Congress did specify certain remedies in
the Act might, however, indicate an intent by Congress
to deny any other type of civil remedy. This result would
follow if we were to employ the doctrine of statutory con-
struction known as expressio unius exlusio alterius, and
this leads us into the consideration of the second Cort
factor:
{Is there any indication of legislative intent, explicit
or implicit, either to create a remedy or to deny one?
422 US. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26
(1975).
Prior to the Cort opinion, the law appeared to be that if
‘legislation expressly provides a particular remedy or
remedies, courts should not expand the coverage of the
statute to subsume other remedies" absent clear con-
A-59
trary evidence of legislative intent. National Railroad
Passenger Corp. v. National Association of Railroad
Passengers, 414 U.S. 453, 458, 94 S.Ct. 690, 693, 38
L.Ed.2d 646 (1974) (Amtrak). The Cort opinion seems to
modify this position somewhat. The statute under
scrutiny in Cort provided for ciminal sanctions, yet the
Court stated that “provision of a criminal penalty does
not necessarily preclude implication of a private cause of
action for damages.”’ 422 U.S. 66, 79, 95 S.Ct. 2080,
2088, 45 L.Ed.2d 26 (1975). The Cort opinion also dif-
fered from Amtrak in that it stated that absence of any
intention to create a cause of action in the legislative
history would not necessarily preclude implication,
although an implicit or explicit purpose to deny such
cause of action would be controlling.
The controversy before us is significantly different
than the facts before the Supreme Court in Cort. The
Outer Continental Shelf Lands Act not only provides
criminal penalties for violation of the Act (§ 1334(a)(2) ),
but also provides extensive civil remedies. As previously
noted, § 1333(c) provides that the Longshoremen’s and
Harbor Workers’ Compensation Act should apply in
cases of disability or death of an employee working on
the platform, and § 1333(a)\2) provides the workers on
the shelf any remedy which might be available under
state law as long as that remedy is not inconsistent with
federal law. We feel, therefore, that fewer reasons exist
A-60
underlying purpose of implication is merely to ffectuate
the goals of Congress, we fail to see how implying this
additional remedy will significantly further the goals
Congress was seeking to accomplish in passing the act.
Therefore, a much stronger argument can be made for
applying the expressio unius exclusio alterius doctrine
here than could be made in Cort, and this argument is
strengthened by language in the legislative history of
the Act which indicates that the plight of the workers
was considered, and that the remedies provided for by
the statute were intended to be the sole solution for this
plight. Senator Cordon, while presenting the reasons to
the Senate for adopting state law in certain situations,
explained that “the full development of the estimated
values in the shelf area will require the efforts and the
physical presence of thousands of workers on fixed
structures in the shelf area. Industrial accidents, ac-
cidental death, peace and order”’ present problems re-
quiring a body of law for their solution. Since ‘‘as every
member of the Senate knows, the Federal Code was
never designed to be a complete body of law in and of
itself," the Senate Committee decided that state law
would have to be referred to in some instances. 99
Cong.Rec. 6962-6963 (1952), quoted in Rodrigue v. Aetna
Casualty Co., 395 U.S. 352, 358, 89 S.Ct. 1835, 1838, 23
L.Ed.2d 360 (1969).
The language of Senator Cordon, and the extensive
civil remedies available to the workers, indicates to us a
legislative intent to deny a civil remedy for breach of the
Secretary of Interior's regulations. If in fact Congress
considered the situation of these workers and set forth
specifically the remedies which it felt would adequately
deal with the situation (and there is every indication that
this is what occurred), then we would indeed be ex-
At
A-61
ceeding our authority to ignore their will, and, in effect,
legislate our own remedies.
This conclusion does not change as we examine the
third and fourth Cort criteria. The third factor we are to
consider is whether it is consistent with the underlying
purpose of the legislative scheme to imply a remedy for
the plaintiffs. In applying this factor, the Cort opinion
explained that although ‘“‘it is the duty of the courts to
be alert to provide such remedies as are necessary to
make effective the congressional purpose. . in this in-
stance the remedy sought would not aid the primary con-
gressional goal.’’ 422 U.S. 66, 84, 95 S.Ct. 2080, 2090, 45
L.Ed.2d 26 (1975). It is not surprising that the Cort opi-
nion stressed the fact that implying a civil remedy was
not necessary to make effective the congressional pur-
pose. In most cases where cause of actions have been im-
plied, it has been done to remedy the inadequacy of the
express statutory means of enforcement. See, e. g., J. I.
Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12
L.Ed.2d 423 (1964); Gomez v. Florida State Employment
Serv., 417 F.2d 569 (5th Cir. 1969). As in Cort, we fail to
see how it could be argued that the remedies available to
the workers in our case are inadequate. Nor do we feel
that it is necessarily consistent with the legislative goal
of the Act (to fully develop the natural resources of the
Shelf) to impose liability upon a lessee based upon viola-
tion of a departmental regulation when that lessee is ad-
mittedly free from fault.
The final fector which Cort commands us to consider is
whether the cause of action is one traditionally relegated
to state law, in an area basically the concern of the
states, so that it would be inappropriate to infer a cause
of action based solely on federal law. From what we have
A-62
previously stated, it is apparent that Congress, at least,
felt that state law should govern this sort of controver-
sy. Congress reached this conclusion not solely because
there are “‘gaps’’ in the Federal Code, but also because it
recognized that the individual states had a very real in-
terest in the workers on these platforms. As Senator
Long pointed out in his minority report to the Senate:
A typical individual employed in operations in the
shelf area will maintain his family in one of our coastal
parishes; he will own or be buying his house and an
automobile there. His children will attend Louisiana
schools. If either he or a member of his family becomes
ill, he will be cared for by a Louisiana doctor in a Loui-
siana hospital. After his employment in the shelf ends,
he will continue to live in Louisiana and will spend his
old age there.
The children of these employees will attend a free
public school, and be provided with free schoolbooks,
supplies, lunches, and transportation. Our highways
and streets will be traveled by both employer and
employee. The State provides charity hospitals for the
indigent sick. Care for those stricken with tuber-
culosis or mental diseases is provided by State-
operated hospitals. A State-financed medical school
now provides many of the doctors who will minister
unto these people. The worker's person and property
will be protected by our police. He will be protected
from disease and sickness by our public health and
sanitation offices. His elderly parents are likely to be
receiving a pension during their period of nonproduc-
tivity.
A-63
Louisiana provides a system of courts in which the
employee will litigate many of his claims.
Many of these same services will be provided for the
oil company whose base of operations will be
necessarily on Louisiana soil. The company will use
our highways, will benefit from police protection, and
make use of our courts.
None can deny that the furnishing of such services
to the thousands of shelf workers, their families, and
the companies for which they work will be a heavy
financial burden on the State and its subdivisions.
S.Rep.No.411 of the Committee on Interior and insular
Affairs, 83d Cong., ist Sess., 66, 67 (1953). We think that
it is apparent, therefore, that this controversy should be
controlled by state law. The concern of the state for
these workers is real, and this concern was recognized
and provided for by Congress in the actual provisions of
the Act.
We are aware of the fact that brevity is not the chief
attribute of this decision. We have gone to some lengths
to explain ourholding because of the many lives and for-
tunes involved. Development of the Outer Continental
Shelf will continue for generations, and, indeed, seems to
be gaining added importance. All involved in these vital
activities, employers and employees, have a right to
know the “rules”. Having reached this point, there is
much left to be resolved including the applicable state
law.
A-64
III. LOUISIANA LAW
(2) Having determined that federal law requires the
plaintiffs to look to state law for redress, we now turn to
plaintiffs alternative theory that Shell is strictly liable
for the injuries sustained pursuant to Article 2322 of the
Louisiana Civil Code. Article 2322 provides:
The owner of a building is answerable for the
damage occasioned by its ruin, when this is caused by
neglect to repair it,’ or when it is the result of a vice in
its original construction.
The text of Article 2322 reveals that several threshold
issues must be considered before liability under the Arti-
cle can accrue. The parties to the appeal have vigorously
contested the meaning of “owner’’, “‘building’’, and
“ruin’’ as applied to the facts of this case.’
° “Neglect to repair” means failure to keep in repair and does not
require a showing of negligence. See Adamson v. Westinghouse Elec-
tric Corp. 236 So.2d 556 (La.App. 1970).
© Shell Oil Company contends that it cannot be held strictly liable
pursuant to Article 2322 because it did not own the modular drilling
rig containing the hot water heater which was placed upon the plat-
form, not did it own the soil upon which the platform was placed.
Shell also contends that, in effect, the hot water heater which explod-
ed in this case is not an immovable by attachment within the meaning
of Cothern v. La Rocca, 255 La. 673, 232 So.2d 473 (1970) because the
hot water heater was not placed on the premises by the owner of the
building as required by Article 467 of the Louisiana Code. The Court
in Cothern recognized that an appurtenance or an immovable by at-
tachment may be included within the term “‘building’’. Shell further
argues that the fall or collapse of the drilling rig and platform did not
result from “ruin” within the meaning of Article 2322, but rather
resulted from the negligence of Movible Offshore, Inc.
The plaintiffs counter by arguing that the drilling rig need not be
owned by the owner of the platform in order for Article 2322 to apply,
and that the drilling rig is an immovable by attachment within the
A-65
The main issue of contention between the parties,
however, is the purely legal question of whether an
owner of an offshore drilling platform can be held strict-
ly liable pursuant to Article 2322 for injuries sustained
by employees of an independent contractor present on
the platform for the purpose of conducting drilling
operations. The district court denied recovery, holding
that an employee of an independent contractor can not
recover under Article 2322 unless performance of the
work on the owner’s premises is intrinsically
dangerous."
meaning of Cothern because it was attached in such a way that burn-
ing and cutting would be required to remove it. In addition, plaintiffs
rely upon Article 464 of the Louisiana Code in support of thier conten-
tion that the drilling rig is an immovable by attachment. Article 464
provides:
Lands and buildings or other constructions, whether they have
their foundation in the soil or not, are immovable by their nature. Ar-
ticle 464 has been interpreted to exclude the requirement that “‘other
constructions’ be placed upon the premises by the owner. See Hilltop
Bowl, Inc. v. United States Fidelity & Guaranty Co., 248 F.Supp. 572
(D.C.W.D.La. 1966); Louisiana v. Illinois Central Railroad Company,
256 So.2d 819 (La.App. 1972), cert. denied 260 La. 1136, 258 So.2d
381 (1972).
The plaintiffs also contend that the “ruin” was catastrophic and
was caused by Shell's neglect to repair an appurtenance of the struc-
ture. The plaintiffs assert that it is irrelevant that Shell's ‘neglect to
repair” was caused by a breach of duty by Movible Offshore, Inc.
'' The Court stated in pertinent part:
Louisiana law is consistently to the effect that an injury to the
employee of an independent contractor, caused by the contractor’s
negligence, does not impose strict liability on the building owner.
Henson v Traveler's Ins. Co. 208 So.2d 366 (La.App. 1968), and cases
cited therein. The only relevant exception appears to be where ‘‘the
contract directly requires the performance of a work intrinsically
, however skillfully performed.'’ Vinton Petroleum Co. v. L.
Seiss Oil Syndicate, 19 L.App. 179 [182], 139 So.2d [139 So.] 543, 545
(1932).
Minute Entry of Trial Court, May 14, 1973 (R.503, 504).
A-66
If the theory of the plaintiffs’ action against Shell was
liability for the negligent acts of an independent contrac-
tor under the doctrine of respondeat superior, our task
would not be nearly as difficult. In Cole v. Louisiana Gas
Co., 121 La. 771, 46 So. 801 (1908), the Louisiana
Supreme Court long ago held that:
The general rule is that the servants of an indepen-
dent contractor must look to him (and not to the per-
son with whom he has contracted) for injuries which
they receive through his fault or negligence.
Id. at 779, 46 So. at 804. An exception to the general
rule, as recognized in Cole, will arise if the work is in-
herently dangerous.
The theory of the plaintiffs’ action, however, is not
that Shell is liable for the acts of its independent contrac-
tor under the doctrine of respondent superior, but rather
that Article 2322 imposed a strict statutory responsibili-
ty upon Shell to keep the platform and the ap-
purtenances thereto free from ruin. Since the basis of the
plaintiffs claim for damages in this case is strict liability,
rather than negligence or respondeat superior, our in-
quiry must go beyond Cole.
The district court cited the cases of Vinton Petroleum
Co. v. L. Seiss Oil Syndicate, Inc.,"* and Henson v.
Traveler's Ins. Co.," in support of its conclusion that
Shell is not liable to the plaintiffs under Article 2322. We
are of the opinion that these cases are not dispositive of
the issue and that a brief analysis of Louisiana
jurisprudence will demonstrate the absence of clear and
controlling precedent.
* 19 La. App. 179, 139 So. 543 (1932).
* 208 So.2d 366 (La. App. 1968), cert. denied, 252 La. 174, 210
So.2d 55 (1968).
A-67
Although both Vinton and Henson are cases involving
claims under Article 2322, whether these cases support
the holding of the district court is indeed uncertain. The
Vinton case involved damage to the property of an ad-
joining property owner and not injury to an employee of
an independent contractor. In addition, there is ambigui-
ty in Vinton as to whether the Louisiana appellate court
extended the general rule that an owner is not responsi-
ble for the acts of an independent contractor to cases in-
volving Article 2322 strict liability."
In Henson, an employee of an independent contractor
was injured when he stepped in an unattended piling
hole at a construction site. Although the injured
employee in Henson did assert a claim based upon Arti-
cle 2322 against the owner of the property, the plaintiffs
argue that a simple negligence count was also asserted
against the owner. The plaintiffs contend that Article
2322 is inapplicable because a hole in the ground is ob-
'* In Vinton, the owner of an oil derrick hired a man named Buton
quence, made three findings:
(1) Burton was not an independent contractor so the landowner
could not prevail on the defense to the negligence count.
(2) The plaintiff sustained his burden of proof under Article
2322 of establishing that the derrick was in a rotten or decayed
condition at the time of the collapse.
(3) Even if Burton was an independent contractor, the defendant
landowner would still be liable because the work was intrinsic-
The third holding sequentially follows the second holding but
logically relates to the holding on the issue of negligence, not the
holding on the issue of the decayed condition of the building. If the
third holding relates to the first holding, Vinton clearly does not app-
ly the independent contractor rule, and the intrinsically dangerous ex-
ception thereto, to Article 2322.
A-68
viously not an appurtenance of a building within the
meaning of Article 2322,'* and, therefore, the discussion
in the case as to the liability of the owner to the injured
employee deals with the negligence count.
Although we do not go so far as to accept the plain-
tiffs’ interpretation of Henson, we are of the opinion that
the holding of the Louisiana appellate court is unclear in
light of the fact that there is uncertainty as to whether
Article 2322 is applicable to facts in that case. More im-
portantly, the discussion of liability in Henson deals
with the issue of whether an owner is responsible under
Article 2322 for the negligence of an independent con-
tractor, and not whether an owner can be held strictly
liable under Article 2322 for ‘neglect to repair’’ as a
separate theory of liability independent of any fault or
negligence of the contractor.'*
Resolution of the issue of whether Shell is strictly
liable to the plaintiffs in this case is further clouded by
the case of Temple v. General Ins._Co, of America, 306
So.2d 915 (La.App.1974), cert. denied, 310 So.2d 643
(1975). The Temple Court found that because of a sub-
contractor’s employee sustained his injuries while in the
process of repairing a building, the ruin did not occur
from ‘neglect to repair” within the meaning of Article
‘* The plaintiffs in their reply brief reason as follows:
The only presumption we make here is that the State Appellate
!
:
|
.
|
“ We perceive this to be the narrow issue which the plaintiffs raise
on appeal. See, e.g. Camp v. Church Wardens of the Church of St.
Louis, 7 La.Aan. 321, 325 (1852).
A-69
2322.'’ Although the court expressly found that Article
2322 did not apply, the court proceeded to set forth what
it deemed to be the determinative issue in a case involv-
ing injury to an employee of an independent contractor
The court stated:
The question of concern is whether the owner was in
control of the premises or the contractor who was per-
forming work of laying the bricks which fell causing
injury to plaintiff. The answer appears obvious. Cer-
tainly the subcontractor, J. R. McFarland, d/b/a
United Masonry Company, had control of the wall as
the construction was not complete. A workman was
working on the wall at the moment it fell. The
evidence shows that a workman was striking the
joints of the courses of brick when the newly con-
structed wall began to fall around him. Such a cir-
cumstance does not bring the injured plaintiff within
the statutory liability imposed on the owner by
LSA—C.C. Article 2322, and Article 670.
'' In Daroca v. Metropolitan Life Ins. Co., 121 F.2d 917 (5th Cir.
1941), an employee of an independent contractor was injured while
working on the owner’s premises. The Court stated:
Plaintiff was neither a tenant nor a third person lawfully, but ac-
cidentally, on the premises nor a passerby. He was a workman engag-
ed in making repairs to the building, employed for the very purpose of
vebiiiian ai dinueedy dehy shea tphatidianteeaeee As to
him there is no doubt whatever the owner was not responsible for any
negligence of an independent contractor. Camp v. Church Wardens, 7
La. Ann.321; Peyton v.' Richards, 11 La.Ann. 62; Burton v. Davis, 15
La.Ann. 448; Gallagher v. Southwestern Exposition Ass'n, 28 La.
Ann. 943; Robideaux v. Hebert, 118 La. 1089, 43 So. 887, 12
L.R.A.N.S., 632. It is evident appellant can not recover on his first
alleged cause of action.
Id. at 919. Shell has argued that Daroca is authority for denial of
recovery by an employee of an independent contractor pursuant to
Article 2322 under all circumstances. The plaintiffs counter by argu-
ing that Daroca may deny recovery only when the employee is on the
premises for the very purpose of repairing those premises. See Har-
rison v. Blueberry Hill, 255 F.2d 730 (3rd Cir. 1958).
A-70
Counsel has not cited to us any case which holds
these codal articles applicable to the construction or
repair of a building. We find no liability herein. See,
Daroca v. Metropolitan Life Insurance Comapny, 5
Cir., 121 F.2d 917; and Matthews v. Southern Amuse-
ment Company, La.App., 199 So.2d 403 (La.App. 3rd
Cir. 1967).
Id. at 917, 918.
The Court of Appeals in Temple thus placed great em-
phasis upon control of the premises, an issue not ex-
pressly considered in Henson." Furthermore, the em-
phasis upon control of the premises in Temple is concep-
tually inconsistent with other Louisiana case law pro-
viding that absent an agreement whereby a lessee
assumes responsibility, a lessorowner can be held strict-
“ In Camp v. Church Wardens of the Church of St. Louis, 7
La.Ann. 321 (1852), the Chief Justice of the Louisiana Supreme Court
stated that an owner was liable pursuant to Article 2302 of the Loui-
siana Code (the predecessor of Article 2322 and indentical in wording)
for injuries sustained by an employee of a contractor on the premises.
The owner had retained substantial supervisory authority over the
work of the employees of the contractor doing the repairs. The finding
of liability, however, was not premised upon the control retained by
the owner. The Chief Justice stated:
street; and it would be singular, indeed, if the men at work at the
building were excluded from their just and salutory operation.
Id. at 325. Justice Slidell, in his concurring opinion, took a different
A-71
ly liable under Article 2322 for injuries sustained by
employees of the lessee, regardless of whether actual
control of the premises is retained by the lessor. See, e.
g., Hornsby v. Ray, 327 So.2d 146 (La.App. 1976), cert.
denied, 330 So.2d 293 (La.1976); 330 So.2d 319
(La.1976).'*
We have surveyed Louisiana law as presented by the
briefs of counsel and as gathered from our own research,
and we have concluded that there is no clear and con-
trolling precedent from Louisiana's highest court to
resolve several of the issues presented by this appeal.
The issue which we perceive as most perplexing is
whether Shell has available to it an ‘independent con-
tractor’’ defense. We hesitate to accept Shell’s argument
and its interpretation of the Henson and Vinton cases,
because of what appears to be a theoretical inconsisten-
cy between the imposition of a strict liability standard
on a building owner, and at the same time providing an
‘independent contractor” defense which developed
primarily in response to negligence actions and
respondeat superior liability. Because the Supreme
Court of Louisiana is the final expositor of Louisiana
law, we feel compelled to certify the significant ques-
‘* The plaintiffs have also cited the case of McIlwain v. Placid Ol
ng
») Dean
A-72
tions requiring state law determination to that court.”
We perceive these issues to include the following:
PROPOSED ISSUES TO BE CERTIFIED
(1) Whether the owner of an offshore drilling platform
can be held strictly liable pursuant to Article 2322 of
the Lousiana Civil Code absent the existence of intrin-
sically dangerous work and absent the exercise of con-
trol of the premises — when employees of an indepen-
dent contractor hired by the owner are injured while
on the platform by the explosion of a hot water heater
located in the living module which caused part of the
platform to fall or collapse, and when the employees
are on the platform for the purpose of conducting drill-
ing operations and not for the purpose of repairing or
constructing the platform or any appurtenances or at-
tachments thereto.
(2) Assuming that an owner cannot be held strictly
liable to employees of an independent contractor
without the existence of an intrinsically dangerous ac-
tivity, whether drilling for oil on an offshore drilling
platform constitutes “intrinsically dangerous work"
within the meaning of Vinton Petroleum Co. v. L.
Seiss Oil Syndicate, Inc., 19 La.App. 179, 139 So. 543
(1st Cir. 1932), and as applied to Article 2322 of the
Louisiana Civil Code.
(3) Whether injuries sustained by an employee of an
independent contractor are the result of ‘‘ruin”’ of the
*” We recognize the wisdom of utilizing the certification procedure
and are merely attempting to stay within the wake of our own Ad-
miral (Chief Judge Brown) who is currently aboard the “‘S.S. Certifica-
tion"’ in route to Georgia, Florida and heavens knows where else. See
In Re McClintock, 558 F.2d 732 (5th Cir. 1977); Phillips v. Iglehart,
558 F.2d 737 (5th Cir. 1977). Certification to the Louisiana Supreme
is provided for by La.Rev.Stat.Ann. § 13:72.1 and Rule 12 of
the Rules of the Louisiana Supreme Court.
AB
building within the meaning of Article 2322 of the
Louisiana Civil Code, when the fall or collapse of the
building is caused by the explosion of a hot water
heater attached to the living module of the platform.
(4) Whether a modular and movable drilling rig which
is attached to an offshore drilling platform in such a
manner that cutting and burning would be required to
remove it, and which is not owned by the owner of the
platform to which it is attached, constitutes an ‘‘im-
movable by attachmen’’ within the meaning of
Cothern v. La Rocca, 255 La. 673, 232 So.2d 473, 477
(1970), and as applied to Article 2322 of the Louisiana
Civil Code.
(5) Whether an owner of an offshore drilling platform
can be held strictly liable pursuant to Article 2322 of
the Louisiana Civil Code for injury sustained upon the
platform, even though ownership of the underlying
soil is not vested in the owner of the platform.
In accordance with the practice of the court, the clerk
wil be instructed to seek the cooperation of counsel in
formulating the precise questions to be certified. We
recognize that there are several issues which have been
raised with regards to indemnification that are still
unresolved. These issues, however, become pertinent on-
ly if liability is placed upon Shell Oil Company.
Therefore, we will reserve discussion of these issues until
we have completed the certification process and the
Supreme Court of Louisiana has had a chance to answer
the questions so certified. If they should determine that
Shell is liable under Louisiana law, we shall endeavor to
answer the indemnification questions as expeditiously
as possible. If Shell is not liable these questions become
moot.
A-74
APPENDIX D
DENIALS OF REHEARING EN BANC
UNITED STATES COURT OF APPEALS
Fifth Circuit
DENIALS OF REHEARING EN BANC
(Rule 35 Federal Rules of Appellate Procedure; Local
Fifth Circuit Rule 12)
Group 1 — Denials where no member of the panel nor
Judge in regular active service on the Court
requested that the Court be polled on rehear-
ing en banc.
Group 2 — Denials after a poll requested by a member
of the panel or a Circuit Judge in regular ac-
tive service.
Group 3 — Denials on the Court's own motion after a
poll requested by a member of the panel or a
Circuit Judge in regular active service.
A-75
Docket
Title Number
GROUP 1
Argonaut Ins. Co. v.
EE cl virrinsiy fxaniccnccovs 75-4019
Booker v. Shell OilCo.......... . 75-4019
Carvin v. Shell Oil Co. 75-4019
Dollar v. Long Mfg., N.C., Inc. .... 76-1018
Long Mfg., N.C., Inc. v.
Nichols Tractor Co., Inc...... .. 76-1018
Olsen v. Shell Ol Co 75-4019
Shell Oil Co. v.
ArgonautIns Co... .......... 75-4019
Shell Oil Co. v ee Movible
Offshore, Inc.. falls Spe 75-4019
Stewart v. Batley .... ss ccccccrcse 75-2996
Teledyne Movible Offshore, Inc.
v. Argonaut Ins. Co. . 75-4019
oh Gy |" eee ann 76-1401
U.S. v. Bowdach 76-2258
US. v. James. . 77-1685
Wallace v. Shell Oil Co. ........... 75-4019
GROUP 2
Equal Employment Opportunity
Commission v. D.H.
Holmes Col, Ltd... . . 76-4184
Neidhardt v.
D.H. Holmes Co, Ltd........... 76-4184
Date of
Denial
12, 1/77
12/ 1/77
12) 1/77
11/30/77
11/30/77
12) 1.77
12/ 1/77
12) 1/77
12) 7977
12) 1/77
12. 5/77
11/2877
11 2877
12) 1/77
12) 5/77
12, 5/77
E.D.La., 561
F.2d 1178
E.D.La., 561
F.2d 1178
E.D.La., 561
F.2d 1178
M.D.Ga., 561
F.2d 613
M.D.Ga., 561
F.2d 613
E.D.La., 561
F.2d 1178
E.D.La., 561
F.2d 1178
E.D.La., 561
F.2d 1178
N.D.Ala., 561
F.2d 1195
E.D.La., 56!
F.2d 1178
S.D Fla., 559
F.2d 1339
S.D.Fla.. 561
F.2d 1160
S.D.Tex.. 562
F.2d 1259
E.D.La., 561
F.2d 1178
A-76
APPENDIX E
Mary OLSEN, Plaintiff-Appellant
Cross Appellee,
v.
SHELL OIL COMPANY et al., Defendants-
Appellees Cross Appellants,
Vv.
ARGONAUT INSURANCE COMPANY,
Intervenor-Appellant.
Christine W. CARVIN, Plaintiff-Appellant
Cross Appellee,
v.
SHELL OIL COMPANY et al., Defendants-
Third-Party Plaintiffs Appellees-Cross Appellants,
v.
TELEDYNE MOVIBLE OFFSHORE, INC., et al.,
Third-Party Defendants-Appellees Cross Appellants,
Argonaut Insurance Company,
Intervenor-Appellant.
Frank Winston BOOKER et al.,
Plaintiffs-Appellees,
v.
SHELL OIL COMPANY et al.,
Defendants-Appellants.
Gordon Davis WALLACE, Plaintiff-Appellant
Cross Appellee,
Vv.
SHELL OIL COMPANY et al., Defendants-
Appellees Cross Appellants,
v.
ARGONAUT INSURANCE COMPANY,
Intervenor-Appellant.
A-77
ARGONAUT INSURANCE COMPANY,
Plaintiff-Appellant Cross Appellee,
Vv.
SHELL OIL COMPANY et al., Defendants-
Appellees Cross Appellants.
No. 75-4019.
United States Court of Appeals,
Fifth Circuit.
May 12, 1978.
Rehearing Denied June 14, 1978
Consolidated appeals were taken from orders of the
United States District Court for the Eastern District of
Louisiana, Frederick J. R. Heebe, Chief Judge. The
Court of Appeals, Fay, Circuit Judge, held that the court
would certify to the Supreme Court of the State of Loui-
siana questions relating to the applicability of a provi-
sion of the Louisiana Civil Code in determining whether
the owner of an offshore oil drilling platform can be held
strictly liable for injuries sustained by employees of an
independent contractor.
Question certified.
Federal Courts 392
Court of Appeals certified to Supreme Court of State
of Louisiana questions relating to whether owner of off-
shore drilling platform could be held strictly liable to
employees of independent contractor pursuant to provi-
sion of Louisiana Civil Code absent existence of intrin-
sically dangerous work and absent control of premises,
whether offshore oil drilling constitutes “intrinsically
dangerous work,’ whether injuries sustained by
employee of independent contractor are result of ‘ruin’
of building when caused by explosion of hot water heater
attached to living module of platform, whether modular
a4
A-78
drilling rig attached to platform but not owned by owner
of platform constitutes an “immovable by attachment,”
and whether owner of platform could be held strictly
liable for injuries sustained upon it even though owner-
ship of underlying soil was not vested in platform owner.
LSA—C.C. art. 2322.
Wm. P. Rutledge, Lafayette, La., for Olsen, et al.
Joel L. Borrello, New Orleans, La., for Argonaut Ins.
Co.
Donald A. Hoffman, New Orleans, La., for Pacific
Employers Insurance Co.
John O. Charrier, Jr., New Orleans, La., for Shell Oil
Co.
W. K. Christovich, Charles W. Schmidt, III, New
Orleans, La., for Teledyne Movible.
Francis G. Weller, New Orleans, La., for Wiegand Co.
& Thermo-Disc., Inc.
Patrick T. Caffery, W. Eugene Davis, New Iberia, La.,
for Texsteam Corp.
Consolidated Appeals from the United States District
Court for the Eastern District of Louisiana.
Before GOLDBERG and FAY, Circuit Judges, and
DUMBAULD, District Judge.*
*District Judge for the Western District of Pennsylvania, sitting by
designation.
A-79
FAY, Circuit Judge:
We have concluded that this appeal presents impor-
tant issues of Louisiana law which we believe are ap-
propriate for resolution by the Supreme Court of Loui-
siana. Our final decision in this matter will therefore be
deferred pending certification of the issues to the
Supreme Court of Louisiana.
We have reques ‘ed that the parties submit a proposed
agreed statement of facts and certificate of issues for
decision pursuant to our general practice. See West v.
Caterpillar Tractor Co., Inc., 504 F.2d 967 (5th Cir. 1974).
CERTIFICATION FROM THE UNITED STATES
COURT OF APPEALS FOR THE FIFTH CIRCUIT
TO THE SUPREME COURT OF LOUISIANA PUR-
SUANT TO LA.REV.STAT.ANN. § 13:72.1 AND
RULE 12 OF THE RULES OF THE LOUISIANA
SUPREME COURT.
It appears to the Unites States Court of Appeals for
the Fifth Circuit that the above-styled case in this court
involves questions or propositions of the law of the State
of Louisiana which are determinative of this cause, and
there appear to be no clear, controlling precedents in the
decisions of the Supreme Court of the State of Louisiana.
This Court certifies the following questions of law to the
Supreme Court of Louisiana for instructions concerning
said questions of law, such case being on appeal from the
United States District Court for the Eastern District of
Louisiana.
Pas’
— <_< —_— -—”
A-80
I. STYLE OF THE CASE
The style of the case in which this certification is made
is Mary Olsen, et al., Plaintiffs-Appellants, versus Shell
Oil Company, et al., Defendants-Appellees; Christine W.
Carvin, et al., Plaintiffs-Appellants, versus Shell Oil
Company, et al., Defendants-Appellees; Gordon Davis
Wallace, Plaintiff-Appellee, versus Shell Oil Company,
et. al., Defendants-Appellees; and Argonaut Insurance
Company, Plaintiff-Appellant, versus Shell Oil Com-
pany, et al., Defendants-Appellees, Case No. 75-4019,
United States Court of Appeals for the Fifth Circuit, on
appeal from the United States District Court for the
Eastern District of Louisiana.
II. STATEMENT OF THE FACTS
A complete statement of the facts of this case, show-
ing the nature of the case and the circumstances out of
which the questions or propositions of law arise, can be
found at 561 F.2d 1178, 1180, and will not be set forth in
full in this certification.
III. QUESTIONS FOR THE SUPREME
COURT OF LOUISIANA
The parties have been unable to agree on the precise
questions for certification. We have concluded that the
following questions delineate the issues and accordingly
certify them to the Supreme Court of the State of Loui-
siana.
(1) Whether the owner of an offshore drilling platform
can be held strictly liable pursuant to Article 2322
of the Louisiana Civil Code absent the existence of
intrinsically dangerous work and absent the exer-
> o & Sie ithe | a
(2)
we
~—
(4)
A-81
cise of control of the premises — when employees
of an independent contractor hired by the owner
are injured while on the platform by the explosion
of a hot water heater located in the living module
which caused part of the platform to fall or col-
lapse, and when the employees are on the platform
for the purpose of conducting drilling operations
and not for the purpose of repairing or construc-
ting the platform or any appurtenances or at-
tachments thereto.
Assuming that an owner cannot be held strictly
liable to employees of an independent contractor
without the existence of an intrinsically dangerous
activity, whether drilling for oil or an offshore drill-
ing platform constitutes “intrinsically dangerous
work"’ within the meaning of Vinton Petroleum Co.
v. L. Seiss Oil Syndicate, Inc., 19 La.App. 179, 139
So. 543 (1st Cir. 1932), and as applied to Article
2322 of the Louisiana Civil Code.
Whether injuries sustained by an employee of an
independent contractor are the result of “ruin” of
the building within the meaning of Article 2322 of
the Louisiana Civil Code, when the fall or collapse
of the building is caused by the explosion of a hot
water heater attached to the living module of the
platform.
Whether a modular and movable drilling rig which
is attached to an offshore drilling platform in such
a manner that cutting and burning would be re-
quired to remove it, and which is not owned by the
owner of the platform to which it is attached, con-
stitutes and “immovable by attachment” within
an
A-82
the meaning of Cothern v. La Rocca, 255 La. 673,
232 So.2d 473, 477 (1970), and as applied to Article
2322 of the Louisiana Civil Code.
(5) Whether an owner of an offshore drilling platform
can be held strictly liable pursuant to Article 2322
of the Louisiana Civil Code for injury sustained
upon the platform, even though ownership of the
underlying soil is not vested in the owner of the
platform.
A-83
APPENDIX F
Mary OLSEN, Plaintiff,
v.
SHELL OIL COMPANY, Defendant.
No. 62522.
Supreme Court of Louisiana.
Nov. 16, 1978.
As Corrected on Rehearing Denied
Jan. 26, 1979.
Questions of state law were certified by the United
States Court of Appeals for the Fifth Circuit. The
Supreme Court, Tate, J., held that: (1) fixed offshore
drilling rig was ‘“‘building’’ within meaning of statute im-
posing liability upon building owner to persons injured
through its ruin whether due to vice in original construc-
tion of building or through owner's neglect to repair it;
(2) owner of rig was ‘‘owner,”’ for purposes of statute, of
defective modular living unit attached to drilling rig; (3)
explosion of water heater within modular living unit con-
stituted “‘ruin”’ of building within meaning of statute; (4)
rig owner was not exculpated from liability for injuries
and death caused by explosion on ground that damages
were caused by fault of third person, and (5) rig owner's
liability was not affected by fact that underlying soil
upon which rig rested was owned by another party.
Certified questions answered.
Dixon, J., concurred and filed opinion.
Sanders, C.J., dissented and assigned written reasons.
Summers, J., dissented.
A-84
Marcus, J., dissented and filed opinion.
Summers, C.J., and Marcus, J., would grant applica-
tion for rehearing.
1. Negligence 44
Owner's fault, under statute imposing liability upon
owner of building to persons injured through its ruin, is
founded upon breach of his obligation to maintain or
repair his building so as to avoid creation of undue risk
of injury to others; owner is absolved from his strict
liability neither by his ignorance of condition of building,
nor by circumstances that defect could not easily be
detected; he is absolved from such liability only if the
thing owned by him falls, not because of its defect, but
rather because of fault of some third person or of person
injured thereby, or because fault is caused by irresistible
cause or force not usually foreseeable. LSA—C.C. arts.
2322, 3556, subds. 14, 15.
2. Negligence 44
As regards term ‘“‘building,’’ for purposes of statute
imposing liability upon owner of building to persons in-
jured through its ruin, inherent requirement is that there
be a structure of some permanence; permanent structure
need not be intended for habitation for it to be con-
sidered a building. LSA—C.C. art. 2322.
See publication Words and Phrases for other judicial con-
structions and definitions.
A-85
3. Negligence 44
Fixed offshore drilling platform which had foundation
in the soil was “‘building’’ for purposes of statute impos-
ing liability upon owner of building to persons injured
through its ruin, whether or not intended for habitation.
LSA—C.C. art. 2322.
4. Negligence 44
Necessary appurtenances to structures and movables
made immovable by attachment, which are defective or
have fallen into ruin, also may be included within term
“building” for purposes of statute imposing liability
upon owner of building to persons injured through its
ruin. LSA—C.C. art. 2322.
5. Negligence 44
In absence of another statute providing otherwise,
strict liability imposed by statute upon owner of
building for harm caused by defects in its structures or
appurtenances imposes nondelegable duty upon owner
to keep his building and appurtenances in repair and to
be responsible to third persons for harm caused by any
defect in structure or its appurtenances. LSA—C.C. art.
2322.
6. Negligence 54
As regards statute imposing liability upon owner of
building to persons injured through its ruin, building
owner, by contractual agreement between himself and
occupant who “owns”’ appurtenance incorporated into
structure of building, may regulate their relative owner-
A-86
ship or duties of indemnification to one another resulting
from injury to third persons; owner cannot by such con-
tract, however, limit his law-imposed liability to third
persons for unjuries arising from premise defects; for
same reasons, neither can he, by contractual agreement
relating to ownership of appurtenant parts by occupier,
absolve himself from liability to third person from in-
juries resulting from premise defect in any part of his
premises, including in occupierowned appurtenant
parts attached to his building so as to become a part of
it. LSA—C.C. art. 2322.
7. Negligence 54
Owner of fixed offshore drilling rig was ‘“‘owner’”’ of rig
and of modular living unit which was attached to rig and
in which explosion causing injuries and death to third
persons took place, for purposes of statute imposing
liability upon owner of building to persons injured
through its ruin, notwithstanding rig owner’s contrac-
tual relationship with drilling contractor which, as bet-
ween those two parties, remained owner of modular liv-
ing unit. LSA—C.C. art. 2322.
See publication Words and Phrases for other judicial
constructions and definitions.
8. Negligence 44
Explosion of water heater within modular living unit
attached to offshore drilling rig was “‘ruin’’ of drilling rig
within meaning of statute imposing liability upon owner
of building to persons injured through its ruin whether
caused by neglect to repair building or by a vice in its
original construction, notwithstanding contention that
explosion was caused by negligent failure of occupier of
modular living unit to install correct valve in water
heater. LSA—C.C. art. 2322.
See publication Words and Phrases for other judicial
A-87
9. Negligence 62(3)
Owner of building may be exculpated from liability
under statute imposing liability upon building owner to
persons injured through its ruin for premise defect if vic-
tim is injured not by reason of defect but instead
because of fault of some third person. LSA—C.C. art.
2322.
10. Negligence 62(3)
Building owner's agreement with or reliance upon con-
tractor or tenant to perform owner’s nondelegable duty
to keep his building in repair and free of defect con-
stituting unreasonable risk of injury to others does not
constitute that contractor or tenant a ‘‘third person”’ for
purposes of exculpation of building owner from
statutory liability for premise defect if victim is injured
not by reason of defect but instead because of fault of
some third person. LSA—C.C. arts 670, 2322.
See publication Words and Phrases for other judicial
constructions and definitions.
11. Negligence 62(3)
Fault of “third person’’ which exonerates building
owner from his own obligation importing strict liability
as imposed by statute making building owner liable to
persons injured through ruin of building and by other
statutes is that which is sole cause of the damage, of the
nature of an irresistible and unforeseeable occurence,
that is, where damage resulting has no casual relation-
ship whatsoever through fault of owner in failing to keep
his building in repair, and where “third person”’ is
stranger rather than person acting with consent of
owner in performance of owner’s nondelegable duty to
keep his building in repair. LSA—C.C. arts. 2317, 2321,
2322.
A-88
12. Negligence 62(3)
Principle that building owner may be exculpated from
liability under statute imposing liability upon building
owner to persons injured through its ruin for premise
defect if victim is injured not by reason of defect but in-
stead because of fault of some third person was inap-
plicable to owner of fixed offshore drilling rig, which
asserted that it was exculpated from liability to third
persons injured by explosion which took place within
modular living unit attached to drilling rig on ground
that damages were in fact caused by intervening fault of
drilling contractor which occupied modular living unit
and which negligently failed to repair defective water
heater valve which caused explosion. LSA—C.C. arts.
2317, 2321, 2322.
13. Negligence 44
Liability of owner of fixed offshore drilling rig under
statute imposing liability upon building owner to per-
sons injured through its ruin was not affected by cir-
cumstance that underlying soil upon which building rig
rested was owned by another party. LSA—C.C. arts.
464-464 comment, 2320, 2322.
William P. Rutledge, Domengeaux & Wright,
Lafayette, for plaintiff.
John O. Charrier, Jr., Jones, Walker, Waechter, Poite-
vent, Carrere & Denegre, W.K. Christovich, Charles W.
Schmidt, III, Christovich & Kearney, Patrick T. Caffery,
Caffery, Duhe, Oubre & Gibbons, New Iberia, for defen-
dant.
Douglas A. Molony, Bernard J. Caillouet, Gene S.
Palmisano, M. Truman Woodward, Jr., H.H. Hillyer, Jr.,
A-89
Wilson S. Shirley, Jr., James K. Irvin, M. Hampton,
Carver, W. Richard House, Jr., Milling, Benson, Wood-
ward, Hillyer & Pierson, New Orleans, amicus curiae for
Chevron U.S.A., Inc. and Exxon Corp.
TATE, Justice.
The United States Court of Appeals for the Fifth Cir-
cuit certified to us for our opinion certain questions of
state law. Olsen v. Shell Oil Co., 561 F.2d 1178 (1977).
Ther certification was in accordance with the procedure
authorized by La.R.S. 13:72.1 (1972) and Rule 12, Rules
of the Supreme Court of Louisiana (1973).
Certain employees of a drilling contractor (‘‘Movible’’)
were killed or injured, and they or their representatives
sue to cover damages thereby sustained. As set forth
more fully in Appendix 1 to this opinion:
The injuries and deaths resulted frem the explosion of
a water heater aboard a fixed drilling platform owned by
Shell Oil Company situated in the Gulf of Mexico off-
shore of Louisiana. Pursuant to a drilling contract with
Shell, Movible had attached (in such a way that burning
and cutting of metal would be required to remove it) its
modular drilling rig onto the platform, and a medular liv-
ing unit to house Movible’s drilling employees. The ex-
plosion of the water heater which caused the injuries
(and which was part of the living quarters) resulted from
Movible’s failure to repair properly or to replace a
pressure relief valve of the heater after having been
warned to do so by a safety engineer.
The issue before us concerns Shell's liability for the in-
juries and deaths by reason of its ownership of the drill-
A-90
ing platform, Louisiana Civil Code Article 2322 (1870).'
The Fifth Circuit, having determined that federal law re-
quires the plaintiffs to look to Louisiana law for redress,’
found itself unable to determine whether Shell is liable
under Civil Code Article 2322 and Louisiana
jurisprudence thereunder.
Accordingly, that court certified five questions to us
for our opinion as to state law applicable. Four questions
query as to Shell’s strict liability as owner of the drilling
platform,’ which are answered below in our discussion of
' La.C.C. art. 2322 provides: “The owner of a building is
answerable for the damage occasioned by its ruin, when this is caused
by neglect to repair it, or when it is the result of a vice in its original
construction.’
* The Outer Continental Shelf Lands Act, 43 U.S.C. § 1331 et seq.
(1953) makes Louisiana law applicable to fixed offshore platforms.
i v. Aetna Cas. & Sur. Co., 395 U.S. 352, 89 S.Ct. 1835, 23
L.Ed.2d 360 (1969).
* These four questions are:
(1) Whether the owner of an offshore drilling platform can be
held strictly liable pursuant to Article 2322 of the Louisiana Civil
Code absent the existence of intrinsically dangerous work and ab-
sent the exercise of control of the premises — when employees of
lapse, and when the employees are on the platform for the purpose
of conducting drilling operations and not for the purpose of
saints ter acetals Gb olaifumn or ny tamales or
attachments thereto.
(3) Whether injuries sustained by an employee of an indepen-
A-91
liability and defenses under Civil Code Article 2322. In
view of the conclusions we reach below as to Shell's
strict liability, the remaining question‘ need not be
answered by us.
I. LIABILITY UNDER CIVIL CODE
ARTICLE 2322.
Article 2322 imposes liability upon the owner of a
building to persons injured through its “ruin’’, whether
due to a vice in its original construction or through his
neglect to repuir it.*
(4) Whether a modular and movable driliing rig which is attach-
ed to an offshore drilling platform in such a manner that cutting
and burning would be required to remove it, and which is not own-
ed by the owner of the platform to which it is attached, con-
stitutes an “immovable by attachment”’ within the meaning of
Cothern v. La Rocca, 255 La. 673, 232 So.2d 473, 477 (1970), and
as applied to Article 2322 of the Louisiana Civil Code.
(5) Whether an owner of an offshore drilling platform can be
held strictly liable pursuant to Article 2322 of the Louisiana Civil
Code for injury sustained upon the platform, even though owner-
ship of the underlying soil is not vested in the owner of the plat-
form.
* The remaining question certified to us is:
(2) Assuming that an owner cannot be held strictly liable to
i trinsically dangerous
work"’ within the meaning of Vinton Petroleum Co. v. L. Seiss Oil
Syndicate, Inc., 19 La.App. 179, 139 So. 543 (1st Cir. 1932), and as
applied to Article 2322 of the Louisiana Civil Code.
* See also Civil Code Article 670: ‘Every one is bound to keep his
buildings in repair, so that neither cheir fall, nor that of any part of
A-92
[1] The owner's fault is founded upon the breach of his
obligation to maintain or repair his building so as to
avoid the creation of undue risk of injury to others. The
owner is absolved from its strict liability neither by his
ignorance of the condition of the building, nor by cir-
cumstances that the defect could not easily be detected.
He is absolved from such liability only if the thing owned
by him falls, not because of its defect, but rather because
of fault of some third person or of the person injured
thereby, or because the fault is caused by an irresistible
cause or force not usually foreseeable. Article 3556(14),
(15), (usually, an act occasioned exclusively by violence
of nature without the interference of or contribution by
any human agency).
See: Klein v. Young, 163 La. 59, 111 So. 495 (1927);
Thompson v. Commercial National Bank, 156 La. 479,
100 So. 688 (1924); Barnes v. Beirne, 38 La.Ann. 280
(1886); Camp v. Church Wardens, 7 La.Ann. 321 (1852);
Crawford v. Wheless, 265 So.2d 661 (La.App.2d Cir.,
1972); Anslem v. Travelers Insurance Company, 192
So.2d 599 (La. App.3d Cir., 1966); Green v. Southern Fur-
niture Company, 94 So.2d 508 (La.App.lst Cir., 1957);
Comment, 42 Tul.Law Rev. 178 (1967).
Under the terms of Article 2322, several requirements
for the imposition of liability under the article must be
met: (1) There must be a building; (2) the defendant must
be its owner; and (3) there must be a “‘ruin”’ caused by a
vice in construction or a neglect to repair, which occa-
sions the damage sought to be recovered.
A-93
1. Is Shell's Platform a “Building”
Within the Meaning of Article 2322?
The word “building’’ as used in Article 2322 has
received no clear jurisprudential definition. This court
itself has never spoken directly to the question whether
an oil derrick or drilling platform constitutes a building
within the meaning of the article.
Nevertheless, some Louisiana jurisprudence indicates
that an oil derrick is a building for purposes of imposing
liability under the code article. Vinton Petroleum Co. v.
L. Seiss Oil Syndicate, 19 La.App. 179, 139 So. 543
(1932). The United States Fifth Circuit Court of Appeals
has relied on the Vinton decision, in holding that fixed
offshore drilling platforms constitute buildings for such
purposes. Mott v. Odeco, 577 F.2d 273 (1978); Moczygem-
ba v. Danos & Curole Marine Contractors, 561 F.2d 1149
(1977); McIlwain v. Placid Oil Company, 472 F.2d 248
(1973) certiorari denied, 412 U.S. 923, 93 S.Ct. 2734, 37
L.Ed.2d 150 (1973).
[2] Without making specific reference to oil derricks,
this court has made several observations as to what con-
stitutes a building under the article. An inherent require-
ment is that there be a structure of some permanence.
Mudd v. Travelers Indemnity Co., 309 So.2d 297
(La.1975). Also, the permanent structure need not be in-
tended for habitation, for it to be considered a
“building.” Cothern v. LaRocca, 255 La. 673, 232 So.2d
473 (1970). Additionally, we have held, for instance, that,
for purposes of delictual responsibility under Article
2322, the word “building’”’ encompasses a wharf or
walkway over water which gave access and was attached
to a camphouse. Cristadoro v. Von Behren's Heirs, 119
La. 1025, 44 So. 852 (1907). See also Howe v. City of New
Orleans, 12 La.Ann. 481 (1857).
A-94
The wording “building” in Article 2322 is translated
from the word ‘‘batiment”’ in its corresponding article of
the French Civil Code, Article 1386. ‘‘Batiment”’ is defin-
ed in Bescherelle’s Dictionnaire National (1844) as ‘‘a
generic term designating all edifices public or private,
regardless of the type material composing them, but
most particularly those which serve as habitations.”
(The writer’s translation.) Traditionally, French
jurisprudence has interpreted the word ‘batiment”’
broadly; according to an autoritive French treatise,
numerous French authors consider it to include all works
of man, synonymous with the word “construction” (in-
cluding structures both movable and immovable,
whether temporary or permanent).* The treatise would
more narrowly define the word, at least limiting it to im-
movables, and the tendency of modern French
jurisprudence has been so to interpret the word more
narrowly?’
Louisiana Civil Code Article 464 (1870) provides that
“buildings or other constructions, whether they have
their foundations in the soil or not, are immovable by
their nature.’ See also Civil Code Articles 463 and 464,
as re-enacted in 1978. In the context of the Louisiana
Civil Code, a ‘‘building”’ is a type of permanent construc-
tion that would be classified as an immovable.
[3] Without further defining the limits of a ‘‘building’’
within the meaning of Article 2322, it is sufficient for
present purposes to hold that a permanent structure,
* 2 Mazeaud & Mazeaud, Traite Theorique et Practique de la
Responsabilite Civile, Vol. 2, Section 1039, pp. 26-29 (Gth ed. 1970).
' For a general discussiongf the of the word, see Mazeaud,
id.; Comment, Article 2322 and the Li y of the Owner of an Im-
movable, 42 Tul.L.Rev. 178, especially 182-84 (1968).
A-95
such as the fixed drilling platform owned by Shell and
which has a foundation in the soil, is indeed a building
for purposes of that article, whether or not intended for
habitation.* This result is consistent with and analogous
with our earlier holdings summarized above.
The defendant further argues that federal law dictates
that we hold Shell's drilling platform to be an island, and
therefore an extension of the soil, rather than a building.*
In support of this thesis, the defendant cites Rodrigue v.
Aetna Casualty & Surety Co., 395 U.S. 352, 89 S.Ct.
1835, 23 L.Ed.2d 360 (1969) and Jn Re Dearborn Marine
Service, Inc., 499 F.2d 263 (5th Cir. 1974).
We find no merit to this argument. The cited decisions
concern a choice of law question, federal maritime law
versus state law. They do not touch upon nor concern
the classification of a drilling platform as land or soil
rather than as a building.’® ;
As previously noted, the federal courts have reached,
correctly, the same conclusion as we do now, i.e., that a
drilling platform such as the present is a building within
the meaning of Article 2322: See Mott, Moczygemba,
and Mcllwain, cited above.
* It should be pointed out that, even if we were to hold that the
platform is not a “building” within the meaning of q
would not necessarily follow that the defendant is free from liability.
A-96
2. Is Shell the ‘Owner’, for Purposes of Article 2322
Liability, of the Defective Attachments to Its Drill-
ing Platform?
By contract between Shell and Movible, Movible re-
tained the ownership ot its drilling rig and of its living
unit attached to Sheil’s drilling platform. (Movible’'s
modular living unit included the defective water heater
as a component part thereof.) Much of the argument of
both parties is addressed to this issue of ownership. Un-
questionable, as between Shell and Movible, the latter
remained the owner of its drilling rig and living unit.
The true issue, however, is whether by reason of this
contractual circumstance, Shell is relieved of its obliga-
tion as owner of the “building” (i. e., the fixed drilling
platform) for its strict liability under Article 2322 for in-
juries caused by any defect in it or its appurtenances.''
[4] Preliminarily, we note that “necessary ap-
purtenances to structures and movables made im-
movable by attachment, which are defective or ha‘
characterized as vessels, in which case the law applicable to actions
for death on the rig would be the Death on the High Seas Act, 46
U.S.C. § 761 et seq. (1920), or instead as artificial islands, in which
case the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331 et seq.
(1953), would provide the applicable law. In Rodrigue, the United
4 By the questions presented, we are not required to address the
issue of any concurrent liability under Articles 2315-17 or 2322 of
Movible for the defective part of Shell's ‘‘building’’ under its control
(and owned by Movible, pe* contractual agreement between Shell and
A-97
fallen into ruin, also may be included within that term
‘building’ " for purposes of the building-owner's delic-
tual responsibility under Article 2322. Cothern v. LaRoc-
ca, 255 La. 673, 232 So.2d 473, 477 (1970). See also Dunn
v. Tedesco, 235 La. 679, 105 So.2d 264 (1958) (water
heater).'? Thus, the Fifth Circuit has correctly held that
the owner of a fixed drilling platform (a ‘‘building’’) is
liable for injuries resulting from a defect in an appurte-
nant drilling rig which (as in the present case) was weld-
ed onto the building by a drilling contractor which (as
between itself and the platform owner) retained title to
this appurtenant attachment. Moczygenba v. Danos and
Curole Marine Contractors, 561 F.2d 1149 (CA 5, 1977).
in attacking the conclusion reached in the cited Moc-
zygemba decision, Shell argues that because its drilling
contractor (Movible) owned the living unit attached so as
to become part of Shell's building (the drilling platform),
Shell cannot be held delictually responsible for defects in
the living unit, insofar as sought to be based on the
strict liability of an owner under Article 2322 for defects
in its buildings or appurtenant or component parts
thereof.
In our view, this argument overlooks the basis for the
delictuai obligation of the owner of a building for
damages caused by defects in its structure or ap-
purtenances:
‘* Other Louisiana cases which have held the owner of a building
liable under this “appurtenance doctrine” include, for instance,
Adamson v. Westinghouse Electric Corp. 236 So.2d 556
(La.App.1970) (elevator), Fontenot v. Sarver, 183 So.2d 75 (La.App.
(1966) window fan), and Murphy v. Fidelity and Casualty Co., 165
So.2d 497 (La.App.2d Cir. 1964) (electrical wiring).
A-98
“The obligation of every property owner to answer for
damages for a failure to keep his property in such condi-
tion of repair that it will not be dangerous to other per-
sons is imposed by law, by Articles 670, 2315, 2322 of
the Civil Code." Klein v. Young, 163 La. 59, 69, 111 So.
495 (1927). In Klein, this court held that, although the
owner of the premises could by contract “allow another
person to use the property for any particular purpose”’
and could thus regulate the rights as between owner and
contractual occupant, the owner could not by such con-
tract evade his obligation imposed by law to repair harm
to others resulting from defec*s in his premises.
[5] The decisions previously cited have imposed Arti-
cle 2322 liability upon the owner of a building for defects
in its appurtenant structures without consideration of
whether the thing attached to a building has become an
immovable by nature or by destination under property
law concepts, and without consideration of whether
there is unity of ownership of the building and its ap-
purtenance. In the absence of another statute providing
otherwise, the strict liability under Article 2322 of the
owner of a building for harm caused by defects in its
structure or appurtenances imposes a nondelegable duty
upon him to keep his building and appurtenances in
repair and to be responsible to third persons for harm
caused by any defect in the structure or its ap-
purtenances."*
‘* There are two competing notions of the theoretical basis of the
strict liability of the owner for the harm caused by his building, the
‘fault’ theory and the ‘‘risk’’ theory. For a general discussion of
these competing theories, see Starck, The Foundation of Delictual
Liability in Contemporary French Law, 48 Tul.L.Rev. 1043 (1974);
Comment, Article 2322 and the Liability of the Owner of an Im-
A-99
(6, 7) By contractual agreement between himself and
the occupant who “owns” the appurtenance incor-
porated into the structure of the building, the owner of
the building may regulate their relative ownership or
duties of indemnification to one another resulting from
injury to third persons. The owner cannot by such con-
tract, however, limit his law-imposed liability to third
persons for injuries arising from premise defects. Klein
v. Young, 163 La. 59, 111 So. 495 (1927). For the same
reasons, neither can he, by contractual agreement
relating to the ownership of appurtenant parts by an oc-
cupier, absolve himself from liability to third persons
from injuries resulting from premise-defects in any part
of his premises, including in occupierowned appurte-
nant parts attached to his building so as to become a
part of it.
In view of this conclusion, we need not discuss Shell’s
additional argument that no liability attaches to it
because the modular living unit attached to its building
(the drilling platform) did not become an immovable by
movable, 42 Tul.L.Rev. 178, especially footnotes 3, 22, and 53.
Basically, the ‘‘fault’’ theory is that even though we hold the owner
of the building strictly liable, this liability is based on his “fault” in
failing to attend to his building. For a thorough discussion of this
theory, see Mazeaud and Mazeaud, Traite Theorique et Pratique de la
Responsibilite Civile, § 1063-1070, pp. 48-53 (6th ed. 1970).
The “risk” theory is based on the notion that, even though the
owner may have a right of indemnification against some third person,
powers
the building. This theory of liability is quite similar to the no-
“enterprise ty”, which j
that the person or entity that causes risk to the public through some
A-100
nature under Civil Code Article 467 (1870; as amended in
1912), since it was attached to the building by a person
(Movible) other than the owner. Because the appurte-
nant living unit was part of the building for purposes of
Article 2322, cf. also La.C.C. art. 508 (1870), it is im-
material whether it is technically immobilized or not
under Article 467 (1972) for purposes of determining
rights between Shell and Movible and their respective
creditors or purchasers.'*
3. Did the explosion of the water heater constitute a
‘Tuin”’ of the building under Article 2322 so to im-
pose liability upon the building’s owner for
damages occasioned thereby?
[8] Shell argues that the explosion of the water heater,
caused by the negligent failure of the occupier Movible
to install the correct valve in it, is not a “ruin” of the
building which was the result of a ‘‘neglect to repair” it
or ‘“‘a vice in its original construction’, as required by
Article 2322.
The revision of Article 467 in 1912, upon which Shell relies, had
as a primary purpose to protect, against the landlord's creditors and
purchasers the interest of tenants in incidental attachments to a
building made for their own convenience. Yiannopoulos, Civil Law of
, Section 47 (Louisiana Civil Law Treatise, Volume 2; 1966);
Comment, 20 La.L.Rev. 410, 413 (1960). The immobilization issue
raised by Shell would if applicable, include a consideration of whether
the attachment of the living unit and drilling rig to the platform was
of so substantial a nature as instead to be the incorporation of them
into the building as an integral and component part of it, Civil Code
Article 464 (1870; cf. Article 465 (1978), and of whether the substan-
tial attachments in question were within the terms and intent of Arti-
cle 467 (1912) or met certain technical requirements of that code arti-
cle, insofar as it inhibits the immobilization which would normally
flow from attachment to the building. See Yiannopoulas, cited above,
id.
See also La.Civ.Code Article 466 (1978).
A-101
We find no merit to this contention, for reasons stated
in our previous discussion. There, we
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.