Union Texas Petroleum Corp. v. PLT Engineering, Inc.

895 F.2d 1043, 1990 WL 13945
CourtCourt of Appeals for the Fifth Circuit
DecidedMarch 7, 1990
DocketNos. 88-4823, 89-4118
StatusPublished
Cited by28 cases

This text of 895 F.2d 1043 (Union Texas Petroleum Corp. v. PLT Engineering, Inc.) 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
Union Texas Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d 1043, 1990 WL 13945 (5th Cir. 1990).

Opinion

JOHN R. BROWN, Circuit Judge:

On this appeal from the entry of summary judgments, we hold that the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. §§ 1331-56 (1986 and Supp. Ill 1989), requires the application of Louisiana state law to non-maritime contract disputes arising from the construction of a gathering line on the seabed of the outer Continental Shelf (OCS). We further hold that the subcontractors were entitled to assert liens against the project under the Louisiana Oil Well Lien Act (LOWLA), LSA-R.S. 9:4861 et seq. The availability of the liens was not defeated by the language of LOW-LA or contract provisions. Thus we affirm the summary judgments in favor of the subcontractors.

An Underwater Pipeline

Union Texas Petroleum Corporation (UTP) entered into an offshore construction contract with PLT Engineering, Inc. (PLT). PLT was to design, fabricate, and install a gas transportation system from a platform owned by UTP, and its partners 1 in the Vermilion Area Block 237 off the coast of Louisiana, to a side tap in the Bluewater Pipeline owned by Columbia Gulf Transmission Company and located in Vermilion Area Block 225. The platform and the pipeline at the point of the side tap are located on the OCS. The gas transportation system was built to function as a gathering line. The line is located in its entirety on the OCS. Completed, it belongs to UTP.

The Contractual Network

In order to complete the gathering line, PLT entered into contracts with Brown & Root USA, Inc., State Service Company, Inc. and Sub Sea International, Inc. Additionally, State Service contracted with Power Well Service, Inc. and Gulf Island IV, a jack-up barge. Brown & Root, State Service, Sub Sea and Power Well are referred to collectively as the subcontractors. Brown & Root was contractually obligated to construct the pipeline by welding together joints of pipe supplied by PLT, to bury the line, and to lay the pipe close to the platform at one end and the Bluewater Pipeline at the other. Brown & Root performed labor and services and furnished materials, equipment and supplies includ[1046]*1046ing a barge. After Brown & Root had laid the gathering line, State Service was to fabricate and install tap assemblies to connect it to the platform and the Bluewater Pipeline. State Service also did some burial and testing work using divers. It worked from vessels and chartered Power Well’s Gulf Island IV in connection with its work on the project. Sub Sea provided inspection services performed by divers, to ensure that the other subcontractors complied with contractual specifications. Sub Sea provided vessels for these divers to work from. Most of the work done under the subcontracts took place on the ocean floor or on a riser on UTP’s platform. Some vessels were used for transportation of men and facilities. Others afforded living facilities. The Gulf Island IV was used to fulfill contract obligations.

PLT eventually completed and tested the line. However, through communications with some of the subcontractors, UTP learned that PLT had not paid the subcontractors. Accordingly, UTP invoked the contract provision that allowed it to withhold money from the amount due under the contract with PLT. UTP withheld $420,-045.59 then instituted an interpleader action under F.R.Civ.P. 22 to enable PLT and the subcontractors to determine how the money should be allocated among them. Each of the subcontractors answered and filed counterclaims asserting liens.

After cross motions for summary judgment, the trial court issued a Memoranda Ruling. It held that (i) LOWLA2 was applicable, (ii) the choice of law provisions in the subcontracts3 could not be enforced by UTP because of a lack of privity, (iii) federal admiralty law was not applicable because the activities involved were not traditionally maritime and thus OCSLA applied, and (iv) recordation requirements for the liens were sufficiently complied with by filing in adjacent parishes and with the Department of the Interior’s Mineral Management Division. The trial court then dismissed the interpleader action as inappropriate since LOWLA was applicable. The district court retained jurisdiction under 43 U.S.C. § 1349(b)(1) and 28 U.S.C. § 1331. Eventually final judgments were entered in favor of each of the subcontractors.4 Without challenging the correctness of the subcontractors’ claims or the receipt of their value, UTP appeals from all aspects of the trial court’s rulings.

Breathing Salt Air

The trial court held that Louisiana law, rather than maritime law applied to these contracts by operation of the Outer Continental Shelf Lands Act (OCSLA). 43 U.S.C. §§ 1331-1356 (1986 & Supp III 1989). UTP argues that OCSLA cannot apply to work performed in a maritime setting on the high seas. It places a great deal of reliance on the recent Supreme Court decision in Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 106 S.Ct. 2485, 91 L.Ed.2d 174 (1986). We agree with the trial court and hold that Tallentire does [1047]*1047not impose the application of maritime law in this case.

OCSLA provides in pertinent part:

(1) The Constitution and laws and civil and political jurisdiction of the United States are hereby extended to the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources therefrom, or any such installation or other device (other than a ship or vessel) for the purpose of transporting such resources, to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State....
(2)(A) To the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws and regulations of the Secretary now in effect or hereafter adopted, the civil and criminal laws of each adjacent State, now in effect or hereafter adopted, amended, or repealed are hereby declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artifical islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf....

43 U.S.C. § 1333(a) (1986).

Rodrigue v. Aetna Casualty and Surety Co., 395 U.S. 352, 355-56, 89 S.Ct. 1835, 1837-38, 23 L.Ed.2d 360, 364 (1969), said:

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Bluebook (online)
895 F.2d 1043, 1990 WL 13945, Counsel Stack Legal Research, https://law.counselstack.com/opinion/union-texas-petroleum-corp-v-plt-engineering-inc-ca5-1990.