The U.S. Fifth Circuit Court of Appeals recently addressed the situs requirement of a personal injury claim arising under the Outer Continental Shelf Lands Act (OCSLA). Tetra Technologies was performing a salvage operation on a decommissioned oil production platform in the Gulf of Mexico and retained Vertex Services to assist with the project. A rigger employed by Vertex was injured when he fell approximately 80 feet into the water. He sued Tetra for personal injury and Tetra sought indemnity from Vertex pursuant to a Master Service Agreement between the two companies. The District Court determined Tetra was entitled to indemnity from Vertex and Vertex appealed to the 5th Circuit.
On appeal, Vertex raised several arguments including that under OCSLA, Louisiana law was applicable and the indemnity agreement was voided under the Louisiana Oilfield Indemnity Act (LOIA). The first question for the Court was whether OCSLA applied to this case such that Louisiana law should be applied as a surrogate to federal law. The adoption of state law as a surrogate to federal law requires 1) that the controversy arise on a situs covered by OCSLA (such as a fixed platform on the outer continental shelf); 2) that federal maritime law must not apply of its own force; and 3) state law must not be inconsistent with federal law. For the controversy to arise on a situs covered by OCSLA in a contractual dispute, the majority of the work performed under the contract must occur on a stationary platform or other OCSLA situs.
After reviewing the plaintiff’s deposition testimony, the MSA, and the Salvage Plan, the Court was unable to conclude whether the majority of Vertex’s work was to be performed on an OCSLA situs. The Court determined the record was inadequate and the case was remanded to the District Court for further evaluation of this dispositive question.
Tetra Technologies v. Continental Insurance Co.