Fifth Circuit's Seaman Status Realignment Brings New Considerations for Offshore Oil & Gas and Wind Industry Operators
Since the enactment of the Jones Act, courts have wrestled to define "seaman" and who is entitled to remedies under the Jones Act. The Jones Act grants a "seaman" a negligence cause of action against his employer and only a seaman may sue under the Jones Act. Importantly, if a worker does not qualify as a Jones Act seaman, his injury claim will be likely governed by a workers' compensation statute, most likely the Longshore and Harbor Workers' Compensation Act. Whether a worker qualifies as a seaman under the Jones Act is subject to a two-part test: 1) the worker must contribute to the function of a vessel and 2) the worker must have a connection to the vessel (or a fleet of vessels) that is substantial in both nature and duration. See Chandris, Inc. v. Latsis, 515 U.S. 347, 368 (1995).
The wrinkle, however, is that Congress has not provided a definition for "seaman," which has led to extensive litigation and left courts with the task of establishing tests to define "seaman." Attempts to clarify the confusion surrounding the term has led lower courts to apply a number of different standards and ultimately a lack of uniformity in determining "seamen status." However, the U.S. Court of Appeals for the Fifth Circuit has found a trio of U.S. Supreme Court cases, Wilander, Chandris and Papai to be "enormously helpful in giving meaning to the term 'seaman.'" [See Harbor Tug and Barge Co. v. Papai, 520 U.S. 548 (1997); Chandris, Inc. v. Latsis, 515 U.S. 347 (1995); McDermott International, Inc. v. Wilander, 498 U.S. 337 (1991).] This is especially evident given the recent en banc decision in Sanchez v. Smart Fabricators of Texas, L.L.C., No. 19-20506,2021 WL 1882565 (5th Cir. May 11, 2021) (en banc) (Davis).
In Sanchez, the Fifth Circuit overturned a three-judge panel decision and reinstated a district court's holding that a land-based welder allegedly injured while working on a jacked-up drilling rig failed to meet the definition of a "seaman" to sue under the Jones Act. The en banc panel expanded the considerations that should be applied to distinguish whether a maritime worker is a seaman entitled to benefits under the Jones Act from other maritime workers generally covered under the Longshore and Harbor Workers' Compensation Act (a federal compensation remedy for injuries to certain land-based workers occurring on navigable waters). The Sanchez case provided the Fifth Circuit with an opportunity to realign its prior interpretation of the nature element of the seaman status test as set forth in previous Fifth Circuit cases: In re: Endeavor Marine and Naquin. [See Naquin v. Elevating Boats, L.L.C., 744 F.3d 927 (5th Cir. 2014) (holding plaintiff was a seaman when he was exposed to the "perils of the sea"); In re: Endeavor Marine, Inc., 234 F.3d 287 (5th Cir. 2000) (same).]
Sanchez Case Background
Gilbert Sanchez was employed by Smart Fabricators as a welder and was directed by his employer to work on two discrete short-term transient repair jobs on two jacked-up rigs. One of the rigs was located two steps from a gangplank. The other rig was located on the Outer Continental Shelf and was being moved by tugboats to a new drilling location. During the course of his work, Sanchez was injured while working on the rig jacked-up on the Outer Continental Shelf. Sanchez then filed suit against Smart Fabricators in state court under the Jones Act, and Smart Fabricators removed the case to federal court, arguing exclusive federal subject matter jurisdiction under the Outer Continental Shelf Lands Act and that the Jones Act was improperly pleaded (no longer preventing removal). U.S. District Court for the Southern District of Texas Chief Judge Lee Rosenthal agreed and denied Sanchez's motion to remand and ultimately granted summary judgment, finding Sanchez was not a seaman.
On appeal, the three-judge panel found that the district court's holding that Sanchez was not a seaman because he failed to establish a meaningful connection to a vessel in navigation went against precedent set forth in In re: Endeavor Marine and Naquin. The panel concluded that they were bound by the Fifth Circuit precedent set forth in the Endeavor Marine and Naquin, where the primary consideration to determine if a worker qualified as a seaman was whether the worker was subject to the "perils of the sea." However, in a unanimous concurring opinion, the panel expressly noted that the Fifth Circuit precedent may be "inconsistent with the teaching" of the Supreme Court in Wilander, Chandris and Papai and urged that the Fifth Circuit take the case en banc to reconsider the circuit precedent. See Sanchez v. Smart Fabricators of Tex., L.L.C., 970 F.3d 550, 555 (5th Cir. 2020), reh'g en banc granted, opinion vacated.
On the advice of the panel, the Fifth Circuit agreed to an en banc rehearing of Sanchez's appeal in an effort to align the circuit cases with Supreme Court precedent. Writing for the full court, Judge W. Eugene Davis stated that while whether a worker was subject to the "perils of the sea" is one of the considerations, "it is not the sole or even primary test" to determine seaman status. See Sanchez,2021 WL 1882565 at *6. It is not enough to simply inquire as to whether a worker is subject to the perils of the sea to resolve the nature element. Rather, there are several other criteria that need to be met before a worker can be deemed a seaman.
Persuaded by Supreme Court precedent, the Fifth Circuit endeavored to align the circuit's precedent and to provide a clearer test to distinguish when a maritime worker is a seaman entitled to benefits under the Jones Act. In doing so, Judge Davis stated that courts should also consider the following definitive inquiries when determining whether a worker is a seaman:
- Does the worker owe his allegiance to the vessel, rather than simply to a shoreside employer?
- Is the work sea-based or involve seagoing activity?
- Is the worker's assignment to a vessel limited to performance of a discrete task after which the worker's connection to the vessel ends or does the worker's assignment include sailing with the vessel from port to port or location to location? See Id. at *6-7.
Considering the above, the en banc court concluded that Sanchez, a land-based welder, directed by his employer to work on two discrete short-term transient repair jobs on two rigs was not a seaman because he was not engaged in "sea-based" work to satisfy the requirement that he be "substantially connected to a fleet of vessels" with respect to the nature of his work. See Id.
Conclusion and Takeaways
The Fifth Circuit's decision will undoubtedly impact the determination of seaman status for workers assigned to work offshore in the oil and gas industry and the developing offshore wind industry. Offshore wind operations frequently utilize various maritime workers, including installation and maintenance workers that may or may not implicate the Jones Act. While the Sanchez decision may shed some light on the gray areas surrounding these offshore employees, the decision still signals that seaman status will turn on a highly fact-intensive inquiry regarding the worker's scope of work and the worker's connection to the vessel. For these reasons, it is imperative that employers in the oil and gas industry, offshore wind industry and in the related offshore construction, service and repair industries, remain mindful of employee classifications when considering contractual indemnities, insurance coverage, project development and risk management.
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