Apache Corp. v. Globalsantafe Drilling Co.

• Decision Date: 04 June 2010
• Docket Number: Civil Action No. 06–1643.
• Parties: APACHE CORP. v. GLOBALSANTAFE DRILLING CO., et al.
• Court: U.S. District Court — Western District of Louisiana

832 F.Supp.2d 678

APACHE CORP.

v.GLOBALSANTAFE DRILLING CO., et al.

Civil Action No. 06–1643.

United States District Court,

W.D. Louisiana,

Lafayette Division.

June 4, 2010.

Douglas C. Longman, Jr., Jones Walker et al., Lafayette, LA, Joseph D. Jamail, Jr., Frank M. Staggs, Jamail & Kolius, David J. Bernal, Dominic J. Ricotta, Apache Corp., Houston, TX, Mark Thomas Mahfouz, Gieger Laborde & Laperouse, Peter B. Sloss, Peter B. Tompkins, Murphy Rogers et al., New Orleans, LA, for Plaintiff.

Robert R. Johnston, Fowler Rodriguez Valdes–Fauli, New Orleans, LA, Justin W.R. Renshaw, Mark E. Lewis, Timothy W. Strickland, Fowler Rodriguez Valdes–Fauli, Houston, TX, for Defendants.

MEMORANDUM RULING

REBECCA F. DOHERTY, District Judge.

Pending before this Court is the Report and Recommendation issued by the magistrate judge on the Motion to Strike Demand for Jury Trial [Doc. 60], filed by defendants GlobalSantaFe Corporation, GlobalSantaFe Drilling Company, GlobalSantaFe South America, LLC, and GlobalSantaFeHungary Services, LLC (collectively, “GSF”). The motion is opposed by plaintiff Apache Corporation (“Apache”) [Doc. 62]. In its motion, GSF seeks to strike the demand for jury trial by Apache on grounds the right to trial by jury does not exist under the law applicable to this case.

In her Report and Recommendation,¹ the magistrate judge recommends GSF's motion be granted and Apache's request for a jury trial be stricken. Apache filed an Objection to the magistrate judge's Report and Recommendation [Doc. 138], and GSF filed a Response to Apache's Objection [Doc. 149]. Cognizant that the instant motion impacted more than the discrete issue of whether the case is tried to a jury, and recognizing neither party had completely and thoroughly addressed the myriad of issues raised by the motion that was filed, this Court thereafter, conducted oral argument on the motion on August 5, 2009. At the conclusion of oral argument, this Court permitted the filing of post-argument briefs before issuing a final ruling on the motion. Those briefs have been received by the Court [Docs. 163, 164, 178, & 184]. After having reviewed the record and the applicable case law, as well as Apache's Objection, GSF's Response to Apache's Objection, and the post-argument briefing of both parties, this Court now declines to adopt the magistrate judge's recommendation, finding it to be contrary to law, and the Motion to Strike Jury Demand [Doc. 60] is DENIED.

I. Factual and Procedural Background

This lawsuit arises out of an alleged allision between GSF's jack-up drilling rig, the ADRIATIC VII, and a platform owned by Apache during Hurricane Rita in September 2005. Specifically, Apache alleges GSF's rig broke loose during the hurricane and allided with Apache's platform on the outer continental shelf off the coast of Louisiana at South Marsh Island, Block 128 (hereinafter, “SMI 128”), causing extensive damage to Apache's platform.

In its original Complaint, Apache invokes this Court's jurisdiction under two bases: (1) “admiralty jurisdiction” pursuant to 28 U.S.C. § 1333 and the Admiralty Extension Act, 46 U.S.C. § 30101, and (2) the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331, et seq. (“OCSLA”). With respect to the specific claims alleged by Apache against GSF, Apache alleges the following in its First Supplemental and Amended Complaint:

The allision, and all damages and losses resulting therefrom, were in no way caused or contributed to by any fault or neglect on the part of Apache or any of its joint interest owners in SMI 128, their agents, servants and/or employees. Rather the allision, damages and losses were solely caused by [GSF's] jack-up drilling rig, ADRIATIC VII, and the actions of [GSF], its agents, servants or employees, or parties for whom they are responsible, in the following particulars, among others, all of which will be more fully established at the trial of this matter:

A. Failing to insure that the ADRIATIC VII was capable of working at the water depth and in the wether conditions to which it would be exposed during hurricane season;

B. Failing to properly and timely secure the ADRIATIC VII in light of clear weather information published in advance of the approaching hurricane,including, without limitation, failing to provide a sufficient air gap for the rig;

C. Failing to timely heed the warnings regarding the approach of Hurricane Rita;

D. Failing to maintain the ADRIATIC VII in a seaworthy condition; and

E. Other acts of negligence and/or gross negligence to be established at the time of this trial.

Apache does not make a Fed.R.Civ.P. 9(h)² declaration in its Complaint; Apache requests a jury trial. Similarly, in its original Answer, GSF requests a jury trial. In the instant motion, however, GSF seeks to strike the jury demands of both parties, arguing federal question jurisdiction under the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331, et seq. (“OCSLA”), does not exist under the facts presented, and jurisdiction exists solely under the Court's admiralty jurisdiction, within which there is no right to a jury trial. In response, Apache argues it is entitled to a jury trial because it has asserted an in personam maritime claim against GSF on the “law” side of the Court's jurisdiction pursuant to the Admiralty Extension Act,³ and because the Seventh Amendment guarantees a party's right to a jury trial for claims such as Apache's against GSF.

II. The Magistrate Judge's Report and Recommendation

The magistrate judge concluded this Court has jurisdiction over Apache's claims by virtue of both “admiralty law” (pursuant to 28 U.S.C. § 1333 and the Admiralty Extension Act, 46 U.S.C. § 30101), as well as OCSLA, 43 U.S.C. § 1331, et seq. The magistrate judge concluded, however, that such finding does not end the enquiry, finding “if both general maritime law and OCSLA could apply in a case, then the case is to be covered by the general maritime law to which no right to a jury trial attaches.” ⁴ The magistrate judge also concluded maritime law applies “of its own force” in this matter by virtue of the Admiralty Extension Act, and therefore,the court may not apply adjacent state law as surrogate federal law, suggesting that settled the issue.

Apache objected on grounds the Seventh Amendment guarantees the parties in civil cases the right to a jury trial “in suits at common law, where the value in controversy shall exceed twenty dollars.” Apache cites several cases in which the Fifth Circuit held the plaintiff's right to a jury trial is preserved where multiple jurisdictional bases exist. See, e.g., Powell v. Offshore Navigation, Inc., 644 F.2d 1063 (5th Cir.1981); Romero v. Bethlehem Steel Corp., 515 F.2d 1249 (5th Cir.1975).⁵ Therefore, Apache argues because this Court has dual bases for jurisdiction—“admiralty law” i.e., general maritime law and under the Admiralty Extension Act, and OCSLA—the plaintiff's right to a jury trial is preserved by the Seventh Amendment.

III. Standard of Review

With some exceptions inapplicable for purposes of this motion, a magistrate judge may hear and determine any pre-trial matter pending before a district court. 28 U.S.C. § 636(b)(1). Federal law affords the magistrate judge broad discretion in the resolution of non-dispositive matters. SeeFed.R.Civ.P.72(a). With regard to a non-dispositive matter, a district court will reverse a magistrate judge's ruling only if the party challenging the decision demonstrates that the magistrate's determination was clearly erroneous or contrary to law. Id.; Castillo v. Frank, 70 F.3d, 382, 385–86 (5th Cir.1995).

IV. Law and Analysis

The issues raised by the motion before the Court are akin to loose threads on a sweater, each separate and distinct; however, the more one pulls on one thread, the more of the sweater one unravels. Although the motion is couched within the issue of whether this case is tried to a jury, the motion, also, implicates three separate but interrelated issues: (1) the basis of this Court's jurisdiction, (2) what substantive law is applicable to each of the claims made as against each party, and (3) what procedural law is applicable to the claims made.

The jurisprudence is clear, substantive law to be applied to a matter cannot merely be agreed upon by the parties without some basis in law. As the Fifth Circuit stated in Texaco Exploration & Production, Inc. v. AmClyde Engineered Products Co., Inc. (“AmClyde”), 448 F.3d 760, 772 (5th Cir.2006), this Court cannot rely on the parties' “bare conclusion” that a particular body of substantive law applies in a case. Rather, the Court must determine what body of substantive law applies in a given case.

Additionally, under this particular factual scenario, the argument that how one frames the issue controls the outcome is particularly true. If the issue is framed one way, one result is reached; framed another way, the result is much different. Considering the foregoing, this Court will consider each alleged basis for jurisdiction to determine whether Apache is entitled to a jury trial. Based on the manner in which this Court frames the issues, this Court concludes Apache is entitled to a jury trial as to its claims made against GSF, but agrees the question requires a complex analysis which, at multiple junctures, could end in a different result and invites clarification of the issues by the appellate court.

Because of the breadth of the question presented for review, this Court must begin with a brief discussion of the substantive and procedural law impacting the right of a litigant to a jury trial.

1. The Seventh Amendment and Fed.R.Civ.P. 38

Apache relies heavily on the language of the Seventh Amendment in support of its position that it is entitled to a jury trial, inasmuch as Apache argues it has asserted its claims against GSF on the “law” side of the Court. The Seventh Amendment states:

In Suits at common law, where the value in controversy shall exceed twenty dollars,...