United States: Texas Supreme Court Reverses Lower Court, Holding That A Ship Unable To Engage In Self-Transportation During A Major Overhaul Was Not A Vessel In Navigation Under The Jones Act

Over a four-justice dissent, the Texas Supreme Court reversed the decision of the court of appeals and held that a drill ship undergoing a conversion was not a "vessel in navigation" for purposes of Jones Act seaman status.

In an extensive opinion tracing the various proper and improper standards for determination of what qualifies as a "vessel in navigation," the Texas Supreme Court ruled on June 16, 2017 that a ship taken out of service for a 20-month conversion and unable to engage in transportation during the entire time the plaintiff was working on board was "out of navigation" and therefore did not qualify as a "vessel in navigation" under the Jones Act.

In August 2012, Helix Energy Solutions Group purchased a drill ship (the HELIX 534) with plans to convert her into a well-intervention ship for use in Texas. Contractors at a shipyard in Singapore completed the most significant conversions – removing obsolete equipment, configuring and installing well-intervention equipment, and overhauling engines and other propulsion equipment. The work performed on the propulsion equipment left the HELIX 534 unable to navigate on her own for a substantial portion of the conversion in Singapore.

In November 2012, near the beginning of the conversion, Helix hired Kelvin Gold as an "able bodied seaman" to serve as an offshore worker aboard the HELIX 534 once it was converted. He was sent to Singapore to familiarize himself with the HELIX 534 while it was under conversion. Gold served two 28-day hitches on the HELIX 534 (December 2012 and March 2013) and a partial hitch in late-April 2013. During the time Gold worked aboard the HELIX 534, the ship lacked the ability to navigate on her own. Gold claimed he was injured aboard the HELIX 534 during his December 2012 and March 2013 hitches. His employment ended in November 2013. Helix paid Gold maintenance and cure but terminated benefits after Gold allegedly failed to follow his doctor's orders.

Gold then sued Helix for additional maintenance and cure, punitive damages and damages under the Jones Act. Helix moved for summary judgment on grounds that the HELIX 534, while undergoing a major conversion during the time Gold was aboard, was not a "vessel in navigation" and that Gold therefore was not a seaman under the Jones Act. The trial court agreed and granted Helix's motion.

Gold appealed, and the court of appeals reversed, finding that Helix failed to "conclusively prove that the [HELIX 534] was totally deactivated or out of service for an extended period of time before Gold's injury." 482 S.W.3d 638, 650 (Tex. App.-Houston [14th Dist.] 2501). The court of appeals held "[a] reasonable fact-finder could determine, based on the Helix 534's physical characteristics and activities, that the ship was designed to a practical degree for carrying people or things over water, and the Helix 534's use as a means of transportation on water was a practical possibility." Id.

The Texas Supreme Court granted Helix's petition for review to determine if the employee claiming benefits qualifies as a seaman if the vessel on which the employee worked was unable to move under her own power during the time the employee was aboard. The court began its analysis by recognizing that the Jones Act does not define "seaman" and that courts look to apply the "general maritime law [that existed] at the time the Jones Act was enacted." Chandris v. Latsis, 515 U.S. 347, 355 (1995). The court stated that over decades of analysis, two basic components of Jones Act coverage emerged: the maritime worker must (1) be a crew member who does the "ship's work," and (2) have a substantial connection to a vessel in navigation. Chandris, 515 U.S. at 368. Helix's argument related to the second prong – whether the HELIX 534 was a "vessel in navigation."

The court noted that temporary and routine repairs do not take otherwise seaworthy vessels out of navigation, but observed that the Supreme Court's distinction between temporary repairs and major overhauls focuses on "the status of the ship, the pattern of the repairs, and the extensive nature of the work contracted to be done." Chandris, 515 U.S. at 122. Taking a cue from Stewart, the court focused on whether the major overhaul rendered the ship incapable of self-transportation, and therefore, "out of navigation."

The court then examined the evidence in support of summary judgment and noted that there was no dispute about whether the HELIX 534 was operable or capable of self-propulsion during the time Gold was aboard. When compared against case authority about vessels in navigation, the evidence about the extensive nature of the conversion placed the HELIX 534 in the category of ships rendered "out of navigation." The court held that the HELIX 534 was not a vessel in navigation and Gold therefore could not be a Jones Act seaman and reversed the court of appeals.

The Texas Supreme Court explained that the court of appeals focused incorrectly on three factors: (1) subjective evidence about vessel and seaman status (whether other individuals viewed the HELIX 534 as a vessel and whether Helix had referred to Gold as an "able bodied seaman"); (2) whether the HELIX 534 was expected to sail again; and (3) whether Helix conclusively proved that the HELIX 534 was totally deactivated or out of service for an extended period of time before Gold's injury. The Texas Supreme Court found that reliance on these subjective factors was improper and in conflict with established Supreme Court authority.

The court also addressed the four-justice dissent finding conclusive evidence that the HELIX 534 was out of navigation during Gold's time onboard was insufficient to remove the vessel from navigation as a matter of law. The dissent urged evaluation of a longer "relevant time period" extending before and after Gold's time on the HELIX 534 and cited to a concern that evaluation merely of the time Gold was aboard the HELIX 534 would amount to an improper "snapshot" analysis.

In response, the majority stated that the dissent's rule did not exist, and that in any event, requiring analysis of a longer time period would introduce an analysis of "precondition" of a vessel in order to determine the significance of the overhaul. With regard to the "snapshot" concern, the majority noted that it did not look merely at the status of the HELIX 534 at the time of Gold's injury (usually the concern about "snapshot" tests); it looked at the status of the HELIX 534 during the entire time he was aboard.

The Texas Supreme Court concluded by acknowledging that "[a]dmiralty law is not always a model of clarity," but that one clear rule is that "major overhauls that render watercraft practically incapable of transportation are sufficient to remove those crafts from 'vessel in navigation' status."

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