Ranger Ins., Ltd. v. Transocean Offshore Deepwater Drilling (In re Horizon)

• Decision Date: 29 August 2013
• Docket Number: No. 12–30230.,12–30230.
• Citation: 728 F.3d 491
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: In re DEEPWATER HORIZON. Ranger Insurance, Limited, Plaintiff–Appellee v. Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; Triton Asset Leasing GMBH, Intervenor Plaintiffs–Appellees v. BP P.L.C.; BP Exploration & Production, Incorporated; BP American Production Company; BP Corporation North America, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP America, Incorporated; BP Holdings North America, Limited, Defendants–Intervenor Defendants–Appellants. Certain Underwriters at Lloyd's London, Plaintiff–Appellee v. Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; Triton Asset Leasing GMBH, Intervenor Plaintiffs–Appellees v. BP P.L.C.; BP Exploration & Production, Incorporated; BP American Production Company; BP Corporation North America, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP America, Incorporated; BP Holdings North America, Limited, Defendants–Intervenor Defendants–Appellants.

728 F.3d 491

In re DEEPWATER HORIZON.

Ranger Insurance, Limited, Plaintiff–Appellee

v.Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; Triton Asset Leasing GMBH, Intervenor Plaintiffs–Appellees

v.BP P.L.C.; BP Exploration & Production, Incorporated; BP American Production Company; BP Corporation North America, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP America, Incorporated; BP Holdings North America, Limited, Defendants–Intervenor Defendants–Appellants.

Certain Underwriters at Lloyd's London, Plaintiff–Appellee

v.Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; Triton Asset Leasing GMBH, Intervenor Plaintiffs–Appellees

v.BP P.L.C.; BP Exploration & Production, Incorporated; BP American Production Company; BP Corporation North America, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP America, Incorporated; BP Holdings North America, Limited, Defendants–Intervenor Defendants–Appellants.

No. 12–30230.

United States Court of Appeals,Fifth Circuit.

Aug. 29, 2013.

Michael John Maloney, Maloney, Martin & Associates, David Wallace Holman, Esq., Holman Law Firm, P.C., Byron Charles Keeling, Keeling & Downes, P.C., Houston, TX, for Plaintiff–Appellee.

Steven Lynn Roberts, Rachel Giesber Clingman, Attorney, Sutherland Asbill & Brennan, L.L.P., John Michael Elsley, Esq., Attorney, Royston, Rayzor, Vickery & Williams, L.L.P., Daniel O. Goforth, Goforth Geren Easterling, L.L.P., Houston, TX, Brad D. Brian, Esq., Daniel Benjamin Levin, Munger, Tolles & Olson, L.L.P., Los Angeles, CA, Edward F. Kohnke, IV, Esq., Edwin G. Preis, Jr., Esq., Preis & Roy, A.P.L.C., Kerry J. Miller, Frilot, L.L.C., New Orleans, LA, Kent C. Sullivan, Sutherland, Asbill & Brennan, L.L.P., Austin, TX, for Intervenor Plaintiffs–Appellees.

David B. Goodwin, Allan Baron Moore, Covington & Burling, L.L.P., San Francisco, CA, for Defendants–Intervenor Defendants–Appellants.

Richard N. Dicharry, Evans Martin McLeod, Esq., Phelps Dunbar, L.L.P., New Orleans, LA, Kyle S. Moran, Esq., Attorney, Phelps Dunbar, L.L.P., Gulfport, MS, for Plaintiff–Appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before JOLLY, BENAVIDES, and HIGGINSON, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

The original opinion in this case was filed on March 1, 2013.¹ Because this case involves important and determinative questions of Texas law as to which there is no controlling Texas Supreme Court precedent, the panel, upon the petition for rehearing, unanimously withdraws the previous opinion and substitutes the following certified questions to the Supreme Court of Texas.

CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT TO THE SUPREME COURT OF TEXAS, PURSUANT TO THE TEXAS CONSTITUTION ART. 5 § 3–C AND TEXAS RULE OF APPELLATE PROCEDURE 58.1.

TO THE SUPREME COURT OF TEXAS AND THE HONORABLE JUSTICES THEREOF:

I. Style of the Case: Parties and Counsel

The style of the case is In re: Deepwater Horizon: Ranger Insurance, Limited, Plaintiff–Appellee v. Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; Triton Asset Leasing GMBH, Intervenor Plaintiffs–Appellees v. BP P.L.C.; BP Exploration & Production, Incorporated; BP American Production Company; BP Corporation North America, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP America, Incorporated; BP Holdings North America, Limited Defendants–Intervenor Defendants–Appellants; Certain Underwriters at Lloyd's London, Plaintiff–Appellee,Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; Triton Asset Leasing GMBH, Intervenor Plaintiffs–Appellees v. BP P.L.C.; BP Exploration & Production, Incorporated; BP America Production Company; BP Corporation North America, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP America, Incorporated; BP Holdings North America, Limited, Defendants–Intervenor Defendants–Appellants. This is Case No. 12–30230, in the United States Court of Appeals for the Fifth Circuit, on appeal from the judgment of the United States District Court for the Eastern District of Louisiana. Federal jurisdiction is premised upon 28 U.S.C. § 1333.

The names of all the parties to the case, each of whom is represented by counsel, and the respective names, addresses, and telephone numbers of their counsel, are as follows:

• Ranger Insurance, Limited, plaintiff in the district court and appellee in this court, represented by Michael John Maloney of Maloney, Martin & Associates, Suite 100, 3401 Allen Parkway, Houston, TX 77019–0000, Tel. 713–759–1600;

• Transocean Offshore Deepwater Drilling, Incorporated; Transocean Holdings, L.L.C.; Transocean Deepwater, Incorporated; and Triton Asset Leasing GMBH, intervenor—plaintiffs in the district court and appellees in this court, represented by Steven Lynn Roberts, of Sutherland Asbill & Brennan, L.L.P., Suite 3700, 1001 Fannin Street, Houston, TX 77002–6760, Tel. 713–470–6192;

• BP, P.L.C.; BP Exploration & Production, Incorporated; BP American Production Company; BP Corporation North America, Incorporated; BP Company North America, Incorporated; BP Products North America, Incorporated; BP America, Incorporated; BP Holdings North America Limited, defendants and defendant-intervenors in the district court and appellants in this court, represented by David B. Goodwin of Covington & Burling, L.L.P., 35th Floor, 1 Front Street, San Francisco, CA 94111–5356, Tel. 415–591–6000; and

• Certain Underwriters at Lloyds London, plaintiff in the district court and appellee in this court, represented by Richard N. Dicharry of Phelps Dunbar, L.L.P., Suite 2000, 365 Canal Street, 1 Canal Place, New Orleans, LA 70130, Tel. 504–556–1311.

II. Statement of the Case

Transocean Holdings, Inc. (“Transocean”) owned the Deepwater Horizon, a semi-submersible, mobile offshore drilling unit. In April 2010, the Deepwater Horizon sank into the Gulf of Mexico after burning for two days following an onboard explosion (“Incident” or “ Deepwater Horizon Incident”). At the time of the Incident, the Deepwater Horizon was engaged in exploratory drilling activities at the Macondo Well under a Drilling Contract between the Appellant BP American Production Company's (together with its affiliates, “BP”) predecessor and Transocean's predecessor. This Contract required Transocean to maintain certain minimum insurance coverages for the benefit of BP. The extent to which these policies covered BP's pollution-related liabilities arising from the Deepwater Horizon Incident is the subject of this appeal.

The Insurance Contracts

Transocean held insurance policies with a primary liability insurer, Ranger Insurance Ltd. (“Ranger”), as well as several excess liability insurers led by London market syndicates (“Excess Insurers;” together with Ranger, “Insurers”). Transocean's insurance policy with Ranger provided at least $50 million of general liability coverage, and its policies with the Excess Insurers formed four layers of excess coverage directly above the Ranger Policy that provided at least $700 million of additional general liability coverage. The Ranger and Excess Policies contain materially identical provisions. ² The Policy terms that are important to this case are “Insured” and “Insured Contract.” The Policies define “Insured” as including the Named Insured, other parties, and

(c) any person or entity to whom the “Insured” is obliged by any oral or written “Insured Contract” (including contracts which are in agreement but have not been formally concluded in writing) entered into before any relevant “Occurrence”, to provide insurance such as is afforded by this Policy....

The Policies define “Insured Contract” as follows:

The words “Insured Contract”, whenever used in this Policy, shall mean any written or oral contract or agreement entered into by the “Insured” (including contracts which are in agreement but have not been formally concluded in writing) and pertaining to business under which the “Insured” assumes the tort liability of another party to pay for “Bodily Injury”, “Property Damage”, “Personal Injury” or “Advertising Injury” to a “Third Party” or organization. Tort Liability means a liability that would be imposed by law in the absence of any contract or agreement.³

The Drilling Contract

The Drilling Contract defines BP's and Transocean's obligations to one another, separately identifying the liabilities each party assumes. Article 20 of the Contract is a singular provision that imposes upon Transocean an insurance requirement:

20.1 INSURANCE

Without limiting the indemnity obligations or liabilities of CONTRACTOR [Transocean] or its insurer, at all times during the term of this CONTRACT, CONTRACTOR shall maintain insurance covering the operations to be performed under this CONTRACT as set forth in Exhibit C.

(Emphasis added.) Exhibit C to the Drilling Contract is titled “Insurance Requirements” and establishes the types and minimum level of coverage that Transocean is obligated to maintain. This Exhibit provides that Transocean shall carry all insurance at its own expense and that the policies “shall be endorsed to provide that there will be no recourse against [BP] for payment of premium.” Further, Exhibit C states:

[BP], its subsidiaries and affiliated companies, co-owners, and joint venturers, if any, and their employees, officers and agents shall be named as additional insureds in each of [Transocean's] policies, except Workers' Compensation for liabilities assumed by [Transocean] under the terms of this Contract.

(Emphasis added.)

The Procedural History

Following the Incident, BP...