Petition for Writ of Certiorari — Fruge v. Anadarko Petroleum Corp.

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ICE OF THE CLERK

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Supreme Court of the Gnited States

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CARL FRUGE AND DARLA MONK FRUGE,

INDIVIDUALLY AND ON BEHALF OF CASEY FRUGE

AND DERRICK FRUGE,

Petitioners,

ANADARKO PETROLEUM CORPORATION;

_ STOKES & SPIEHLER USA, INCORPORATED;

AND GREG ZIELINSKI, INCORPORATED,

Respondents.

She

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

PETITION FOR A WRIT OF CERTIORARI

JENNIFER JONES

Counsel of Record for Petitioners

J. B. JONES, JR.

JONES LAW FIRM

Post Office Box 1550

Cameron, Louisiana 70631

(337) 775-5714

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

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED FOR REVIEW

Whether the trial court and Court of Appeal erred in

holding that Louisiana law establishing the duties be-

tween principals and independent contractors should be

applied to a_case arising on the Outer Continental Shelf,

when such law is in conflict with federal regulations.

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW......sssssssses i

TABLE OF CONTENTS ....ssccssssssssssssssssssssssssssssseeeeeee ii

TABLE OF AUTHORITIES....scscccssssssssssssssssssseseeseeee iii |

OPINIONS BELOW .necssssssssscsessssssssscesssssssssssssssssseesees 1 |

SUUICTINE sete 1 |

STATUTORY PROVISIONS INVOLVED ........sssssss111 1 |

STATEMENT OF FACTS -ancscccsccssssccsessesssssssseesssessses 1

REASONS FOR GRANTING THE PETITION ........... 3

I. THE FIFTH CIRCUIT COURT OF APPEAL

HAS DECIDED AN IMPORTANT QUESTION

OF FEDERAL LAW THAT HAS NOT BEEN,

BUT SHOULD BE SETTLED BY THIS

COURT. THE DECISION OF THE FIFTH

CIRCUIT IS IN CLEAR CONFLICT WITH

THE EXPRESS LANGUAGE OF A CON-

GRESSIONAL STATUTE BY PERMITTING A

STATE LAW TO PREEMPT THE APPLI-

CATION OF FEDERAL REGULATIONS ON

THE OUTER CONTINENTAL SHELLF............. 3

INCL AIBN av ensersecseniinnnainmenincannanane onseaeetsamnnees 10

ili

TABLE OF AUTHORITIES

Page

CASES:

Bartholomew v. CNG Producing Company, 832 F.2d

I I shes saictniconcicctndniistnicbleenapamemnadesninnitvnniind 5

Coulter v. Texaco, Inc., 117 F.3d 909 (5th Cir. 1999) ...4, 5, 6

Dupre v. Chevron U.S.A., Inc., 109 F.3d 230 (5th

a aa cit eee hicdinatasabicadcncanssovontcnadoéamasiabe 6

English v. General Electric Co., 496 U.S. 72, 110

S.Ct. 2270, 110 L.Ed.2d 65 (1990) ...........ccccsscesesceseeeees 10

Fruge ex rel. Fruge v. Parker Drilling Co., 337 F.3d

558 (5th Cir. (La.) July 23, 2008)... eee ecceessecesseeeees 1

Fruge v. Parker Drilling Co., ___ F.3d ___ (5th Cir.

i i sn sacutiariadiciniisidimnanien 1

People v. Torch Energy Services, Inc., 102

Cal.App.4th 181, 125 Cal.Rptr.2d 365 (2002)................ 10

Resolution Trust Corporation v. Feldman, 3 F.3d 5

SI III si sic sdono se edeeindtalntéveabeedicdiirvomeneentbinines 8

Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S. 352, 89

S.Ct. 1835, 23 L.Ed.2d 360 (1969)... eeseeeseeeeeees 4,5

Romero v. Mobil Exploration and Producing North

America, Inc., 939 F.2d 307 (5th Cir. 1991)................. 5,6

Shell Offshore, Inc. v. Kirby Exploration Co. of

Texas, 909 F.2d 811 (5th Cir. 1990)................ccscccseceseeee 4

Union Texas Petroleum v. PLT Engineering, 895

F.2d 1043 (5th Cir.), cert. denied, 498 U.S. 848,

111 S.Ct. 136, 112 L.Ed.2d 103 (1990)... eeeeeeeeeeeee 4

TABLE OF AUTHORITIES — Continued

Page

STATUTES:

QB U.S.C.A. § 1254( 1)... eccccnssccceeseeeeseeceecceeeseeseeeneeeeeeeees 1

28 U.S.C.A. § 1881 .........scccscccsccccccccccessssssssscseccccssooscceesasssees 1

43 U.S.C.A. § 1833. ..........ccccccssscccccccrccssssesssccseccrcccssceerenesesens 1

43 US.C.A. © SBD A) wcccvcsseserecsssorssessreccsesvovoesescsenssepaonscssons 3

43 U.S.C.A. § 1833(a)(1)........seeeeeseeeeeeeeeeeeees ‘ulsissamdiaasinias 1

43 U.S.C.A. § 1333(a)(2)A)........cccrccsccsvercoosssssesesensooes 1,4,5

OO) CER BIB nin svcsessncscscnecensonnsevesepesecenistosuvenncsenseeseneuononsstes 8

SO) CITE BOBO ec escncsscescenscerssecescestsoensovssvsewnssoenesewonssvcesavonse 6

30 CFR. 250.105.....:.....cccsssccssscccscccscccvccscssccessssscccsosesssooess 1,8

BO CER 250.106..........ccccssccovscscsecscrscvcvecscosovesseescssseccsoooeses 1,3

SO CPR 260.107 .ccsccscocsesseveccesesssousoovscssonsvsrnvescessnssensssecsnts 1,9

SO CER 250.14. .....cccscccccsosseecctensnsovenscesorsnensveoneesesconssnes 15,2

BO CHER BBO. 40D. ccrscccnvccsesesesesesceecesvsocsvecssevvvenessatecssesosess 1,9

SO CER BGO GG onc csceissevsversnssesessovccocnsssnesonensvtsnevsanectsees 1, 9, 10

BO CHE FO BG crvvcnsncnvevcvevencsesectossennossscnssevavovsemsmensesentaueons 1,9

BD TR BIGGS ocacsecccnecscnvsecssecsocssesssecversssnsssvensianessvenensonuennsseere 7

BD BTR DIED inisinsissiccesissvnnsscvnnserssrssvenvecsecnareces ‘sisieateateanainidin 7,8

OD RR FID a ceicicvsnsesecssncnsvectvinensincsnnnsenveccsevsarsarsnnnsnsntannarees 8

6 RR TIT vsiceicevesscesiersernepesresenisccservenssssasensnseermisernenesesonets 8

G4. FR 72783 ..........ccccccscccccccccscccccccssccecnseccessssrscsonsssenesessessens 8

OPINIONS BELOW

Fruge ex rel. Fruge v. Parker Drilling Co., 337 F.3d

558 (5th Cir. (La.) July 23, 2003) (NO. 02-30659), rehear-

ing and rehearing en banc denied by Fruge v. Parker

Drilling Co., __ F.8d __ (5th Cir. (La.) Aug 19, 2003)

(TABLE, NO. 02-30659).

JURISDICTION

The Fifth Circuit filed its decision on July 23, 2003

and entered an order denying petitioners’ motion for

rehearing on August 19, 2003. This Court has jurisdiction

under 28 U.S.C.A. § 1254(1) to review the circuit court’s

decision on a writ of certiorari.

STATUTORY PROVISIONS INVOLVED

43 U.S.C.A. § 1333(a)(1) and (2)(A)

30 CFR 250.105, 250.106, 250.107, 250.146, 250.400,

250.413 and 250.514

STATEMENT OF FACTS

The basis of jurisdiction in the court of first instance

was 28 U.S.C.A. § 1331, a civil action arising under the

Constitution, laws and treaties of the United States. In

this case, the specific law at issue was 43 U.S.C.A. § 1333,

providing for jurisdiction over actions arising out of the

conducting of mineral operations on the Outer Continental

Shelf.

This is an action for personal injuries sustained on a

drilling platform on the Outer Continental Shelf off the

coast of Louisiana. The district court granted motions for

summary judgment filed by the platform owner (Anadarko

Petroleum Corporation, the mineral lessee) and two

independent contractors hired by the mineral lessee to

supervise and monitor drilling operations (Stokes &

Spiehler USA, Inc. and Greg Zielinski, Inc.).

Petitioner, Carl Fruge, was an employee of M-I L.L.C.

He was working on Anadarko’s stationary drilling plat-

form, where drilling operations were being conducted by

Parker Drilling Offshore Corporation. On November 27,

2000, a high pressure hose, which was a part of a Parker

drilling rig attached to the Anadarko platform, exploded,

spewing drilling fluid into Petitioner’s face and slamming

his entire body against a steel-enclosed mud cleaning unit

of his employer, M-I. As a result of the accident, Petitioner

lost his sight in both eyes and injured his back. The hose

had not been tested by Anadarko or their representatives

prior to the commencement of operations by the M-I crew.

Two sets of valves which would have prevented the explo-

sion either failed or were not in operation.

The trial court held that, as a matter of Louisiana law,

Anadarko, Stokes & Spiehler and Zielinski were not

subject to strict liability under Louisiana law, were not

negligent and were not responsible for the negligent acts,

if any, of Parker. Federal regulations of the Mineral

Management Service impose joint and several liability on

Anadarko and its agents, Stokes & Spiehler and Zielinski

for violations of safety regulations promulgated by the

MMS. However, the Fifth Circuit affirmed the granting of

summary judgment by the district court, holding that

“

these regulations did not apply and that Louisiana law

governed the outcome of this case.

REASONS FOR GRANTING THE PETITION

I. THE FIFTH CIRCUIT COURT OF APPEAL

HAS DECIDED AN IMPORTANT QUESTION

OF FEDERAL LAW THAT HAS NOT BEEN,

BUT SHOULD BE SETTLED BY THIS COURT.

THE DECISION OF THE FIFTH CIRCUIT IS

IN CLEAR CONFLICT WITH THE EXPRESS

LANGUAGE OF A CONGRESSIONAL STAT-

UTE BY PERMITTING A STATE LAW TO PRE-

EMPT THE APPLICATION OF FEDERAL

REGULATIONS ON THE OUTER CONTINEN-

TAL SHELF.

The Outer Continental Shelf Lands Act provides that

federal law and jurisdiction is extended to the subsoil and

seabed of the Outer Continental Shelf and all artificial

islands attached to the seabed erected for the purpose of

exploring for, developing, or producing resources there

from. State law will apply to cases arising on the Outer

Continental Shelf only to the extent that state law is not

inconsistent with federal law or regulation. 43 U.S.C.A.

§ 1333(a). The Fifth Circuit has held that state law may be

applied pursuant to the OCSLA only if all three of the

following conditions are satisfied:

1. The controversy must arise on a situs

covered by the OCSLA.

2. Federal maritime law must not apply of

its own force.

3. The state law must not be inconsistent

with federal law.

Union Texas Petroleum v. PLT Engineering, 895 F.2d 1043

(5th Cir.), cert. denied, 498 U.S. 848, 111 S.Ct. 136, 112

L.Ed.2d 103 (1990). Congress has provided that “Para- —

graph (2) adopts State law as Federal law, to be used when

Federal statutes or regulations of the Secretary of the

Interior are inapplicable.” S.Rep.No. 411, 83d Cong., 1st

Sess. 23 (1953), quoted by this Court in Rodrigue v. Aetna

Cas. & Sur. Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d

360 (1969).

In keeping with this mandate, the Fifth Circuit

correctly held that Louisiana law pertaining to predial

servitudes could not be applied to a dispute arising out of

Outer Continental Shelf operations because it conflicted

with federal regulations. Federal regulations prohibited

the owner of a servient estate from abandoning the plat-

form to the owner of a dominant estate. Shell Offshore,

Inc. v. Kirby Exploration Co. of Texas, 909 F.2d 811 (5th

Cir. 1990). The Fifth Circuit has characterized Section

1333(a)(2)(A) of the OCSLA as “a Congressionally man-

dated choice of law provision.” Union Texas Petroleum

Corporation v. PLT Engineering, Inc., 895 F.2d 10438, 1050

(5th Cir. 1990).

However, relying on Coulter v. Texaco, Inc., 117 F.3d

909 (5th Cir. 1999), the Fifth Circuit held in the case sub

Judice that there was no conflict or inconsistency between

federal regulations promulgated by the Mineral Manage-

ment Service and Louisiana state law. Therefore, pursuant

to 43 U.S.C.A. § 1333(a)(2)(A), Louisiana law provided the

principles of substantive law governing this action, and

required dismissal of the Petitioners’ claim.

Petitioners contend that there is in fact a clear and

irreconcilable conflict between federal regulations and

Louisiana law. This being the case, the provisions of state

law must yield to the mandates of federal regulation.

Pursuant to the Outer Continental Shelf Lands Act,

Congress has provided that the applicable laws governing

this accident are federal laws and regulations. State laws

may be applied as “surrogate” federal laws only to the

extent that they are not inconsistent with federal laws or

regulations. This Court has emphasized that the law to be

applied in actions governed by the OCSLA is “federal law,

supplemented by state law of the adjacent state ...” 43

.U.S.C.A. § 1333(a)(2)(A); Rodrigue v. Aetna Casualty Co.,

395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969). See

also Bartholomew v. CNG Producing Company, 832 F.2d

326 (5th Cir. 1987).

Louisiana law provides that a principal is not liable

for the actions of its independent contractor unless the

principal retained “operational control” over the contrac-

tor’s work or expressly or impliedly approved the contrac-

tor’s unsafe work practice which resulted in injury to the

plaintiff. Coulter v. Texaco, Inc., 117 F.3d 909 (5th Cir.

1997). On the other hand, regulations of the Mineral

Management Service impose joint and several liability on

both the principal (mineral lessee) and the independent

contractor (lease operator) for violation of safety regula-

tions of the MMS. 30 CFR 250.146.

In Romero v. Mobil Exploration and Producing North

America, Inc., 939 F.2d 307 (5th Cir. 1991), the plaintiff

contended that the defendant violated MMS federal

regulations, which at that time imposed a general re-

quirement that drillers must at all times keep their wells

under control and utilize trained and competent personnel

to assure the safety and protection of lives and property.

30 CFR 250.50. However, the Fifth Circuit rejected the

plaintiff’s claim, holding that violation of the MMS regu-

lations cannot form the basis of a state law negligence

claim. Similarly, in Dupre v. Chevron U.S.A., Inc., 109 F.3d

230 (5th Cir. 1997), the Fifth Circuit held that (1) the

MMS regulations adopted pursuant to the Outer Conti-

nental Shelf Lands Act provide no basis for an implied

cause of action and the mineral lessee; (2) the MMS

regulations do not create an independent duty under

Louisiana law on the part of the mineral lessee to protect a

contractor’s employee from hazards created by the con-

tractor; and (3) the mineral lessee/platform owner did not

contractually assume a duty of reasonable care to the

employees of a contractor under the terms of its lease with

the United States, which incorporated the federal regula-

tions.

However, it is of critical importance to note that

Coulter, Romero, and Dupre were all decided prior to the

amendment to the MMS regulations which now place

primary responsibility on the mineral lessee and its agent

for supervising the operations and maintaining safety over

the operations and equipment without regard to principles

established by Louisiana law regarding “operational

control” or authorization of unsafe work practices. Under

the current version of the regulations, the lessee, the

operator, and the person actually performing the activity

are jointly and severally responsible for complying with

offshore MMS regulations.

In fact, prior to the 1997 amendments (effective only

after the Fifth Circuit’s opinions in Coulter, Romero and

Dupre), there was no mention of joint and several liability.

The comments to the 1997 amendments (effective August

20, 1997) to the MMS regulations specifically provide that

the amendments are intended to clarify the position of the

MMS that co-lessees and operating rights owners are

jointly and severally liable for compliance with MMS

regulations and the terms and conditions of their OCS

lease for nonmonetary obligations. 62 FR 27948-45. The

comments also provide:

Every lessee or working interest owner who exe-

cutes the designation of operator required under

the provisions of 250.8, Form MMS-1123, ac-

knowledges its joint and several liability ... 62

FR 27949.

This rule simply clarifies our position that non-

monetary lease obligations are joint and several

among co-lessees (i.e., multiple lessees) and own-

ers of operating rights .. . 62 FR 27949.

(E)ach party that executes a designation of op-

erator agreement recognizes the joint and several

nature of OCS lease obligations. The designation

of operator (Form MMS-1123) designates the en-

tity that the co-lessees authorize to conduct lease

operations as each of the co-lessee’s. “operator

and local agent.” Each lessee, by execution of the

designation of operator, agrees that “In case of

default on the part of the designated operator,

the signatory lessee will make full and prompt

compliance with all regulations, lease terms, or

orders of the Secretary of the Interior (Secretary)

or his representative. . . 62 FR 27949.

A trade organization commented that the imposi-

tion of joint and several liability should be prospec-

tive only because the Secretary has no authority to

issue retroactive rules. . .. This rule merely codifies

what has been the law under the OCSLA since en-

actment and the common law .. . 62 FR 27949.

———

A trade organization stated, with respect to joint

and several liability, that absent an express rule

on the subject at the time of the lease, one should

look to the common law to understand what the

parties understood their contract to mean. It

cites Resolution Trust Corporation v. Feldman, 3

F.3d 5 (1st Cir. 1993) for the proposition that par-

ties to a contract may agree to limit the liability

of each of several promisors. ... While parties to

a contract may agree to limit liability, neither

Congress nor the Secretary ever agreed to limit

the liabilities of OCS lessees for operational obli-

gations. The relevant common law rule is that

stated in Restatement of the Law of Contracts,

Second 289(1).

Where two or more parties to a contract promise

the same performance to the same promise, each

is bound for the whole performance thereof,

whether his duty is joint, several, or joint and

several... 62 FR 27950.

See also 30 CFR 250.105 and 30 CFR 250.106.

The 1997 amendment to 30 CFR 250.8 provided that

lessees and operating rights owners were jointly and

severally responsible for performing nonmonetary lease

obligations. Effective December 28, 1999, these provisions

were revised and renumbered. 64 FR 72756, 72783. The

current provision providing for joint and several liability of

lease owners and lease operators is found at 30 CFR

250.146. The text now provides:

250.146 Who is responsible for fulfilling leasehold

obligations?

(a) When you are not the sole lessee, you and

your co-lessee(s) are jointly and severally

responsible for fulfilling your obligations

under the provisions of 30 CFR parts 250

through 282, unless otherwise provided in

these regulations.

(b) If your designated operator fails to fulfill

any of your obligations under 30 CFR parts

250 through 282, the Regional Supervisor

may require you or any or all of your co-

lessees to fulfill those cbligations or other

operational obligations under the Act, the

lease, or the regulations.

250 through 282 require the lessee to meet a

requirement or perform an action, the lease,

operator (if one has been designated), and

the person actually performing the activity

to which the requirement applies are jointly

and severally responsible for complying with

the regulation.

It is clear beyond question that the above provision

requires both the lessee and the designated operator to

insure compliance with all provisions of 30 CFR parts 250

through 282. In this case, the plaintiff has alleged that the

lessee and the operator failed to comply with several

safety provisions, including parts 250.107, 250.400,

250.413, and 250.514.

The issue, therefore, is not whether the regulations of

the MMS provide a duty and a cause of action under

Louisiana law. The sole issue is whether the MMS regula-

tions conflict with Louisiana law, in which case the OCSLA

provides that the regulations must prevail and Louisiana

law must be disregarded.

The regulations are in irreconcilable conflict with

Louisiana law, which allows a principal to “contract away”

his duty to comply with safety regulations established by

the MMS. Part 250.413 specifically requires the lessee to

provide on-site supervision of drilling operations on a 24-

hour per day basis and to maintain rig-floor surveillance of

drilling activity on a continuous basis. There is no author-

ity in this situation for the use of Louisiana law as “surro-

gate” federal law — the federal regulations themselves are

applicable to define the duties and liabilities of the parties.

The decision of the Fifth Circuit Court of Appeals

conflicts with the principle of federal preemption. State

law is preempted to the extent that it actually conflicts

with federal law. English v. General Electric Co., 496 U.S.

72, 78-79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990). See also

People v. Torch Energy Services, Inc., 102 Cal.App.4th 181,

125 Cal.Rptr.2d 365 (2002). Therefore, it was error to

apply Louisiana law to Petitioners’ claim.

CONCLUSION

The Court should grant the petition for a writ of

certiorari and reverse the decision of the Fifth Circuit

Court of Appeals.

Respectfully submitted,

JENNIFER JONES

Counsel of Record for Petitioners

J. B. JONES, JR.

JONES LAW FIRM

Post Office Box 1550

Cameron, Louisiana 70631

(337) 775-5714

App. 1

APPENDIX

337 F.3d 558

United States Court of Appeals,

Fifth Circuit.

Carl FRUGE, on behalf of Casey FRUGE;

Darla Monk Fruge, on behalf of Casey Fruge;

Derrick Fruge, Plaintiffs-Appellants,

PARKER DRILLING COMPANY, et al., Defendants,

Anadarko Petroleum Corporation; Stokes & Spiehler

USA Incorporated; Greg Zielinski Incorporated,

Defendants-Appellees.

No. 02-30659.

July 23, 2003.

J.B. Jones, Jr., Jennifer Ann Jones (argued), vones

Law Firm, Cameron, LA, for Plaintiffs-Appellants.

Bradford Hyde Felder (argued), John A. Jeansonne,

Jr., Jeansonne & Remondet, Lafayette, LA, for Anadarko

Petroleum Corp.

Melvin A. Eiden (argued), H. Lee Leonard, Leonard &

Leonard, Lafayette, LA, for Stokes & Spiehler USA, Inc.

W. Gerald Gaudet (argued), Voorhies & Labbe, sini

ette, LA, for Greg Zielinski Inc.

Appeals from the United States District Court for the

Western District of Louisiana.

Before DUHE, EMILIO M. GARZA and DeMOSS,

Circuit Judges.

DUHE, Circuit Judge:

App. 2

In this suit involving personal injuries on a drilling

platform on the outer continental shelf off the coast of

Louisiana, the district court granted summary judgment

to the platform owner and two independent contractors

whom the owner had hired to monitor the drilling opera-

tion. Holding as a matter of law that Appellees are not

subject to strict liability, are not guilty of negligence, nor

responsible for the negligent acts, if any, of the drilling

contractor (another independent contractor not appearing

in this appeal), or for loss of evidence, we affirm.

Defendant-Appellee Anadarko Petroleum Corporation

(“Anadarko”) as principal contracted with Parker Drilling

Offshore Corporation (“Parker”) as drilling contractor to

complete a well on Anadarko’s stationary platform. Plain-

tiff’s employer, M-I, LLC, was under contract with Ana-

darko to provide filtration services for the project.

Plaintiff-Appellant Carl Fruge was operating a filter unit

on the platform when a discharge hose which was part of

Parker’s rig ruptured and injured him.

The ruptured hose was not produced for examination

despite Plaintiff’s demands. The hose is lost. The on-site

supervisors saw the ruptured hose at the time of the

accident and several times after the accident. Those

supervisors were employees of Defendants-Appellees

Stokes & Spiehler USA, Inc., and Greg Zielinski, Inc., with

whom Anadarko had contracted to provide company men

for on-the-job supervision.

Fruge sued Parker, Anadarko, Stokes & Spiehler, and

Zielinski, among others. Anadarko, Stokes & Spiehler, and

App. 3

Zielinski moved for summary judgment on the basis that

they were not negligent and did not exercise operational

control over Parker’s drilling operations so bore no respon-

sibility for Parker’s alleged negligence.

The district court granted all three motions. Fruge’s

claims against Parker remain in the district court.’

This Court reviews grants of summary judgment de

novo, applying the same standard as the district court,

viewing the evidence in a light most favorable to the non-

movant. Coulter v. Texaco, 117 F.3d 909, 911 (5th

Cir.1997); Coleman v. Houston Indep. Sch. Dist., 113 F.3d

528, 533 (5th Cir.1997).

IT.

Federal jurisdiction is predicated on the Outer Conti-

nental Shelf Lands Act (OSCLA), 43 U.S.C. § 1331 et seq.

OCSLA adopts the law of the adjacent state (Louisiana) as

surrogate federal law, to the extent that it is not inconsis-

tent with other federal laws and regulations. Bartholomew

v. CNG Producing Co., 832 F.2d 326, 328 (5th Cir.1987); 43

U.S.C. § 1333(a)(2)(A). Thus the law applicable is “federal

law, supplemented by state law of the adjacent state.”

Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S. 352, 355, 89

S.Ct. 1835, 1837, 23 L.Ed.2d 360 (1969).

* Appellate jurisdiction is appropriate, as Fruge noticed appeals

from judgments certified as final under Fed.R.Civ.P. 54(b). We agree

with the parties that the timeliness of the appeal under 28 U.S.C.

§ 1292(a)(3) is not at issue, because this case does not arise under

admiralty jurisdiction.

App. 4

Bearing in mind these principles, we are first asked to

determine whether federal regulations create civil liability

beyond the liability under state law as enunciated in

Coulter v. Texaco. Applying Louisiana negligence law,

Coulter held that a principal is not liable for the actions of

its independent contractor unless the principal retained

“operational control” over the contractor’s work (discussed

infra) or expressly or impliedly approved its unsafe work

practice that led to an injury. Coulter, 117 F.3d at 912.

Fruge argues that Coulter is not an appropriate

precedent because it did not deal with federal Minerals

Management Service (“MMS”) regulations enacted after

Coulter. Those regulations, according to Plaintiff, place

primary responsibility on the mineral lessee (Anadarko)

and its agents (Zielinski and Stokes & Spiehler) for super-

vising the operations and maintaining safety over the

operations and equipment — without any regard to “opera-

tional control” i authorization of an unsafe work practice.

If a mineral lessee establishes that it did not maintain

operational control, according to Fruge, it has necessarily

violated the federal regulations, creating liability as a

matter of law. The key regulation, in Plaintiff’s view,

charges that the lessee, the operator, and the person

actually performing the activity “are jointly and severally

responsible” for complying with the offshore MMS regula-

tions. 30 C.F.R. § 250.146(a) & (c). This regulation further

allows the Regional Supervisor to require any or all co-

lessees to fulfill obligations under the regulations or the

App. 5

lease, if the designated operator fails to fulfill obligations

under the regulations. Jd. § 146(b).?

The MMS regulations in place at the time of Coulter

similarly carried the concept of responsibility on the

parts of both the lessee and the operator for obligations

under the lease and the regulations.* The Secretary has

* The regulation provides as follows:

§ 250.146 Who is responsible for fulfilling leasehold obligations?

(a) When you are not the sole lessee, you and your co-lessee(s)

are jointly and severally responsible for fulfilling your obligations

under the provisions of 30 CFR parts 250 through 282, unless oth-

erwise provided in these regulations.

(b) If your designated operator fails to fulfill any of your obliga-

tions under 30 CFR parts 250 through 282, the Regional Supervi-

sor may require you or any or all of your co-lessees to fulfill those

obligations or other operational obligations under the [OCSLA],

the lease, or the regulations.

require the lessee to meet a requirement or perform an action, the

lessee, operator (if one has been designated), and the person actu-

ally performing the activity to which the requirement applies are

. jointly and severally responsible for complying with the regula-

tion.

30 C.F.R. § 250.146 (2002) (eff. Jan. 27, 2000, 64 Fed.Reg. 72,756 (Dec.

28.1999)).

* July 29, 1997, was the decision date of Coulter The MMS

regulations at that time provided,

$ 250.8 Designation of operator.

In all cases where operations are not conducted by an exclusive

owner of record, a designation of operator shall be submitted to

the Regional Supervisor prior to the commencement of operations.

This designation will be accepted as authority for the operator, or

the operator’s local representative, to act on behalf of the lessee

and to fulfill the lessee’s obligations under the Act and the regula-

tions in inis part. ... In case of a termination [of the authority of

the operator] or in the event of a controversy between the lessee

(Continued on following page)

App. 6

considered the law to have provided for joint and several

liability of co-lessees and the operator since the enactment

of OCSLA (1953) and the common law, through the pre-

sent date.‘ Although the regulations have been modified a

and the designated operator, both the lessee and the operator will

be required to protect the interests of the lessor. 7

30 C.F.R. § 250.8 (1988) (emphasis added). This regulation became

effective May 31, 1988, 53 Fed.Reg. 10,596 (April 1, 1988), and was

superseded August 20, 1997, by § 250.8, infra n. 4.

* The MMS has taken the position, since long before the 1988

regulation quoted in the previous note, that the [sic] both lessee and the

designated operator are required to bear the non-monetary obligations

under the lease as well as any obligations under the regulations.

Publishing notice of the superseding regulation (reproduced below)

which used the phrase “joint and several” to describe non-monetary

lease obligations, the MMS expressed its intention that the regulation

simply “/cJlarifie[dJ[its] position that co-lessees and operating rights

owners are jointly and severally liable for compliance with our regula-

tions and the terms and conditions of their OCS oil and gas and sulphur

lease for nonmonetary obligations.” 62 Fed.Reg. 27,948, 27,948-49 (May

22, 1997) (emphasis added). That “clarifying” regulation ati

§ 250.8 Designation of operator.

This section explains the requirement for designation of an opera-

tor to conduct operations on a lease where the operator is not the

sole lessee (record title owner) and owner of operating rights.

(a) Each record title owner (lessee) or operating rights owner for

a lease must provide the Regional Supervisor a designation of op-

erator in each case where someone other than an exclusive record

title and operating rights owner will conduct lease operations. .. .

(1) This designation of operator is authority for the operator to

act on behalf of each lessee and operating rights owner and fo ful-

fill each of their obligations under the Act, the lease, and the regu-

lations in this part.

(3) If you terminate a designation of operator or a controversy |

develops between you and your designated operator, you and the |

operator must protect the lessor’s interests. |

(Continued on following page)

in App. 7

(b) Lessees and operating rights owners are jointly and severally

responsible for performing nonmonetary lease obligations, unless

otherwise provided in the regulations in this chapter. If the desig-

nated operator fails to perform any obligation under the lease or

the regulations in this chapter, the Regional Director may require

any or all of the co-lessees and operating rights owners to bring the

lease into compliance. 30 C.F.R. § 250.8 (1997) (emphasis added)

(effective Aug. 20, 1997, 62 Fed.Reg. 27,954 (May 22, 1997), redes-

ignated as 30 C.F.R. § 250.108 effective June 30, 1998, without

any change in substance, 63 Fed.Reg. 29,478, 29,479 (May 29,

1998) (renumbering §§ 250.0-250.26 as §§ 250.100- 250.126), and

superseded Jan. 27, 2002 by 30 C.F.R. § 250.146 (2002), supra n.

2). Further revealing the MMS’s understanding that joint and

several liability had been the law since before Coulter, the Federal

proposed § 250.8(a)(1):

Comment: A trade organization commented that the imposition of

joint and several liability should be prospective only because the

Secretary has no authority to issue retroactive rules.

Response: This rule merely codifies what has been the law under

the OCSLA, since enactment and the common law. As previously

noted, section 5(a)(2)(C)(II) of the OCSLA describes those who

jointly own interests in a lease as “partners.”

62 Fed.Reg. 27,948, 27,950 (May 22, 1997) (emphasis added). Announc-

ing the regulation as final, the MMS again demonstrated that it had

long held the view that operating rights owners and lessees are jointly

and severally responsible for nonmonetary lease obligations as well as

obligations to comply with MMS regulations in the following commen-

tary: Section 250.8 . . . Since joint and several liability is closely related

to the requirement for the designation of an operator, we have consoli-

dated several provisions of the proposed rule in a revised § 250.8....

Every lessee or working interest owner who executes the designation of

operator required under the provisions of § 250.8, Form MMS-1123,

acknowledges its joint and several liability.

Comment: Twelve respondents expressed opposition to, or lack of

support for, what they characterized as “the effort to establish

joint and several liability between co-lessees or between assignors

and assignees of OCS leases.”

(Continued on following page)

App. 8

number of times, the regulations and commentary main-

fest the intention to retain this shared liability over the

years. Nothing in the 2002 regulations preempts Coulter,

and Coulter is therefore still precedent.

Additionally, this Court has held that a violation of

the MMS regulations does not give rise to a private cause

of action. Romero v. Mobil Exploration & Producing North

America, Inc., 939 F.2d 307, 310-11 (5th Cir.1991). The

regulations govern the parties’ joint and several liabilities

vis-a-vis the Government,’ not amongst themselves.® This

Response: This rule simply clarifies our position that nonmonetary

lease obligations are joint and several among co-lessees (i.e., mul-

tiple lessees) and owners of operating rights. Section 5(a)(2)(C)(II)

of the Outer Continental Shelf Lands Act (OCSLA) equates mul-

tiple lessees to “partners.”

Our position on this matter remains the same as it was May 10,

1954, the effective date of the regulations the Department of the In-

terior (DOI) issued to implement the OCSLA of 1953

As previously noted, each party that executes a designation of

operator agreement recognizes the joint and several nature of OCS

lease obligations. The designation of operator (Form MMS-1123)

designates the entity that the co-lessees authorize to conduct

lease operations as each of the co-lessee’s “operator and local

agent.” Each lessee, by execution of the designation of operator,

agrees that “In case of default on the part of the designated opera-

tor, the signatory lessee will make full and prompt compliance

with all regulations, lease terms, or orders of the Secretary of the

Interior (Secretary) or his representative.”

Id. at 27,949 (emphasis added).

* See, eg., 62 Fed.Reg. 27,948, 27,950 (discussing 30 C.FR.

§ 250.8(a)(1) (eff. Aug. 20, 1997), supra n. 4) in which the MMS de-

clared, “While parties to a contract may agree to limit liability, neither

Congress nor the Secretary ever agreed to limit the liabilities of OCS

lessees for operational obligations.”

App. 9

principle also defeats Fruge’s contention that Anadarko

had a duty under the regulations to use the best available

and safest technology to test the hose. Under the drilling

contract, the obligation to maintain and repair Parker’s

equipment and to comply with applicable safety regula-

tions rested on Parker’s shoulders.’ The OCSLA regula-

tions do not create an independent duty under Louisiana

* Fruge also argues that the regulations making the duties joint

and several perforce make the duties non-delegable among the private

parties. Discussing joint and several liability of § 250.108, the MMS

responded to a comment on a related regulation making lessees and

owners of operating rights jointly and severally responsible for obliga-

tions relating to abandoning well bores (30 C.F.R. § 250.110). In the

following exchange, the MMS made clear that the joint and several .

liability to the MMS for fulfillment of lease obligations does not prevent

the parties from parsing out the obligations differently among them-

selves by contract:

Section 250.110 General requirements. Comment: Two respon-

dents recommended that paragraph (b) of § 250.110, General re-

quirements, be changed to clarify the extent of responsibility of

prior lessees for obtaining compliance with accrued obligations.

Response: We have modified the text of this provision to present

its contents in easily understood English. While this rule deter-

mines who is liable to MMS for performance of nonmonetary obli-

gations, it is not our intention that this rule preclude private

agreements concerning the allocation of liabilities between and

among the affected parties. Nor does this rvle specify against

whom we will take enforcement action if we discover noncompli-

ance.

62 Fed.Reg. 27948, 27,949-50 (emphasis added). The Secretary further

declared, “MMS has never given its imprimatur to efforts of lessees to

limit their liabilities to MMS, much less created a property right to such

limitations.” Id. at 27,950 (emphasis added).

” Master Domestic Daywork Drilling Contract § 503(b) (Parker and

its personnel to “comply with all applicable federal, state, and local

laws, ordinances, rules, regulations, and lease or contract provisions

regarding pollution, safety and the environment”); id. § 403 (Parker

“responsible for the maintenance and repair” of all its own equipment).

App. 10

negligence law. Dupre v. Chevron U.S.A., Inc., 109 F.3d

230, 231 (5th Cir. 1997). Therefore, we will follow the

guidance of Coulter and Romero, finding nothing in the

MMS regulations to preempt their application.

III.

Fruge next argues that, regardless of the MMS

regulations, under the Coulter standard, the evidence left

a question of fact whether Anadarko and its company

representatives retained operational control over the work

of its independent contractor, Parker. To determine

whether the exception for operational control makes a

principal liable, we first examine the extent to which

Anadarko contractually reserved the right to control the

work. Coulter, 117 F.3d at 912.

Under the contract between Parker and Anadarko,

Parker was “responsible for the maintenance and repair of

all [its own equipment].” Master Domestic Daywork

Drilling Contract § 403. Parker also was responsible for

the “operation and control of the Drilling Unit,” including

supervision and having “final authority and responsibility

for the safety and operation of all systems and all person-

nel associated with the drilling operation.” Contract

§ 502(a). When the contract assigns the independent

contractor responsibility for its own activities, the princi-

pal does not retain operational control. Coulter, 117 F.3d at

912.

Operational control exists only if the principal has

direct supervision over the step-by-step process of accom-

plishing the work such that the contractor is not entirely

free to do the work in his own way. LeJeune v. Shell Oil

Co., 950 F.2d 267-270 (5th Cir.1992); McCormack v. Noble

App. 11

Drilling Corp., 608 F.2d 169, 175 n. 9 (5th Cir.1979). Here,

Parker was exclusively responsible for controlling the

details of the work it performed: the contract provided that

Parker “shall be an independent contractor with respect to

performance of all work hereunder. [Anadarko] shall have

no direction or control of [Parker] or [Parker’s] Personnel

except in the results to be obtained.” Contract § 105

(emphasis added).

The summary judgment evidence shows Anadarko

provided on-site supervision 24-hours per day, via various

independent contractors whose employees reported to

Anadarko staff engineers on a daily basis. The physical

presence of a representative of a principal is not sufficient

to show supervision or control. Ainsworth v. Shell Off-

shore, Inc., 829 F.2d 548, 550-51 (5th Cir.1987), cert.

denied, 485 U.S. 1034, 108 S.Ct. 1593, 99 L.Ed.2d 908

(1988), Graham v. Amoco Oil Co., 21 F.3d 643, 646 (5th

Cir.1994). Periodic inspections by a principal’s “company

man” do not equate to that principal retaining control over

the operations conducted by a drilling crew. Ainsworth,

829 F.2d at 550. “In short, absent an express or implied

order to the contractor to engage in an unsafe work prac-

tice leading to an injury, a principal ... cannot be liable

under the operational control exception.” Coulter, 117 F.3d

at 912.

Summary judgment is appropriate because Plaintiff

has failed to present facts sufficient to distinguish his case

from Coulter. See Celotex Corp. v. Catrett, 477 U.S. 317,

322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (summary

judgment is appropriate unless plaintiff can present

evidence to support each essential element of his claim).

“This Court has consistently held on similar facts that a

principal, such as [Anadarko], who hires independent

App. 12

contractors over which he exercises no operational control

has no duty to discover and remedy hazards created by its

independent contractors.” Wallace v. Oceaneering Int'l, 727

F.2d 427, 437 (5th Cir.1984). On the evidence of record,

summary judgment is proper for Anadarko as well as the

employers of Anadarko’s company men, Zielinski and

Stokes & Spiehler, neither of whom are responsible for the

alleged negligent acts of an independent contractor of their

principal.

IV.

As alternative grounds for liability, Fruge argues that

Anadarko or its representatives had custody of the defec-

tive hose that caused Fruge’s injuries or that the hose was

a component part or appurtenance to Anadarko’s platform,

resulting in custodian or premises liability under the

Louisiana Civil Code. Indisputably, Parker provided the

hose and Parker employees operated its equipment.

The first requirement for custodial liability under

Louisiana Code articles 2317 and 2317.1, is that the

“thing” that caused the injury be in the custody of the

defendant. Although the owner is presumed to have

custody, a non-owner defendant may have custody over

* Louisiana Civil Code article 2317 provides, “We are responsible,

not only for the damage occasioned by our own act, but for that which is

caused by ... the things which we have in our custody.” Article 2317.1

provides, “The owner or custodian of a thing is answerable for damage

occasioned by its ruin, vice, or defect, only upon a showing that he knew

or, in the exercise of reasonable care, should have known of the ruin,

vice, or defect which caused the damage,” if the damage could have

been prevented by the exercise of reasonable care.

App. 13

property if “he exercises direction and control of the thing

and derives some benefit from it.” Coulter, 117 F.3d at 913

& n. 10. The mere presence of Anadarko’s company man

does not create the kind of supervision and control neces-

sary to establish that Anadarko had custody over the

Parker rig or the hose that ruptured. Neither the presence

of company men who monitored the contractor’s perform-

ance nor the limited involvement of engineers “comes

anywhere close to creating the kind of supervision and

control necessary” to establish the principal’s custody over

the drilling rig or the hose for purposes of article 2317.

Coulter, 117 F.3d at 914.

As for premises liability under article 2322,’ a prereq-

uisite to recovery is that Parker’s rig “had become an

appurtenance to, or integral part of, [Anadarko’s] platform

by virtue of that rig’s physical attachment to that struc-

ture.” Coulter, 117 F.3d at 914. Things are considered a

component part of a construction for purposes of assessing

premises liability under article 2322 if they are “perma-

nently attached” to a building or other construction within

the meaning of article 466. Coulter, 117 F.3d at 914.

“Things are considered permanently attached if they

cannot be removed without substantial damage to them-

selves or to the immovable to which they are attached.”

La. Civ.Code art. 466.

* Louisiana Civil Code article 2322 makes the owner of a building

“answerable for the damage occasioned by its ruin, when this is caused

by neglect to repair it, or when it is the result of a vice or defect in its

original construction,” if he knew or should have known of the vice or

defect which caused the damage, and the damage could have been

prevented by the exercise of reasonable care.

App. 14

Plaintiff has pointed out no evidence that Parker’s rig

became a component part of Anadarko’s platform. The only

summary judgment evidence is to the contrary — that the

rig moved from platform to platform without substantial

damage to either the rig or the platform. As such, we hold

as a matter of law that the rig is not an appurtenance for

purposes of article 2322. See Coulter, 117 F.3d at 914-918.

Fruge’s theories of recovery under articles 2317,

2317.1, and 2322 therefore fail.

Fruge finally argues that according to the two cases

decided at Marrocco v. General Motors Corp., 966 F.2d 220

(7th Cir.1992), Anadarko should be held liable as a matter

of law for loss of the hose. Those two cases are distin-

guishable in that each involved violation of a protective

order. See id. at 221.

Here, the hose was lost before the suit was filed, when

no such order to preserve evidence had issued. Moreover,

Plaintiff presented no evidence suggesting bad faith on the

part of Anadarko. Accordingly, we discern no error in the

district court's decision to dismiss Anadarko despite

Plaintiff’s arguments regarding spoliation of evidence.

VI.

After a de novo review of the record, we hold that the

undisputed facts leave no room for finding liability against

Anadarko, Stokes & Speihler, or: Zeilinski under the

various theories asserted. Under the Anadarko/Parker

contract and based on the conduct of the parties, Anadarko

and its company representatives did not have operational

App. 15

control over the work performed by Parker. A violation of

MMS regulations, even if one occurred, does not give rise

to a cause of action. The hose that ruptured was not in the

custody of Anadarko or its representatives, at the time of

the accident and the rig was not part of Anadarko’s plat-

form. We find no error in the decision not to sanction

Anadarko for the loss of the hose. The judgment of the

district court is

AFFIRMED.

App. 16

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 02-30659

CARL FRUGE, on behalf of Casey Fruge;

DARLA MONK FRUGE, on behalf of Case

Fruge; DERRICK FRUGE

Plaintiffs-Appellants

PARKER DRILLING COMPANY; ET AL

Defendants

ANADARKO PETROLEUM

CORPORATION; STOKES & SPIEHLER

USA INCORPORATED; GREG ZIELINSKI

INCORPORATED

Defendants-Appellees

Appeals from the United States District Court for the

Western District of Louisiana, Lafayette

ON PETITION FOR REHEARING EN BANC

(Filed Aug. 19, 2003)

(Opinion July 23, 2003,5 Cir.,_ _,_ sx F.38d___)

Before DUHE, EMILIO M. GARZA, and DeMOSS, Circuit

Judges.

PER CURIAM:

(~) Treating the Petition for Rehearing En Banc as a

Petition for Panel Rehearing, the Petition for Panel

Rehearing is DENIED. No member of the panel nor judge

in regular active service of the court having requested that

App. 17

the court be polled on Rehearing En Banc (FED. R. App. P.

and 5TH Cir. R. 35), the Petition for Rehearing En Banc is

DENIED.

( ) Treating the Petition for Rehearing En Banc as a

Petition for Panel Rehearing, the Petition for Panel

Rehearing is DENIED. The court having been polled at

the request of one of the members of the court and a

majority of the judges who are in regular active service not

having voted in favor (FED. R. App. P. and 5TH Cir. R. 35),

the Petition for Rehearing En Banc is DENIED.

ENTERED FOR THE COURT:

/s/ John M. Duhé, Jr.

United States Circuit Judge

REHG-6a

App. 18

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF LOUISIANA

LAFAYETTE DIVISION

CARL FRUGE, ET AL,

; Plaintiffs, CIVIL ACTION

NO. 00-CV-2792

PARKER DRILLING CO., April 4, 2002

ET AL,

Defendants.

TRANSCRIPT OF PROCEEDINGS

The above-entitled proceedings came on to be heard

before THE HONORABLE TUCKER L. MELANCON,

UNITED STATES DISTRICT JUDGE.

APPEARANCES:

FOR THE PLAINTIFFS:

MR. JENNINGS B. JONES

Attorney at Law

Post Office Drawer 1550

Cameron, Louisiana 70631

FOR PARKER DRILLING OFFSHORE USA:

MR. STEVEN K. BEST

Attorney at Law

3850 North Causeway Boulevard, Ste. 950

Metairie, Louisiana 7000

FOR STOKES & SPIEHLER USA, INC-.:

MR. H. LEE LEONARD

Attorney at Law

Post Office Box 91823

Lafayette, Louisiana 70509-1823

App. 19

* * *

[70]That’s the extent of the relevant testimony, I

believe.

_ THE COURT: All right. Well, let me just say I

think that my Supreme Court, the Fifth Circuit, has

covered the issue in the Coulter case. I don’t see anything

in the record that has been presented to me in competent

summary judgment evidenee form that would take the

facts of this case outside the language from Coulter that I

read about operation and control. I think the issue of 2317

and 2322 via Article 466 were completely addressed to

cover this situation. I'm going to grant the defendants’

motion for summary judgment. I will say, though, I’m

going to allow, just to make sure we don’t walk of a cliff

here — and I address this to Mr. Jones, officer of the Court

— if after he goes back and he reads those depositions, if he

can make a good faith assertion to this court under Coul-

ter that, Judge, look at Page 9, Lines 23 through 25 and

whatever else, I'll give him within ten days to file a motion

for me to reconsider my action on this; but I’m granting

the summary judgment right now. And I’m granting them

for the reasons that have been stated in the dialogue I

have had with the lawyers on the case and argument,

starting with the plaintiff or defendant and then plaintiff

and then defendant again, those reasons and the reasons I

have just given.

MR. JONES: Id just like to make a comment on

your business of what you are going to let me continue to

do. What

App. 20

[76] he’s going to prevail against the defendant that’s got a

legal obligation.

MR. JONES: Well, what I expect to say to Your

Honor is when there is a dispute of fact about something,

I’m entitled to my day in court so they can decide who is

telling the truth, and that’s my point here; and if you

throw these people out, both of them, then I’m denied that

right. That’s why I think you should not do it.

THE COURT: Well, that’s why I made again the

reference to operation and control. But I think the record

is clear what you think the situation is.

So I’m going to go ahead and — I think I didn’t men-

tion this before but, Mr. Weathers, for the record, the

earlier motion of Anadarko that I granted, I think that’s

Record Document 52, I’m going to go ahead and grant the

motion, the summary judgment motion of Stokes and

Spiehler for the reasons that I have said here today in

connection with the argument that was just made by Mr.

Leonard and Mr. Jones, as well as Mr. Felder and the

pleadings that have been filed and the question that I

have asked throughout — I hate to do that to the Fifth

Circuit if they ever get to read this, but it is almost like

you've got to read the record. But it’s real clear in my view,

based on the current record, that the motion should be

granted so I’m going to go ahead and grant that.

Now I believe there is another motion that was filed

* * *

[79]try it with the facts that have all been corrected, so

there is no real pushy reason to why we have to roll along

too fast and maybe make a mistake.

THE COURT: The only one reason I have got,

and I’m sincere and earnest, and I want Mr. and Mrs.

App. 21

Fruge to know that is because of the oath I took to follow

the law, period, end of subject.

MR. JONES: Well, I don’t have any problem like

that. I just wanted to say I think it would be your discre-

tion if you wanted to let us go out there and take the

deposition of these people again.

THE COURT: I’ve ruled on that.

MR. JONES: I know you have.

THE COURT: All right. I'm going to go ahead

and grant the motion for summary judgment. And that is

Record Document 89 filed by Zielinski, Greg Zielinski,

Inc.; and I’m going to dismiss those claims. And those,

again, for the reasons that I have given previously, the

discussions with the lawyers, their arguments, comments I

have made and the reasons I have given as it relates to

operation and control in this case.

Now I’m going to go ahead and we'll have — I'll reiter-

ate, I'll give Mr. Jones ten days to go to the present record

and say, see, Judge, if you read these pages of these guys’

depositions and these liens, even you will be able to get

* * *

App. 22

43 U.S.C.A. § 1333

(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 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 seabed, which

may be erected thereon for the purpose 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:

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 declared to be the law of the

United States for that portion of the subsoil and seabed of

the outer Continental Shelf, and artificial islands and

fixed structures erected thereon, which would be within

the area of the State if its boundaries were extended

seaward to the outer margin of the outer Continental

Shelf, and the President shall determine and publish

App. 23

in the Federal Register such projected lines extending

seaward and defining each such area. All of such applica-

ble laws shall be administered and enforced by the appro-

priate officers and courts of the United States. State

taxation laws shall not apply to the outer Continental

Shelf.

30 CFR Ch. 11 § 250.105

Act means the OCS Lands Act, as amended (43 U.S.C.

1331 et seq.).

Affected State means with respect to any program,

plan, lease sale, or other activity proposed, conducted, or

approved under the provisions of the Act, any State:

(1) The laws of which are declared, under section

4(a)(2) of the Act, to be the law of the Untied States for the

portion of the OCS on which such activity is, or is proposed

to be, conducted;

(2) Which is, or is proposed to be, directly connected

by transportation facilities to any artificial island or

installation or other device permanently or temporarily

attached to the seabed;

(3) Which is receiving, or according to the proposed

activity, will receive oil for processing, refining, or trans-

shipment that was extracted from the OCS and trans-

ported directly to such State by means of vessels or by a

combination of means including vessels;

(4) Which is designated by the Secretary as a State

in which there is a substantial probability of significant

impact on or damage to the coastal, marine, or human

App. 24

environment, or a State in which there will be significant

changes in the social, governmental, or economic infra-

structure, resulting from the exploration, development,

and production of oil and gas anywhere on the OCS; or _

(5) In which the Secretary finds that because of such

activity there is, or will be, a significant risk of serious

damage, due to factors such as prevailing winds and

currents to the marine or coastal environment in the event

of any oil spill, blowout, or release of oil or gas from

vessels, pipelines, or other transshipment facilities.

Air pollutant means any airborne agent or combina-

tion of agents for which the Environmental Protection

Agency (EPA) has established, under section 109 of the

Clean Air Act, national primary or secondary ambient air

quality standards.

Analyzed geological information means data collected

under a permit or a lease that have been analyzed. Analy-

sis may include, but is not limited to, identification of

lithologic and fossil content, core analysis, laboratory

analyses of physical and chemical properties, well logs or

charts, results from formation fluid tests, and descriptions

of hydrocarbon occurrences or hazardous conditions.

Archaeological interest means capable of providing

scientific or humanistic understanding of past human

behavior, cultural adaptation, and related topics through

the application of scientific or scholarly techniques, such

as controlled observation, contextual measurement,

controlled collection, analysis, interpretation, and expla-

nation.

App. 25

Archaeological resource means any material remains

of human life or activities that are at least 50 years of age

and that are of archaeological interest.

Attainment area means, for any air pollutant, an area

that is shown by monitored data or that is calculated by

air quality modeling (or other methods determined by the

Administrator of EPA to be reliable) not to exceed any

primary or secondary ambient air quality standards

established by EPA.

Best available and safest technology (BAST) means

the best available and safest technologies that the director

determines to be economically feasible wherever failure of

equipment would have a significant effect on safety,

health, or the environment.

Best available control technology (BACT) means an

emission limitation based on the maximum degree of

reduction for each air pollutant subject to regulation,

taking into account energy, environmental and economic

impacts, and other costs. The Regional Director will verify

the BACT on a case-by-case basis, and it may include

reductions achieved through the application of processes,

systems, and techniques for the control of each air pollut-

ant.

Coastal environment means the physical, atmospheric,

and biological components, conditions, and factors that

interactively determine the productivity, state, condition,

and quality of the terrestrial ecosystem from the shoreline

inward to the boundaries of the coastal zone.

Coastal zone means the coastal waters (including the

lands therein and thereunder) and the adjacent shore-

lands (including the waters therein and thereunder)

App. 26

strongly influenced by each other and in proximity to the

shorelands of the several coastal States. The coastal zone

includes islands, transition and intertidal areas, salt

marshes, wetlands, and beaches. The coastal zone extends

seaward to the outer limit of the U.S. territorial sea and

extends inland from the shorelines to the extent necessary

to control shorelands, the uses of which have a direct and

significant impact on the coastal waters, and the inward

boundaries of which may be identified by the several

coastal States, under the authority in section 305(b)(1) of

the Coastal Zone Management Act (CZMA) of 1972.

Competitive reservoir means a reservoir in which >

there are one or more producible or producing well comple-

tions on each of two or more leases or portions of leases,

with different lease operating interests, from which the

lessees plan future production.

Correlative rights when used with respect to lessees of

adjacent leases, means the right of each lessee to be

afforded an equal opportunity to explore for, develop, and

produce, without waste, minerals from a common source.

Data means facts and statistics, measurements, or

samples that have not been analyzed, processed, or inter-

preted.

Departures means approvals granted by the appropri-

ate MMS representative for operating requirements/

procedures other than those specified in the regulations

found in this part. These requirements/procedures may be

necessary to control a well; properly develop a lease;

conserve natural resources, or protect life, property, or the

marine, coastal, or human environment.

App. 27

Development means those activities that take place

following discovery of minerals in paying quantities,

including but not limited to geophysical activity, drilling,

platform construction, and operation of all directly related

onshore support facilities, and which are for the purpose of

producing the minerals discovered.

Director means the Director of MMS of the USS.

Department of the Interior, or an official authorized to act

on the Director’s behalf.

District Supervisor means the MMS officer with

authority and responsibility for operations or other desig-

nated program functions for a district within an MMS

Region.

Easement means an authorization for a nonposses-

sory, nonexclusive interest in a portion of the OCS,

whether leased or unleased, which specifies the rights of

the holder to use the area embraced in the easement in a

manner consistent with the terms and conditions of the

granting authority.

Eastern Gulf of Mexico means all OCS areas of the

Gulf of Mexico the Director decides are adjacent to the

State of Florida. The Eastern Gulf of Mexico is not the

same as the Eastern Planning Area, an area established

for OCS lease sales.

Emission offsets means emission reductions obtained

from facilities, either onshore or offshore, other than the

facility or facilities covered by the proposed Exploration

Plan (EP) or Development and Production Plan (DPP).

Enhanced recovery operations means pressure main-

tenance operations secondary and tertiary recovery,

cycling, and similar recovery operations that alter the

App. 28

natural forces in a reservoir to increase the ultimate

recovery of oil or gas.

Existing facility, as used in § 250.303, means an OCS

facility described in an Exploration Plan or a Development

and Production Plan approved before June 2, 1980.

Exploration means the commercial search for oil, gas,

or sulphur. Activities classified as exploration include but

are not limited to:

(1) Geophysical and geological (G&G) surveys using

magnetic, gravity, seismic reflection, seismic refraction,

gas sniffers, coring, or other systems to detect or imply the

presence of oil, gas, or sulphur; and

(2) Any drilling conducted for the purpose of search-

ing for commercial quantities of oil, gas, and sulphur,

including the drilling of any additional well needed to

delineate any reservoir to enable the lessee to decide

whether to proceed with development and production..

Facility means:

(1) As used in § 250.130, any installation perma-

nently or temporarily attached to the seabed on the OCS

(including manmade islands and bottom-sitting struc-

tures). It includes mobile offshore drilling units (MODUs)

or other vessels engaged in drilling or downhole opera-

tions, used for oil, gas, or sulphur drilling, production, or

related activities. It also includes facilities for product

measurement and royalty determination (e.g., Lease

Automatic Custody Transfer units, gas meters) of OCS

production on installations not on the OCS. Any group of

OCS installations interconnected with walkways, or any

group of installations that includes a central or primary

installation with processing equipment and one or more

PRE YE EET er at

App. 29

satellite or secondary installations is a single facility. The

Regional Supervisor may decide that the complexity of the

individual installations justifies their classification as

separate facilities.

(2) As used in § 250.303, means any installation or

device permanently or temporarily attached to the seabed.

It includes mobile offshore drilling units (MODUs), even

while operating in the “tender assist” mode (i.e. with skid-

off drilling units) or other vessels engaged in drilling or

downhole operations. They are used for exploration,

development, and production activities for oil, gas, or

sulphur and emit or have the potential to emit any air

pollutant from one or more sources. During production,

multiple installations or devices are a single facility if the

installations or devices are at a single site. Any vessel

used to transfer production from an offshore facility is part

of the facility while it is physically attached to the facility.

(3) As used in § 250.417(b), means a vessel, a struc-

ture, or an artificial island used for drilling, well-

completion, well-workover, and/or production operations.

Gas reservoir means a reservoir that contains hydro-

carbons predominantly in a gaseous (single-phase) state.

Gas-well completion means a well completed in a gas

reservoir or in the associated gas-cap of an oil reservoir.

Governor means the Governor of a State, or the person

or entity designated by, or under, State law to exercise the

powers granted to such Governor under the Act.

HS absent means:

(1) Drilling, logging, coring, testing, or producing

operations have confirmed the absence of H,S in

App. 30

concentrations that could potentially result in atmospheric

concentrations of 20 ppm or more of HS; or

(2) Drilling in the surrounding areas and correlation

of geological and seismic data with equivalent strati-

graphic units have confirmed an absence of H,S through-

out the area to be drilled.

HS present means drilling, logging, coring, testing, or

producing operations have confirmed the presence of H,S

in. concentrations and volumes that could potentially

result in atmospheric concentrations of 20 ppm or more of

HS.

H,S unknown means the designation of a zone or

geologic formation where neither the presence nor absence

of H,S has been confirmed.

Human environment means the physical, social, and

economic components, conditions, and factors that interac-

tively determine the state, condition, and quality of living

conditions, employment, and health of those affected,

directly or indirectly, by activities occurring on the OCS.

Interpreted geological information means geological

knowledge, often in the form of schematic cross sections, 3-

dimensional representations, and maps, developed by

determining the geological significance of data and ana-

lyzed geological information.

Interpreted geological information means geophysical

knowledge, often in the form of schematic cross sections, 3-

dimensional representations, and maps, developed by

determining the geological significance of geophysical data

and analyzed geophysical information.

App. 31

Lease means an agreement that is issued under

section 8 or maintained under section 6 of the Act and that

authorizes exploration for, and development and produc-

tion of minerals. The term also means the area covered by

that authorization, whichever the context requires.

Lease term pipelines means those pipelines owned and

operated by a lessee or operator that are completely

contained within the boundaries of a single lease, unit, or

contiguous (not cornering) leases of that lessee or operator.

Lessee means a person who has entered into a lease

with the Untied States to explore for, develop, and produce

the leased minerals. The term lessee also includes the

MMS-approved assignee of the lease, and the owner or the

MMS-approved assignee of operating rights for the lease.

Major Federal action means any action or proposal by

the Secretary that is subject to the provisions of section

102(2)(C) of the National Environmental Policy Act of

1969, 42 U.S.C. (2)(C) (i.e., an action that will have a

significant impact on the quality of the human environ-

ment requiring preparation of an environmental impact

statement under section 102(2)(C) of the National Envi-

ronmental Policy Act).

Marine environment means the physical, atmospheric,

and biological components, conditions, and factors that

interactively determine the productivity, state, condition,

and quality of the marine ecosystem. These include the

waters of the high seas, the contiguous zone, transitional

and intertidal areas, salt marshes, and wetlands within

the coastal zone and on the OCS.

App. 32

Material remains means physical evidence of human

habitation, occupation, use, or activity, including the site,

location, or context in which such evidence is situated.

Maximum efficient rate (MER) means the maximum

sustainable daily oil or gas withdrawal rate from a reser-

voir that will permit economic development and depletion

of that reservoir without detriment to ultimate recovery.

Maximum production rate (MPR) means the approved

maximum daily rate at which oil or gas may be produced

from a specified oil-well or gas-well completion.

Minerals includes oil, gas, sulphur, geopressured-

geothermal and associated resources, and all other miner-

als that are authorized by an Act of Congress to be pro-

duced.

Natural resources includes, without limiting the

generality thereof, oil, gas, and all other minerals, and

fish, shrimp, oysters, clams, crabs, lobsters, sponges, kelp,

and other marine animal and plant life but does not

include water power or the use of water for the production

of power.

Nonattainment area means, for any air pollutant, an

area that is shown by monitored data or that is calculated

by air quality modeling (or other methods determined by

the Administrator of EPA to be reliable) to exceed any

primary or secondary ambient air quality standard estab-

lished by EPA.

Nonsensitive reservoir means a reservoir in which

ultimate recovery is not decreased by high reservoir

production rates.

App. 33

Oil reservoir means a reservoir that contains hydro-

carbons predominantly in a liquid (single-phase) state.

Oil reservoir with an associated gas cap means a

reservoir that contains hydrocarbons in both a liquid and

gaseous (two-phase) state.

Oil-well completion means a well completed in an oil

reservoir or in the oil accumulation of an oil reservoir with

an associated gas cap.

Operating rights means any interest held in a lease

with the right to explore for, develop, and produce leased

substances.

Operator means the person the lessee(s) designates as

having control or management of operations on the leased

area or a portion thereof. An operator may be a lessee, the

MMS-approved designed agent of the lessee(s), or the

holder of operating rights under an MMS-approved operat-

ing rights assignment.

Outer Continental Shelf (OCS) means all submerged

lands lying seaward and outside of the area of lands

beneath navigable waters as defined in section 2 of the

Submerged Lands Act (43 U.S.C. 1301) whose subsoil and

seabed appertain to the United States and are subject to

its jurisdiction and control.

Person includes, in addition to a natural person, an

association (including partnerships and trusts), a State, a

political subdivision of a State, or a private, public, or

municipal corporation.

Pipelines are the piping, risers, and appurtenances

installed for transporting oil, gas, sulphur, and produced

waters.

App. 34

Processed geological or geophysical information means

data collected under a permit or a lease that have been

processed or reprocessed. Processing involves changing

the form of data to facilitate interpretation. Processing

operations may include, but are not limited to, applying

corrections for known perturbing causes, rearranging or

filtering data, and combining or transforming data ele-

ments. Reprocessing is the additional processing other

than ordinary processing used in the general course of

evaluation. Reprocessing operations may include varying

identified parameters for the detailed study of a specific

problem area.

Production means those activities that take place

after the successful completion of any means for the

removal of minerals, including such removal, field opera-

tions, transfer of minerals to shore, operation monitoring,

maintenance, and workover operations.

Production areas are those areas where flammable

petroleum gas, volatile liquids or sulphur are produced,

processed (e.g., compressed), stored, transferred (e.g.,

pumped), or otherwise handled before entering the trans-

portation process.

Projected emissions means emissions, either controlled

or uncontrolled, from a source or sources.

Regional Director means the MMS officer with re-

sponsibility and authority for a Region within MMS.

Regional Supervisor means the MMS officer with

responsibility and authority for operations or other desig-

nated program functions within an MMS Region.

Right-of-use means any authorization issued under

this part to use OCS lands.

App. 35

Right-of-way pipelines are those pipelines that are

contained within:

(1) The boundaries of a single lease or unit, but are

not owned and operated by a lessee or operator of that

lease or unit; ;

(2) The boundaries of contiguous (not cornering)

leases that do not have a common lessee or operator;

(3) The boundaries of contiguous (not cornering)

leases that have a common lessee or operator but are not

owned and operated by that common lessee or operator; or

(4) An unleased block(s).

Routine operations, for the purposes of subpart F,

means any of the following operations conducted on a well

with the tree installed:

(1) Cutting paraffin;

(2) Removing and setting pump-through-type tubing

plugs, gas-lift valves, and subsurface safety valves that

can be removed by wireline operations;

(3) Bailing sand;

(4) Pressure surveys;

(5) Swabbing;

(6) Scale or corrosion treatment;

(7) Caliper and gauge surveys;

(8) Corrosion inhibitor treatment;

(9) Removing or replacing subsurface pumps;

(10) Through-tubing logging (diagnostics);

App. 36

(11) Wireline fishing;

(12) Setting and retrieving other sub-surface flow-

control devices; and

(13) Acid treatments.

Sensitive reservoir means a reservoir in which high

reservoir production rates will decrease ultimate recovery.

For submitting the first MER, all oil reservoirs with an

associated gas.cap are classified as sensitive.

Significant archaeological resource means. those

archaeological resources that meet the criteria of signifi-

cance for eligibility to the National Register of Historic

Places as defined in 36 CFR 60.4, or its successor.

Suspension means a granted or directed deferral of

the requirement to produce (Suspension of Production

(SOP)) or to conduct leaseholding operations (Suspension

of Operations (SOO)).

Waste of oil, gas, or sulphur means:

(1) The physical waste of oil, gas, or sulphur;

(2) The inefficient, excessive, or improper use, or the

unnecessary dissipation of reservoir energy;

(3) The locating, spacing, drilling, equipping, operat-

ing, or producing of any oil, gas, or sulphur well(s) in a

manner that causes or tends to cause a reduction in the

quantity of oil, gas, or sulphur ultimately recoverable

under prudent and proper operations or that causes or

tends to cause unnecessary or excessive surface loss or

destruction of oil or gas; or

(4) The inefficient storage of oil.

App. 37

Welding means all activities connected with welding,

including hot tapping and burning.

Minerals Management Service, Interior

Wellbay is the area on a facility within the perimeter

of the outermost wellheads.

Well-completion operations means the work conducted

to establish production from a well after the production-

casing string has been set, cemented, and pressure-tested.

Well-control fluid means drilling mud, completion

fluid, or workover fluid as appropriate to the particular

operation being conducted.

Western Gulf of Mexico means all OCS areas of the

Gulf of Mexico except those the Director decides are

adjacent to the State of Florida. The Western Gulf of

Mexico is not the same as the Western Planning Area, an

area established for OCS lease sales.

Workover operations means the work conducted on

wells after the initial well-completion operation for the

purpose of maintaining or restoring the productivity of a

well.

You means a lessee, the owner or holder of operating

rights, a designated agent of the lessee(s), a pipeiine right-

of-way holder, or a State lessee granted a right-of-use and

easement.

App. 38

§ 250.105 Definitions.

Terms used in this part will have the meanings given

in the act and as defined in this section:

§ 250.106 What standards will the Director use to

regulate lease operations?

The Director will regulate all operations under a

lease, right-of-use and easement, or right-of-way to:

(a) Promote orderly exploration, development, and

production of mineral resources;

(b) Prevent injury or loss of life;

resource, property, or the environment; and

(d) Cooperate and consult with affected States, local

governments, other interested parties, and relevant

Federal agencies.

§ 260.107 What must I do to protect health, safety,

property, and the environment?

(a) You must protect health, safety, property, and

the environment by:

(1) Performing all operations in a safe and work-

manlike manner; and

(2) Maintaining all equipment in a safe condition.

App. 39

(b) You must immediately control, remove, or other-

wise correct any hazardous oil and gas accumulation or

other health, safety, or fire hazard.

technology (BAST) whenever practical on all exploration,

development, and production operations. In general, we

consider your compliance with MMS regulations to be the

use of BAST.

(d) The Director may require additional measures to

ensure the use of BAST:

(1) To avoid the failure of equipment that would

have a significant effect on safety, health, or the environ-

ment;

(2) Ifit is economically feasible; and

(3) Ifthe benefits outweigh the costs.

§ 250.146 Who is responsible for fulfilling leasehold

obligations?

(a) When you are not the sole lessee, you and your

co-lessee(s) are jointly and severally responsible for fulfill-

ing your obligations under the provisions of 30 CFR parts

250 through 282, unless otherwise provided in these

regulations.

(b) If your designated operator fails to fulfill any of

your obligations under 30 CFR parts 250 through 282, the

Regional Supervisor may require you or any or all of your

co-lessees to fulfill those obligations or other operational

obligations under the Act, the lease, or the regulations.

App. 40

through 282 require the lessee to meet a requirement or

perform an action, the lessee, operator (if one has been

designated), and the person actually performing the

activity to which the requirement applies are jointly and

severally responsible for complying with the regulation.

§ 250.400 Control of wells.

The lessee shall take necessary precautions to keep its

wells under control at all times. The lessee shall utilize the

best available and safest drilling technology in order to

enhance the evaluation of conditions of abnormal pressure

and to minimize the potential for the well to flow or kick.

The lessee shall utilize personnel who are trained and

competent and shall utilize and maintain equipment and

materials necessary to assure the safety and protection of

personnel, equipment, natural resources, and the envi-

ronment.

§ 250.413 Supervision, surveillance, and training.

(a) The lessee shall provide onsite supervision of

drilling operations on a 24-hour per day basis.

(b) From the time drilling operations are initiated

and until the well is completed or abandoned, a member of

the drilling crew or the toolpusher shall maintain rig-floor

surveillance continuously, unless the well is secured with

BOP’s, bridge plugs, packers, or cement plugs.

trained and qualified according to Subpart O of this part.

—————

App. 41

Records of specific training which lessee and drilling

contractor personnel have successfully completed, the

dates of completion, and the names and dates of the

courses shall be maintained at the drill site.

[53 FR 10690, Apr. 1, 1988. Redesignated at 63 FR 29479,

May 29, 1998; 64 FR 9065, Feb. 24, 1999]

§ 250.514 Well-control fluids, equipment, and

operations.

(a) Well-control fluids, equipment, and operations

shall be designed, utilized, maintained, and/or tested as

necessary to control the well in foreseeable conditions and

circumstances, including subfreezing conditions. The well

shall be continuously monitored during well-completion

operations and shall not be left unattended at any time

unless the well is shut in and secured.

(b) The following well-control-fluid equipment shall

be installed, maintained, and utilized:

(1) A fill-up line above the uppermost BOP;

(2) A well-control, fluid-volume measuring device for

determining fluid volumes when filling the hole on trips;

and

(3) A recording mud-pit-level indicator to determine

mud-pit-volume gains and losses. This indicator shall

include both a visual and an audible warning device.

annulus shall be filled with well-control fluid before the

change in such fluid level decreases the hydrostatic

pressure 75 pounds per square inch (psi) or every five

App. 42

stands of drill pipe, whichever gives a lower decrease in

hydrostatic pressure. The number of stands of drill pipe

and drill collars that may be pulled prior to filling the hole

and the equivalent well-control fluid volume shall be

calculated and posted near the operator’s station. A

mechanical, volumetric, or electronic device for measuring

the amount of well-control fluid required to fill the hole

shall be utilized.

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.