In In the Matter of Offshore Oil Services, Inc., Offshore owned and operated the M/V Anna. Offshore sued Island Operating Company for exoneration and/or limitation of liability for a personal injury claim by an employee of Island. The question (after a series of earlier rulings): After reaching a settlement with the employee of Island, did Offshore retain the right under the Louisiana Oilfield Anti-Indemnity Act to require Island to defend and indemnify Offshore for its losses?
Says the United States District Court for the Eastern District of Louisiana, No.
On its journey to reach that result, the Court reviewed a short history of recent LOAIA cases involving efforts by settling parties to obtain indemnity. The Court held that Tanksley v. Gulf Oil Corporation is still good law in Louisiana. What does that mean?
The LOAIA nullifies oilfield indemnity provisions that purport to provide for defense or indemnity against loss or liability for damages or bodily injury caused by the sole or concurrent negligence or fault of the indemnitee.
In Tanksley, Chevron (f/k/a Gulf, in case you forgot) sought indemnity from its contractor related to injuries suffered by the contractor’s employee. Chevron and the employee Tanksley agreed to settle without involving the contractor. Chevron sought a trial to determine it was not at fault. The Fifth Circuit determined that Chevron was not entitled to an adjudication of its fault because it voluntarily foreclosed such a determination by settling with the employee. Without a finding that Chevron was free from fault, the LOAIA nullified Chevron’s indemnification rights. In arriving at its result, the Fifth Circuit relied on the Louisiana Supreme Court’s answer to a certified question.
In Tanksley, Chevron was the indemnitee. A subsequent Fifth Circuit case, American Home Insurance Company v. Chevron USA and several Louisiana state appellate court decisions did not overrule Tanksley. For example, in American Home the indemnitor, not the indemnitee, settled with the underlying plaintiff. Those are distinguishing facts.
The court granted Island’s motion to dismiss all of Offshore’s claims.
Here’s a more low key Garth