March 2016

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In 2006, the Fifth Circuit issued a landmark controversial opinion in Texaco Exploration & Production, Inc. v. AmClyde Engineered Products Co., 448 F.3d 760, 770 (5th Cir.) amended on reh’g, 453 F.3d 652 (5th Cir. 2006). The case concerned the loss of the 3,605 ton, $70 million South Deck Module of Texaco’s compliant tower Petronius platform (then the tallest man-made structure in the world, from seafloor to above-surface platform height) due to failure of a wire rope component during transfer of the module from a deck barge via a barge-mounted crane. Despite the fact that the operation involved the use of two vessels and the crane-assisted movement of the South Deck Module over water in the middle of the Gulf of Mexico, the Fifth Circuit held that admiralty tort jurisdiction did not apply, and that the incident fell within the exclusive jurisdiction of the Outer Continental Shelf Lands Act (“OCSLA”). Accordingly, the case was remanded for a jury trial (after a prior improvidently conducted bench trial in admiralty) pursuant to the law of Alabama (the state adjacent to the platform site), instead of general maritime law. (more…)

As previously reported on Striding the Quarterdeck, district courts within the federal Fifth Circuit had split over recent years as to whether the Texas and Louisiana Oilfield Anti-Indemnity Acts (TOAIA, Tex. Civ. Prac. & Rem. Code §127.001 et seq., and LOAIA, La. Rev. Stat. §9:2780) applied to platform decommissioning work. Both statutes in general prohibit indemnity and additional insured agreements in contracts for work “pertaining to a well,” a broadly worded operative clause that has been interpreted to include everything from catering work on production platforms to shoreside fabrication of a platform that would eventually be used at a producing well. (more…)