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Helix Energy Solutions Group, Inc. v. Gold

Supreme Court of Texas

June 16, 2017

Helix Energy Solutions Group, Inc., Helix Well Ops, Inc., and Helix Offshore International, Inc., Petitioners,
Kelvin Gold, Respondent

          Argued January 11, 2017

         On Petition for Review from the Court of Appeals for the Fourteenth District of Texas

          Justice Devine delivered the opinion of the Court, in which Chief Justice Hecht, Justice Willett, Justice Guzman, and Justice Brown joined.

          John P. Devine Justice

         The Jones Act provides a compensation scheme designed to mitigate the unique perils faced by "seamen"-maritime workers with a substantial connection to a "vessel in navigation." Chandris v. Latsis, 515 U.S. 347, 357 (1995). But without straightforward statutory definitions, and with courts left to wade into a historically murky body of admiralty law, an array of vexing (and inevitable) questions persists. What must a maritime worker do to bear an adequate connection to a vessel? What is a vessel in the first place? And how do we know whether a vessel remains in navigation when it exits the water for some time? Answering these questions has proven to be, as the Supreme Court has charitably described the endeavor, "a difficult task." Id. at 358.

         Despite recent clarifications on the subject, questions remain. Be that as it may, we are not without enough clarity to guide our resolution of today's case. That task requires us to determine whether a certain ship-taken out of service, subjected to a 20-month conversion process, and unable to engage in transportation during the entirety of the claimant's onboard employment-was "out of navigation" and thus outside the Jones Act. We must determine also whether that question can be answered as a matter of law.

         We answer both questions in the affirmative; the vessel was out of navigation as a matter of law. We accordingly reverse the court of appeals, which found a fact question, and we reinstate the trial court's summary judgment in favor of the ship's owner.

         I. Background

         In August 2012, Helix Energy Solutions Group purchased the HELIX 534 for $85, 000, 000. Prior to the purchase, the 534 was laid up in a shipyard. And upon purchase, another vessel towed the 534 to the Jurong Shipyard in Singapore. The 534 served her previous owner as a drill ship, a ship that drills wells. But Helix purchased the 534 with plans to convert her into a well-intervention ship, a ship that services pre-existing offshore wells.

         Work began upon the 534's arrival in Singapore. Due to the extent of the conversion, Helix turned the 534 over to the control of contractors at the shipyard for completion of the bulk of the overhaul; though, Helix employees assisted with minor repairs. The conversion involved, among other things, removing obsolete equipment, configuring and installing well-intervention equipment, and overhauling the engines, thrusters, generators, and in-line propulsion equipment. The work done on the propulsive components rendered the 534 unable to navigate on her own for a substantial portion of the conversion process.

         Though Helix initially expected the conversion to take five or six months (ending in mid 2013), unanticipated work, labor issues, and trouble procuring certain parts delayed the conversion. In September 2013, with work still to be done, Helix dry-towed[1] the 534 from Singapore to Galveston, Texas. In April 2014, 20 months after work began, the 534 entered well-intervention service for the first time under Helix's control. In total, the 20-month conversion cost $115, 000, 000, or roughly 135% of the 534's purchase price.

         Today's dispute involves a particular Helix employee, Kelvin Gold. In November 2012, near the beginning of the project, Helix hired Gold as an "able bodied seaman, " anticipating that he would serve as an offshore worker. Consequently, Gold's responsibility was to familiarize himself with the craft and to assist with the overhaul (painting, cleaning, taking inventory, etc.). Gold served two alternating 28-day hitches between early December 2012 and March 2013, along with a partial hitch in late April 2013. During the entire time Gold worked aboard the 534 (almost five months), the ship lacked the ability to navigate on her own due to the overhaul of her engines.

         Gold reported injuries suffered aboard the 534 in December 2012 and in April 2013. Gold then stopped work aboard the 534 in April 2013, and his employment ceased in November 2013. Helix paid Gold "maintenance and cure" benefits, benefits available to an injured Jones Act seaman. But Helix terminated the payments after Gold allegedly failed to follow his doctor's orders.

         Gold then sued Helix and Helix's affiliated entities for additional maintenance-and-cure benefits as well as actual and punitive damages. Gold claimed these remedies under the Jones Act as a "seaman" aboard a "vessel in navigation." Helix disagreed that the Jones Act applied to Gold's lawsuit and moved for summary judgment on the ground that the 534, while undergoing a major overhaul, was not a vessel in navigation. The trial court agreed and granted Helix's motion.

         Gold appealed, and the court of appeals reversed. 482 S.W.3d 638, 650 (Tex. App.-Houston [14th Dist.] 2015). The court observed that Helix failed to "conclusively prove that the [534] was totally deactivated or out of service for an extended period of time before Gold's injury." Id. In turn, the court held, "A reasonable fact-finder could determine, based on the Helix 534's physical characteristics and activities, that the ship was designed to a practical degree for carrying people or things over water, and the Helix 534's use as a means of transportation on water was a practical possibility." Id.

         We granted Helix's petition for review.

         II. Standard of Review

         We review a trial court's grant of summary judgment de novo. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). To prevail on a traditional motion for summary judgment, "a movant must show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law." Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002) (citing Tex.R.Civ.P. 166a(c)). When a movant conclusively negates an essential element of a cause of action, the movant is entitled to summary judgment on that claim. Id.

         Furthermore, "we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor." Id. But we cannot disregard "conclusive evidence"-that evidence upon which "reasonable people could not differ in their conclusions." City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). Typically, evidence is conclusive when "it concerns physical facts that cannot be denied" or "when a party admits it is true." Id. at 815.

         Here, Helix bore the burden to conclusively negate the "seaman" element of Gold's Jones Act claim.

         III. The Jones Act

         The Jones Act provides that,

A seaman injured in the course of employment . . . may elect to bring a civil action at law, with the right of trial by jury, against the employer. Laws of the United States regulating recovery for personal injury to, or death of, a railway employee apply to an action under this section.

46 U.S.C. § 30104. The heightened legal protection under the Jones Act "grow[s] out of the status of the seaman and his peculiar relationship to the vessel, and as a feature of the maritime law compensating or offsetting the special hazards and disadvantages to which they who go down to sea in ships are subjected." Chandris, 515 U.S. at 355 (internal quotations and citations omitted).

         So who qualifies as a seaman? The Jones Act does not define the term, which left courts to apply the "general maritime law [that existed] at the time the Jones Act was enacted." Id. Alas, the traditional admiralty definition was unhelpful; a seaman was "a mariner of any degree, one who lives his life upon the sea." Warner v. Goltra, 293 U.S. 155, 157 (1934). Fortunately, Congress gave some context to the term in 1927 when it enacted the Longshore and Harbor Workers' Compensation Act (LHWCA), which provides coverage to "land-based maritime workers but which also explicitly excludes from its coverage 'a master or member of a crew of any vessel.'" Chandris, 515 U.S. at 355 (quoting 44 Stat. (part 2) 1424, as amended, 33 U.S.C. § 902(3)(G)). In effect, Congress's creation of "mutually exclusive" compensation regimes meant that the LHWCA's exclusion actually helped to define the term "seaman" in the Jones Act-i.e., a Jones Act seaman must be a member of a crew of a vessel. See McDermott Int'l, Inc. v. Wilander, 498 U.S. 337, 347 (1991) (explaining the relationship between the acts). But not just any vessel will do. The Supreme Court later clarified that a Jones Act seaman must bear a satisfactory connection to a "vessel in navigation." Roper v. United States, 368 U.S. 20, 22-23 (1961).

         After decades of navigating a labyrinth of definitions and admiralty buzzwords, the Supreme Court identified two basic components of Jones Act coverage: the maritime worker must (1) be a crew member who does the "ship's work" and (2) have a substantial connection to a vessel in navigation. Chandris, 515 U.S. at 368. But, like most aspects of admiralty law, there is more to this standard than meets the eye.

         A. Crew Member Who Does the Ship's Work

         The Supreme Court has clarified that the worker's duties must "contribut[e] to the function of a vessel or to the accomplishment of its mission." Wilander, 498 U.S. at 355. The requirement thus looks to the nature of the person-what does he or she do in relation to the watercraft?

          Here, Gold was employed in anticipation of being an offshore worker, and his duties plainly "contribute[d] to the function" of the 534. Chandris, 515 U.S. at 368. Helix does not contend that it is Gold's job description that renders him outside Jones Act coverage-Helix says simply that the 534's conversion took her out of navigation. The present dispute therefore does not hinge on Gold's particular duties while aboard the 534.

         B. Substantial Connection with a Vessel In Navigation

         A Jones Act seaman must bear a requisite connection-one that is "substantial in terms of both its duration and its nature"-to a vessel in navigation. Id. Whether the 534 was a vessel in navigation is implicated directly by Helix's motion for summary judgment.

         What is a vessel in navigation? Again, Congress provided some helpful context for the phrase. In Section 3 of the Rules of Construction Act, Congress defined the word "vessel" to mean "every description of water-craft or other artificial contrivance used, or capable of being used, as a means of transportation on water." 1 U.S.C. § 3. Drawing on that definition and decades of caselaw, the Supreme Court emphasized in Stewart v. Dutra Construction Co. that the vessel-in-navigation requirement asks "whether the watercraft's use as a means of transportation on water is a practical possibility or merely a theoretical one." 543 U.S. 481, 496 (2005) (internal quotations and citations omitted). And in making that determination, the Supreme Court recently stressed the importance of considering objective evidence of the status and characteristics of the watercraft in lieu of subjective evidence of the owner's intent. Lozman v. City of Riviera, 568 U.S. 115, 145 (2008).

          Though the vessel-in-navigation issue is couched as a singular requirement, two distinct situations can arise. This distinction plays an important role in conceptualizing the crux of today's dispute and in deciding its ultimate outcome.

         1. The Design of the Structure

         The first potential question under the in-navigation framework involves the type of structure-is it designed to function in the manner of a seafaring "vessel, " or does it merely happen to float? A classic example of this dilemma is Lozman, in which the Court analyzed whether a 60-foot by 12-foot floating home was a vessel. 568 U.S. at 118. The Court concluded the home was not a vessel, reasoning that "[t]he home has no other feature that might suggest a design to transport over water anything other than its own furnishings and related personal effects. In a word, we can find nothing about the home that could lead a reasonable observer to consider it designed to a practical degree for 'transportation on water.'" Id. at 122. Numerous cases involve similar design-based questions. See, e.g., Martin v. Boyd Gaming Corp., 374 F.3d 375, 377 (5th Cir. 2004) (a moored floating casino served no transportation function and was not a vessel in navigation); Billiot v. Great Lakes Dredge & Dock Co., Civ. A. No. 92-2813, 1993 WL 322906, at *3 (E.D. La. Jun. 29, 1993) (a barge configured solely for use as a work platform was not a vessel in navigation).

         The conversion of the 534 presents no such controversy. Prior to Helix's purchase of the 534, the craft functioned as a seafaring vessel. She transported maritime workers in the course of her well-drilling role-precisely the type of function performed by a Jones Act vessel. And the 534's conversion, though it gave her an added well-servicing capacity, did nothing to change her transportation-facilitating design. In plain English, the 534 was, is, and (unless transformed into something like a stationary casino) will be a boat. Helix does not suggest otherwise.

         2. Major Overhauls

         Different entirely, though also under the vessel-in-navigation umbrella, is the principle that "major renovations can take a ship out of navigation, even though its use before and after the work will be the same." Chandris, 515 U.S. at 374 (citing McKinley v. All Alaskan Seafoods, Inc., 980 F.2d 567, 570 (9th Cir. 1992)). That is, even when a structure is unquestionably designed to engage in maritime transportation, an extended overhaul can remove the structure from navigation. McKinley, 980 F.2d at 570. This rule is deeply ingrained in admiralty, dating back to West v. United States, in which the Supreme Court held as a matter of law[2] that a vessel withdrawn from service and undergoing a major overhaul was not in navigation. See 361 U.S. 118, 121-22 (1959). Lower courts have likewise acknowledged and applied the rule. See, e.g., Wixom v. Boland Marine & Man. Co., 614 F.2d 956, 957 (5th Cir. 1980) (a three year, $25, 000, 000 conversion that included major structural changes such that the ship's engine and propellers were inoperable for "at least some of the time" rendered the ship out of navigation).

         Yet, at the same time, "a vessel does not cease to be a vessel when she is not voyaging, but is at anchor, berthed, or dockside, " even when she "is taken to a drydock or shipyard to undergo repairs in preparation to making another trip." Chandris, 515 U.S. at 373-74 (citations and internal quotations omitted). Lower courts have echoed this sentiment; temporary and routine repairs do not take otherwise seaworthy vessels out of navigation. See, e.g., Romero v. Cajun Stabilizing Boats, Inc., 307 Fed.App'x 849, 851 (5th Cir. 2009) (holding that a vessel that was dry-docked for several weeks for routine repairs remained in navigation as a matter of law).

         The dichotomy, phrased in the Court's language from West, is between ordinary, expected "ship's work" and "complete overhaul[s]." 361 U.S. at 122; see also Stewart, 543 U.S. at 494 (explaining that a vessel does not move out of Jones Act coverage when "berthed for minor repairs"). Of course, that distinction is a matter of "degree"-at some point "repairs become sufficiently significant that the vessel can no longer be considered in navigation." Chandris, 515 U.S. at 374. And in evaluating where a ship falls on the spectrum, the Supreme Court enshrined a touchstone: "the focus should be upon the status of the ship, the pattern of the repairs, and the extensive nature of the work contracted to be done." Id. (citing West, 361 U.S. at 122). Over the years, courts have utilized various proxies in evaluating the extent of overhauls, but no exhaustive list or uniform approach has emerged.

         It bears emphasis too that the distinction between routine, temporary repairs and major overhauls is not an arbitrary one. The distinction makes good sense in the greater context of the Jones Act, which codified "a feature of maritime law compensating or offsetting the special hazards and disadvantages to which they who go down to sea in ships are subjected." Id. at 355 (citations omitted). When a maritime worker suffers an injury during a routine repair, we can confidently attribute the worker's injury to a risk associated with "go[ing] down to sea in ships." Id. After all, every seagoing ship (and thus every seaman) experiences routine repairs from time to time. But a maritime worker whose only connection is to a ship undergoing a nonroutine, major overhaul incurs risks more akin to those faced by land-based construction workers-a danger better addressed by the Longshore and Harbor Workers' Compensation Act. See 33 U.S.C. § 902(3) (covering those non-seamen engaged in maritime employment, such as longshoremen "and any harbor-worker including a ship repairman, shipbuilder, and ship-breaker").

         Finally, we must address the impact of Stewart, one of the Supreme Court's most recent forays into in-navigation territory. Stewart dealt with both sides of the in-navigation coin, answering first a design-based question: whether a barge was designed to a practical degree to facilitate maritime transportation. But Stewart dealt also with repairs: whether a temporary repair took the barge out of navigation. With respect to the repair question, Stewart did not effectuate a paradigm shift from the concept that major overhauls take a ship out of navigation; in fact, the Court reaffirmed West (the classic overhaul case) and the idea that "structures may lose their character as vessels if they have been withdrawn from the water for extended periods of time." Stewart, 543 U.S. at 496 (citing West, 361 U.S. at 118).

         But Stewart did recognize that a major overhaul must carry with it a certain effect to take a vessel out of navigation. By broadly stating that the in-navigation requirement "is relevant to whether the craft is 'used or capable of being used' for maritime transportation, " and by stressing that the vessel in question was not rendered practically incapable of maritime transport by its temporary repair, the Supreme Court appears to have clarified that only overhauls ...

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