A New Old Thing (LOIA and Indemnity!!)

 It's here! The Fifth Circuit, en banc, has ruled on how to tell whether oilfield service contracts are maritime (indemnity is the best!) or under Louisiana law (no, it's the worst!). 

Brief explanation: the Fifth Circuit decided many years ago that maritime contracts aren't subject to Louisiana law. This has always been a bit of an odd conclusion: two companies in Louisiana contract for work that's definitely going to take part at least in part in Louisiana, and in part on the high seas. (Of those seas, some will be in Louisiana territorial waters, and others will not.) Louisiana cannot pass a law that is effective on that contract. What the what? What if Louisiana increased its minimum wage for vessel crewmembers or offshore workers? "Oh, well sorry Louisiana, that's federal maritime law. You can't touch it." And yet that's where we are. 

From there, things get weird. Let's say you're a jack-up rig, and your thing is doing jack-up rig things. Well, you're a boat. Maritime law. BUT you're also drilling wells and such. Louisiana law under OCSLA. What do we do? We get confused and we say "plugging and abandonment work is oil-related so Louisiana law applies." But we say "casing work is vessel work and maritime law applies." Why? Depends on the Fifth Circuit panel somebody drew a couple decades ago. 

And into this void steps Judge Eugene Davis, with a clear approach, which, in fairness, he is cribbing in large part from the Supreme Court. The Supreme Court ruled that a maritime contract is not one where you look at the site of the accident; it's one where you look at the focus of the contract. Is it salty? If so, it's maritime. If not, it's not. And that's the best description I can find of the in re Larry Dorion opinion. If a vessel plays a "substantial part" in the contract, it's maritime. If it doesn't, it's nonmaritime. What's a substantial part? We'll figure that out. 

I'm not sure how many outcomes this will change, but it will be interesting to see new cases percolate and see how courts determine what is or isn't maritime.