Kermit Demette v. Falcon Drilling Company, Inc., R&b Falcon Drilling Usa, Inc., Defendant-Third Party v. Frank's Casing Crew & Rental Tools, Inc., Third Party
Docket: 00-30165
Court: Court of Appeals for the Third Circuit; January 15, 2002; Federal Appellate Court
In the case of Demette v. Falcon Drilling Company, Inc., the Fifth Circuit addressed an indemnity dispute stemming from an injury lawsuit involving an employee of Frank's Casing Crew Rental Tools, Inc. against R&B Falcon Drilling USA, Inc. The injury occurred while working on a Falcon jack-up rig in the Gulf of Mexico, prompting Falcon to seek indemnity from Frank's under their agreement. Frank's contended that the indemnity agreement was invalid under the Longshore and Harbor Workers' Compensation Act (LHWCA) or Louisiana law. The district court upheld the validity of the indemnity agreement.
The court's analysis centered on federal statutes relevant to offshore drilling, specifically the Outer Continental Shelf Lands Act (OCSLA) and the LHWCA. The court concluded that the OCSLA applies to the situation, indicating that state law does not govern the case due to the OCSLA's provisions, while the LHWCA is applicable. Importantly, the court determined that the LHWCA does not invalidate the indemnity agreement between the parties. The ruling affirmed the lower court's decision, recognizing the contractual relationships and obligations involving Unocal, Frank's, and Falcon in the context of offshore drilling operations, particularly focusing on the nature of casing services and the functionality of jack-up drilling rigs.
Kermit Demette, an employee of Frank's, sustained injuries while welding on the Fal-Rig 85 during a casing operation. His injury occurred when a metal retaining ring fell from the derrick, hitting him on the head. At the time, the rig was positioned on the outer continental shelf (OCS) of the United States. Demette subsequently filed a lawsuit against Falcon, the operator of the rig. Falcon, following the Offshore Daywork Drilling Contract, initiated a third-party complaint against Unocal for defense and indemnity, which Unocal accepted. Falcon also filed a third-party complaint against Frank's for similar claims under the Master Contract. The district court ruled in favor of Falcon regarding Frank's obligation to provide defense and indemnity. Frank's agreed to settle with Demette and cover Falcon's defense costs while reserving the right to appeal. Frank's is appealing the summary judgment on the indemnity and defense issues.
The Outer Continental Shelf Lands Act (OCSLA) governs activities on the OCS, incorporating both federal and state laws and making the Longshore and Harbor Workers' Compensation Act (LHWCA) applicable to certain injuries. The legal questions include whether Louisiana state law governs the Master Contract, whether the OCSLA applies, and if the LHWCA is relevant to Demette's injuries. Determining the applicability of OCSLA requires establishing whether the injury occurred on an OCSLA situs and reviewing the law's application to subsoil, seabed, and installations on the OCS. OCSLA section 1333(a)(1) extends U.S. laws to the OCS and defines the scope of federal jurisdiction, indicating that both the seabed and attached installations fall under federal law, thus necessitating a detailed analysis of the situs requirements for legal applications under OCSLA.
The OCSLA distinguishes between two categories of artificial islands, installations, and other devices based on their purpose: one for resource extraction and the other for resource transportation. The extraction category includes devices that may be erected on the OCS, while the transportation category explicitly excludes ships or vessels. The OCSLA applies to the following: (1) the subsoil and seabed of the OCS; (2) any artificial structure permanently or temporarily attached to the seabed for resource exploration, development, or production; and (3) any artificial structure not classified as a ship or vessel, permanently or temporarily attached to the seabed for transporting resources. If the situs test is satisfied, section 1333(a)(2) incorporates applicable state civil and criminal laws as federal law on OCS situses, as defined in section 1333(a)(1). A three-part test from Union Texas Petroleum Corp. v. PLT Engineering establishes that for state law to govern, the controversy must arise from an OCSLA situs, federal maritime law must not apply, and state law must not conflict with federal law. For disputes involving contracts related to offshore drilling, if the contract is maritime, federal law applies exclusively. Section 1333(b) extends the LHWCA to non-seamen on the OCS, requiring that injured workers meet both the status and situs requirements. The Fal-Rig 85, at the time of the incident, was a device temporarily attached to the seabed for drilling, thus satisfying the situs requirement. Frank's contention that the Fal-Rig 85 is a vessel and therefore outside OCSLA's applicability is refuted, as the statute differentiates between the terms used for artificial structures and vessels, allowing for the application of OCSLA in this case.
The circuit's precedent indicates that a jacked-up rig qualifies as an OCSLA situs, as supported by the case of Domingue v. Ocean Drilling and Exploration Co. Although Domingue did not directly address the situs requirement, it implicitly affirmed that state law could only apply through federal law under OCSLA due to the incident's location beyond Louisiana's territorial waters. An amicus brief cited Longmire v. Sea Drilling Corp., which differentiated between fixed platform workers and floating rig workers, but this distinction does not apply to Frank's case because the injury occurred on a tender, a vessel servicing a fixed platform, rather than a floating rig. The court clarified that tenders are not considered extensions of fixed drilling rigs, thus OCSLA does not apply to them.
Given that the injury occurred on an OCSLA situs, OCSLA is applicable here. The subsequent consideration involves whether Louisiana law could be applied as a surrogate under section 1333(a)(2). The circuit employs the PLT test, which indicates that maritime law applies independently, negating the relevance of Louisiana law in this instance. The Master Contract between Unocal and Frank's, which involved casing installation services and mutual indemnification, does not explicitly reference vessels and lacks clarity on whether it pertains solely to offshore work.
To determine the maritime nature of the contract, the circuit uses the two-step Davis test, examining both historical treatment and case-specific facts. The historical context shows that indemnity provisions for offshore casing services are generally deemed maritime. Even contracts that do not mention vessels can be maritime if their execution necessitates vessel use. The Davis factors provide a framework for this determination, which includes assessing the specific work order, the crew's actual tasks, the location of the work, its relevance to the vessel's mission, and the injured worker's role and activities at the time of injury. The conclusion is that the contract in question is maritime, supported by circuit precedent and the application of the Davis factors.
Demette's work order specified a crew of six, including himself, to perform casing work on 416 feet of pipe from the Fal-Rig 85 while the rig was jacked-up. This work occurred over navigable waters and was integral to the vessel's drilling operations, confirming that both the contract and the injury were maritime in nature. The Outer Continental Shelf Lands Act (OCSLA) applies, excluding state law, and the Longshore and Harbor Workers' Compensation Act (LHWCA) is applicable under section 1333(b) of the OCSLA, as Demette was performing casing work at the time of his injury.
The LHWCA provides exclusive remedies for injured employees and allows them to sue the vessel on which they were injured. Section 905(b) prohibits employers from indemnifying vessels against LHWCA liability, whereas section 905(c) permits reciprocal indemnity agreements if the injured employee is entitled to LHWCA benefits by virtue of OCSLA. Frank's argues that section 905(b) bars indemnity between Falcon and Frank's because Demette is directly covered by the LHWCA. However, the interpretation of "by virtue of" in this context suggests that it does not imply exclusivity, as the statute lacks terms like "exclusively" or "solely." Legislative history supports this interpretation, indicating that section 905(c) applies to all persons connected to the OCS without exception for those qualifying directly under the LHWCA.
Frank's contends that applying section 1333(b) to workers already covered by the LHWCA results in inconsistencies, attributing this to section 905(c) rather than its interpretation. The distinction drawn between LHWCA employees on permanent platforms and those on temporary platforms is deemed no more arbitrary than other classifications. It is noted that interpreting section 905(c) to encompass employees covered by both the LHWCA and OCSLA resolves some of these inconsistencies. Since section 1333(b) applies to Demette, the language of section 905(c) indicates that a reciprocal indemnity contract is valid, despite section 905(b). Both Frank's and Unocal indemnified each other, making the agreement reciprocal and valid. Frank's also argues that Louisiana law invalidates the indemnity agreement; however, it is concluded that Louisiana law does not apply in this context. Ultimately, the OCSLA governs this case, excluding Louisiana law as surrogate federal law, and validates the indemnity agreement between Unocal and Frank's due to Demette's coverage under the LHWCA via the OCSLA. The dissent's concerns regarding the classification of a jack-up rig as a vessel and the application of maritime law in this context are acknowledged but deemed insufficient for an en banc reversal. The court affirms the district court's summary judgment against Frank's.
The document addresses legal interpretations related to offshore operations under the Outer Continental Shelf Lands Act (OCSLA) and the Longshore and Harbor Workers’ Compensation Act (LHWCA). It notes that the District Judge of the Northern District of Texas is sitting by designation. Key statutory references include 33 U.S.C.A. § 901 et seq. and 43 U.S.C.A. § 1331 et seq. The OCS is defined to exclude state territorial waters, aligning with 43 U.S.C. § 1331(a). Case law, such as Mills v. Director, OWCP, is cited to clarify that injuries not occurring on or over the OCS fall outside its jurisdiction.
The document emphasizes that Congress classifies "artificial islands, installations, and other devices" as a single category and affirms that special-purpose movable drilling rigs, including jack-up rigs, qualify as vessels under admiralty law, regardless of their operational status. The dissenting opinion's contention that a jack-up rig ceases to be a vessel when it is jacked up is rejected, reinforcing that a vessel retains its status as long as it can return to navigation. The text further asserts that the definition of a vessel should not be overly restrictive to exclude various marine craft, including submersibles or vessels temporarily out of water.
Lastly, it clarifies that the distinction between devices that extract resources and those that transport them serves to exclude transport vessels like oil tankers from OCSLA coverage, while pipelines are explicitly included. The exclusion of vessel crew members from LHWCA coverage on OCSLA sites supports the argument that such sites can be vessels, countering the dissent's assertions.
In the 5th Circuit case, Frank's argues against the conclusion that certain vessels qualify as OCSLA situses, citing various precedents. Specifically, Frank's references Smith v. Penrod Drilling Corp., which established that maritime law governs indemnity agreements for jack-up rigs but did not address whether jack-ups themselves qualify as OCSLA situses. Dupre v. Penrod Drilling Corp. follows a similar rationale and is similarly distinguishable. Frank's also incorrectly interprets Tennessee Gas Pipeline v. Houston Cas. Ins. Co. as asserting that vessels fall outside OCSLA jurisdiction for removal purposes; however, this case actually confirms federal jurisdiction over maritime claims involving fixed platforms. The distinction between maritime claims and general claims is emphasized, clarifying that the presence of a vessel does not automatically categorize non-maritime claims as removable. Additionally, Frank's references legislative history regarding the situs requirement of section 1333(b), noting that the deletion of certain phrases did not affect the lack of a situs requirement in the final statute. The court indicates that it need not assess the compatibility of Louisiana law with federal law, as Louisiana law is not applicable in this case. The complexity surrounding the determination of whether a contract related to offshore oil and gas production is governed by state or maritime law is acknowledged, with multiple case references illustrating that various contracts related to jack-up rigs and offshore operations are indeed classified as maritime.
A contract for offshore drilling services is considered maritime even if vessels are not explicitly mentioned, as established in Lewis v. Glendel Drilling Co. The Fifth Circuit has noted that contracts involving vessels are typically classified as maritime, with PLT providing a simplified criterion of whether a transaction relates to ships, vessels, or maritime personnel. The classification of workers as longshoremen under the Longshore and Harbor Workers’ Compensation Act (LHWCA) requires engagement in maritime employment over navigable waters, but not as seamen. The text of the Outer Continental Shelf Lands Act (OCSLA) indicates that the classification of a worker as a longshoreman does not affect the application of the OCSLA's provisions. Both parties agree that Demette qualifies as a longshoreman under the LHWCA. The interpretation of Section 905(c) within the OCSLA context is crucial, particularly regarding indemnity agreements involving workers injured on the same platform. The discussion outlines that Section 905(c) applies specifically on the Outer Continental Shelf (OCS) when contracts are reciprocal, and the absence of a signatory to an indemnity agreement does not alter its applicability. The dissent's argument against classifying OCSLA situses as vessels fails to address the statute's text, which allows for such classification. The OCSLA serves as a gap-filling statute for fixed platforms that lack clear jurisdiction, while floating rigs are subject to maritime law. The distinction between floating rigs and fixed platforms in legal interpretation may seem arbitrary, but it is consistent with the OCSLA's purpose of providing legal clarity where none existed before.
The legal excerpt addresses the extension of federal law to the Outer Continental Shelf (OCS) as if it were an area of exclusive federal jurisdiction within a state. It emphasizes that the civil and criminal laws of adjacent states apply to the sub-soil and seabed of the OCS and to artificial islands and fixed structures, as if the state's boundaries were extended seaward. Two key cases, Dore v. Link Belt Co. and Rodrigue v. Aetna Casualty, involved worker deaths on drilling rigs, where plaintiffs sought relief under Louisiana state law, citing the Outer Continental Shelf Lands Act (OCSLA). The defendants argued for relief under the Death on the High Seas Act (DOHSA). The Fifth Circuit ruled that relief was only available under DOHSA, asserting that Congress intended for these incidents to be governed by federal maritime law.
The Supreme Court later reversed the Fifth Circuit's rulings, holding that relief should be sought under the OCSLA and Louisiana law. The Court clarified that federal law, supplemented by state law, applies to artificial islands as if they were federal enclaves, choosing this framework over treating them as vessels subject to admiralty law. The Court noted that Congress intentionally did not apply admiralty law to these structures, highlighting the legislative intent to treat them as islands rather than vessels.
Scrutiny of the hearings reveals that the elimination of artificial islands' treatment as vessels under the Lands Act stemmed from the belief that maritime law was unsuitable for these fixed structures. The committee recognized its authority to treat activities on artificial islands as maritime activities but opted against it, concluding that maritime law would not apply to stationary structures unless explicitly stated. The relationship between workers on these islands and the adjacent shore was acknowledged, leading to legislative amendments that asserted these islands exist within an area of exclusive federal jurisdiction, despite administrative objections.
Key principles established include: 1) structures on the Outer Continental Shelf for resource exploration and development are not classified as vessels; 2) Congress determined that maritime law does not govern these structures; and 3) Louisiana state law applies to activities on these structures, provided there is no conflict with federal laws.
In 1978, Congress enacted amendments to the Outer Continental Shelf Lands Act (OCSLA). Specifically, Section 203(a) revised the definition by replacing "fixed structures" with "all installations and other devices permanently or temporarily attached to the seabed." The amendment clarified that federal law governs all activities on seabed-contacting devices related to resource exploration, development, and production, while the intent behind these changes was to restate and clarify existing law rather than alter it. The Conference Report confirmed that both federal and state laws apply as long as state laws do not conflict with federal statutes.
Section 88 amends the OCS Act of 1953, replacing "fixed structures" with "all installations and other devices permanently or temporarily attached to the seabed," thereby clarifying that federal law applies to all activities involving such devices on the Outer Continental Shelf (OCS) for exploration, development, and production. This encompasses drilling ships and semi-submersible rigs when connected to the seabed, but excludes vessels used solely for transporting OCS mineral resources. The 1978 Amendments were designed to broaden the scope of OCSLA, and there is no indication that Congress intended to alter existing Supreme Court interpretations, specifically referencing the Rodrigue case.
The legislative change eliminates distinctions between "jack-up rigs" and "fixed platforms" regarding their classification as vessels for OCS activities. The majority opinion in related cases claims that if a jack-up rig is classified as a vessel, admiralty and maritime law would govern its operations, thus preempting state law. However, it is argued that the statutory language and the interpretations provided by Congress indicate that jack-up rigs are installations temporarily attached to the seabed for oil and gas operations, not vessels. This interpretation is supported by the definition of a vessel in common usage as a craft for traveling on water.
A vessel is defined by its ability to float on water and its use for transporting cargo or passengers. The principle of buoyancy dictates that a vessel must displace a volume of water that weighs more than the vessel itself. However, structures that float, such as floating docks, permanently moored barges, and pontoon bridges, do not qualify as vessels if they are stationary and connected to land. The analysis of a jack-up drilling rig, specifically the Fal-Rig 85, reveals that when it is jacked up, it is not floating; its hull and work decks are elevated above water, supported by legs that extend to the seabed. In this position, the rig is fixed in place and cannot move, functioning like a stationary drilling platform. The primary purpose of the Fal-Rig 85 is to drill for oil and gas, generating revenue through these operations while jacked up. It is functionally similar to a drilling platform assembled on-site, as both are elevated above water and conduct drilling activities. Although case law has referred to jack-up rigs as "special purpose vessels," this designation is misleading and does not reflect their operational realities, particularly following the 1978 Amendments to the Outer Continental Shelf Lands Act (OCSLA). Drilling operations do not contribute to traditional maritime activities, navigation, or vessel loading/unloading. A jack-up drilling rig is designed to house all necessary equipment for drilling and to float only when relocating between sites, making it distinct from typical vessels. This design facilitates efficiency by eliminating the need for disassembly and reassembly when moving.
A jack-up rig is primarily a "movable drilling platform," as it is only mobile during short periods of relocation, while the majority of its operational time is spent fixed and engaged in drilling. Classifying the Fal-Rig 85 as a "vessel" while it is actively drilling is deemed inappropriate, especially when it has a casing being driven into the seabed. The 1978 amendments to the Outer Continental Shelf Lands Act (OCSLA) introduced specific definitions for "exploration," "development," and "production," and redefined the situs of operations to encompass broader activities related to natural resource extraction on the Outer Continental Shelf. These changes aimed to extend workers' compensation benefits to employees injured or killed in these contexts, while explicitly excluding "masters or crew members of any vessel" from the definition of "employee." This distinction emphasizes that "artificial islands and installations" are separate from "vessels." The Supreme Court case Herb's Welding, Inc. v. Gray is referenced as pivotal in understanding the relationship between the Longshore and Harbor Workers' Compensation Act (LHWCA) and OCSLA, as it involved a worker injured in navigable waters who was engaged in activities related to fixed platforms.
Gray received workers' compensation under Louisiana law, but his claim for benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA) was initially denied by an administrative law judge on the grounds that he was not engaged in maritime employment. The Benefits Review Board later found that Gray was covered under the LHWCA and remanded the case for an award, which resulted in a $10,000 award after deducting $3,000 already received. Herb's Welding appealed to the Fifth Circuit, which upheld the Benefits Review Board's decision, affirming that Gray was indeed engaged in maritime employment.
The Supreme Court subsequently granted certiorari and reversed the Fifth Circuit's ruling, arguing that the definition of maritime employment was overly broad and included nearly everyone working on a stationary platform, which was deemed untenable. The Court emphasized that tasks such as building and maintaining pipelines and platforms are not inherently maritime and are often performed on land, thus not qualifying as maritime commerce. Key points noted included that Gray's injury occurred in 1975 under the LHWCA as amended in 1972 and the Outer Continental Shelf Lands Act (OCSLA) as originally passed in 1953, and that the Supreme Court chose not to address specific provisions of OCSLA during its decision.
The Court's ruling in Herb's Welding reinforced its previous decisions, particularly the case of Rodrigue v. Aetna Casualty, clarifying the meaning of "maritime employment" and indicating that Congress did not intend to apply this term broadly, particularly concerning stationary drilling rigs. In summary, the Supreme Court's decision established a more restrictive interpretation of maritime employment under the LHWCA.
The Court clarified that the 1972 amendments to the Longshore and Harbor Workers' Compensation Act (LHWCA) were not intended to cover employees injured in areas adjacent to navigable waters unless they were actively involved in loading, unloading, repairing, or building vessels. The term "maritime employment" is not interpreted to extend to those not directly engaged in moving cargo. The decisions in Caputo and P.C. Pfeiffer Co. reinforce the conclusion that Gray did not qualify as engaging in maritime employment under the LHWCA.
No Supreme Court ruling has overruled the core principle established in Herb's Welding, which states that "maritime employment" does not encompass activities related to the exploration and production of oil and gas from beneath navigable waters. The 1984 amendments introduced a new subparagraph (c) in 33 U.S.C. 905, allowing individuals entitled to benefits under the LHWCA due to third-party negligence to sue the vessel responsible for their injury. This amendment maintains the enforcement of any indemnity agreements between employers and vessels concerning defense costs and liabilities for employee injuries.
The legislative history indicates that the Senate Bill aimed to exempt the Longshore Act's prohibition on indemnity agreements in situations occurring on the Outer Continental Shelf, as referenced in Section 4 of the Outer Continental Shelf Lands Act.
The bill aims to legalize indemnity agreements related to the Outer Continental Shelf (OCS) and supersedes state laws that prohibit such agreements. It removes existing restrictions on mutual indemnity agreements between employers and vessels as defined by the Outer Continental Shelf Lands Act (OCSLA). Key changes in the final statute include the substitution of "third person" with "vessel," narrowing the scope of parties involved in indemnity agreements. The report indicates that the final statute does not explicitly address the preemption of state law as initially intended. Additionally, the term "vessel" must align with its definition in OCSLA and not be interpreted as a location for offshore activities. In the Supreme Court case Offshore Logistics, Inc. v. Tallentire, the court addressed the applicability of the Death on the High Seas Act (DOHSA) versus OCSLA in a situation where offshore workers were killed in a helicopter crash. The federal district court ruled that the survivors were entitled only to benefits under DOHSA, highlighting the legal complexity surrounding these statutes.
Section 7 of the Death on the High Seas Act (DOHSA) is interpreted to allow for the application of the Louisiana Wrongful Death Statute to its citizens on the high seas, enabling survivors to claim under the Louisiana Death Act. In Tallentire v. Offshore Logistics, Inc., the Fifth Circuit acknowledged the potential applicability of OCSLA but suggested that Louisiana law could only apply if it did not conflict with DOHSA. Upon appeal, the Supreme Court clarified that neither OCSLA nor DOHSA permits Louisiana law in this case, reversing the Fifth Circuit's decision. The Supreme Court emphasized the context of the accident, which occurred far from the platform on the high seas, indicating that OCSLA should not extend to such incidents. The Court's interpretation of OCSLA was that it treats artificial structures as federal enclaves rather than vessels, suggesting that maritime law does not apply. The Supreme Court, referencing Rodrigue v. Aetna Casualty and Herb's Welding, concluded that DOHSA does not apply to accidents on these artificial islands, allowing for state law to govern wrongful death claims related to offshore platform accidents. The analysis indicates that the location of the injury is crucial for determining the applicability of OCSLA, regardless of the worker's employment status related to offshore oil and gas operations. At the time of his injury, Demette was working as a welder for Frank's Casing on an oil and gas well.
Demette sustained a head injury on the derrick floor of the Fal-Rig 85, which was in a jacked-up position on the Outer Continental Shelf near Louisiana. At the time, casing installation was in progress, with the casing pipe extending into the seabed. Demette's employer, Union Oil of California (Unocal), had a blanket service agreement with Frank's Casing Crew and Rental, Inc. (Frank's) for casing services, applicable both onshore and offshore. Unocal also had a separate blanket agreement with R&B Falcon Drilling USA, Inc. (Falcon) for access to jack-up rigs but did not specify Fal-Rig 85. Both agreements included indemnity clauses, but there was no direct contract between Falcon and Frank's.
It is established that Fal-Rig 85 qualifies as a situs under the Outer Continental Shelf Lands Act (OCSLA), being jacked up out of the water and connected to the seabed through the casing. Demette is deemed to have been employed in operations related to oil and gas exploration, thus entitled to compensation under OCSLA.
However, there are dissenting views regarding several conclusions drawn by the majority opinion:
1. The assertion that maritime law applies exclusively, excluding Louisiana law.
2. The conclusion that all factors indicate a maritime nature of the contract linked to Demette's injury, likely referring to the Unocal and Frank's contract.
3. The validation of the indemnity agreement under Section 905(c) of the Longshore and Harbor Workers’ Compensation Act (LHWCA), which the dissent finds unnecessary and incorrect.
The dissent references the Supreme Court's ruling in Rodrigue, emphasizing that Congress intended for maritime law not to apply to artificial islands on the Outer Continental Shelf. Amendments to OCSLA in 1978 clarified that federal law applies to installations connected to the seabed, which includes drilling rigs and similar structures.
Congress's 1978 Amendments to the Outer Continental Shelf Lands Act (OCSLA) established that artificial islands and structures used for oil and gas production are not classified as "vessels," and thus maritime law does not apply to them. This interpretation aligns with prior Supreme Court rulings, including those from 1953 and 1969, which maintained that complexities in distinguishing what constitutes a "vessel" are irrelevant for activities on the Outer Continental Shelf. The majority's conclusion that the contract between Unocal and Frank's was maritime contradicts the Supreme Court's findings in Herb's Welding, which stated that tasks associated with oil well casing do not relate to maritime navigation or vessel operations. Consequently, the welding of casing pipe segments should not be classified as maritime employment, and the contract for those services should not be deemed maritime. The circuit's inconsistent interpretations of "maritime employment," "maritime contracts," and "vessels" have led to unpredictability in legal outcomes, benefiting only legal practitioners rather than providing clarity. Furthermore, if Fal-Rig 85 is considered a vessel, then Demette, who performed welding tasks, would be regarded as a crew member, thus potentially disqualifying him from Longshore and Harbor Workers' Compensation Act (LHWCA) benefits. However, even if he is not seen as a crew member, his work remains outside the scope of maritime employment as determined by Herb's Welding.
If the majority opinion holds that the Fal-Rig 85 is a vessel, Demette would be ineligible for compensation benefits under § 1333(b) of OCSLA since the Fal-Rig 85 would not qualify as a situs for those benefits. The dissent argues that the Fal-Rig 85 cannot simultaneously be classified as a vessel and an OCSLA situs, just as an injured employee cannot be both an offshore oil production worker under § 1333(b) and a maritime worker under § 902(3) of the LHWCA. Conversely, if the Fal-Rig 85 is deemed not a vessel while jacked up and drilling into the seabed, then Demette is correctly identified as an oil field worker on an OCSLA situs and entitled to benefits under § 1333(b). However, since Demette has settled his personal injury claims, the question of his entitlement to benefits is not relevant to the current appeal.
The dissent further addresses the complexities surrounding the applicability of § 905(c), referencing the legislative history of that provision. Initially, the provision in Senate Bill 38 referred to "third party" negligence instead of "vessel," and included preemption of state law, which was later removed in conference. It is recognized that Demette's injury occurred on the Fal-Rig 85, with no indication of other vessels involved that could lead to a "vessel negligence" claim. If the Fal-Rig 85 is not a vessel, no negligence claim can be made against it. If it is a vessel, Demette, as a crew member, would lose his status as an employee eligible for compensation under § 1333(b), which is necessary for § 905(c) to apply.
The dissent concludes with a call for potential en banc reconsideration of the panel's decisions, emphasizing the importance of the oil and gas resources on the Outer Continental Shelf adjacent to Texas, Louisiana, and Mississippi.
The majority of workers involved in the development of oil and gas resources on the Outer Continental Shelf (OCS) predominantly come from Texas, Louisiana, and Mississippi, where most operators, contractors, and subcontractors are also based. These states possess a significant concentration of legal professionals knowledgeable in the history of OCS resource development, federal statutory enactments, Supreme Court interpretations, and relevant state statutes, as well as admiralty and maritime law.
An en banc reconsideration of the legal issues presented in the case is deemed necessary to achieve greater uniformity and predictability in the law governing the development of these vital resources. It is emphasized that in 1953, there were no "jack-up rigs" operating on the OCS, and the engineering advancements for such rigs were not realized until the late 1950s and early 1960s. The term "fixed structures" as used in the Outer Continental Shelf Lands Act (OCSLA) should not be interpreted restrictively, as historically it referred to structures assembled at sea.
The original OCSLA, enacted in 1953, did not include specific references to "general admiralty law" or "maritime law," and there is no statutory requirement for courts to distinguish between zones where federal law and admiralty law apply. The majority's interpretation, which implies that courts must first assess the applicability of admiralty law before applying OCSLA's choice-of-law provisions, lacks a statutory foundation. Additionally, references to prior cases, such as Offshore Co. v. Robison, are critiqued for not being relevant to OCSLA's applicability at the time of the incident discussed. The original OCSLA’s language, which excluded certain maritime personnel from compensation benefits, was established before the broader definitions of "vessel" were contemplated, underscoring the historical context of the law.
Congress, through the 1953 Act and the 1978 Amendments, acknowledged that certain vessels (such as tugs, barges, crew boats, and tankers) would transport personnel and goods to and from "artificial islands." Consequently, crew members aboard these vessels would not be eligible for compensation for injuries sustained on such islands. On remand from the Supreme Court, the Fifth Circuit ruled that Gray could not recover under 43 U.S.C. § 1333(b) due to a geographical limitation imposed by the Outer Continental Shelf Lands Act (OCSLA). Notably, although the helicopter crash in Tallentire occurred in 1980, the Fifth Circuit referenced the 1953 version of § 1333(a)(1) rather than the updated definition of "situs" established by the 1978 amendments. The excerpt also mentions an earlier amendment proposed by the International Association of Drilling Contractors (IADC) during oversight hearings in 1978, which used the term "third party" instead of "vessel" and lacked mention of state law preemption. This proposal included a definition for "Marine Petroleum Worker," which did not appear in the 1984 amendments.
