Fifth Circuit Hands Down Highly Anticipated En Banc RulingPosted on Friday, January 12th, 2018 | Posted in Resources & Publications, Site Blog
On Monday, January 8, 2018, the United States Court of Appeals for the Fifth Circuit handed down its much anticipated en banc decision in In re Larry Doiron, Inc., setting forth a new test for determining whether a contract for services in the offshore industry is a maritime contract governed by federal maritime law, or a non-maritime contract governed by state law. This issue is of particular importance for cases arising off the coast of Louisiana, since indemnity agreements are enforceable under federal law, but usually unenforceable under Louisiana law.
Main takeaways from the court’s opinion
In Doiron, the court abandoned the six-part test set forth in Davis & Sons v. Gulf Oil Corp. in 1990, which was very fact specific and generated a great deal of uncertainty. The court substituted a simpler two part test purporting to be consistent with the decision of the Supreme Court of the United States in Norfolk Southern Ry. Co. v. Kirby. Under the new test set forth in Doiron, the first question is –
whether the contract is one to provide services to facilitate the drilling or production of oil and gas on navigable waters.
If the answer to that question is “yes,” the court must address whether the contract provides or the parties expect that a vessel will play a substantial role in the completion of the contract.
While the test is considerably simpler than the former Davis & Sons test, it leaves a number of questions unanswered. For example, it is not clear what is meant by “drilling or production of oil and gas on navigable waters.” While this would rather clearly include drilling from special purpose vessels such as jack-up and semisubmersible drilling rigs, it is not clear whether this includes drilling and production from fixed platforms located in navigable waters. In addition, the decision does not answer what is meant by a vessel playing a “substantial role” in completion of the contract.
Chaffe McCall’s Role
Chaffe McCall participated in Doiron as an amicus curiae, arguing in favor of abandonment of the Davis & Sons test and in favor of adopting the simpler test set forth in Kirby. Chaffe McCall is also involved in a case with similar facts pending in the Fifth Circuit in which oral argument was deferred pending the decision in Doiron, and the decision in that case may answer some of the questions left unanswered by Doiron.
Please contact us if you would like more information about these cases, or if we can be of service in matters raising similar issues.