Social Host Liability and Maritime Law

Social Host Liability and Maritime Law

By: Jillian Talley

Edited by: Molly MacKenzie

Schlumberger Technology Corp v. Arthey, 2014 WL 2789691 (Tex. 1/8/2014).

Schlumberger Technology Corporation (hereinafter “Schlumberger”) hosted a retreat for some of its own employees as well as some of its business partners at the Shoal Grass Lodge in Aransas Pass close to the Gulf of Mexico. The Lodge provided the guests with rooms, meals, an open bar, and bay fishing trips with professional guides at Schlumberger’s expense. The open bar was not included on the boats, but the Plaintiff’s outfitter supplied guests with alcohol at their request. David Huff, an employee of Petrobras America Inc., which does significant business with Schlumberger, was a guest on the retreat. Huff and William Ney, a Schlumberger employee, left the Lodge for a fishing trip with a guide between 9:00 and 10:00 in the morning and returned from their trip around 1:00 that afternoon. Upon returning to the Lodge after the fishing trip, Huff left to drive home.Approximately an hour and a half after leaving the Lodge, Huff drove into oncoming traffic and hit a motorcycle ridden by Christopher and Denise Arthey. The Artheys sustained severe injuries, which led to the loss of each of their left legs. Huff was taken to the hospital, and his blood alcohol level tested 0.25 three hours after the accident. The Artheys hired an expert who posited that Huff’s blood alcohol level at the time of the accident was 0.31. It was the expert’s opinion that Huff could not have consumed enough alcohol after leaving the Lodge to reach that level of intoxication and continue to function; he therefore had to have been drinking on the boat. Huff admitted that he was intoxicated at the time of the accident and pleaded guilty to intoxication assault.The Artheys sued Schlumberger, claiming that the company negligently allowed Huff to drink in excess. Texas law does not recognize “social host liability,” leading the Artheys to claim that federal maritime law should apply due to the fact that Huff became intoxicated on a boat the day of the accident. The trial court granted Schlumberger’s motion for summary judgment, and the court of appeals reversed and remanded, finding that maritime law applied and that granting summary judgment was error due to issues of material fact. The issue before the Supreme Court of Texas was whether the Artheys’ action fell within admiralty jurisdiction.The present test for determining whether admiralty jurisdiction is applicable to a tort case involves questions of location and of connection with maritime activity. The location test asks whether the injury occurred on navigable waters or on land due to a vessel on navigable water. The connection test involves a two-part analysis: (1) whether the particular type of incident could potentially negatively impact maritime commerce, and (2) whether the activity that caused the injury/incident shows a substantial relationship to traditional maritime activity.The factual dispute was over whether the Artheys satisfied the location test. Schlumberger argues that there is no evidence to prove that Huff was drinking on the boat, or, if he was, that Schlumberger furnished that alcohol. The Artheys argue that their expert provided evidence showing that Huff drank while on the boat, and that even if there were no evidence of that fact, the Schlumberger employee present on the boat and immediately after the trip at least had a duty to take action upon realizing Huff’s state of intoxication.With regard to the connection test, the Supreme Court of Texas analyzed precedent that held that just because an incident involved boats that were not engaged in commercial activity, it did not mean that the incident would not have an effect on commerce. Foremost Ins. Co. v. Richardson, 457 U.S. 668 (1982). The court found that the activity of drinking alcohol on a small recreational boat was not within the class of incidents that posed a risk to commercial shipping, because the guide, not the guests, was operating the boat. Furthermore, the court noted that drinking on a fishing boat is so common that if such activity was seen as posing more than an insignificant risk to commercial activity, reports of disruption to commerce would be rampant. The second part of the connection test also was not satisfied because the activity complained of in this case was the supervision of the consumption of alcohol by guests on chartered fishing boats, which was not found to be substantially related to traditional maritime activity. The court further noted that even if such activity was found to be related to traditional maritime activity, there was no reason to apply special admiralty rules over state law.The Supreme Court of Texas ultimately found that much of Huff’s drinking during the retreat occurred on land rather than on water, and that the Artheys’ claim was not necessary for uniformity of rules governing maritime commerce. The court additionally stated that applying maritime law would make state law regarding social host liability non-uniform. The court thus held that admiralty jurisdiction did not exist in this case, and ruled in favor of Schlumberger.