FACTUAL AND PROCEDURAL BACKGROUND

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1 The Fifth Circuit Attempts to Clarify the Interplay Between OCSLA and Maritime Law; Declines to Create a Zone of Danger Cause of Action Under General Maritime Law In Francis Barker v. Hercules Offshore, Inc. and Hall Houston Exploration II, L.P., et al., a threejudge panel comprised of Fifth Circuit Justices Higginbotham, Clement and Haynes held 2 1 to affirm Defendant Appellees summary judgment verdict on all counts. Justice Clement wrote for the majority, which established new Fifth Circuit law concerning the Outer Continental Shelf Lands Act ( OCSLA ) and its interplay with general maritime law. The panel also declined to create a new bystander zone of danger cause of action under general maritime law. Justice Higginbotham dissented. FACTUAL AND PROCEDURAL BACKGROUND Defendant Hall Houston owned a subsea mineral lease on the Outer Continental Shelf in the Gulf of Mexico. Hall Houston contracted with co defendant Hercules Offshore, who provided a jackup rig, HERCULES 251, to drill oil and gas wells on the lease. Hall Houston also contracted with Frank s Casing to run a casing over the wells before drilling commenced. Plaintiff Barker was a welder for Frank s Casing. On January 27, 2008, Plaintiff was aboard HERCULES 251 on the Outer Continental Shelf in the Gulf of Mexico. The rig was completely jacked up out of the water with its legs resting on the sea floor. Plaintiff and his longtime friend were welding on the rig s pollution pan which they thought was welded to the rig itself. Unfortunately it was not, and when the pan s last support strap was cut, the pan plummeted 100 feet into the ocean. Plaintiff was standing on the rig s framing, about two feet from the pollution pan, and was physically uninjured in the incident. Horrified, Plaintiff watched as his friend fell to his death. Plaintiff sued Hercules and Hall ( Defendants ) in Texas state court. Despite being physically uninjured in the incident, Plaintiff alleged that after the incident he suffered severe emotional distress and various physical injuries resulting from that distress. He sought general, special and punitive damages for negligent infliction of emotional distress and negligence under general maritime law, and alternatively under Texas tort law.

2 Defendants removed the action to U.S. District Court for the Southern District of Texas under OCSLA, which grants federal question jurisdiction over incidents occurring on the Outer Continental Shelf. The District Court denied Plaintiff s motion to remand to state court and granted Defendants motion for summary judgment on all issues. Plaintiff appealed both the summary judgment and the removal remand issue to the Fifth Circuit. MARITIME LAW OR OCSLA? The majority first addressed the issue of when maritime law applies to incidents that occur on the Outer Continental Shelf. OCSLA provides a federal cause of action for incidents arising on the Outer Continental Shelf. State law applies to fill in any gaps in OCSLA, and it is state law that provides the theories of recovery for most tort actions under OCSLA. On the other hand, general maritime law can also apply to an OCSLA tort action if it would apply of its own force that is, when there is a maritime situs and a connection to traditional maritime activity. When it applies to an OCSLA tort action, maritime law supplants both federal and state law as the substantive law of decision. Plaintiff argued that general maritime law should decide his claim. In evaluating whether maritime law applied, the Court summarily determined that the jack up rig was a vessel, thereby satisfying the maritime situs requirement. To determine whether the incident maintained a sufficient connection to traditional maritime activity, the Court applied the Grubart v. Great Lakes Dredge & Dock, Co. analysis. 513 U.S. 527, 534 (1995). This analysis asks whether the incident had a potentially disruptive impact on maritime commerce and whether the general character of activity giving rise to the incident bore a substantial relationship to traditional maritime activity. In other words, the question is whether the tortfeasor s activity is so closely related to activity traditionally subject to admiralty law that the reasons for apply special admiralty rules would apply in the suit at hand. Grubart, at Fifth Circuit precedent recognizes that accidents occurring while a jack up rig moves through the water could implicate maritime law. Nonetheless, Supreme Court precedent holds that offshore oil exploration and drilling itself is not a maritime activity, and subsequent Fifth Circuit precedent 2

3 held that incidents that occur as a result of offshore drilling are non maritime. Looking to the Congress s intent in OCSLA, the majority reiterated that by its plain language OCSLA applies to all structures permanently or temporarily affixed to the Outer Continental Shelf. After this scholarly analysis, the majority explicitly refused to decide whether maritime law applied to Plaintiff s claim, as they decided he could not maintain a cause of action under either OCSLA/state law or general maritime law. Nevertheless, given the varied decisions on the interplay between OCSLA and maritime law, the majority fashioned a new test to determine when maritime law applies to an OCSLA tort suit: whether the act giving rise to the incident in question was in furtherance of a non maritime activity (e.g., offshore oil exploration) or a maritime activity (e.g. repair and maintenance of a jack up rig to enable it to move across water). Because Plaintiff was working to prepare the jack up rig for drilling, the Court held that the general character of this incident appeared non maritime in nature. THE REMOVAL OF AN OCSLA ACTION The majority then addressed whether maritime law, when it provides the substantive rule of decision in an OCSLA suit, abrogates OCSLA s grant of federal question jurisdiction, thereby prohibiting removal from state court absent complete diversity. Prior Fifth Circuit decisions had fallen on both sides of the issue. By its plain language, OCSLA grants federal courts the exclusive jurisdiction to hear suits that arise from incidents on the Outer Continental Shelf. Plaintiff argued, however, that because maritime law itself does not provide federal question jurisdiction under 28 U.S.C. 1441(a), when maritime law applies to an OCSLA suit, it supplants OCSLA entirely, including OCSLA s subject matter jurisdiction grant. The majority disagreed with Plaintiff s argument. In a thorough analysis, the majority distinguished subject matter jurisdiction from choice of substantive law, noting that Congress did not intend for the choice of law analysis to impact OCSLA s independent basis for jurisdiction. In distinguishing choice of law from subject matter jurisdiction, the Court fashioned a succinct rule the application of maritime law does not displace OCSLA s grant of federal question jurisdiction. 3

4 Plaintiff also argued that, even if OCSLA provides federal question jurisdiction, the homestate defendant rule (i.e. all defendants should be out of state residents) should be satisfied before removing a claim where maritime law provides the substantive rule of decision. Plaintiff looked to the removal statute, 28 U.S.C. 1441(b) (2011), which stated that any civil action of which the district courts have original jurisdiction founded on a claim or right arising under [the laws of the United States] shall be removable regardless of the defendants citizenship or residence. Any other such action can be removed only if all defendants are foreign to the state where the plaintiff files suit. Plaintiff conceded that his maritime law claims may have arisen under the laws of the United States via OCSLA. He nonetheless contended that because maritime law should provide the substantive rule of decision in this case, and because maritime law is common law, his claims, and thus the Court s jurisdiction, were not founded on the laws of the United States. Therefore, by Plaintiff s logic, his claims fell under the category of any other such action, requiring satisfaction of the home state defendant rule before removal was proper. While some prior Fifth Circuit panels had contemplated this argument, the Court rejected it here. The Court held that OCSLA provides federal question jurisdiction, and federal questions are, simply put, founded on a claim or right arising under the laws of the United States. In other words, absent a statutory requirement of diversity of citizenship, removal of a federal question should not be limited because of a defendant s citizenship. THE SUMMARY JUDGMENT Plaintiff alleged damages for negligent infliction of emotional distress under maritime law, and alternatively for personal injuries under Texas law. To sustain this cause of action under maritime law, Plaintiff argued that he was sufficiently within the zone of danger. The majority expressly refused to determine whether maritime law or state law applied to this claim, but affirmed the District Court s decision that Plaintiff could not recover under either body of law. The Court summarily affirmed the dismissal of Plaintiff s Texas claim, as Texas does not recognize a cause of action for negligent infliction of emotional distress. The Court also dismissed Plaintiff s negligence claims, stating that Texas does not allow an independent contractor to recover 4

5 against a non employer property owner absent a showing that the property owner exercised some degree of control over the contractor and had actual knowledge, but failed to warn, of the danger or condition that resulted in the injury. Likewise, the Court affirmed dismissal of the Plaintiff s maritime law claims. Plaintiff argued that he was a bystander within the zone of danger, which should allow him to recover for purely emotional injuries. Despite decisions from other Circuit Courts allowing it, the Fifth Circuit does not recognized a zone of danger theory of recovery for non Jones Act maritime claims, and the majority expressly refused to create one in this instance. Moreover, the Court stated that even if such a theory of recovery existed, Plaintiff was on solid footing, two feet away from the falling pan, and in no danger of falling. On these facts, the Court concluded that Plaintiff was not within the zone of danger. THE DISSENT Because of the uncertainty created by the majority opinion, Judge Higginbotham dissented. He agreed with the majority that the tort alleged in this incident occurred on a maritime situs. Nonetheless, he believed that the court should have looked at the potential disruption this incident could have had on maritime commerce, as Grubart requires. Given Plaintiff s injury allegations, along with the pollution pan unexpectedly falling into the ocean, Judge Higginbotham would have found that this incident had a potential to disrupt maritime commerce. Turning to whether the general character of the incident shows a substantial relationship to traditional maritime activity, Judge Higginbotham focused on the fact that the jack up rig was a vessel, and Plaintiff and his friend were performing maintenance on the jack up rig. As vessel maintenance is a traditional maritime activity, he would have concluded that all Grubart factors were satisfied, and the incident had the potential to disrupt maritime commerce. As such, Judge Higginbotham would have held that Plaintiff had alleged a maritime tort and would have applied maritime law to resolve the substantive disputes in the case. After briefly explaining why he agreed with the majority that OCSLA provided federal question jurisdiction and allowed removal to federal court, Judge Higginbotham addressed the 5

6 majority s summary judgment affirmation. He noted that the Fifth Circuit has explicitly left open the question of whether, under the zone of danger theory, a bystander can recover for purely emotional injuries. Based on recent Supreme Court precedent, the facts as he saw them presented factual questions as to whether Defendants were liable for Plaintiff s emotional injuries. As he succinctly put it: Plaintiff was a man standing two feet from certain death with no protective harness, stunned at witnessing his friend cling to a beam and then fall to his death. An involuntary reach out and he, too, would have died. This is the stuff of a live trial, not a paper review. CONCLUSION AND FUTURE MATTERS This decision s future impact is unclear. On one hand, the majority fashioned a clear, wellreasoned rule that is unlikely to be challenged soon maritime law does not supplant OCSLA federal question jurisdiction. Thus, OCSLA tort actions brought in state court can be removed to federal court regardless of a defendant s residence or what body of law will decide the case s merits. On the other hand, the new rule for determining when maritime law applies to an OCSLA tort action may further muddy this already murky issue. While the majority clearly stated the rule the application of maritime law to an OCSLA tort turns on whether the activity giving rise to the incident was a maritime or non maritime activity the argument as to what qualifies as maritime or nonmaritime remains open ended. Moreover, as the dissent noted, this new rule seemingly does not consider an incident s potential disruption of maritime commerce, which is a long standing requirement to apply the rules of admiralty. For now, it appears that the issue of when maritime law applies to an OCSLA action will continue to be litigated. Finally, there remains no zone of danger theory of recovery for non Jones Act seamenbystanders in the Fifth Circuit. The facts of Plaintiff Barker s case provided ample opportunity for the Fifth Circuit to create such a cause of action, given how Plaintiff s friend died and Plaintiff s position less than two feet away from falling too. Nevertheless, unless the Supreme Court decides to remedy the Circuit split, expect plaintiffs to continue to press courts in the Fifth Circuit to create a general maritime law cause of action for bystanders within the zone of danger. ************ 6

7 If you have any questions about this topic, please contact either of the following Legge Farrow attorneys: James T. Brown (713) Wesley K. Young (713) This publication is intended for educational purposes only and is not a substitute for legal advice based on unique facts and circumstances. It is provided free of charge as a courtesy to clients and friends of the firm. For frequent legal updates, follow us on 7

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