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A panel of the United States Fifth Circuit consisting of Chief Judge Stewart and Judges Jolly and Graves recently issued a per curiam opinion regarding the effect of the Louisiana Underground Utilities and Facilities Protection Law (the “Louisiana One-Call Statute”). Plains Pipeline, L.P. et al. v. Great Lakes Dredge & Dock Co., et al., No. 14-31046, 2015 U.S. App. LEXIS 14337 (5th Cir. Aug. 12, 2015). The Louisiana One-Call Statute requires persons planning to “excavate” to give at least forty-eight hours’ notice, allowing operators of nearby underground facilities time to mark their assets. Noting that “[t]he Louisiana Supreme Court has never interpreted the One-Call Statute’s definition of ‘excavation’” and, the panel made what it termed an “Erie guess” holding that a vessel that anchors without first placing a One-Call does not violate the One-Call Statute. Id. at *4-5.

The case involved a Great Lakes vessel that anchored using both a cutter head (a dredging tool) and traditional anchors to stabilize the vessel. The cutter head, the court noted, penetrated deeper into the seabed than traditional anchors and was used to keep the vessel at a complete stop. The cutter head punctured a pipeline owned by Plains Pipeline that carried product for Phillips 66.

In litigation that followed, Plains and Phillips argued that Great Lakes’ anchoring activity constituted excavation, requiring that Great Lakes provide notice under the One-Call Statute. The district court (Judge Fallon) disagreed, and this appeal followed. The Fifth Circuit affirmed Judge Fallon’s decision, finding that excavation required an element of intent. According to the panel, Great Lakes’ purpose was to anchor, not “movement of the earth.” The panel explained:

The Plaintiffs may well be right that movement of earth is an inevitable result of anchoring, and thus that a person who engages in anchoring does so knowing that he will cause the movement of earth. But under the One-Call Statute, an activity constitutes “excavation” only if the “purpose” – the actual object – of engaging in it is the “movement . . . of earth.” And the object of “anchoring” is, unmistakably, the securing of a ship, not the movement of earth.

Id. at *8 (emphasis in original). The panel based this conclusion mainly on a noscitur a sociis argument. First, each of the examples listed in the One-Call Statute as an “excavation” activity “is an activity in which the movement of the earth is the object, not just a side effect.” Id. at *9 (emphasis in original). Second, “the word ‘excavation’ itself connotes an activity that not only incidentally results in the movement of earth, but is actually aimed at it: that is why no one would say, for instance, that raking leaves constitutes ‘excavation.’”  Id. at *10. Thus, an activity constitutes excavation “only if—unlike anchoring—its actual goal is the movement of earth.”  Id.  The panel also noted that the One-Call Statute is penal in nature. As a result, “Louisiana courts resolve ambiguities in ‘penal’ statutes (such as this one) in the defendant’s favor.”  Id.  Both rationales compelled a ruling in favor of the dredge.

The panel also addressed a subsidiary issue: whether Phillips’ costs it incurred in transporting its oil by alternative means following the allision were precluded by Robins Dry Dock. General maritime law, through Robins Dry Dock, precludes the recovery of economic damages unless the plaintiff can demonstrate sufficient interest in the damaged object. Here, Phillips had argued that it had the exclusive right to the entire capacity of the pipeline and that it was “almost totally responsible” for expenses associated with the pipeline. Id. at *13. The Fifth Circuit held that Phillips’ exclusive use alone did not grant Phillips a propriety interest in the pipeline within the meaning of Robins Id.  Further, Plains retained ownership of the line and was initially responsible for all maintenance and repair costs. Id. at *14. In short, Phillips argument was rightly dismissed under the longstanding rule of Robins.

The Plains Pipeline decision is a concerning one for companies that operate submerged or buried pipelines. In essence, the decision suggests that a person or entity not having an intent to excavate is not required to give notice under the One-Call Statute. This is especially troublesome to the oil and gas industry given that coastal erosion and other forces have reduced the amount of cover over numerous pipelines in South Louisiana. Vessels that now have increased access to non-traditional waterways will not, under the federal court interpretation of the statute, be subject to statutory violation and penalties if, in anchoring or navigating, they damage an underground Louisiana line. Plains and Phillips have petitioned the full Fifth Circuit for en banc review.