Cheramie Services v. Shell Deepwater Prod.

• Decision Date: 04 March 2009
• Docket Number: No. 2007-CA-1231.,2007-CA-1231.
• Citation: 14 So.3d 1
• Parties: CHERAMIE SERVICES, INC. and Attecia Cheramie v. SHELL DEEPWATER PRODUCTION, INC. and Filco International, Inc.
• Court: Court of Appeal of Louisiana — District of US

14 So.3d 1

CHERAMIE SERVICES, INC. and Attecia Cheramie v. SHELL DEEPWATER PRODUCTION, INC. and Filco International, Inc.

No. 2007-CA-1231.

Court of Appeal of Louisiana, Fourth Circuit.

March 4, 2009.

Rehearing Denied March 18, 2009.

Vallerie Oxner, Metairie, LA, and Daniel G. Abel, Daniel G. Abel, Inc., Metairie, LA, for Plaintiffs/Appellants.

Mary S. Johnson, Jill T. Losch, Johnson Gray McNamara, LLC, Mandeville, LA, for Defendant/Appellee (Shell Deepwater Production, Inc.).

(Court composed of Judge MICHAEL E. KIRBY, Judge TERRI F. LOVE, Judge ROLAND L. BELSOME.

MICHAEL E. KIRBY, Judge.

Plaintiffs, Cheramie Services, Inc. and Attecia Cheramie, appeal the granting of the Motion for Summary Judgment in favor of Shell Deepwater Production, Inc. (hereinafter "Shell"), the defendant.

In 1996, Attecia Cheramie founded Cheramie Services, Inc. (hereinafter "Cheramie Services"), a small company that provides services to the oil industry, especially labor and personnel to support offshore activities. Cheramie Services did business primarily with Shell.

Cheramie Services first supplied clerks to Shell's Auger platform in the Gulf of Mexico in 1996. On or about August 12, 1997, Cheramie Services entered into a written contract with Shell "to furnish all tools, equipment, materials, labor and supervision in order to provide the furnishing of clerical support for buyer." This contract was called the "Blanket Order Document" and was an agreement for Cheramie Services to provide labor for clerical support for any platform that needed it, not just the Auger platform. This contract was the standard agreement prepared and used by Shell with its independent contractors.

At or about the same time that Shell sent Cheramie Services the blanket order agreement, Shell also sent Cheramie Services a contract that provided for Cheramie Services to provide all the clerical services to the Auger platform. That contract defined its scope as follows:

THIS ORDER, INCLUDING "GENERAL CONDITIONS" AND "WORK ORDER CONDITIONS" ATTACHED, SHALL CONSTITUTE AN AGREEMENT BY CONTRACTOR TO FURNISH ALL TOOLS AND EQUIPMENT, MATERIALS (EXCEPT BUYER-FURNISHED MATERIAL), LABOR AND SUPERVISION IN ORDER TO PROVIDE FOR THE FURNISHING OF CLERICAL SUPPORT FOR BUYER'S AUGER TENSION LEG PLATFORM (TLP).

Shell notes that this six (6) page document does not contain any signatures, other than the username of Rhett Bailey¹ at the top. Plaintiffs argue that these pages formed part of the "Blanket Order Agreement" with Shell.

Cheramie Services placed two clerks on the Auger platform, Kenneth Ward and Kevin Kayes, who each worked fourteen-day shifts. They alternated their shifts so that one of them was always on the platform. The record contains no indication that Cheramie Services' performance was anything less than satisfactory.

In January, 1998, without any warning or notice to Cheramie Services, Shell began paying Filco International, Inc. (hereinafter "Filco") for services provided by Kenneth Ward and Kevin Kayes. For the purposes of this litigation, Kenneth Ward and Kevin Kayes attached affidavits that they voluntarily quit Cheramie Services and went to work for Filco. Filco is a competitor of Cheramie Services. Cheramie Services alleges Shell and Filco conspired to deprive Cheramie Services of its employees and contractual rights.

In the early part of 1998, Shell called Cheramie Services regarding a position for a logistics coordinator on another platform known as "Ursa." Cheramie Services sent Mary Perez to One Shell Square in New Orleans to be interviewed for the position by several Shell employees including Floyd Guidry and Bobby Coker. Mary Perez testified that she was offered the position only if she agreed to work for Filco. Because Ms. Perez needed the job, she agreed to leave the employ of Cheramie Services and work for Filco.

On January 14, 1999, the plaintiffs, Cheramie Services, Inc. and Attecia Cheramie, brought this action against Shell and Filco alleging several causes of action. Plaintiffs allege that defendants conceived and implemented a plan to enhance their respective businesses and competitive positions over the petitioners by misappropriating, stealing, and luring the petitioners' employees away and by committing other acts to be proved at the trial. The petition also alleges misappropriation of trade secrets of Cheramie Services as well as breach of contract and violation of the Louisiana Unfair Trade Practices Act, La. R.S. 51:1401, et seq. ("LUTPA")

Filco failed to file an answer in this matter, and on March 2, 2000, the plaintiffs obtained a default which was confirmed by judgment on September 5, 2000.

On May 2, 2001, Filco paid plaintiffs a settlement sum in return for plaintiffs dismissing their suit against Filco.

On March 16, 2007, the trial court held a hearing on Shell's Motion for Summary Judgment and granted a partial dismissal based on all causes of action except the action for breach of contract. On May 18, 2007, the trial court granted Shell's motion for summary judgment as concerns the breach of contract action and dismissed plaintiffs' petition.

Plaintiffs argue the trial court erred in granting the motion for summary judgment finding that there was no breach of contract and that LUTPA did not apply.

DISCUSSION

At the appellate level, we conduct de novo review of summary judgments. Grant v. American Sugar Refining, Inc., 2006-1180 (La.App. 4 Cir. 1/31/07), 952 So.2d 746.

The first issue we must address is whether LUTPA applies to this case. LUTPA was enacted by the Louisiana Legislature in 1972. The Legislature modeled LUTPA after the Federal Trade Commission Act of 1914 (FTC Act), which set up a regulatory agency with broad powers to curb unfair or deceptive trade practices. In the 1950s, state legislatures began adopting "little FTCs" in an attempt to supplement the FTC in areas where the federal agency did not have the resources to enforce the federal act. While there is no private right of action under the FTC Act, most states, including Louisiana, have created a private right of action as part of their "little FTCs." The Louisiana Legislature adopted the same broad language as that of the FTC Act and left the interpretation of this language and how it should apply to a private cause of action up to the courts.² A primary goal of LUTPA is to further the public interest by creating an environment conducive to fair competition.³

Plaintiffs argue that the actions of Shell and Filco in misappropriating, stealing, and luring plaintiffs' employees away amounted to unfair methods of competition and breached the contract between Shell and Cheramie Services.

La. R.S. 51:1405(A) provides that "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." The broad language of this statute necessarily requires a case-by-case determination of what constitutes an unfair trade practice. Roustabouts, Inc. v. Hamer, 447 So.2d 543 (La.App. 1 Cir.1984). A practice is considered unfair when it offends established public policy and when the practice is unethical, oppressive, unscrupulous, or substantially injurious to consumers, and consumers include business competitors. Roustabouts, 447 So.2d at 548.

La. R.S. 51:1409(A) provides a private right of action to "[a]ny person who suffers any ascertainable loss of money or movable property, corporeal or incorporeal, as a result of the use or employment by another person of an unfair or deceptive method, act, or practice declared unlawful by R.S. 51:1405."

The law requires the deceptive or unfair act to be one in the course of trade or commerce. La. R.S. 51:1402(9) defines "trade" or "commerce" as "the advertising, offering for sale, sale, or distribution of any services and any property, corporeal or incorporeal, immovable or movable, and any other article, commodity, or thing of value wherever situated, and includes any trade or commerce directly or indirectly affecting the people of the state."

The present case deals with the letting out of labor or industry that is governed by La. C.C. arts. 2475 et seq. More specifically, plaintiffs were leasing employees to Shell. Applying the above statutes to the case at hand, we find plaintiffs business arrangement with Shell amounts to the distribution of any services within the definition of "trade" or "commerce" as set forth in La. R.S. 51:1402(9).

Shell argues that the class of persons who have a private right of action under LUTPA is limited to "consumers," and "business competitors." Gil v. Metal Serv. Corp., 412 So.2d 706 (La.App. 4 Cir. 1982). In Gil, this Court denied an employee a remedy under LUTPA because he was neither a consumer nor a business competitor, based upon two prior decisions, stating:

However, this statute has been construed to give protection only to consumers and business competitors. National Oil Service of Louisiana v. Brown, 381 So.2d 1269 (La.App. 4th Cir. 1980), reh. den. 1980; Reed v. Allison & Perrone, 376 So.2d 1067 (La.App. 4th Cir.1979). Gil is not a member of one of the protected classes; he does not have a cause of action under this statute. The trial court's decision is correct.

Gil, supra, 412 So.2d at 707.

La. R.S. 51:1402(1) defines "consumer" as "any person who uses, purchases, or leases goods or services." In the instant case, plaintiffs do not purport to be a "consumer" or a "business competitor" of Shell. However, plaintiffs have alleged that Filco and Shell conceived and implemented a plan to enhance their respective businesses and competitive positions over plaintiffs by, inter alia, misappropriating, stealing, and luring its employees away. In other words, plaintiffs allege a conspiracy between Filco (plaintiffs' business competitor) and Shell.

In Strahan v. Louisiana, 93-0374, p. 6 (La.App. 1 Cir. 8/25/94), 645 So.2d 1162, 1165, the First Circuit accepted the conspiracy theory in the...