Fifth Circuit upholds Robins Dry Dock and distinguishes anchoring from excavation for “Louisiana One-Call” purposes

Fifth Circuit upholds Robins Dry Dock and distinguishes anchoring from excavation for “Louisiana One-Call” purposes

by: John Berteau

Plains Pipeline, L.P. v. Great Lakes Dredge & Dock Co., 2015 U.S. App. LEXIS 14337, 2015 WL 4745425 (5th Cir. 2015).The present case involved an alleged allision between a dredge owned and operated by the defendant and an underwater oil pipeline owned by Plains Pipeline, L.P. and used by Phillips 66 Pipeline, LLC. The alleged allision occurred when the dredge, seeking to secure its position for anchoring, lowered its dredge ladder and cutter head into the seabed, striking the pipeline.The first issue in this appeal is the district court’s granting of summary judgment against Phillips 66, which sought recovery for economic loss due to costs incurred in transporting its oil by alternative means during the period following the alleged allision. Phillips 66 has no proprietary interest in the damaged pipeline, but argued that the contractual relationship between Plains and Phillips 66, governed by a Service Agreement and an Operating Agreement, gives Phillips 66 a sufficient proprietary interest to recover its economic losses.In a per curiam opinion on August 12, 2015, the U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s granting of summary judgment regarding the economic loss, once again upholding the well-known “Robins Dry Dock Rule,” Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303 (1927). The Fifth Circuit noted that a plaintiff must have complete control over the property, tantamount to full ownership, to create a proprietary interest in the property. Plains and Phillips 66’s contractual relation did not meet the Fifth Circuit’s standard for proprietary interest.Since State of Louisiana ex rel Guste v. M/V TESTBANK, 752 F.2d 1019 (5th Cir. 1985), the Fifth Circuit has consistently applied the rule limiting recovery in maritime cases to plaintiffs who sustain physical damage to a proprietary interest. As recently as 2013 the Fifth Circuit restated in Bertucci Contr. Co., L.L.C. v. Steele, 712 F.3d 245 (5th Cir. 2013) (quoting In re Taira Lynn Marine Ltd. No. 5, LLC, 444 F.3d 371 (5th Cir. 2006)), that “it is unmistakable that the law of this circuit does not allow recovery of purely economic claims absent physical injury to a proprietary interest in a maritime negligence suit.”The second issue in this appeal is the district court’s granting of summary judgment against Plains which sought a ruling that the defendants acted negligently in failing to discharge its notification responsibilities under the Louisiana “One-Call Statute” (La. Rev State. Ann. § 40:1749.11), because the defendants anchoring was tantamount to excavation.The Fifth Circuit affirmed the district court’s granting of summary judgment regarding the dredge anchoring. The plaintiff’s argument on this point was that the lowering of the dredge ladder and cutter head into the seabed was an operation for the purpose of movement of earth and fit the general definition of the term “excavation.” The court was not persuaded by this argument, indicating that although the defendants had knowledge that the act of anchoring would result in the movement of earth, the purpose of anchoring is the securing of a ship, not the movement of earth. By contrast, the purpose of excavation is the movement of earth, and it is excavation, not anchoring that triggers notification responsibilities under the Louisiana “One-Call Statute.”