Fifth Circuit Addresses Scindia Duties on Summary Judgment and the West Caveat Sending Case Back to District Court

In another recent case on the Scindia duties,[1] the Fifth Circuit Court of Appeals in Manson Gulf, L.L.C. v. Modern American Recycling Service, Inc.,[2] remanded a case dismissed by the District Court for the Eastern District of Louisiana on summary judgment against the vessel owner on the grounds that there was a material dispute of fact as to whether a hole in a decommissioned oil platform (and decommissioning work has become a semiregular theme on this blog) was open and obvious or a danger that a “reasonably competent stevedore” should have anticipated. Notably the Court also addressed whether the West exception for independent contractors injured by the conditions/defects they were hired to repair or inspect applied to a stevedore retained to remove an oilfield structure for scrap metal. The Court found that the narrow West exceptions do not apply in this case.

Manson Gulf, L.L.C. (“Manson Gulf”) decommissions oil-drilling platforms in the Gulf of Mexico when production has ceased, as required by the so-called “Idle Iron” regulatory policy.[3] Manson Gulf purchased the oil platform at issue and subsequently extracted the platform onto a chartered barge for delivery to Modern American Recycling Service (“MARS”) to dismantle and sell the metal for scrap.[4] In order to extract the oil platform Manson Gulf cut four large holes in the platform (approximately two feet by two feet[5]) to allow rigging chains to be passed through the platform and around the legs of the platform to allow for a crane to lift and transfer the platform to the barge. Manson Gulf left the four holes uncovered and unmarked after delivery to MARS.[6]

On June 16, 2015, a Manson Gulf project engineer warned MARS that the oil platform still contained oil in the pipes, but, did not inform MARS of the unmarked holes used for the extraction of the platform.[7] After Manson Gulf informed MARS of the oil still present on the platform, the project engineer for Manson Gulf left and no other representatives from Manson Gulf remained.[8] Jeff Smith, a foreman for MARS in charge of riggers and cutters boarded the platform to inspect for the presence of oil.[9] Shortly thereafter, J.J. LaFleur joined Smith to lend a hand. LaFleur was an independent contractor hired by MARS to conduct investigations and take inventories.[10]

During the inspection by LaFleur and Smith, LaFleur stepped through one of the holes in the platform cut by Manson Gulf.[11] LaFleur fell 50 feet to the deck of the barge and died from his injuries.[12]

After LaFleur’s death, Manson Gulf filed a complaint against MARS seeking exoneration and limitation from liability.[13] LaFleur’s widow also filed claims against both Manson Gulf and MARS alleging negligence under both Louisiana and maritime law. Both Manson Gulf and MARS filed motions for summary judgment as to LaFleur’s claims under § 905(b) of the Longshore and Harbor Worker’s Act (LHWCA).[14] The District Court granted summary judgment for both Manson Gulf and MARS against the LaFleur claimants.[15] The appeal came to the Fifth Circuit only on the summary judgment granted for Manson Gulf.[16]

As part of the Fifth Circuit’s analysis, the Court laid out the duties a vessel owner owes to a longshoreman under §905(b) of the LHWCA (Scindia duties) as laid out in Scindia Steam Navigation Co. v. De Los Santos, 451 U.S. 156 (1981). As the Supreme Court articulated, these “three “narrow duties” owed by the vessel owner: “(1) a turnover duty, (2) a duty to exercise reasonable care in the areas of the ship under the active control of the vessel [“active control duty”], and (3) a duty to intervene.””[17]

In fairly short order, the Fifth Circuit dispensed with the claims against Manson Gulf under the “active control” duty and the “duty to intervene” because it was undisputed that Manson Gulf was not in control of the vessel at the time of LaFleur’s fall because there were no Manson Gulf personnel present. In this regard, the Court reiterated that under the “active control” duty, ownership is not the correct test but rather that the test is actual control“[i]ndeed, if mere ownership of a hazardous condition was sufficient to create control, would not every vessel owner automatically control hazards appurtenant to its vessel? Our cases say otherwise.” [18] Similarly, due to their absence at the time of the incident, Manson Gulf personnel could not have had knowledge of any peculiar dangers related to Smith and LaFleur’s operations on the oil platform and thus had no possible “duty to intervene” under the second Scindia duty.[19]

As to the “turnover duty,” however, the Fifth Circuit found summary judgment improper based on what ultimately amounted to a narrow point of dispute in otherwise undisputed facts on both sides. The parties all agreed that the hole LaFleur fell through was a danger, that Manson Gulf had actual knowledge of the hole or at the least constructive knowledge, and that Manson Gulf only warned MARS of oil and not of holes.[20] The only question left for the Court was whether the hole was “(1) open and obvious or (2) a danger “a reasonably competent stevedore” should have anticipated,” both of which are exceptions to the “turnover duty” to warn of latent/hidden defects.[21]

In addressing this issue, the Court specifically focused on the evidence that had been presented at the summary judgment stage and whether there was a material dispute of fact as to whether the hole was open and obvious or a danger that a reasonably competent stevedore should have anticipated. In particular, the Fifth Circuit specifically noted that there was conflicting testimony from Smith, the only witness to the LaFleur’s fall. Smith testified that if he was in LaFleur’s shoes he would not have fallen because he double checks where he is going, but, he also testified that the platform’s “grating can play tricks on your eyes,” that the hole was not easily seen until a person was right on top of it, and that the hole looked like a solid floor.[22] Other conflicting testimony from Smith included that he would expect there to be holes on oil platforms such as this one, but, he also testified that these types of holes are typically covered or marked by placing cables around them and that “an un covered, unmarked hole—the very danger that befell [LaFleur]—was “just not common at all.””[23] In assessing this conflicting testimony, the District Court found that Smith’s testimony that if he was in LaFleur’s shoes he would not have fallen because he double checks where he goes and that he expects a decommissioned oil platform like this one to include holes was more convincing than his other testimony  – i.e. a credibility determination typically prohibited on summary judgment.[24] Notably, in a curious and rare move for an appellate court that typically eschews delving into the details of evidence, the Fifth Circuit’s opinion in Manson Gulf includes an appendix with color photos of the holes/grating in question to further support its analysis as to the disputed testimonial evidence.

The Fifth Circuit ultimately reversed and remanded on this specific factual point.  Critically, while the Fifth Circuit reaffirmed its general rule that summary judgment may be granted in a bench-tried case (as  this one was) when the district court finds that “proceeding to trial would not enhance the Court’s ability to draw inferences and conclusions,” this rule only applies when  there are truly no material factual disputes,.[25] As discussed above, however, the court found that the discrepancies in the testimony – particularly in light of the photographic evidence – constituted material disputes of fact precluding summary judgment.  The Court further explicitly noted that credibility determinations are improper at the summary judgment stage, even if the Court is able to draw its own inferences and conclusions.[26]

One final issue addressed by the Court was applicability of the exception to §905(b)liability set forth in West v. United States[27]. West is a pre-Scindia case that denied recovery for a shore based employee because the vessel owner had “no duty to protect [the employees] from risks that were inherent in the carrying out of the contract.”[28] The court held the West exception was not applicable because there was no authority indicating it should extend beyond situations where the danger was “(1) an open and obvious defect that (2) an independent contractor is retained by the vessel owner to repair or inspect.”[29] The Manson Gulf court held that this formulation did not apply to the facts of this case because MARS was inspecting for leftover oil in piping, not for holes in the platform grating:

“When control of the structure was turned over, a warning was given about oil but not holes—and this is more than a hole in the grating. Unseen is a hole in the platform underneath, and if a man slips or steps over the edge of the hole, he will fall to a terribly painful death. Surely, this danger could be found to constitute a latent hazard. And, moreover, this case involves a stevedore retained by the vessel owner to remove a structure for scrap, not to repair or inspect for particular known dangers. It is thus outside West’s narrow liability bar.”[30]

After this opinion, the litigation between the Lafleur claimants and Manson Gulf will be heading back to district court for what seems to be a trial on whether the hole was open and obvious or (2) a danger “a reasonably competent stevedore” should have anticipated, unless the parties separately settle. And again, the Fifth Circuit’s unusual decision to include photographic evidence in its opinion emphasizes the old cliché that pictures can be worth a thousand words, even (and perhaps especially) in the thorny world of maritime personal injury litigation, and perhaps even at the appellate level. We will keep our eye on this case for any further developments on how the District Court, or the Fifth Circuit if it comes to that, address the final piece of Manson Gulf’s possible Scindia duty.

[1] The Fifth Circuit also addressed the Scindia duties at the end of 2016 in Abston v. Jungerhaus Mar. Servs. GMBH & Co. KG, 2016 WL 6574085 (5th Cir. Nov. 5, 2016).

[2] 2017 WL 6422334 (5th Cir. Dec. 18, 2017).

[3] See id. at *2.

[4] See *2–3.

[5] See id. at *2.

[6] See id.

[7] See *3.

[8] See id.

[9] See id.

[10] See id.

[11] See id.

[12] See id.

[13] See id.

[14] See id.

[15] See id.

[16] See id.

[17] Manson Gulf, 2017 WL 6422334, at *4–5 (quoting Kirkesey v. Tonghai Mar., 535 F.3d 388, 391 (5th Cir. 2008)).

[18] See Manson Gulf, 2017 WL 6422334, at *5–6 n.1 (citing Fontenot v. United States, 89 F.3d 205, 208 (5th Cir. 1996))

[19] *6.

[20] Id. at *6–7.

[21] Id. at *7.

[22] Id. at *8.

[23] Id. at *8.

[24] *7–8.

[25] Id. at *9 (quoting Nunez v. Superior Oil Co., 572 F.2d 1119 (5th Cir. 1978)).

[26] Id.

[27] 361 U.S. 118, 119 (1959).

[28] West, 361 U.S. at 123.

[29] Manson Gulf, 2017 WL 6422334, at *10 (citing West, 361 U.S. at 124).

[30] Id.