Coast Guard Regulations Requiring Emergency Evacuation Plan Do Not Make Rig Owner Liable For Not Executing the Plan
September, 2002
by Kimbley A. Kearney and
Facts
In Graham Offshore, Inc., Limitation Proceedings, 2002 AMC 1253, 287 F.3d 352 (5th Cir. 2002), two former employees of a mud logging corporation sought compensation for injuries sustained while they were evacuating a drilling rig during Hurricane Danny. Plaintiffs were working aboard an offshore drilling rig located on the Outer Continental Shelf in the Gulf of Mexico. As part of the project, the rig’s time-charterer had chartered a vessel to transport crew and equipment.
In July, 1997, Hurricane Danny formed in the Gulf of Mexico. The time-charterer and rig owner decided that several non-essential workers should be evacuated. The vessel was contacted and ordered to make the voyage to the pick up the workers. The vessel’s captain failed to monitor the path of the hurricane. Upon reaching the rig, no one shared updated weather information with the vessel’s captain or crew. The vessel began its return trip without realizing that it was headed directly into the storm. The vessel encountered rough seas and returned to port after a 15-hour voyage that would have taken no more than 6 hours under normal conditions.
Plaintiffs claimed they were injured during the voyage and sued the vessel owner, the time-charterer, and the rig owner. The trial court awarded damages and apportioned liability among all defendants: 60% to the vessel owner and 20% each to the other defendants. The court found that the rig’s Emergency Evacuation Plan (EEP), required by Coast Guard regulations, imposed a legal duty on the time-charterer and rig owner to transport workers safely, and that both defendants had breached this duty by failing to share weather information with the vessel. The court further found that the time-charterer shared in the vessel owner’s duty of safe transport because the time-charterer exercised at least partial control over the timing, missions, and route of the vessel. The court may also have imposed this hybrid duty on the rig owner to the extent that the workers’ transportation fell within its “sphere of control.”
Defendants appealed. The vessel owner and time-charterer then settled with plaintiffs, leaving only the rig owner’s liability to be decided by the appellate court.
Analysis
The Fifth Circuit reversed, ruling that it was error to hold the rig owner liable for that which was the responsibility of the other two defendants. Citing Hodgen v. Forest Oil Corp., 87 F.3d 1512 (5th Cir. 1996), the court ruled that an EEP does not change the rule that the general mission, route, cargo and timing of a chartered vessel’s voyage are traditionally within the control of the vessel operator and the time-charterer. The court reasoned that the purpose of an EEP is to require offshore operators to foresee and document possible emergency evacuation scenarios; it does not assure that the planned remedies are the only or even best plans in the face of an actual emergency. EEP regulations impose a duty of documentation, not execution. Thus, a rig owner does not assume responsibility for every act done in furtherance of evacuation. The court stated that although failure to share weather information in this case may have been “imprudent,” an EEP’s “barebones allocation of tasks” does not create liability for parties to offshore drilling operations beyond that which is undertaken by contract or imposed by law. For the same reasons, the court held that it was also error to impose the vessel owner’s and time-charterer’s shared duty of safe transport on the rig owner, calling the trial court’s ruling an “unwarranted extension of Hodgen.”
Learning Point:
The Fifth Circuit’s opinion makes clear that Coast Guard regulations requiring an EEP do not disrupt the traditional allocation of duties among the various parties engaged in offshore drilling operations. The purpose of an EEP is solely to require parties to predict potential emergencies and then come up with possible ways of addressing those situations. Parties subject to these regulations should not feel strictly wedded to an EEP for fear of liability given the Fifth Circuit’s recognition that flexibility is required in the face of an actual emergency. Rather, offshore drillers should be encouraged to frequently review and revise their EEPs as relevant information becomes available.
This decision may also serve as precedent for defeating claims based on failure to comply with other Coast Guard regulations and directives where the reason for that failure can be analogized to the circumstances of this case.
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