Significant Development in Maritime Personal Injury Law
| Author | Dean A. Sutherland |
| Position | Adjunct Professor of Admiralty Law and Maritime Personal Injury Law, Louisiana State University |
| Pages | 299-314 |
Page 299
Adjunct Professor of Admiralty Law and Maritime Personal Injury Law, Louisiana State University, Paul M. Hebert Law Center.
Rather than survey numerous recent maritime personal injury decisions, this article focuses on two recent cases that address the validity of contractual indemnity agreements covering personal injuries sustained by Outer Continental Shelf Lands Act (OCSLA) workers on "special purpose" vessels.
During 2002, the United States Court of Appeals for the Fifth Circuit rendered two important decisions regarding contractual indemnity claims related to maritime personal injuries sustained by offshore oilfield workers: Demette v. Falcon Drilling Co., Inc. 1 and Diamond Offshore Co. v. A&B Builders, Inc.2
In an attempt to clarify this complex area of the law, the Demette majority panel opinion interpreted the 1978 amendments to the OCSLA and established a new test to determine when a "special purpose" vessel, used by the oil and gas industry to develop and Page 300 produce mineral resources from beneath the Outer Continental Shelf of the United States (OCS), constitutes an OCSLA situs. It concluded that when a jack-up rig is jacked-up over the floor of the OCS, it has a dual status-it remains a vessel pursuant to the general maritime law, but it also constitutes an OCSLA situs.3
The effect of this conclusion is that while a special purpose vessel is "temporarily attached" to the seabed, reciprocal indemnity agreements between the vessel owner and a Longshore and Harbor Workers' Compensation Act (LHWCA) maritime employer are enforceable, pursuant to 33 U.S.C. ß 905 (b).4
The dissenting judge in Demette issued a spirited opinion, arguing that a jack-up rig or any other "special purpose" oilfield vessel loses its status as a vessel while it is "attached" to the seabed of the OCS (during which time it would be legally identical to OCS fixed platforms). Presumably, the special purpose vessel would regain its vessel status when it is jacked-down and again floating on navigable waters. The dissenting judge's call for an en banc rehearing of Demette to adopt this position was not accepted.
The Demette majority panel decision has been subjected to scholarly criticism. 5Despite the questionable statutory support for Page 301 the Demette reasoning, another Fifth Circuit panel in Diamond Offshore felt obliged to follow the Demette OCSLA situs test, following the rule that one panel cannot overrule or ignore an earlier panel's decision.6
In Diamond Offshore, the injured worker was aboard a semisubmersible drilling rig in navigable waters over the Outer Continental Shelf of the United States. The Fifth Circuit applied the new Demette OCSLA situs test but remanded the case to the district court for a hearing to obtain evidence about whether the semi- submersible drilling rig was anchored or was in transit at the time of the underlying personal injury. Presumably, if the semi-submersible drilling rig was anchored or otherwise simply in contact with the seabed, the Fifth Circuit will hold this vessel to be an OCSLA situs, if it applies the Demette OCSLA situs test without serious analysis.
The premise of this article is that the Demette OCSLA situs test for special purpose vessels is fundamentally flawed. Both the published criticisms of the Demette test, as well as this author's separate statutory objection, are discussed in greater detail later in this article. They suggest that the en banc Fifth Circuit may wish to review the Demette OCSLA situs test, if the Diamond Offshore case returns to it.
To understand the context in which this issue arose, some background information is necessary. Near the end of World War II, oil production moved offshore into shallow water adjacent to several states. With rapidly improving technology, the oil industry developed the ability to locate and obtain oil and gas from beneath the seabed in deeper water, beyond the adjacent states' territorial boundaries. Initially, access to these subsurface oil and gas reserves was from fixed platforms erected on the seabed.
At that time, the United States had not established sovereignty over the seabed and the buried resources beyond state territorial waters. A Presidential Proclamation and U.S. Supreme Court rulings initially established federal sovereignty over the Outer Continental Shelf and the subsurface mineral resources.7
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In 1953, Congress enacted the OCSLA to establish the law governing conduct on the Outer Continental Shelf, which by then was an area of intense activity that lacked an established legal system because it was beyond state territorial boundaries. Congress enacted the OCSLA "to define a body of law applicable to the seabed, the subsoil, and the fixed structures . . . on the Outer Continental Shelf."8Congress made non-maritime federal law applicable to the subsoil, seabed, and platforms.9 In the event no federal law existed on a particular issue, Congress elected to borrow the adjacent state's law as surrogate federal law.10 It considered, and specifically rejected, the idea that federal maritime law would be adequate for those needs.
Thus, the OCSLA is a gap-filling statute, initially designed to apply federal law to fixed structures that were erected on the OCS for the purpose of developing and producing oil and gas and that were not covered by either maritime law or state law.11
Between 1953 and 1978, the oil and gas industry created a variety of "special purpose" vessels, including jack-up rigs 12and semi submersible rigs13, from which the exploration, development and production of oil and gas from the OCS could be performed. The courts have consistently treated these floating special purpose drilling rigs as vessels in navigation, governed by the general maritime law, even though only a small portion of their time is spent moving from location to location.14
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For a variety of reasons, the OCSLA was amended in 1978.15These amendments form the basis of the controversy concerning the status of "special purpose" vessels as OCSLA situses. The applicable portion of the OCSLA, as amended, provides:
43 U.S.C. ß 1333. Laws and regulations governing lands
(a) Constitution and United States laws; laws of adjacent States; publication of projected State lines; international boundary disputes; restriction on State taxation and jurisdiction.
(1) The Constitution and laws and civil and political jurisdiction of the United States are 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 in the Federal Register such projected lines extending seaward and defining each such area. All of such applicable laws shall be administered and enforced by Page 304 the appropriate officers and courts of the United States. State taxation laws shall not apply to the outer Continental Shelf. * * *
(b) Longshore and Harbor Workers' Compensation Act applicable; definitions
With respect to disability or death of an employee resulting from any injury occurring as the result of operations conducted on the outer Continental Shelf for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the outer Continental Shelf, compensation shall be payable under the provisions of the Longshore and Harbor Workers' Compensation Act [33 U.S.C.A. ß 901 et seq.]. For the purposes of the extension of the provisions of the Longshore and Harbor Workers' Compensation Act under this section-
(1) the term "employee" does not include a master or member of a crew of any vessel, or an officer or employee of the United States or any agency thereof or of any State or foreign government, or of any political subdivision thereof;
(2) the term "employer" means an employer any of whose employees are employed in such operations; and
(3) the term "United States" when used in a geographical sense includes the outer Continental Shelf and artificial islands and fixed structures thereon.
The 1978 amendments to the OCSLA changed ß 203(a), by substituting "and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for...
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