Tennessee Gas Pipeline v. Houston Cas. Ins. Co.
| Decision Date | 08 July 1996 |
| Docket Number | No. 95-30739,95-30739 |
| Citation | 87 F.3d 150 |
| Parties | TENNESSEE GAS PIPELINE, also known as Tenneco Incorporated, Plaintiff-Appellant, v. HOUSTON CASUALTY INSURANCE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
James B. Doyle, Woodley, Williams, Fenet, Boudreau, Norman & Brown, Lake Charles, LA, for plaintiff-appellant.
Cliffe E. Laborde, III, Susan Stagg Robinson, Laborde & Neuner, Lafayette, LA, for defendant-appellee.
Appeal from the United States District Court for the Western District of Louisiana.
Before REAVLEY, GARWOOD and JOLLY, Circuit Judges.
An ocean-going vessel, in the tow of a tug whose helmsman was reading a novel, allided with a platform secured to the outer continental shelf some 35 miles off the coast of Louisiana. The platform owner filed suit in state court against a non-diverse insurer of the tug, contending both that the allision gave rise to a federal maritime claim that was "saved to suitors" under 28 U.S.C. § 1333, and that the Louisiana direct action statute gave it the right to proceed against the insurer directly. The insurer removed the case, asserting that the federal courts had federal question jurisdiction because the suit arose under the Outer Continental Shelf Lands Act (OCSLA). 1 The platform owners moved for remand. The district court denied remand, but, finding it a close case, certified the question for interlocutory appeal. 2 We permitted appeal, and we now affirm.
Tennessee Gas Pipeline Company (Tennessee Gas or appellant), a citizen of Texas, owned and operated a fixed platform in West Cameron Block 192, on the outer continental shelf approximately 35 miles off the coast of Louisiana. On September 23, 1992, the barge Iron Mike, in the tow of the tug M/V Gulf Miss, allided with the platform, substantially damaging it and disrupting its operation for a considerable length of time. Houston Casualty Company (HCC or appellee), also a citizen of Texas, is an insurer of the several entities which owned, operated, or chartered the M/V Gulf Miss (collectively Tidewater).
Following the allision, Tennessee Gas sued HCC in the state direct action suit at issue in this appeal. Tennessee Gas admits forthrightly that it attempted to craft its lawsuit to avoid federal removal jurisdiction. First, in order to defeat diversity jurisdiction, and as allowed under Louisiana law, Tennessee Gas sued only HCC, even though HCC underwrote only 4% of the risk covered under Tidewater's insurance policy. And second, Tennessee Gas tried to defeat federal question jurisdiction by asserting only a general maritime claim saved to suitors under 28 U.S.C. § 1333, 3 purposely choosing not to assert a claim under OCSLA.
But even assuming that Tennessee Gas has defeated diversity jurisdiction and that its well-pleaded complaint asserts a maritime claim that is saved to suitors, we nevertheless have removal jurisdiction.
HCC, the removing party, bears the burden of demonstrating the propriety of removal 4 under the statute, 28 U.S.C. § 1441, which reads:
(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending....
(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States, shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
It is well-established that maritime claims do not "aris[e] under the Constitution, treaties or laws of the United States" for purposes of federal question and removal jurisdiction. 5 Tennessee Gas's maritime claim is not removable under the first sentence of 28 U.S.C. § 1441(b) by falling within the admiralty jurisdiction of the federal courts. But it is also well-established that the saving clause does not prevent the removal of maritime claims when original jurisdiction is based on something other than admiralty. 6 As we have stated:
The "saving to suitors" clause does no more than preserve the right of maritime suitors to pursue nonmaritime remedies. It does not guarantee them a nonfederal forum, or limit the right of defendants to remove such actions to federal court where there exists some basis for federal jurisdiction other than admiralty. 7
In this case OCSLA provides an alternative basis for original jurisdiction.
OCSLA declares that "the subsoil and seabed of the outer Continental Shelf appertain to the United States and are subject to its jurisdiction, control, and power of disposition...." 8 OCSLA also declares that "the outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public...." 9 In order to provide expeditious but environmentally safe development of the resources on the OCS, OCSLA explicitly prevents individual states from authorizing mineral leases covering the OCS. 10 Thus OCSLA is an assertion of national authority over the OCS at the expense of both foreign governments and the governments of the individual states.
One purpose of OCSLA was to define the law applicable to the seabed, subsoil, and fixed structures on the OCS. 11 Section 4 of OCSLA 12 makes federal law exclusive in its regulation of the OCS, but in order to fill the substantial gaps in the coverage of federal law, OCSLA adopts the "applicable and not inconsistent" laws of the adjacent states as surrogate federal law. 13 State law was adopted as federal law because Congress knew that federal law, including maritime law, was inadequate to meet the full range of disputes that would arise on the OCS. 14
While OCSLA was intended to apply to the full range of disputes that might occur on the OCS, it was not intended to displace general maritime law. This is clear from both the statute itself and holdings of this court. According to the statute, "this subchapter shall be construed in such a manner that the character of the waters above the outer Continental Shelf as high seas and the right to navigation and fishing therein shall not be affected." 15 Furthermore, 43 U.S.C. § 1333(f) makes clear that the applicability of OCSLA law under 43 U.S.C. § 1333(a) shall not give rise to any inference that other provisions of law (such as general maritime law), do not also apply. 16 It is not surprising, therefore, that this court has declared that where OCSLA and general maritime law both could apply, the case is to be governed by maritime law. 17
OCSLA not only defines the law applicable to the OCS, but also grants federal courts jurisdiction over disputes occurring there. The jurisdictional grant, contained in 43 U.S.C. § 1349(b)(1), is very broad. With exceptions not relevant here, the statute provides that
the district courts of the United States shall have jurisdiction of cases and controversies arising out of, or in connection with (A) any operation conducted on the outer Continental Shelf which involves exploration, development, or production of the minerals, of the subsoil and seabed of the outer Continental Shelf, or which involves rights to such minerals, or (B) the cancellation, suspension, or termination of a lease or permit under this subchapter.
We have no difficulty in deciding that § 1349 grants original jurisdiction in federal court over Tennessee Gas's claim. The statute does not define the term "operation." However, this court has defined "operation" to be "the doing of some physical act." 18 In our case, Tennessee Gas alleged that its platform was affixed to the OCS and was used to extract and transport minerals from the OCS. This was clearly enough physical activity on the OCS to constitute an operation. In EP Operating Ltd. Partnership v. Placid Oil Co., 19 this court considered whether it had jurisdiction under § 1349 over a partition action brought to determine ownership of an offshore platform not then being used. The defendants argued that there was no operation because use of the platform had ceased. We disagreed, noting that construction of the platform and pipes to transport minerals was sufficient physical activity to constitute an operation under § 1349. 20
It is clear that the operation involves "exploration, development, or production" of minerals on the OCS. These terms denote respectively the processes involved in searching for minerals on the OCS; 21 preparing to extract them by, inter alia, drilling wells and constructing platforms; 22 and removing the minerals and transferring them to shore. 23 Tennessee Gas's platform was constructed to aid in the "development" of minerals on the OCS, and Tennessee Gas's allegations that the accident caused losses due to the inability to extract minerals implicates the "production" of minerals on the OCS.
But did the accident "arise out of, or in connection with" Tennessee Gas's operation on the OCS? In Recar v. CNG Producing Co., we applied a "but for" test under § 1349 to resolve whether a dispute "arises out of, or in connection with" an operation, thus granting the federal courts subject matter jurisdiction. 24 Use of the but-for test implies a broad jurisdictional grant under § 1349, but we have concluded that " 'a broad, not a narrow, reading of this grant is supported by the clear exertion of federal sovereignty' " over the OCS. 25
In our case it is clear there would have been no accident but for Tennessee Gas's operation on the OCS. Tennessee Gas argues that the dispute...
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