Appendix — Shell Oil Co. v. Olsen

“Office - Supreme Court, U.S.

FILED

NOV 18 1963

NO.

STEVAS,

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. II — APPENDIX H — K

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.

SO YT ET A NE TN | I AE RE A SET, OT

A B Letter Service, Inc., 327 Chartres St.. New Orleans, La. (604 581-5565

i

TABLE OF CONTENTS

Page

APPENDIX H—Fifth Circuit Opinion........... A-150

APPENDIX I—District Court Minute Entry ..... A-172

APPENDIX J—District Court Judgment........ A-187

APPENDIX K—Order Denying Rehearing....... A-193

A-150

APPENDIX “H”

Mary OLSEN, Etc., Christine W. Carvin, Etc.,

Gordon Davis Wallace and Argonaut

Insurance Company,

Plaintiffs-Appellees,

v.

SHELL OIL COMPANY,

Defendant-Appeilant-Appellee,

v.

TELEDYNE MOVIBLE OFFSHORE,

Defendant-Appellant.

No. 82-3363.

United States Court of Appeals,

Fifth Circuit.

July 5, 1983.

Action was brought to recover for injuries and death

caused by explosion of water heater in living quarters on

offshore drilling platform. After remand, 595 F.2d 1099,

the United States District Court for the Eastern District of

Louisiana, Frederick J.R. Heebe, Chief Judge, entered

judgment adopting and modifying a special master’s

recommendations and awarding damages to widows of

deceased employees, injured employee, and contractor’s in-

surer as against owner of platform and contractor. Plat-

form owner and contractor appealed. The Court of Appeals,

Patrick E. Higginbotham, Circuit Judge, held that: (1)

A-151

Longshoremen’s and Harbor Workers’ Compensation Act

was no bar to recovery by insurer from owner, who was

strictly liable under applicable state law, of amount greater

than what victims or their representatives were entitled to

recover as matter of state tort law; (2) Louisiana law on in-

flationary factors in damages awards was properly applied;

(3) award of prejudgment interest was proper; (4) district

court did not make erroneous awards to widow both for

loss of love and affection and for grief and anguish; and (5)

death of one of six beneficiaries of one of deceased

employees just prior to judgment did not require recalcula-

tion of damages.

Affirmed.

John O. Charrier, Jr., Robert T. Lemon, II, New

Orleans, La., for defendant-appellant-appellee.

W.K. Christovich, New Orleans, La., for Teledyne,

Pacific & Movible.

William P. Rutledge, Lafayette, La., for Olsen, Car-

vin & Wallace.

Joel L. Borrello, New Orleans, La., for Argonaut Ins.

Appeals from the United States District Court for

the Eastern District of Louisiana.

Before GEE, REAVLEY and HIGGINBOTHAM,

Circuit Judges:

PATRICK E. HIGGINBOTHAM, Circuit Judge:

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On May 6, 1970, a hot water heater exploded aboard a

fixed drilling platform in the Gulf of Mexico, killing three

workers and injuring six. There followed these cases, which

are now appearing before us for the third time. See Olsen

v. Shell Oil co., 561 F.2d 1178 (5th Cir.! 977) (Olsen I); Olsen

v. Shell Oil Co., 595 F.2d 1099 (5th Cir.1979) (Olsen IJ).

Following the remand in Olsen IJ, the district court entered

a judgment adopting and modifying a special master’s

recommendations and awarding damages to plaintiffs

Mary Olsen, Christine Carvin, Gordon Wallace, and

Argonaut Insurance Co. Defendant Shell Oil Co. and third-

party defendant Teledyne Movible Offshore now appeal.

Concluding that none of their challenges to the district

court’s award of damages has merit, we affirm the carefully

considered judgment below.

Facts and Procedural History

The facts are ably summarized in Judge Fay’s earlier

opinion. Olsen I, 561 F.2d at 1180-81. We repeat here only

for the context of these appeals.

Shell Oil Co. owned the drilling platform fixed ninety

miles off the coast of Louisiana. At the time of the accident

a contractor, Teledyne Movible Offshore, was drilling from

the platform. Movible Offshore had installed a movable

drilling rig on the platform and modular living quarters for

its employees. The living quarters, which included

bathroom and galley facilities, were equipped with two elec-

tric hot water heaters.

The explosion, on May 6, 1970, of one of the hot

water heaters caused the deaths and injuries to Movible

Offshore’s employees. It was later discovered that an un-

suitable valve in the water heater had allowed pressure to

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build up, causing the explosion. An insurance company in-

spector had recommended one type of valve, but Movible

Offshore had ordered and installed another.

Because the accident occurred on a fixed platform in

the Gulf of Mexico, the provisions of the Outer Continental

Shelf Lands Act, 43 U.S.C. §§ 1331-1356, govern. The

OCSLA provides that with respect to the disability or

death of an employee engaged in natural resource mining or

exploration activity on the outer Continental Shelf, com-

pensation shall be payable under the Longshoremen’s and

Harbor Workers’ Compensation Act, 33 U.S.C. §§ 901-950,

43 U.S.C. § 1333(b).! After the accident, Movible Off-

shore’s insurer, Argonaut Insurance Co., paid benefits to

the personal representatives and injured survivors under

the LHWCA. Because the LHWCA limits the employer’s

liability to compensation or benefits under the Act, 33

U.S.C. § 933(i), the search then began for a more access‘ble

purse.

The first three suits were brought by Mary Olsen and

Christine Carvin, two widows, and by Gordon Wallace, an

injured employee. Defendants included Shell, manufac-

turers and sellers of the hot water heater and some of its

components, and the builder of the living quarters.

Argonaut Insurance Co. intervened in all three suits and

also filed its own suit in an effort to recover amounts paid

and to be paid in compensation to other employees or their

representatives. In all four suits Shell filed a third-party

complaint against Movible Offshore for indemnity.

After exhaustive proceedings, the trial judge entered

his opinion with respect to liability in these consolidated

* Before 1978, the provision in question was §1333(c).

av

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cases. He acquitted all parties of negligence except Movi-

ble Offshore. He also rejected the two theories of strict

liability asserted against Shell. A judgment in favor of all

defendants followed.

On appeal, we affirmed the district court's ruling

that plaintiffs had no right to recover from Shell for viola-

tions of certain regulations issued by the Secretary of the

Interior pursuant to the authority granted to him by

OCSLA, because the OCSLA provided neither an express

nor an implied right of action. Olsen J, 561 F.2d at

1181-1190. Plaintiffs’ second theory of strict liability was

based on Article 2322 of the Louisiana Civil Code, which

provides:

The owner of a building is answerable for the

damage occasioned by its ruin, when this is caus-

ed by neglect to repair it, or when it is a result of

a vice in its original construction.

In the absence of a controlling precedent of the Louisiana

Supreme Court, we were unable to decide whether Shell

could be held liable under Article 2322. We therefore cer-

tified the question to the Louisiana Supreme Court, Olsen

I, 561 F.2d at 1194, which held that Shell was strictly

liable. Olsen v. Shell Oil Co., 365 So.2d 1285 (La.1977).

After the cases had been returned to us, we resolved

the remaining issues on appeal. Olsen IJ, 595 F.2d 1099.

We upheld the trial judge’s determination that Movible

Offshore was contractually bound to indemnify Shell for

any liability incurred through Movible’s negligence. Jd. at

1103-1104. We affirmed the finding that Movible had been

negligent. Jd. at 1104. And we affirmed the trial judge’s

exoneration of the manufacturer of the valve that was

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installed, the insurance company whose inspector had

recommended the valve that was not installed, and the

manufacturers of certain other components of the water

heater. Jd. at 1104-1105. Finally, we held that Argonaut In-

surance Co. had a right to proceed against Shell although

no formal compensation award had been entered. Jd. at

1105-1106.

On remand the damage issues were tried to a

magistrate acting as special master. See Fed.R.Civ.P. 53.

He entered proposed findings and recommendations. The

district court then filed an opinion adopting the findings

and recommendations with certain modifications. It

entered judgment as follows:

1. Shell was ordered to pay $771,487.67 to Carvin,

$16,000 to Olsen, and $88,092.02 to Wallace, of

which awards Argonaut was to_ receive

$39,674.72, $16,000, and $8,750.91 respectively;

2. Shell was ordered to pay Argonaut a sum equal

to the compensation benefits and medical ex-

penses it had paid on account of the deaths and

injuries of the other Movible Offshore employees;

3. Shell was ordered to assume payment of any

compensation benefits and medical expenses that

Argonaut would have to pay in the future;

4. Movible Offshore was ordered to indemnify

Shell for all the above amounts, and for its at-

torneys’ fees and costs of defense.

In addition, the district court ordered prejudgment in-

terest to be paid on the awards to all plaintiffs. This appeal

by Shell and Movible Offshore followed.

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The OCSLA

We preface our review of error claimed by Shell and

Movible with a reference to the underlying substantive

law. The OCSLA provides:

To the extent that they are applicable and not

inconsistent with this subchapter or with other

Federal laws and regulations of the Secretary ...,

the civil and criminal laws of each adjacent State

... are declared to be the law of the United States

for that portion of the subsoil and seabed of the

outer Continental Shelf, and artificial islands and

fixed structures erected thereon, which would be

within the area of the State if its boundaries were

extended seaward to the outer margin of the

outer Continental Shelf ...

43 U.S.C. § 1333(a)(2)(A).

The OCSLA, as the Supreme Court made clear in

Rodrigue v. Aetna Casualty Co., 395 U.S. 352, 89 S.Ct.

1835, 23 L.Ed.2d 360 (1969), ‘‘deliberately eschewed the ap-

plication of admiralty principles to these novel structures”

and instead applied ‘‘federal law, supplemented by state

law of the adjacent State, ... to these artificial islands as

though they were federal enclaves in an upland State.”’ Jd.

at 355, 89 S.Ct. at 1837. The Court continued:

Since federal law, because of its limited function

in a federal system, might be inadequate to cope

with the full range of potential legal problems, the

Act supplemented gaps in the federal law _

state law through the ‘adoption of State law

the law of tohe United Stptea.’ Under § 4, the od-

ee ee ee Se

A-157

seabed] and artificial islands and fixed structures

erected thereon,’ but only to ‘the extent that they

are applicable and not inconsistent with ... other

federal laws.’

Id. at 357, 89 S.Ct. at 1838. In Rodrigue, the Court held that

the Louisiana wrongful death statute, not the Death on the

High Sea Act, furnished the remedy for two tortious deaths

occurring on fixed offshore oil rigs.

In Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349,

30 L.Ed.2d 296 (1971), the Court developed the teaching of

Rodrigue, holding that the Louisiana statute of limitations

governed personal injury actions under the OCSLA that were

based on Louisiana law: ‘“‘Congress made clear provision for

filling the the ‘gaps’ in federal law; it did not intend that

federal courts fill in those ‘gaps’ themselves by creating new

federal common law.” Jd. 404 U.S. at 104, 92 S.Ct. at 354.

The Court added:

If Congress’ goal was to provide a comprehensive

and familiar body of law, it would defeat that goal

to apply only certain aspects of a state personal

injury remedy in federal court. A state time limita-

tion is coordinated with the substance of the

remedy and is no less applicable under the Lands

Act.

Id. at 103, 89 S.Ct. at 353.

The implication of Rodrigue and Huson is that

whenever an action is based on “surrogate” Louisiana law,”

2 We borrow the term from Judge Brown's opinion in Law v. Sea

Drilling Corp., 510 F.2d 242, 244 (5th Cir.1975). The law governing ail

OCSLA cases is of course federal; the question is whether state law has

been incorporated as federal law.

s

A-158

as are the claims of Olsen, Carvin, and Wallace, Louisiana ,

law provides all aspects of the remedy. More problematical

is the task of classifying the independent action brought by

Argonaut. In one sense, Argonaut’s claim against Shell is

derived from Louisiana law, in that Argonaut seeks to hold

Shell liable for violating Article 2322. In another sense,

Argonaut is proceeding under federal law, because its

federal obligation to pay compensation benefits to the vic-

tims of their survivors is a necessary element of its claim

against Shell. Not surprisingly, we are not the first to con-

front this puzzlement. Another panel in a separate case

from this same explosion has concluded that Argonaut’s

claim against Shell is for ‘‘unjust enrichment”’ under Loui-

siana law as incorporated into federal law by the OSCLA,

rather than a strictly federal claim.

Raymond Louviere, a victim, filed suit in 1973

against the same array <f defendarts now before us. On

defendants’ plea of prescripition, alleging that Louviere’s

claim for personal injuries was barred because the one-year

prescriptive period for tort actions in Louisiana had pass-

ed, the district court dismissed the suit.

We reversed and remanded. The issue on appeal was

whether Argonaut’s independent action seeking reimburse-

ment for compensation benefits (the fourth case involved in

this appeal) interrupted the period of prescription. Defen-

dants argued that it did not, because it ‘‘ ‘does not state

any right or cause of action whatsoever.’ ’’ Louviere v.

Shell Oil Co., 509 F.2d 278, 281 (5th Cir. 1975), cert. denied,

423 U.S. 1078, 96 S.Ct. 867, 47 L.Ed.2d 90 (1976) (quoting

Callender v. Merks, 185 La. 948, 171 So. 86, 87 (La. 1936)).

We disagreed, holding first that § 33 of the LHWCA, 33

U.S.C. § 933, does not provide the sole remedy of an

employer or its insurer against third persons, 509 F.2d at

A-159

282-284, and second that Argonaut s complaint alleged

facts sufficient to support a claim under the Louisiana law

of unjust enrichment. Jd. at 284-285. Thus, Louviere stands

for the proposition that surrogate Louisiana law, not

federal law, provides the basis for Argonaut’s recovery of

compensation benefits and medical expenses from Shell.

We turn now to the error claimed by Shell and Movible

Offshore.

Recovery in Excess of Tort Damages

Shell and Movible Offshore contend that the district

court erred in awarding as damages an amount in excess of

their maximum exposure in direct tort liability to Olsen,

Carvin, Wallace and the other employees or their represen-

tatives. The district court in fact ordered Shell to compen-

ste Argonaut for all amounts it had paid out in LHWCA

oenefits. According to Shell and Movible Offshore, the

LHWCA contemplates one damage award against a

culpable third person and limits that award to the amount

the employee or his representative would be entitled to

recover under applicable tort law. The district court’s

damage award to Argonaut, they contend, violated this

principle of the LHWCA.

As a gloss on the language of § 33 of the LHWCA,

this argument is not without force. Section 33(b) provides

that acceptance of compensation under an award shall

operate as an assignment to the employer of the employee’s

rights of action against third persons. Section 33(e) sets

forth how ‘‘[alny amount recovered by such employer on ac-

count of such assignment”’ shall be distributed. Shell and

Movible Offshore argue that these subsections by implica-

tion limit an employer or insurer’s potential recovery

against third persons on account of a compensation award

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to the amount it could recover by assignment.

Contrary to Argonaut’s suggestion, we do not

believe that Louviere v. Shell Oil Co., 509 F.2d 278 (5th

Cir.1975), has fully resolved this issue against Shell and

Movible Offshore. In Louviere, we held only that § 33 was

not the exclusive remedy of an employer or insurer against

a third person. Jd. at 282-84. Specifically, we held that

Argonaut could sue Shell and the other defendants even

though no formal compensation award had been entered

and it was not a statutory assignee. See also Pallas Shipp-

ing Agency, Ltd. v. Duris, __ U.S. _, __, 103 S.Ct. 1991,

1996, 75 L.Ed.2d __ (1983). We did not decide, however,

whether Argonaut could recover an amount in excess of the

potential tort recovery of the victims or their survivors.

Shell and Movible Offshore’s argument is, however,

foreclosed by the Supreme Court’s decision in Federal

Marine Terminals, Inc. v. Burnside Shipping Co., 394 U.S.

404, 89 S.Ct. 1144, 22 L.Ed.2d 385 (1969). There the Court

held that a stevedore that had paid compensation benefits

to a widow under the LHWCA was not limited by the Act

to recovering from the shipowner the amount recoverable

by the widow in a direct action against the shipowner. The

situation in Burnside, as the Court explained, was as

follows:

Normally the stevedoring contractor is content

with its remedy of subrogation to the rights of the

deceased longshoreman’s representative against

whatever third party may be liable for the death,

usually the shipowner. In this case, however, the

applicable Illinois Wrongful Death Act limited

the amount recoverable by by the decedent's

representative to $30,000, far short of Marine

Terminals’ potential liability of $70,000.

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Id. at 410, 89 S.Ct. at 1148. The Court concluded, ‘‘[W]e can

perceive no reason why Congress would have intended so to

curtail the stevedoring contractor's rights against the

shipowner.”’ Jd. at 413, 89 S.Ct. at 1149.3 Argonaut’s situa-

tion is comparable.* It has sought to recover from Shell an

amount greater than what the victims or their represen-

tatives are entitled to recover as a matter of state tort law.

Bound by the Supreme Court’s decision in Burnside, we

hold that the LHWCA is no bar. See also Pallas Shipping

Agency, Ltd. v. Duris, 51 U.S.L.W. at 4583.

Shell and Movible Offshore identify only one

arguably apposite case. In Hinson v. SS Paros, 461 F.Supp.

219 (S.D.Tex.1978), where a longshoreman fell to his death

as a result of negligence on the part of the shipowners, the

court denied the insurer recovery of the total projected

compensation benefits and limited recovery to the damages

for which the shipowners would be liable to the employer’s

family in an action brought by them. Because the

longshoreman was sixty-six years old at the time of his

death, the expected compensation benefits far exceeded the

wrongful death recovery, as in Burnside and the present

case. 461 F.Supp. at 222-223. The court reasoned that the

1972 amendments to the LHWCA, in particular the addi-

tion of § 905(b), ‘modified Burnside to the extent that

employers or their compensation insurance carriers are

5 In Burnside the Court indicated that the stevedore's right of in-

demnity, if available, would be under federal maritime law. 394 U.S. at

416-417, 420 n. 23, 89 S.Ct. at 1151-1153 n. 23. In the context of the

OCSLA, we recognized that the insurer's remedy was under surrogate

state law. Louviere, 509 F.2d at 284-285.

‘ The district court awarded Mary Olsen only $16,000 because she

had been divorced from the decedent at the time of the accident and he

had been providing little support or comfort to his former family.

Argonaut's compensation obligation to the Olsen family was much

greater than this amount.

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limited to the recovery of compensation benefits paid, as

provided ir § 933, and that in no instance can they recover

more than the injured worker or his beneficiaries.’’ Jd. at

223. The pertinent part of § 905(b) reads as follows:

In the event of injury to a person covered under

this chapter caused by the negligence of a vessel,

then such person, or anyone otherwise entitled to

recover damages by reason thereof, may bring an

action against such vessel as a third party in ac-

cordance with the provisions of section 933 of this

title.... The liability of the vessel under this

subsection shall not be based upon the warranty

of seaworthiness oor a breach thereof at the time

the injury occurred. The remedy provided in this

subsection shall be exclusive of all other remedies

against the vessel except remedies available

under this chapter.

33 U.S.C. § 905(b) (emphasis added). In Hinson the court in-

terpreted § 905(b) not only as abolishing the Sieracki action

for breach of warranty of seaworthiness, but also as

limiting the vessel’s liability to the amount that could be

recovered in an action under § 933.

Whatever its meaning, however, § 905(b) only applies

to vessels. It does not limit the liability of other “third per-

sons’’ who were never bound by the Sieracki doctrine to

begin with. Shell’s fixed oil drilling platform, like the

helicopter in Barger v. Petroleum Helicopters, Inc., 692

F.2d 337, 341 n. 5 (5th Cir.1982), simply is not a “‘vessel’”’

within the meaning of the LHWCA. See Longmire v. Sea

Drilling Corp., 610 F.2d 1342, 1348 (5th Cir.1980); Callahan

v. Fluor Ocean Services, Inc., 482 F.2d 1350, 1351 (5th

Cir.1973). The 1972 LHWCA amendments thus cannot

affect the availability of a recovery in excess of tort

A-163

damages against Shell.®

Inflation

Movible Offshore argues that the district court erred

in following the Louisiana law on inflationary factors in

damage awards, see Edwards v. Sims, 294 So.2d 611, 617

(La.App.1974); Murphy v. Georgia-Pacific Corp., 628 F.2d

862, 869 (5th Cir.1980) (diversity case applying Louisiana

law), rather than “‘federal’’ law. As noted above, the claims

of Olsen, Carvin, Wallace, and Argonaut derive from Loui-

siana law. Huson teaches that when a state remedy is ap-

plicable through the OCSLA, all aspects of that remedy are

applicable, except for ‘‘mere ‘housekeeping rules.’ "’ 404

U.S. at 103 n. 6, 92 S.Ct. at 354 n. 6. ‘‘The federal borrow-

ing of state law under the Lands Act is all-inclusive ...”’

Bonner v. Chevron U.S.A., 668 F.2d 817, 819 (5th Cir.1982).

We have not yet decided the precise issue of whether

the state law on inflation governs in an OCSLA action bas-

ed on surrogate state law. Yet in Evans v. Chevron Oil Co.,

438 F.Supp. 1097, 1104 (E.D.La.1977), aff'd without opi-

nion, 616 F.2d 565, 566 (5th Cir.1980), the district court,

citing Rodrigue, employed the Louisiana rule, which allows

the decreasing purchasing power of the dollar due to infla-

tion to be considered, in making an OCSLA damage award.

On the other hand, in the recent case of Gulf Offshore

> In a somewhat related and spirited argument, Shell also con-

tends that the district court erred in requiring it to assume Argonaut’s

future compensation liabilities. We disagree. Contrary to Shell's pro-

testations, the district court’s order does not force it “to enter the

business of an American casualty insurance company.”’ Shell car pay a

lump sum, which is what it wants to do, to a carrier in return for its

assumption of the obligation to issue the weekly compensation checks.

The district court's order was a pragmatic gesture to judicial economy.

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Co. v. Mobile Oil Corp., 453 U.S. 473, 101 S.Ct. 2870, 69

L.Ed.2d 784 (1981), the Supreme Court was confronted

with the somewhat analogous question of whether Norfolk

& Western R. Co. v. Liepelt, 444 U.S. 490, 100 S.Ct. 755, 62

L.Ed.2d 689 (1980), the federal rule requiring FELA juries

to be instructed on the nontaxability of personal injury

awards, applies to an OCSLA personal injury action based

on Louisiana law. Instead of deciding this question, the

Supreme Court remanded the case to the Texas Court of

Civil Appeals for a determination of what the Louisiana

rule was, and (assuming an inconsistency between the two)

to decide ‘‘whether Liepelt displaces the state rule in an

OCSLA case.” Id. 453 U.S. at 488, 101 S.Ct. at 2880. That

the Supreme Court would remand rather than answering

the question itself suggests that the answer was less than

self-evident.

On remand, 628 S.W.2d 171 (Tex.Civ.App.—

Houston 1982, writ ref. n.r.e.), cert. denied, __ U.S. _, 103

S.Ct. 259, 74 L.Ed.2d 202 (1982), the Texas Court of Civil

Appeals held that state law, although inconsistent with

federal law, had to be followed:

In the instant case OCSLA has borrowed a

remedy provided by the state law of Louisiana: a

cause of action for damages for personal injuries.

We think that when OCSLA borrowed the

remedy, it borrowed the remedy in its entirety. In

other words, OCSLA made the entire state cause

of action applicable federal law, enforceable as

federal law. This conclusion leads to our holding

that OCSLA has borrowed from the law of Loui-

siana and has made applicable federal law in this

case the Louisiana law which makes discretionary

the giving of a jury instruction that damage

awards are not subject to income taxation.

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Id. at 174 (emphasis in original).

We think the Texas Court of Civil Appeals reached

the result required by Rodrigue and Huson. Likewise, we

believe that Rodrigue and Huson dictate that the state rule

on inflation be followed here. Pretending that inflation does

not exist only disconnects the law from reality. Enough

fairy tales float into trials without our adding a judicial

spook. But our view of the wisdom of a rule is not here the

index of its application. That we view the rule as integral

to a tort system is important, however. Accounting for in-

flation has a direct and appreciable impact on the dollar

amount of a plaintiff's recovery; far from being a mere

“housekeeping rule,”’ it is at least as much an aspect of the

state remedy as the state statute of limitations. Indeed, the

Supreme Court’s quotation in Huson from a leading case

on the Erie doctrine points toward choice of law principles

analogous to those prevailing in diversity cases, even

though the Court cautioned in the preceding footnote that

“[t]his is not to imply that a federal court adjudicating a

claim under state law as absorbed in the Lands Act must

function as it would in a diversity case.’’ 404 U.S. at 103 n.

5 & n. 6, 92 S.Ct. at 353 n. 5. Further, to the extent OCSLA

cases travel parallel to the more frequently trod paths of

diversity cases, courts and counsel may with greater

sureness engage in the task of predicting the choice of law.

Finally, observing the essentially unitary character of

these state and federal remedies enhances the probability

of each system’s achieving its risk-distributive goals.

Prejudgment Interest

Both Shell and Movible Offshore contend that the

district court should not have awarded prejudgment in-

terest, citing Berry v. Sladco, Inc., 495 F.2d 523 (5th

~®)

i

A-166

Cir.1974); Aymond v. Texaco, Inc., 554 F.2d 206 (5th

Cir.1977), and Musial v. A & A Boats, Inc., 696 F.2d 1149

(5th Cir.1983). Plaintiffs meanwhile argue that such an

award is expressly permitted by Ellis v. Chevron U.S.A.,

Inc., 650 F.2d 94 (5th Cir.1981). We have the task of seek-

ing common ground for these cases.

In Berry, a personal injury action under the OCSLA,

we upheld a district court’s denial of prejudgment interest:

The tenets of Rodrigue make firm the conclusion

that 28 U.S.C. § 1961 controls the applicable time

period for determining interest in this case. Sec-

tion 1961 provides in relevant part that, ‘interest

shall be calculated from the date of the entry of

the judgment, at the rate allowed by State law.’

(emphasis added) This is a positive statement of

federal law, obligatory in its terms, and as such is

controlling in an action brought under the Lands

Act.

495 F.2d at 528. In Aymond we followed Berry in affirming

a denial of prejudgment interest, noting that ‘‘this action

was in federal court under the Lands Act, not the diversity

statute, in a manner indistinguishable from the Berry ac-

tion, and, as in Berry, there are no gaps in the federal law

on computation of interest to be filled by the Louisiana in-

terest statute.”’ 554 F.2d at 212. Recently, in Musial, we

applied both Berry and Aymond in holding that an OCSLA

plaintiff's claim for prejudgment interest on his LHWCA

award had been properly rejected by the district court:

An award of interest in a suit brought under

OCSLA is governed by federal law. See Berry v.

Sladco, Inc., 495 F.2d 523, 528 (5th Cir.1974).

Hence, pursuant to 28 U.S.C. § 1961 ‘such in-

terest shall be calculated from the date of entry of

A-167

the judgment, at the rate allowed by state law.’ Aymond v.

Texaco, Inc., 554 F.2d 206, 211 (5th Cir.1977). The trial

court’s award of interest is, therefore, affirmed.

Id. 696 F.2d at 1154.

By contrast, in Ellis, an OCSLA wrongful death

case, we upheld a denial of prejudgment interest once

again, but only on the ground that the district court had

“properly exercised its discretion.’’ 650 F.2d at 98. The

panel there read 28 U.S.C. § 1961 as mandating postjudg-

ment interest but also permitting prejudgment interest.

Thus, it concluded that the district court ‘‘could have left

intact its award of prejudgment interest if it found ‘other

principles of law’ which justified the award ...”’ Jd. (quoting

Illinois Central Railroad Co. v. Texas Eastern Transmis-

sion Corp., 551 F.2d 943, 944 (5th Cir.1977)).

We,think Ellis is the better view. Ellis reads the

federal interest statute as permissive on the matter of pre-

judgment interest; Berry and Aymond read it as pro-

hibitory. The problem with the latter reading is that 28

U.S.C. § 1961 governs all civil actions in federal district

courts, Gele v. Wilson, 616 F.2d 146, 148 (5th Cir.1980), ex-

cept diversity cases, Degelos Bros. Grain Corp. uv.

Fireman’s Fund Insurance Co. of Texas, 498 F.2d 1238,

1239 (5th Cir.1974), yet prejudgment interest has frequent-

ly been awarded in nondiversity cases without express

statutory authority (for example, suits in the admiralty).

Indeed, Berry and Aymond appear to contravene the

almost universal view that ‘‘Section 1961 does not by its

silence bar the awarding of prejudgment interest ...”

Bricklayers’ Pension Trust Fund v. Taiariol, 671 F.2d 988,

989 (6th Cir.1982) (citing cases).

A-168

Ellis indicated that an award of prejudgment in-

terest in an OCSLA case might be justified by ‘‘other prin-

ciples of law.’’ We think the Louisiana statute providing

for interest from the date of judicial demand, La.Rev.Stat.

§ 13:4203, is such a principle. Accordingly, we hold that

where, as here, a district court awards prejudgment in-

terest to a prevailing OCSLA plaintiff whose remedy is

based on surrogate state law, the award should not be

disturbed on appeal if supported by that state law.

This holding, we believe, is consistent with the

precepts of Rodrigue and Huson. Prejudgment interest,

and inflationary measures, ought to be regarded as integral

to each other and to the state law remedy, particularly

when the final judgment is being entered, as it is here, more

than a decade after the suits were originally filed. See

General Motors Corp. v. Devex Corp., __ U.S. __, __ n. 10,

103 S.Ct. 2058, 2062-2063, 75 L.Ed.2d __ (1983).§

Recovery for Loss of Love and Affection

and for Grief and Anguish

Shell and Movible Offshore also maintain that the

district court erred in making awards to Christine Carvin

© Our choice between the Berry-A ymond-Musial line of cases and

the Ellis case could be argued to be a choice between two sets of dicta.

That construction is in our view strained. We prefer to address head on

the fact that we have conflicting cases and to state candidly that we

have chosen the Ellis case.

It has been suggested, in dictum, that a panel faced with conflic-

ting panel decisions must follow ‘‘the longer established and more exten-

sive line of precedent.’ Washington v. Watkins, 655 F.2d 1346, 1354

(5th Cir.1981), cert. denied, 456 U.S. 949, 102 S.Ct. 2021, 72 L.Ed.2d 474

(1982). If this rule were applied here, we would note that the Berry-

Aymond-Ellis line of cases contravenes an earlier holding that 28 U.S.C.

§ 1961 does not address prejudgment interest. Louisiana & Arkansas

Railway Co. v. Export Drum Co., 359 F.2d 311, 317 (5th Cir. 1966).

A-169

both for loss of love and affection and for grief and anguish.

In Croce v. Bromley Corp., 623 F.2d 1084, 1094-1095 (5th

Cir.1980), cert. denied, 450 U.S. 981, 101 S.Ct. 1516, 67

L.Ed.2d 816 (1981), we held that Louisiana law does not

permit plaintiffs in a wrongful death action to recover

‘separate monetary awards for loss of love and affection on

the one hand and for sorrow and mental anguish on the

other”’ (emphasis in original).

The question here is the separateness of the awards.

The special master recommended an award of $290,000 for

“loss of love and affection” and an award of $90,000 for

“grief and anguish.’’ The trial judge acknowledged that

these duplicative awards for a single category of loss con-

stituted error under Louisiana law. However, he concluded

that when they were viewed as a single award for loss of

society, the $380,000 total was not ‘‘clearly erroneous.’’ He

therefore approved the entire damage amount.

The district court explained that it was ‘‘willing to

look beyond the labels the master has placed on the awards

herein disputed ...’’ Its intent was clearly to combine the

two sums and treat them as its single award for loss of

society. We cannot say this sum was excessive. We find no

error.

Death of Cynthia Carvin

Finally, Movible Offshore argues that the death of

Cynthia Carvin just prior to judgement should have been

taken into account in calculating the damages for her

father’s wrongful death. Assuming that this point was

preserved, we nonetheless reject Movible Offshore’s claim

of error. In Wakefield v. Government Employees Ins. Co.,

253 So.2d 667 (La.App.1971), writ denied, 255 So.2d 771

A-170

(La.1972), the court reasoned:

If the beneficiary has died by the time that the

court assesses damages, certainly that fact must

be considered in the assessment, because loss of

support and other damages can then be actually

(rather than fictionally) measured.

Id. at 671. In the present case, however, Cynthia Carvin

had reached the age of majority at the time of her death,

which occurred twelve years after the accident. Given this

fact, and the fact that Cynthia Carvin was only one of six

beneficiaries (the others were her four siblings and her

mother), any reduction in the district court’s damage

award would have been minimal. We do not believe the

Louisiana Supreme Court would require recomputation of

a wrongful death recovery under these circumstances. Here

time would feed upon time if we were to find that because

we have taken so long that we must take even longer.

Somewhere in that process we will have lost sight of the

idea that no decision is a decision, if in the past thirteen

years we have not done so already.’

Two additional arguments have been raised on appeal by Movi-

ble Offshore. Movible contends that the district court erred in ordering

it to indemnify Shell not only for the judgment against it but also for

its attorneys’ fees. In Olsen IJ, however, we held, ‘The trial court was

correct in finding that the contract required Movible to indemnify Shell

for attorney's fees and costs.’ 595 F.2d at 1104. Thus, Movible’s appeal

of this point challenges the law of the case. We decline to reconsider our

prior holding.

Movible also argues that a waiver of subrogation in its drilling

contract with Shell prohibits Argonaut from recovering from Shell. The

problems with this argument are threefold. For one thing, this conten-

tion does not appear to have been presented below. Moreover, a waiver

in Movible’s contract with Shell would not bind Argonaut, a nonparty.

Finally, in Louviere this court recognized that Argonaut’s right to

recovery was based on unjust enrichment, not contractual subrogation.

509 F.2d at 284-85.

A-i71

Lest our silence be taken as expression of other than

frustration we pause to note the consumption of thirteen

years to decide these cases, to date. It is not a pleasing

story for counsel, court, or the Congress. This is too long

for widows and children. Without attempting to assess

blame for all the systemic cracks into which these cases

fell, the snail’s pace was not fair. At some point it ceases

to be justice.

In sum, we agree with the district court’s interpreta-

tions of the Longshoremen’s and Harbor Workers’ Com-

pensation Acat, the Outer Continental Shelf Lands Act,

and Louisiana law. We affirm the judgment below, and

with the hope that these cases will now be ending their

thirteen-year odyssey.

AFFIRMED.

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APPENDIX “I”

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

Minute Entry

April 21, 1982

Heebe, J.

MARY OLSEN

AS ADMINISTRATRIX OF THE

SUCCESSION OF KENNETH CIVIL ACTION

MAHANEY, etc., et al.

NO. 70-1240

versus

SECTION B

SHELL OIL COMPANY, et al

CHRISTINE W. CARVIN,

ADMINISTRATRIX OF THE CIVIL ACTION

ESTATE OF, AND WIDOW OF

HER LATE HUSBAND NO. 70-2986

JOSEPH R. CARVIN, SR., etc., et al.

SECTION B

versus

SHELL OIL COMPANY, et al.

FRANK WINSTON BOOKER CIVIL ACTION

and MRS. MINNIE LEONARD BOOKER,

HIS WIFE NO. 71-894

versus SECTION B

SHELL OIL COMPANY, et al

GORDON DAVIS WALLACE CIVIL ACTION

versus NO. 71-1144

A-173

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)

These consolidated actions arose under the Outer

Continental Shelf Lands Act (hereinafter OCSLA). Present-

ly before the Court are the Findings and Recommendation

of the Special Master, appointed to determine the issue of

damages. Teledyne Movible Offshore, Inc., Shell Oil Com-

pany, and Argonaut Insurance Company have made objec-

tions to the master’s findings and recommendation pur-

suant to Rule 53(e)(2), Federal Rules of Civil Procedure.

Teledyne contends the master was in error in the

following respects:

1) by allowing prejudgment interest on the claims

made to the Carvin and Olsen plaintiffs;

2) by considering the effects of future inflationary

trends in assessing damages;

3) by granting separate awards to the Carvin family

for loss of love and affection and for grief and anguish and

in addition, by granting awards in these areas which are ex-

cessive; and

4) by basing his computation of the loss of support to

the Carvin family on the late Mr. Carvin's gross wages.

“

- iin, a aoe

A-174

Shell joins in the first two of Teledyne’s objections.

Shell also makes the following objections:

1) that the discount rate used by the mster, 7.75%,

was too low;

2) that Shell should not be required to reimburse

Argonaut for compensation benefits Argonaut has paid;

and

3) that Shell should not be required to assume

Argonaut’s future compensation liabilities.

Argonaut, the compensation carrier in these con-

solidated cases, makes three objections. They are:

1) the master did not recognize or discuss the claims

of Argonaut Insurance Company presented in Civil Action

No. 71-1265 as it relates to claims other than those of Olsen

and Carvin;

2) the findings and recommendations make no provi-

sions for compensation paid by Argonaut subsequent to

the date of the stipulation or for future compensation

obligations of Argonaut Insurance Company; and

3) Argonaut was not awarded prejudgment interest.

When reviewing objections to the master’s factual

findings, this Court must accept those findings unless they

are ‘‘clearly erroneous.”’ Rule 53(e)(2), supra. See Livas v.

Teledyne Movible Offshore, Inc., 607 F.2d 118 (5th Cir.

1979). The clearly erroneous standard is the same one ap-

plied by an appellate court when reviewing objections to

findings of fact of a district court. N.L.R.B. v. Sequoia

A-175

District Council of Carpenters, 568 F.2d 628 (9th Cir. 1977).

Therefore, the master’s factual findings ‘“‘come here well-

armed with the buckler and shield,’’ Horton v. United

States Steel Corp., 286 F.2d 710, 713 (5th Cir. 1961), and

the party objecting to them must bear the burden of prov-

ing they are ‘‘clearly erroneous.’’ N.L.R.B. v. Crockett-

Bradly, Inc., 598 F.2d 971 (5th Cir. 1979).

I

Defendants Teledyne and Shell object to the

master’s award of prejudgment interest to wrongful death

plaintiffs Carvin and Mahaney. Their contention is based

on an interpretation of 28 U.S.C. § 1961! which would

preclude an award of interest prior to entry of judgment.

Arguing that § 1961 is inconsistent with the Louisiana

Rule which would require the award of prejudgment

interest,” Teledyne and Shell assert the federal statute

must displace the inconsistent state law. See 43 U.S.C. §

1333(a)(2).

We cannot accept defendant's interpretation of 28

U.S.C. § 1961. The statute does not address the issue of

prejudgment interest. It was enacted to insure that in-

terest would be paid from the date of entry of judgment

! Section 1961 of 28 U.S.C. reads, in pertinent part, as follows:

Interest shall be allowed on any money judgment in a civil

case recovered in a district court....Such interest shall be

calc: \ated from the date of the entry of the judgment, at the

rate allowed by State law.

2 L.S.A.-R.S. 12:4203 reads as follows:

Legal interest shall attach from date of judicial demand, on

all judgments, sounding in damages, “ex delicto,"’ which

may be rendered by any of the courts.

A-176

and not to preclude interest prior to that time. Illinois Cen-

tral Railroad Co. v. Texas Eastern Transmission Corp., 551

F.2d 943 (5th Cir. 1977), and Louisiana and Arkansas

Railway Co. v. Export Drum Co., 359 F.2d 311 (5th Cir.

1966).

Briefs submitted by defendants make it clear that the

view this Court takes is not universally accepted. See Ay-

mond v. Texaco, Inc., 554 F.2d 206 (5th Cir. 1977), and Berry

v. Sladco, Inc., 495 F.2d 523 (5th Cir. 1974). In Aymond and

Berry, the Fifth Circuit affirmed the trial court’s denial of

prejudgment interest. The opinions also contain dicta to the

effect that prejudgment interest may not be awarded in an

OCSLA case. However, in Ellis v. Chevron U.S.A., Inc., 650

F.2d 94 (5th Cir. 1981), the court rejected dicta in Aymond

and Berry. Ellis reasoned that the sole purpose of § 1961 was

to provide post-judgement interest. The court then went on

to find that since there was no preclusion to an award of pre-

judgment interest under federal law, the award of such in-

terest in an OCSLA case was within the discretion of the

trial court. In light of prior interpretations of 28 U.S.C. §

1961, see Illinois Central Railroad Co. and Louisiana and

Arkansas railway Co., supra, Ellis would seem to be a bet-

ter reasoned opinion than A ymond and Berry, and this Court

will follow the Ellis decision.

The master felt he was precluded by Aymond and

Berry from awarding prejudgment interest to Gordon

Wallace, the personal injury plaintiff. He also felt he was

compelled, under L.S.A.-R.S. 13:4203 and Louisiana Civil

Code Article 2924, to award prejudgment interest to the

wrongful death plaintiffs. However, in light of the Ellis

decision,? the master was neither precluded from nor

° Ellis was handed down after the magistrate issued his Findings

and Recommendation.

A-177

required to award prejudgment interest to any of the plain-

tiffs. For that reason, this Court rejects the master’s deter-

mination on those issues and will determine for itself

whether the award of prejudgment interest would be pro-

per in the instant case.

These consolidated cases have been filed approx-

imately eleven years ago. During that time there have been

many delays caused by appeals, certification to the Loui-

siana Supreme Court, numerous unique issues of law, etc.,

but the inordinate delays incurred herein are in no way at-

tributable to the plaintiffs. During this same period of

time, Shell has had the use of this money when interest

rates have greatly exceeded the legal rate applicable herein.

Under the circumstances, discretion and wisdom would dic-

tate that an award of prejudgment interest is necessary in

order to fully compensate the claimants and to make them

whole. Sea Land Services, Inc. v. Eagle Terminal Tankers,

Inc., 443 F.Supp. 532 (D.D.C. 1977).

II

Teledyne and Shell contend that under Johnson v.

Penrod Drilling Co., 510 F.2d 234 (5th Cir. 1975), the

master erred when he considered inflationary factors in

determining the amount of damages recoverable in the ins-

tant litigation. Although Penrod reflects the use of infla-

tionary factors, it is not applicable here. ‘‘[FJor federal law

to oust adopted state law, federal law must first apply.’’

Rodrigue v. Aetna Casualty Co., 395 U.S. 352 (1965), at

page 359. After making this statement, Rodrigue went on

to hold that Louisiana's wrongful death statute controlled

the litigation involved in that case because federal admiral-

ty law was not applicable to actions arising on fixed plat-

forms within the area of the Outer Continental Shelf.

A-178

In addition, Johnson v. Penrod Drilling Co., supra,

was a Jones Act case and is not applicable to this litigation

which arose out of an accident on a fixed structure within

the area of the Outer Continental Shelf. There being no ap-

plicable federal law on the issue of inflation, Rodrigue man-

dates that this Court look to Louisiana law which allows

consideration of inflationary factors. See Morgan v. Liber-

ty Mutual Ins. Co., 323 So.2d 855 (La.App. 4th Cir. 1975),

and Evans v. Chevron Oil Co., 438 F.Supp. 1097 (E.D.La.

1977), aff'd 616 F.2d 565 (5th Cir. 1980). Therefore, we con-

clude the master was correct in considering the effects of

inflationary factors in determining the award of damages.

Ill

Teledyne makes two objections to the master’s

awards to the Carvin family for loss of love and affection

and for grief and anguish. It contends the two elements

may not form the basis of two separate awards and that the

awards are excessive. Under Louisiana law, the master er-

red by allowing separate awards to the Carvin family for

loss of love and affection and for grief and anguish. Croce

v. Bromley Corp., 623 F.2d 1084 (5th Cir. 1980). However,

the Court’s inquiry cannot stop there. Even though

separate awards were not appropriate, loss of love and af-

fection and grief are component parts of the broader

category of damages known as “‘loss of society,’’ which is

recoverable under Louisiana law, see Croce, supra, and this

Court will not overturn the award just because it was

mislabeled.

Since the Court is willing to look beyond the labels

the master has placed on the awards herein disputed, the

only issue is whether or not the awards were ex-essive for

the loss of society suffered by the Carvins. The question

A-179

presented by this issue is not whether this Court would

have made the same award but whether th. award made by

the master was “clearly erroneous.”’ Rule 53(e}(2), supra. In

light of the close relationship that ‘existed between Mr.

Carvin and each member of the household,’’ master’s Fin-

dings and Recommendation, at page 13, this Court cannot

say that an award of $380,000 for loss of society to the Car-

vin family is “clearly erroneous.’’ Accordingly, the

master’s determination herein is accepted by this Court.

IV

In addition to the foregoing objections, Teledyne ob-

jects to the master’s determination of the loss of support

to the Carvin family. This objection is based on the conten-

tion that the master relied on the gross wages of the late

Mr. Carvin in determining the amount of loss of support.

See Norfolk Western Railway v. Liepelt, 444 U.S. 490

(1980). Although, at one point in his findings of fact, the

master refers to the decedent’s gross wages, he does not

state, and this Court does not find, that his determination

was based on gross wages. The master received evidence of

Mr. Carvin’s tax liabilities, Transcript of the Proceedings

Before the Special Master, at pages 387-388, and this Court

will not assume that he ignored those considerations. Ac-

cordingly, the master’s determination of loss of support is

accepted by this Court.

V

The master reduced the award of future loss of sup-

port to the Carvin family by 5.75%. He made this reduction

in order to arrive at the present value of the award. Shell

contends that in light of the presently available investment

opportunities the discount rate should have been higher.

A-180

Under OCSLA, the master was required to apply

Louisiana law when determining the amount of damages.

Rodrigue v. Aetna Casualty Co., supra. Recent Louisiana

jurisprudence provides ample support for the discount rate

used by the master. See Cheathem v. City of New Orleans,

378 So.2d 369 (La. 1979); Hebert v. Diamond M Drilling

Co., 385 So.2d 410 (La.App. 1st Cir. 1980); and Lalonde v.

Weaver, 360 So.2d 542 (La.App. 4th Cir. 1978). In those

cases, the Louisiana Supreme Court and Courts of Appeal

relied upon a discount rate of 5%. In addition, as recently

as 1980, the 5th Circuit in Evans v. Chevron, supra, ap-

proved an award which was based on a 6% discount rate.

In light of the Louisiana jurisprudence and the Evans deci-

sion, we cannot say the master’s use of a 5.75% discount

rate was clearly erroneous.

VI

Shell objects to the recommendation by the master

that it be required to reimburse Argonaut for the compen-

sation benefits Argonaut has paid. This objection is based

on Shell’s contention that Argonaut is limited to its com-

pensation lien against the awards made to the wrongful

death and personal injury plaintiffs and that Shell may not

be held liable for any amount which exceeds the amount

awarded to those persons.

Shell’s contention is only partially correct. The

awards made to Christine Carvin, Mary Olsen, and Gordon

Wallace are subject to a lien in favor of Argonaut for the

compensation benefits it has paid. Bloomer v. Liberty

Mutual Insurance Co., 445 U.S. 74 (1980). However, this

lien is not Argonaut’s sole source of reimbursement. In the

event the awards to the compensation recipients are not

sufficient to fully reimburse Argonaut, Shell must make up

A-181

the difference between those awards and the compensation

benefits paid. This independent right of Argonaut to bring

suit for compensation benefits it has paid due to deaths and

injuries arising from the accident involved in the instant

litigation has already been recognized by the Fifth Circuit.

See Olsen v. Shell Oil Co., 595 F.2d 1099, 1105-6 (5th Cir.

1979), and Louviere v. Shell Oil Co., 509 F.2d 278 (5th Cir.

1975).

VII

Somewhat related to the preceding objection is

Shell’s objection to the master’s recommendation that it be

required to assume directly all of Argonaut’s future com-

pensation liabilities. Shell asserts that by accepting such a

recommendation, this Court would “impose an infinite

period for which defendants will be liable to pay damages.”’

Shell claims infinite periods of liability are contrary to the

established view of the courts that prospective damages

should be limited to a definite term (i.e., until maximum

cure in the cse of a seaman receiving maintenance and

cure).

Contrary to Shell’s assertions, the master’s recom-

mendation would not impose an infinite period of liability

on it. Argonaut’s potential liability is limited to the

amounts due the compensation claimants under the Long-

shoremen’s and Harbor Workers’ Compensation Act, 33

U.S.C. § 901, et seg. The recommendations would only re-

quire that Shel! assume this limited liability.

Since the Fifth Circuit and this Court have already

determined that Argonaut has an independent right to

seek reimbursement for the compensation benefits it has

paid, the master’s recommendation is in the best interest of

A-182

judicial economy without any detriment to the parties. If

Shell were not required to assume directly the payment of

these benefits, Argonaut would have to periodically return

to this Court for a judgment requiring reimbursement of

the benefits it pays in the future. In order to avoid this un-

necessary judicial waste, this Court will accept the

master’s recommendation.

VIII

In its first objection, Argonaut contends the master

erred by only recommending that Shell reimburse it for

compensation benefits paid to the Olsen and Carvin plain-

tiffs. The Court agrees with Argonaut. Argonaut has an in-

dependent right of reimbursement and that right cannot be

prejudiced by the failure of some of the compensation reci-

pients to file suit. Louviere v. Shell, supra. Therefore, the

master should have recognized Argonaut's right to receive

reimbursement for the benefits it paid to all compensation

claimants.

IX

Argonaut next objects because it contends there are

no provisions in the master’s recommendations for reim-

bursement of the benefits it has paid and will pay subse-

quent to the stipulation entered into by the parties. Not-

withstanding Argonaut’s contention to the contrary, the

master recommends Argonaut be reimbursed for all com-

pensation benefits it pays up to entry of judgment. A\l-

though this recommendation includes reimbursement for

compensation benefits paid subsequent to the stipulation,

we feel Argonaut should be allowed reimbursement for

compensation benefits paid up to the time of payment of

A-183

this judgment.4 Thereafter, Shell will directly assume pay-

ment of these benefits.

X

Argonaut’s final objection is that the master erred in

not awarding prejudgment interest to it. Howell v. Marm-

pegaso Compania Naviera, 578 F.2d 86 (5th Cir. 1978),

made it clear that an award of prejudgment interest is

within the discretion of the trial court. However, Howell

went on to hold it was in error tor the trial court to award

prejudgment interest to plaintiffs and withhold such an

award from the intervening compensation carrier. Accor-

dingly, the master should have allowed prejudgment in-

terest to Argonaut. Such interest shall be at the legal rate

and shall run from the date of judicial demand on those

compensation payments made prior to judicial demand,

and as to those compensation payments made subsequent

to judicial demand, legal interest shall apply from the date

the compensation benefits are paid.

The Court, after carefully considering the record, the

applicable law, the master’s Findings and Recommenda-

tion, and the objections thereto, hereby approves and

adopts the master’s Findings and Recommendation insofar

as they are not inconsistent with the foregoing.

Accordingly,

IT IS THE ORDER OF THE COURT that plaintiff

Christine Carvin, individually and in her representative

capacity, be, and she is hereby, AWARDED $771,487.67.

* Due to Argonaut's ongoing obligation and the possibility of ap-

peal, the amount of reimbursement owed to Argonaut may change even

after entry of this judgment.

A-184

IT IS THE FURTHER ORDER OF THE COURT

that plaintiff Mary Olsen Haun, in her representative

capacity, be, and she is hereby, AWARDED $16,000.00.

IT IS THE FURTHER ORDER OF THE COURT

that plaintiff Gordon Davis Wallace, be, and he is hereby,

AWARDED $88,092.02.

IT IS THE FURTHER ORDER OF THE COURT

that Argonaut Insurance company, be, and the same is

hereby, AWARDED the following amounts:

a) with respect to its claim for reimbursement of com-

pensation and burial expenses resulting from the death of

Joseph R. Carvin, Argonaut is to be AWARDED

$39,674.72, being the amount paid by Argonaut as of

December 17, 1979, and such other amounts of compensa-

tion which may have been paid by Argonaut to date of pay-

ment of judgment herein, with legal interest as provided in

Section X of this opinion;

b) with respect to its claim for reimbursement of com-

pensation and burial expenses resulting from the death of

Kenneth E. Mahaney (Olsen), Argonaut is to b AWARD-

ED $37,760.92, being the amount paid by Argonaut as of

December 18, 1979, and such other amounts of compensa-

tion which may have been paid by Argonaut to date of pay-

ment of judgment herein, with legal interest as provided in

Section X of this opinion;

c) with respect to its claim for reimbursement of

amounts paid by Argonaut Insurance Company to the

Special Fund resulting from the death of Robert L. Booker,

Argonaut is to be AWARDED $1,000.00, with legal in-

terest from the date of judicial demand;

A-185

d) with respect to its claim for reimbursement of com-

pensation and medical expenses resulting from the injuries

sustained by Raymond D. Louviere, Argonaut is to be

AWARDED $69,302.12, being the amount paid by

Argonaut as of December 12, 1979, and such other

amounts of compensation and medical expenses which may

have been paid by Argonaut to the date of payment of

judgment herein, with legal interest as provided in Section

X of this opinion;

e) with respect to its claim for reimbursement of

amounts paid by Argonaut Insurance Company resulting

from injuries sustained by George M. Parker, Argonaut is

to be AWARDED $2,121.02, with legal interest as provid-

ed in Section X of this opinion;

f) with respect to its claim for reimbursement of com-

pensation and medical expenses resulting from injuries

sustained by Gordon D. Wallace, Argonaut is to be

AWARDED $8,750.91, with legal interest as provided in

Section X of this opinion;

g) with respect to its claim for reimbursement of com-

pensation and medical expenses resulting from injuries

sustained by Charles J. Martinez, Argonaut is to be

AWARDED $62,752.74, of which $26,095.02 was pad in

medical expenses through November 13, 1979, and com-

pensation benefits in the amount of $36,757.72 to January

3, 1980, and such other amounts of compensatin and

medical expenses which may have been paid by Argonaut

to date of payment of judgment herein, with legal interest

as provided in Section X of this opinion.

IT IS THE FURTHER ORDER OF THE COURT

that with respect to amounts awarded Argonaut Insurance

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Company by the judgment herein, resulting from the

deaths of Joseph R. Carvin and Kenneth E. Mahaney

(Olsen) and from injuries sustained by Gordon D. Wallace,

such amounts are to be paid in preference and priority to

and out of any amounts to which individual compensation

beneficiaries may be entitled to under the judgment herein,

provided the remainder of any amount which individual

compensation beneficiaries may be entitled to under the

judgment herein shall bear interest at the legal rate from

the date of judicial demand.

IT IS THE FURTHER ORDER OF THE COURT

that with respect to any amounts of compensation benefits

or medical expenses which Argonaut Insurance Company

may be obligated to pay subsequent to date of payment of

judgment herein and which are caused by the accident in-

volved in this litigation, Shell Oil Company shall assume

such payments in the place of Argonaut.

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APPENDIX “J”

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

MARY OLSEN

AS ADMINISTRATRIX OF THE

SUCCESSION OF KENNETH CIVIL ACTION

MAHANEY, etc., et al.

NO. 70-1240

versus

SECTION B

SHELL OIL COMPANY, et al

CHRISTINE W. CARVIN, AS

ADMINISTRATRIX OF THE CIVIL ACTION

ESTATE OF, AND WIDOW OF

HER LATE HUSBAND NO. 70-2986

JOSEPH R. CARVIN, SR.., etc., et al.

SECTION B

versus

SHELL OIL COMPANY, et al.

FRANK WINSTON BOOKER CIVIL ACTION

and MRS. MINNIE LEONARD BOOKER,

his wife NO. 71-894

versus SECTION B

SHELL OIL COMPANY, et al

GORDON DAVIS WALLACE CIVIL ACTION

versus NO. 71-1144

SHELL OIL COMPANY, et al. SECTION B

ARGONAUT

INSURANCE COMPANY CIVIL ACTION

A-188

versus NO. 71-1265

SHELL OIL COMPANY, et al. SECTION b&b

(CONSOLIDATED CASES)

JUDGMENT

These consolidated cases came on for hearing before

the Honorable Frederick J. R. Heebe, Chief District Judge,

to review the Special Master’s Proposed Findings and

Recommendations with respect to the issue of quantum.

The Court having duly considered the parties’ briefs and

arguments, and having duly rendered a decision affirming

in part and modifying in part the Special Master’s Propos-

ed Findings and Recommendations, and the Court having

granted the motion of Shell Oil Company for entry of judg-

ment against Movible Offshore, Inc., on the third party

complaint,

IT IS ORDERED, ADJUDGED AND DECREED:

1) that there be judgment in favor of Christine W.

Carvin, individually and in her representative capacity,

and against Shell Oil Company for the sum of $771,487.67;

2) that out of such award to plaintiff Christine W.

Carvin, and in preference thereto, Argonaut Insurance

Company be awarded the sum of $39,674.72, said amount

representing those compensation benefits and burial ex-

penses paid by Argonaut Insurance Company as of

December 17, 1979, resulting from the death of Joseph R.

Carvin, together with any such other amounts of compen-

sation benefits which may have been paid by Argonaut In-

surance Company to the date of payment of judgment

herein for the death of Joseph R. Carvin;

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3) that upon payment of said award to Argonaut In-

surance Company, pre-judgment interest be awarded and

assessed on that amount remaining to plaintiff Christine

W. Carvin at the rate of 7% per annum from date of judicial

demand to September 12, 1980, at the rate of 10% per an-

num from September 13, 1980, to September 11, 1981, in-

clusive, and at the rate of 12% per annum from September

12, 1981, until paid;

4) that there be judgment in favor of Mary Olsen

Haun, in her representative capacity, and against Shell Oil

Company for the sum of $16,000.00;

5) that out of such award to plaintiff Mary Olsen

Haun, and in preference thereto, Argonaut Insurance Com-

pany be awarded the sum of $16,000.00, said amount

representing a portion of those compensation benefits and

burial expenses paid by Argonaut Insurance Company as

of December 18, 1979, resulting from the death of Kenneth

E. Mahaney (Olsen);

6) that there be judgment in favor of Argonaut In-

surance Company and against Shell Oil Company for any

and all compensation benefits paid as a result of the death

of Kenneth E. Mahaney and which were not reimbursed to

Argonatu Insurance in 4 5;

7) that plaintiff Gordon Davis Wallace be awarded

the sum of $88,092.02;

8) that out of such award to plaintiff Gordon Davis

Wallace, and in preference thereto, Argonaut Insurance

Company be awarded the sum of $8,750.91, together with

any such other amounts of compensation benefits which

may have been paid by Argonaut Insurance Company to

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date of payment of judgment herein for the injuries sus-

tained by Gordon Wallace;

9) that upon payment of said award to Argonaut In-

surance Company, pre-judgment interest be awarded and

assessed on that sum remaining to plaintiff Gordon Davis

Wallace at the rates specified in § 3;

10) that there be judgment in favor of Argonaut In-

surance Company and against Shell Oil Company for the

amount of $1,000.00, that sum representing those compen-

sation benefits and burial expenses paid by Argonaut In-

surance Company resulting from the death of Robert L.

Booker;

1) that there be judgment in favor of Argonaut In-

surance Company and against Shell Oil Company for the

amount of $69,302.12, said sum representing compensation

benefits and medical expenses paid by Argonaut Insurance

Company as of December 12, 1979, resulting from the in-

juries sustained by Raymond D. Louviere, plus such other

amounts of compensation benefits and medical expenses

which may have been paid by Argonaut Insurance Com-

pany since December 12, 1979, to the date of payment of

judgment herein for the injuries sustained by Raymond D.

Louviere;

12) that there be judgment in favor of Argonaut In-

surance Company and against Shell Oil Company for the

amount of $2,121.02, said sum representing compensation

benefits and medical expenses paid by Argonaut Insurance

Company as a result of the injuries sustained by George M.

Parker;

13) that there be judgment in favor of Argonaut

*\

A-191

Insurance Company and against Shell Oil Company for

compensation benefits and medical expenses paid by

Argonaut Insurance Company as of January 3, 1980,

resulting from the injuries sustained by Charles J.

Martinez;

14) that there be judgment in favor of Argonaut In-

surance Company and against Shell Oil Company for in-

terest on each of the awards enumerated in ¢{ 2, 5, 6, 8, and

10-13 above, at the rate specified in ¢ 3;

15) that defendant Shell Oil Company shall assume

payment of any amounts of compensation benefits or

medical expenses whicch Argonaut Insurance Company

may become obligated to pay subsequent to the date of

payment of judgment herein for the injuries sustained as a

result of the accident involved in this litigation.

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED:

16) that there be judgment in favor of Shell Oil Com-

pany and against third party defendant Teledyne Movible

Offshore, Inc., for full indemnity, including but not limited

to reimbursement for all amounts paid to plaintiffs herein

as personal injury and wrongful death awards and as com-

pensation benefits, amounts paid as reimhursement to

Argonaut Insurance Company, amounts paid as interest

due on the amounts awarded herein, attorney fees, and all

costs of defense of these consolidated actions. The parties

are to reach an agreement on this issue within thirty days

of entry of judgment, and absent such an agreement within

thirty days, the Court ORDERS the inatter resolved by a

hearing before a United States Magistrate.

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New Orleans, Louisiana, this 21st day of May, 1982.

UNITED STATES DISTRICT JUDGE

A-193

APPENDIX “K”

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 82-3363

MARY OLSEN, Etc.,

CHRISTINE W. CARVIN, Etc.

GORDON DAVIS WALLACE,

and ARGONAUT INSURANCE COMPANY,

Plaintiffs-Appellees,

versus

SHELL OIL COMPANY,

Defendant-Appellant-Appellee,

versus

TELEDYNE MOVIBLE OFFSHORE,

Defendant-Appellant.

Appeals from the United States District Court for the

Eastern District of Louisiana

ON SUGGESTIONS FOR REHEARING EN BANC

(Opinion JULY 5, 5 Cir., 1983, __ F.2d _)

(September 26, 1983)

Before GEE, REAVLEY and HIGGINBOTHA\M, Circuit

A-194

Judges.

PER CURIAM:

(X) Treating the suggestions for rehearing en banc as peti-

tions for pannel rehearing, it is ordered that the petitions

for panel rehearing are DENIED. No member of the panel

nor Judge in regular active service of this Court having re-

quested that the Court be polled on rehearing en banc

(Federal Rules of Appellate Procedure and Local Rule 35),

the suggestions for Rehearing En Banc are DENIED.

( ) Treating the suggestions for rehearing en banc as peti-

tions for panel rehearing, the petitions for panel rehearing

are DENIED. The judges in regular active service of this

Court having been polled at the request of one of said

judges and a majority of said judges not having voted in

favor of it (Federal Rules of Appellate Procedure and Local

Rule 35), the suggestions for Rehearing En Banc are

DENIED.

ENTERED FOR THE COURT:

United States Circuit Judge