Transcontinental Gas Pipe Line Corp. v. Transportation Insurance

953 F.2d 985, 1992 WL 17378
CourtCourt of Appeals for the Fifth Circuit
DecidedFebruary 20, 1992
DocketNo. 91-3135
StatusPublished
Cited by2 cases

This text of 953 F.2d 985 (Transcontinental Gas Pipe Line Corp. v. Transportation Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Transcontinental Gas Pipe Line Corp. v. Transportation Insurance, 953 F.2d 985, 1992 WL 17378 (5th Cir. 1992).

Opinion

WIENER, Circuit Judge:

This case is another in the burgeoning line of litigation hinging on the interpretation of the Louisiana statute that proscribes indemnification provisions in agreements pertaining to oil, gas and water wells. At issue here is the applicability of the statute to an interstate gas transmission pipeline company’s unmanned platforms in the Gulf of Mexico — platforms admittedly unrelated to exploration, drilling or completing gas wells, but admittedly related directly to transportation of natural gas. The Defendants-Appellants appeal from the district court’s summary judgment in favor of Plaintiff-Appellee, Transcontinental Gas Pipe Line Corporation (Transco), grounded in the court’s determination that the subject statute is inapplicable here. Because we find the uncontested facts revealed in the summary judgment evidence in the record to be insufficient for us to make a de novo determination of the statute’s applicability, we reverse and remand.

I.

FACTS

Transco is an interstate natural gas transmission and marketing company. Among other things, it owns and operates natural gas pipelines originating in the Gulf Coast areas of Texas and Louisiana and extending through the southeastern states. Transco avers that it does not own or operate natural gas wells. Instead, it purchases natural gas from those persons who drill, produce or operate natural gas wells, transports that gas through its pipeline from the well or from some pickup point remote from the well, such as the tail gates of plants or other facilities, to Tran-sco’s gas purchasers throughout the southeastern United States. Transco also avers that as a common carrier it receives gas purchased by third parties from producers whose wells are located in the Offshore Louisiana area and transports that gas, for a fee, as directed by the purchasers of that gas.

In 1987, APS was a Louisiana contractor providing painting, sandblasting, and other services to the oilfield industry. On May 20, 1987, APS and Transco entered into a contract (the contract or the APS/Transco contract) under which APS agreed to perform painting, sandblasting, inspection and “codework” on Transco’s platforms and pipelines located in the Gulf of Mexico or in the adjacent marshlands of Louisiana. The contract contained an Insurance Requirement Exhibit that provides: “It is further [987]*987agreed that [APS’s comprehensive general liability insurance policy] shall name [Tran-sco] ... as an Additional Insured ... with respect to [APS’s] operations hereunder.” APS named Transco as an additional insured on its comprehensive general liability insurance policy.

On or about May 20, 1987, a foreman for APS was injured on a Transco platform located on the Outer Continental Shelf offshore Louisiana. This employee filed suit in the United States District Court for the Eastern District of Louisiana against APS, Transco and other parties. Transco’s demand to APS for indemnification and defense was denied. APS filed for bankruptcy and the court proceedings as to APS were stayed. Transco settled the suit with the injured worker for $225,000.00.

Transco then filed suit against the Defendants alleging that the APS/Transco contract required that Transco be named as an additional insured under the comprehensive general liability policy issued by the Defendants to APS, and that the Defendants’ failure to defend and indemnify Transco with respect to the suit by APS’s worker was without justification and was arbitrary and capricious. Transco sought indemnity for the amount paid in the settlement, plus penalties and attorney’s fees pursuant to Louisiana law. Transco also sought a declaratory judgment that Transportation Insurance Company (TIC), the worker’s compensation insurer of APS, was not entitled to reimbursement for compensation benefits it paid to the insured worker.

The Defendants and TIC filed motions for summary judgment. The district court denied those motions1 addressing only the issue of the applicability of the Louisiana Oilfield Anti-Indemnity Act.2 Subsequently, the Defendants and TIC moved the district court to amend its judgment and certify to the Louisiana Supreme Court the issue of the applicability of the Act to the instant contract. After the district court requested additional briefing, Transco opposed the motions. Ultimately, the district court refused to amend its judgment.

Transco then filed a motion for summary judgment on the remaining issue of the scope of coverage provided by the Defendants’ insurance policy. The Defendants and TIC opposed Transco’s motion for summary judgment. In addition, the Defendants requested that the court review its prior ruling on the applicability of the Act to the contract between APS and Transco. The court (1) found that there were no adequate grounds to reconsider its prior decision regarding the applicability of the Act to the contract, and (2) granted Tran-sco’s motion for summary judgment on the issue of the scope of coverage provided by the insurance policy.

The district court entered its judgment against the Defendants in the amount of $225,000 plus interest. The Defendants timely appealed the district court’s judgment. After the appeal was filed, we granted the request of the Louisiana Oilfield Contractors Association and the Louisiana Pipeline Contractors Association (the amici curiae) to file a brief in support of the Defendants’ position on the coverage of the Act.

II.

STANDARD OF REVIEW

As far as they go, the facts of this case are not disputed. The sole issue is one of the applicability of a statute. As such, we review the decision of the district court de novo.

The accident that gave rise to this litigation occurred off the Louisiana coast on a fixed platform located on the Outer Continental Shelf. Federal law applies to the Outer Continental Shelf by reason of the Outer Continental Shelf Lands Act (OCS-LA).3 In OCSLA, Congress directed appli[988]*988cation of the laws of adjacent states.4 We, therefore, apply Louisiana law in this case.5

In order to determine state law, federal courts look to final decisions of the highest court of the state. When there is no ruling by the state’s highest court, it is the duty of the federal court to determine as best it can, what the highest court of the state would decide.6 Furthermore, as a “Lands Act” court, we are bound, as we are in any other case decided under federal law, by prior determinations of the United States Supreme Court and determinations of this court directly applicable to the issues in this case.

The Louisiana Supreme Court has not interpreted the provisions of the Act with regard to whether the Act applies to contracts concerning natural gas transmission pipelines as such. Likewise, we find no prior Fifth Circuit cases directly applicable to this issue.7 Therefore, it makes no difference whether we sit as a Lands Act court or as a federal court exercising its diversity jurisdiction; under either circumstance our position is analogous to that of a Louisiana appellate court. Furthermore, although we are not bound by state appellate court decisions, we will not disregard them “unless [we are] convinced by other persuasive data that the highest court of the state would decide otherwise.”8

III.

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Related

In Re Orso
219 B.R. 402 (M.D. Louisiana, 1998)

Cite This Page — Counsel Stack

Bluebook (online)
953 F.2d 985, 1992 WL 17378, Counsel Stack Legal Research, https://law.counselstack.com/opinion/transcontinental-gas-pipe-line-corp-v-transportation-insurance-ca5-1992.