Fifth Circuit Replaces 6-Factor Test of Maritime Contract Jurisdiction in Favor of 2-Factor Test in Kirby
In January 2018, the Fifth Circuit in In Re: In the Matter of the Complaint of Larry Doiron, Incorporated set aside the “confusing,” six-factor, fact-intensive test of maritime contract jurisdiction from Davis & Sons v. Gulf Oil Corp (5th Cir.), in favor of the conceptual two-factor test laid out by the U.S. Supreme Court in Norfolk Southern Railway Co. v. Kirby. In re Larry Doiron involved a limitation of liability action following a personal injury to a crane operator working on a services contract for oil drilling. The master services contract contained an indemnity provision. If the contract was a maritime contract, the indemnity provision would be enforced. If the contract was not a maritime contract, the Louisiana Oilfield Indemnity Act would apply and preclude indemnity. The District Court applied the six-factor test and found the contract was maritime in nature; a panel of the Fifth Circuit affirmed that judgment on appeal after applying the six-factor test and found that the contract was maritime in nature because a vessel was essential to the completion of the job.
A majority of the active judges then voted to take the case en banc, ultimately adopting the following two-pronged test to determine whether a contract is maritime: (1) is the contract one to provide services to facilitate the drilling or production of oil and gas on navigable waters, and if so, (2) does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract? If so, the contract is maritime in nature. Applying the new test and reversing the panel, the Fifth Circuit held that a work order for "flow-back" services on a stationary production platform which did not anticipate use of a vessel was non-maritime, even though use of a crane barge became necessary.