We took this case en banc to consider modifying the criteria set forth in Davis & Sons, Inc. v. Gulf Oil Corp. for determining whether a contract for performance of specialty services to facilitate the drilling or production of oil or gas on navigable waters is maritime.
I. BACKGROUND
On October 12, 2005, Apache Corporation (“Apache”) entered into a blanket master services contract (“MSC”) with Specialty Rental Tools & Supply, L.L.P. (“STS”). The MSC included an indemnity provision running in favor of Apache and
On February 24, 2011, STS dispatched a two-man crew to perform the work required by the work order. After an unsuccessful day of work, the STS crew determined that some heavy equipment was' needed to complete the job and that a crane would be required to lift the equipment into place. Because the production platform was too small to accommodate a crane, the crew suggested to Apache that it engage a barge equipped with, a crane to lift the equipment. Apache agreed and contracted with Plaintiff Larry Doiron, Inc. (“LDI”), to provide a crane barge.
The next day, the LDI crew proceeded to the job site on the crane barge POGO and unloaded the equipment requested by the STS crew. After being unsuccessful, however, the STS crew discoveréd that it needed yet a different piece of equipment, so, with the aid of the crane, both crews began removing the heavy equipment previously unloaded. During this process, the LDI crane operator struck and injured one of the STS crewmembers, Peter Savoie, with the equipment.
Anticipating a claim from Mr. Savoie, LDI filed a limitation of liability proceeding as owner of the crane barge POGO. Savoie filed a claim in the limitation proceeding. LDI, as Apache’s contractor, then filed a third-party complaint against STS, seeking indemnity under the terms of the MSC.
LDI filed a motion for summary judgment seeking a declaration that it was entitled to indemnity from STS under the MSC. STS filed a cross-motion for summary judgment seeking a determination that it owed no indemnity. The -narrow issue presented was whether the MSC was a maritime contract. If1 so, general maritime law permitted enforcement of the indemnity provision. If not, Louisiana law controlled, and the Louisiana1 Oilfield Indemnity Act (“LOLA”) precluded indemnity.
II. DISCUSSION
A. Standard of Review
We review de novo a district court’s grant of summary judgment.
B. Current Law
The issue in this case is whether the Court should apply maritime law or Louisiana law to determine the validity of the indemnity provisions in the MSC. If Louisiana law applies, the indemnity agreement is void as against public-policy.
Our cases in this area have long been confusing and difficult to apply. In Thurmond v. Delta Well Surveyors, Judge Garwood stated in his concurring opinion that he was “generally in agreement with Judge Wisdom’s persuasive opinion, but ... troubled by the tension, or perhaps outright inconsistency, between many of our opinions in this area.”
[I]t seems to me that it may be desirable to consider this issue en banc, in order that we may take a more' consistent approach to the question of whether and in what circumstances activities in connection with mineral development in state territorial waters are maritime (or perhaps “maritime and local[.]”) ]12
Since 1990, we have followed the multi-factor test set forth in Davis & Sons, Inc. v. Gulf Oil Corp„ (“Davis & Sons”) to determine whether a contract is a maritime contract.
If ... the contract consists of two parts, a blanket contract followed by later work orders, the two must be interpreted together in evaluating whether maritime or land law is applicable to the interpretation and enforceability of the contract’s provisions. The blanket' contract is not of itself Complete and calls for no specific work. The actual contract between the parties therefore consists of the blanket agreement as modified by the later work order.14
He stated further:,
A contract may either contain both maritime and non-maritime obligations.... If separable maritime obligations are imposed ..., these are maritime obligations that can be separately enforced in admiralty without prejudice to the rest, hence subject to maritime law.15
Whether the blanket agreement and work orders, read together, do or do notconstitute a maritime contract depends, as does the characterization of any other contract, on the nature and character of the contract, rather than on its place of execution or performance. A contract relating to a ship in its use as such, or to commerce or navigation on navigable waters, or to transportation by sea or to maritime employment is subject to maritime law. What, constitutes maritime character is not determinable by rubric. The Supreme Court has resorted to the observation that a contract is maritime if it has a genuinely salty flavor. 16
He concluded his synopsis by distilling these principles into the six-factor test at issue in this appeal:
Determination of the nature of a contract depends in part on historical treatment in the jurisprudence and in part on a fact-specific inquiry. We consider six factors in characterizing the contract: 1) what does the specific work order in effect at the time of injury provide? 2) what work did the crew assigned under the work order actually do? 3) was the crew assigned to work aboard a vessel in navigable waters? 4) to what extent did the work being done relate to the mission of that vessel? 5) what was the principal work of the injured worker? and 6) what work was the injured worker actually doing at the time of injury?17
A number of judges on this Court have since criticized this approach as confusing, particularly the six-factor, fact-intensive test.
This appeal requires us to sort once more through the authorities distinguishing maritime and non-maritime contracts in the offshore exploration and production industry. As is typical, the final result turns on a minute parsing of the facts. Whether this is the soundest jurisprudential approach may be doubted, inasmuch as it creates uncertainty, spawns litigation, and hinders the rational calculation of costs and risks by companies participating in this industry. Nevertheless, we are bound by the approach this court has followed for more than two decades.19
Professor David W. Robertson has also pointed out some of the difficulties with the Davis & Sons test:
The six factors are too pointillistic: they have led Fifth Circuit panels down such odd lines of thought as “whether drilling mud services are more akin to wireline work [which has sometimes been viewed as quintessentially nonmaritime] or to casing services.”20
For a variety of reasons, most of the prongs of the Davis & Sons test are unnecessary and unduly complicate the determination of whether a contract is maritime.- Judge Southwick’s complex factual explication of the prongs in the panel opinion—-which we consider below—demonstrates
The first Davis & Sons’ prong asks: What does the contract provide?
The second prong asks: What did the crew actually do?
The third and fourth Davis & Sons prongs ask: Was the crew assigned to a vessel in navigable waters, and to what extent was the crew’s work related to the mission of the vessel?
The sixth prong asks: What was the injured worker doing when injured?
In our panel opinion, after exhaustively analyzing the facts of this case in light of the six-prong test, we limited our holding to the. facts of this case and determined that the contract was maritime primarily because a vessel was essential to the completion of the job.
C. Kirby
Fortunately, the Supreme Court’s opinion in Norfolk Southern Railway Co. v. Kirby lights a path to a simpler, more straightforward method for determining whether a contract is maritime and avoids most of the unnecessary analysis required by Davis & Sons
In considering whether the bills of lading were maritime contracts, the Court broadly defined what characterized a contract as maritime. The Court observed that:
[W]e cannot look to whether a ship or other vessel was involvéd in the dispute, as we would in a putative maritime tort case. ... Nor can we simply look to the place of the contract’s formation or performance. Instead, the answer “depends upon ... the nature and character of the contract,” and. the true criterion is whether it has “reference to maritime service or maritime transactions.”38
The Court also emphasized that “the fundamental interest giving rise to maritime jurisdiction is the protection of maritime commerce.”
A contract may either contain both maritime and non-maritime obligations or, as in the Gulf-Davis blanket agreement, contemplate future detailed contracts having different characteristics. If separable maritime obligations are imposed by the supplementary contracts, or work orders, these are “maritime obligations [that] can be separately enforced [in admiralty] without prejudice to the rest,” hence subject to maritime law.42
The Kirby court, after disapproving mixed-contract decisions from the Second, Fifth, and Federal Circuit Courts of Appeal,
Furthermore, to the extent that these lower court decisions fashion a rule for identifying maritime contracts that depends solely on geography, they are inconsistent with the conceptual approach our precedent requires. Conceptually, so long as a bill of lading requires substantial carriage of goods by sea, its purpose is to effectuate maritime commerce— and thus it is a maritime contract. Its character as a maritime contractus not defeated simply because it also provides for some land carriage.44
Our cases have long held that the drilling and- production of oil and gas on navigable waters from a vessel is commercial maritime activity. For example, in Theriot v. Bay Drilling Corp.; we considered a contract for supplying a‘submersible drilling barge and concluded that the contract was clearly maritime, noting that “[o]il and gas drilling- on navigable waters aboard a vessel is recognized to be maritime commerce.”
III. CONCLUSION
Based on the principles laid out in Kirby, we adopt the following two-pronged
This test places the focus on the contract and the expectations of the parties. This is the proper approach in a contract case and assists the parties in evaluating their risks, particularly their liability under indemnification clauses in the contract.
This does not mean, however, that some of the Davis & Sms factors are never relevant. The scope of the contract may be unclear; the extent to which the parties expect vessels to be involved in the work may also be unclear. In resolving these issues, courts may permit the parties to produce evidence of the work actually performed and the extent of vessel involvement in the job. It is also conceivable, for example, that the seamen status of a crew—which is implicated in two of the Davis & Sons factors—could be relevant to whether the vessel involvement was a substantial part of the overall contract. If the contract provided only for work to be done by permanent crewmembers aboard a vessel, the substantial vessel involvement issue would ordinarily be answered. If part of the contract work involves work by crewmembers aboard a vessel and part does not, the work by seamen aboard a vessel would be part of the factual mix that the district court could consider in resolving whether the overall contract involved substantial involvement of a vessel.
Applying this new test to this case, the oral work order called for STS to perform downhole work on a gas well that had access only from a platform. After the STS crew began work down hole, the crew encountered an unexpected problem that required a vessel and a crane to lift equipment needed to resolve this problem. The use of the vessel to lift the equipment was an insubstantial part of the job and not work the parties expected to be performed. Therefore, the contract is nonmar-itime and controlled by Louisiana law. The LOIA bars indemnity. Accordingly, we reverse the summary judgment in favor of LDI and grant summary judgment in favor of STS, render judgment in favor of STS, and dismiss LDI’s third-party complaint against STS.
REVERSED AND RENDERED.
Notes
. See
. See
. A inore exhaustive factual background can be found in the panel opinion, See In re Larry Doiron, Inc.,
. See La. Rev. Stat. § 9:2780(A).
. James v. State Farm Mut. Auto. Ins. Co.,
. Fed. R. Civ, P. 56(a).
. Anderson v. Liberty Lobby, Inc.,
. James,
. See La. Rev. Stat. § 9:278Q(A).
. See Hoda v. Rowan Cos.,
LDI also argues that the choice-of-law clause in the MSC, which specifies general maritime law as the applicable law under which to construe the contract, should be enforced even if the contract is nonmaritime in nature.
Our case law makes clear that, if the contract is nonmaritime, Louisiana law will govern its construction even in the face of a choice-of-law clause. This is so because enforcement of the choice-of-law clause would violate Louisiana's public policy and directly contravene LOIA, See Verdine v. Ensco Offshore Co.,
.
. See id. (quoting Kossick v. United Fruit Co.,
. 919 F,2d at 316.
. Id. at 315.
. Id, at 315-16 (internal quotation'marks, brackets, and citations omitted).
. Id. at 316 (internal quotation marks and citations omitted).
.; Id.
. See, e.g., Hodgen v. Forest Oil Corp.,
. 419 F,3d at 380.
. David W. Robertson, The Outer Continental Shelf Lands Act’s Provisions on Jurisdiction, Remedies, and Choice of Law: Correcting the Fifth Circuit's Mistakes, 38 J. Mar. L. & Com. 487, 545 (2007). For a more detailed criticism of the Davis & Sons test, see id. at 540-45.
. See generally In re Doiron,
. Davis & Sons,
. STS argues that the following provision in the MSC contemplates the use of a vessel: "IF CONTRACTOR [STS] USES ANY VESSELS in Connection with its work for COMPANY OR COMPANY GROUP,” additional vessel-related insurance is required, (emphasis added).
This insurance provision on its face has no application because STS did not provide or use a vessel—the vessel and crew were provided by LDI. This provision requiring vessel-related insurance applied to contractors such as LDI.
. Davis & Sons,
. See In re Doiron,
. See id. at 344-46.
. Compare Thurmond,
. Davis & Sons,
. See id.
. Id.
. In re Doiron,
. See
: See id. at 18,
. See id. at 18-21,
. See id. at 22-24,
. See id. at 24,
. Id.
. Id. (second alteration in original) (quoting N. Pac. S.S. Co. v. Hall Bros. Marine Ry. & Shipbuilding Co.,
. Kirby,
. Id.
. Id. at 24,
. See Davis & Sons,
. See, e.g., Kuehne & Nagel (AG & Co.) v. Geosource, Inc.,
. Kirby,
.
.
. When work is performed in part on a vessel and in part on a platform or on land, we should consider not only time spent on the vessel but also the relative importance and value of the vessel-based work to completing the contract. In Chandris, Inc. v. Latsis, in formulating the test for whether a worker’s connection to a vessel was substantial enough to qualify him as a seaman under the Jones Act, 46 U.S.C. § 30104, the Supreme Court noted:
[Substantiality in this context is determined by reference to the period covered by the Jones Act plaintiff’s maritime employment, rather than by some absolute measure. Generally, the Fifth Circuit seems to have identified an appropriate rule of thumb for the ordinary case: A worker who spends less than about 30 percent of his time in the service of a vessel in navigation should not qualify as a seaman under the Jones Act. This figure of course serves as no more than a guideline established by years of experience, and departure from it will certainly be justified in appropriate cases.
. See Robertson, supra note 20, at 547-48.
. See Kirby,
. See Kirby,
. We applied a similar analysis in Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, where we held that the focus of the contract, rather than the situs of the injury, was the relevant consideration for the purposes of evaluating the applicability of an indemnity agreement. See
. We deal today only with determining the maritime or nonmaritime nature of contracts involving the exploration, drilling, and production of oil and gas. If an activity in a non-oil and gas sector involves maritime commerce and work from a vessel, we would expect that this test would be helpful in determining whether a contract is maritime.