REVISED APRIL 9, 2002
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________________
No. 00-31032
_______________________
In Re: In the Matter of GRAHAM OFFSHORE,
INC., as owner and
GRAHAM MARINE, INC., as owner pro hac vice
of the
vessel M/V Miss Paula, her engines, tackle,
appurtenances, furniture, etc, praying
for Exoneration
from or Limitation of Liability.
GRAHAM OFFSHORE, INC.; GRAHAM MARINE, INC.,
Petitioners-Appellants,
versus
EPOCH WELL LOGGING; INDUSTRIAL INDEMNITY;
JAMES ALLAWAY;
JOCELYN BATES,
Claimants-Appellees,
versus
TEXACO EXPLORATION AND PRODUCTION, INC.;
TEXACO, INC.;
TRANSOCEAN OFFSHORE INC.; formerly known
as Sonat Offshore
Drilling, Inc.,
Claimants-Appellants.
- - - - - - - - - - - - - - - -
JAMES D. ALLAWAY,
Plaintiff-Appellee,
and
EPOCH WELL LOGGING; INDUSTRIAL INDEMNITY,
Intervenors-Appellees,
versus
TEXACO, INC.; ET AL
Defendants,
TEXACO INC.; TEXACO EXPLORATION AND PRODUCTION,
INC.,
Defendants-Appellants,
and
TRANSOCEAN OFFSHORE VENTURES, INC.,
Defendant-Third Party Plaintiff-Appellant,
versus
GRAHAM MARINE, INC.,
Defendant-Third Party Defendant-Appellant,
and
GRAHAM OFFSHORE, INC.,
Third Party Defendant-Appellant.
- - - - - - - - - - - - - - - -
JOCELYN N. BATES,
Plaintiff-Appellee,
and
EPOCH WELL LOGGING; INDUSTRIAL INDEMNITY,
Intervenors-Appellees,
versus
TEXACO, INC.; ET AL,
Defendants,
TEXACO, INC.; TEXACO EXPLORATION AND PRODUCTION,
INC.,
Defendants-Appellants,
and
TRANSOCEAN OFFSHORE VENTURES, INC.,
Defendant-Third Party Plaintiff-Appellant,
versus
GRAHAM MARINE, INC.,
Defendant-Third Party Defendant-Appellant,
and
GRAHAM OFFSHORE, INC.,
Third Party Defendant-Appellant.
____________________
NO. 00-31239
____________________
In Re: In the Matter of the Complaint of
GRAHAM OFFSHORE, INC.,
as owner; GRAHAM MARINE, INC., as owner
pro hac vice of the
vessel M/V Miss Paula, her engines, tackle,
appurtenances,
furniture, ect, for Exoneration from or
Limitation of Liability.
GRAHAM OFFSHORE INC., as owner; GRAHAM
MARINE, INC., as owner
pro hac vice of the vessel M/V Miss Paula,
her engines,
tackle, appurtenances, furniture, ect,
praying for Exoneration
from or Limitation of Liability;
Petitioners-Appellees-Cross Appellants,
EPOCH WELL LOGGING,
Intervenor-Appellee,
JAMES ALLAWAY; JOCELYN BATES; INDUSTRIAL
INDEMNITY,
Claimants-Appellees,
versus
TEXACO EXPLORATION AND PRODUCTION INC.;
TEXACO, INC.,
Claimants-Appellants,
versus
TRANSOCEAN OFFSHORE INC., formerly known
as Sonat Offshore
Drilling Incorporated,
Claimants-Appellant-Cross Appellee.
- - - - - - - - - - - - -
JAMES D. ALLAWAY,
Plaintiff-Appellee,
EPOCH WELL LOGGING; INDUSTRIAL INDEMNITY,
Intervenors-Appellees,
versus
TEXACO EXPLORATION AND PRODUCTION, INC.,
TEXACO, INC.,
Defendants-Appellants,
versus
GRAHAM MARINE, INC.,
Defendant-Third Party Defendant-Appellee-Cross
Appellant,
GRAHAM OFFSHORE, INC.,
Third Party Defendant-Appellee-Cross Appellant,
versus
TRANSOCEAN OFFSHORE VENTURES, INC.; TRANSOCEAN
OFFSHORE, INC.,
Defendants-Third Party Plaintiffs-Appellants-Cross
Appellees.
- - - - - - - - - -
JOCELYN N. BATES,
Plaintiff-Appellee,
EPOCH WELL LOGGING,
Intervenor-Appellee,
versus
TEXACO EXPLORATION AND PRODUCTION, INC.;
TEXACO, INC.,
Defendants-Appellants,
GRAHAM MARINE, INC.,
Defendant-Third Party Defendant-Appellee-Cross
Appellant,
GRAHAM OFFSHORE, INC.,
Third Party Defendant-Appellee-Cross Appellant,
INDUSTRIAL INDEMNITY,
Claimant-Appellee,
versus
TRANSOCEAN OFFSHORE VENTURES, INC.; TRANSOCEAN
OFFSHORE, INC.,
Defendants-Third Party Plaintiffs-Appellants-Cross
Appellees.
_________________________________________________________
Appeals from the United States District
Court
for the Eastern District of Louisiana
_________________________________________________________
March 28, 2002
Before DAVIS and JONES, Circuit Judges, and
PRADO(1), District Judge.
EDITH H. JONES, Circuit Judge:
Two former employees of Epoch Well Logging
seek compensation for injuries sustained while they were evacuating a drilling
rig during Hurricane Danny in July 1997. The dispute centers around the
rough voyage of the Miss Paula, a crew boat that ferried personnel
from the drilling rig to shore. The injured employees filed claims against
the owner of the vessel (Graham Offshore); the vessel's time-charterer
(Texaco); and the owner of the drilling rig (Transocean). Graham Offshore
filed a maritime limitation action, and Texaco and Transocean filed claims
against Graham Offshore.
While all three defendants appealed from a
substantial judgment that apportioned damages among them, the Graham Offshore
and Texaco appellants settled with appellees while this appeal was pending.
In the only remaining portion of the appeal, we conclude that the trial
court erred in holding Transocean, the rig owner, liable for errors that
were the responsibility of the vessel and, to a lesser extent, the time-charterer.
I. FACTS AND PROCEDURAL HISTORY
In mid-1997, Texaco Exploration and Production,
Inc. ("Texaco") chartered the DF-97, a mobile offshore drilling unit owned
by Transocean Offshore Venture, Inc. ("Transocean"), to conduct drilling
operations on the Outer Continental Shelf in the Gulf of Mexico. The drilling
site was located on the Vioska Knoll, approximately 80 miles south of Mobile,
Alabama.
As part of this drilling project, Texaco contracted
with Epoch Well Logging, Inc. ("Epoch Well") to perform mud logging services
on the well. Texaco also chartered a 120-foot crew boat, the Miss Paula,
to provide transportation for personnel and equipment to and from the DF-97.
The Miss Paula was owned by Graham Offshore, Inc. ("Graham Offshore")
and was docked at Venice, Louisiana, at the mouth of the Mississippi River.
Tropical Storm Danny formed in the Gulf of
Mexico on July 16, 1997, and was eventually upgraded to a category one
hurricane. On July 17, Texaco and Transocean decided that 25 non-essential
workers on the DF-97 should be evacuated.(2)
Weather reports available on the 17th indicated that Danny was moving in
a northeasterly direction and would make landfall the following morning
near Houma, Louisiana.
Texaco then contacted Graham Offshore to determine
whether the Miss Paula could be dispatched to the DF-97. At approximately
4:00 p.m., the captain of the Miss Paula replied that he could make
the voyage, and Texaco ordered him to proceed. After re-fueling, the Miss
Paula departed Venice at 5:45 p.m.
Inexplicably, the captain of the Miss Paula
did not monitor the path of Hurricane Danny. Although the vessel was equipped
with radio and other equipment, the captain relied solely on a television
news broadcast he had seen at 5:00. Consequently, the captain was not aware
that the National Weather Service began reporting around 10:00 p.m. that
Hurricane Danny had turned sharply to the east and was projected to make
landfall near Venice.
The Miss Paula arrived at the DF-97
at 11:00 p.m. and boarded the 25 oil rig workers into the crew boat. Although
the
Miss Paula was alongside the DF-97 for approximately 30 minutes,
the representatives of Texaco and Transocean - who had obtained updated
weather information -- did not discuss the hurricane's path with the captain
or crew of the Miss Paula.
The Miss Paula began its return trip
to Venice around 11:30 and soon encountered heavy rain, strong winds, and
rough seas. The vessel was blown off course and ran aground on a sand bar;
the captain freed the boat by reversing the engines, thereby causing the
boat to lurch violently. The captain then took the
Miss Paula to
deeper water in the Breton Sound and waited out the storm. The voyage was
unpleasant, but the captain and crew reported that the boat never took
on water or lost power and that the vessel was not in danger of capsizing
or sinking. Miss Paulareturned to port in Venice on the afternoon
of July 18, after a 15-hour voyage that would have taken no more than 6
hours under normal conditions.
Two employees of Epoch Well -- James Allaway
and Jocelyn Bates -- claimed that they were injured during this voyage
of the
Miss Paula. In March 1998, Graham Offshore filed a liability
limitation action under 46 U.S.C. § 181. Allaway and Bates filed actions
(which were subsequently consolidated) against Graham Offshore, Texaco,
and Transocean. Texaco and Transocean then sought indemnification from
Graham Offshore, asserting that Graham Offshore had acted negligently.
Epoch Well and Industrial Indemnity intervened to recoup compensation paid
to Allaway and Bates pursuant to the Longshore and Harbor Workers Compensation
Act ("LHWCA").
The trial was set for December 13, 1999. On
December 10, however, the parties agreed to continue the trial and to try
the issue of damages before determining liability. As part of this agreement,
the defendants pledged to "fund any final judgment [on damages] . . . on
the basis of a one-third contribution each" and then to try the issue of
liability among themselves in order to determine the ultimate allocation
of responsibility for any award for damages. With the consent of all parties,
the district court entered an order bifurcating the trial.
In March 2000, the district court conducted
a non-jury trial on the issue of damages. The court credited Allaway's
testimony that the return trip to Venice was "a voyage from hell" and that
Allaway was terrified as he "bounced around" the ship. The court found
that Allaway suffered permanent but relatively minor injuries to his right
knee, his right shoulder, and back. The court added, though, that the most
significant injury suffered by Allaway was psychological. The court found
that Allaway, though he had been an offshore oil worker for twenty-five
years, suffered from "severe post-traumatic stress disorder" as a result
of "the extreme fear and fright he experienced during the fifteen hour
voyage aboard the Miss Paula."
The court found that Jocelyn Bates suffered
minor injuries to her shoulder, arm, and wrist. The court noted that Bates's
traumatic experience prevented her from taking assignments that required
her to travel offshore by boat. Otherwise, she suffered from no serious
psychological conditions that interfered with her daily life.
The district court entered judgment on damages,
awarding $765,217 to Allaway and $81,068 to Bates. The court also entered
judgments for the intervenors, Epoch Well and Industrial Indemnity, in
the amounts of $85,897 (against Allaway) and $2,790 (against Bates) for
compensation paid to the claimants under the LHWCA. Limitation of liability
became a moot point, inasmuch as the vessel is worth more than the combined
judgments.
In its order awarding damages, the district
court announced that Graham Offshore, Texaco, and Transocean would be the
only participants in the liability phase of the trial. The court concluded
that the defendants' December 10th agreement had relieved Allaway and Bates
of their burden of proving negligence on the part of the defendants.
In September 2000, the district court conducted
a trial to apportion liability. Counsel for appellees were not present.
The court found that Graham Offshore breached its duty of reasonable care
to the passengers onboard the Miss Paula. Specifically, the court
found that the captain of the vessel did not even attempt to obtain updated
weather information and that he negligently failed to realize he was heading
directly into the storm. As to the other defendants, the district court
concluded that Texaco and Transocean had a legal duty to transport the
rig workers safely to shore pursuant to the Emergency Evacuation Plan,
a plan that Coast Guard regulations required Texaco to prepare and disseminate.
According to the district court, Texaco and Transocean breached this duty
by failing to share weather information with the vessel. The district court
also noted that Texaco owed a legal duty to the passengers because Texaco
was the time-charterer of the Miss Paula and exercised at least
partial control over the timing, mission, and route of the vessel. Having
concluded that all three parties were liable, the district court then apportioned
liability as follows: 60% to Graham Offshore, 20% to Texaco, and 20% to
Transocean.
II. DISCUSSION
Among several issues raised by Transocean,
the question of Transocean's legal duties to appellees overarches other
issues in this case and requires our primary attention.
During the liability phase of the trial, the
district court concluded that Transocean had assumed responsibility for
the passengers of the Miss Paula because Transocean had designated
its rig superintendent as the person in charge of implementing the Emergency
Evacuation Plan (EEP). In addition, the district court may have held that
Transocean, like Texaco, shared in a hybrid duty with Graham for the safe
transportation of Allaway and Bates, to the extent that elements of their
transportation fell within Transocean's "sphere of control."(3)
We review de novo these grounds for the district court's conclusion
that Transocean owed a legal duty to Allaway and Bates. Canal Barge
Co., Inc. v. Torco Oil Co., 220 F.3d 370, 376 (5th Cir. 2000).
United States Coast Guard regulations require
the operator of each manned facility on the Outer Continental Shelf to
submit an Emergency Evacuation Plan, or EEP. 33 C.F.R. §§ 146.140,
146.210. Texaco duly submitted its evacuation plan for the DF-97. This
case involves a "Level I" evacuation of non-essential personnel to shoreside
facilities. The EEP states that evacuation could be by helicopter or by
boat, and it includes an estimate of the total evacuation time for each
method. The EEP also identifies the sources of weather information to be
relied upon in determining whether to abandon the rig. Significantly, the
EEP designates Transocean's rig superintendent as the "Person-in-Charge"
of implementing the EEP (except in cases of "well-control situations").
As the "Person-in-Charge," the Transocean representative had the duty to
advise Texaco "of any situations warranting implementation of the EEP."
The contract between Texaco and Transocean was to the same effect, adding
only that Transocean would consult with Texaco in deciding whether to institute
precautionary measures to safeguard the rig.
Through the EEP and the contract with Texaco,
Transocean was involved in the evacuation of rig workers. The EEP indicates
that Texaco and Transocean would monitor the weather for the purpose of
deciding whether to evacuate the rig, by what means to evacuate the non-essential
personnel, and how to transfer personnel safely from the rig to the evacuation
craft. The plaintiffs do not contend, nor did the district court find,
that Texaco or Transocean performed these specific duties in a negligent
manner.
Instead, Allaway and Bates contend that Transocean
had a more general duty imposed by the EEP to ensure that the employees
were transported safely to shore and that Transocean breached this duty
by not transmitting weather information to the vessel. Viewed in retrospect,
Transocean's failure to discuss weather developments with the crew of the
Miss Paula may have been imprudent. However, the narrow question
before us is whether the EEP imposes a legal duty on Transocean to oversee
the operations of the boat or helicopter that is used to evacuate personnel
from the rig. Although Transocean's rig superintendent was the "person
in charge" of implementing the evacuation plan, it does not follow that
Transocean assumed responsibility for every act done in furtherance of
the evacuation. Nothing in Texaco's evacuation plan for the DF-97 imposed
a duty on Transocean to monitor weather conditions for the purpose of assisting
the Miss Paula in navigation. The general mission, route, cargo
and timing of a chartered vessel's voyage are traditionally within the
control of the vessel operator and the time-charterer, see Hodgen
v. Forest Oil Corp., 87 F.3d 1512, 1520 (5th Cir. 1996), and the EEP
does not alter that arrangement.
In fact, apart from identifying a few specific
tasks, the balance of the EEP regulation requires only an index of resources
and tentative plans for addressing various types of emergencies. It is
by no means clear that the EEP should of its own force create legal duties.
Instead, its purpose appears to be that of requiring offshore operators
to foresee and document possible emergency evacuation scenarios, without
any assurance that the planned remedies are the only feasible plans or
even the best plans when an actual emergency erupts. See 54 Fed.
Reg. 21566 (May 18, 1989). The EEP regulation imposes a duty of documentation,
not execution.
Given the limited, though useful, purpose
of the EEP, it makes no sense to hold that its barebones allocation of
tasks affixes legal responsibility on any party to offshore drilling operations
beyond that which is undertaken by contract or imposed by extrinsic law.
The district court thus erred in concluding that Transocean could be held
liable on the basis of a specific duty to transmit weather information
to the Miss Paula that does not exist in the EEP or of some more
general but wholly unarticulated duty of Transocean's supervisor as the
EEP person-in-charge to guarantee the flawless execution of the Miss
Paula's task.
Transocean also takes issue with the district
court's apparent imposition of a hybrid duty upon it to assure Appellees'
safe transportation within the sphere of activity in which Transocean "exercised
at least partial control" with Graham. Since the court gleaned the duty
of an "exercise of partial control" only from the EEP, a holding we have
found erroneous, the hybrid duty theory fails on that basis alone. More
generally, however, the court's attribution of any hybrid duty upon Transocean
in these circumstances represents an unwarranted extension of Hodgen.
The
Hodgen decision synthesizes this court's caselaw describing
the duties of a vessel's time-charterer to passengers on the vessel. Texaco
was the Miss Paula's time charterer, not Transocean. Transocean
had no direct contractual relation with Graham and, according to the record,
it never had any direct contact with Graham concerning routine transportation
to and from its rig, much less the evacuation in the face of Hurricane
Danny. Texaco contracted with Transocean to operate Transocean's mobile
rig, and Texaco contracted with Graham to supply transportation services
to the rig at Texaco's instruction. The parties' practices followed their
contracts. Thus, Texaco as time charterer potentially bore a hybrid duty
to passengers carried by Graham, but neither the factual nor legal predicate
for creating such a duty existed in Transocean's fortuitous connection
to Graham. Hodgen is inapplicable.
For these reasons, the judgment against Transocean
cannot stand. Accordingly, the judgment of liability against Transocean
is REVERSED.
1. District Judge of the
Western District of Texas, sitting by designation.
2. The United States Coast
Guard required Texaco to submit an Emergency Evacuation Plan ("EEP"), which
will be discussed in more detail below.
3. The district court rejected
Transocean's contention that its liability to Allaway and Bates, employees
covered by the LHWCA, arises only from its status under 33 U.S.C. §
905(b) as a vessel owner (of a mobile drilling rig). We agree with the
district court that appellees' claim against Transocean did not rest on
vessel-based negligence, but only upon duties allegedly created by Texaco's
EEP. We have no occasion to consider the applicability of § 905(b)
to these facts.
