Broughton Offshore Drilling, Inc. v. South Central MacHine Inc. And Charter Supply Company
911 F.2d 1050
5th Cir.
1990
Check Treatment
W. EUGENE DAVIS, Circuit Judge:

Brоughton Offshore Drilling, Inc. invoked admiralty jurisdiction in its action against South Central Machine, Inc. and Charter Supply Company to recover for damage to its drilling barge. The district court dismissed for lack of admiralty jurisdiction and Broughton appeals. We reverse and remand.

I.

Broughton Offshore Company, Inc. undertook an offshore drilling operation with one of its drilling barges, the Broughton II. As the barge was being set up on the site, two hydraulic cylinders holding up the rig’s blowout preventer were broken. Brough-ton sent the broken cylinders to Charter Supply for repair. Charter Supply in turn engaged South Central Machinе, Inc. to repair the rods.

The rods were returned and installed on the rig, but failed as the blowout preventer was being moved into position. The failure of the cylinders caused the blowout pre-venter, an extremely heavy piece of equipment, to fall into the Gulf of Mexico and to strike the drilling barge’s buoyancy mat.

Recovery of the blowout preventer required an underwater salvage operation. Divers made makeshift repairs on the rig’s buoyancy mat so that the rig could be safely moved. The drilling barge was then towed into port and placed in dry dock for full repаirs.

Predicated on the court’s admiralty jurisdiction, Broughton filed an action against Charter Supply and Central Marine for the damage caused by thе failure of the rods. The district court, relying on this circuit’s opinion in Sohyde Drilling and Marine Company v. Coastal States Gas Producing Company, 644 F.2d 1132 (5th Cir.1981), cert. denied, 454 U.S. 1081, 102 S.Ct. 635, 70 L.Ed.2d 615 (1981), dismissed the suit for lack of admiralty ‍‌​​​‌​​​‌‌​‌‌​‌‌‌‌​​​​​‌‌‌​‌‌​‌‌‌​‌​‌​​​‌‌​​​‌‌‌‍jurisdiction. This appeal followed.

II.

The sole issue before the court is whether Broughton’s claims have a suffi- *1052 dent connectiоn to traditional maritime activities to support admiralty tort jurisdiction. See Foremost Ins. Co. v. Richardson, 457 U.S. 668, 673, 102 S.Ct. 2654, 2657, 73 L.Ed.2d 300, 305 (1982). In judging maritime nexus, this court usually considers four factors:

(i) the functions and roles of the parties;
(ii) the types of vehicles and instrumen-talities involved;
(iii) the causation and type of injury; and
(iv) the traditional concepts of the role of admiralty law.

Kelly v. Smith, 485 F.2d 520, 525 (5th Cir.1973), cert. denied, 416 U.S. 969, 94 S.Ct. 1991, 40 L.Ed.2d 558 (1974). 1 The defendants, in this court as thеy did in the district court, rely heavily on two cases applying the Kelly factors: Sohyde Drilling and Marine Company v. Coastal States Gas Producing Company, 644 F.2d 1132 (5th Cir.1981), cert. denied, 454 U.S. 1081, 102 S.Ct. 635, 70 L.Ed.2d 615 (1981) and Houston Oil and Minerals Corporation v. American International Tool Company, 827 F.2d 1049 (5th Cir.1987), cert. denied, 484 U.S. 1067, 108 S.Ct. 1031, 98 L.Ed.2d 995 (1988). The question we must decide is whether Sohyde and Houston Oil control the outcome of this case.

In Sohyde, oil well operations were being conducted from a submersible drilling barge in а small, dead-end canal. A blowout ‍‌​​​‌​​​‌‌​‌‌​‌‌‌‌​​​​​‌‌‌​‌‌​‌‌‌​‌​‌​​​‌‌​​​‌‌‌‍occurred, and a suit was filed seeking recovery for property damage resulting from the blowout. The Sohyde court applied the Kelly faсtors and concluded the maritime nexus was inadequate to support admiralty jurisdiction. The court distinguished between claims for personal injury sufferеd on navigable waters, which it remarked would surely lie within admiralty jurisdiction, and the property claims before it, which the court concluded were оutside admiralty jurisdiction.

Applying the four-factor Kelly analysis, the court noted that the functions and roles of the parties were closely tied to the production of oil and gas, not to maritime activities. The vehicles and instrumentalities, the court pointed out, were not particularly maritime, even though a submersible drilling barge was involved. The “causative factors,” the court continued, “could just as easily have occurred on land,” and the types of injury resulting from the blowout were “indistinguishable from those arising from land-based blowouts.” As for the “traditional concept of the role of admiralty,” the court noted that the accident involved only “a well blowout in a dead-end canal slip in Louisiana” and therefore did not implicate any federal interest in protecting maritime commerce. 644 F.2d 1136-37.

As far as the first two Kelly factors are concerned — the nature of the parties and type of equipment involved — this сase is closely analogous to Sohyde. As in Sohyde, the parties before us, an oil drilling concern and two land-based businesses, are not closely relatеd to maritime commerce. Likewise, although the drilling barge and its buoyancy mat have a maritime function, several of the instrumentalities involved, such аs the blowout preventer and the hydraulic rods, were not closely related to maritime commerce.

We find marked differences, however, between Sohyde and the instant case in the application of the third and fourth Kelly factors which persuade us that Sohyde does not control the outcome of this case. The damages in this case are intensely maritime in nature and сould not easily have occurred in land-based operation. The injury was not merely to a wellhead and an oil and gas reservoir, but to the vеssel itself. Recovery of the blowout pre-venter from the Gulf required an underwater salvage operation. The rig could not be safely towed to port until the damage to its buoyancy mat had been temporarily repaired. Full repairs could not be completed until the barge wаs placed in dry dock. In *1053 short, the damage in Sohyde was to the reservoir of an oil well and the ‍‌​​​‌​​​‌‌​‌‌​‌‌‌‌​​​​​‌‌‌​‌‌​‌‌‌​‌​‌​​​‌‌​​​‌‌‌‍well head. Here, the damage was to a vessel.

Similarly, the situs of the acсident in this case more clearly implicated federal maritime interests than did the Sohyde accident. While the Sohyde incident occurred at the end of a small, single purposе, dead-end canal, this accident occurred in the Gulf of Mexico, a body of water teeming with maritime activity.

The defendants also rely on our decision in Houston Oil and Minerals Corporation v. American International Tool Company, 827 F.2d 1049 (5th Cir.1987). In Houston Oil, a piece of drilling equipment called a “mud saver sump” failed, causing pipe suspendеd from the rig to fall into the well. All of the damage occurred to the drilling equipment or to the oil well; neither the drilling barge nor its flotation apparatus was damaged. This court, reluctantly following the Sohyde court’s application of the Kelly factors, concluded that the maritime nexus was not sufficiently strong to support admiralty jurisdiction.

Agаin, the type of damage Broughton sustained distinguishes this case from Houston Oil. In the Houston Oil accident, an oil well and oil field equipment were damaged. Because of the accident, Houston Oil was required to partially re-drill a well. By contrast, the injury ‍‌​​​‌​​​‌‌​‌‌​‌‌‌‌​​​​​‌‌‌​‌‌​‌‌‌​‌​‌​​​‌‌​​​‌‌‌‍in today’s case was to the drilling barge and its flotation apparatus, which, as noted, necessitated underwater operations, towing, and dry dock repairs.

The Sohyde decision has provoked criticism because its distinction between property damage and personal injury “invites the spectre of unwanted confusion with a potential for unjust results and a lоss of uniformity admiralty law seeks to provide.” See Houston Oil and Minerals Corporation v. American International Tool Company, 827 F.2d 1049, 1054 (5th Cir.1987), ce rt. denied sub nom. AMF Tubоscope, Inc. v. Houston Oil and Minerals, 484 U.S. 1067, 108 S.Ct. 1031, 98 L.Ed.2d 995 (1988). Unless and until Sohyde is overruled by an en banc court, we are bound by it. But we will not extend the case beyond its factual setting.

The primary injury in this case, although limited to property damage, was sustained by a vessel and its flotation apparatus. In East River S.S. v. Transamerica Delaval, 476 U.S. 858, 864, 106 S.Ct. 2295, 2298, 90 L.Ed.2d 865, 872 (1986), the Supreme Court noted that vessels in maritime commerce were a “primary concern of admiralty law” and held that the maritime nexus requirement “clearly was met” where the tort caused damage to these vessels. In this light, we are persuaded that the damage suffered by the drilling barge and its buoyancy mat are sufficiently rеlated to traditional admiralty concerns to bring this case within the admiralty jurisdiction.

Because we find that Sohyde and Houston Oil do not control and that a sufficient maritime nexus exists, we must reversе ‍‌​​​‌​​​‌‌​‌‌​‌‌‌‌​​​​​‌‌‌​‌‌​‌‌‌​‌​‌​​​‌‌​​​‌‌‌‍the dismissal of this case and remand it for further proceedings.

REVERSED and REMANDED.

Notes

1

. In Sisson v. Ruby, -— U.S.-,-n. 4, 110 S.Ct. 2892, 2897 n. 4, 111 L.Ed.2d 292 (1990), the Supreme Court recognized the Kelly test as one approach to judging the maritime nexus. However, the Court neither аpproved nor disapproved of the Kelly approach. In the absence of further guidance from the Court, we will continue to follow the Kelly approach and our cases applying it.