SDV Insights

Stormy Seas Ahead: 5th Circuit to Review Whether Maritime Law Applies to Offshore Service Contract

Earlier this year, the 5th Circuit applied the Davis factors to determine the validity of an indemnity clause in a Master Services Contract.  In Larry Doiron Inc. et al., v. Specialty Rental Tool & Supply LLP et al., the court affirmed the notion that if a contract provides services on navigable waters aboard a vessel, a maritime contract exists, even if the contract calls for incidental or insubstantial work unrelated to the use of a vessel. With this decision, plaintiffs were granted indemnification for a crane injury and all was well on the open seas.

The 5th Circuit made waves, however, on July 7, 2017, when it agreed to rehear the case en banc. In its petition for rehearing, defendant STS argued that: (1) the original opinion conflicted with Supreme Court precedent by applying tort law principles to a contract case; (2) the court misapplied the Davis factors and the decision was contrary to Davis because the historical treatment of specialty well service work has been established as non-maritime; (3) the court needed to address whether a contract is subject to maritime or land-based law in the context of offshore mineral exploration.

SDV will be on the lookout for the 5th Circuit’s decision on whether it will be smooth sailing for plaintiffs, or if STS will successfully rock the boat.

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