The Fifth Circuit Court of Appeals affirmed a district court ruling Tuesday that denied Aries Marine Corporation's attempt to seek indemnification from United Fire & Safety following a liftboat accident during offshore platform operations in Louisiana waters.
The case, *In re: In the Matter of the Complaint of Aries Marine Corporation*, arose from repairs conducted by Fieldwood Energy on its offshore platform located off the Louisiana coast. Fieldwood Energy had contracted separately with United Fire & Safety for fire watch services and chartered a liftboat from Aries Marine Corporation to support the repair operations.
During the platform repair work, the chartered liftboat listed and subsequently capsized. Following the maritime accident, a United Fire employee filed a personal injury claim as part of the limitation of liability action that ensued. Aries Marine then sought indemnification from United Fire pursuant to cross-indemnification provisions contained in the contract between Fieldwood Energy and United Fire & Safety.
The dispute centered on whether maritime law or Louisiana state law governed the indemnification provisions in the Fieldwood-United Fire contract. Aries Marine had filed a motion for summary judgment in the U.S. District Court for the Eastern District of Louisiana, arguing it was entitled to indemnification under the contract terms.
The district court denied Aries Marine's summary judgment motion, making two key determinations that proved decisive in the case. First, the court found that the contract between Fieldwood Energy and United Fire & Safety was not maritime in nature, despite the offshore platform setting. Second, because the contract was deemed nonmaritime, Louisiana state law applied to govern the indemnity provisions rather than federal maritime law.
Under Louisiana law, the indemnity provisions in the contract were invalidated, preventing Aries Marine from obtaining the protection it sought. Louisiana has specific statutory provisions that limit or prohibit certain types of indemnification agreements, particularly in contexts involving personal injury claims.
Circuit Judge James E. Graves Jr. wrote the opinion for the three-judge panel, which also included Circuit Judges Dennis and Duncan. The Fifth Circuit agreed with both key findings made by the district court below.
"For the reasons that follow, we agree that the contract is nonmaritime and we AFFIRM," Judge Graves wrote in the opinion filed Feb. 9.
The determination that the contract was nonmaritime was crucial to the outcome. Maritime contracts are generally governed by federal admiralty law, which often provides different rules for indemnification than state laws. The distinction between maritime and nonmaritime contracts can depend on factors such as the nature of the services provided, the location of performance, and the contract's connection to maritime commerce.
In this case, despite the offshore platform location and the involvement of maritime vessels, the court determined that the fire watch services contract between Fieldwood Energy and United Fire & Safety lacked the maritime character necessary to invoke federal admiralty jurisdiction over the indemnity dispute.
The ruling has implications for how courts analyze indemnification disputes in the offshore energy industry, where multiple contractors often work together on platforms and vessels. Companies frequently include cross-indemnification provisions in their contracts to allocate risk among the various parties involved in complex offshore operations.
The case originated from two consolidated district court cases in the Eastern District of Louisiana: USDC Nos. 2:19-CV-10850 and 2:19-CV-13138. The limitation of liability action itself is a common legal mechanism used in maritime law that allows vessel owners to limit their financial exposure following accidents.
Aries Marine Corporation had argued it should be protected by the indemnification provisions when facing claims related to the liftboat accident. However, the Louisiana law's invalidation of such provisions left the company without that contractual protection.
The Fifth Circuit's affirmance means the district court's ruling stands, and Aries Marine cannot pursue indemnification from United Fire & Safety under the challenged contract provisions. The decision reinforces the importance of state law limitations on indemnification agreements, even in contexts involving offshore maritime operations.
For companies operating in the offshore energy sector, the ruling highlights the need to carefully consider which law will govern contractual provisions and how state law restrictions might affect risk allocation strategies. The case demonstrates that even contracts performed in maritime settings may be subject to state law limitations that can invalidate standard indemnification language.
The opinion provides guidance for future disputes involving the intersection of maritime operations and state law contractual restrictions, particularly in Louisiana waters where the state's specific indemnification statutes may override contractual risk allocation provisions.