Petition for Writ of Certiorari — Union Texas Petroleum Corp. v. State Service Co.

Supreme Court brief1990

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PUG Ww 4 | FILED

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0 | JUL S yy

* | JOSEPH F. SPANIOL, UR,

In The CLERK

Supreme Court of the United-States-

October Term, 1989

UNION TEXAS PETROLEUM CORPORATION, AGIP

PETROLEUM COMPANY and MINATOME

CORPORATION,

Petitioners,

versus

P L T ENGINEERING, INC., STATE SERVICE

COMPANY, INC., POWER WELL SERVICE, INC.,

GULF ISLAND-IV, BROWN & ROOT USA,

INC. and SUB SEA INTERNATIONAL, INC.,

Respondents.

»%

v—

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Ropert T. JORDEN

Patrick W. Gray*

CHARLES B. GriFFIS

GEORGE ARCENEAUx III

Liskow & Lewis

822 Harding Street

P.O. Box 52008

Lafayette, Louisiana 70505

(318) 232-7424

Attorneys for Union Texas

Petroleum Corporation, Agip

Petroleum Co. Inc. and Minatome

Corporation

*Counsel of Record

july 5, 1990

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Whether Section 4 of the Outer Continental Shelf

Lands Act, 43 U.S.C. § 1333, or federal maritime law is

applicable to individual contracts for specific activities

performed in a maritime setting on the high seas in

connection with mineral production from the Outer Con-

tinental Shelf.

2. Whether Section 4 of tne Outer Continental Shelf

Lands Act, 43 U.S.C. § 1333, precludes private persons

from freely choosing the law to be applicable to their

contracts in conformity with Louisiana law, where no

public policy is violated by the choice of law stipulation.

3. Whether Section 4 of the Outer Continental Shelf

Lands Act, 43 U.S.C. § 1333, operates to extend the

boundaries of a Louisiana parish to the outer limits of the

Outer Continental Shelf for administrative purposes in

connection with lien recordation and enforcement.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ...........-.0ceceeeeeees i

TABLE OF CONTENTS..........0.c0cecceececeeees i

TABLE OF AUTHORITIES............c0ce0ce0eeee. iv

OPINIONS BELOW............-c0cccceeeeueeeees 2

JURISDICTION... ....sccecccrcecdcuedseeeuenes 2

STATUTORY PROVISIONS INVOLVED...........-. 2

STATEMENT OF THE CASE............2..00e0000 3

REASONS FOR GRANTING THE WRIT ........... 8

1. The decision below raises important questions

concerning both the proper method for analysis

and the characterization of contracts for deter-

mination of whether federal maritime law or

the law of the adjacent state through OCSLA

will govern the rights and liabilities thereunder

Lesereenswuns 66684664550 5 Seen ea eee 10

The decision below raises important questions

concerning the statutory construction of

OCSLA with regard to whether the Act oper-

ates to invalidate choice of law provisions of

contracts which are favored by law and contra-

vene nO public POUEY. 24.0665 66ccdenwesssneees 18

3. The decision below construes OCSLA so as to

create a legal fiction for compliance with Loui-

siana statutory recordation requirements, the

effect of which constitutes judicial legislation

and violates the provisions of OCSLA itself... 23

CONCLAISIIN «os cs0ccknecatusussUsheeneeeee eee 27

ili

TABLE OF CONTENTS - Continued

APPENDICES:

APPENDIX A -

APPENDIX B -

APPENDIX C -

APPENDIX D -

APPENDIX E -

APPENDIX F -

APPENDIX G -

APPENDIX H -

Page

Opinion, Union Texas Petroleum

Corporation v. PLT Engineering, Inc.,

895 F.2d 1043 (Sth Cir. 1990). .App.

Memorandum Ruling, Union Texas

Petroleum Corporation v. PLT Engi-

neering, Inc., United States District

Court, Western District of Louisi-

ana, Lafayette-Opelousas Division,

Docket No. 87-0521 “L”, March 10,

Memorandum Ruling, Union Texas

Petroleum Corporation v. PLT Engi-

neering, Inc., United States District

Court, Western District of Louisi-

ana, Lafayette-Opelousas Division,

Docket No. 87-0521 “L”, May 18,

DR RE NAS bE 0 060 Gass eee eeees App.

The Outer Continental Shelf Lands

Act, 43 U.S.C. § 1333......... App.

Louisiana Revised Statutes, Title

ae ka ck 8s App.

I ea App.

Louisiana Revised Statutes, Title

SIT E55 6 xe 5 6466446605504 App.

Opinion, Lewis v. Glendel Drilling

Company, 598 F.2d 1083 (5th Cir.

SEES Cg NK 545555550050 App.

TABLE OF AUTHORITIES

Page

Cases:

Andrepont v. Acadia Drilling Co., 225 La. 347, 231

eee ee eey eect eee rere re ee 20

Boudreaux v. American Workover, Inc., 664 F.2d 463

(Sth Cir. 1981), cert. denied, 459 U.S. 1170 (1983).... 13

Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)..20, 21, 22

Corbitt v. Diamond M. Drilling Co., 654 F.2d 329

See TaN SUI oo os ee Cane ecb n hs KauRansboueees 11

Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423

0 eer pee re Pee rn CE Or eee ee 20

Delhomme Industries, Inc. v. Houston Beechcraft, Inc.,

GOP Tia DOGP COR Cae TIER on in nsec cesescscess 19

Fine v. Property Damage Appraisers, Inc., 393 F.

UN. TOS GE TAEM. FeG ii 5 wn nc ccccscsssncnancess 20

Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473

oo) ee ey rt ere Teer er ere 20, 25

Harris v. Waikane Corp., 484 F. Supp. 372 (D.

PON SUD cc'c sear ene bwesetweGeesesae sues anradeus 20

Herb’s Welding, Inc. v. Gray, 470 U.S. 414 (1985) ..13, 16

Kossick vu. United Fruit Co., 365 U.S. 731 (1961)....12, 15

Laredo Offshore Constructors, Inc. v. Hunt Oil Co.,

FOR Te Se CUR AE POOP Ride cx esdcgabacavas’s 14

Lewis v. Glendel Drilling Co., 898 F.2d 1083 (5th Cir.

1990)

Matte v. Zapata Offshore Co., 784 F.2d 628 (5th Cir.),

cert. denied, 479 U.S. 872 (1986)

TABLE OF AUTHORITIES - Continued

Page

Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207

GUUED sx vukno05600os cab sbausunuenebukeneeseeeun 12, 15

Pippen v. Shell Oil Co., 661 F.2d 378 (5th Cir. 1981) .... 13

Richards v. United States, 369 U.S. 1 (1962)........... 21

Rodrigue v. Aetna Casualty and Surety Co., 395 US.

PO CON cc iea iG cR ee ee ves eens ahawatboen ees 12, 15

Rodrigue v. LeGros, Docket No. 89-C-2828 (La.

SUNED Gi, TE os ka vvgbcnciGecuudeuscenaebeuanees 13, 22

Smith v. Brown & Root Marine Operators, 243 F.

Supp. 130 (W.D.La. 1965), aff'd, 376 F.2d 852 (Sth

RR BOD nc ch ued kab c0dgeeesaesbeRabeeseeeknbnes 16

Southport Petroleum Co. of Delaware v. Fithian, 203

Lm. GD, TS SOG FEZ CIDES) oo ic ceccccacesccsedens 24

St. Mary Iron Works, Inc. v. McMoran Exploration

Co., 802 F2d 809 (Sth Cir. 1986), vacated on

rehearing, 809 F.2d 1130 (5th Cir. 1987)............ 24

State ex rel. Guste v. Simoni, Heck & Associates, 331

Oe GO GE. FPO es i nc onccscesscasaun Sree 20

The Murphy Tugs, 28 F. 429 (E.D.Mich. 1886)......... 16

Theriot v. Bay Drilling Corp., 783 F.2d 527 (Sth Cir.

PODS v6 ouch scdcveensndsaneaWhaseddan abeeenseeeses 13

Thurmond v. Delta Well Surveyors, 836 F.2d 952 (Sth

GE, TOD oc cinsvesnssuinceessabtssseveuncnsass 12, 13

Transcontinental Gas Pipe Line Corp. v. Mobile Dril-

ling Barge, 424 F.2d 684 (5th Cir.), cert. denied,

8 | Teer eee er rer rer errs 11

TABLE OF AUTHORITIES - Continued

Page

Twin City Pipe Line Co. v. Harding Glass Co., 283

EE 64) 55 544 00a WRK Ke eee ORK hh des 0s ans 20

Wooton v. Pumpkin Air, Inc., 869 F.2d 848 (5th Cir.

EECA 5 ceu2ca cts a0 cchne shack OVE se Fak conway cis 22

STATUTES:

NE EN Sino 544s 60 Ks OARS LEA CAREER KaoA 2

CV ins oa nt adabactens Kasson cknkeekes 7

ee MEE 35 65 Sho Sy-as0ayckhanseeeedseueean’ 21

Se reer nn ree arr e 14

EEN ee ee arr eS Sey ee neg He 3

ae MOPED 5 5h. 00 0500000 baa KCn nese mROO 19

Gee WOUERIEEDS bcs wane nbcencanenarscoannsunse 25

ee rer rrr rey ree 7

i MS sass kv haweccccswuawsbaunkeannees 19

La. Civ. Code arts. 1978-82 (1984)................... 20

ES 60 Ci X65 «sR SSAaY AREA RECS 3, 4, 18, 24

oa dn as KL ARAL AAR ER AKRR ORAS EN eee 3, 24

SS 5 tt |) rn eee sana e eens 23

a ER ee rT ener:

OTHER AUTHORITIES:

1 E. Jhirad, A. Sann, B. Chase & M. Chynsky,

Benedict on Admiralty § 182, at 12-4 (7th ed.

ES Shas 5 Khas Adee wnee dc kekkenn thane ee t2, 15, 26

Vii

TABLE OF AUTHORITIES - Continued

Page

H.R. Rep. No. 590, 95th Cong., 1st Sess. 126 (1977),

reprinted in 1978 'J.S. Cong. & Admin. News

BGT, BORD ss ccncccnecccdceasesnsscacsscesessseses 26

S.Rep. No. 411 of the Committee on Interior and

Insular Affairs, 83d Cong., Ist Sess., 2............ 11

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In The

Supreme Court of the United States

October Term, 1989

—

UNION TEXAS PETROLEUM CORPORATION, AGIP

PETROLEUM COMPANY and MINATOME

CORPORATION,

Petitioners,

versus

P L T ENGINEERING, INC., STATE SERVICE

COMPANY, INC., POWER WELL SERVICE, INC.,

GULF ISLAND-IV, BROWN & ROOT USA,

INC. and SUB SEA INTERNATIONAL, INC.,

Respondents.

—_

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

—

The petitioners, Union Texas Petroleum Corporation,

Agip Petroleum Company and Minatome Corporation,!

respectfully pray that a writ of certiorari issue to review

' Pursuant to Rule 29.1, a list naming all parent companies

and subsidiaries of each corporation was included in the

Application for Extension of Time to File Petition for Writ of

Certiorari previously filed on May 23, 1990, under Application

No. A-833.

the judgment and opinion of the United States Court of

Appeals for the Fifth Circuit, entered in the above-enti-

tled proceeding on March 7, 1990.

OPINIONS BELOW

The opinion of the United States Court of Appeals for

the Fifth Circuit is reported at 895 F.2d 1043 (Sth Cir.

1990), and is reprinted in Appendix A, infra. The mem-

orandum rulings of the United States District Court for

the Western District of Louisiana (Duhe, J.), dated March

10, 1988 and May 18, 1988, are unreported, and are

reprinted in Appendices B and C, infra, respectively.

—

JURISDICTION

On March 7, 1990, the Fifth Circuit entered its judg-

ment and opinion affirming the district court’s ruling

granting respondents’ Motions for Summary judgment.

No petition for rehearing was sought. On May 24, 1990,

Justice White granted petitioners’ application for an

extension of time and extended the time for filing a

petition for writ of certiorari to and including July 5,

1990. The Court has jurisdiction under 28 U.S.C.

§ 1254(1).

STATUTORY PROVISIONS INVOLVED

Section 4 of the Outer Continental Shelf Lands Act

(“OCSLA”), 67 Stat. 462 (1953) (codified as amended at 43

U.S.C. § 1333), “Laws and regulations covering lands.”

The entirety of this statutory provision is reprinted in

Appendix D, infra.

Louisiana Statutes Annotated - Revised Statutes,

Title 9:4861, “Privilege for labor, services, or supplies.”

The entirety of this statutory provision is reprinted in

Appendix E, infra.

Louisiana Statutes Annotated - Revised Statutes,

Title 9:4862, “Preservation and ranking of privilege.” The

entirety of this statutory provision is reprinted in Appen-

dix F, infra.

Louisiana Statutes Annotated — Revised Statutes,

Title 49:6, “Gulfward boundary of coastal parishes.” The

entirety of this statutory provision is reprinted in Appen-

dix G, infra.

STATEMENT OF THE CASE

On August 15, 1986, Union Texas Petroleum Corpora-

tion (“UTP”) entered into an offshore construction con-

tract (the “Construction Contract”) with PLT Engineering,

Inc. (“PLT”) for the design, fabrication and installation of

an underwater gas transportation line from a platform

owned by UTP, Agip Petroleum Co. Inc. and Minatome

Corporation and operated by UTP in Vermilion Area

Block 237, over the Outer Continental Shelf (“OCS”) off

the coast of Louisiana, to a side-tap in the Bluewater

Pipeline in Vermilion Area Block 225, also on the federal

OCS off the coast of Louisiana.

In order to perform its obligations to UTP under the

Construction Contract, PLT entered into contracts with

Brown & Root U.S.A., Inc. (“Brown & Root”), State Ser-

vice Company, Inc. (“State Service”) and Sub Sea Interna-

tional, Inc. (“Sub Sea”) (the “Subcontracts”). In

connection with the services it agreed to provide under

its contract with PLT, State Service contracted with Power

Well Service, Inc. and Gulf Island-IV (collectively “Power

Well”). Each of the subcontractors was called upon by

contract to perform certain specific tasks in connection

with the construction of the line, which was fabricated on

a vessel designed for that purpose, then laid upon and

buried in the seabed. At issue herein is an in rem judg-

ment granting liens in favor of Brown & Root, State

Service, Sub Sea and Power Well, against certain proper-

ties belonging to UTP and its partners on the OCS,

including their mineral lease and pipeline right-of-way,

pursuant to LSA-R.S. § 9:4861 (the “Lien Act”). See

Appendix E, infra. |

Both the Construction Contract between UTP and

PLT and the Subcontracts were provided by PLT and all

were virtually identical. Each is in the same format, is

identified in the same manner as “Contract For Union

Texas Petroleum Vermilion Pipeline Project Fabrication,

and Installation of Pipeline,” and each contract contains

the same critical stipulation. Article 21.1 of Exhibit A of

each contract provides:

If the work to be performed pursuant to this

Contract is conducted in whole or in part over

the Continental Shelf or in navigable water then

this Contract shall be governed and construed in

accordance with the General Maritime Laws of

the U.S. If the work to be performed is con-

ducted on land, then the Laws of the State of

Texas shall govern the provisions hereof.

Thus, each contract at issue contains a provision requir-

ing application of General Maritime Law to the work

performed thereunder over the Outer Continental Shelf.

Notwithstanding this stipulation, each of the claimants

asserted a claim under the Lien Act for the amount due

under its respective contract, on the basis that the law of

Louisiana provides a lien for the types of services per-

formed under that contract.

Under its contract, Brown & Root was obligated to

provide the vessels, personnel, machinery and equipment

necessary to fabricate and install the approximately

three-mile long submarine pipeline in one hundred

twenty-five feet of water. The focal point of the entire

operation involved the mobilization of a special purpose,

fully-manned, two hundred ninety foot long by seventy-

two foot wide “Pipe Lay and Pipe Bury Barge,” the

BAR-278. The mobilization also included support vessels,

including a tug boat, crew boat, pipe barge and the

divers, diver tenders and such members of the crews of

the vessels as were necessary. Record at 323. The work

performed by Brown & Root was done from those vessels

over the OCS and those workers invelved in the project

ate, slept and worked on or from the various vessels.

Record at 431. The work that was not actually performed

on the barge or other vesseis, to a large degree, involved

transportation of labor, materials and supplies to the

work site and divers working on the floor of the Gulf of

Mexico in connection with the burial of the line. Record at

585. Brown & Root was eventually discharged from the

job and its contract was terminated when high seas and

weather related down-time prevented the efficient and

economical completion of its task. Record at 975, 980-81,

987-89.

State Service contracted with PLT to provide con-

struction vessels and diving services to the offshore

pipeline project. The contract called for State Service to

mobilize the necessary vessels, manpower, equipment

and diving services to perform the undersea connection

of the line to the UTP platform at one end and the

Bluewater Pipeline at the other. State Service was also

obligated to test and de-water the line. Record at 75-76.

When weather caused Brown & Root to be removed from

the operation, State Service provided divers to do reme-

dial burial work on the line. Record at 666. The work was

centered around and performed from vessels over the

OCS or by divers in the sea. Some of State Service’s work

was done on the ocean floor, while some of it was per-

formed by divers in the ocean itself at or near a riser

attached to the underwater leg of the UTP platform.

Record at 767-71. The workers ate on, slept on, and

worked from the various vessels. Record at 431. Power

Well’s sole contribution to the project was to provide the

vessel, the Gulf Island-IV, under an agreement with State

Service. Power Well had no direct contract with PLT.

Record at 285-86, 302-07.

Sub Sea contracted to provide diving personnel with

support equipment and vessels. Record at 30-31, 624. The

divers were hired to inspect the work done by the other

subcontractors in order to insure that they complied with

UTP’s contractual specifications. Those divers ate and

slept on the vessels provided by their employer, Sub Sea,

and worked from and upon those vessels. Record at 431,

624.

As a result of these various contractual undertakings,

the underwater line was eventually completed and

tested, then accepted by UTP. However, through commu-

nications with one or more of PLT’s subcontractors, UTP

became aware of the fact that PLT had not been paying its

subcontractors. For that reason, and in accordance with

the contract between it and PLT, UTP withheld

$420,045.59 from the amount due under the contract. At

the time at which that money was withheld, UTP had

already paid PLT $1,340,830.35 for services performed

under the Construction Contract. UTP instituted proceed-

ings in the District Court as an interpleader action to

enable PLT and its subcontractors to determine how the

sum withheld should be allocated among those entities.

Each of the subcontractors answered and filed counter-

claims against petitioners asserting separate liens for the

work which they each performed.

After cross-motions for summary judgment were

filed and considered, the District Court held that the

choice of law provisions contained in the contracts were

unenforceable, that federal admiralty law was inapplica-

ble to the facts as not constituting traditional maritime

activities, and that Louisiana and federal recordation

requirements for liens had been sufficiently complied

with. Appendix B, infra. Jurisdiction was asserted under

43 U.S.C. § 1349(b)(1) and 28 U.S.C. § 1331. For reasons

which vary somewhat with the District Court, a panel of

the Fifth Circuit Court of Appeals affirmed the holding of

the District Court. Appendix A, infra. Petitioners seek

review of that decision through this Petition for Writ of

Certiorari.

REASONS FOR GRANTING THE WRIT

This Court should grant certiorari to review the deci-

sion of the Fifth Circuit because that opinion involves the

construction and application of OCSLA with regard to

important issues arising from offshore mineral explora-

tion and production. In the first instance, the decision

calls into question the proper standards and analysis for

determining whether a contract related to offshore min-

eral production will be characterized as maritime or non-

maritime for purposes of application of federal maritime

law or state law under OCSLA. Additionally, the opinion

raises the question of whether OCSLA was intended to

exclude the application of the adjacent state’s choice of

law rules, with the result that parties are effectively

denied the right granted under state law to select the law

to govern their contract, even in the instance in which no

public policy is violated. Finally, the Fifth Circuit has

construed OCSLA in combination with a Louisiana stat-

ute to create a legal fiction which circumvents the strict

statutory lien recordation requirements of Louisiana law

and which itself is inconsistent with the terms of OCSLA.

The principal body of law in question, the law appli-

cable to the characterization and construction of contracts

related to offshore mineral production, is one presently

fraught with conflicts and inconsistencies resulting from

various decisions by this Court and the Fifth Circuit, the

court most often presented with cases in this area. As a

consequence of opinions arising from the personal injury

context and from the application of statutes other than

OCSLA, the law in this area is in a state of confusion,

marked by conflicting lines of cases based upon question-

able authority and by the lack of consistent standards for

analysis and reasoning. The resulting uncertainty over

whether maritime law, OCSLA, or the law selected by

contract will apply to a given contract or activity has

serious and far-reaching consequences for all those con-

nected with the offshore oil and gas industry, especially

as to the rights and liabilities of those parties and the

causes of action and remedies available to them in con-

nection therewith.

Both the importance of the issues presented and the

question of the continuing validity of the authorities

relied upon herein were discussed at length in the subse-

quent Fifth Circuit decision in Lewis v. Glendel Drilling

Co., 898 F.2d 1083 (5th Cir. 1990) (reprinted because of its

importance in the consideration of this writ application in

Appendix H, infra). Noting the uncertainties existing in

both the areas of law concerning characterization of con-

tractual liabilities arising from offshore mineral explora-

tion and the effect of choice of law clauses contained in

such contracts, the Fifth Circuit itself acknowledged that

“these inconsistent lines of authority” have resulted in “a

serious legal conundrum,” and acknowledged the need

for a uniform approach and standards to be established

by this Court in the following summary:

Moreover, for purposes of interpreting the reach

of federal maritime law, the relative importance

that one attaches to the use of “vessels” in off-

shore oil exploration, the dissimilarity between

such exploration and traditional maritime con-

cerns, the impact of potential harm to maritime

commerce, and the need for uniformity are mat-

ters that have not been settled by the Supreme

Court or our court.

898 F.2d at 1087; p. App. 55, infra. As is evident, this

matter concerns questions in terms of the interpretation

and administration of the OCSLA having significant

impact upon the offshore mineral industry, and are

clearly of such a recurring nature as to require an analysis

and formulation by this Court of precedential guidelines.

Based upon the standards previously set forth by this

Court and in the applicable decisions of the Fifth Circuit,

it is submitted that the court erred in its findings in the

present matter that maritime law was not applicable to

the contracts at issue, that the choice of law stipulations

contained in those contracts were pretermitted by

OCSLA, and that Louisiana lien laws were applicable and

were complied with herein.

1. The decision below raises important questions

concerning both the proper method for analysis

and the characterization of contracts for deter-

mination of whether federal maritime law or the

law of the adjacent state through OCSLA will

govern the rights and liabilities thereunder.

The question of determining what law is to be appli-

cable to the various causes of action which may arise in

connection with the exploration and production of min-

erals offshore and the related interplay between maritime

law and state law as applied through OCSLA, is a recur-

ring one and one over which this Court has repeatedly

exercised jurisdiction. In the present case, the narrow

issue of the proper characterization of the individual

contracts as being maritime or non-maritime in nature

and the resultant determination that the law of admiralty

or OCSLA would apply is now apparently subject to tests

of conflicting standards drawn from prior jurisprudence

arising in the personal injury, property damage or indem-

nity contexts. The policies of OCSLA and the efforts by

the courts to implement them in personal injury and

other “social law” contexts have created problematic pre-

cedents for the determination of commercial contract dis-

putes. Both the analysis employed and the finding

reached in the instant case determining that the contracts

at issue were non-maritime in nature evidence the confu-

sion in the law and the need for uniform guidelines in the

administration of OCSLA with regard to contracts related

to mineral production. Most critically, the result, purpor-

tedly dictated by a consideration of Congress’ goal to

provide a body of law for the workers on “artificial

islands” constructed on the offshore seabed, ignores the

paramount goal of not affecting the high seas as high-

ways of commerce. See S.Rep. No. 411 of the Committee

on Interior and Insular Affairs, 83d Cong., Ist Sess., 2

(“OCSLA jurisdiction does not in anywise affect the char-

acter as high seas of the waters above [the] seabed and

subsoil nor their use with respect to navigation and fish-

ing.”).

Background

The controlling premise here is the established prin-

ciple that the construction of a maritime contract will be

governed by maritime law. Corbitt v. Diamond M. Drilling

Co., 654 F.2d 329, 332 (5th Cir. 1981); Transcontinental Gas

Pipe Line Corp. v. Mobile Drilling Barge, 424 F.2d 684, 691

(Sth Cir), cert. denied, 400 U.S. 832 (1970). The implemen-

tation of OCSLA was not intended to displace the appli-

cation of maritime law to traditional maritime activities

on the OCS. Offshore Logistics, Inc. v. Tallentire, 477 U.S.

207, 218 (1986). The purpose of OCSLA was “to define a

body of law applicable to the seabed, the subsoil, and the

fixed structures ... on the outer Continental Shelf,” and

to apply federal law, supplemented by the state law of the

adjacent state, to those fixed structures and the seabed as

though they were “federal enclaves in an upland State.”

Rodrigue v. Aetna Casualty and Surety Co., 395 U.S. 353, 355

(1969). The limitations on the scope of OCSLA were fur-

ther defined by this Court in the Tallentire decision, in

which the Court rejected the attempt to extend OCSLA

beyond the area defined by the statute, requiring that it

not be construed in a manner which would affect the high

seas, even as to injuries to OCSLA-covered platform

workers on the high seas. Id. at 218.

The traditional test for determining whether a partic-

ular contract may be characterized as maritime was

stated in this Court’s decision in Kossick v. United Fruit

Co., 365 U.S. 731 (1961), as “whether the transaction

relates to ships and vessels, masters and mariners, as the

agents of commerce.” /d. at 736. In fact, as noted by the

Fifth Circuit, the development of offshore oil production

has necessitated an expansion of both maritime law and

of the already broad definition of a maritime contract.

Thurmond v. Delta Well Surveyors, 836 F.2d 952, 954 (5th

Cir. 1988); see also, 1 E. Jhirad, A. Sann, B. Chase & M.

Chynsky, Benedict on Admiralty § 182, at 12-4 (7th ed.

1985).

a es

In the context of offshore mineral production, appli-

cation of these general definitions has not been without

difficulty, and divergent lines of authority have arisen,

both of which are cited as authority by the Fifth Circuit in

the present opinion. In the first of these, oil and gas

drilling on navigable waters aboard a vessel was held to

be maritime commerce, with the result that the contract

focused upon the use of a vessel in a maritime transac-

tion, and thus was a maritime contract governed by mar-

itime law. See Theriot v. Bay Drilling Corp., 783 F.2d 527,

538-39 (5th Cir. 1986); Boudreaux v. American Workover,

Inc., 664 F.2d 463, 466 (5th Cir. 1981), cert. denied, 459 US.

1170 (1983); Pippen v. Shell Oil Co., 661 F.2d 378, 384 (5th

Cir. 1981); see also, Rodrigue v. LeGros, Docket No. 89-

C-2828 (La. June 4, 1990). However, that analysis and

result were called into question below because of the

opinion of this Court in Herb’s Welding, Inc. v. Gray, 470

U.S. 414 (1985). There, in considering the question of

coverage under the Longshoremen’s & Harbor Workers’

Compensation Act for non-vessel workers, the Court

focused upon the specific tasks performed by those plat-

form workers, and concluded that mineral exploration

and development of the Continental Shelf “are not them-

selves maritime commerce.” Id. at 425. In a subsequent

Fifth Circuit decision, Thurmond v. Delta Well Surveyors,

supra, a case which has been considered for practical and

precedential purposes to be indistinguishable from

Theriot, the Fifth Circuit found that the principal obliga-

tion of the contract was non-maritime because the cause

of action arose out of the performance of a non-maritime

obligation, t.e., well-servicing operations performed from

a vessel. Importantly, in a concurring opinion, Judge Gar-

wood notes the inconsistency in the Fifth Circuit’s

opinions in this area, and the fact that the separate lines

of cases in the area fail to consider or cross-cite each

other. Similar concerns are expressed in Lewis v. Glendel

Drilling Co., 898 F.2d at 1086-88; p. App. 52-57, infra.

The case principally relied upon as authority by the

Fifth Circuit herein, Laredo Offshore Constructors, Inc. v.

Hunt Oil Co., 754 F.2d 1223 (5th Cir. 1985), involved the

determination of whether a single contract for the con-

struction of a well platform on OCS waters was maritime.

The Fifth Circuit found that, in the context of oil and gas

exploration on the OCS, maritime law would apply “if

the case has a sufficient maritime nexus wholly apart

from the situs of the relevant structure in navigable

waters.” Id. at 1230. The operations there involved the use

of vessels, but the court went to great lengths to specify

that the cause of action at issue grew only from that

portion of the contract that related to actual platform

construction, and not the other provisions in the perti-

nent contract relating to diving services, etc. The court

found that since OCSLA is made expressly applicable to

“platform construction,” 43 U.S.C. § 1331(1), OCSLA

jurisdiction applied.

Argument

All of the cited cases involve the use of vessels on the

OCS in relation to mineral production, and draw into

focus the difficulties presented in applying to contractual

issues the precedents of this Court interpreting the intent

of OCSLA’s provisions in contexts other than maritime

contracts. In the first instance, it appears that this Court

has recognized that it was not the intent of Congress to

supplant existing admiralty rules. Tallentire, 477 U.S. at

218. Rather, the intent was to direct the application of

specific bodies of law to areas to which no law applied

naturally, t.e., “artificial islands.” Rodrigue, 395 U.S. at

361. Thus, the Fifth Circuit properly stated below that in

order for OCSLA to incorporate state law: (a) the contro-

versy must arise in an OCSLA location; (b) federal mar-

itime law must not apply of its own force; and, (c) the

state law must not be inconsistent with OCSLA. Admit-

tedly, many of the activities at issue here were performed

on the seabed and the pipeline was buried therein, and

thus those activities can be said to bear upon an OCSLA

location. But, even conceding for purposes of argument

that an OCSLA location was involved and that the state

law at issue here is not inconsistent with any federal law,

maritime law, as it has been traditionally applied, must

be said to pertain to the activities performed under each

of the contracts herein. In fact, a principal error by the

courts below was the failure to analyze each of the con-

tracts involved separately and the activities performed

giving rise to the claims in conformity with traditional

maritime contract tests.

As noted, Power Well’s sole contribution to the enter-

prise was to provide a vessel, and Brown & Root pro-

vided the special purpose vessel which was the focal

point of the operation. A contract to charter a vessel is

unquestionably a maritime contract. Kossick v. United

Fruit Co., 365 U.S. at 735; 1 Benedict, supra, § 123, at 12-7.

Sub Sea and State Service essentially contracted to pro-

vide diving services, Brown & Root also supplied divers,

and a contract to provide diving services is considered

maritime. 1 Benedict, supra, § 184, at 12-17, citing Smith v.

Brown & Root Marine Operators, 243 F. Supp. 130 (W.D.La.

1965), aff'd, 376 F.2d 852 (5th Cir. 1967); The Murphy Tugs,

28 F. 429 (E.D.Mich. 1886). In sum, because the fabrica-

tion, laying and burying of the pipeline involved the use

of a special purpose vessel, as well as divers and other

vessels and seamen, and because all of the above-refer-

enced activities relate to mineral production offshore, the

issue demanding this Court’s resolution is drawn. Can it

now be said as a rule of law that activities relating to the

production of minerals on the OCS which involve con-

tracts for the provision those traditional instruments of

admiralty are, ipso facto, not maritime? This is essentially

the issue which creates the “legal conundrum” which the

[wis panel struggled with, and the one which the panel

below considered was addressed and answered by this

Court in Herb’s Welding, with this Court’s conclusion that

“[t]he history of the Lands Act at the very least forecloses

the Court of Appeals’ holding that offshore drilling is a

maritime activity and that any task essential thereto is

maritime employment for LHWCA purposes.” 470 US. at

422.

It is respectfully submitted that this conclusion

drawn by the court below from Herb’s Welding is

improper. It inverts and then extends the rule stated by

this Court well beyond the holding, and beyond the

intent of Congress in implementing OCSLA. It is certainly

true that mineral activities on the OCS are not, of neces-

sity, maritime for LHWCA or OCSL.A purposes. It does

not follow from this premise that mineral activities which

are conducted from vessels designed for mineral develop-

ment are therefore not maritime. Where the function of a

vessel in commerce relates to mineral development activ-

ities, it follows that contracts calling for the use of vessels

in the conduct of those activities are maritime. This con-

clusion is drawn directly from maritime principles devel-

oped over many years, and nothing in the legislative

history of the OCSLA suggests an intent to define mar-

itime commerce or mineral development in such a way as

to exclude the operation of such vessels from the law of

admiralty as it applies on the OCS. In fact, the record

suggests a contrary intent, to the effect that activities

conducted by vessels and contracts involving vessels on

the high seas will not be affected by the OCSLA.

As indicated above, to the extent that proper analyti-

cal standards may be gleaned from the jurisprudence in

the determination of the law applicable to a contract

related to mineral production on the OCS, it seems clear

that the courts should analyze the language and obliga-

tions of each contract at issue with regard for the specific

activity from which the cause of action arose. Where the

subject matter of the case has a direct relationship with

the traditional subjects of maritime law, 1.e., maritime

commerce, maritime law will apply. In the case of a

mixed contract, a balancing of maritime and non-mar-

itime obligations, with regard for the extent of the use of

“instruments of admiralty,” would be determinative. To

the extent that such standards apply to this question, the

opinion below effectively circumvents their application

by failing to consider the causes of action, subcontracts,

and activities performed on an individual basis, and by

focusing upon the principal obligation and result of the

primary contract between UTP and PLT and its relation to

mineral production.

It is impertant to note that the cause of action

brought by each claimant for lien rights is defined pur-

suant to LSA-R.S. 9:4861 which, by its terms, grants an in

rem privilege for the amount due for the labor or services

rendered. See Appendix E, infra. Thus, each individual

cause. of action must have been brought pursuant to the

specific contract under which that party claimed entitle-

ment to a lien for the amount due under that contract. As

noted previously, the subject matter of each of the four

subcontracts here at issue involved separate activities or

obligations to be performed, and each had a different

“principal obligation” from that of the primary contract

between UTP and PLT. Each contract specified the provi-

sion of and utilization of instruments of admiralty, and

the subject matter of each cause of action must be said to

have a direct relationship with the traditional subjects of

maritime law.

The errors by the Fifth Circuit result in an unreason-

able extension of OCSLA to certain contracts that are

clearly maritime in nature, and pose significant conse-

quences in the area of contracting in the offshore indus-

try. It is submitted that this entire area of law requires

clarification-and- the formulation of substantive guide-

lines by this Court.

2. The decision below raises important questions

concerning the statutory construction of OCSLA

with regard to whether the Act operates to

invalidate choice of law provisions of contracts

which are favored by law and contravene no

public policy.

The Fifth Circuit, without analysis, labelled OCSLA

as “a Congressionally mandated choice of law provision”

which requires the application of the substantive law of

the adjacent. state, even where the parties to a contract

have stipulated a choice of law, and without regard to

whether that provision contravenes any public policy.

This finding unreasonably extends the holding in Matte v.

Zapata Offshore Co., 784 F.2d 628 (5th Cir.), cert. denied, 479

U.S. 872 (1986), which was grounded on such public

policy considerations. This ruling clearly has a serious

impact upon the freedom of parties to contract and upon

the policy goals of certainty and uniformity in the area of

commercial relations. Further, any number of offshore

contracts in which the parties have selected the law to be

applicable would be defeated in ail instances in which

OCSLA applied, without regard to a traditional jurisdic-

tional analysis.

The legislative history of OCSLA evidences no intent

on the part of Congress to in any way restrict the imple-

mentation of the choice of law principles of the adjacent

state through OCSLA. The language of the statute itself

provides at § 1333(a)(2)(A) only that “the civil laws” of the

adjacent state are to apply, and contains no limitation as to

a state’s civil laws concerning choice of law. The principle

favoring choice of law in Louisiana is found in Louisiana

Civil Code article 7 which provides that parties may

choose the law to be applied when such action does not

“derogate from laws enacted for the protection of the

public interest.” Thus, where the parties stipulate the law

to govern the contract, Louisiana conflict of laws princi-

ples require that the stipulation be given effect, unless

there is statutory or jurisprudential law to the contrary or

strong public policy considerations justifying the refusal to

honor the contract as written. Delhomme Industries, Inc. v.

Houston Beechcraft, Inc., 669 F.2d 1049, 1058 (Sth Cir. 1982).

Additionally, courts have traditionally favored, and ten-

ded to uphold, contractual choice of law provisions and

have been reluctant to declare such provisions void as

against public policy. See Twin City Pipe Line Co. v. Hard-

ing Glass Co., 283 U.S. 353, 356-57 (1931); Fine v. Property

Damage Appraisers, Inc., 393 F. Supp. 1304, 1308 (E.D.La.

1975). Finally, the Louisiana statutory and jurisprudential

law offer no suggestion that a waiver of lien rights by

contractual stipulation or otherwise is against public pol-

icy.2

Neither of the cases from this Court cited in the

present opinion directly addressed nor determined this

issue. In Chevron Oil Co. v. Huson, 404 U.S. 97 (1971), the

Court found only that the federal OCSLA forum is to be

treated as the local forum, and not as a foreign forum,

when applying adopted state conflicts principles. Id. at

102-03. That ruling was cited only in that context in Gulf

Offshore Co. v. Mobil Oil Cory., 453 U.S. 473 (1981), which

2 As noted, the claims by respondents in the present case

were brought pursuant to their individual contracts, so that

those claims must be governed by the contractual choice of law

provisions contained in those contracts. Additionally, in an

argument not reached by the court of appeal, petitioners

asserted their entitlement to enforce the choice of law stipula-

tions in those subcontracts based upon petitioners’ status as

third party beneficiaries of those contracts. This result obtains

under both federal maritime law, see Crumady v. The Joachim

Hendrik Fisser, 358 U.S. 423 (1959); Harris v. Waikane Corp., 484

F. Supp. 372 (D.Hawaii 1980), and under the law of Louisiana.

See La. Civ. Code arts. 1978-82 (1984); State ex rel. Guste v.

Simoni, Heck & Associates, 331 So.2d 478 (La. 1976); Andrepont v.

Acadia Drilling Co., 225 La. 347, 231 So.2d 347 (1969).

must be read only as asserting that OCSLA’s choice of

law provision requires application of the adjacent state’s

law, but not that its rule as to statutory choice of law is

not applied. By contrast, in interpreting the Federal Tort

Claims Act, 28 U.S.C. § 1346(b), which provides for the

adoption of “the law of the place where the act or omis-

sion occurred,” this Court held in Richards v. United

States, 369 U.S. 1 (1962), that the Act required application

of the whole law of the state where the act or omission

occurred, including its conflict of laws rules. The Huson

Court also suggested that the whole body of state law

must be adopted by OCSLA, focusing on the Act’s policy

favoring the application of “a comprehensive body of

state law” in refusing to apply only certain aspects of a

state remedy in federal court, and citing Richards, stating:

“(I]t supports our holding that federal courts should not

create interstitial federal common law when the Congress

has directed that a whole body of state law shall apply.”

404 U.S. at 105 n. 8.

Not only did the Fifth Circuit fail to employ this

reasoning, it also failed to analyze the present case for

public policy considerations which might limit the appli-

cation of choice of law rules, the principle which was

central to the holding in Matte v. Zapata Offshore Co., 784

F.2d 628 (5th Cir. 1986). Noting that Louisiana law per-

mits parties to select the law which will govern their

contractual relationship, the court found that in that

instance, that right had to yield to public policy consider-

ations with regard to contractual indemnity statutes.

Finding a violation of state public policy, the court also

noted the policy of “federal deference” embodied in

OCSLA demonstrating that it would incorporate the pub-

lic policy of the coastal states, and that contracts offensive

to state policy may be similarly repugnant to the Lands

Act.? The subsequent Fifth Circuit decision in Wooton v.

Pumpkin Air, Inc., 869 F.2d 848 (5th Cir. 1989), does not

address the issue of contractual choice of law stipulations

but misapplied this Court’s decision in Huson, and

ignored the language therein relative to applying the

whole law of the adjacent state. The Wooton court’s con-

cern as to the “potential hall of mirrors” of state conflicts

rules is dispelled by a consideration of modern interest

analysis in contract actions which would dictate in almost

every instance that adjacent state law would be applica-

ble, except in the unusual case in which fairness to the

parties dictated otherwise.

In the absence of a clear expression by Congress of an

intent to the contrary, the Fifth Circuit has placed an

unreasonable construction on OCSLA which denies par-

ties the contractual freedom to stipulate in accordance

with Louisiana law where no public policy violation is at

issue. This interpretation is at variance with prior state-

ments by this Court in Huson, and suggests an inap-

propriate abridgement of the parties’ ability to tailor their

rights and liabilities to their particular commercial enter-

prises on the OCS. This issue is a significant one requir-

ing resolution by this Court, touching as it does upon the

3 A recent Louisiana Supreme Court decision suggests that

the Fifth Circuit may have overstated the importance of Louisi-

ana public policy considerations on this issue when compared

with the significant goals of freedom of contract and unifor-

mity of commercial maritime transactions. See Rodrigue v.

LeGros, Docket No. 89-C-2828 (La. June 4, 1990).

general principles of freedom of contract and the proper

application of OCSLA by the courts.

3. The decision below construes OCSLA so as to

create a legal fiction for compliance with Loui-

Siana statutory recordation requirements, the

effect of which constitutes judicial legislation

and violates the provisions of OCSLA itself.

In considering the interplay between OCSLA and the

Louisiana lien recordation requirements contained in

LSA-R.S. 9:4862(A)(1), the Fifth Circuit has effectively

enacted its own recordation scheme enabling the creation

of certain extra-contractual security interests on the Outer

Continental Shelf. That opinion purports to extend the

boundaries of a Louisiana parish “to the outer limits of

the OCS,” in order to assert that the property against

which liens were filed by respondents was located in that

parish. That conclusion constitutes the thinnest of legal

fictions, and clearly violates the provisions of OCSLA

itself which expressly prohibit any interpretation of the

Act which would extend the interest or jurisdiction of any

state over the OCS for any purpose. As the Fifth Circuit

had previously recognized, the specific recordation

requirements of Louisiana law are not enforceable against

leasehold properties located on the OCS, and the court’s

strained construction of OCSLA serves to rewrite the

Louisiana statute and improperly extend the State’s

administrative functions to the federally-administered

OCS.

Under Louisiana law, lien statutes are laws in deroga-

tion of common rights, require strict construction, and

lien rights arise only when plainly and expressly created

by statute. See Southport Petroleum Co. of Delaware v.

Fithian, 203 La. 49, 13 So.2d 382, 383 (1943). Pursuant

thereto, recordation is an indispensable prerequisite to

the validity of a lien in Louisiana, as provided in LSA-

R.S. 9:4862:

§ 4862. Preservation and ranking of privilege.

A. (1) To preserve the privilege granted by R.S. 9:4861,

a notice of such ciaim or privilege, setting forth

the nature and amount thereof, shall be filed for

record and inscribed in the mortgage records of the

parish where the property is located. (Emphasis

added.)

Secause the Lien Act creates rights against specific prop-

erty of another for labor or services that were performed

in connection with that property, the Louisiana legisla-

ture has required recordation within the parish where the

property is then physically located for purposes of juris-

diction over the creation of those rights, and of the

administration and enforcement of those rights. In pre-

vious decisions, the Fifth Circuit had recognized that

recordation in compliance with the statute is mandatory

for the creation or preservation of a lien, and could not be

complied with when the property against which the lien

is Claimed is physically located on property outside of

any parish, t.e., on the OCS. St. Mary Iron Works, Inc. v.

McMoran Exploration Co., 802 F.2d 809, 814 (5th Cir. 1986),

vacated on rehearing, 809 F.2d 1130, 1135 (Sth Cir. 1987).

The court’s prior ruling was in compliance with Louisi-

ana policy with regard to limiting lien rights, and was

consistent with the function of OCSLA of applying only

a |

those state laws which were applicable, necessary to fill

gaps in and not inconsistent with federal law.

In constructing its legal fiction, the Fifth Circuit

places questionable reliance upon LSA-R.S. 49:6, which

has the effect only of extending the gulfward boundaries

of the coastal parishes to the limits of the line of demarca-

tion between state and federal waters. By its unprece-

dented utilization of OCSLA to extend the physical

boundaries of the parishes onto the OCS, the court is in

clear violation of the provisions of OCSLA itself, which

provides at 43 U.S.C. § 1333(a)(3):

(3) The provisions of this section for adoption of

State law as the law of the United States shail

never be interpreted as a basis for claiming any

interest in or jurisdiction on behalf of any State for

any purpose over the seabed and subsoil of the outer

Continental Shelf, or the property and natural

resources thereof or the revenues therefrom.

(Emphasis added.)

Such extension of the political jurisdiction of a state based

upon the geographic boundaries of state sovereignty was

specifically rejected by Congress in the formulation of

OCSLA, and this Court has noted that “the adoption of

state law as federal law cannot be the basis for a claim by

the State ‘for participation in the administration of or

revenues from the areas outside of State boundaries.’

1953 S.Rep., at 23.” Gulf Offshore Co. v. Mobil Oil Corp., 453

U.S. 473, 482 (1981). The application of these Louisiana

statutes in the manner envisioned by the Fifth Circuit

must be said to be “inconsistent” with the provisions of

the Act.

The federal recordation scheme does not provide any

means for compliance with the recordation requirement

for validity of a lien, but that question remains one for

resolution by Congress or by the Secretary of the Interior

through MMS compliance,* and cannot properly be the

subject for judicial legislation by the Fifth Circuit. The

policies of OCSLA bear no relevance to this issue, and it

cannot be said that Congress contemplated or intended to

extend the coverage ot lien laws for the benefit of private

corporations engaged in doing business on the OCS. It is

not correct that respondents would be denied the protec-

tion of Louisiana law without lien rights, as those parties

would otherwise still be afforded the full panoply of

rights for actions under their contracts. Rather, respon-

dents would be afforded only those rights under Louisi-

ana law which are applicable and necessary to protect

their interests. This attempt by the Fifth Circuit to circum-

vent a requirement of Louisiana statutory law by drafting

its own recordation scheme through an expansive and

unwarranted construction of OCSLA requires this Court’s

consideration and correction.

4 In this regard, it must be noted that OCSLA provides its

own comprehensive procedures for lease and pipeline right-of-

way administration. In fact, the 1978 amendments to the Act

were intended by Congress to provide all-inclusive, “one-stop

shopping” procedures for the administration of OCS leases.

H.R. Rep. No. 590, 95th Cong., Ist Sess. 126 (1977), reprinted in

1978 U.S. Cong. & Admin. News 1450, 1455. Thus, not only is

the creation of this fiction unnecessary to fill a void or gap in

the comprehensive federal leasing and pipeline right-of-way

regulations, the potential for affecting title to these federally-

adrninistered leases and rights-of-way through the incorpora-

tion of extra-contractual remedies is inconsistent with the fed-

eral lease administration scheme provided by OCSLA.

CONCLUSION

As demonstrated above, the decision by the Fifth

Circuit raises serious questions regarding the application

and construction of OCSLA which, by their nature and

importance, require resolution by this Court. Those deter-

minations have immediate and significant consequences

for all parties involved in the offshore mineral production

industry in this country. The judicial precedents estab-

lished herein will have a marked impact on both the

lower courts and future litigants, involving as they do

matters relating to the proper law to be applied to con-

tracts connected with mineral production offshore, the

freedom of parties to stipulate the law to be applied to

such contracts, and the interplay between federal and

state law with regard to administration of interests in that

area. The decision below, absent review by this Court,

effectively resolves these important and far-reaching

issues. Because of the significance of these questions and

because petitioners believe the decision below to be

incorrect, they respectfully request that their Petition for

Writ of Certiorari to the Fifth Circuit be granted.

Respectfully submitted,

Ropert T. JORDEN

Patrick W. Gray *

CHARLEs B. Grirris

Georce ARCENEAUX III

822 Harding Street

P.O. Box 52008

Lafayette, Louisiana 70505

(318) 232-7424

Counsel for Petitioners

* Counsel of Record

—————E——————————

App. 1

APPENDIX A

UNION TEXAS PETROLEUM

CORPORATION, Plaintiff,

Vv.

PLT ENGINEERING, INC., Defendants,

State Service Company, Inc.,

Defendant-Counter-Plaintiff,

POWER WELL SERVICE, INC. and

Gulf Island-IV, a Louisiana

Partnership, Intervenors-Appellees,

Vv.

UNION TEXAS PETROLEUM

CORPORATION, Agip Petroleum Company

and Minatome Corporation, Counter-

Defendants-Appellants.

UNION TEXAS PETROLEUM

CORPORATION, Plaintiff,

Vv.

PLT ENGINEERING, INC., et

al., Defendants,

Brown and Root USA, Inc. and Sub

Sea International, Inc.,

Detendants-Appellees,

and

State Service Company, Inc.,

Defendant-Counter-Plaintiff-Appellee,

Union Texas Petroleum Corporation,

Agip Petroleum Company and

Minatome Corporation, Counter-

Defendants-Appellants.

App. 2

Nos. 88-4823, 89-4118.

United States Court of Appeals,

Fifth Circuit.

March 7, 1990.

Patrick W. Gray, Charles B. Griffis and George

Arceneaux, III, Liskow & Lewis, Lafayette, La., for coun-

ter-defendants-appellants.

Robert J. Burvant and John T. Nesser, III, Nesser,

King & LeBlanc, New Orleans, La., for intervenors-appel-

lees.

Mitchell J. Hoffman, Lowe, Stein, Hoffman & All-

weiss, New Orleans, La., for State Service Co.

Robert W. Daigle, Onebane, Donohoe, Bernard,

Torian, Diaz, McNamara & Abell, Lafayette, La., for Sub

Sea Intern.

Stewart F. Peck, Nathan P. Horner, Lugenhuhl, Burke,

Wheaton, Peck & Rankin, New Orleans, La., for Brown &

Root USA, Inc.

Appeals from the United States District Court for the

Western District of Louisiana.

Before BROWN, REAVLEY, and HIGGINBOTHAM,

Circuit Judges.

JOHN R. BROWN, Circuit Judge:

On this appeal from the entry of summary judg-

ments, we hold that the Outer Continental Shelf Lands

Act (OCSLA), 43 U.S.C. §§ 1331-56 (1986 and Supp. III

1989), requires the application of Louisiana state law to

App. 3

non-maritime contract disputes arising from the construc-

tion of a gathering line on the seabed of the outer Conti-

nental Shelf (OCS). We further hold that the

subcontractors were entitled to assert liens against the

project under the Louisiana Oil well Lien Act (LOWLA),

LSA-R.S. 9:4861 et seq. The availability of the liens was

not defeated by the language of LOWLA or contract

provisions. Thus we affirm the summary judgments in

favor of the subcontractors.

An Underwater Pipeline

Union Texas Petroleum Corporation (UTP) entered

into an offshore construction contract with PLT Engineer-

ing, Inc. (PLT). PLT was to design, fabricate, and install a

gas transportation system from a platform owned by

UTP, and its partners! in the Vermilion Area Block 237 off

the coast of Louisiana, to a side tap in the Bluewater

Pipeline owned by Columbia Gulf Transmission Com-

pany and located in Vermilion Area Block 225. The plat-

form and the pipeline at the point of the side tap are

located on the OCS. The gas transportation system was

built to function as a gathering line. The line is located in

its entirety on the OCS. Completed, it belongs to UTP.

The Contractual Network

In order to complete the gathering line, PLT entered

into contract with Brown & Root USA, Inc., State Service

' Agip Petroleum Company and Minatome Corporation

were sued along with UTP, however, for purposes of simplicity,

the opinion refers to them collectively as UTP.

App. 4

Company, Inc. and Sub Sea International, Inc. Addi-

tionally, State Service contracted with Power Well Service,

Inc. and Gulf Island IV, a jack-up barge. Brown & Root,

State Service, Sub Sea and Power Well are referred to

collectively as the subcontractors. Brown & Root was

contractually obligated to construct the pipeline by weld-

ing together joints of pipe supplied by PLT, to bury the

line, and to lay the pipe close to the platform at one end

and the Bluewater Pipeline at the other. Brown & Root

performed labor and services and furnished materials,

equipment and supplies including a barge. After Brown

& Root had laid the gathering line, State Service was to

fabricate and install tap assemblies to connect it to the

platform and the Bluewater Pipeline. State Service also

did some burial and testing work using divers. It worked

from vessels and chartered Power Well’s Gulf Island IV in

connection with its work on the project. Sub Sea provided

inspection services performed by divers, to ensure that

the other subcontractors complied with contractual speci-

fications. Sub Sea provided vessels for these divers to

work from. Most of the work done under the subcontracts

took place on the ocean floor or on a riser on UTP’s

platform. Some vessels were used for transportation of

men and facilities. Others afforded living facilities. The

Gulf Island IV was used to fulfill contract obligations.

PLT eventually completed and tested the line. How-

ever, through communications with some of the sub-

contractors, UTP learned that PLT had not paid the

subcontractors. Accordingly, UTP invoked the contract

provision that allowed it to withhold money from the

amount due under the contract with PLT. UTP withheld

$420,045.59 then instituted an interpleader action under

App. 5

F.R.Civ.P. 22 to enable PLT and the subcontractors to

determine how the money should be allocated among

them. Each of the subcontractors answered and filed

counterclaims asserting liens.

After cross motions for summary judgment, the trial

court issued a Memoranda Ruling. It held that (i)

LOWLA? was applicable, (ii) the choice of law provisions

in the subcontracts? could not be enforced by UTP

because of a lack of privity, (iii) federal admiralty law

was not applicable because the activities involved were

not traditionally maritime and thus OCSLA applied, and

(iv) recordation requirements for the liens were suffi-

ciently complied with by filing in adjacent parishes and

with the Department of the Interior’s Mineral Manage-

ment Division. The trial court then dismissed the inter-

pleader action as inappropriate since LOWLA was

applicable. The district court retained jurisdiction under

43 U.S.C. § 1349(b)(1) and 28 U.S.C. § 1331. Eventually

2 The relevant provisions of LOWLA are cited and dis-

cussed, infra, in the section entitled “UTP Can’t Sink LOWLA.”

+ The subcontracts provided:

If the work to be performed pursuant to this contract

is conducted in whole or in part over the Continental

Shelf or in navigable water then this contract shall be

governed and construed in accordance with the Gen-

eral Maritime Laws of the U.S. If the work to be

performed is conducted on land, then the laws of the

State of Texas shall govern the provisions hereof.

Contract for Union Texas Petroleum Vermilion Pipeline Project

Fabrication, and Installation of Pipeline, Exh. A, § 21.1 (Oct. 14,

1986) (contract by and between Brown & Root and PLT). Each

contract contained this clause.

App. 6

final judgments were entered in favor of each of the

subcontractors.4 Without challenging the correctness of

the subcontractors’ claims or the receipt of their value,

UTP appeals from all aspects of the trial court’s rulings.

Breathing Salt Air

[1] The trial court held that Louisiana law, rather

than maritime law applied to these contracts by operation

of the Outer Continental Shelf Lands Act (OCSLA). 43

U.S.C. §§ 1331-1356 (1986 & Supp III 1989). UTP argues

that OCSLA cannot apply to work performed in a mar-

itime setting on the high seas. It places a great deal of

reliance on the recent Supreme Court decision in Offshore

Logistics, Inc. v. Tallentire, 477 U.S. 207, 106 S.Ct. 2485, 91

L.Ed.2d 174 (1986). We agree with the trial court and hold

that Tallentire does not impose the application of maritime

law in this case.

4 Power Well and Gulf Island IV received summary judg-

ment in the undisputed amount of $93,551 plus 10% attorneys’

fees and interest (with an accompanying decrease in State

Service’s lien) on May 17, 1988. R. 874-76. Brown & Root

received summary judgment in the stipulated amount of

$450,000 plus 10% attorneys’ fees and interest along with some

additional adjustments on Sept. 27, 1988. R. 1180-82. Sub Sea

received summary judgment in the amount of $120,922.89 plus

10% attorneys’ fees and interest on Dec. 14, 1988 (amending

the order entered Mar. 14, 1988). R. 1281-83. State Service

received summary judgment in the stipulated amount of

$352,000 plus 10% attorneys’ fees and interest on Jan. 19, 1989.

R. 1292-94. These judgments were all made final and consoli-

dated for appeal.

App. 7

OCSLA provides in pertinent part:

(1) The Constitution and laws and civil

and political jurisdiction of the Untied States are

hereby extended to the subsoil and seabed of

the outer Continental Shelf and to all artificial

islands, and all installations and other devices

permanently or temporarily attached to the sea-

bed, which may be erected thereon for the pur-

pose of exploring for, developing, or producing

resources therefrom, or any such installation or

other device (other than a ship or vessel) for the

purpose of transporting such resources, to the

same extent as if the outer Continental Shelf

were an area of exclusive Federal jurisdiction

located within a State... .

(2)(A) To the extent that they are applicable

and not inconsistent with this subchapter or with

other Federal laws and regulations of the Secretary

now in effect or hereafter adopted, the civil and

criminal laws of each adjacent State, now in effect

or hereafter adopted, amended, or repealed are

hereby declared to be the law of the United States

for that portion of the subsoil and seabed of the

outer Continental Shelf, and artifical [sic] islands

and fixed structures erected thereon, which wou'd

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) (1986).

[2] Rodrigue v. Aetna Casualty and Surety Co., 395

U.S. 352, 355-56, 89 S.Ct. 1835, 1837-38, 23 L.Ed.2d 360,

364 (1969), said:

The purpose of the Lands Act was to define

a body of law applicable to the seabed, the

subsoil, and the fixed structures... on the outer

Continental Shelf. That this law was to be fed-

eral law of the United States, applying state law

App. 8

only as federal law and then only when not incon-

sistent with applicable federal law, is made clear

by the language of the Act. (Emphasis added.)

Rodrigue made clear that “for federal law to oust adopted

state law, federal law must first apply.” 395 U.S. at 359, 89

S.Ct. at 1839, 23 L.Ed.2d at 366. But for adjacent state law

to apply as surrogate federal law under OCSLA, three

conditions are significant. (1) The controversy must arise

on a situs covered by OCSLA (i.e. the subsoil, seabed, or

artifical structures permanently or temporarily attached

thereto). (2) Federal maritime law must not apply of its

own force. (3) The state law must not be inconsistent with

Federal law. All of these conditions are met in this case.

UTP argues that all of the subcontractors’ contracts

for the building and completion of the pipeline called for

services which were provided from vessels and by divers

in the ocean, not ona platform, and therefore were not in

areas covered by OCSLA. Perhaps in a more traditional

approach, the contention comes down to an assertion that

these collective contracts were maritime in nature and

thus subject exclusively to admiralty law. On both

grounds we disagree.

In the first place, the gathering line exactly fits the

statutory definition of an “other device[] permanently or

temporarily attached to the seabed . . . erected thereon for

the purpose of .. . developing, or producing resources

therefrom.” 43 U.S.C. § 1333(a)(1). In addition, the gather-

ing line was buried beneath the ocean floor. It was con-

nected to a platform at one end. It was connected to a

transmission line at the other. The locations where the

substantial work was done were covered situses — the

App. 9

subsoil or seabed;> an artificial island;® and an installa-

tion for the.production of resources.” Thus the first condi-

tion is met.

Whether the second factor — that the activity be non-

maritime — is present requires further analysis. In a defi-

nition highly oversimplified which would exclude a myr-

iad of contracts obviously maritime, one authority stated,

“ ‘It]he only question is whether the transaction relates to

ships and vessels, masters and mariners, as the agents of

commerce. ...’” Kossick v. United Fruit Co., 365 U.S. 731,

736, 81 S.Ct. 886, 890, 6 L.Ed.2d 56, 61 (1961), citing, I

Benedict, Admiralty 131.8 The contracts at issue here

were not maritime.

> OCSLA extends the laws of the United States “to the

subsoil and seabed of the [OCS].” 43 U.S.C. § 1333(a)(1). A line

buried beneath the ocean floor is clearly covered. No party has

disputed the fact that the gathering line lies, in its entirety, on

the OCS.

$ In Rodrigue, the court described drilling rigs as “islands,

albeit artificial ones.” 395 U.S. at 360, 89 S.Ct. at 1839, 23

L.Ed.2d at 367. OCSLA extends “to all artificial islands ...” 43

U.S.C. § 1333(a)(1).

7 OCSLA extends to “all installations and other devices

permanently or temporarily attached to the seabed, which may

be erected thereon for the purpose of . . . producing resources

therefrom.” 43 U.S.C. § 1333(a)(1). “The term ‘production’

means those activities which take place after the successful

completion of any means for the removal of minerals, includ-

ing such removal, field operations, transfer of minerals to

shore, ...” 43 U.S.C. § 1331(m). The Bluewater Pipeline meets

these criteria.

8 True to the legal traditions of the sea, a more recent

edition of Benedict’s defines the maritime contract more

broadly.

(Continued on following page)

OOO ev

App. 10

In its analysis of the legislative history surrounding

OCSLA, Rodrigue reflects that Congress was aware that it

had the power to treat activities on the artificial islands as

though they had occurred aboard ship and were thus

maritime and in fact a proposed bill did so. However, in

passing the bill that ultimately became OCSLA, “Con-

gress assumed that the admiralty law would not apply

unless Congress made it apply, and then Congress

decided not to make it apply.” 395 U.S. at 361, 89 S.Ct. at

1840, 23 L.Ed.2d at 367. Rodrigue further explains that

“the committee was acutely aware of the inaptness of

admiralty law. The bill applied the same law to the sea-

bed and subsoil as well as to the artificial islands, and

admiralty law was obviously unsuited to that task.” 395

U.S. at 364-65, 89 S.Ct. at 1841-42, 23 L.Ed.2d at 369

(footnote omitted).

The Fifth Circuit has likewise determined that “[i]n

the context of contract disputes, the principle underlying

Rodrigue and Kimble [v. Noble Drilling Co., 416 F2d 847

(Continued from previous page)

In matters of contract, the principal determinant

which emerges from a long course of decisions is the

relation which the cause of action bears to the ship,

the great agent of maritime enterprise, and to the sea

as a highway of commerce. A contract relating to:a

ship in its use as such, or to commerce or navigation

on navigable waters, or to transportation by sea or to

maritime employment is subject to maritime law and

the case is one of admiralty jurisdiction, whether the

contract is to be performed on land or water.

1 E. Jhirad, A. Sann. B. Chase & M. Chynsky, Benedict on

Admiralty § 183, at 11-6 (7th ed. 1985) (cited in Thurmond v.

Delta Well Surveyors, 836 F.2d 952, 954 (Sth Cir.1988)).

App. 11

(Sth Cir.1969), cert. denied, 397 U.S. 918, 90 S.Ct. 924, 25

L.Ed.2d 99 (1970),] precludes the application of maritime

law except in those cases where the subject matter of the

controversy bears the type of significant relationship to

traditional maritime activities necessary to invoke admi-

ralty jurisdiction.” Laredo Offshore Constructors, Inc. v.

Hunt Oil Co., 754 F2d 1223, 1231 (5th Cir.1985).

Laredo’s arguments were much akin to UTP’s. It

argued that (1) to perform contract obligations, many

seamen and vessels had to be hired, and (2) the recovery

of oil and natural gas from the seabed was a traditional

maritime activity. The court there held:

The contract involved here . . . did more than

charge Laredo with the responsibility of carry-

ing workers and supplies to the well site.

Laredo’s principal obligation under the contract

was the construction of a stationary platform,

and, as Laredo conceded at oral argument, it is

the alleged breach of this obligation that gave

rise to the instant action. While the contract no

doubt contemplated the hiring of vessels and

seamen to build the structure, the subject of this

case has no direct relationship with these tradi-

tional subjects of maritime law. It is fundamen-

tal that the mere inclusion of maritime

obligations in a mixed contract does not, with-

out more, bring nonmaritime obligations within

the pale of admiralty law. That the contract con-

templated in part the use of instruments of

admiralty, therefore, is not sufficient to oust

OCSLA-adopted state law in this case.

Id. at 1231-32.

As much a grey horse case as any diligent scholar or

the ubiquitous tentacles of LEXIS could uncover, our case

is much the same. While some maritime operations were

App. 12

undoubtedly contemplated, the principal obligation of

PLT and the subcontractors was to build the gathering

line and connect it to the platform and the transmission

line. These activities are not traditionally maritime.

Rather they are the subjects of oil and gas exploration

and production.

No subsequent case alters the result. In Herb’s Weld-

ing Inc. v. Gray, 470 U.S. 414, 422, 105 S.Ct. 1421, 1426, 84

L.Ed.2d 406, 413 (1985), the Supreme Court reversed this

court, finding that “[t]he history of the Lands Act at the

very least forecloses the Court of Appeals’ holding that

offshore drilling is a maritime activity and that any task

essential thereto is maritime employment for LHWCA

purposes.”

UTP is afforded no comfort by Theriot v. Bay Drilling

Corp., 783 F.2d 527 (5th Cir. 1986), in which we stated that

“{ojil and gas drilling on navigable waters aboard a ves-

sel is recognized to be maritime commerce.” Id. at 538-39.

‘It is important that the cases relied on by the court in

° As always, the lessons of prior cases must be applied in

deciding new cases that arise under different statutes. Under

the Longshore and Harbor Workers’ Compensation Act

(LHWCA), 33 U.S.C. §§ 901-950, coverage may extend beyond

admiralty’s boundaries. However, the threshold question

under both LHWCA and OCSLA is: does the dispute arise out

of traditional maritime activity? Thus, while the LHWCA was

not intended to “cover all those who breathe salt air,” neither

was OCSLA intended to exclude them all. See Herb’s Welding,

Inc. v. Gray, 470 U.S. 414, 423, 105 S.Ct. 1421, 1427, 84 L.Ed.2d

406, 414 (1985).

App. 13

Theriot predated both Laredo and Herb’s Welding.!° Fur-

thermore, in Herb’s Welding the Supreme Court had spe-

cifically criticised the Fifth Circuit’s “expansive view of

maritime employment” which it found was not consistent

with LHWCA cases. 470 U.S. at 423, 105 S.Ct. at 1427, 84

L.Ed.2d at 414.

Finally, we point out that Theriot was predicated on

the theory that “[w]hether a particular contract can be

characterized as maritime depends on the nature and

character of the contract, not on the situs of its perfor-

mance or execution.” 783 F.2d at 538. While this has merit

as a general proposition, “Congress determined that the

general scope of OCSLA’s coverage, . . . would be deter-

mined principally by locale, not by the status of the

individual injured or killed.” Offshore Logistics, Inc. v.

Tallentire, 477 U.S. 207, 219, 106 S.Ct. 2485, 2492, 91

L.Ed.2d 174, 188 (1986). Therefore, we construe Theriot

narrowly and constrain it to its facts. Since no drilling on

navigable waters from a vessel is involved here, Theriot is

not controlling.

Tallentire does not in any way change our result. In it,

two platform workers were killed when the helicopter

which was transporting them from the platform to shore

10 The court relied on Pippen v. Shell Oil Co., 661 F.2d 378,

384 (Sth Cir.1981); Boudreaux v. American Workover, Inc., 664

F.2d 463, 466 (5th Cir.1981), reh'g en banc, 680 F.2d 1034 (5th

Cir.1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 815, 74 L.Ed.2d

1014 (1983). The continued validity of these cases has not been

tested in light of Herb’s Welding. The court distinguished Herb’s

Welding, 783 F.2d at 539, n. 11, reading it as holding only that

“not every worker performing a task in oil and gas production

from fixed platforms is engaged in maritime employment.”

App. 14

crashed into the sea. Recognizing that “[bly its terms,

OCSLA must be ‘construed in such a manner that the

character of the waters above the outer Continental Shelf

as high seas . . . shall not be affected,’ § 1332(2),” the

Court held that in contrast with the Death on the High

Seas Act (DOSHA), OCSLA was not applicable. 477 U.S.

at 217-19, 106 S.Ct. at 2491-92, 91 L.Ed.2d at 186-87.

Critical to this holding was the Court’s determination

that,

admiralty jurisdiction is appropriately invoked

here under traditional principles because the

accident occurred on the high seas and in fur-

therance of an activity bearing a significant rela-

tionship to a traditional maritime activity. See

Executive Jet Aviation, Inc. v. City of Cleveland, 409

U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972).

Although the decedents were killed while riding

in a helicopter and not a more traditional mar-

itime conveyance, that helicopter was engaged

in a function traditionally performed by water-

borne vessels: the ferrying of passengers from

an “island,” albeit an artificial one, to the shore.

477 U.S. at 218-19, 106 S.Ct. at 2492-93, 91 L.Ed.2d at 187.

In other words, the Supreme Court found in Tallentire that

(1) the accident did not occur at an OCSLA situs — it took

place miles away from the platform where the decedents

worked over the open sea, and more than that, (2) federal

maritime law did apply of its own force to the loss of two

lives in the ocean, a classic case of maritime jurisdiction.

Tallentire did not change the law, it merely followed it.

Whatever doubt could remain - and we can conjure

up none - is dispelled by Thurmond v. Delta Well Sur-

veyors, 836 F.2d 952, 955 (Sth Cir.1988), which following

Herb’s Welding stated that “jt]he principal obligation

Se ee See Oe

App. 15

under this contract was to perform wireline services,

clearly a nonmaritime obligation in the sense that it does

not concern the operation of the vessel. Such services are

peculiar to the oii and gas industry, not maritime com-

merce.”

Because the contracts at issue were nonmaritime,

OCSLA came into force so that Louisiana state law

applies to the claims for liens regardless of whether a

particular service supplied would be maritime (e.g. char-

ter hire).

Submerging (Not Drowning)

Louisiana Law

UTP argues that even if OCSLA applies, the parties

have chosen admiralty law through the choice of law

provisions in their contracts.'! This argument can not

prevail.

Although Louisiana’s choice of law rules might

enforce this choice of law provision OCSLA will not. We

find it beyond any doubt that OCSLA is itself a Congres-

sionally mandated choice of law provision requiring that

the substantive law of the adjacent state is to apply even

in the presence of a choice of law provision in the con-

tract to the contrary. See Matte v. Zapata Offshore Co., 784

F.2d 628, 631 (Sth Cir.), cert. denied, 479 U.S. 872, 107 S.Ct.

247, 93 L.Ed.2d 171 (1986); Wooton v. Pumpkin Air, Inc., 869

F.2d 848, 852 (Sth Cir.1989); See also Gulf Offshore Co. v.

Mobil Oil Corp., 453 U.S. 473, 482 n. 8, 101 S.Ct. 2870, 2877

') See supra note 3.

App. 16

n. 8, 69 L.Ed.2d 784, 794 n. 8 (1981) (“OCLSA [sic] does

supercede the normal choice-of-law rules that the forum

would apply.”); Chevron Oil Co. v. Huson, 404 U.S. 97,

102-03, 92 S.Ct. 349, 353-54, 30 L.Ed.2d 296, 303 (1971).

UTP Can't Sink LOWLA

LOWLA is available for all of the subcontractors.

Now embracing LOWLA, UTP asserts three reasons

against the availability of lien rights under the facts of

this case. (1) By the letter of LOWLA, the subcontractors

are not entitled to assert liens. (2) The recordation

requirements of LOWLA cannot be complied with hence

liens are not available. (3) The right to assert liens was

waived by the choice of law provisions in the sub-

contracts. We disagree with all of these arguments and

hold that the subcontracts were entitled to assert liens,

they were properly recorded, and their right to assert

liens was not waived.

First, LOWLA expressly provides for a lien privilege

in favor of

[aJny person who performs any labor or service

in drilling or in connection with the drilling of

any well or wells in search of oil, gas or water,

or who performs any labor or service in the

operation or in connection with the operation of

any oil, gas or water well or wells, or performs

any labor or service in the construction, opera-

tion, or repair or in connection with the con-

struction, operation, or repair of any flow lines

or gathering lines, regardless of their length,

which are attached to or connected with the oil,

gas or water well or wells, and any pipeline

owned by the producer, operator or contract

operator of the weli. .

App. 17

LSA-R.S. 9:4861(A) (emphasis added). The privilege is in

all the oil or gas produced from the well or the proceeds

thereof or any equipment, lines or other appurtenances

on the lease. Id.

The argument in this regard is largely grammatical.

For example, UTP argues that in order to have a lien

privilege arising out of the construction of a gathering

line, the gathering line must connect to both a well and a

pipeline owned by the owner of the well. In other words,

they read a common ownership requirement into the

statutory provision. Such a requirement, if it existed,

would not be met in our case because the well is owned

by UTP while the transmission line, the Bluewater

Pipeline, is owned by Columbia Gas Transmission.

The comma after “well or wells” and before “and any

pipeline” services no grammatical function under UTP’s

theory. Under the subcontractors’ theory, which we

adopt, it sets off the phrase “which are attached to or

connected with the oil, gas or water well or wells.” The

phrase thus modifies gathering line and flow line. We

agree that the comma clearly establishes two classes of

pipelines from which a lien might arise: (1) flow lines or

gathering lines connected to the well and (2) pipelines

owned by the well owner.

This provision of LOWLA was amended in 1984.

Those amendments clearly incorporated the prior cases!

12 See, e.g., Continental Casualty Co. v. Associated Pipe &

Supply Co., 447 F.2d 1041 (5th Cir. 1971) (distinguishing

between gathering lines and transmission lines); McGee v. Mis-

sourt Valley Dredging Co., 182 So.2d 764, 767 (La.App. Ist

Cir.1966).

App. 18

and now mandate that those who construct gathering

lines which are connected to a well have a lien privilege.

Second, the liens were properly recorded. The statute

provides:

To preserve the privilege granted by R.S.

9:4861, a motion of such claim or privilege, set-

ting forth the nature and amount thereof, shall

be filed for record and inscribed in the mortgage

records of the parish where the property is

located.

LSA-R.S. 9:4862(A)(1). UTP argues that this requirement

was not complied with because the well (the property) is

located on the OCS. Because the well is not located within

the former physical boundaries of a parish, the liens

could not be recorded “in the parish where the property

is located.”

UTP places some reliance on our St. Mary cases. St.

Mary Iron Works, Inc. v. McMoran Exploration Co., 802 F.2d

809 (Sth Cir.1986), vacated 809 F.2d 1130 (5th Cir.1987).

However, the second St. Mary decision explicitly refused

to answer the question at issue here. There the court said,

“[w]e leave the question of whether this statute has any

effect on the interaction of the Lands Act and Louisiana

law to another day.” 809 F.2d at 1135, n.5. This is “another

day.”

If 9:4862 were to be read as UTP urges, to allow liens

to be recorded only if the property is located on land ina

parish, it would deny the subcontractors the protection of

Louisiana law merely because their work was performed

on the OCS rather than on shore. At the least, this would

frustrate the Congressional intent behind OCSLA that

state law operate as surrogate federal law on the OCS. It

App. 19

would be anomalous to deny the liens here when a prin-

cipal reason for adopting state law to apply as federal law

on the OCS was to protect all those who perform activ-

ities, including providing services and materials, on the

OCS.!3 See, e.g., Chevron Oil Co. v. Huson, 404 U.S. 97,

103-04, 92 S.Ct. 349, 353-54, 30 L.Ed.2d 296, 303-04 (1971);

Wooton v. Pumpkin Air, Inc., 869 F.2d 848, 851 (5th

Cir.1989).

The combination of both OCSLA and Louisiana law

extend Vermilion parish beyond the location of the work

done here. Louisiana law provides that,

the gulfward boundary of all said coastal par-

ishes extend coextensively with the gulfward

boundary of the State of Louisiana.

LSA-R.S. 49:6. OCSLA adopts this state law and extends

the boundaries of Vermilion parish to the outer limits of

the OCS by providing that state law applies to the subsoil

and seabed of the OCS and all artificial islands thereon

“which would be within the area of the State if its bound-

aries were extended seaward to the outer margin of the

outer Continental Shelf... .” 43 U.S.C. § 1333(a)(2)(A).

Thus the liens were actually filed in the parish where the

property is located.

Any other result here would frustrate the Congres-

sional purpose that the OCS be treated as an area of

exclusive federal jurisdiction within the state where state

law will apply to fill in the gaps in the federal law. Brown

13 See in contrast the treatment of workers compensation

liabilities which for OCSLA purposes are covered by the

LHWCA territorial extension. See 43 U.S.C. § 1333(b).

App. 20

& Root v. Prosper Energy, Civ. Action No. 87-0343 (E.D.La.

June 29, 1987) (unpublished).'4

14 The Brown & Root case, involving the question of

whether recordation in the coastal parishes adjacent to the

mineral lease satisfied 9:4862, was remarkably similar to ours.

We repeat with approval a portion of that opinion.

The defendants concede that if the pipeline built

by the plaintiff were located on land or within the

waters of the state of Louisiana the lien sought by

plaintiff would attach. However, they contend that

because the property against which the lien is sought

in this case is not located in a parish, there is no

place in which to record the lien as required by La.

Rev.Stat.Ann. 9:4862 and that therefore no lien exists.

Cf. St. Mary Iron Works, Inc. v. McMoran Exploration

Co., 802 F.2d 809, 813-14 (5th Cir.1986) vacated on

reh’g, 809 F.2d 1130 (5th Cir.1987)

The recording requirement of La.Rev.Stat.Ann.

§ 9:4862 restricts the applicability of the LOLA to

property located in the parishes of the state of Loui-

siana. That restriction, however, is contrary to the

Congressional mandate that state law apply on fed-

eral lands on the Outer Continental Shelf. Rodrigue,

395 U.S. at 357 [89 S.Ct. at 1838]; cf. Chevron Oil Co. v.

Huson, 404 U.S. 97 [92 S.Ct. 349, 30 L.Ed.2d 296]

(1971).

To protect laborers, materialmen and contractors

and to encourage development of mineral resources

Louisiana law has provided for oilfield liens since

1916. See generally Louisiana Materials Co. v. Atlantic

Richfield Co., 493 So.2d 1146-48 (La.1986). The defen-

dant’s view of this case denies the protection of

Louisiana’s lien laws to those providing oilfield ser-

vices only because the services were provided to

oilfield operators in federal territory. In passing the

(Continued on following page)

ee |

App. 21

Third, the subcontractors did not waive their lien

rights. UTP argues that the subcr itractors all waived

their rights to assert liens under Louisiana law because of

a provision in each of their contracts that UTP contends

made the project “lien free.”

Neither the final payment nor any part of the

retention, if any, provided for in Exhibit E to the

Contract shall become due until CONTRACTOR

delivers to COMPANY a complete release or

waiver of all liens arising or which may arise

out of this Contract of as to the Work or any part

thereof, or receipts in full in lieu thereof and, if

requested by COMPANY, an affidavit that so far

as CONTRACTOR has knowledge or informa-

tion the release and receipts include all labor,

material, and services for which a lien could be

filed upon the pipeline against the COMPANY.

CONTRACTOR shall indemnify and hold harm-

less the COMPANY from all liens and other

encumbrances against the Work and any claims

or actions on account of debts or claims with

respect to the Work alleged to be due from

CONTRACTOR or its subcontractors and sup-

pliers to any person including subcontractors

and suppliers, and will defend at its own

expense any c.aim or litigation in connection

therewith. The provisions of this Section 11.1.2

(Continued from previous page)

OCSLA, Congress intended exactly the opposite

result. See Rodrigue, 395 U.S. at 356-58 [89 S.Ct. at

1837-38]; cf. St. Mary, 802 F.2d 809, 815 (5th Cir.1986),

vacated on other grounds, 809 F.2d 1130 (5th Cir.1987)

(applying the Louisiana Private Works Act on the

Outer Continental Shelf).

App. 22

shall survive the termination or expiration of

this Contract.!>

Even if remotely valid under Louisiana law'® (which

we need not determine) we reject UTP’s construction that

no liens were to attach to the project. This provision

expressly contemplates that liens might arise on the pro-

ject. It merely says that they are to be released or waived

before final payment is made. The reservation of indem-

nity not only refers specifically to “liens” but it would be

wholly ineffectual under UTP’s construction in the usual

commercial setting where potential liens arise on the

default or insolvency of the contractor.

Finding no waiver of liens, we need not reach UTP’s

argument that it is a third party beneficiary of the sub-

contracts.

Conclusion

Thus UTP fails on all its contentions. The District

Judge was correct. i

AFFIRMED.

15 Contract for Union Texas Petroleum Vermilion Pipeline

Project Fabrication, and Installation of Pipeline, Exh. A § 11.1.2

(Oct. 14, 1986) (contract by and between Brown & Root and

PLT) (emphasis added). Each contract contained a like clause.

16 Louisiana law allows parties to waive their lien rights.

Wardlaw Brothers Garage, Inc. v. Thomas, 19 La.App. 241, 140 So.

108 (La.App. 2d Cir.1932); Babineaux v. Grisaffi, 180 So.2d 888

(La.App. 3d Cir.1965). However, that waiver must be clearly

indicated. Bank of Jena v. Rowlen, 370 So.2d 146 (La.App. 3d

Cir.1979) (“materialman’s lien may be waived expressly or by

implication where there is a strong factual basis”).

App. 23

APPENDIX B

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE-OPELOUSAS DIVISION

UNION TEXAS PETROLEUM CORPORATION

VS. CIVIL ACTION NO. 87-0521 “L”

PLT ENGINEERING, INC., ET AL

JUDGE JOHN M. DUHE, JR.

MAGISTRATE METHVIN

MEMORANDUM RULING

(Filed Mar 10, 1988)

This ruling concerns the consolidated motions for

summary judgment by Brown & Root U.S.A., Inc.

(“Brown & Root”), Sub Sea International (“Sub Sea”),

State Service Company (“State”), intervenors Power Well

Service, Inc. (“Power”) and Gulf Island-IV (“Gulf”) and

the counter motion for summary judgment by plaintiff

Union Texas Petroleum (“UTP”). This action was filed on

March 6, 1987, as an interpleader complaint by UTP

against PLT Engineering, Inc. (“PLT”), Brown & Root,

State Service, and Sub Sea. At issue is the collection by

claimants for services rendered in connection with a gas

gathering pipeline constructed for UTP by PLT.

UTP, Agip Petroleum Co., Inc. (“Agip”), and Min-

atome Corporation (“Minatome”) are the owners of Lease

No. OCS-G6677, located in Vermilion Block 237, Outer

Con‘inental Shelf, Gulf of Mexico (“the lease”). Pursuant

to an agreement among UTP, Agip and Minatome, UTP

was designated the operator of the lease. On August 15,

1986 UTP and PLT executed a contract for the design and

App. 24

construction of a gas pipeline from a platform owned by

UTP in Vermilion Area Block 237 to the Bluewater

Pipeline owned by Columbia Gulf Transmission in Ver-

milion Block 225. It was understood at the time of con-

tracting that PLT would perform the services of design,

material purchase, supervision, and inspection and that

subcontactors [sic] would perform the actual construction

services. Later defendants, as subcontractors, entered into

contracts with PLT to perform various services in connec-

tion with the construction of the pipeline.

The sum of $420,000.00 was withheld by UTP pur-

suant to its contract because of PLT’s alleged failure to

perform certain conditions of the contract. It is this sum

that UTP wishes to implead in this action. The defen-

dants-subcontractors contend UTP has no right to inter-

pleader. They contend that they are entitled to full

payment from UTP for the services they rendered to

UTP’s pipeline. In addition, defendants have asserted lien

rights pursuant to Louisiana law and as provided under

the Louisiana Oil, Gas and Water Wells Lien Statute, La.

Rev. Stat. 9:4861 et seq.

LAW AND ANALYSIS

UTP asserts five arguments for its proposition that

defendants summary judgment should be denied and its

summary judgment granted. (1) The contract between

UTP and PLT and the contracts between PLT and the

defendants under which the work was performed con-

tained a choice of law provision which states that the

contracts are to be governed by and construed in accor-

dance with the general maritime law of the United States.

App. 25

UTP contends these provisions preclude any application

of Louisiana law to the present case, thus denying the

defendants any entitlement to lien rights against the

property. (2) Offshore Logistics, Inc. v. Tallentire, 477 U.S.

207, 106 S.Ct. 2485 (1986), establishes that Louisiana law

will not be applied as a supplement to the Outer Conti-

nental Shelf Lands Act (“OCSLA”), to the types of ser-

vices rendered in the present case since OCSLA must, by

its own terms, yield to federal admiralty law when the

matter at issue involves traditional maritime activites

[sic] on the ocean. (3) The Louisiana Oil Well Lien Statute

does not provide for a lien or privilege for the type of

work performed in the present case, i.e. the construction

of a gathering line which is not connected to an oil or gas

well and a pipeline owned by the producer, operator or

contract operator of that well. (4) No lien may attach

where there is no statutory means of recording the

required notice thereof, such as when the property at

issue is located outside of any parish where filing may be

effected. (5) Certain of the claimants have asserted dupli-

cative claims which should be disallowed and there are

factual issues relating to the amounts claimed by certain

of the claimants which would prevent the award of sum-

mary judgment on behalf of the defendants.

CHOICE OF LAW BY CONTRACT:

Defendants acknowledge that the choice of law pro-

vision at issue is contained both in UTP’s contract with

PLT and in PLT’s contracts with defendants, but defen-

dants contend that UTP has failed to show that any

contractual relationship exists between UTP and defen-

dants. Further, the liens of defendants, and the claims

filed herein seeking the enforcement of those liens, are

App. 26

claims which have been asserted against the property

interest of UTP. Therefore, defendants assert that the

contractual stipulations in their contracts with PLT are

not binding and do not govern their rights against UTP, a

party with whom they have no privity of contract.

Further, a party is only bound by a contract to which

it is a party. See Farmers State Bank and Trust Co. v. Leger,

503 So.2d 1141, 1143 (La. Ct. App. 1987). Because no

contractual relationship exists between defendants and

UTP, the choice of law provision in UTP’s contract with

PLT which states that general maritime law will govern

the parties rights is not applicable to the claims asserted

by defendants against UTP pursuant to La. Rev. Stat.

§ 9:4861 et seq.

CHOICE OF LAW BY TALLENTIRE:

Defendants disagree that Tallentire, supra, dictates the

application of general maritime law, in lieu of OCSLA or

Louisiana law, simply because some of the work per-

formed by the various lien claimants was performed from

vessels. Tallentire, supra stands for the proposition that

OCSLA should not apply to traditional maritime activity

which occurs on the ocean overlying the Outer Continen-

tal Shelf, i.e. travel by helicopter in lieu of a vessel.

Tallentire is distinguishable from the case at hand, for

although the services performed by defendants neces-

sarily involved the use of vessels, they did not involve

traditional maritime activity.

Further, the principal obligation of defendants was to

build a pipeline from UTP’s well to a pipeline owned by

Columbia Gulf Transmission, clearly a non-maritime

activity in the sense that it does not concern the operation

App. 27

of a vessel. Such construction is peculiar to the oil and

gas industry, not maritime commerce. Pipeline construc-

tion is performed on land-based wells as well as offshore

wells and pipeline construction presents problems pecu-

liar to the oil and gas industry. Maritime law in the strict

sense has never had to deal with the resources in the

ground beneath the sea, and its rules are ill adapted for

that purpose. See Thurmand v. Delta Well Surveyors, __

F.2d __ (5th Cir. 1988). Therefore, Tallentire is inapplica-

ble to this situation which involves pipeline construction

not a traditional maritime activity.

OWNERSHIP OF FACILITIES:

Plaintiff’s third argument suggests that under the

wording of La. Rev. Stat. 9:4861 et seq, a lien is granted for

work performed upon a flow line or gathering line, only

when such line is attached at one end to a well and at the

other end to a pipeline owned by the same producer,

operator, or contract operator of that well. Further, plain-

tiff contends this statute, as a lien statute, must be strictly

construed and any ambiguity must be resolved against

the party asserting the lien. Defendants contend that

§ 9:4861(A), as amended in 1984, which reads in pertinent

part:

Any person who .. . performs any labor or

service in the construction .. . of any flow lines

or gathering lines, regardless of their length,

which are attached to or connected with the oil,

gas or water well or wells, and any pipeline

owned by the producer, operator or contract

operator of the well, has a privilege... .

should be interpreted to grant a privilege to any person

who performs any labor or service in the construction of

——___V__exkaaaeYT | k eS

App. 28

(1) any flow lines or gathering lines which are attached to

or connected with the oil, gas or water well or wells or (2)

any pipeline owned by the-producer, operator or contract

operator of the well.

The comma in question was added in the 1984

amendments to § 9:4861. The insertion of this comma is

supportive of defendants’ contention that the pipeline

need not be connected to a well and a pipeline owned by

the same producer, operator or contract operator. Fur-

thermore, defendants’ interpretation of Paragraph (A) of

§ 9:4861 is supported by the language contained in Para-

graph B of the statute which allows a privilege to any

person doing any trucking, towing, etc., in connection

with the construction, operation or repair of (1) flow lines

or gathering lines and (2) other pipelines owned by the

producer, operator or contract operator of the well or

wells.

Louisiana courts have drawn a distinction between

transmission lines and pipelines that are part of a gather-

ing system connected to producing wells. See McGee v.

Missouri Valley Dredging Company, 182 So.2d 764 (La. Ct.

App. 1966) and Continental Casualty Company v. Associated

Pipe & Supply Co., 279 F. Supp. 490 (E.D. Ia. 1967) (Conti-

nental Casualty I). The court in McGee reasoned that the

scope of the statute should be limited to work directly

related to that property upon which the statute grants a

privilege. In McGee, the gas transmission line was not

attached to the wells from which the gas transinitted

through the pipeline originated, nor was it attached to

any drilling rigs, therefore the court held no privilege |

attached. The reasoning of the court in McGee provides a

logical basis for limiting the scope of the Oil Well Lien

ae |

App. 29

Statute, while at the same time giving it sufficiently broad

application so as not to frustrate the apparent liberal

legislative intent. Continental Casualty I, supra.

Aithough this Court must construe statutes creating

privileges and liens stricti juris because they are in dero-

gation of common rights, this does not mean strained or

unnatural construction. It means a fair, reasonable and

natural interpretation by the ordinary rules for the con-

struction of statutes with the goal of ascertaining the

intention of the legislature. See Continental Casualty I,

supra.

Accordingly, after applying the McGee test to the

facts of this case, it is clear that the gathering pipeline at

issue is within the realm of La. Rev. Stat. 9:4861 et seq, for

the pipeline is attached to the well and is located on the

lease.

PLACE FOR RECORDATION

Plaintiff’s fourth argument asserts that under current

Louisiana !aw, there is no procedure for the preservation

of a lien on property not located in any parish where

recordation may be effected. In St. Mary Iron Works, Inc. v.

McMoran Exploration Co., 809 F.2d 1130 (5th Cir. 1987) (St.

Mary II), the Fifth Circuit specifically noted that the

Louisiana Legislature had recently passed 1986 La. Act

191 amending the Oil Well Lien Act to make recordation

within the time specified in the act a requirement for

preservation of the lien. However, the Court left the

question of whether this statute has any effect on the

Lands Act and Louisiana law to another day.

App. 30

In Brown & Root 'J.S.A., Inc. v. Prosper Energy, CA,

87-0343 (E.D. La. 1987), Judge Boyle held that the Oil Well

Lien Statute is applicable on the Outer Continental Shelf

because the recordation requirement which restricts

applicability to property located in the State of Louisiana

is contrary to the Congressional mandate that state law

apply on federal lands on the Outer Continental Shelf. See

Rodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352, 357;

Chevron Oil Co. v. Huson, 404 U.S. 97 (1971). Judge Boyle

went on to state that since 1916 Louisiana law has pro-

vided oilfield liens to protect laborers, materialmen and

contractors and to encourage development of mineral

resources. UTP’s argument would deny the protection of

Louisiana’s lien laws to those providing oilfield services

only because the services were provided to oilfield opera-

tors in federal territory. In passing OCSLA, Congress

intended exactly the opposite result. Therefore, since the

Lands Act treats platforms and structures on the Outer

Continental Shelf as if they were within the coastal state

if its boundaries were extended to the outer limits of the

Outer Continental Shelf, see Genina Marine Services v. Arco

Oil & Gas Co., 499 So.2d 257 (La. Ct. App. 1986), and La.

Rev. Stat. § 49:6 provides that the gulfward boundaries of

the coastal parishes extend coextensively with the gulf-

ward boundary of the State of Louisiana, defendants’

recordation of their liens in Vermilion Parish, (the coastal

parish opposite UTP’s well), satisfies La. Rev. Stat.

§ 9:4862.

CONCLUSION

There remain in this case factual issues concerning

the amount of defendants Brown & Root, State Service

App. 31

and intervenors claims. Therefore, their motions for sum-

mary judgment are denied. Since no factual issues exist as

to the claim of Sub Sea, summary judgment in its favor

against UTP in the amount of $120,922.89 plus interest

and attorney fees is granted. Further, it is this court’s

opinion that the defendants’ claims are against UTP’s

pipeline and well pursuant to La. Rev. Stat. 9:4861 et seq.

Consequently, UTP cannot limit its exposure to defen-

dants claim by depositing with this Court the sum of

$420,045.59 which it withheld from PLT pursuant to their

contract.

Although this ruling concerns motions for summary

judgment and material outside the pleadings have been

accepted in support thereof, it may be more proper to

view these as motions to dismiss under Fed. R. Civ. P.

12(b)(6). A summary judgment which is made on the

basis of the complaint may be treated as the functional

equivalent of a motion to dismiss for failure to state a

claim. See 10 C. Wright & A. Miller and M. Kane, Federal

Practice & Procedure § 2713 (1983). Furthermore, although

a motion to dismiss under Rule 12(b)(6) for failure to

state a claim upon which relief can be granted addresses

itself to the claim, the movant merely is asserting that the

pleading to which the motion is directed does not suffi-

ciently state a claim for relief, which is what is involved

in the case at hand.

UTP has filed a complaint in the form of an inter-

pleader and has deposited the sum of $420,045.59 into the

registry of the court. In order to file an interpleader

proceeding, UTP must be a mere stakeholder who

requests the court to determine which of two or more

App. 32

adverse claimants is rightfully entitled to funds or prop-

erty possessed by it. Since this Court has determined that

the defendants claims are not limited to the funds depos-

ited by UTP but instead attach to UTP’s well and pipeline

pursuant to La. Rev. Stat. § 9:4861 et seq, UTP’s complaint

is improperly filed and therefore, fails to state a claim

upon which relief may be granted.

Accordingly, Union Texas Petroleum’s interpleader

complaint is hereby dismissed under Fed. R. Civ. P. 12(b)

(6) for failure to state a claim upon which relief may be

granted.

Lafayette, Louisiana, March 10, 1988.

/s/ John M. Duhe Jr.

JUDGE, U.S. DISTRICT

COURT

App. 33

APPENDIX C

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE-OPELOUSAS DIVISION

UNION TEXAS PETROLEUM

VS. CIVIL ACTION NO. 87-0521 “L”

P L T ENGINEERING, INC., ET AL

JUDGE JOHN M. DUHE, JR.

MAGISTRATE MILDRED METHVIN

MEMORANDUM RULING

(Filed May 18, 1988)

This ruling concerns the request by intervenors

Power Well Service, Inc. and Gulf Island IV for this Court

to review its Memorandum Ruling of March 10, 1988 as it

pertains to them. In that ruling intervenor’s motion for

summary judgment was denied because there remain

factual issues concerning the amount of intervenor’s

claims. In addition, there remained the issue raised by

interpleader Union Texas Petroleum (“UTP”), that a lien

exists exclusively in favor of the party who provides

services directly to a project for which a lien is granted

and that a claim does not exist in favor of a party simply

because that party caused a third person to provide the

services.

The facts of this case were clearly set forth in this

Court’s Memorandum Ruling of March 10, 1988, and this

Court sees no need for a detailed restatement of those

facts. After careful review of the briefs submitted on the

original motions for summary judgment, it is this Court’s

App. 34

opinion that La. Rev. Stat. 9:4861(a) and (b) provides for

liens in favor of any “person” who,

A. Performs any labor or services.

B. Does any of several enumerated acts.

It must have been obvious to the Legislature that this

statutory scheme admitted the possibility of more than

one potential lien claimant for the furnishing of a single

service or activity. The clearest example of this possibility

is present in this case. Intervenors provided their barge to

the project therefore, they are entitled to assert their own

rights for services physically provided by them to this

project. In addition, State Service Company, Inc., as a

contractor, provided services to the project which

included those of intervenors. The owner, Union Texas

Petroleum, is foreclosed from being twice liable for the

same amount by the fact that payment of the actual

supplier (intervenor) will extinguish the contractor’s

(State Service) lien by a like amount.

In the case at hand, there is no factual dispute con-

cerning the amount owed to intervenors for the services

they provided. The dispute was over the fact that State

Service as well as intervenors filed a lien claim for the

same services. Union Texas Petroleum did not dispute the

amount owed to intervenors, but merely disputed the

duplicate claims of State Service and intervenors. The

affidavit of John Powers, President of Power Well Service,

sets forth the amount due and owing intervenors at

$93,551.00. Accordingly, since there is no factual dispute

concerning the amount owed to intervenors for the ser-

vices provided, intervenors are entitled to judgment on

App. 35

their claim in the amount of $93,551.00 plus 10% attorney

fees and interest, along with recognition of their claim

under the Louisiana Oil Well Lien Act. In addition, State

Services’ lien will be reduced accordingly.

Lafayette, Louisiana, May 17, 1988.

/s/ John M. Duhe Jr.

JUDGE, UV. S. DISTRICT

COURT

App. 36

APPENDIX D

The Outer Continental Shelf Lands Act, 43 U.S.C. § 1333

§ 1333. Laws and regulations governing lands

(a) Constitution and United States laws; laws of

adjacent States; publication of projected

State lines; international boundary disputes;

restriction on State taxation and jurisdiction

(1) The Constitution and laws and civil and political

jurisdiction of the United States are hereby extended to

the subsoil and seabed of the outer Continental Shelf and

to all artificial islands, and all installations and other

devices permanently or temporarily attached to the sea-

bed, which may be erected thereon for the purpose of

exporing [sic] for, developing, or producing resources

therefrom, or any such installation or other device (other

than a ship or vessel) for the purpose of transporting

such resources, to the same extent as if the outer Conti-

nental Shelf were an area of exclusive Federal jurisdiction

located within a State: Provided, however, That mineral

leases on the outer Continental Shelf shall be maintained

or issued only under the provisions of this subchapter.

(2)(A) To the extent that they are applicable and not

inconsistent with this subchapter or with other Federal

laws and regulations of the Secretary now in effect or

hereafter adopted, the civil and criminal laws of each

adjacent State, now in effect or hereafter adopted,

amended, or repealed are hereby 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

App. 37

were extended seaward to the outer margin of the outer

Continental Shelf, and the President shall determine and

publish in the Federal Register such projected lines

extending seaward and defining each such area. All of

such applicable laws shall be administered and enforced

by the appropriate officers and courts of the United

States. State taxation laws shall not apply to the outer

Continental Shelf.

(B) Within one year after September 18, 1978, the

President shall establish procedures for setting! any out-

standing international boundary dispute respecting the

outer Continental Shelf.

(3) The provisions of this section for adoption of

State law as the law of the United States shall never be

interpreted as a basis for claiming any interest in or

jurisdiction on behalf of any State for any purpose over

the seabed and subsoil of the outer Continental Shelf, or

the property and natural resources thereof or the reve-

nues therefrom.

(b) Longshore and Harbor Workers’ Compensation

Act applicable; definitions

With respect to disability or death of an employee

resulting from any injury occurring as the result of opera-

tions conducted on the outer Continental Shelf for the

purpose of exploring for, developing, removing, or trans-

porting by pipeline the natural resources, or involving

rights to the natural resources, of the subsoil and seabed

of the outer Continental Shelf, compensation shall be

1 So in original. Probably should be “settling”.

etl

App. 38

payable under the provisions of the Longshore and Har-

bor Workers’ Compensation Act [33 U.S.C.A. § 901 et.

seq.]. For the purposes of the extension of the provisions

of the Longshore and Harbor Workers’ Compensation Act

under this section -

(1) the term “employee” does not include

a master or member of a crew of any vessel, or

an officer or employee of the United States or

any agency thereof or of any State or foreign

government, or of any pohtical subdivision

thereof;

(2) the term “employer” means an

employer any of whose employees are

employed in such operations; and

(3) the term “United States” when used in

a geographical sense includes the outer Conti-

nental Shelf and artificial islands and fixed

structures thereon.

For the purposes of the National Labor Relations Act,

as amended [29 U.S.C.A. § 151 et seq.], any unfair labor

practice, as defined in such Act, occurring upon any

artificial island, installation, or other device referred iv 1n

subsection (a) of this section shall be deemed to have

occurred within the judicial district of the State, the laws

of which apply to such artificial island, installation, or

other device pursuant to such subsection, except that

until the President determines the areas within which

such State laws are applicable, the judicial district shall

be that of the State nearest the place of location of such

artificial island, installation, or other device.

App. 39

(d) Coast Guard regulations; marking of artificial

islands, installations, and other devices; failure

of owner suitably to mark according to regulations

(1) The Secretary of the Department in which the Coast

Guard is operating shall have authority to promulgate and

enforce such reasonable regulations with respect to lights

and other warning devices, safety equipment, and other

matters relating to the promotion of safety of life and prop-

erty on the artificial islands, installations, and other devices

referred to in subsection (a) of this section or on the waters

adjacent thereto, as he may deem necessary.

(2) The Secretary of the Department in which the

Coast Guard is operating may mark for the protection of

navigation any artificial island, installation, or other

device referred to in subsection (a) of this section when-

ever the owner has failed suitably to mark such island,

installation, or other device in accordance with regula-

tions issued under this subchapter, and the owner shall

pay the cost of such marking.

(e) Authority of Secretary of the Army to prevent

obstruction to navigation

The authority of the Secretary of the Army to prevent

obstruction to navigation in the navigable waters of the

United States is hereby extended to the artificial islands,

installations, and other devices referred to in subsection

(a) of this section.

(f) Provisions as nonexclusive

The specific application by this section of certain

provisions of law to the subsoil and seabed of the outer

: |

App. 40

Continental Shelf and the artificial islands, installations,

and other devices referred to in subsection (a) of this

section or to acts or offenses occurring or committed

thereon shall not give rise to any inference that the appli-

cation to such islands and structures, acts, or offenses of

any other provision of law is not intended.

(Aug. 7, 1953, c. 345, § 4, 67 Stat. 462; Jan. 3, 1975, Pub.L.

93-627, § 19(f), 88 Stat. 2146; Sept. 18, 1978, Pub.L. 95-372,

Title II, § 203, 92 Stat. 635; Sept. 28, 1984, Pub.L. 98-426,

§ 27(d)(2), 98 Stat. 1654.)

App. 41

APPENDIX E

Louisiana Revised Statutes, Title 9:4861

PART II. OIL, GAS, AND WATER WELLS

SUBPART A. IN GENERAL

§ 4861. Privilege for labor, services or supplies

A. Any person who performs any labor or service in

drilling or in connection with the drilling of any well or

wells in search of oil, gas or water, or who performs any

labor or service in the operction or in connection with the

operation of any oil, gas or water well or wells, or per-

forms any labor or service in the construction, operation,

or repair or in connection with the construction, opera-

tion, or repair of any flow lines or gathering lines, regard-

less of their length, which are attached to or connected

with the oil, gas or water well or wells, and any pipeline

owned by the producer, operator or contract operator of

the well, has a privilege on all oil or gas produced from

the well or wells, and the proceeds thereof inuring to the

working interest therein, and on the oil, gas or water well

or wells and the lease whereon the same are located, and

on all drilling rigs, standard rigs, machinery, pipelines,

flow lines, gathering lines and other related equipment,

including, but not limited to, monitoring, measuring,

metering and control equipment, appurtenances,

appliances, equipment, buildings, tanks, and other struc-

tures thereto attached or located on the lease, and rights-

of-way in the case of a gathering line, flow line or other

producer, operator or contract operator owned pipeline

for the amount due for labor or service, in principal ana

interest, and for the cost of preparing and recording the

App. 42

privilege, as well as ten percent attorney’s fees in the

event it becomes necessary to employ an attorney to

enforce collection.

B. Any person who does any trucking, towing or

barging, or who makes any repairs, or furnishes any fuel,

drilling rigs, standard rigs, machinery, equipment, mate-

rial or supplies for or in connection with the drilling of

any well or wells in search of oil, gas or water, or for or in

connection with the operation of any oil, gas or water

well or wells, or for or in connection with the construc-

tion, operation or repair of any flow lines or gathering

lines, regardless of their length, and any other pipeline

owned by the producer, operator or contract operator of

the well or wells, whether or not a producing well is

obtained and whether or not such materials, machinery,

equipment, services and supplies are incorporated in or

become a part of the completed oil, gas or water well, has

a privilege on all oil or gas produced from the well or

wells and the proceeds thereof inuring to the working

interest therein and on the oil, gas or water well or wells

and the lease whereon the same are located, and on all

drilling rigs, standard rigs, machinery, appurtenances,

appliances, equipment, buildings, tanks, pipelines, flow

lines, gathering lines and other related equipment,

including, but not limited to monitoring, measuring,

metering and control equipment and other structures

thereto attached for drilling, equipment and operation of

the well or lease, and rights-of-way in the case of a

gathering line, flow line or other producer, operator or

contract operator owned pipeline, for the amount due for

such trucking, towing, barging, repairs, fuel, drilling rigs,

App. 43

standard rigs, machinery, equipment, material, or sup-

plies, in principal and interest, and for the cost of prepar-

ing and recording the privilege as well as ten percent

attorney’s fees in the event it becomes necessary to

employ an attorney to enforce collection thereof. This

privilege is second in rank only to the privilege granted

in favor of laborers.

Amended by Acts 1984, No. 949, § 1.

App. 44

APPENDIX F

Louisiana Revised Statutes, Title 9:4862

§ 4862. Preservation and ranking of privilege

A. (1) To preserve the privilege granted by R:S.

9:4861, a notice of such claim or privilege, setting forth

the nature and amount thereof, shall be filed for record,

and inscribed in the mortgage records of the parish where

the property is located:

(a) Within one hundred eighty days after the last

day of the performance of the labor or service, in the case

of laborers;

(b) Within one hundred eighty days after the last

day of the doing, making, or performing of such trucking,

towing, barging, or repairing, in the case of claimants

doing, making, or performing such services; and

standard rigs, machinery, equipment, material, or sup-

plies, within one hundred eighty days from the last date

of the delivery of such fuel, drilling rigs, standard rigs,

machinery, equipment, material, or’supplies to the well or

wells. .

(2) When so recorded, the privileges are superior to

all other privileges or mortgages against the property,

except taxes or a bona fide vendor’s privilege, or privi-

leges or mortgages filed or recorded prior to the date on

which the first labor, service, trucking, towing, barging,

repairs, fuel, drilling rigs, standard rigs, machinery,

equipment, material, or supplies covered by the privilege

herein granted is furnished.

App. 45

B. The one hundred eighty day period shall not

commence to run, and shall be suspended, so long as the

person entitled to the privilege shall continue to furnish

labor, services, fuel, materials, and supplies, or any of

those things in the same oil field in which the well or

wells subject to the privilege are located, to the same

owner, operator, producer, or driller of the well or wells,

and whether the labor, services, fuel, materials, and sup-

plies, or any of those things are furnished to the well or

wells subject to such privilege or to other well or wells.

C. The notice of such claim or privilege shall con-

tain a description of the leased property of such nature as

to make the leased property reasonably subject to identi-

fication.

Amended by Acts 1983, No. 374, § 1; Acts 1986, No. 191,

§ 1.

App. 46

APPENDIX G

Louisiana Revised Statutes, Title 49:6

§ 6. Gulfward boundary of coastal parishes

A. The gulfward boundaries of the coastal parishes

of the state of Louisiana situated east of the Mississippi

River extended from the outer land terminus of their

common boundary due east, true bearing, to the outer

gulfward boundary of the state of Louisiana, and the

gulfward boundaries of the coastal parishes situated west

of the Mississippi River extended from the outer land

terminus of their common boundaries due south, true

bearing, to the outer gulfward boundary of the state of

Louisiana, and the gulfward boundary of all said coastal

parishes extend coextensively with the gulfward bound-

ary of the state of Louisiana.

B. The interior or inland boundaries of all coastal

parishes shall remain as now existing or fixed by applica-

ble state laws. ~

Added by Acts 1954, No. 32, §§ 1, 2, eff. June 21, 1964.

App. 47

APPENDIX H

Beverly Locks LEWIS, Individually and as the

Tutrix of Her Minor Children, Nona Aisha

Lewis, Erisa Kironda Lewis, Jamal William

Lewis, Benita Leshawn Lewis and Jeriel Nicole

Lewis, Plaintiff,

GLENDEL DRILLING COMPANY and

Pioneer Production Corporation,

Defendants.

AVANTI SERVICES, INC., Defendant,

Third Party Defendant,

Cross-Defendant, Appellant,

Vz.

GLENDEL DRILLING COMPANY and High-

lands Insurance Company, Defendants, Cross-

Plaintiffs, Appellees,

Mesa (as Successors to Pioneer Production),

Third Party Plaintiff,

Cross-Defendant, Appellee.

No. 88-4934.

United States Court of Appeals,

Fifth Circuit.

April 26, 1990.

Robert A. Redwine, Sessions, Fishman, Boisfontaine,

Nathan, Winn, Butler & Barkley, New Orleans, La., for

Avanti Services, Inc.

Douglas W. Truxillo, Onebane, Donohoe, Bernard,

Torian, Diaz, McNamara & Abell, Lafayette, La., for

Glendel Drilling Co.

Patrick W. Gray, Lafayette, La., for Mesa Operating

Ltd. Partners.

App. 48

Appeal from the United States District Court for the

Western District of Louisiana.

Before GEE and JONES, Circuit Judges, and

HUNTER!, District Judge.

EDITH H. JONES, Circuit Judge:

This case confronts us again with the vexing question

whether liabilities arising from offshore mineral explora-

tion are to be determined: under federal admiralty or

state law. The result here is foreordained by precedent,

but because of an apparently contradictory line of cases

in our circuit and the uncertain policy underpinning our

result, the appellant would justly ask “why?”. Perhaps

this court should seek to answer Avanti’s question en

banc.

FACTS

Avanti Services, Inc., appellant, signed a turnkey

contract with Pioneer Production corporation (now Mesa

Operating Ltd. Partners) to drill a well in Vermillion

Block 55 in the territorial waters of Louisiana. Avanti

hired Glendel Drilling to furnish a barge rig. The two

contracts contain indemnity clauses designed to protect,

respectively, Pioneer and Glendel from liability arising

out of injuries to employees or invitees of Avanti on the

1 Senior District Judge of the Western District of Louisiana

sitting by designation.

App. 49

drilling site.2 Except for references to the furnishing of

tugs or crewboats in a checklist of equipment needed for

the drilling, neither contract mentions a vessel or any

maritime condition as bearing upon the work to be per-

formed. Given the location of drilling, however, the use

of an offshore drilling rig was obviously necessary. The

contracts are in large part form documents used in

onshore and offshore mineral exploration.

2 Pioneer-Avanti contract:

11.3 Contractor [Avanti] agrees to protect, defend,

indemnify, and save Operator [Pioneer], its joint

owners’ and their respective officers, directors, and

employees harmless from and against all claims, and

causes of action of every kind and character, without

limit and without regard to the cause or causes

thereof or the negligence of any party or parties,

arising in connection herewith in favor of Contrac-

tor’s employees or Contractor’s subcontractors or

their employees, on account of bodily injury, death,

or damage to property.

Avanti-Glendel contract:

14.9 Operator’s indemnification of Contractor. Oper-

ator [Avanti] agrees to protect, defend, indemnify,

and save Contractor [Glendel], its officers, directors,

employees and joint owners harmless from and

against all claims, demands, and causes of action of

every kind and character, without limit and without

regard to the causes or causes thereof or the negli-

gence of any party or parties, arising in connection

herewith in favor of Operator’s employees or Opera-

tor’s contractors or their employees, or Operator’s

invitees, other than those parties identified in para-

graph 14.8 on account of bodily injury, death or

damage to property... . ”

App. 50

During the drilling, Avanti hired Schlumberger Well

Services to log the well’s progress. On April 16, 1985,

Schlumberger’s crew was on the rig either engaged in or

just having completed this task when it was discovered

that Ernest Lewis, an employee of Schlumberger, had

drowned. He had apparently been trying to transfer to

the pipe barge, and thence to Schlumberger’s equipment

barge, which were moored next to Glendel Rig 18.

Lewis’s widow filed suit alleging general maritime

claims against Pioneer, Glendel, and Avanti and a Jones

Act claim against Schlumberger. The liability actions

eventually settled, leaving for resolution the cross-claims

for contractual indemnity filed by Pioneer and Glendel

against Avanti.? The court initially granted Pioneer’s and

Glendel’s motions for summary judgment granting

indemnity under maritime law, but upon Avanti’s

request, it decided to hold a hearing and reconsider.

Avanti alleged that a fact issue existed concerning

whether Schlumberger was its invitee at the time of the

accident. Avanti had stitched together a circumstcuntial

case suggesting that after Schlumberger finished its work

for Avanti on April 16, it commenced an entirely different

logging operation that must have been ordered by the

lease operator Pioneer. If the accident occurred during

the later, hypothetical engagement, Avanti contended,

Schlumberger and Lewis, its employee, had become

Pioneer’s invitees and the indemnity tables were turned,

3 Avanti’s contracts with Schlumberger and Glendel did

not permit indemnity of Avanti for loss attributable to Avanti’s

payments of contractual indemnity. See Corbitt v. Diamond M.

Drilling Co., 654 F.2d 329 (Sth Cir.1981).

App. 51

because Avanti was owed indemnity by Pioneer for

injury to Pioneer’s invitees. The court, after a hearing and

receiving further evidence and briefs, rejected Avanti’s

argument and entered judgment calling for Avanti to

indemnify Pioneer and Glendel according to their settle-

ments with Plaintiffs.4

On appeal, Avanti continues to urge that summary

judgment was erroneously ordered on the invitee issue.

More important, however, Avanti questions the appli-

cability of maritime law to its contractual indemnity obli-

gations. We shall discuss these issues in inverse order.

II.

CONTRACTS FOR OFFSHORE OIL DRILLING

AS MARITIME CONTRACTS

Avanti contends that its contracts with Pioneer to

drill the wildcat well in Louisiana territorial waters and

with Glendel to furnish its barge rig for that purpose are

not maritime contracts.5 The essence of a maritime con-

tract, Avanti urges, is a connection with a vessel, but the

instant contracts do not refer to a vessel. In a broader

sense, Avanti urges that there is nothing inherently mar-

itime in the business of offshore mineral exploration and

that state law is better suited to resolve the problems it

poses. Finally, because the contract which led to the death

4 No other issues relating to the indemnity obligations are

before us.

° If Louisiana law governs Avanti’s contracts with Pioneer

and Glendel, Avanti would not be liable for contractual indem-

nity by operation of Louisiana’s Oil Field Anti-Indemnity Act,

La.Rev.Stat.Ann. 9:2780 (West.Supp.1989).

App. 52

of Ernest Lewis was for the performance of wireline

services by Schlumberger, Avanti contends that we are

bound by our past recognition that wireline services per-

formed offshore do not constitute maritime activity. Thur-

mond v. Delta Well Surveyors, 836 F.2d 952 (5th Cir.1988).

The relevant law of our circuit does not support

Avanti’s argument. Since at least as early as 1970, our

authorities have identified contracts for offshore drilling

and mineral operations involving the use of a “vessel” as

maritime in nature. Theriot v. Bay Drilling Corp., 783 F.2d

527 (5th Cir.1986) (contract for use of “the drilling barge

Rome”); Corbitt v. Diamond M. Drilling Co., 654 F.2d 329

(Sth Cir.1981) (contract for casing services to be per-

formed on an inland drilling barge); Transcontinental Gas

Pipe Line Corp. v. Mobile Drilling Barge “Mr. Charlie”, 424

F2d 684, 691 (5th Cir.1970) (as to contract for offshore

drilling and reworking operations, the court said “of

course, the construction of a maritime contract is gov-

erned by federal, not state, law.” [citations omitted]).

Likewise, each of these cases interpreted an indemnity

clause in the particular drilling or offshore servicing con-

tract. As Avanti concedes, a contract need not specifically

reference a vessel if it is actually “maritime”. The drilling

contract in Theriot, supra, provided that the drilling com-

pany “would furnish the equipment, materials, supplies,

and services necessary to the drilling and completion of

the well.” 783 F.2d at 538. These terms are substantially

similar to the terms of the contract between Avanti and

Pioneer. The court’s conclusion in Theriot that the contract

“focused upon the use of a vessel”, i.e. the drilling barge

identified in an exhibit to the contract, inescapably leads

to the same conclusion in this case.

App. 53

A recent decision of this court questions whether

Theriot’s broad characterization of maritime contracts

comports with the Supreme Court’s decision in Herb’s

Welding, Inc. v. Gray, 470 U.S. 414, 105 S.Ct. 1421, 84

L.Ed.2d 406 (1985). See Union Texas Petroleum Corp. v. PLT

Engineering, Inc., 895 F.2d 1043 (5th Cir.1990). Judge

Brown’s opinion in Union Texas goes on to

construe Theriot narrowly and constrain it to its

facts. Since no drilling on navigable waters from

a vessel is involved here, Theriot is not control-

ling.

Union Texas, at 1049. “Constrained to its facts,” however,

Theriot still controls the result in this case. Avanti’s

reliance on Union Texas must be limited to a plea for en

banc review of the Theriot line of cases.

Only one case arguably runs counter to this author-

ity. Avanti relies heavily on Thurmond for the proposition

that a contract to furnish wireline services is “clearly a

non-maritime obligation” . . . “performed on land-based

wells and offshore wells, and wireline services present

hazards and problems peculiar to the oil and gas indus-

try.” 836 F.2d at 955. Thurmond applied state law to the

construction of an indemnity clause in a wireline service

contract, although the contract was performed and the

employee injured while working on a wireline barge in

Louisiana territorial waters. Thurmond is, however, distin-

guishable precisely because the contract there interpreted

called solely for the performance of wireline services by a

contractor. Because our other cases hold that contracts to

drill a well offshore or to provide general services in

connection therewith are, when performed from a mov-

able drilling platform, maritime obligations, we must be

App. 54

bound by those authorities rather than by the special-

purpose contract in Thurmond.

More difficult to dispose of is Avanti’s reliance on the

choice-of-law analysis applied by Thurmond and Union

Texas: For although we are bound by cases construing

contracts essentially analogous to those in issue here, we

recognize the logical conflict between holding that such

cases are inherently maritime while a contract for wire-

line services, not specifically referencing the offshore

nature of the work, but actually performed from a barge,

is not. Judge Garwood noted the apparent inconsistencies

among some of our cases in this area, as well as their

failure to cross-cite each other, in his concurrence to

Thurmond, 836 F.2d at 957-58.

From these inconsistent lines of authority springs the

potential for significant uncertainty in the law applicable

te offshore mineral exploration. The application of mar-

itime or state law to a particular contract may turn, as in

Thurmond, on the degree of specificity with which it

identifies operations offshore or on navigable waters. It

may turn on whether the particular contractor furnished

a “vessel” in connection with his work. It may depend on

whether the work is performed from a fixed platform or

one of the several types of movable rigs that we have

held to be “vessels.” By act of Congress, whether the

contract covered activity in state territorial waters or on

the Outer Continental Shelf will also have an impact on

the choice of law. See Outer Continental Shelf Lands Act,

43 U.S.C. § 1333(a); Laredo Offshore Constructors Inc. v.

Hunt Oil Company, 754 F.2d 1223 (5th Cir.1985).

App. 55

How to resolve these inconsistencies is perplexing.

What appears to us as a serious legal conundrum may

have had little effect in the real world. That is to say, oil

companies, drilling contractors and oil field service com-

panies, together with their insurers, may already have

adjusted to the overlapping applications of maritime and

state law by choice of law clauses® or adjustments in the

rates of coverage. We should not lightly “straighten out”

the formal logic of the law where to do so would upset

stable commercial expectations. Moreover, for purposes

of interpreting the reach of federal maritime law, the

relative importance that one attaches to the use of “ves-

sels” in offshore oil exploration, the dissimilarity between

such exploration and traditional maritime concerns, the

impact of potential harm to maritime commerce, and the

need for uniformity are matters that have not been settled

by the Supreme Court or our court.

This case radiates with the uncertainties that exist in

this area of the law. Although it is technically resolved by

application of settled authority, the persuasiveness of that

authority is much in doubt.

There are at least three ways to resolve the inconsis-

tency among our precedents. First, we could hold that no

movable offshore oil and gas rig, when moored and

engaged in exploration or production, is a vessel. This

would apply the realistic view of Thurmond and Sohyde

that (a) federal maritime law was not intended to cover

42 (5th Cir.1989); but compare Union Texas, supra, at 1050 (par-

ties may not contract away choice of law mandated by Con-

gress through OCSLA)

nila sinteasileeaaemnl

App. 56

liabilities arising from mineral exploration and (b) the

adjective use of vessels to assist in such operations is not

sufficient to invoke the law of admiralty. This result

would also eliminate the rather absurd inconsistency that

otherwise exists between applying maritime law to cer-

tain mineral exploration contracts when the drilling

occurs in state territorial waters, as here, while state law

governs precisely the same contractual relationship a few

miles further offshore pursuant to the OCSLA. See Laredo

Offshore Constructors, Inc. v. Hunt Oil Company, supra. As

Judge Garwood put it,

Given the OCSLA directed applicability of state

law to such activities when conducted on the

outer continental shelf, see Laredo, there is

plainly much to be said, as Judge Wisdom

points out, for also applying state law when the

same activities are conducted in the state’s terri-

torial waters.

Thurmond v. Delta Well Surveyors, supra at 957-58 (Gar-

wood, J., concurring). Despite our reflexive invocation of

admiralty jurisdiction to cover contracts involving mov-

able offshore rigs, we have in the OCSLA context recog-

nized that admiralty law is unsuited to dealing with

extraction of minerals from the sea bottom. Laredo, 754

F.2d 1228 (citing legislative history of OCSLA and

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

S.Ct. 1835, 23 L.Ed.2d 360 (1969)). See also Herb’s Welding,

Inc. v. Gray, 470 U.S. 414, 105 S.Ct. 1421, 1428, 84 L.Ed.2d

406 (1985) (“[t]here is nothing inherently maritime about”

building and maintaining pipes and platforms on the

outer continental shelf).

Second, we could retain our decades-old holding that

movable offshore rigs are non-traditional “vessels” in

App. 57

admiralty, even when moored in place, while attempting

to articulate consistent standards for maritime contracts

and liabilities. A variation on the second alternative

would be to overrule Thurmond and Union Texas and

apply maritime law to all offshore mineral exploration

contracts, save those governed by the OCSLA. Whether

one of these results, or others we have not yet conceived,

should prevail, we leave to the decision of the court en

banc.

Ill.

SCHLUMBERGER’S iNVITEE STATUS

Avanti contended that at the time Ernest Lewis

drowned, Schlumberger may have been an invitee of

Pioneer rather than itself on Glendel Rig 18, inasmuch as

Schlumberger may have been performing services at

Pioneer’s request. Although Avanti’s theory is intriguing,

it was not supported by sufficient evidence to raise an

issue for summary judgment purposes. See Celotex Corp. v.

Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Avanti purported to substantiate its claim with affidavits

from two of its employees. One of them stated that the

daily drilling log for the well and Schlumberger’s invoice

for its logging activities both covered a type of logging

activity that Avanti had not specifically requested

Schlumberger to perform, and it noted that Avanti was

not charged for this service. The second Avanti employee

stated that he “had no interest” in certain activity that

continued on that platform after Schlumberger removed

particular equipment from the hold that was needed for

Avanti’s contract requirements. Neither employee

——<&x«a—“<—_—_

App. 58

attested that Schlumberger actually performed any addi-

tional logging that evening.

In response to this evidence, Glendel submitted affi-

davits from Mesa (formerly Pioneer) and Schlumberger

attesting that pioneer did not request Schlumberger to

perform any logging services of the type contended by

Avanti and that Schlumberger did not do any work on the

well other than as requested by Avanti. Avanti’s evidence

does not squarely contradict these affidavits, hence, no

genuine issue of material fact appeared over whether

Schlumberger was the invitee of Pioneer at the time of the

accident.

For the foregoing reasons, the judgment of the trial

court is affirmed.

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.