Fifth Circuit Takes Complex Drill Site Case En Banc to Determine If Maritime Law Applies

In 2011, Specialty Rental Tools & Supplies, LLC employee, Peter Savoie, was injured on the job at an offshore oil drill site when a crane owned and operated by Larry Doiron, Inc.(LDI) struck Savoie. In anticipation of a claim filed against them by Savoie, LDI filed a limitation of liability proceeding as the owner of the crane barge used when the incident injuring Savoie occurred. LDI also filed a third-party complaint against Specialty Rental Tools & Supplies seeking indemnity under a master services contract had with contractors operating the drill site. Specialty Rental Tools & Supplies challenged LDI’s claim of indemnity under the master service contract which raised the question of whether maritime law or Louisiana law applied to the contract. If maritime law applied, the indemnity obligation could be enforced. However, if the Louisiana law applied, the Louisiana Oilfield Indemnity Act precluded indemnity under the master services contract. The district court, using a six-factor inquiry, determined that maritime law applied. This decision was appealed to the Fifth Circuit Court of Appeals, sitting. In the end, En Banc, Fifth Circuit adopted a more straightforward two-prong test, consistent with the United States Supreme Court decision in Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14 (2004), for determining whether the contract was governed by maritime law or Louisiana law. In examining the master services contract at issue under the two-prong test, the Fifth Circuit determined the indemnity master services contract should be interpreted under Louisiana law, reversing the original decision and rendering judgment in favor of Specialty Rental Tools & Supplies. Read the entire case here.