5th Circuit Rules That Offshore Floating Oil and Gas Platform Moored on the OCS Floor Is Not a Vessel and Not Subject to Maritime Lien

A recent “unpublished”  decision from the U.S. Fifth Circuit addressed the issue of whether a maritime lien can attach to on offshore floating production platform.  In Warrior Energy Services Corp. v. ATP Titan M/V, Action No. 13-30587 (5 Cir. 2014), several oilfield contractors, Warrior and others, contracted with ATP Oil & Gas to provide certain services and supplies to the ATP TITAN M/V (”TITAN”), a floating oil and gas production facility owned by ATP Titan, LLC.  The TITAN is moored on the Outer Continental Shelf, miles offshore from Louisiana.

ATP Oil & Gas filed for bankruptcy and did not pay the contractors for their services.  Warrior and the other contractors then filed a USDC action against platform owner ATP Titan and asserted a maritime lien against the TITAN.  ATP Titan filed a motion to dismiss the USDC action as well as the maritime lien on the basis the TITAN was not a vessel and the court lacked jurisdiction.  Warrior et al conceded that its claims before the court were dependent upon the TITAN’s status as a vessel.  On motion for summary judgment, Judge Sara Vance ruled the TITAN was not a vessel and she dismissed the contractors’ lawsuit on jurisdictional grounds.

Addressing the issue of vessel status, the 5th Circuit panel looked to the U.S. Supreme Court’s vessel status decisions in Stewart v. Dutra and Lozman v. City of Riviera Beach. The dispositive question was whether the TITAN’s “use as a watercraft as a means of transportation on water is a practical possibility or merely a theoretical one.” (citing Dutra). The court went on to note that the TITAN is moored to the OCS floor by 12 mooring chains connected to 12 anchor piles imbedded over 200 feet into the seafloor. It is further immobilized by “an oil and gas production infrastructure”.  The TITAN has not been moved since it was installed in 2010 and it has no means of self-propulsion, apart from the ability to reposition itself within a 200 foot range by manipulating its mooring lines.  Moreover, moving the TITAN would require 12 months of preparation, at least 15 weeks for its execution and would cost more than $70-million.  Based on these factors, the 5th Circuit ruled that the TITAN was not practically capable of transportation on water and, therefore, as a matter of law, was not a vessel.

Editor’s Note: The contractors complained to the 5th Circuit that Judge Vance relied on its unpublished opinion in a similar case: Mendez v. Anadarko Petroleum Corp.  By way of a footnote, the panel acknowledged that Mendez was not “controlling precedent” but could be cites as “persuasive authority” given its factual similarity with the subject ATP case.

U.S. District Judge Awards Punitive Damages Against Barge Operator in Non-Injury, Property Damage Suit Arising Out of Barge Breakaway — Despite Finding that Barge Operator Did Not Act With Malice or that Its Conduct Was Outrageous or Showed Wanton Indifference to Safety Concerns

U.S. District Judge Gregg Costa of Galveston recently awarded a fishing boat owner punitive damages for damages suffered in an allision caused by a drifting construction barge.  Graham v. PCL Civil Constructors, Inc., C.A. 3:11-CV-00546 (S.D. Tex. Dec. 23, 2013).  The barge was moored to an H-beam pile which had been driven into the water bottom on a bridge construction site near Freeport, TX.  The barge was caused to break away from its mooring during a storm (30 mph sustained winds, with gusts up to 43 mph).  The drifting barge struck plaintiff’s stationary fishing vessel which docked for fuel and ice.  Judge Costa ruled that the barge bareboat charterer/operator (PCL) was negligent in the use of the H-pile due to its sharp edges that created a risk of cutting a mooring line–a risk that would not exist with a typical round piling.  Judge Costa emphasized that the barge owner failed to monitor weather conditions and take appropriate steps to prevent the breakaway in view of the forecasted adverse weather.  He also noted that PCL failed to obtain a required federal permit for the mooring piling.

Relying heavily on the US Supreme Court’s landmark Exxon Shipping punitive damages ruling, Judge Costa acknowledged that PCL did not act with malice or that its conduct was outrageous or showed wanton indifference to safety concerns.  Moreover, Judge Costa expressly stated that the Court did not conclude that PCL had actual knowledge of the extreme danger of risk and that it proceeded with conscious indifference to the safety of others.  The Court noted that PCL’s conduct was not motivated by a decision to place economic gain over reasonable safety measures.  Rather, the Court found that PCL “did not realize or appreciate the high degree of risk involved when a reasonable company in its position would do so.”  Thus, Judge Costa ruled, “PCL’s conduct with regard to inadequate moorings and weather preparations was reckless.”  He then awarded punitive damages that equaled to 65% of the compensatory damages.

Editor’s Note: Our firm was involved for the barge owner who was dismissed prior to trial upon a showing that the bareboat charterer was solely responsible for the H-beam piling and maintained exclusive care, custody and control of the barge at the time of the breakaway.

BP Oil Spill: U.S. District Court Bars Oyster Claims Against Non-BP Defendants Where Claimants Did Not Opt Out of Class Settlement in Master BP Case

Following the BP oil spill, the State of Louisiana constructed a massive sand barrier off its Gulf coast to protect its fragile wetlands.  The berm was constructed in the immediate vicinity of certain oyster leases held by the oyster claimants who alleged the construction destroyed their oyster beds.  The claimants sued the State of Louisiana and the various contractors and subcontractors involved in the construction.  The suit was filed in Louisiana state court.  Two of the involved dredging companies filed limitation of liability suits in USDC and impleaded the State and other involved contractors.  (The State was dismissed based on sovereign immunity.)

The limitation complainants also filed a third party action impleading BP in the limitation suit.  BP responded with a motion for summary judgment based on one of the several class action settlements reached in the “master” BP multi district litigation (“MDL”).  Most of the other contractor defendants joined in BP’s motion.  BP argued that the oyster claims fell within the scope of the “Economic and Property Damages Settlement Agreement” which was finalized with court approval in December 2012.  (The economic damages settlement provided generous terms to the Gulf Coast seafood industry, most notably the oyster industry.)  U.S. District Judge Carl Barbier agreed with BP’s argument that the oyster claimants released not only BP for their oyster losses but also all released of the State’s contractors and subcontractors whom the court determined fell within the term “Other Released Parties” within the class action settlement agreement.

U.S. District Judge Dismisses Seaman’s Claim for Punitive Damages on Summary Judgment

In Snyder v. L&M BoTruc Rental, Inc.,  C.A. No. 12-0097, (E.D. La. 2013), plaintiff counsel sued his employer for punitive damages on two separate causes for action: a) maintenance and cure (M&C), and b) alleged gross negligence and unseaworthiness.

With respect to M&C, counsel claimed punitive damages prospectively, i.e., in the event the employer arbitrarily denied benefits in the future.  In support of its motion, the employer presented evidence that it regularly paid maintenance to Snyder and that it had only suspended payments only after plaintiff counsel refused to provide medical records after repeated requests. The court noted that plaintiff presented no evidence that employer failed to pay maintenance “owed to date.”  In dismissing the punitive damage claim relating to M&C, U.S. District Judge Nannette Olivette Brown rejected plaintiff’s argument that he should be allowed to maintain the prospective claim until the point he reaches maximum cure.

On the gross negligence and unseaworthiness count, Judge Brown ruled that a seaman is not allowed to recover punitive damages based on the longstanding Miles v. Apex Supreme Court ruling. She expressly ruled that the Supreme Court’s more recent Townsend (punitive damages allowed for M&C) did not alter the rule of Miles which rejected seamen’s claims for punitive damages for negligence or unseaworthiness.