Offshore Seismic Vessel Is A Towing Vessel Captain Required to Have License

Shell Offshore, Inc. v. Tesla Offshore, LLC, 905 F.3d 915 (5th Cir. 2018) United States Court of Appeals Fifth Circuit, October 5, 2018

By: Taylor Malinosky

Tesla Offshore, LLC (Tesla) chartered a vessel from International Offshore, LLC (International) to pull a sonar device known as a “towfish” to survey the ocean floor.  On November 22, 2012, the towfish struck the mooring line of Shell Offshore, Inc.’s (Shell) drilling rig located in the Gulf of Mexico, causing substantial damage, and resulting in this suit.International appealed to the Fifth Circuit asserting the trial judge erred in instructing the jury that the vessel towing the towfish at the time of the allision with the mooring line was a “towing vessel” under 46 U.S.C. § 2101. On cross-appeal, Tesla argued the jury erred in its allocation of fault and that it was entitled to contribution from International.First, the appellate court held that the district court’s instructions to the jury that the vessel was a towing vessel and that its captain did not have the requisite towing verification did not constitute error. It was undisputed that the captain of the vessel did not hold the correct towing credential. International argued that a literal reading of the statute would make any commercial vessel that pulls, pushes or hauls anything a “towing vessel”. Also, International argued that sonar surveying is different from traditional towing and only traditional towing vessels should be limited to “traditional” towing activities. The U.S. Code defines a towing vessel as “a commercial vessel engaged in the service of pulling, pushing, or hauling alongside.” 46 U.S.C. § 2101(50). It is likely that Congress intended the commercial towing of submerged objects to fall under the laws enacted. Furthermore, the statute should not be read in a restrictive fashion because doing so would permit large objects to be towed without a towing license.Second, Tesla was assessed with 75% of the fault and International was 25% liable. Tesla argued that International was 50% liable because the captain lacked experience in sonar surveying, lacked attention to the location of the towfish including collision risks, and violated legal duties. However, the jury heard testimony that Tesla was told by Shell the location of the drilling rig’s mooring lines, which was not conveyed to International. Also, Tesla failed to inform Shell of the accident in a timely and accurate manner causing additional damage. The captain of International’s caption lack of towing license was unrelated to the cause of the accident. The jury here could find Tesla responsible for the damage to Shell.Finally, the Fifth Circuit panel affirmed that the district court was correct in its calculation of the amount of contribution which International had to pay Tesla $1,948,060.76 which is 25% of the total settlement amount of $8,771,918.99 minus $244,918.99 that was previously paid to Shell. Tesla arguing that International should pay twice is invalid, as it has no legal authority.