Law of Adjacent State Does Not Apply Under OCSLA Where Federal Maritime Law Applies of its Own Force

In June 2007, Rodney Hamm was injured during his employment with Rodan Marine Services II, LLC (“Rodan”).  At the time of his injury, Hamm was moving equipment between his vessel, the M/V Tara Louisa, and an oil platform permanently affixed to the Outer Continental Shelf.  While performing his task, Hamm became pinned against the side of the vessel by a cargo basket and suffered injuries to his back and hips.

Approximately seventeen months after his injury, Hamm filed suit against Rodan and Island Operating Company, Inc. (“IOC”), the owner of the oil platform.  Hamm alleged admiralty jurisdiction and elected a non-jury trial pursuant to Rule 9(h).  However, IOC and Rodan requested a jury in their answers and the court clerk set the case to be tried to a jury.  Hamm subsequently moved to have the case classified as an admiralty suit and designated for a non-jury trial.  In response, IOC moved alternatively to dismiss or for summary judgment based on the one-year statute of limitations under Louisiana law.  IOC claimed that Louisiana substantive law applied under the Outer Continental Shelf Lands Act (“OCSLA”).  The district court ultimately adopted the magistrate judge’s report and recommendation to grant Hamm’s motion and deny IOC’s.

The defendants moved to have the order certified for interlocutory appeal and the district court obliged.  The Fifth Circuit granted the defendants’ requests for review to consider IOC’s argument that Hamm’s claim should be dismissed or, alternatively, it should be granted summary judgment, because Hamm’s claim was time-barred by Louisiana’s one-year statute of limitations.  Both defendants also argued alternatively that they were entitled to a jury trial.

IOC took the position that Louisiana substantive law applied because OCSLA adopts the law of the adjacent state.  Hamm conceded this would be the case if OCSLA applied but argued federal maritime law, not OCSLA, applied.  Under federal maritime law, Hamm had three years rather than one year to file his suit.

The court explained the three-part test to be applied in determining whether the law of the adjacent state governs as “surrogate federal law.”  First, the controversy must arise on a situs governed by OCSLA.  This includes the subsoil, seabed, or artificial structure permanently or temporarily attached thereto.  Second, federal maritime law must not apply of its own force.  Finally, the state law must be consistent with federal law.

The court focused on the second prong of the test and concluded that federal maritime law applied of its own force.  This determination turned on the allegations of Hamm’s complaint.  Indeed, the test to determine the existence of a maritime tort is the same as that applied to determine admiralty jurisdiction.  This is the familiar test established in Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co., 513 U.S. 527 (1995).  The tort must have occurred on navigable water (or create a land-based injury caused by a vessel on navigable water), it must have a potentially disruptive effect on maritime commerce, and the activity giving rise to the injury must have a substantial relationship to traditional maritime activity.

The court noted that the location aspect of this test was satisfied.  Hamm was injured on the deck of a vessel on navigable waters.  The court also concluded that the incident was potentially disruptive to maritime commerce.  Grubart advised that the type of incident should be characterized at “an intermediate level of possible generality.”  Here, the cause of the injury was an accident during the loading and unloading of cargo and equipment to and from a vessel by crane.  The court reasoned that this type of incident could not only injure seamen but could damage vessels and delay shipment of goods.  The court also found that the general activity involved was substantially related to traditional maritime activity.

Because federal maritime law applied of its own force, Louisiana law could not apply as surrogate federal law under OCSLA.  Therefore, Hamm’s claim was timely under the applicable three-year statute of limitations.

With that determination made, the court turned to IOC’s alternative argument that even if maritime law did govern, it was entitled to a jury trial under the Seventh Amendment.  Although it is well established that there is no right to a jury trial in admiralty suits, IOC argued that this was not an admiralty or maritime suit.  Rather, IOC argued, this was an OCSLA suit in which maritime law applied by virtue of OCSLA’s choice of law provision.  The court was not convinced by this argument, noting that OCSLA was not meant to displace general maritime causes of action any time a court had OCSLA jurisdiction.  Further, the court reasoned that even if there was admiralty jurisdiction and OCSLA jurisdiction, IOC still had no right to a jury trial in light of Hamm’s invocation of Rule 9(h), which provides that where a claim is within a court’s admiralty jurisdiction and also within the court’s subject matter jurisdiction on some other ground, a pleader may designate the claim as admiralty or maritime for purposed of Rule 38(e) which allows for bench trials in maritime cases.

Hamm v. Island Operating Co., Inc., 2011 WL 5570644 (5th Cir. 11/16/11).