Schlumberger Tech. Corp. v. Arthey
| Decision Date | 20 June 2014 |
| Docket Number | No. 12–1013.,12–1013. |
| Citation | 57 Tex. Sup. Ct. J. 840,435 S.W.3d 250 |
| Parties | SCHLUMBERGER TECHNOLOGY CORPORATION, Petitioner, v. Christopher ARTHEY and Denise Arthey, Respondents. |
| Court | Texas Supreme Court |
OPINION TEXT STARTS HERE
David W. Green, Michael G. Terry, Hartline Dacus Barger Dreyer LLP, Houston, TX, for Petitioner.
James Hans Barcus, Lanny D. Ray, Cantrell, Ray & Barcus, LLP, Huntsville, TX, for Respondent.
Under Texas law, a social host has no duty to prevent someone from drinking and driving.1 But in this case, the driver became intoxicated on a small, chartered fishing boat during a business retreat, and plaintiffs contend that their action against the host is governed by federal maritime law, which, they argue, would recognize liability.2 For maritime law to apply, the action must fall within admiralty jurisdiction, and under the tests prescribed by the United States Supreme Court in Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co.,3 it does not. Accordingly, we reverse the judgment of the court of appeals 4 and render judgment for petitioner.
To foster good business relations, Schlumberger Technology Corp. invited employees from some of its business partners, along with several of its salesmen, to a retreat at Schlumberger's expense at the Shoal Grass Lodge in Aransas Pass near the Gulf of Mexico. From Wednesday afternoon to Friday afternoon, Schlumberger had the Lodge provide the twelve guests with rooms, meals, an open bar, and a total of eight to ten hours of bay fishing from small boats with professional guides. The Lodge did not provide alcoholic beverages on the boats, but Schlumberger's outfitter, who arranged the event, could “make it happen”, and did, at guests' request.
One guest was David Huff, an employee of Petrobras America, Inc., a company that did millions of dollars of business with Schlumberger. On Friday morning, Huff, a Schlumberger employee named William Ney, and a guide left the Lodge on a fishing boat between 9:00 and 10:00. Huff and Ney did not remember whether there was alcohol on the boat that morning, though Huff assumed so, and there had been the day before. Ney recalled that Huff was drinking something from a can wrapped in a “koozie”,5 though Huff slept most of the time they were out. The boat returned to the Lodge between 12:30 and 1:00 p.m., and Huff left to drive home.
At 2:34 p.m., some 40 miles from the Lodge, Huff crossed into oncoming traffic and struck a motorcycle ridden by Christopher and Denise Arthey. Both Artheys were severely injured, and as a result, lost their left legs. Other motorists had seen Huff driving erratically, but the investigating officer did not smell alcohol on his breath. Huff was taken to a hospital where, three hours after the accident, his blood alcohol content tested 0.25, more than three times the legal limit.6 An expert retained by the Artheys extrapolated Huff's blood alcohol content at the time of the accident to be 0.31. According to the expert, Huff could not have drunk enough after leaving the boat to reach that level and yet still continue to function, and thus he must have been drinking on the boat. Huff conceded he was “significantly intoxicated” at the time of the accident. He pleaded guilty to intoxication assault, a third degree felony,7 and was given a probated sentence by a jury.
The Artheys sued Schlumberger,8 alleging that it negligently allowed Huff to drink excessively. As noted, Texas law does not recognize such social host liability,9 but the Artheys assert that federal maritime law applies because Huff became intoxicated while on the fishing boat the morning of the accident. The Artheys contend that maritime law would impose liability in these circumstances. The trial court granted summary judgment for Schlumberger, and the Artheys appealed. A divided court of appeals reversed and remanded, concluding that maritime law applies and that fact issues precluded summary judgment.10
We granted Schlumberger's petition for review.11
The parties agree that for maritime law to apply, the Artheys' action must lie within admiralty jurisdiction.12 The test for determining admiralty jurisdiction over tort claims has evolved, as recounted by the United States Supreme Court in Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co.13 Traditionally, “whether the tort occurred on navigable waters” was conclusive.14 “If it did, admiralty jurisdiction followed; if it did not, admiralty jurisdiction did not exist.” 15 Now,
a party seeking to invoke federal admiralty jurisdiction ... over a tort claim must satisfy conditions both of location and of connection with maritime activity. A court applying the location test must determine whether the tort occurred on navigable water or whether injury suffered on land was caused by a vessel on navigable water. The connection test raises two issues. A court, first, must assess the general features of the type of incident involved to determine whether the incident has a potentially disruptive impact on maritime commerce. Second, a court must determine whether the general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity.16
Schlumberger is entitled to summary judgment only if it established as a matter of law that, under these tests, the Artheys' action is not within admiralty jurisdiction.
The evidence clearly presents a factual dispute over whether the Artheys can satisfy the location test. Schlumberger argues that there is no evidence that Huff was drinking alcoholic beverages on the boat the morning of the accident, or even that alcoholic beverages were present, or if they were, that Schlumberger furnished them. But the Artheys' expert's analysis of the level of Huff's intoxication at the time of the accident is some evidence that he must have been drinking on the boat. And even if there is no evidence that Schlumberger provided alcoholic beverages on Huff's boat Friday morning, Ney was present and could see Huff's condition. If Schlumberger had a duty under maritime law to prevent Huff from drinking just before driving home, Ney's failure to take any action is at least some evidence that the duty was breached on the boat.17
Applying the two-part connection test is more difficult. Both parts of the test require an examination of the general character of the incident and the activity giving rise to it, not the specifics.18
This focus on the general character of the activity is, indeed, suggested by the nature of the jurisdictional inquiry. Were courts required to focus more particularly on the causes of the harm, they would have to decide to some extent the merits of the causation issue to answer the legally and analytically antecedent jurisdictional question.19
The first part of the connection test asks whether an incident, described “at an intermediate level of possible generality”, has a potentially disruptive impact on maritime commerce.20 The second part asks
whether the general character of the activity giving rise to the incident shows a substantial relationship to traditional maritime activity [, that is] whether a tortfeasor's activity, commercial or noncommercial, on navigable waters is so closely related to activity traditionally subject to admiralty law that the reasons for applying special admiralty rules would apply in the suit at hand.21
Grubart derived this connection test from two prior cases, Foremost Insurance Co. v. Richardson22 and Sisson v. Ruby,23 and we look to those three cases for guidance in applying the test.
In Foremost, two small “pleasure boats” collided, one used for riding and water-skiing and the other a bass boat.24 The Supreme Court described the incident as “a collision between boats on navigable waters” and the activity giving rise to the incident as “navigation”.25 The Court rejected arguments that a collision between boats not engaged in commerce could not disrupt commerce, and that the use of the boats was not a traditional maritime activity to which uniform rules of admiralty should apply.
The federal interest in protecting maritime commerce cannot be adequately served if admiralty jurisdiction is restricted to those individuals actually engaged in commercial maritime activity. This interest can be fully vindicated only if all operators of vessels on navigable waters are subject to uniform rules of conduct.... For example, if these two boats collided at the mouth of the St. Lawrence Seaway, there would be a substantial effect on maritime commerce, without regard to whether either boat was actively, or had been previously, engaged in commercial activity. Furthermore, admiralty law has traditionally been concerned with the conduct alleged to have caused this collision by virtue of its “navigational rules—rules that govern the manner and direction those vessels may rightly move upon the waters.” The potential disruptive impact of a collision between boats on navigable waters, when coupled with the traditional concern that admiralty law holds for navigation, compels the conclusion that this collision between two pleasure boats on navigable waters has a significant relationship with maritime commerce. 26
The Court added:
Not every accident in navigable waters that might disrupt maritime commerce will support federal admiralty jurisdiction. In [Executive Jet Aviation, Inc. v. Cleveland, 409 U.S. 249, 93 S.Ct. 493, 34 L.Ed.2d 454 (1972) ], for example, we concluded that the sinking of the plane in navigable waters did not give rise to a claim in admiralty even though an aircraft sinking in the water could create a hazard for the navigation of commercial vessels in the vicinity. However, when this kind of potential hazard to maritime commerce arises out of activity that bears a substantial relationship to traditional maritime activity, as does the navigation of the boats in this case, admiralty jurisdiction...
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