Situs of Accident Permits Choice of Law Provision in Master Service Agreement between Operator and Services Contractor for Work on Fixed Platform

In Naquin v. Lin-Bar Marine, Inc., the U.S. District Court for the Eastern District of Louisiana recently examined a claim for indemnity that arose out of personal injuries allegedly sustained by an offshore worker while being transferred from a liftboat to a crew boat. The employer of the injured party was working for a company that owned numerous platforms and wells and had contracted with the employer for various equipment and personnel to be used in its offshore oil and gas drilling operations occurring in the Gulf of Mexico off the Louisiana coast. The platform owner sought indemnity from the employer pursuant to the terms of a Master Service Agreement, arguing that the agreement between the parties was a maritime contract because it was a contract for the drilling of oil and gas aboard a vessel, and because the contract was maritime in nature, the indemnity provision was enforceable. In response, the employer argued that because the work was to be performed on fixed platforms located on the Outer Continental Shelf off the coast of Louisiana, Louisiana law should be applied as the law of the adjacent state and that the Louisiana Oilfield Anti-Indemnity Act rendered the indemnity provision of the Master Service Agreement null and unenforceable.

In determining whether the indemnity obligation was enforceable, the court noted that the law of the adjacent state could only be applied through the Outer Continental Shelf Lands Act (“OCSLA”) and that OCSLA only applied if the controversy arose on an OCSLA situs. The court then noted that the situs determination turns on the physical location of the underlying accident. Finding that plaintiff’s injury occurred while aboard a vessel and further finding that a vessel does not qualify as an OCSLA situs, the court found that OCSLA was not triggered and a choice of law analysis could be made. In reviewing the contract’s choice of law provision which called for the application of maritime or alternatively Texas law, the court found the indemnity obligation enforceable. Because the enforceability of the indemnity obligation was the same under either maritime or Texas law, there was no need for the court to address whether the contract was maritime or non-maritime pursuant to the factors set forth in Davis & Sons, only finding that OCSLA did not apply under the facts of the case.

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