Judge's Benchbook:
Longshore & Harbor Workers' Compensation Act

Supplement - January 2005
Topic 5 - Exclusivity of Remedy and Third Party Liability


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Description

Topic

Exclusivity of Remedy and Third Party Liability

5

  • Exclusiveness of Remedy and Third Party Liability

5.1

    • Exclusiveness of Remedy and Third Party Liability--Exclusive Remedy

5.1.1

    • Exclusiveness of Remedy and Third Party Liability--Right to Sue Employer If No Coverage

5.1.2

  • Third Party Liability

5.2

  • Third Party Liability - Generally

5.2.1

  • Indemnification

5.2.2

    • Exclusiveness of Remedy & Third Party Liability--Third Party Liability--Dual Capacity States of Maritime Employer

5.2.3

  • Indemnification in OCSLA Claims

5.3

 

TOPIC 5

 

Topic  5          Exclusiveness of Remedy and Third Party Liability--Generally

 

In Re: Kirby Inland Marine , 2002 WL 31746725, 237 F. Supp. 2d 753 (S.D. Tex. Dec. 2, 2002).

 

            This matter involves a third party action commenced after a longshoreman was injured when he fell from the deck of a vessel onto the hopper. After the longshoreman filed his 905(b) Action in state court, the vessel owner filed under the Limitation of Vessel Owners Liability Act, 46 U.S.C. 181 et seq. to stay the state court action pending the Limitation proceeding. The longshoreman stipulated that the federal court had exclusive jurisdiction over the limitation action and that he would not try to enforce a 905(b) judgment in excess of the declared value of the vessel until the Limitation action had been determined. However, since the 905(b) Action included claims by other corporate entities for indemnification and contribution, the federal district court would not lift the stay since there was no assurance by these "other plaintiffs" that they would not seek enforcement prior to the determination of the Limitation action.


Topic  5.1       Exclusiveness of Remedy and Third Party Liability--Generally

 

Riley v. F A Richard & Associates Inc; Ingalls Shipbuilding; and Hyland , (Unreported) (No. 01-60337) (August 1, 2002) ( 5th Cir. 2002).

 

            At issue here was whether a claim filed against an employer, a self-insured administrator, and an individual of that administrator, was properly removed from state court to federal court and then ultimately dismissed by the federal district court. The longshore claimant (Riley) asserted that Hyland, a nurse employee/agent of F A Richard, posed as Riley's medical case manager and that Hyland, while purporting to assist Riley in obtaining appropriate medical care, engaged in ex parte communications with Riley's doctor. According to Riley, these communications caused the doctor to reverse his opinion regarding the nature and causation of Riley's back condition. After contact with Hyland, the doctor concluded that a natural progression of Riley's congenital spondylolisthesis caused Riley's back pain rather than the work-related accident. In a suit filed in Mississippi state court, Riley alleged that Ingalls and FA Richard established a close working relationship with the Orthopaedic Group, where numerous injured Ingalls employees are sent for treatment.

 

            According to Riley, this close relationship allowed Ingalls and F A Richard to exert inappropriate influence over the Orthopaedic Group's physicians so as to interfere with the medical treatment of injured Ingalls employees. Specifically, Riley asserted the following nine state law claims: (1) intentional interference with contract, (2) breach of fiduciary duty, (3) intentional interference with prospective advantage, (4) medical malpractice by Hyland, as nurse, (5) fraud and misrepresentation, (6) negligence, (7) intentional infliction of emotional distress, (8) intentional interference with medical care and/or breach of confidentiality of doctor/patient privilege, and (9) intentional interference with medical care by ex parte communication.

 

            The Fifth Circuit found that Riley did not fraudulently join Ingalls in order to avoid federal diversity and found that Riley's claim against Ingalls was not for wages, compensation benefits or bad faith refusal to pay benefits; but rather was "for damages that are completely independent of the employer/employee relationship."

 

            The court concluded that the federal district court lacked both federal question jurisdiction and diversity jurisdiction over this matter. The court noted that the LHWCA is nothing more than a �'statutory defense' to a state-court cause of action and that the LHWCA does not create federal subject matter jurisdiction supporting removal.


Topic  5.1.1    Exclusiveness of Remedy and Third Party Liability�Exclusive Remedy

 

Hebert v. Pride International , (Unpublished) (Civ. No. 03-0804)(E. D. La. March 5, 2004); 2004 U.S. Dist. LEXIS 3436.

 

            This OCS summary judgment matter dealt with whether a worker was a borrowed employee making his exclusive remedy workers' compensation benefits under the LHWCA. Noting Fifth Circuit case law, the federal district court listed the nine factors a court must consider in making a borrowed employee determination.


Topic  5.1.1    Exclusiveness of Remedy and Third Party Liability�Exclusive Remedy

 

Cheramie v. Superior Shipyard and Fabrication, Inc ., (Unpublished) (Civ. A 02-3099)(E.D. La. July 7, 2003).

 

            Here the claimant was injured while working in a ship repair facility. He settled with the owner of the boat on which he was working and filed a 905 action against his employer. His employer filed a motion for summary judgment noting that the claimant had not sought the employer's written permission prior to entering into the settlement with the boat owner. The claimant alleges that he was entitled to file the 905 action because his employer failed to secure LHWCA insurance. In denying the motion for summary judgment, the federal district judge found that �Section 933(g) is inapplicable because [claimant] is suing [his employer] for damages, not compensation or benefits under the LHWCA.� The judge went on to state, �[T]he Court does not consider whether Plaintiff's action is permissible under Section 905(a), or whether [the employer] has failed to secure payment of compensation because the record is devoid of any reference as to whether [the claimant] has either sought or received compensation from [the employer].�


Topic  5.1.1    Exclusiveness of Remedy and Third Party Liability�Exclusive Remedy

 

Sobratti v. Tropical Shipping and Const. Co., Ltd. , 267 F. Supp. 2d 455 (D. Vir. Isls. 2003), 2003 WL 21418333.

 

            The issue here is whether a trial court correctly granted a borrowing employer summary judgment when a worker injured upon a vessel filed a LHWCA claim and then filed an action in the Virgin Islands Territorial trial court against the borrowing employer. [The Federal District Court of the Virgin Islands serves as the appellate court of the Territorial Court.] Prior to the filing of the trial court action, OWCP had found the claimant to be covered by the LHWCA and the borrowing employer, Tropical Shipping, to be responsible. Claimant received benefits from Tropical Shipping. He then filed a negligence action against Tropical Shipping, claiming he fell into a "twilight zone" status of uncertain LHWCA coverage.

 

            The Virgin Islands Federal District Court concluded the summary judgment against the claimant was proper given the claimant's prior admissions on the issue of borrowed employee. It found that his assertions "conclusively determined the issue of Tropical's employer status thereby removing any genuine dispute on that issue." The court noted that, "The factual basis of appellant's entire negligence claim was that he was working for Tropical at the time he was injured; that Tropical had a duty, as his employer, to provide safe equipment and failed to do so in this instance by providing him with a defective ladder, and that Tropical's safety standards were breached. Additionally, the assertions in the initial pleadings were consistent with Sobratti's claims to the administrative agency, for the purpose of recovering benefits under the LHWCA. Throughout the administrative proceedings following his injury, Sobratti continuously asserted and relied on the fact that he was an employee of Alltempts, performing duties for Tropical." In sum, the court found that the record was replete with admissions and facts which establish that Tropical was the borrowed employer with control over the claimant's work at the time he was injured and that Tropical was protected under Section 5 of the LHWCA.


Topic  5.1.2    Exclusiveness of Remedy and Third Party Liability--Right to Sue Employer If No Coverage

 

[ED. NOTE: The following California Workers� compensation case is included for informational purposes only. ]

 

Le Parc Community Association v. Worker's Compensation Appeals Board, ___ Cal. App. 2 Dist, 2003; 2 Cal. Rptr. 3d 408, (W.C.A.B. No. VNO041798) (July 25, 2003).

 

            The California Court of Appeal held that a civil action for negligence by an injured employee against an illegally uninsured employer pursuant to the California Labor Code, as a matter of law, is not based on the same cause of action as an application for compensation filed with the compensation Board pursuant to the code and that the principles of res judicata and collateral estoppel do not bar the employee's pursuit of his workers� compensation remedy.


Topic  5.1.2    Exclusiveness of Remedy and Third Party Liability--Right to Sue Employer If No Coverage

 

Cheramie v. Superior Shipyard and Fabrication, Inc., ___ F. Supp 2d  ___ (Civ. A 02-3099)(E.D. La. July 7, 2003).

 

            Here the claimant was injured while working in a ship repair facility. He settled with the owner of the boat on which he was working and filed a 905 action against his employer. His employer filed a motion for summary judgment noting that the claimant had not sought the employer's written permission prior to entering into the settlement with the boat owner. The claimant alleges that he was entitled to file the 905 action because his employer failed to secure LHWCA insurance. In denying the motion for summary judgment, the federal district judge found that �Section 933(g) is inapplicable because [claimant] is suing [his employer] for damages, not compensation or benefits under the LHWCA.� The judge went on to state, �[T]he Court does not consider whether Plaintiff's action is permissible under Section 905(a), or whether [the employer] has failed to secure payment of compensation because the record is devoid of any reference as to whether [the claimant] has either sought or received compensation from [the employer].�


Topic  5.2       Exclusiveness of Remedy and Third Party Liability--Third Party Liability�Generally         

 

Anastasiou v. M/T World Trust , ___ F. Supp. 2d ___ (02 CV 1917 (ILG))((E. Dist. NY Oct. 1, 2004).

 

            This is an Order Denying A Motion for a Summary Judgment.  The plaintiff was the sole employee and owner of a company called Maritech Electronics.  He slipped and fell, breaking his leg on a ramp shortly after boarding a vessel on which he was supposed to conduct an annual radio safety survey.  The defendants allege entitlement to a Summary Judgment, arguing that the plaintiff is covered under the LHWCA and that his negligence claim does not on its face disclose any negligence on the part of the vessel.

           
            The court found that the plaintiff satisfied both pre- and post-1972 LHWCA amendment tests for coverage.  The plaintiff had alleged that he did not fall under the protections of the LHWCA because his work in conducting the radio survey was not an �integral or essential part of loading or unloading a vessel.�  The court found that the plaintiff misread pertinent case law and that the Second Circuit has held that an individual satisfies the status test where he has �a significant relationship to navigation or to commerce on navigable waters.�  The court noted that the LHWCA �clearly divides maritime workers into two mutually exclusive categories: seamen, on the one hand, and longshoremen, harbor workers and all other employees entitled to protection under the Act, on the other hand.�  The court pointed out that in rare instances longshoremen and harbor worker type workers not covered by the LHWCA  [�Sieracki seamen�] may avail themselves of the duty of seaworthiness.

 

            The court equally found that the plaintiff was not entitled to pursue an action under 905(b) since his claim on its face admitted that the vessel was built to American Bureau of Shipping standards.  His claim also failed to put forward any evidence that there was constructive knowledge by the owners of any danger associated with the ramp.  Finally, the court noted that in any event, the plaintiff failed to show that any negligence created a genuine issue of material fact since he did not show that the ship owner's duty of care to an individual such as the plaintiff (an invitee on board to perform navigational related work) had been breached.


Topic  5.2       Exclusiveness of Remedy and Third Party Liability--Third Party Liability

 

Lively v. Diamond Offshore Drilling, Inc ., (Unpublished)(No. Civ. A. 03-1989)(E.D. La. August 3, 2004).

 

            At issue here was whether, under the OCSLA, general maritime law or Louisiana law would apply. (Louisiana law prohibits enforcement of an indemnity provision pursuant to the Louisiana Oilfield Anti-Indemnity Act ("LOAIA"). In addressing whether state law would apply as surrogate law, the court reviewed the law of the Fifth Circuit to determine if federal maritime law applied of its own force in this case. Noting that circuit law indicates that a contract to furnish labor to work on special purpose vessels to service oil wells is a maritime contract, the district court concluded that the worker's duties were in furtherance of the vessel's primary purpose and that the agreement was maritime. Thus federal law and not Louisiana law governed.

 

            The court next held that Section 905(c) and not 905(b) governed since the worker was a non-seaman engaged in drilling operations on the OCS. (As a non-seaman engaged in drilling operations on the OCS, the worker is subject to the exclusive remedy of the LHWCA by virtue of 43 U.S.C. � 1333(b) of the OCSLA, rather than 33 U.S.C. � 901, et seq. When the LHWCA is applicable by virtue of Section 1333(b), the third-party remedy against the vessel owner is governed by Section 905(c). ) Under Section 905(c) "any reciprocal indemnity provision" between the vessel and the employer is enforceable.


Diamond Offshore Co. v. A & B Builders, Inc ., 302 F.3d 531 ( 5th Cir. 2002).

 

            This 905(b) summary judgment case concerning whether there has been a breach of an indemnity provision in a contract, has an extensive discussion of "situs" and "status" under the OCSLA. The matter was remanded for supplementation of the record in order for there to be a determination as to if there was a genuine issue of material fact as to whether the repair contractor's employee's injury on an offshore drilling rig qualified as an OCSLA situs so that the contractor could validly contract to indemnify the operator of the rig with respect to the injury. The court noted that because an employee of a contractor repairing an offshore drilling rig was injured on navigable water (qualifying for benefits under the LHWCA) did not preclude the possibility of also qualifying for benefits under the OCSLA. If the worker qualified for benefits directly under the OSCLA, the contractor could validly contract to indemnify the rig operator as to the worker's injury.


Topic   5.2.1   Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally

 

Koch v. R.E. Staite Engineering, Inc ., (Unpublished), 2004 Cal. App. Unpub. LEXIS 898 (D041657)(Court of Appeal of California, Fourth Appellate District, Division One) (January 29, 2004).

 

            In this 905(b) related matter, the injured worker was a commercial diver and marine construction worker employed  injured in an underwater industrial accident while he was repairing the decaying wall of a quay at a San Diego Navy base near a self-propelled barge owned by his employer.  This is the de novo appeal of a summary judgment issued in favor of the employer which had found that the undisputed material facts showed that the accident occurred during marine construction activity due to co-workers� acts and not in the employer's capacity as vessel owner.

 

            The court noted that Section 905(b) of the LHWCA authorizes certain covered employees to bring an action against the vessel as a third party if their employment-related injury was caused by the negligence of the vessel.  It found that the employer here was a �dual-capacity� employer and that liability in vessel negligence under Section 905(b) will only lie where the dual-capacity defendant breached its duties of care while acting in its capacity as vessel owner.  Thus, the analysis must determine whether the negligent actions of a dual-capacity defendant's employees were undertaken in pursuance of the defendant's role as vessel owner or as employer.  The court found here that the conclusion was correct that the actions had been taken by co-workers in pursuance of the employer's role as an employer.  Thus the summary judgment decision was upheld.


Topic   5.2.1   Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally

 

Beasley v. U.S. Welding Service, Inc . (Unreported) ( Civ. A. 02-2567)(E.D. La. January 20, 2004).

 

            In this potential 905(b) case, the court found that it did not need to determine the worker's seaman status (Claimant sued under both the Jones Act and filed a 905(b) action) since he failed to carry his burden of proving that an incident occurred and that it caused his injury.  The court found that the worker's version of the facts defied the laws of physics.  It seems his injuries were more consistent with previous injuries.


Topic   5.2.1   Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally 

 

[ED. NOTE:   The following case has been revised by the Fifth Circuit twice now.  The outcome remains the same however. ]

 

Moore v. ANGELA MV , 353 F.3d 376 ( 5 th Cir. 2004).

 

            In this 905(b) action, the Fifth Circuit found that the non-pecuniary award (for loss of love and affection totaling $750,000) given to the surviving widow was excessive. (The couple, both approximately 50 years old, had been married for six months after having been together for seven years.  They had no children.) It further held that the district court exceeded its authority in increasing the security posted in lieu of the vessel.


Topic   5.2.1    Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally 

 

Lincoln v. Reksten Mgmt ., 354 F.3d 262 ( 4th Cir. 2003).

 

            At the federal district court level, a motion for summary judgment was issued in this 905(b) claim wherein the court found that the longshoreman had not provided sufficient evidence that the turnover duty (the duty to use reasonable care when turning over the ship for stevedoring activities) to the longshoreman had been breeched. The Fourth Circuit found that Reksten may have breached its duty by failing to inspect or warn. The vessel might have been negligent in the maintenance, upkeep, and especially the inspection of the deck where the longshoreman was injured so that, in the exercise of reasonable care, it might have discovered the defect or hole in the decking into which he fell, enabling it to warn the stevedore of the defect. Therefore the circuit court vacated the district court's grant of summary motion.


Topic  5.2.1    Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally 

 

Stewart v. Dutra Construction Co ., ___ F.3d ___, (No. 02-1713) ( 1st Cir. Sept. 4, 2003), c ert. granted , ___ U.S. ___ , 124 S.Ct. 1414 (No. 03-814) Supreme Court will consider whether a dredge is a �vessel� under the Jones Act.).

 

            In this "905(b)" and Jones Act case the First Circuit granted summary judgment against the Jones Act claim after finding that there was not a "vessel in navigation" for purposes of the Jones Act. The court next determined that it need not labor over "vessel status" for purposes of the LHWCA: "Although the LHWCA permits an employee to sue in negligence only in the event of an injury caused by the negligence of a vessel, 33 U.S.C. � 905(b), the LHWCA's definition of �vessel' is 'significantly more inclusive than that used for evaluating seaman status under the Jones Act.'" Citing Morehead v. Atkinson-Kiewit , 97 F.3d 603 (1st Cir . 1996)( en banc ).

 

            As to the 905(b) matter, the court addressed the "dual capacity" issue where the Longshore employer is also the vessel owner. If a dual capacity defendant's alleged acts of negligence were committed in its capacity qua employer (for which it is immune from tort liability under 905(b)) or qua vessel owner (for which it may be held liable under 905(b)). The circuit court rejected using a "functional" approach because it increased uncertainty and contravened the Congressional intent behind the LHWCA by expanding vessel owner liability. The court concluded that the dual capacity vessel could be held liable under 905(b) only to the extent that it breached its duties of care while acting in its capacity as a vessel.


Topic  5.2.1    Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally 

 

Cheramie v. Superior Shipyard and Fabrication, Inc., ___ F. Supp 2d ___ (Civ. A 02-3099)(E.D. La. July 7, 2003).

 

            Here the claimant was injured while working in a ship repair facility. He settled with the owner of the boat on which he was working and filed a 905 action against his employer. His employer filed a motion for summary judgment noting that the claimant had not sought the employer's written permission prior to entering into the settlement with the boat owner. The claimant alleges that he was entitled to file the 905 action because his employer failed to secure LHWCA insurance. In denying the motion for summary judgment, the federal district judge found that �Section 933(g) is inapplicable because [claimant] is suing [his employer] for damages, not compensation or benefits under the LHWCA.� The judge went on to state, �[T]he Court does not consider whether Plaintiff's action is permissible under Section 905(a), or whether [the employer] has failed to secure payment of compensation because the record is devoid of any reference as to whether [the claimant] has either sought or received compensation from [the employer].�


Topic  5.2.1    Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally       

 

Scott v. Trump Indiana, Inc., 337 F.3d 939, ( 7th Cir. July 28, 2003).

 

            In this Admiralty Extension Act and LHWCA 905(b) case, the Seventh Circuit found that neither a land-based crane nor a life raft were �appurtenances� to a vessel. The circuit court further found that the director of safety training was not engaged in maritime employment� for purposes of the LHWCA. The director had been injured on a dock while observing a life raft being lowered onto the dock. His employer had contracted with Trump Indiana to design, install and maintain the lifesaving equipment required by the U.S. Coast Guard for the vessel �Trump Casino.�


 

Topic  5.2.1    Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally         

 

Christensen v. Georgia-Pacific Corp , 279 F.3d 807 ( 9th Cir. 2002).

 

[ED. NOTE: While the forum for "905(b) negligence claims is federal district court, the Ninth Circuit's general language as to "coverage" under the LHWCA is noteworthy here. ]

 

            At issue in this "905(b)" claim [33 U.S.C.�  905(b)] was whether the district court had properly granted a motion for summary judgment when it held that, as a matter of law, the injury was not a foreseeable result of the appellee's acts. The Ninth Circuit reversed, finding that genuine issues of material fact existed as to breach of duty and proximate cause that must be resolved at trial.

 

            Under Section 905(b), a claimant can sue a vessel for negligence under the LHWCA. However the Supreme Court has limited the duties that a vessel owner owes to the stevedores working for him or her. Scindia Steam Navigation Co. v. De Los Santos , 451 U.S. 156, (1981) (A vessel owes three duties to its stevedores: the turnover duty, the active control duty, and the intervention duty.).

 

            In Christensen , the Ninth Circuit noted that "Coverage does not depend upon the task which the employee was performing at the moment of injury." [ Ninth Circuit cites Brady-Hamilton Stevedore Co. v. Herron , 568 F.2d 137, 140 ( 9th Cir. 1978); H. Rep. No. 98-570, at 3-4 (1984), reprinted in 1984 U.S.C.C.A.N. 2734, 2736-37.] The court found that claimant "was engaged as a stevedore and routinely worked at loading and unloading cargo from ships. Therefore, he is covered by the LHWCA."


Topic  5.2.1    Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally         

 

Mayberry v. Daybrook Fisheries, Inc ., Unpublished) (2002 WL 1798771) (E.D. La. Aug 5, 2002).

 

            A "905(b) action" is not available where it was dock-side, land-based equipment that caused an injury. For there to be a 905(b) action against the vessel owner, there must be vessel negligence. Therefore, the vessel owner is not liable for breaching the "turnover duty" (failing to warn a stevedore when turning over the ship hidden defects of which the owner should know) since the faulty equipment was not part of the vessel.


Topic   5.2.1   Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Generally 

 

In the Matter of The Complaint of Kirby Inland Marine , 241 F. Supp. 2d 721 (S.D. Texas Jan. 15, 2003), 2003 WL 168673.

 

            This proceeding under the Limitation of Vessel Owners Liability Act was filed in connection with a 905(b) action. The district court held that where a seaman performing longshore duties could have avoided an accident by watching his step more carefully, the vessel owner was not liable for injuries sustained when the seaman fell from the main deck into a hopper.


Topics 5.2.2    Exclusiveness of Remedy and Third Party Liability�Indemnification

 

Clayton Williams Energy, Inc. v. National Union Fire Ins. Co. of Louisiana , ___ F. Supp. 2d ___ (Civ. Action No. 03-2980)(E.D. of La. Nov. 2, 2004)

 

            This 905(b) claim addresses choice of law clauses and indemnity issues as they relate to the Texas Oilfield Anti-Indemnity Act (TOIA), Tex. Civ. Prac. & Rem. Code � 127.005.  The district court found that �Because the TOIA conflicts with section 905(b) on the particular facts present in this case, the choice of law clause will not be enforced and Texas law does not govern the enforceability of the indemnity agreement.�


Topic  5.2.2    Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Indemnification

 

Lively v. Diamond Offshore Drilling, Inc ., (Unpublished)(No. Civ. A. 03-1989)(E.D. La. August 3, 2004).

 

            At issue here was whether, under the OCSLA, general maritime law or Louisiana law would apply. (Louisiana law prohibits enforcement of an indemnity provision pursuant to the Louisiana Oilfield Anti-Indemnity Act ("LOAIA"). In addressing whether state law would apply as surrogate law, the court reviewed the law of the Fifth Circuit to determine if federal maritime law applied of its own force in this case. Noting that circuit law indicates that a contract to furnish labor to work on special purpose vessels to service oil wells is a maritime contract, the district court concluded that the worker's duties were in furtherance of the vessel's primary purpose and that the agreement was maritime. Thus federal law and not Louisiana law governed.

 

            The court next held that Section 905(c) and not 905(b) governed since the worker was a non-seaman engaged in drilling operations on the OCS. (As a non-seaman engaged in drilling operations on the OCS, the worker is subject to the exclusive remedy of the LHWCA by virtue of 43 U.S.C. � 1333(b) of the OCSLA, rather than 33 U.S.C. � 901, et seq. When the LHWCA is applicable by virtue of Section 1333(b), the third-party remedy against the vessel owner is governed by Section 905(c). ) Under Section 905(c) "any reciprocal indemnity provision" between the vessel and the employer is enforceable.


 

Topic   5.2.2   Exclusiveness of Remedy and Third Party Liability--Third Party Liability--Indemnification

 

Diamond Offshore Co. v. A & B Builders, Inc ., 302 F.3d 531 ( 5th Cir. 2002).

 

            This 905(b) summary judgment case concerning whether there has been a breach of an indemnity provision in a contract, has an extensive discussion of "situs" and "status" under the OCSLA. The matter was remanded for supplementation of the record in order for there to be a determination as to if there was a genuine issue of material fact as to whether the repair contractor's employee's injury on an offshore drilling rig qualified as an OCSLA situs so that the contractor could validly contract to indemnify the operator of the rig with respect to the injury. The court noted that because an employee of a contractor repairing an offshore drilling rig was injured on navigable water (qualifying for benefits under the LHWCA) did not preclude the possibility of also qualifying for benefits under the OCSLA. If the worker qualified for benefits directly under the OSCLA, the contractor could validly contract to indemnify the rig operator as to the worker's injury.


Topic  5.2.2    Exclusiveness of Remedy and Third Party Liability�Third Party Liability--Indemnification 

 

Hudson v. Forest Oil Corp ., (Unpublished)(No. Civ. A. 02-2225)(E.D. La. June 2, 2003), aff�d at 372 F.3d 742 ( 5 th Cir. 2004).

 

            In this �borrowing employer� case, the insurer of the claimant's formal employer paid compensation benefits and sought reimbursement from the insurer of the borrowing employer.  The federal district court rejected this claim for reimbursement.  The insurer of the formal employer had first cited Total arine Servs., Inc. v. Director, OWCP , 87 F.3d 774 ( 5th Cir. 1996), for the proposition that when a formal employer has already paid benefits, it is entitled to reimbursement for the borrowing employer.  However, Total arine is distinguishable since its holding was conditioned on the fact that there was no valid and enforceable indemnification agreement.  In the instant case there was such an agreement.  The formal employer also argued that any indemnification and waiver of subrogation clauses were invalid under the Louisiana Oilfield Anti-Indemnity Act (LOAIA), La. Rev. Stat. Ann. � 9:2780.  The federal district court found the statute inapplicable and thus the indemnification and waiver of subrogation were valid.


Topic  5.2.3    Exclusiveness of Remedy & Third Party Liability�Third Party Liability--Dual Capacity States of Maritime Employer

 

Stewart v. Dutra Construction Co ., ___ F.3d ___, (No. 02-1713) ( 1st Cir. Sept. 4, 2003), c ert. granted , ___ U.S. ___ , 124 S.Ct. 1414 (No. 03-814) (2004) Supreme Court will consider whether a dredge is a �vessel� under the Jones Act.).

 

            In this "905(b)" and Jones Act case the First Circuit granted summary judgment against the Jones Act claim after finding that there was not a "vessel in navigation" for purposes of the Jones Act. The court next determined that it need not labor over "vessel status" for purposes of the LHWCA: "Although the LHWCA permits an employee to sue in negligence only in the event of an injury caused by the negligence of a vessel, 33 U.S.C. � 905(b), the LHWCA's definition of �vessel' is 'significantly more inclusive than that used for evaluating seaman status under the Jones Act.'" Citing Morehead v. Atkinson-Kiewit , 97 F.3d 603 ( 1st Cir. 1996)( en banc ).

 

            As to the 905(b) matter, the court addressed the "dual capacity" issue where the Longshore employer is also the vessel owner. If a dual capacity defendant's alleged acts of negligence were committed in its capacity qua employer (for which it is immune from tort liability under 905(b)) or qua vessel owner (for which it may be held liable under 905(b)). The circuit court rejected using a "functional" approach because it increased uncertainty and contravened the Congressional intent behind the LHWCA by expanding vessel owner liability. The court concluded that the dual capacity vessel could be held liable under 905(b) only to the extent that it breached its duties of care while acting in its capacity as a vessel.


Topic  5.3       Exclusiveness of Remedy and Third Party Liability Indemnification in OCSLA Claims 

 

Clayton Williams Energy, Inc. v. National Union Fire Ins. Co. of Louisiana , ___ F. Supp. 2d ___ (Civ. Action No. 03-2980)(E.D. of La. Nov. 2, 2004)

 

            This 905(b) claim addresses choice of law clauses and indemnity issues as they relate to the Texas Oilfield Anti-Indemnity Act (TOIA), Tex. Civ. Prac. & Rem. Code � 127.005.  The district court found that �Because the TOIA conflicts with section 905(b) on the particular facts present in this case, the choice of law clause will not be enforced and Texas law does not govern the enforceability of the indemnity agreement.�


Topic  5.3       Exclusiveness of Remedy & Third Party Liability�Third Party Liability--Indemnification in OCSLA Claims

 

Diamond Offshore Co. v. A & B Builders, Inc ., 302 F.3d 531 ( 5th Cir. 2002).

 

            This 905(b) summary judgment case concerning whether there has been a breach of an indemnity provision in a contract, has an extensive discussion of "situs" and "status" under the OCSLA. The matter was remanded for supplementation of the record in order for there to be a determination as to if there was a genuine issue of material fact as to whether the repair contractor's employee's injury on an offshore drilling rig qualified as an OCSLA situs so that the contractor could validly contract to indemnify the operator of the rig with respect to the injury. The court noted that because an employee of a contractor repairing an offshore drilling rig was injured on navigable water (qualifying for benefits under the LHWCA) did not preclude the possibility of also qualifying for benefits under the OCSLA. If the worker qualified for benefits directly under the OSCLA, the contractor could validly contract to indemnify the rig operator as to the worker's injury.


Topic  5.3       Exclusiveness of Remedy & Third Party Liability�Third Party Liability--Indemnification in OCSLA Claims 

 

Hudson v. Forest Oil Corp ., (Unpublished)(No. Civ. A. 02-2225)(E.D. La. June 2, 2003), aff�d at 372 F.3d 742 ( 5 th Cir. 2004).

 

            In this �borrowing employer� case, the insurer of the claimant's formal employer paid compensation benefits and sought reimbursement from the insurer of the borrowing employer.  The federal district court rejected this claim for reimbursement.  The insurer of the formal employer had first cited Total arine Servs., Inc. v. Director, OWCP , 87 F.3d 774 ( 5th Cir. 1996), for the proposition that when a formal employer has already paid benefits, it is entitled to reimbursement for the borrowing employer.  However, Total arine is distinguishable since its holding was conditioned on the fact that there was no valid and enforceable indemnification agreement.  In the instant case there was such an agreement.  The formal employer also argued that any indemnification and waiver of subrogation clauses were invalid under the Louisiana Oilfield Anti-Indemnity Act (LOAIA), La. Rev. Stat. Ann. � 9:2780.  The federal district court found the statute inapplicable and thus the indemnification and waiver of subrogation were valid.