Jackson v. Samedan Oil Corp.

Full title: JACKSON v. SAMEDAN OIL CORP., ET AL

Court: United States District Court, E.D. Louisiana

Date published: Mar 31, 2000

CIV. NO: 98-0472 SECTION: "R"(2) (E.D. La. Mar. 31, 2000)

Opinion

CIV. NO: 98-0472 SECTION: "R"(2)

March 31, 2000

ORDER AND REASONS

SARAH S. VANCE, District Judge.

Before the Court are the motions for summary judgment of defendants, Test, Inc. and Energy Development Corp. Test also moves the Court to strike the expert report of Bernard M. Price. For the following reasons, the Court grants defendants' motions for summary judgment and dismisses Test's motion to strike as moot.

I. BACKGROUND

This case arises out of an injury sustained by plaintiff, Glen Jackson, when a master control panel caught fire aboard a fixed oil platform located in the Gulf of Mexico on October 12, 1997. At the time of the injury, Jackson was a payroll employee of Oilfield Production Contractors, Inc. assigned to work for Samedan Oil Corp. aboard the South Pass 47(a) platform owned by Samedan's wholly-owned subsidiary, Energy Development Corp. Jackson originally filed suit against Samedan and subsequently amended his complaint to assert claims against EDC; Gulf Island Fabrication, the constructor of the platform; Test, Inc., the manufacturer of the control panel; Paragon Engineers Constructors, Inc., the designer of the platform; and Production Services, Inc., the employer of Jimmy Bingham, another individual working aboard the platform at the time of plaintiff's accident. The Court granted plaintiff's motions to dismiss Paragon and Gulf Island without prejudice on January 14, 1999 and March 29, 1999, respectively.

On January 28, 2000, the Court granted summary judgment in favor of defendants Samedan and PSI and dismissed them from the case with prejudice. The Court held that Jackson and his co-worker Bingham were borrowed employees of Samedan. In so concluding, the Court observed that Jackson and Bingham's payroll employers, OPC and PSI, were in the business of supplying workers to various oil companies in the oil and gas industry, including Samedan. OPC and PSI supplied Jackson and Bingham to work for Samedan as junior lease operator and production operator. In turn, Samedan provided all platform workers who worked on SP-47 to EDC pursuant to an "Employee Leasing Agreement," in which Samedan retained "authoritative control as to the details of the services performed by it and the Employees." ( See EDC Mem. Supp. Mot. Summ. J. Ex. F, Employee Leasing Agreement ¶ 12, at 5.) The agreement also stated that Samedan had the sole authority to determine the terms of employment of the platform workers and that EDC had no right to change the employer-employee relationship between any employee and his direct employer. ( See id. ¶ 6, at 3.) Although Samedan did not maintain a physical presence aboard the SP-47 platform, the Court found that Samedan controlled the work Jackson and Bingham did by issuing work orders and requiring that they complete and submit morning production reports and record daily statistics in a Samedan provided logbook, among other tasks. See Jackson v. Samedan Oil Corp., 2000 WL 108880, at *4-5 (E.D. La. Jan. 28, 2000).

Following the January 28, 2000 summary judgment Order, the only parties remaining in this case are Test and EDC. Jackson asserts negligence and strict liability claims against these defendants. ( See First Amend. Compl. ¶ XXI.) In particular, he argues that the control panel which caught fire and injured him was defective and that defendants negligently designed, constructed, installed, repaired and/or maintained the platform and control panel. ( See id.) He premises federal jurisdiction on 28 U.S.C. § 1331 and the Outer Continental Shelf Lands Act, 43 U.S.C. § 1333.

The control panel at issue here was manufactured by Test in accordance with specifications provided by EDC. ( See Test Ex. D, Wise Dep., at 93.) Test built the control panel with all stainless steel tubing and installed it on the SP-47 platform by January 1996. ( See id. Ex. C, Wise Dep., at 26; Ex. E, Wise Dep., at 36.) As installed by Test, the control panel did not contain any plastic, or polyflow, tubing. ( See id. Ex. F., Wise Dep., at 40.) Further, Test never repaired or serviced the panel after installation. ( See id. Ex. I, Wise Dep., at 104.)

After the fire aboard SP-47 on October 12, 1997, plaintiff and other witnesses reported that some polyflow tubing inside the control panel had separated and burned and the control panel had shut down. ( See id. Ex. K, Jackson Dep., at 188-97; Ex. N, Bingham Dep., at 38-39.) It is undisputed that the oil and gas industry uses polyflow tubing in control panels on offshore platforms. ( See id. Ex. F, Wise Dep., at 40.) However, the safe use of polyflow is restricted to low pressure lines. ( See id.) Plaintiff alleges that an unknown third party improperly used polyflow tubing to "repair" the control panel manufactured by Test and installed on SP-47, causing the fire inside the panel and plaintiff's subsequent injuries. There is no evidence, however, that the control panel malfunctioned before the plastic tubing was placed inside it. Nor is there any evidence to explain why, when, or by whom the control panel was modified. When plaintiff's co-worker Jimmy Bingham replaced the polyflow with stainless steel tubing immediately after the accident, the production platform came back on line. ( See id. Ex. S, Bingham Dep., at 63-64.)

Test now moves for summary judgment on the ground that plaintiff has failed to create a genuine issue of fact as to its liability under the Louisiana Products Liability Act. Test also asks the Court to strike the expert report of Bernard M. Price, attached to plaintiff's summary judgment opposition, for violating this Court's scheduling order. EDC moves for summary judgment, claiming that it is not liable for any negligence by its independent contractor Samedan and that no genuine issue of fact exists as to EDC's liability for its own acts under Articles 2315 and 2317.1 of the Louisiana Civil Code.

II. DISCUSSION

A. Legal Standard

Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552 (1986). A court must be satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words, "that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to return a verdict in her favor." Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 178 (5^th Cir. 1990) ( citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511 (1986)), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069 (5^th Cir. 1996). The moving party bears the burden of establishing that there are no genuine issues of material fact.

If the dispositive issue is one for which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. at 2554; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The nonmovant may not rest upon allegations and denials. See id. at 324, 106 S.Ct. at 2552. Finally, the Fifth Circuit has held that "the nonmoving party's burden is not affected by the type of case." Little, 37 F.3d at 1075. Rather, summary judgment is appropriate in "any case" where the nonmoving party fails to come forward with evidence sufficient to support a judgment in its favor. See id.

B. Choice of Law

The Outer Continental Shelf Lands Act, 43 U.S.C. § 1333, et seq., applies to this dispute because plaintiff was injured on a fixed oil platform located on the Outer Continental Shelf, off the Louisiana coast. The OCSLA directs the Court to apply the law of the state adjacent to the controversy to the extent not inconsistent with other federal laws and regulations. See 43 U.S.C. § 1333(a)(2)(A); Rodrigue v. Aetna Cas. and Sur. Co., 395 U.S. 352, 355, 89 S.Ct. 1835, 1837 (1969). The parties have not cited, and the Court has not found, any federal law that conflicts with Louisiana products liability and negligence principles applicable here. Accordingly, the Court applies Louisiana law to this dispute.

C. Liability of Test Under the LPLA

The Louisiana Products Liability Act, LA. REV. STAT. ANN. § 9:2800.51, et seq., establishes the exclusive theories of liability against manufacturers for damage caused by their products. See LA. REV. STAT. ANN. § 9:2800.52 (West 1997). A manufacturer of a product can only be held liable for damage proximately caused by a characteristic of the product that renders it unreasonably dangerous during a reasonably anticipated use of that product. See id. § 9:2800.54(A). A product is unreasonably dangerous in any one of the following four ways: (1) in construction or composition; (2) in design; (3) because of an inadequate warning; or (4) because of a failure to conform to an express warranty. See id. § 9:2800.54(B).

Regardless of how a product is deemed unreasonably dangerous, the plaintiff must establish that his damage was proximately caused by an unreasonably dangerous characteristic of that product. See Brown v. Parker-Hannifin Corp., 919 F.2d 308, 311 n. 9 (5^th Cir. 1990). See also Delery v. Prudential Ins. Co. of America, 643 So.2d 807, 814 (La.App. 4^th Cir. 1994) (essential element of action for failure to warn of product's danger is existence of some reasonable connection between manufacturer's omission and plaintiff's damage) (citing Bloxom v. Bloxom, 512 So.2d 839 (La. 1987)). To establish proximate cause, the plaintiff must prove not only cause-in-fact, but also that the product defect was "the most probable cause" of the injury. See Wheat v. Pfizer, Inc., 31 F.3d 340, 342 (5^th Cir. 1994) (citing Brown, 919 F.2d at 311 n. 9); accord Pilet v. Ciba Geigy Corp., 1997 WL 86353, at *2 (E.D. La. Feb. 26, 1997) (granting summary judgment under the LPLA when plaintiff failed to produce sufficient evidence regarding whether defect in medication caused his seizure). Thus, in Brown, the Fifth Circuit affirmed a directed verdict in favor of the manufacturer of coupling used to seal metal pipes when nothing in the record established that a defect in the coupling, or the failure to label it with a pressure rating, more likely than not caused the product's failure. 919 F.2d at 312. The Court noted that, in order to establish causation, plaintiff "need not rule out every conceivable explanation for the failure, but he must present sufficient evidence to enable a jury to find that either a defect in the product or the defendant's negligence was the most probable cause of the failure of the coupling." Id. Finding an endless number of reasons why the coupling could have failed, including corrosion, normal wear and tear, and abuse, the Court held that plaintiff failed to present sufficient evidence to establish probable cause. See id.

Here, Jackson asserts claims of defective construction, defective design, and inadequate warning against Test. Plaintiff focuses his summary judgment opposition on the claim that Test had a duty to include a warning on the control panel or in the operating and maintenance manual to the effect that the use of plastic tubing to repair certain high pressure lines in the panel is improper and that Test's failure to adopt such a warning violates the LPLA. The Court is skeptical of whether Test owed any duty to warn of the dangers associated with repairing its all-stainless steel control panel, a product not subject to ordinary wear and tear, with potentially flammable polyflow tubing. See LA. REV. STAT. ANN. §§ 9:2800.53(8) 9:2800.54(C) ("reasonably anticipated alteration or modification" of product refers to change in product manufacturer should reasonably expect to be made by ordinary person and change from ordinary wear and tear); Hoyt v. Wood/Chuck Chipper Corp., 651 So.2d 1344, 1352 (La.App. 1^st Cir. 1995) (woodchipper manufacturer not liable under LPLA for failing to warn of dangers associated with alteration of product which it could not reasonably foresee); Goins v. Galion Mfg. Co., 626 So.2d 1200, 1204 (La.App. 3^rd Cir. 1993) ("A manufacturer's duty to anticipate users might replace certain worn out parts on its product does not include the risks occasioned by the use of improper or substandard replacement parts."); Frey v. Travelers Ins. Co., 271 So.2d 56, 59 (La.App. 4^th Cir. 1972) ("it is impossible to place upon a manufacturer of a product the obligation to warn against conceivably defective repairs to its product made by third persons."). But see Hooker v. Super Products Corp., 1999 WL 459360 (La.App. 5^th Cir. June 30, 1999), writs denied, ___ So.2d ___, 1999 WL 1286197 and ___ So.2d ___, 1999 WL 1286212 (La. Dec. 17, 1999) (finding duty to warn when manufacturer clearly anticipated need for repairs and machine manufacturer had previously approved to repair its product was no longer safe). Nevertheless, even if a duty to warn exists, plaintiff's claims fail for another reason. Plaintiff has failed to produce sufficient summary judgment evidence to establish that any defect in the control panel caused his injuries.

The record contains absolutely no evidence regarding who modified the control panel and why. Indeed, there is no evidence that the control panel malfunctioned or that the unknown third party who altered the panel was attempting to repair it. Test's representative, Mitchell Wise, testified that Test manufactured the control panel in accordance with line pressure specifications provided by EDC and with all stainless steel tubing inside. ( See Test Ex. D, Wise Dep., at 93; Ex. E, Wise Dep., at 36.) It is undisputed that Test never placed polyflow tubing on the control panel; nor did it repair or service the panel after installation. ( See Test Ex. I, at 104-05.) With regard to a potential panel malfunction, plaintiff testified that when he looked at the panel after the fire, the burned pieces of polyflow tubing were not even connected to anything inside the panel. ( See Def.'s Ex. L, Jackson Aff., at 286.) His co-worker Bingham testified that he does not know what caused the fire and that the only evidence of a fire inside the panel were the burned pieces of polyflow tubing. ( See Def.'s Ex. O, Bingham Dep., at 51; Ex. CC, Bingham Dep., at 77.)

As in Brown, the Court can hypothesize a number of reasons why an unknown person would have altered the control panel with polyflow tubing, none of which is more likely than the next. In light of the evidence that polyflow tubing is commonly used offshore and that its use on high pressure lines is unsafe, the record here is equally consistent with sabotage of the equipment or reckless disregard of a known risk. ( See Def.'s Ex. G, Wise Dep., at 97; Ex. H, Wise Dep., at 91-92; Ex. CC, Bingham Dep., at 74.) The fundamental defect with plaintiff's claim is that no one knows why, how, or by whom the control panel was modified and nothing suggests that such information will ever be forthcoming. Because nothing in the record establishes a defect in the panel or its repair as the most likely cause of the fire that injured plaintiff, plaintiff's claims under the LPLA must fail for failure to present sufficient summary judgment evidence on proximate causation.

D. Negligence and Strict Liability Claims Against EDC

1. EDC's Liability for Negligent Acts of Samedan

Under Louisiana law, a principal is not generally liable for any negligent acts committed by its independent contractor in the course of performing its contractual duties. See Ainsworth v. Shell Offshore, Inc., 829 F.2d 548, 549 (5^th Cir. 1987). Exceptions to this general rule exist in two circumstances. A principal may be held liable when: (1) the independent contractor engages in an ultrahazardous activity; and (2) the principal retains "operational control" over its independent contractor. See Graham v. Amoco Oil Co., 21 F.3d 643, 645 (5^th Cir. 1994); Ainsworth, 892 F.2d at 549-50. Plaintiff does not contend that his injuries resulted from an ultrahazardous activity. Accordingly, the Court's analysis of EDC's liability for any negligent acts committed by Samedan is limited to whether EDC exercised operational control over Samedan. The operational control inquiry focuses primarily on whether and to what extent the right to control work has been contractually reserved by the principal. See Coulter v. Texaco, Inc., 117 F.3d 909, 912 (5^th Cir. 1997) (citations omitted); Ainsworth, 829 F.2d at 550. Of less significance is the actual control exercised by the principal. See Duplantis v. Shell Offshore, Inc., 948 F.2d 187, 193 (5^th Cir. 1991) ( quoting Ham v. Pennzoil. Co., 869 F.2d 840, 842 (5^th Cir. 1989)); Ainsworth, 829 F.2d at 550-51 ( quoting Hemnphill v. State Farm Ins. Co., 472 So.2d 320 (La.App. 3^rd Cir. 1985)).

Here, the Employee Leasing Agreement between Samedan and EDC, dated August 1, 1996, stated that Samedan's relationship to EDC was that of an independent contractor. ( See EDC Ex. F ¶ 612, at 5.) Further, the agreement expressly assigns "authoritative control over the services performed by Samedan and [its] [e]mployees" to Samedan. ( See id.) Unlike contract provisions in other cases finding no operational control, the contract here does not even give EDC a right to inspect the results of Samedan's work or require that Samedan submit to EDC reports on unsafe work practices or conditions. See Ainsworth, 829 F.2d at 550 (finding no operational control when Master Drilling Agreement between principal and independent contractor provided work must meet approval of principal and was subject to principal's right of inspection); Hebert v. CXY Energy, Inc., 72 F. Supp.2d 681, 687 (W.D. La. 1999) (contract provision requiring independent contractor to observe principal's safety guidelines does not demonstrate operational control); Haynie v. Dynamic Offshore Contractors, Inc., 1991 WL 33615, at *4 (E.D. La. Mar. 7, 1991) (principal did not retain operational control by reserving right to inspect results of contractor's work). The plain language of the contract reveals that EDC did not retain any right to control Samedan's work aboard SP-47. EDC likewise did not retain actual control over Samedan's work aboard SP-47. EDC did not maintain any employee or "company man" aboard the platform. Furthermore, this Court's prior Order granting summary judgment in favor of Samedan expressly found that Samedan exercised control over plaintiff and his co-worker Bingham and their work on the EDC platform. Because EDC did not exercise contractual or actual operational control over its independent contractor's work under the leasing agreement, EDC cannot be held liable for any negligent acts on the part of Samedan.

2. EDC's Negligence for Its Own Acts

Plaintiff claims that EDC is negligent under Article 2315 of the Louisiana Civil Code and strictly liable under Article 2317.1 for failing to warn employees of Samedan's independent contractors working aboard SP-47 of the dangers of using polyflow to repair the control panel and failing to place warning labels on the inside of the panel. The Court notes that the Louisiana Legislature's 1996 amendment to Article 2317.1 effectively eliminated strict liability by adding a knowledge requirement. See Greenhouse v. C.F. Kenner Assocs. Ltd. Partnership, 723 So.2d 1004, 1007 (La.App. 4^th Cir. 1998) (citing Frank L. Maraist and Thomas C. Galligan, Jr., LOUISIANA TORT LAW § 14-1 (1996)). Moreover, under either a theory of negligence or strict liability of recovery, plaintiff must prove duty and causation by a preponderance of the evidence. See Theriot v. Lasseigne, 640 So.2d 1305, 1310 (La. 1994) (citing Ryland v. Liberty Lloyds Ins. Co., 630 So.2d 1289 (La. 1994)). See also Schexnayder v. Bunge Corp., 508 F.2d 1069, 1072 (5^th Cir. 1975) ("Even under the theory of strict liability, causation must be proved.") (citations omitted). Under Louisiana law, cause-in-fact is a "but-for" inquiry in which the court examines whether or not the injury would have occurred but for the defendant's substandard conduct. See Theriot, 640 So.2d at 1310 (citing Faucheaux v. Terrebonne Consol. Govt., 615 So.2d 289 (La. 1993)). "A finding of no cause in fact ends the inquiry into liability." Id.

The record does not support a finding that EDC knew that its equipment would need to be repaired by third parties so as to give rise to any duty to warn against repairing it improperly. Even if the duty to warn was triggered, however, there is no evidence that any warning would have prevented plaintiff's injuries, plaintiff's failure to establish why the unknown third party altered the control panel with polyflow tubing means that no reasonable jury could find that a warning not to repair the panel improperly would have prevented a third party from placing the polyflow tubing inside the control panel, thereby causing the fire which led to plaintiff's injuries. Based on the record evidence, the Court finds that plaintiff has failed to produce sufficient summary judgment evidence on an element essential to his negligence and strict liability claims against EDC — whether defendant's failure to warn caused his injuries.

E. Motion to Strike Plaintiff's Expert Report

After considering the report of plaintiff's expert, Bernard Price, the Court finds that it fails to create a genuine issue of fact sufficient to withstand summary judgment in this case. Defendant's motion to strike that expert report is therefore moot.

III. CONCLUSION

For the foregoing reasons, the Court GRANTS the motions of Test and EDC for summary judgment and dismisses plaintiff's claims against them with prejudice. The Court DISMISSES Test's motion to strike plaintiff's expert report AS MOOT.

New Orleans, Louisiana, this 31st day of March, 2000.