Oppen v. Aetna Insurance Co.

• Decision Date: 20 September 1973
• Docket Number: No. 71-1136.,71-1136.
• Citation: Oppen v. Aetna Insurance Co., 485 F.2d 252 (9th Cir. 1973)
• Parties: James J. OPPEN et al., Plaintiffs, Arthur J. Luck and Glenn A. Henry, Plaintiffs-Appellants, v. AETNA INSURANCE CO. et al., Defendants, Union Oil Co. of Calif., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

485 F.2d 252 (1973)

James J. OPPEN et al., Plaintiffs, Arthur J. Luck and Glenn A. Henry, Plaintiffs-Appellants, v.AETNA INSURANCE CO. et al., Defendants, Union Oil Co. of Calif., et al., Defendants-Appellees.

No. 71-1136.

United States Court of Appeals, Ninth Circuit.

September 20, 1973.

James J. Oppen(argued), Santa Barbara, Cal., for plaintiffs-appellants.

Max K. Jamison(argued), McCutchen, Black, Verleger & Shea, Richard B. Goethals(argued), Schell & Delamer, Girard E. Boudreau, Jr.(argued), Allyn O. Kreps, A. Robert Pisano, Richard H. Zahm, Douglas C. Gregg, George C. Bond, Sam A. Snyder, O'Melveny & Myers, Roger A. Ferree, Robert K. Wrede, Alfred T. Smith, McCutchen, Black, Verleger & Shea, Walter O. Schell, Thomas J. Kelley, Jr., Miles W. Newby, Jr., B. J. Roose, Schell & Delamer, Los Angeles, Cal., for defendants-appellees.

Before HAMLEY and WRIGHT, Circuit Judges, and POWELL, District Judge.^*

EUGENE A. WRIGHT, Circuit Judge:

In this appeal we must decide whether plaintiffs may recover certain damages caused by the Santa Barbara oil spill disaster of 1969.Preliminary questions are whether general maritime law applies to plaintiffs' claims and, if so, whether the application of maritime law precludes the plaintiffs from recovering under state law.A panel of three special masters¹ took the evidence by stipulation and concluded that the claims involved should be determined by reference to maritime law, that the maritime remedy was exclusive, and that under maritime law plaintiffs' damages were not compensable.

Subsequently, the Supreme Court substantially altered what had theretofore been the standard used by lower federal courts² in determining whether a tort was a maritime one, Executive Jet Aviation, Inc. v. City of Cleveland, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454(1972) and also broadened the power of the states to apply their own laws to certain maritime torts occurring within their territorial waters, Askew v. American Waterways Operators, Inc., 411 U.S. 325, 93 S.Ct. 1590, 36 L.Ed.2d 280(1973).This court asked the parties for additional briefs considering the effect of those decisions.We now conclude that the decision of the special masters was correct and the judgment of the district court entered thereon should be affirmed.

I.

On January 28, 1969 large amounts of crude oil escaped from the ocean floor underneath and near Platform "A" maintained by appelleeUnion Oil Company of California (Union) for the benefit of itself and other oil companies, Platform "A" was on the outer Continental Shelf of the United States in the Santa Barbara Channel.Escaping oil floated to the surface of the ocean and was carried by wind and tide until it virtually permeated the waters of the Santa Barbara Channel and harbor.

Not surprisingly, many lawsuits were brought against the oil companies and their insurers.Certain of these suits brought in the United States District Court for the Central District of California were, by stipulation, consolidated under the caption "Oppen v. Union Oil Co. of California, Civil No. 69-576-ALS."³

The parties to the consolidated action agreed to proceed before the special masters with the trial of the claims of seven representative boat owners in order to obtain rulings on certain legal issues prior to trial of the other claims.Before this hearing could be held five of the boat owners' claims were settled.

Trial was held on the claims of the other two owners, appellants Henry and Luck.Each owned a private pleasure boat which had sustained physical damage from contact with the oil slick.The boats had also been rendered unusable in the Santa Barbara Channel for a period of time as a result of the spill.The special masters concluded that federal maritime law was applicable to the plaintiffs' claim and thereunder loss of use of a private pleasure craft was not a compensable item of damage.⁴A judgment was rendered accordingly and the district court granted leave to appeal that we might render an opinion prior to the trial of the remaining claims.

II.

Plaintiffs' initial contention was that California law applied to their claims by virtue of the Outer Continental Shelf Lands Act ("Lands Act"), 43 U.S.C. § 1301 et seq.andRodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 363(1969).In our view plaintiffs read too much into the statute and the decision.

Section 1333(a) of Title 43 provides:

"(1)The Constitution and laws and civil and political jurisdiction of the United States are extended to the subsoil and seabed of the outer Continental Shelf and to all artificial islands and fixed structures which may be erected thereon for the purpose of exploring for, developing, removing, and transporting resources therefrom, to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State . . ..

"(2) To the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws and regulations of the Secretary now in effect or hereafter adopted, the civil and criminal laws of each adjacent State as of August 7, 1953 are declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf . . .."

In Rodriguethe Supreme Court was faced with the question of whether the Death on the High Seas Act⁵ or the Louisiana wrongful death statute⁶ applied to suits resulting from two accidents occurring on fixed platforms on the outer Continental Shelf off the Louisiana coast.

Both accidents had their primary locus on fixed platforms.In one the decedent was performing a test high on a derrick rising above the platform and fell to his death on the floor of the structure.In the other the decedent was working on a crane mounted on the platform and being used to unload a barge.As the crane lifted a load from the barge it collapsed and toppled over onto the barge, killing the worker.

In both casesthe Court held that under admiralty principles the Seas Act did not apply.Therefore there was no federal law inconsistent with the Louisiana wrongful death statute and, by virtue of the Lands Act, the latter applied.The Court went on to state categorically that federal maritime law had no more application to accidents occurring on these fixed structures than it would to accidents occurring on natural islands or on piers extending from the mainland.⁷395 U.S. at 366, 89 S.Ct. 1835.

It is clear that the Court by its holding in Rodrigue did not intend to imply that every occurrence arising out of operations conducted on a fixed platform attached to the outer Continental Shelf would necessarily be governed by state law rather than federal maritime law.

There are well recognized situations where admiralty jurisdiction and maritime law apply to a tort whose locus is on land.For example, the Admiralty Extension Act⁸ provides that admiralty jurisdiction applies to any injury caused by a vessel on navigable water though the injury may be consummated on land.And in Continental Oil Co. v. London Steam-Ship Owners' Mutual Ins. Ass'n, 417 F.2d 1030(5th Cir.1969), the court found that the Louisiana Direct Action Statute⁹ was not applicable to a suit arising from the collision of an oceangoing vessel with a fixed drilling platform on the outer Continental Shelf.Although by traditional standards, the "locus" of the tort was on the platform,¹⁰the court found that the Admiralty Extension Act placed this tort within admiralty jurisdiction and that federal maritime law rather than state law applied.

See alsoKimble v. Noble Drilling Corp., 416 F.2d 847(5th Cir.1969), where the court held that the Jones Act¹¹ applied to a seaman injured on an offshore drilling rig, stating:

"The Outer Continental Shelf Lands Act does not oust admiralty law having a basis of applicability independent from the location of the platforms at sea; indeed, it specifically provides that the general law of the upland state is made the applicable federal law only to the extent that it is `not inconsistent with * * * other Federal laws.\' * * * The case at bar is distinguishable from Rodrigue in that the Jones Act and the general maritime law do apply of their own force here; they would still apply, in fact, even if we assumed that Kimble received his injuries in the heart of the Louisiana mainland, so long as he was acting at the time as a seaman in the service of his ship."416 F.2d at 850.

Directly in point is Armstrong v. Chambers & Kennedy, 340 F.Supp. 1220(S.D.Tex.1972).In that case an explosion and fire on an offshore drilling platform resulted in injury to persons and property on a vessel tied alongside the platform.The court held that maritime law rather than Texas law applied to these claims.Id. at 1233.

These decisions indicate that the Outer Continental Shelf Lands Act, as interpreted in Rodrigue, does not preclude the application of maritime law to claims with a maritime nexus wholly apart from the location of the platform on the navigable waters.

III.

The locus of a tort is the place where injury takes effect.T. Smith & Son, Inc. v. Taylor, 276 U.S. 179, 48 S. Ct. 228, 72 L.Ed. 520(1928);Bible v. Chevron Oil Co., 308 F.Supp. 312(E.D. La.1969), aff'd, 460 F.2d 1218(5th Cir.1972).

Here, the injuries were the physical damage to plaintiffs' boats incurred while they were on the water and the interference with the plaintiffs' alleged navigational rights in the Santa Barbara Channel.Necessarily these injuries "took effect" in the navigable waters of the United States.SeeSound Marine & Machine Corp. v. Westchester County, 100 F.2d 360(2d Cir.1938);State Dep't of Fish and Game v. S.S. Bournemouth, 307 F.Supp. 922(C.D. Cal.1969)...