U.S. Fifth Circuit Illustrates the "Sensible" Rule for Vessel Status as Set Forth in Stewart v. Dutra

by Philip C. Brickman

Earlier this year, the U.S. Fifth Circuit Court of Appeals denied a plaintiff’s appeal of a summary judgment granted in favor of his employer involving a lawsuit filed under the Jones Act  for personal injuries.  In Mendez v. Anadarko Petroleum , the plaintiff was an employee of Anadarko Petroleum, who was injured while working onboard the RED HAWK spar.  The RED HAWK was a floating gas production platform moored in ocean water 5,000 feet deep and approximately 210 miles from Sabine Pass, Texas.  Spars float on the ocean surface, but are moored to large anchors in the seabed.  The RED HAWK had been moored since 2004.  It was secured to the ocean floor by multiple single point anchor moorings, which extend to a spread platform from the spar’s hull.  The spar utilizes a complex mooring system where each mooring line is then anchored to the sea floor with a suction embedment anchor. The mooring lines are held taut so that there is no lateral movement with the spar.  In addition to the mooring lines, there is an infrastructure of flow lines and export pipeline systems that are used to transport oil and gas to shore based facilities.

The plaintiff initially filed his Jones Act claim in state court.  Anadarko then removed the suit to Federal District Court in Texas claiming jurisdiction under the Outer Continental Shelf Lands Act  and argued that the Jones Act claim did not prevent removal because the plaintiff was not a seaman.  Typically, a Jones Act claim cannot be removed unless it is fraudulently plead.   A court can only deny a remand of the case where, after resolving all disputed facts and ambiguities in the plaintiffs favor, the court determines that the plaintiff has no reasonable possibility of establishing a Jones Act claim on the merits.  Here, the plaintiff had an issue with qualifying himself as a seaman on the basis that he did not demonstrate he had a connection to a vessel in navigation that was substantial in terms of both its duration and nature.   The District Court ultimately determined that the plaintiff could not establish a connection to a vessel in navigation because the RED HAWK was not a vessel in navigation as defined by the U.S. Supreme Court in Stewart v. Dutra Construction Co. .  In Stewart, the Supreme Court examined a Fifth Circuit opinion ruling that a floating casino was no longer a vessel because it was moored to the shore in a semi-permanent or indefinite manner.  The Supreme Court held that a vessel is any watercraft practically capable of maritime transportation, regardless of its primary purpose or state of transit at a particular moment.  The Supreme Court further explained that a vessel’s primary purpose need not be navigation or transportation, and it need not be in motion at the time of the seaman’s injury.   However, a watercraft is not capable of being used for maritime transport in any meaningful sense if it has been permanently moored or otherwise rendered practically incapable of transportation or movement.   The Supreme Court also set out the “sensible” rule explaining, “ships taken permanently out of the water as a practical matter do not remain vessels merely because of the remote possibility that they may one day sail again.”

The Fifth Circuit relied heavily on the Supreme Court’s reasoning in Stewart in affirming the District Court’s ruling that the RED HAWK was not a vessel in navigation.  The District Court cited evidence that Anadarko intended the RED HAWK to be in place for several years after it had begun production in 2004.  Even though the field subsequently became unproductive, Anadarko kept the spar in place with no immediate plans to move it.  Anadarko had also commissioned a feasibility study to remove the spar to another field, but that study concluded that moving it would take several days and well over $42 million, making it impossible to move practically.  In addition, the District Court noted that while the shape of the spar’s hull facilitated movement from one offshore location to another, the work and expense needed to unmoor it, prepare it for transportation, and to reattach it to a new location made it extremely difficult and expensive.  The Fifth Circuit concluded that the spar was designed to remain permanently moored to the seabed and stationary for the life of the oil and gas production field.

In addition to the design issues, the U. S. Coast Guard had classified the spar as an industrial vessel, consistent with a fixed structure permanently moored far offshore.  The U.S. Coast Guard’s Certificate of Inspection did not permit it to carry passengers and limited the spar to its offshore exploration block, not an international voyage; thus providing further support for the conclusion that the spar was not a vessel in navigation. 

In affirming the District Courts decision, the Fifth Circuit ultimately concluded that the RED HAWK was not a vessel in navigation and in fact, made for a stronger case of non-vessel status than the casino boat discussed in Stewart.  The District Court cited to the high cost and cumbersome logistics, Coast Guard certification, as well as operator’s intent not to move spar in support of its conclusion that the spar was not a vessel in navigation.  Consequently, the plaintiff had no substantial connection to a vessel, and therefore, there was no reasonable possibility that he could demonstrate seaman status under the Jones Act.  As a result, the plaintiff’s lawsuit was dismissed.

The Fifth Circuit’s opinion in Mendez provides a clear example of the factors and characteristics under consideration when determining whether a structure used in offshore oil and gas exploration can be classified as a vessel in navigation.  It also provides an example of the sensible rule, whereby a ship or similar structure should not be considered a vessel in navigation merely because it may sail at some point and time in the future.  If there are practical considerations that make the structure less likely to be capable of navigation, a court may find that the structure is not a vessel in navigation.  Such a finding could lead to the denial of seaman status and dismissal of a Jones Act claim.  

Please contact Phil Brickman at 504-523-2600 or [email protected] for further information on this issue.