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New Test to Determine Whether Offshore Oil and Gas Contracts are Maritime in Nature Rendered Final by SCOTUS Denial of Writ

May 22, 2018 E-Alerts

The United States Supreme Court has denied writ in the matter of In Re: Larry Doiron, Incorporated, 879 F.3d 568 (5th Circuit, 2018), rendering final the Fifth Circuit en bancjudgment establishing the new choice of law test in context of maritime law.  Mark Clark (Houston) and Jeff Bridger (New Orleans), partners in Thompson Coe's Marine and Energy Division, are honored to have represented the prevailing parties, Oil States, STS, and Zurich North America.

Bridger and Clark successfully argued for the U. S. Fifth Circuit, en banc, to overturn the long-standing, but highly fact intensive and problematic six factor test of Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313 (5th Cir. 1990).  In re: Doiron provides a simpler, contract-focused analysis in the context of contracts for work performed in the offshore "oil patch" industry.  Specifically, the Doironanalysis is expected to provide greater certainty and predictability about whether hold harmless, defense, indemnity, and additional insured provisions in these contracts are enforceable under maritime law or are subject to Louisiana or Texas anti-indemnity statutes.

Doiron mandates a two part test.  First, is the contract one to provide services to facilitate drilling for or production of oil and gas on navigable waters?  Second, if the answer to part one is "yes," does the contract provide or do the parties expect that a vessel will play a substantial role in completion of the contract? If so, the contract is governed by maritime law.  In re: Doiron is now the rule of law in the Fifth Circuit.  Thompson Coe is proud to have been involved and especially pleased to have prevailed for our clients in this matter.

Access the full opinion here. Additional information regarding the SCOTUS ruling can be found here.