LANCE M. AFRICK, District Judge.
Before the Court is a motion
Plaintiff, Neal A. Labove ("Labove"), alleges that on or about August 30, 2010, he sustained serious injuries aboard the CANDY LAND while being transported as a field service technician employed by Dynamic Industries, Inc. ("Dynamic"), to an offshore platform owned and operated by Enterprise Products Partners, L.P ("Enterprise").
On June 14, 2011, Labove filed this lawsuit alleging that his injuries resulted from negligence on the part of Candy Fleet and Enterprise.
On June 20, 2012, this Court granted Candy Fleet permission to file a timely motion for summary judgment with respect to its claim for indemnity from Dynamic pursuant to the offshore call-out agreement.
Summary judgment is proper when, after reviewing "the pleadings, the discovery and disclosure materials on file, and any affidavits," the court determines there is no genuine issue of material fact. Fed. R. Civ. P. 56(c). The party seeking summary judgment always bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking summary judgment need not produce evidence negating the existence of material fact, but need only point out the absence of evidence supporting the other party's case. Celotex, 477 U.S. at 323; Fontenot v. Upjohn Co., 780 F.2d 1190, 1195 (5th Cir. 1986).
Once the party seeking summary judgment carries its burden pursuant to Rule 56(c), the other party must come forward with specific facts showing that there is a genuine issue of material fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The showing of a genuine issue is not satisfied by creating "`some metaphysical doubt as to the material facts,' by `conclusory allegations,' `unsubstantiated assertions,' or by only a `scintilla' of evidence." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations omitted). Instead, a genuine issue of material fact exists when the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The party responding to the motion for summary judgment may not rest upon the pleadings, but must identify specific facts that establish a genuine issue. Id. The nonmoving party's evidence, however, "is to be believed, and all justifiable inferences are to be drawn in [the nonmoving party's] favor." Id. at 255; see Hunt v. Cromartie, 526 U.S. 541, 552 (1999) (internal quotation and citation omitted) (alteration in original).
The sole issue raised in this motion for summary judgment is whether the LOAIA applies to the indemnity provision in the offshore call-out agreement and renders it void as a matter of public policy. The Louisiana legislature enacted the LOAIA in 1981 to address "inequities foisted on certain contractors" by defense or indemnity provisions contained in agreements "pertaining to wells for oil, gas, or water. . . ." La. Rev. Stat. Ann. § 9:2780(A) (2005).
The U.S Court of Appeals for the Fifth Circuit has formulated a two-part test for determining whether the LOAIA applies to a particular contract. As stated by the Fifth Circuit, the LOAIA will apply "if (but only if) the agreement (1) pertains to a well and (2) is related to exploration, development, production, or transportation of oil, gas, or water. . . ." Transcon. Gas Pipe Line Corp. v. Transp. Ins. Co., 953 F.2d 985, 991 (5th Cir. 1992) (emphasis in original); Fontenot v. Chevron U.S.A. Inc., 676 So.2d 557, 564 (La. 1996). Because both factors must be present, "[i]f the contract does not pertain to a well, the inquiry ends. Only if we determine that the contract has the required nexus to a well may we proceed to the second step of the process.. . ." Transcon. Gas, 953 F.2d at 991. As the parties do not contest whether the agreement in this case is related to exploration, development, production, or transportation of oil, gas, or water, the Court will focus only on whether the agreement "pertains to a well."
Candy Fleet contends that the LOAIA does not apply to the offshore call-out agreement because the subject of the contract does not pertain to a well, but rather, to a platform designed merely to facilitate the transmission of commingled oil and gas to downstream pipelines. The Fifth Circuit has recognized that there is a point at which the subject of a contract no longer pertains to a well. The point is reached when the work relates to gas that "can no longer be identified with a particular well or if the gas becomes so fundamentally changed by processing, commingling, or preparing it for distribution to its ultimate end user that it can no longer properly be attributed to a particular well." Johnson v. Amoco Prod. Co., 5 F.3d 949, 953-54 (5th Cir. 1993) (quoting Transcon. Gas, 953 F.2d at 994) (internal quotations and alterations omitted). "[W]ork called for in a contract to service transmission equipment transporting gas downstream from this point is not considered work that `pertains to a well.'" Roberts v. Energy Dev. Corp., 104 F.3d 782, 785 (5th Cir. 1997).
In Transcontinental Gas, the Fifth Circuit identified the following factors as relevant to determining the point at which a contract for services relating to a transmission system or pipeline does or does not pertain a well:
Transcontinental Gas, 953 F.2d at 994-95. The factors bear on the requisite functional and/or geographic nexus between the subject matter of the agreement and a particular well. Friede Goldman Offshore Texas, L.P. v. Pro. Indus. Maint., L.L.C., No. 01-30471, 2001 WL 1223700, at *1 (5th Cir. Sept. 27, 2001); Verdine v. Ensco Offshore Co., 255 F.3d 246, 253 (5th Cir. 2001) (collecting cases). "Whether a contract pertains to a well or to drilling requires a fact intensive case-by-case analysis." Transcon. Gas, 953 F.2d at 994.
When considering the Transcontinental Gas factors in this case, the Court must "focus specifically" on the scope of the particular agreement giving rise to the claims asserted by Labove.
Candy Fleet submitted the affidavit of James Michael McNeer in support of its argument that the agreement does not pertain to a well.
Dynamic does not dispute the vast majority of the information submitted in the affidavit provided by Mr. McNeer and it offers no testimony of its own to contradict his statements. Dynamic admits that Enterprise is not engaged in drilling activities, that it is a provider of midstream energy services to producers and consumers, and that other companies own the well heads that send production to the platform.
Considering the undisputed evidence in light of the Transcontinental Gas factors, the Court finds that Candy Fleet is entitled to summary judgment given the lack of any functional or geographic nexus between the agreement giving rise to Labove's injuries and a well. It is readily apparent that the contract relates to work performed on junction platforms that serve as gathering and transportation stations, which are geographically and functionally distant from any well or wells. The SS-332 platforms are closely related with a system of pipelines that pick up commingled gas from distant wells and production facilities for transportation to main transmission or trunk lines. The purpose of the platforms is to facilitate the transmission of commingled oil and/or natural gas from various pipelines into larger pipelines. Enterprise owns and operates the platforms apart from the owners of the wells and production facilities and no production activities take place on the platforms. Although the Fifth Circuit has cautioned against relying on a "lone affidavit" that contains insufficient information to determine with a reasonable degree of certainty whether a contract pertains to a well, see Transcon. Gas, 953 F. 2d at 995, the undisputed facts along with the uncontroverted affidavit of Mr. McNeer establish with the requisite degree of certainty that the contract in this case related only to product which could "no longer be identified with a particular well" and had become "so fundamentally changed by processing, commingling, or preparing it for distribution to its ultimate end user that it can no longer properly be attributed to a particular well."
This conclusion finds support from decisions of the Fifth Circuit and other U.S. District Courts. The Fifth Circuit previously held that a contract for work on a compressor station at an oil and gas facility does not pertain to a well under the LOAIA. Johnson v. Amoco Prod. Co., 5 F.3d 949 (5th Cir. 1993). In Johnson, an individual was injured while installing and adjusting an engine and compressor at an Amoco facility which processed oil and gas produced from thirtyone Amoco wells located nearby. Id. at 951. All thirty-one wells were connected to the Amoco facility by one gathering line into which each well connected, and through which oil and gas became commingled before arriving at the facility. Id. at 954. At the facility, product from the wellheads underwent processing, including separation, scrubbing, glycol dehydration, and finally compression. Id. at 951. Compressed gas then left the facility in a transmission pipeline which fed into a trunk line approximately ten miles away. Id. The Fifth Circuit held that by the time gas reached the compressor station where the injury occurred, it could no longer be identified with a particular well, and it did not pertain to a well within the meaning of the LOAIA. Id. at 954.
Another district court recently assessed the application of the LOAIA to a contract for the operation and maintenance of the Grand Isle 115, an offshore platform with similar characteristics to platform SS-332. Hughes v. Pogo Prod. Co., No. 06-1894, 2009 WL 667186, at *1 (W.D. La. March 11, 2009). The Grand Isle 115 platform served as a commingling station where gas from three incoming pipelines was further commingled and pumped into one pipeline destined for a refinery. Id. at *3. The Grand Isle 115 platform was not an active, producing well. Id. at *6. In addition, no well that eventually fed production through the platform was located closer than five miles from the platform, and the platform was "closely related to a pipeline," because its sole purpose was to further commingle product from incoming pipelines to larger outgoing pipelines. Id. For these reasons, the court concluded that claimants sufficiently demonstrated the Grand Isle 115 platform did not pertain to a well. Id. at *8.
In contrast, the cases upon which Dynamic relies are distinguishable as each decision rested on facts establishing a nexus with a well or wells. See, e.g., Broussard v. Conoco, Inc. 959 F.2d 42, 45 (5th Cir. 1992) (holding that a contract for catering services pertained to a well by providing maintenance of facilities, i.e. employees and living quarters, related to in-field production); Roberts, 104 F.3d at 785 (holding that a work order for installing a fire safety system pertained to a well because it was installed on a production platform housing workers who maintained wells serviced by the platform); Lloyds of London v. Transcon. Gas Pipe Line Corp., 101 F.3d 425, 428 (5th Cir. 1996) (holding that a contract between a painting and sandblasting contractor and owner of natural gas pipelines pertained to a well because the contract involved work performed on a meter station connected to a well); Verdine, 255 F.3d at 254 (5th Cir. 2001) (holding that a contract for repairs on a dismantled fixed oil platform rig pertained to a well because services rendered were performed on a structure intended for future use in the exploration and production of oil and gas).
Finally, the Court does not find significant the fact that SS-332 used to be a production platform until the early 1990s. Dynamic relies on a paper prepared for a presentation at an offshore technology conference in 2003 for the proposition that the SS-332 platform was previously a production platform until the early 1990s.
For the foregoing reasons,
A. The legislature finds that an inequity is foisted on certain contractors and their employees by the defense or indemnity provisions, either or both, contained in some agreements pertaining to wells for oil, gas or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, to the extent those provisions apply to death or bodily injury to persons. It is the intent of the legislature by this Section to declare null and void and against public policy of the state of Louisiana any provision in any agreement which requires defense and/or indemnification, for death or bodily injury to persons, where there is negligence or fault (strict liability) on the part of the indemnitee, or an agent or employee of the indemnitee, or an independent contractor who is directly responsible to the indemnitee (emphasis added).
B. Any provision contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, is void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages arising out of or resulting from death or bodily injury to persons, which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee, or an agent, employee, or an independent contractor who is directly responsible to the indemnitee (emphasis added).
C. The term "agreement," as it pertains to a well for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, as used in this Section, means any agreement or understanding, written or oral, concerning any operations related to the exploration, development, production, or transportation of oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, including but not limited to drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging, or otherwise rendering services in or in connection with any well drilled for the purpose of producing or excavating, constructing, improving, or otherwise rendering services in connection with any mine shaft, drift, or other structure intended for use in the exploration for or production of any mineral, or an agreement to perform any portion of any such work or services or any act collateral thereto, including the furnishing or rental of equipment, incidental transportation, and other goods and services furnished in connection with any such service or operation.