Diamond Offshore Company; Diamond Offshore Usa, Inc.; Diamond Offshore Drilling, Inc.; Diamond Offshore Drilling Services, Inc., Plaintiffs-counter Defendants-appellants-cross-appellees, v. A&b Builders, Inc., Defendant-counter Claimant-appellee-cross-appellant, 302 F.3d 531 (5th Cir. 2002)

Diamond Offshore Company, Diamond Offshore U.S.A. Inc., Diamond Offshore Drilling, Inc., and Diamond Offshore Drilling Services, Inc. (collectively "Diamond") appeal the district court's entry of final judgment dismissing Diamond's suit without considering Diamond's breach of contract claim. A&B Builders, Inc. ("A&B") cross-appeals the district court's order granting partial summary judgment in favor of Diamond. For the reasons that follow, we affirm the partial summary judgment ruling in part, reverse and remand in part, and vacate the entry of final judgment and remand for further proceedings.

Diamond is engaged in the exploration and development of offshore oil and gas wells. A&B is a contractor that provides repair and maintenance services for offshore oil platforms and drilling rigs. On April 8, 1997, Diamond and A&B entered into a "Master Service Contract" whereby A&B agreed to provide services to Diamond from time to time. Paragraph 9 of the Master Service Contract contains an indemnity provision that specifically applies to claims for bodily injury brought by employees of either A&B or Diamond, including those that result from the negligence of the indemnitee. Under this provision, if a Diamond employee is injured by the negligence of A&B, Diamond agreed to defend and indemnify A&B against any claims brought by Diamond's employee. Should an A&B employee be injured by the negligence of Diamond, A&B agreed to defend and indemnify Diamond and all of the parties for whom Diamond may be working against any claims brought by A&B's employees. Paragraph 8 of the Master Service Contract obligates A&B to purchase various insurance policies, establishes the minimum coverage limits of these policies, and obligates A&B to waive subrogation against Diamond and name Diamond as an "Additional Named Assured []."

Pursuant to the Master Service Contract, Diamond engaged A&B to perform repairs to the Ocean Concorde, a semi-submersible drilling rig owned and operated by Diamond, that were necessary so that the Ocean Concorde "could do its usual work." A semi-submersible drilling rig is a movable rig that is typically towed to a particular location where it is submerged about fifty feet and then anchored in place to complete the mooring of the rig. The rig's platform deck is supported on columns which are attached to large underwater displacement hulls, large vertical caissons, or some combination of both. The columns, displacement hulls, or caissons are flooded on location.¹ 

Lee E. McMillon ("McMillon"), an employee of A&B, worked aboard the Ocean Concorde pursuant to the Maser Service Contract between Diamond and A&B. On March 7, 1998, McMillon was allegedly injured while performing repair services as a welder on the Ocean Concorde. McMillon maintains that, while welding inside a pollution pan, he was injured when he became trapped by drilling mud that was spilled on top of him. The welding being done by McMillon at the time of his alleged injury was necessary to allow the Ocean Concorde to perform its drilling function without polluting the waters of the Gulf of Mexico. At the time of McMillon's alleged injury, the Ocean Concorde was located in navigable waters more than 100 miles offshore in the Gulf of Mexico.

On March 9, 1999, McMillon and his wife sued Diamond, Shell Oil Company ("Shell"),²  and various Shell-affiliated companies for his injuries in the 212th Judicial District Court of Galveston, Texas. Diamond made a demand upon A&B for defense and indemnity pursuant to the terms of the Master Service Contract. When A&B did not respond to this demand, Diamond employed counsel to defend Diamond in the McMillon suit.

Diamond then initiated the present action against A&B in federal court seeking declaratory relief and damages for breach of contract. The district court's general admiralty jurisdiction was invoked pursuant to 28 U.S.C. § 1333. Diamond claimed that A&B refused to act in accordance with the indemnity provision and failed to reveal whether it obtained liability insurance coverage naming Diamond as an additional insured. Diamond sought a determination of its rights to indemnification, insurance, and a defense under the terms of the Master Service Contract. Diamond also sought damages for breach of contract; specifically, costs and attorneys' fees incurred in defending the McMillon suit and bringing this action.³ 

Diamond and A&B then filed cross-motions for partial summary judgment. On November 17, 1999, the district court denied A&B's motion. At the same time, the district court granted Diamond's motion, determining that: (1) the indemnity provision was valid and A&B owed defense and indemnity to Diamond in the McMillon suit; (2) the additional-insured provision created an independent obligation, separate from the indemnity provision, and A&B was obligated to procure the requisite insurance and name Diamond as an additional insured; and (3) Diamond would be entitled to recover damages for breach of contract if A&B has failed to procure the requisite insurance and name Diamond under the contract. The court then entered a final judgment dismissing the entire case.

On November 19, 1999, Diamond filed a motion to reconsider the district court's entry of final judgment, urging the court to retain jurisdiction over Diamond's claim for damages sustained as a result of A&B's breach of contract. The court denied this motion on November 23, 1999.

Diamond appealed and A&B cross-appealed. On August 3, 2000, a panel of this Court remanded the case to establish "whether McMillon directly qualified for coverage under Section 905(b) of the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 905(b)." On November 3, 2000, the district court entered an order, based upon the joint stipulation of the parties, finding that McMillon directly qualified for workers' compensation benefits under the LHWCA. The district court entered another final judgment on March 9, 2001. Again, Diamond appealed and A&B cross-appealed.

In this appeal, Diamond challenges the district court's decision to not consider awarding damages to Diamond. A&B cross-appeals the partial summary judgment rulings on the indemnity and insurance provisions.

"We review a district court's decision not to exercise its jurisdiction for an abuse of discretion; its underlying legal conclusions, de novo." Bank One, N.A. v. Boyd, 288 F.3d 181, 183-84 (5th Cir. 2002).

Diamond argues that the district court erred in not exercising jurisdiction over its breach of contract claim. We agree.

The federal courts have a "virtually unflagging obligation" to exercise the jurisdiction conferred upon them. Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S. Ct. 1236, 47 L. Ed. 2d 483 (1976); see also Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 716, 116 S. Ct. 1712, 135 L. Ed. 2d 1 (1996) (" [F]ederal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress."). Abdication of the obligation to decide cases under the doctrine of abstention can be justified in "exceptional circumstances, where denying a federal forum would clearly serve an important countervailing interest," such as considerations of "proper constitutional adjudication, regard for federal-state relations, or wise judicial administration." Quackenbush, 517 U.S. at 716, 116 S. Ct. 1712 (citations and internal quotations omitted). "Unless there is a legitimate reason to abstain, federal courts `cannot abdicate their authority or duty in any case in favor of another jurisdiction.'" Vulcan Materials Co. v. City of Tehuacana, 238 F.3d 382, 390 (5th Cir. 2001) (quoting New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S. 350, 358, 109 S. Ct. 2506, 105 L. Ed. 2d 298 (1989)). There are four general categories of abstention:

"(1) Pullman-type abstention, to avoid decision of a federal constitutional question where the case may be disposed of on questions of state law; (2) Burford-type abstention, to avoid needless conflict with the administration by a state of its own affairs; (3) abstention to leave to the states the resolution of unsettled questions of state law; and (4) abstention to avoid duplicative litigation, now frequently referred to as Colorado River-type abstention."

Id. (quoting 17A CHARLES ALAN WRIGHT, FEDERAL PRACTICE AND PROCEDURE § 4241 (2d ed.1988)).

The district court dismissed Diamond's breach of contract claim without assigning reasons. In the district court's order denying Diamond's motion to reconsider, however, the court gave the following explanation for declining to "retain jurisdiction and issue a judgment for damages upon the conclusion of the state court action":

The Court has gone to considerable trouble to analyze the underlying contract and applicable law. Diamond has prevailed on the issue of liability, and has received a judgment entitled to full res judicata effect. In light of its enormous docket obligations, and faced with an increase in civil filing this year, the Court sees little point in keeping this case open to await the eventual disposition of McMillon's state court action. While it may be more convenient for Diamond to get a judgment for damages in this Court, there is no reason why a state court could not enter an equally valid and effective judgment.

We have considered the grounds asserted in support of the dismissal of Diamond's breach of contract claim and find none of them, alone or together, sufficient. The heavy trial docket, the preclusive effect of the district court's judgment, the potential for Diamond to incur further damages in the McMillon suit, and the fact that the state court would provide an adequate alternative forum, are not exceptional circumstances warranting abstention.

A&B maintains, however, that the district court did not abuse its discretion in deciding to abstain because the court properly characterized this case as a pure declaratory judgment action and concluded that abstention was warranted because it would be more appropriate for a state court to render a judgment for damages after liability and any damages were ascertained in the McMillon suit. A district court does have broader discretion to decline to hear a claim for declaratory judgment than a breach of contract claim. See Vulcan Materials, 238 F.3d at 390. Although the district court repeatedly characterized this case as a "declaratory judgment action," the court acknowledged that Diamond requested "a judgment for damages" in its order denying Diamond's motion to reconsider and recognized that "Diamond brought this action ... seeking declaratory relief and damages for breach of contract" in its request for clarification of this Court's remand mandate of August 3, 2000. To the extent that the district court classified Diamond's suit as a "declaratory judgment action," the court erred as a matter of law. Although some of the relief sought by Diamond is declaratory in nature, Diamond also requested damages for breach of contract — i.e., defense costs in the McMillon suit — as well as damages arising from enforcing that contract — i.e., attorneys' fees and costs incurred in this federal action.⁴  Inclusion of this request for monetary relief removes this suit from the realm of a declaratory judgment action.⁵  See Southwind Aviation, Inc. v. Bergen Aviation, Inc., 23 F.3d 948, 950 (5th Cir. 1994) (holding that the district court erred as a matter of law in characterizing a suit as a declaratory judgment action where the plaintiff sought declaratory relief and "coercive remedies for breach of contract in the form of damages, attorney's fees, and injunctive relief"). Thus, contrary to A&B's assertion, because Diamond sought both declaratory and monetary relief in this admiralty action, dismissal of Diamond's breach of contract claim after applying the abstention standards for declaratory judgment actions would be inappropriate. See id.; cf. GEICO v. Dizol, 133 F.3d 1220, 1225 n. 6 (9th Cir. 1998) (noting that a district court is "without discretion to remand or decline" claims for monetary relief appended to declaratory judgment actions because they are within its federal diversity jurisdiction).

A&B also contends, alternatively, that the district court had discretion to dismiss Diamond's breach of contract claim under the "exceptional circumstances" test of Colorado River abstention doctrine.⁶  This doctrine only applies when there are parallel proceedings pending in federal and state court. See Republic-Bank Dallas, Nat'l Assoc. v. McIntosh, 828 F.2d 1120, 1121 (5th Cir. 1987); see also Union Planters Bank, N.A. v. Gavel, No. 02-1224, 2002 WL 975675, at *4 (E.D. La. May 9, 2002). Suits are "parallel," for the purposes of determining whether Colorado River abstention applies, if they "involv [e] the same parties and the same issues." McIntosh, 828 F.2d at 1121 (quoting PPG Indus., Inc. v. Continental Oil Co., 478 F.2d 674, 682 (5th Cir. 1973)); see also Mendiola v. Hart, 561 F.2d 1207, 1208 (5th Cir. 1977). As Diamond's federal case against A&B is clearly not parallel with McMillon's state court proceeding against Diamond, Shell, and others, we reject A&B's contention that the district court had discretion to abstain under the Colorado River doctrine.

We therefore find that the district court abused its discretion in refraining from exercising jurisdiction over Diamond's breach of contract claim.⁷ 

We review the grant or denial of summary judgment de novo, applying the same standard as the district court. Mowbray v. Cameron County, Tex., 274 F.3d 269, 278 (5th Cir. 2001). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). If the moving party meets the initial burden of establishing that there is no genuine issue, the burden shifts to the nonmoving party to produce evidence of the existence of a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 321-22, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). We review questions of fact in the light most favorable to the nonmovant, and we review questions of law de novo. Mowbray, 274 F.3d at 279.

A&B challenges the district court's ruling that the indemnity agreement is valid. First, A&B argues that the indemnity provision is void because it directly contravenes § 905(b) of the LHWCA. Second, A&B maintains that state law governs the Master Service Contract and invalidates the indemnity provisions at issue.

A&B argues that § 905(b) of the LHWCA rendered the indemnity clause of the Master Service Contract invalid. The district court rejected this argument, determining that the indemnity provision was saved by § 905(c) of the LHWCA. Diamond Offshore Co. v. A&B Builders, Inc., 75 F. Supp. 2d 676, 681-84 (5th Cir. 1999). Section 905(b) prohibits indemnification by the employer of a covered employee for a claim due to bodily injury brought by the employee against the vessel (including its owner).⁸  33 U.S.C. § 905(b). However, if the injured employee is entitled to receive the benefits of the LHWCA "by virtue of" § 1333(b) of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. § 1331 et seq., then § 905(c) provides an exception, allowing "any reciprocal indemnity provision whereby the employer ... and the vessel agree to defend and indemnify the other for the cost of defense and loss or liability for damages arising out of or resulting from death or bodily injury to their employees." 33 U.S.C. § 905(c).

A&B puts forth two primary grounds in support of its contention that the district court erred in finding that the § 905(c) exception applied to this case.⁹  First, A&B argues that there is no summary judgment evidence that McMillon qualified for LHWCA workers' compensation benefits under § 1333(b) of the OCSLA. Second, A&B contends that the indemnity provision is not "reciprocal." We address both of these grounds in turn.

A&B contends that the district court erred in concluding that McMillon qualified for LHWCA workers' compensation benefits under § 1333(b) because there is no summary judgment evidence that OSCLA's situs and status requirements are met. In order to recover LHWCA benefits by virtue of § 1333(b), notwithstanding any application of the LHWCA of its own force, the injured worker must satisfy "status" requirement of § 1333(b) and the "situs" requirement of § 1333(a) (1). Demette v. Falcon Drilling Co., Inc., 280 F.3d 492, 498 (5th Cir. 2002); see also Mills v. Dep't of Labor, 877 F.2d 356, 361-62 (5th Cir. 1989) (en banc). The following three locations satisfy the "situs" requirement of § 1333(a) (1):

(1) the subsoil and seabed of the OCS;

(2) any artificial island, installation, or other device if (a) it is permanently or temporarily attached to the seabed of the OCS, and

(b) it has been erected on the seabed of the OCS, and

(c) its presence on the OCS is to explore for, develop, or produce resources from the OCS;

(3) any artificial island, installation, or other device if

(a) it is permanently or temporarily attached to the seabed of the OCS, and

(b) it is not a ship or vessel, and

(c) its presence on the OCS is to transport resources from the OCS.

Demette, 280 F.3d at 497.¹⁰  Section 1333(b) creates the following "status" test: The LHWCA applies to injuries "occurring as the result of operations conducted on the [OCS] for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the [OCS]." 43 U.S.C. § 1333(b); see also Demette, 280 F.3d at 498.

A&B argues that the district court erred in its situs determination because it applied the wrong situs test and there is no summary judgment evidence that McMillon's alleged injury occurred on one of the three locations that qualify as a § 1333(a) (1) situs under Demette.¹¹  Demette concerned a worker who sued the owner an offshore jack-up drilling rig under the LHWCA for injuries sustained while performing casing work on the rig. Demette, 280 F.3d at 494. The rig owner, a contractor of the drilling rights owner, sued the injured worker's employer for defense and indemnity pursuant to an indemnity agreement between the employer and the drilling rights owner. Id. at 495. This Court addressed the issue of whether the LHWCA invalidated the indemnity agreement. Id. at 494. In addressing the applicability of the § 905(c) exception, we considered whether the injury occurred on an OCSLA situs. Id. at 498. Relying on the text of § 1333(a) (1), we articulated a precise rule that defines three locations that qualify as an OCSLA situs. Id. at 496-97. Applying this rule to the facts before us, we held that the situs requirement of § 1333(a) (1) was met because, at the time of the worker's injury, the rig was "jacked-up over the OCS" and therefore fell into the second category of OCSLA situses: the rig "was a device temporarily attached to the seabed, which was erected on the OCS for the purpose of drilling for oil." Id. at 498.

Because the district court's partial summary judgment ruling was in November of 1999, the court did not have the benefit of our decision in Demette, which was decided when the parties were briefing this appeal. Instead, the district court relied on our prior decision in Mills. The district court held that in order to qualify under OCSLA, an employee must satisfy the situs test, i.e., suffer injury either on a fixed platform over the OCS or over the waters of the OCS. Diamond Offshore, 75 F. Supp. 2d at 683. Observing that "McMillon was employed as a welder, and was injured in the Gulf of Mexico more than 100 miles off the Louisiana coast," the district court concluded that McMillon satisfied the situs requirement because "he was injured on the navigable waters overlying the Outer Continental Shelf." Id.

Diamond counters that the district court applied the correct situs test because Demette did not limit the situs test established in Mills. Since Demette addressed an injury occurring on a drilling rig that was attached to the seabed of the OCS, as opposed to floating on the water above the OCS, Diamond would have us read the Demette situs test as dicta. Diamond claims that construing Demette otherwise would run afoul of our well-established rule that a panel of this Court cannot overrule a previous en banc decision. This argument is unavailing. Demette clearly articulated the rule regarding what qualifies as an OCSLA situs. We conclude that the Demette situs test is binding and that it does not conflict with our prior decision in Mills. Mills stated that § 1333(b) applies to workers who "suffer injury or death on an OCS platform or the waters above the OCS." 877 F.2d at 362. As we previously explained in Demette, however, Mills does not purport to specify the precise contours of OCSLA's situs requirement. Demette, 280 F.3d at 496 ("Neither the Supreme Court nor this court has parsed the precise language of [OCSLA] to specify the exact contours of the situs test it establishes. We are called upon to do so today."). In Mills, we dealt with whether a land-based welder injured on Louisiana soil qualified for LHWCA benefits under OCSLA. 861 F.2d at 357. We rejected the worker's claim, concluding that § 1333(b) includes a situs requirement that the worker did not satisfy. Id. at 361-62. Thus, Mills held that § 1333(b) does not apply to a land-based injury. Id. at 362; see also Demette, 280 F.3d at 496 n. 10 ("Mills interpreted § 1333(b) and held that it could not apply to injuries that do not occur on or over the OCS.").

Our decision in Demette for the first time laid out a precise rule that defines three "locations" to which OCSLA applies. In light of Demette, it is evident that the district court applied the wrong situs test. Contrary to the district court's holding, the OCSLA situs test is not satisfied merely because McMillon's alleged injury occurred on the navigable waters overlying the OCS. Nonetheless, if the evidence in the summary judgment record is sufficient to meet the situs requirement set forth in Demette, we can affirm the district court's situs determination.

Diamond and A&B dispute whether the summary judgment evidence shows that McMillon's alleged injury falls into the second category of OCSLA situses set forth in Demette.¹²  The second category is described as follows: " [A]ny artificial island, installation, or other device if (a) it is permanently or temporarily attached to the seabed of the OCS, and (b) it has been erected on the seabed of the OCS, and (c) its presence on the OCS is to explore for, develop, or produce resources from the OCS." Demette, 280 F.3d at 497. Diamond points to the following competent evidence in the summary judgment record to support its contention that the second category is met:¹³  (1) McMillon allegedly was injured over 100 miles offshore in the Gulf of Mexico, (2) the Ocean Concorde is a semi-submersible drilling rig, (3) the Ocean Concorde was working under a contract with Shell when McMillon was allegedly injured, (4) Diamond engaged A&B to perform repairs that were necessary in order for the Ocean Concorde to "do its usual work," (5) the welding being done by McMillon at the time of his alleged injury was necessary to allow the Ocean Concorde to perform its drilling function without polluting the waters of the Gulf of Mexico; and (6) McMillon was allegedly injured when drilling mud was spilled on top of him while he was welding inside a pollution pan. While this evidence shows that the Ocean Concorde was on the OCS for the purpose of drilling for oil and gas, our review of the summary judgment record leads us to conclude that because Diamond has failed to put forth evidence that the Ocean Concorde was "attached" to and "erected" on the seabed of the OCS, Diamond has not carried its initial burden of establishing that there is no genuine issue of material fact on the issue of whether the location of McMillon's alleged injury qualifies as an OCSLA situs.

Contrary to Diamond's contention, the summary judgment evidence does not show that McMillon's alleged injury occurred while the Ocean Concorde was physically "attached" to the ocean floor. After the Ocean Concorde was towed to its ultimate location, it would then be anchored to the seabed. The evidence does not indicate whether McMillon was welding inside a pollution pan during towing or while the Ocean Concorde was attached to the seabed by its anchors. Diamond asserts that because the alleged injury occurred when drilling mud was spilled on McMillon, and drilling mud is only used during the drilling process, the only reasonable inference is that the Ocean Concorde was engaged in drilling operations and thus attached to the ocean floor by its drilling mechanisms. Drilling mud is used "from the time a well is begun until the cessation of drilling at that hole."¹⁴  Am. Petroleum Inst. v. E.P.A., 787 F.2d 965, 971 (5th Cir. 1986). There are a number of ways, however, that the drilling mud could have spilled into a pollution pan. It is possible that the drilling mud spilled when the Ocean Concorde was attached to the ocean floor during drilling operations, in which drilling mud is necessarily used. It is also possible, however, that the drilling mud spilled while preparing for drilling in the future or after drilling operations, when the Ocean Concorde was either attached to the ocean floor or in transit. See, e.g., LeBlanc v. Two-R Drilling Co., 527 F.2d 1316, 1318-19 (5th Cir. 1976) (explaining that when the drill pipe is removed from the hole and placed on the pipe rack, drilling mud is spilled from the drill pipe to the drilling floor); LaCross v. Craighead, AWI, 466 F. Supp. 880, 880-81 (E.D. La. 1979) (describing an incident where drilling mud spilled onto the deck of a vessel during loading operations when an employee lifted a torn sack over his head). Drawing all reasonable inferences in A&B's favor, as we must in reviewing the district court's grant of Diamond's motion for partial summary judgment, a genuine issue of material fact remains as to whether the Ocean Concorde was attached to the ocean floor. Since there is no evidence that the Ocean Concorde was connected to the ocean floor by its anchors or through its drilling mechanisms, and there is no evidence of any other contact with the seabed, the second requirement that the Ocean Concorde was "erected" on the OCS at the time of McMillon's alleged injury is clearly not satisfied. Thus, because we conclude that there is insufficient summary judgment evidence to determine whether the location of McMillon's alleged injury qualified under the second Demette situs test, partial summary judgment in favor of Diamond on the issue of whether A&B is obligated to indemnify and defend Diamond under the Master Service Contract was not supported by the record.

Diamond urges that, inasmuch as the Demette OCSLA situs test is controlling and the evidence in the summary judgment record is insufficient under Demette, we should remand this case to the district court with instructions to allow Diamond to supplement the summary judgment record. We agree.¹⁵  In sum, Demette articulated a significantly different rule than had been used here by the district court in determining whether McMillon's alleged injury occurred on an OCLSA situs. Neither the district court nor the parties, in developing the summary judgment record and briefing the cross-motions for partial summary judgment, had the benefit of our opinion in Demette. We therefore reverse the district court's grant of partial summary judgment on the issue of the validity of the indemnity provision and remand with directions to allow Diamond to put forth additional summary judgment proof and reconsider its ruling that this case arises out of an injury on an OCSLA situs. This should require only a brief supplement to the record detailing the contact, if any, that the Ocean Concorde had with the ocean floor at the time of McMillon's alleged injury, such as its anchors, drilling mechanisms, and flooded columns, displacement hulls, or caissons, that connected the rig to the seabed and supported the drilling platform. On remand, the district court should apply the rule enunciated in Demette to determine whether McMillon's alleged injury occurred on an OCLSA situs. As this Court has already concluded that the Ocean Concorde was a device on the OCS for the purpose of exploring for oil and gas, the district court will need to address whether, at the time of McMillon's alleged injury, the Ocean Concorde was "temporarily attached to the seabed of the OCS" and "erected on the seabed of the OCS" and therefore falls into the second category of OCSLA situses. Demette, 280 F.3d at 497. Although we reverse the district court's ruling on this issue and remand for application of the proper legal standard, we proceed to address A&B's further arguments in support of its contention that the district court erred in finding that the § 905(c) exception applied to this case.

A&B also avers that the district court erred in its status determination. The district court held that in order to qualify under OCSLA, an employee must also satisfy the "but for" test, i.e., the injury would not have occurred but for extractive mineral operations over the OCS. Diamond Offshore, 75 F. Supp. 2d at 683 (citing Herb's Welding v. Gray, 766 F.2d 898, 900 (5th Cir. 1985)). Moreover, the district court concluded that the "but for" test was satisfied because "the Ocean Concorde was engaged in offshore mineral extracting activities; the Ocean Concorde needed a pollution plan in order to explore offshore oil; and McMillon would not have been injured but for the need to weld a pollution plan onto the Ocean Concorde." Id. We agree that McMillon's alleged injury occurred "as the result of operations conducted on the [OCS] for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the [OCS]." 43 U.S.C. § 1333(b). McMillon was allegedly injured while performing necessary repairs on the OCS in furtherance of the Ocean Concorde's extractive operations on the OCS. McMillon was doing welding work in a pollution pan on the Ocean Concorde, a semi-submersible drilling rig engaged to work for Shell, over 100 miles offshore in the Gulf of Mexico. The welding services that McMillon was performing at the time of his alleged injury were necessary to allow the Ocean Concorde to explore for offshore oil and perform its drilling function without polluting the waters of the Gulf of Mexico. Thus, this case meets the OCSLA status requirement set forth in § 1333(b).

A&B's second argument is that the district court erred in finding that the § 905(c) exception applied because the indemnity agreement between Diamond and A&B is not reciprocal and therefore is unenforceable under § 905(b). A&B reads the phrase "reciprocal indemnity provision" in § 905(c) to require true or complete reciprocity — i.e., equal obligations imposed on both parties.¹⁶  Examination of the indemnity agreement between Diamond and A&B indicates that the agreement is sufficiently reciprocal to satisfy the § 905(c) exception.

A&B contends that its obligation to indemnify Diamond is more onerous than Diamond's corresponding obligation. The indemnity provision in paragraph 9 of the Master Service Contract obligates Diamond to defend and indemnify A&B against any claims brought by Diamond or its employees arising out of their work regardless of A&B's negligence, and obligates A&B to defend and indemnify Diamond and any parties for whom Diamond may be working against any claims brought by A&B or its employees arising out of their work regardless of Diamond's negligence.¹⁷  A&B argues that this provision impermissibly enlarges A&B's burden by obligating A&B to defend and indemnify Diamond, as well as any companies for whom Diamond might be working. A&B protests that because McMillon sued several Shell entities that Diamond was working with, the indemnity provision may obligate A&B to defend and indemnify those entities in connection with the McMillon suit. Although A&B's indemnity obligation extends to parties for whom Diamond may be working, whereas Diamond's obligation only covers A&B, we do not find this distinction material to this appeal, which involves the reciprocity of the indemnity obligations running between Diamond and A&B. The district court found that A&B is obligated to indemnify Diamond under the Master Service Contract. The court did not address whether A&B is required to indemnify the various Shell entities sued in the McMillon suit. Thus, the fact that A&B agreed to defend and indemnify parties for whom Diamond was working has no effect on the fact that both Diamond and A&B agreed to defend and indemnify each other for claims brought on behalf of their own employees.

A&B also argues that the indemnity provisions are not reciprocal because A&B agreed to (1) defend and indemnify Diamond and any parties for whom Diamond may be working from "all liens and claims for labor or material" provided by A&B or its subcontractors; (2) indemnify Diamond for "any and all claims, demands and causes of action ... made by any patentee, licensee, or claimant of any right or priority to" the equipment furnished and used by A&B; and (3) release Diamond from any liability for damages to A&B's surface equipment. These additional provisions concerning liens, intellectual property claims, and property damage are irrelevant to the issue before us, however, because the only indemnity provisions that are implicated by § 905(b) and § 905(c) are those covering claims brought by an LHWCA employee against a vessel for damages due to bodily injury or death of the employee caused by the negligence of the vessel. Under the indemnity provision governing claims for bodily injury, Diamond and A&B clearly agreed to indemnify each other. See Fontenot v. Southwestern Offshore Corp., 771 So. 2d 679, 687 (La.Ct.App.2000) (rejecting employer's argument that indemnity obligations were not "reciprocal" under § 905(c) because employer and vessel owner agreed to indemnify each other under the personal injury clause, even if their obligations differed concerning property damage, liens, and wreckage).

We likewise reject A&B's argument that the reciprocity of the indemnity provision is destroyed by A&B's insurance obligations in the Master Service Contract. An insurance procurement clause is valid under § 905(b). Sumrall v. Ensco Offshore Co., 291 F.3d 316, 325 at n. 12 (5th Cir. 2002) ("We have determined that differing insurance obligations do not create additional indirect liability sufficient to implicate the prohibitions of subsection 905(b)."); Voisin v. O.D.E.C.O. Drilling Co., 744 F.2d 1174, 1176-78 (5th Cir. 1984) (holding that § 905(b) does not prohibit a valid additional insured provision). Thus, the fact that the insurance provision of the Master Service Contract required A&B to procure insurance, but that Diamond was not required to do the same, does not impact the reciprocity of the indemnity agreement. See Sumrall, 291 F.3d 316, 325 at n. 12 (" [W]e find that any differences in insurance obligations owed between Premiere and Santa Fe does not undermine the reciprocity of their indemnification agreement."). The district court did not err, therefore, in finding that the indemnity provision is sufficiently reciprocal to meet the requirement of § 905(c).

A&B also maintains that state law applies to the Master Service Contract as a "gap-filler under OCSLA" and that the reciprocal indemnity provision is invalid under either Louisiana or Texas anti-indemnity statutes. See LA. REV. STAT ANN. § 9:2780 (West 1991); TEX. CIV. PRAC. & REM.CODE ANN. § 127.001 et seq. (Vernon 1999). Presumably, A&B is relying upon § 1333(a) (2) of OCSLA to argue that either Louisiana or Texas law applies as a surrogate to federal law. Section 1333(a) (2) provides that " [t]o the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws ... the civil and criminal laws of each adjacent State ... are hereby declared to be the law of the United States [on OCS situses as defined by section 1333(a) (1)]." 43 U.S.C. § 1333(a) (2) (A). In order for state law to apply as a surrogate to federal law, the following three-part test announced in Union Texas Petroleum Corp. v. PLT Engineering ("PLT") must be satisfied: (1) the controversy must arise on an OCSLA situs, (2) federal maritime law must not apply of its own force, and (3) the state law must not be inconsistent with federal law. 895 F.2d 1043, 1047 (5th Cir. 1990). The district court rejected A&B's argument that state law applies as a surrogate to federal law to invalidate the indemnity provision, determining that the second prong of the PLT test was not satisfied because the Master Service Contract is a maritime contract. Diamond, 75 F. Supp. 2d at 679-81.

On appeal, A&B avers that the third prong of the PLT test is satisfied because federal law does not mandate that reciprocal indemnity agreements be valid. A&B makes no argument, however, that the first and second prongs are met in this case. Indeed, as discussed above, A&B argues strenuously on appeal that OCSLA is inapplicable because the situs requirement of § 1333(a) (1) is not satisfied. Even assuming that the first and third prongs are satisfied, because maritime law applies of its own force, neither Louisiana or Texas law applies in this case.

To determine whether the Master Service Contract is a maritime contract, we must consider the contract's "historical treatment in the jurisprudence" as well as a six-pronged "fact specific inquiry." Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313, 316 (5th Cir. 1990). Under the Master Service Contract entered into by Diamond and A&B, A&B provided vessel repair services to Diamond. Contracts for vessel repair services are traditionally treated as maritime. See New Bedford Dry Dock Co. v. Purdy, 258 U.S. 96, 99-100, 42 S. Ct. 243, 66 L. Ed. 482 (1922); Southwest Marine v. United States, 896 F.2d 532, 533 (Fed. Cir. 1990). Thus, the historical treatment of contracts for vessel repair services supports a determination that the Master Service Contract is a maritime contract.

The six Davis factors also point to the conclusion that this is a maritime contract.¹⁸  In this case, the work order provided that A&B would supply labor and materials to repair the Ocean Concorde; the crew was performing repair services onboard the Ocean Concorde; the crew was working on a vessel over navigable waters; the repairs to the Ocean Concorde were necessary so that the vessel could explore for oil and gas in the Gulf of Mexico; McMillon's principal work was as a welder; and McMillon was welding inside a pollution pan at the time of the alleged injury. We conclude that the Master Service Contract is a maritime contract, and therefore maritime law applies of its own force. Consequently, state law cannot apply as a surrogate of federal law. Since state law does not apply in this case, A&B's argument that state law anti-indemnity provisions govern the Master Service Contract fails.

Finally, A&B challenges the district court's ruling that the insurance provision in paragraph 8 of the Master Service Contract is valid and enforceable. The insurance provision obligates A&B to obtain and maintain several types of insurance policies with stated minimum limits, waive claims for subrogation against Diamond, and name Diamond as an additional insured. A&B argues that the insurance provision creates a contingent obligation designed to assure performance of the reciprocal indemnity provision. The district court rejected this argument, determining that the insurance provision created an obligation independent of the reciprocal indemnity provision. We agree.¹⁹ 

A&B's argument focuses upon the following language:

The insurance requirements set forth herein are supplementary to and shall not limit or restrict as to amount, extent or otherwise the indemnity obligations undertaken by [A&B] in Paragraph (9) herein..... The Naming of [Diamond] as additional Insured and endorsement as respects of primary insurance shall only apply as respects liability assumed by [A&B] herein.

Paragraph 8 (emphasis added). A&B insists that the emphasized phrasing makes the validity of the insurance provision contingent upon the validity of the reciprocal indemnity provision. A&B maintains that because the reciprocal indemnity provision is invalid, the insurance provision cannot be enforced. A&B's argument improperly assumes the invalidity of the reciprocal indemnity provision. A previously explained, the validity of the reciprocal indemnity provision is dependent upon whether McMillon's alleged injury occurred on an OCSLA situs and must be addressed by the district court on remand. Even assuming the invalidity of the reciprocal indemnity provision, however, we are not persuaded that the language A&B has identified was intended to create a contingent obligation.

The cases cited by A&B do not support the contractual interpretation that it advances.²⁰  Instead, our decision in LeBlanc v. Global Marine Drilling, 193 F.3d 873 (5th Cir. 1999), which was relied on by the district court, guides our resolution. In LeBlanc, an employee of Franks Casing Crew & Rental Tools, Inc. ("Frank's") was injured while performing work for Shell on a drilling rig owned by Marine Drilling Management Company ("Marine"). Id. at 874. There was a contractual dispute as to whether Marine was an additional insured under its master service agreement with Frank's. Id. Among other arguments, Frank's maintained that the validity of the additional-insured provision was contingent upon an indemnity provision, which was barred by § 905(b) of the LHWCA. Id. at 875. Frank's relied upon the following contractual language: " [T]o the extent Subcontractor [Frank's] assumes liability hereunder, and agrees to indemnify Contractor [Marine], Contractor shall be named an additional insured in [certain] insurance policies." Id. We rejected this argument, noting that " [i]f the parties had determined to condition Marine's assured status upon the legal enforceability of the indemnity agreement, they very easily could have done so." Id. Consequently, we held that Frank's was obligated to list Marine as an additional insured in its insurance polices and that this obligation arose automatically upon Frank's agreement to indemnify, regardless of the validity of the indemnity agreement. Id.

If Diamond and A&B had intended to condition A&B's insurance obligations upon the validity of the reciprocal indemnity provision, they easily could have done so. The Master Service Contract could have explicitly required a valid indemnity agreement as a precondition to the insurance requirements. Instead, the Master Service Contract merely states that A&B's insurance obligations are "supplementary to ... indemnity obligations undertaken by [A&B] ... herein," and that A&B's agreement to name Diamond as an additional insured and endorse the procured insurance policies as primary insurance "shall only apply as respects liability assumed by [A&B] ... herein." Consequently, we conclude A&B's insurance obligations arose when it agreed to indemnify Diamond in paragraph 9 and agreed to the terms of the Master Service Contract. Thus, the district court did not err in holding that the insurance provision in paragraph 8 of the Master Service Contract created an independent obligation that is valid and enforceable.

For the reasons discussed above, we VACATE the district court's final judgment and REMAND to the district court for further consideration on the merits of Diamond's request for damages for breach of contract. Because we cannot determine from the summary judgment record whether McMillon's alleged injury occurred on an OCSLA situs, we REVERSE the district court's grant of partial summary judgment in favor of Diamond on the issue of whether the reciprocal indemnity provision of the Master Service Contract is valid, and REMAND with instructions. In all other respects, we AFFIRM the partial summary judgment rulings.

AFFIRMED IN PART, REVERSED AND REMANDED IN PART, VACATED AND REMANDED IN PART.