Cutting Underwater Techs. USA, Inc. v. ENI U.S. Operating Co.

• Decision Date: 14 February 2012
• Docket Number: No. 11–30380.,11–30380.
• Citation: 671 F.3d 512
• Parties: CUTTING UNDERWATER TECHNOLOGIES USA, INCORPORATED, Plaintiff, v. ENI U.S. OPERATING COMPANY; ENI Petroleum U.S., L.L.C., Defendants–Cross Claimants–Appellants, v. T. Baker Smith, Incorporated, Counter Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

671 F.3d 512

CUTTING UNDERWATER TECHNOLOGIES USA, INCORPORATED, Plaintiff,

v.ENI U.S. OPERATING COMPANY; ENI Petroleum U.S., L.L.C., Defendants–Cross Claimants–Appellants,

v.T. Baker Smith, Incorporated, Counter Defendant–Appellee.

No. 11–30380.

United States Court of Appeals, Fifth Circuit.

Feb. 14, 2012.

Cade Aaron Evans (argued), Allen & Gooch, Lafayette, LA, for Counter Defendant–Appellee.

Emile Joseph Dreuil, III (argued), Gerald F. Slattery, Jr., Slattery, Marino & Roberts, P.L.C., New Orleans, LA, for Defendants–Cross Claimants–Appellants.

Appeal from the United States District Court for the Eastern District of Louisiana; Eldon E. Fallon, Judge.

Before KING, WIENER, and HAYNES, Circuit Judges.

PER CURIAM:

Appellants Eni U.S. Operating Company and Eni Petroleum U.S., L.L.C., appeal from the district court's grant of summary judgment in favor of Appellee T. Baker Smith, Inc. The appeal concerns construction and application of the Louisiana Oil Well Lien Act, La.Rev.Stat. Ann. § 9:4861, et seq. (2007), on an issue of first impression. The district court authored a thorough and well-reasoned opinion concerning the substantive issues¹ presented, which we attach and adopt as the opinion of this court. Cutting Underwater Techs. USA, Inc. v. Con–Dive, L.L.C., Civil Action No. 2:09–CV–387, 2011 WL 1103679, 2011 U.S. Dist. LEXIS 29325 (E.D.La. Mar. 22, 2011).

AFFIRMED.

CUTTING UNDERWATER TECHNOLOGIES

USA, INC.

VERSUS

CON–DIVE, LLC ET AL.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

CIVIL ACTIONNO. 09–387

SECTION

“L”(2)

ORDER & REASONS

Before the Court is a Motion for Summary Judgment (Rec. Doc. No. 83) filed by T. Baker Smith, Inc. (TBS), a Motion for Summary Judgment (Rec. Doc. No. 75) filed by Eni U.S. Operating Co. and Eni Petroleum U.S., LLC (collectively Eni), and a Motion to Strike the Affidavit of Scot Childress (Rec. Doc. No. 101) filed by TBS. The Court has reviewed the submitted memoranda and the applicable law and is ready to rule. For the following reasons, TBS's motion for summary judgment is granted, and Eni's cross-motion is denied. In addition, the motion to strike is treated as an objection and sustained in part and overruled in part.

I. BACKGROUND AND PROCEDURAL HISTORY

This case arises out of contracts for the provision of services in connection with the removal of a toppled platform on the Outer Continental Shelf (OCS). ¹ In September 2005, Hurricane Rita toppled and dismantled the Vermilion Block 313–A platform located offshore Vermilion Parish, Louisiana. At that time, the platform was no longer in service, the oil and gas wells to which it was connected had been plugged, and the casings connecting the wells to the platform had been cut. In March 2007, Dominion Exploration & Production, Inc., the then-lessee, entered into a contract with Con–Dive, LLC, under which Con–Dive agreed to remove the toppled platform. In turn, Con–Dive subcontracted various work to T. Baker Smith, Inc. (TBS), Cutting Underwater Technologies USA, Inc., and Cheramie Marine LLC. In its contract with Dominion, Con–Dive warranted that it would not allow any liens to be asserted over Dominion's property.

In June 2007, Dominion conveyed 50 percent of its record title and operating rights in the lease to Eni Petroleum. Together with Eni Operating, Eni Petroleum also acquired all of Dominion's contractual rights and obligations relating to the lease. Con–Dive eventually failed to pay TBS and the other subcontractors for the services they rendered. In response, in October 2008, Cutting Underwater filed suit in state court against Con–Dive. In November and December 2008, TBS, Cutting Underwater, and Cheramie Marine also recorded liens over Eni's property in the records of Vermilion Parish. In January 2009, Cutting Underwater amended its state court petition, adding Eni as defendant. In its petition, Cutting Underwater asked that Con–Dive be held liable for breach of contract and that its lien over Eni's property be recognized as valid under the Louisiana Oil Well Lien Act (LOWLA), La.Rev.Stat. Ann. § 9:4861 et seq.

Eni subsequently removed the suit to this Court on the basis of federal-question jurisdiction under the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331 et seq. A flurry of pleadings were then filed, resulting in various additional claims being asserted. In particular, Eni made claims against Con–Dive for breach of contract and against Cutting Underwater, TBS, and Cheramie Marine for invalid liens under LOWLA.² Similarly, TBS and Cheramie Marine asserted claims against Con–Dive for breach of contract and against Eni for recognition and enforcement of their liens.³ In September 2009, Cheramie Marine settled all of the claims that were asserted by it and against it, and in October 2009, Cutting Underwater did the same. This left in place the lien-related claims that TBS and Eni asserted against each other, as well as the breach-of-contract claims that TBS and Eni asserted against Con–Dive.

In January 2010, TBS filed a motion for summary judgment on its breach-of-contract claim against Con–Dive. In February 2010, the Court granted the motion as unopposed and, on the motion of TBS, entered judgment pursuant to Federal Rule of Civil Procedure 54(b). Since then, however, Con–Dive has not satisfied that judgment. As a result, the dispute between TBS and Eni regarding the validity of TBS's lien remains pending, and it is that which is the subject of the present motions.⁴

II. PRESENT MOTIONSA. Cross–Motions for Summary Judgment

In its Motion for Summary Judgment and its opposition to TBS's cross-motion, Eni argues that TBS's lien is invalid because it did not perform an “operation” within the meaning of LOWLA. La.Rev.Stat. Ann. §§ 9:4861(4)(a), 9:4862(A)(1). In particular, Eni asserts that the work undertaken by TBS was neither performed “for the purpose of ... abandoning a well” nor done “on a well site.” Id. § 9:4861(4)(a). Eni argues that the wells attached to the Vermilion Block 313–A platform had been plugged and that the casings that connected the platform to the wells had been cut in 1999. According to Eni, this forecloses a finding that any work subsequently performed involves “abandoning a well.” Id. Eni also contends that for work to be performed “on a well site,” it must have been “physically carried out” on such a site.

In its own Motion for Summary Judgment and its opposition to Eni's cross-motion, TBS asserts that its lien is valid under LOWLA, and it disputes both of the arguments raised by Eni. TBS states that the work that it performed was a necessary part of “abandoning a well” within the meaning of the statute. TBS emphasizes that once wells connected to a platform are no longer in production, the applicable federal regulations require the lessee not only to plug the wells, but also to remove the production platform. TBS argues that in light of this requirement, the work that it performed is part and parcel of the process by which Eni abandoned the depleted wells. In addition, TBS asserts that the work it performed was on a “well site” as defined by LOWLA because it was present in Vermilion Block 313 near the vicinity of the platform in order to deliver the survey and positioning services that it was asked to provide.

B. Motion to Strike the Affidavit of Scot Childress

Separately, TBS has filed a Motion to Strike the Affidavit of Scot Childress, which Eni has supplied along with its Motion for Summary Judgment (Rec. Doc. No. 75–6). TBS specifically objects to paragraph 11 of the affidavit on the ground that it states an ultimate conclusion in this case. TBS also challenges paragraphs 7 through 13 of the affidavit on the ground that the statements are not based on personal knowledge. Eni opposes the motion. Eni argues that Mr. Childress's statement in paragraph 11 does not state an ultimate conclusion. It also asserts that given Mr. Childress's employment with Dominion and Eni, he has personal knowledge to testify as to the matters addressed in paragraphs 7 through 13 of his affidavit.

III. LAW AND ANALYSIS

TBS's Motion to Strike affects the scope of the record that is to be considered in deciding the parties' cross-motions for summary judgment. Accordingly, the Court will first address that motion and then discuss the cross-motions.

A. Motion to Strike the Affidavit of Scot Childress

Rule 56 of the Federal Rules of Civil Procedure allows a party to provide an affidavit to support or oppose a motion for summary judgment. See Fed.R.Civ.P. 56(c)(1)(A). Such affidavits, however, “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant ... is competent to testify on the matters stated.” Id. 56(c)(4). Prior to December 1, 2010, the proper method by which to attack an affidavit was by filing a motion to strike. See, e.g., Rushing v. Kan. City S. Ry. Co., 185 F.3d 496, 506 (5th Cir.1999), superseded on other grounds by Fed.R.Evid. 103(a); see also 10B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2738 (3d ed. 2004). Under the now-applicable Rule 56(c)(2),⁵ however, it is no longer necessary for a party to file such a motion; instead, the party may simply object to the material. See Fed.R.Civ.P. 56 advisory committee's note to 2010 amendments (“There is no need to make a separate motion to strike.”). In light of this change, TBS's Motion to Strike will be treated as an objection.

As noted above, TBS objects to paragraph 11 of Mr. Childress's affidavit on the ground that it states an ultimate conclusion. Though resisted by Eni, this argument has merit. Indeed, “ultimate or conclusory facts and conclusions of law ... cannot be utilized on a summary-judgment motion.” Wright & Miller, supra, § 2738; see also Galindo v. Precision Am. Corp., 754 F.2d 1212, 1221 (5th Cir.1985). Here, one of the questions that is presented by the cross-motions is whether the work that TBS performed is an “activity for...