Background and Parties

This appeal arose from a limitation-of-liability action brought by Offshore Oil Services, Inc., owner of the M/V Anna M, a contractor hired to transport workers to an offshore oil platform. The underlying incident involved Tyron Felix, a worker employed by Island Operating Company, Inc., which had entered into a master service contract with the platform owner. Felix allegedly sustained injuries to his knee, neck, and back during a personnel basket transfer from the deck of the vessel to the platform. After Felix and Louisiana Workers Compensation Corporation, the workers' compensation insurer, filed claims against Offshore Oil Services, the contractor filed a third-party demand seeking indemnity from Island Operating under the master service contract, along with claims for insurance coverage and defense costs.

The Maritime vs. Non-Maritime Contract Dispute

The central legal question was whether the master service contract between the platform owner and Island Operating constituted a maritime contract governed by federal admiralty law, or a non-maritime contract subject to Louisiana law—specifically, the Louisiana Oilfield Anti-Indemnity Act (LOAIA). This determination was outcome-determinative: if Louisiana law applied, the indemnity provision requiring Island Operating to defend and indemnify Offshore Oil Services would be unenforceable under La. Rev. Stat. Ann. §§ 9:2780(B) and (C). The United States District Court for the Eastern District of Louisiana granted partial summary judgment to Island Operating, finding that Louisiana law applied, and subsequently denied reconsideration.

The Fifth Circuit's Two-Part Maritime Contract Test

Writing for the panel, District Judge Fernando Rodriguez, Jr., sitting by designation, applied the established two-part inquiry for determining whether an offshore oil and gas service contract is maritime in nature. The court explained that it must first ask whether the contract is one to provide services to facilitate drilling or production of oil and gas on navigable waters; if the court answers this question in the affirmative, it then asks whether the contract provides or the parties expect that a vessel will play a substantial role in completion of the contract. An affirmative answer to both questions renders the contract one in maritime, subject to federal maritime law. The court emphasized that under OCSLA, if either prong fails, the laws of the adjacent state govern the contract.

The Fifth Circuit found that even though the contract required the platform owner to provide marine transportation to platforms by vessels, these facts were insufficient to render the contract maritime. The court focused on the contract's definition of the work as 'Lease Operators' and concluded that the contract did not provide that vessels would play a substantial role in contract completion, and the owner and Island Operating did not expect that vessels would play a substantial role in completion of the contract. Accordingly, the court held that the master service contract was nonmaritime and subject to Louisiana law, making the indemnification provision unenforceable under the Louisiana Oilfield Anti-Indemnity Act.

Outcome

The Fifth Circuit affirmed the district court's grant of partial summary judgment to Island Operating. The court also noted that Offshore Oil Services failed to present any argument contesting the district court's decision that the contractor's settlement with Felix precluded recovery of defense costs, resulting in waiver of that issue on appeal.