Ramos v. Liberty Mut. Ins. Co.

• Decision Date: 11 April 1980
• Docket Number: No. 78-1549,78-1549
• Citation: 615 F.2d 334
• Parties: 5 Fed. R. Evid. Serv. 1137 Ernest J. RAMOS et al., Plaintiffs, Cross-Claimants and Intervenors-Appellants, v. LIBERTY MUTUAL INSURANCE COMPANY et al., Defendants, Shell Oil Company et al., Defendants-Appellees. HAROLD LEE ENGINEERING CO. et al., Cross-Claimants and Third Party Plaintiffs-Appellants, v. LIVINGSTON CORPORATION et al., Cross-Claimants and Third Party Defendants- Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 334

615 F.2d 334

5 Fed. R. Evid. Serv. 1137

Ernest J. RAMOS et al., Plaintiffs, Cross-Claimants and Intervenors-Appellants, v. LIBERTY MUTUAL INSURANCE COMPANY et al., Defendants, Shell Oil Company et al., Defendants-Appellees.

HAROLD LEE ENGINEERING CO. et al., Cross-Claimants and Third

Party Plaintiffs-Appellants, v. LIVINGSTON CORPORATION et al., Cross-Claimants and Third

Party Defendants- Appellees.

No. 78-1549.

United States Court of Appeals Fifth Circuit.

April 11, 1980.

Rehearing and Rehearing En Banc Denied June 30, 1980.

Francis E. Mire, Lake Charles, La., for Ernest J. Ramos.

J.L. Cox, Jr., Lake Charles, La., for Booker Drilling Co. and Liberty Mutual Ins. Co.

Jones, Patin, Harper, Tete & Nolen, William M. Nolen, Lake Charles, La., for Harold Lee Engineering Co.

Raggio, Farrar, Cappel & Chozen, Richard B. Cappel, Lake Charles, La., for Gardner-Denver Co.

Woodley & Fenet, Edmund E. Woodley, Lake Charles, La., for Shell Oil Co.

Brame, Bergstedt & Brame, Frank M. Brame, Lake Charles, La., for Oil Field Rental Service Co.

James E. Diaz, Lafayette, La., for The Rucker Co.

Appeals from the United States District Court for the Western District of Louisiana.

Before TUTTLE, FAY and THOMAS A. CLARK, Circuit Judges.

FAY, Circuit Judge:

On this appeal, we review the district court's exclusion of evidence, its ruling that an oil rig is not subject to Louisiana strict tort liability, and its grant of summary judgment to one party. We affirm the grant of summary judgment. As to the other issues, we reverse and remand to the district court.

I. FACTS AND PARTIES' POSITIONS

Ernest J. Ramos and Leon C. Fontenot were injured when the mast of the off-shore oil drilling rig on which they were working collapsed, telescoping within itself. Shell Oil Company (Shell) owned the oil drilling platform, and had contracted with Booker Drilling Company (Booker), the injured parties' employer, for Booker to perform services there. Ramos and Fontenot brought suit to recover for their injuries. ¹ The case mushroomed to include numerous parties. Because virtually each party has a claim against all other parties, we will only attempt to highlight the roles these parties had in the suit. Booker claims its economic loss as a third-party plaintiff, and Liberty Mutual Insurance Company has intervened to recover the Longshoremen and Harbor Workers' benefits it paid Ramos and Fontenot. ² The defendants remaining in this action ³ are Shell, the owner of the platform; Harold Lee Engineering Company (Lee), designer and manufacturer of the mast; Gardner-Denver Company, manufacturer of the drilling rig incorporating the Lee mast; Rucker Company, manufacturer of the pipe rams; Stewart & Stevenson Services, Inc., manufacturer of the accumulator which operates the blowout system; and Oil Field Rental Service Company, bailor to Shell of the rams and blowout preventor.

Lee constructs three-piece telescoping oil derricks or masts. Of the many it has sold, one went to Gulf Offshore Company (GO-4) in 1972, and one to Booker (B-30) in 1973. In the spring of 1972, the GO-4 rig collapsed because of a failure in the pins connecting the upper third of the telescoping mast to the top of the middle third. On March 29, 1974, the B-30 collapsed when the pins failed which connected the lower end of the middle third to the top of the bottom third. Persons injured in the GO-4 failure sued and recovered. In this trial over the B-30 collapse, Mr. Harold Lee testified that the same design calculations were used for GO-4 and B-30. When asked if the GO-4 had collapsed, Mr. Lee answered, "No." Appellants were not allowed to admit evidence of the GO-4 collapse, or of the failure to warn Booker of the GO-4 collapse, and the jury was not instructed to disregard Lee's answer, which went unimpeached because of the court's ruling on the collapse of GO-4.

Approximately ten days after the B-30 collapse, another mast, called B-40, was delivered to Booker. The B-40 mast incorporated design features that strengthened the mast in ways that would prevent collapses such as those occurring in the GO-4 and B-30 masts. The trial court excluded evidence of these improvements.

The trial court granted Shell a directed verdict on the appellants' actions for strict liability under Louisiana Civil Code Ann. Art. 2322 because Shell did not own the mast. The jury, by special verdict, found that Shell, Gardner-Denver, and Lee were not negligent, that the B-30 rig was not defective, and that Booker was negligent. The jury found that a tool joint had hit the rams causing the mast capacity to be exceeded. ⁴ Ramos, Fontenot, Booker, and Liberty Mutual appeal from the judgment. Shell, Lee, and Gardner-Denver perfected their appeals from the summary judgment for Oil Field Rental for consideration in the event this court reverses the judgment. ⁵

No one disputes that at the time of the B-30 collapse, Booker was cementing and abandoning an oil well. During this process, the drilling pipes are withdrawn and at times the pipe rams of the blowout preventor system are closed. The pipe rams are doughnut-shaped pieces of metal and rubber that can contract to encircle the drilling pipe at its narrowest diameter, closing off the well. Where one piece of drilling pipe connects with another, the pipe's shape flares, increasing the diameter. If the drilling pipe is pulled up, the flared end will not pass through closed pipe rams.

The bulk of the trial transcript records the testimony of dueling experts. The appellees attempted to prove that when the Booker driller began to reverse out the drilling pipe, he forgot to reopen the rams or began to pull up the pipe at high speed before the rams were fully opened. According to appellees, the flared end of the drilling pipe crashed into the closed or partially opened rams, exceeding the mast's weight capacity and causing the collapse. Appellees' experts testified that although the rated capacity of the B-30 was 234,600 pounds, the shock load of the collision was about 700,000 pounds. The gist of appellees' argument is that operator error was the sole cause of the collapse.

Experts for appellants painted another picture of the occurrence. Appellants' experts testified that the indentation on the pipe ram did not match up with the drilling pipe. Alternative theories for the shock were that a hole in the outer casing caused the drilling pipe to snag, or that "junk" was left in the drilling hole by one of the defendants. According to appellants' experts, even if the tool joint hit the rams, calculations made from the indentations with all factors taken at their worst possible values indicated that the load was below the rated maximum, at between 198,000 and 220,000 pounds. Appellants' theory on the main cause of the collapse was defective design of the mast. Appellants' experts testified that the front legs of the mast were not designed to carry a sufficient load. The front legs crumpled, pulling out the front pins of the middle section and putting all the weight on the back legs, which caused the load to rest on the remaining two back pins. These pins and the saddles then ripped out of the back legs, collapsing the rig. Experts testified that small metal plates near the pins, better securing of the pins, and slight reinforcement to the front legs might have prevented the collapse. Experts also testified that under the American Petroleum Institute guidelines, all mast designs should include a safety factor. If a safety factor had been included, the mast would have held approximately 437,000 pounds. The core of appellants' argument is that operator error did not occur, but even if it did, a correctly designed mast would not have collapsed. Defects in design were the cause of the injuries.

II. EVIDENCE OF SIMILAR ACCIDENT

Appellants claim the trial court erred in excluding evidence of the prior, similar collapse of a Lee mast. Although the trial court's ruling is not in the record, it apparently believed that evidence of the prior collapse was irrelevant, or that it would have been prejudicial.

Appellants contend that the prior GO-4 collapse is relevant.

"Relevant evidence" means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.

Fed.R.Evid. 401. Evidence of similar accidents might be relevant to the defendant's notice, magnitude of the danger involved, the defendant's ability to correct a known defect, the lack of safety for intended uses, strength of a product, the standard of care, and causation. See Dollar v. Long Mfg., N.C., Inc., 561 F.2d 613, 617 (5th Cir. 1977), cert. denied, 435 U.S. 996, 98 S.Ct. 1648, 56 L.Ed.2d 85 (1978); Nelson v. Brunswick Corp., 503 F.2d 376, 380 (9th Cir. 1974); Wojciechowski v. Long-Airdox, 488 F.2d 1111, 1116 (3d Cir. 1973); Julander v. Ford Motor Co., 488 F.2d 839, 846 (10th Cir. 1973); Bailey v. Kawasaki-Kisen, K.K., 455 F.2d 392 (5th Cir. 1972); Greyhound Lines, Inc. v. Miller, 402 F.2d 134 (8th Cir. 1968); Jones & Laughlin Steel Corp. v. Matherne, 348 F.2d 394, 400 (5th Cir. 1965). In the context of this case's factual disputes, obviously the GO-4 collapse could be relevant to Lee's notice of the defect, its ability to correct the defect, the mast's safety under foreseeable conditions, the strength of the mast, and, most especially, causation.

Because of the impact similar failures can have, the courts have developed principles governing their admissibility:

Whether a reasonable inference may be drawn as to the harmful tendency or capacity (of a product) from prior failures depends upon whether the conditions operating to produce the prior failures were substantially similar to the occurrence in question. The requirement that the prior accident not have occurred at too remote a time is a special qualification of the rule requiring similarity of conditions. The...