United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
H. MILLER, SENIOR UNITED STATES DISTRICT JUDGE
before the court is intervenors Fab-Con, Inc.
(“Fab-Con”) and Signal Mutual Indemnity
Association, Ltd.'s (“Signal”) (collectively,
“Intervenors”) motion for summary judgment. Dkt.
119. After considering the motion, response, reply, record
evidence, and the applicable law, the court finds that
Intervenors' motion should be GRANTED.
case involves injuries plaintiff Jermaine Hines
(“Hines”) alleges he incurred on August 26, 2016
while working aboard an oil rig in the Gulf of Mexico off the
Louisiana coast. Dkt. 119-1. Hines was an employee of Fab-Con
at the time. Dkt. 119-1. In connection with Hines's
injuries and pursuant to the Longshore and Harbor
Workers' Compensation Act (“LHWCA”), Fab-Con
and its group self-insurer, Signal, paid to and on behalf of
Hines indemnity benefits totaling $157, 981.18 and medical
benefits totaling $67, 125.17. Dkt. 119-3 at 2.
Energy XXI Services, LLC and its affiliates (collectively,
“Energy XXI”) own the rig where Hines was
allegedly injured. Dkt. 119-1. Fab-Con and Energy XXI entered
into a Master Services Agreement (“MSA”) on
September 23, 2008, which obligated Fab-Con to indemnify and
defend Energy XXI against injury claims brought by Fab-Con
employees and waive subrogation rights in favor of Energy
XXI. Dkt. 119-5 at 2.
sued Energy XXI, Industrial & Oilfield Services, Inc.
(“IOS”), Sirius Technologies, LLC
(“Sirius”), and Wood Group PSN
(“Wood”) (collectively, “Defendants”)
for damages arising from Defendants' alleged negligence.
Dkt. 1, 46, 62. In connection with Hines' claims, Energy
XXI tendered defense and indemnity to Fab-Con, which accepted
the tender and undertook the defense and indemnity of Energy
XXI. Dkt. 119-6 at 2. Hines settled with Energy XXI and IOS,
and the court granted summary judgment in favor of Sirius and
Wood. Dkt. 99, 104, 105.
15, 2019, the court granted Intervenors' request to file
a complaint asserting a lien under the LHWCA against
Hines's recovery from this litigation, including any
settlement funds. Dkt. 108, 109. Intervenors moved for
summary judgment on August 28, 2019. Dkt. 119. Hines argues
Fab-Con waived its right to a LHWCA lien when it agreed to
waive subrogation in the MSA. Dkt. 122. Intervenors assert
that the subrogation waiver is void under the Louisiana
Oilfield Anti-Indemnity Act (“LOAIA”) because
Energy XXI tendered indemnity and defense to Fab-Con. Dkt.
shall grant summary judgment when a “movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). “[A] fact is genuinely in dispute
only if a reasonable jury could return a verdict for the
nonmoving party.” Fordoche, Inc. v. Texaco,
Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving
party bears the initial burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If
the moving party meets its burden, the burden shifts to the
non-moving party to set forth specific facts showing a
genuine issue for trial. Fed.R.Civ.P. 56(e). The court must
view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of
the non-movant. Envtl. Conservation Org. v. City of
Dallas, 529 F.3d 519, 524 (5th Cir. 2008). But, the
court need not “sift through the record in search of
evidence to support the nonmovant's opposition to summary
judgment.” Carr v. Air Line Pilots Ass'n,
866 F.3d 597, 601 (5th Cir. 2017).
parties agree that Intervenors paid compensation and medical
benefits to and on behalf of Hines in accordance with the
LHWCA. Dkt. 119-1; 122 at 3. The LHWCA is a worker's
compensation statute that affords injured employees
“quick, certain compensation from their employers
regardless of fault.” Chenevert v. Travelers Indem.
Co., 746 F.3d 581, 585 (5th Cir. 2014) In exchange,
employers are generally absolved from any further liability,
but the injured worker may still seek recourse against third
parties who may have caused the injury. Id.
Employers and insurers that pay benefits to an injured
employee under the LHWCA obtain a “subrogation right to
be reimbursed from the worker's net recovery from a third
party for the full amount of compensation benefits already
paid.” Id. These liens attach to a judgment or
settlement. Jacques v. Kalmar Indus., AB, 8 F.3d
272, 274 (5th Cir. 1993). However “[w]hen a party has
waived its right to subrogation, it loses its lien on a
plaintiff's recovery.” Sims v. Envtl., Safety
& Health Consulting Servs., Inc., No. 13-1694, 2014
WL 6633248 *6 (S.D. Tex. Nov. 21, 2014) (citing Allen v.
Texaco, Inc., 510 F.2d 977, 978 (5th Cir. 1975)).
concedes that Intervenors are entitled to a paid compensation
lien under the LHWCA but for the waiver of subrogation in the
MSA. Dkt. 122 at 3-4. Intervenors also acknowledge their
waiver of subrogation rights, but argue that LOAIA voids the
waiver under the present facts. Dkt. 119-2 at 3. Hines agrees
LOAIA is applicable to the MSA, but the facts here do not
warrant voiding the waiver of subrogation. Dkt. 122 at 4-7.
is a Louisiana statute that invalidates certain oilfield
indemnity agreements and “waivers of subrogation . . .
which would frustrate or circumvent the prohibitions of
[LOAIA].” La. Stat. Ann. § 9:2780. The Louisiana
Supreme Court explained LOAIA “arose out of a concern
about the unequal bargaining power of oil companies and
contractors and was an attempt to avoid adhesionary contracts
under which contractors would have no choice but to agree to
indemnify the oil company.” Fontenot v. Chevron
U.S.A. Inc., 676 So.2d 557, 561-63 (La. 1996). The
Fontenot court reasoned that “voiding a waiver
of subrogation clause only achieves the purpose of the
Anti-Indemnity Act when such a clause is sought to be
enforced in conjunction with the enforcement of an
indemnification clause, ” because enforcing the two
clauses together would “shift liability from a
tortfeasor oil company back to the oilfield service
contractor.” Id. at 565; see also Hudson
v. Forest Oil Corp, 372 F.3d 742, 747 (5th Cir. 2004)
(“[T]he most important aspect of Fontenot is
that ‘voiding a waiver of subrogation clause only
achieves the purpose of [LOAIA] when such a clause is sought
to be enforced in conjunction with the enforcement of an
indemnification clause.'”) (quoting
Fontenot, 676 So.2d at 565).
summary judgment evidence establishes that Energy XXI
tendered defense and indemnity to Fab-Con, thereby invoking
its rights to indemnification under the MSA. Dkt. 119-6.
Hines now seeks to enforce the MSA's waiver of
subrogation against Intervenors, but has offered no evidence
to refute Fab-Con's defense and indemnity of Energy XXI.
Because the evidence shows Energy XXI enforced the
indemnification clause, enforcing the waiver of subrogation
would violate LOAIA as construed by the Louisiana Supreme
Court. See Fontenot, 676 So.2d at 565. The waiver of