The Collateral Source Rule is a common issue in almost every personal injury case, but its application can vary significantly from state-to-state. At its core, the rule is intended to ensure that the party responsible for the harm (the tortfeasor) is held fully accountable for the injuries they caused – and that they do not benefit from the plaintiff’s decision to obtain insurance or other benefits. While both Texas and Louisiana recognize the collateral source rule, they apply it with notable differences, particularly concerning statutory exceptions and its impact on medical damages.

Louisiana – Collateral Source Rule

For the longest time, Louisiana’s approach to the collateral source rule was considered one of the “stricter” collateral source states by comparison to other states. In recent years, there has been extensive change to the collateral source rule in Louisiana – through both the courts and the legislature.

  • General Rule – Louisiana courts consistently hold that a defendant is not entitled to any credit for payments the plaintiff received from a collateral source. This includes insurance, social security, workers’ compensation, or even charitable donations.
  • Medical Expense Exceptions – While Louisiana does not have the “Paid or Incurred” rule that Texas has, there are a few exceptions to the collateral source rule’s application dependent upon the source of the medical expense payments. In the last 20 years, the Louisiana Supreme Court has addressed whether medical expenses or rates set by Medicaid, the Workers’ Compensation Medical Reimbursement Fee Schedule, or by an agreement negotiated between the plaintiff’s lawyer and plaintiff’s doctor should be subject to the collateral source rule. However, it was not until recent years that the Louisiana legislature addressed these issues with the enactment of various versions of La. R.S. 9:2800.27.
    • No “Paid or Incurred” Limitation: Unlike Texas, Louisiana law does not always limit a plaintiff’s recovery to the amount actually paid by insurance in every situation.
    • Medicaid Payments: The collateral source rule does not apply to medical expense write-offs from Medicaid. Plaintiff’s recovery for medical expenses paid by Medicaid should be limited to the amount Medicaid actually paid to the healthcare provider. Medicaid is a form of free medical service. Applying the collateral source rule to these payments would allow the plaintiff to recover the written-off amount and “pocket the windfall” of charges plaintiff was never obligated to pay. This is codified in La. R.S. 9:2800.27(C).
    • Workers’ Compensation Medical Payments: The collateral source rule does not apply to amounts that were written off pursuant to the Louisiana Workers’ Compensation Medical Reimbursement Fee Schedule – a statutory list of charges for medical treatment, typically less than charges made outside of the workers’ compensation system. (Note: This Fee Schedule is currently undergoing a legislative update). Again, because these charges are statutorily set, the plaintiff would never be obligated to pay the full charges. This is codified in La. R.S. 9:2800.27(D).
    • Attorney Negotiated Reduced Rates: In many cases, the plaintiff’s lawyer has a relationship with the plaintiff’s doctor and as a result of that relationship the doctor may agree to accept a lower amount for the medical services than what the doctor actually bills. When this happens, the collateral source rule does not apply to these medical expense write-offs resulting from attorney’s negotiation. The plaintiff’s recovery should be limited to what was actually paid to the medical provider. This is in La. R.S. 9:2800.27(G).
    • Medicare and Health Insurance Payments: In cases where the medical expenses have been paid, in whole or partially, by a health insurer or Medicare to a healthcare provider, the recovery of those medical expenses should be limited to the amount actually paid, plus any applicable cost sharing amounts paid or owed by the claimant – not the full amount billed. The phrase “cost sharing” is defined in the new 2025 legislation as, any “copayments, coinsurance, deductibles, and any other amounts which have been paid or are owed by the claimant to a medical provider.”
    • Louisiana Civil Justice Reform Act: Originally passed in 2020, this legislation was amended again in 2025, addressing the collateral source rule and recovery of past medical expenses. Due to the infancy of this act, time will tell how it impacts medical expense in personal injury litigation recovery moving forward. The full, current version can be found here – La. R.S. 9:2800.27.
  • Impact on Evidence at Trial – The factfinder should be informed of both the amount billed by the medical provider and the amount actually paid for the medical services. This is a fairly new change in the law, as the jury was previously only told of the amount billed – not what was paid.

Texas – Collateral Source Rule

In Texas, the collateral source rule is well-established and frequently applied in personal injury litigation. However, several key exceptions can significantly impact how medical expenses are calculated and what the plaintiff may ultimately recover from the tortfeasor.

  • General Rule – The rule generally prohibits the defendant from introducing evidence that the plaintiff’s medical bills were paid by a third party (i.e., health insurer, workers’ compensation carrier, etc.). The rationale behind this rule is that the wrongdoer should not benefit from the victim’s foresight in securing their own insurance.
  • Medical Expense Exception – Texas law does not allow a plaintiff to recover more than the amount actually paid for medical expenses by an insurance provider. This principle is commonly known as the “Paid or Incurred” rule and is codified in Texas Civil Practice and Remedies Code § 41.0105. The Texas Supreme Court has explained that if a plaintiff’s insurer has negotiated a lower rate and the healthcare provider accepts that reduced rate as payment in full, the plaintiff can only recover the lower rate. The difference between the billed amount and the paid amount is considered a “phantom damage” because the plaintiff was never responsible for it. This is a significant limitation on the collateral source rule, when applied and argued correctly.
  • Other Notable Exceptions
    • Tortfeasor’s Insurance: In cases where the alleged tortfeasor’s own insurance company has paid the plaintiff’s expenses, the collateral source rule should not apply to those payments, and those payments should be deducted from the damages ultimately owed.
    • Subrogation: The collateral source rule does not impact or eliminate an insurer’s right of subrogation. If an insurer has paid the plaintiff’s expenses, it may still seek reimbursement for those expenses from the tortfeasor or from the plaintiff’s recovery.
    • Impeachment Evidence: In limited instances, evidence of collateral source payments may be admissible to impeach a witness, though such situations are rare and depend entirely on the witness’s testimony.
  • Impact on Evidence at Trial – Typically, the jury is not informed of the source of the payment (i.e., insurance). Rather, the jury is shown only the amount paid. This rule can cut both ways – as it prevents the jury from seeing the full, billed amount of the medical expenses, and also prevents evidence of the amounts written off due to negotiated discounts (i.e., the “phantom damages”).

Examples of Using These Tools to Reduce Damages

Kean Miller’s team has repeatedly used the above law and arguments to successfully reduce our client’s exposure prior to trial.  Below are a few examples of Kean Miller’s team reducing the plaintiff’s claimed medical special damages (what was charged) to the amount actually paid.

  • From $345,233 to $79,854 – Reduction based on workers’ compensation payments. Products liability claim, amputated leg.
  • From $311,684 to $83,542 – Reduction based on Medicaid payments and attorney negotiated write-offs. Automobile accident, neck and lower back injuries.
  • From $278,457 to $104,652 – Reduction based on workers’ compensation payments and attorney negotiated write-offs. Industrial accident at petrochemical facility, head trauma and spinal injuries.
  • From $153,468 to $86,342 – Reduction based on workers’ compensation payments. Industrial accident at natural gas storage and processing facility.
  • From $106,789 to $22,861 – Reduction based on workers’ compensation payments and attorney negotiated write-offs. Automobile accident, neck and lower back injuries.

Takeaway

Despite being neighboring states, Texas and Louisiana’s application of the collateral source rule can differ significantly. If you or your company are found defending a personal injury matter in either state, understanding the distinction in each state’s application of the collateral source rule is crucial to accurately evaluate potential damages, implement a defense to minimize tort exposure, and strategize a defense.

Forrest Guedry and John Hogg are members of Kean Miller’s Casualty and Mass Tort Litigation group, which manages litigation dockets and tries cases for some of the leading companies in the United States. The team defends clients locally, regionally, and nationally in a wide variety of claims involving wrongful death, bodily injury, industrial accidents, chemical release or exposure, products liability, medical malpractice, workers compensation, as well as breach of contract and business disputes.

When the U.S. Sentencing Commission speaks or writes, criminal practitioners and federal judges listen. An independent agency of the judicial branch created by Congress in the 1980s, it is composed of seven voting members, at least three of whom are federal judges. The U.S. Attorney General, or her designee, and the Chair of the U.S. Parole Commission, also serve as nonvoting members.[1] The Sentencing Commission is the entity that issues the Guidelines Manual.

What is the Guidelines Manual?

The Guidelines Manual is a foundational document for all federal sentences – whether for economic crimes like healthcare, bank, securities and tax fraud, or for trafficking and status crimes like distribution of controlled substances, illegal re-entry, and possession of a firearm by a prohibited person. In short, the Guidelines Manual is what criminal defense attorneys, prosecutors, probation officers, and sentencing judges use to calculate a defendant’s low- and high-end number of months of imprisonment or the “sentencing guidelines range.”

How is the Sentencing Guidelines Range Determined?

The Guidelines Manual computes a sentencing guidelines range using a grid containing two axes – offense level and criminal history.

  1. First, the Guidelines Manual assigns each federal crime a base offense level and provides a series of specific offense characteristics which can increase the base offense level.
  2. Then, an additional chapter provides for victim, role, and obstruction-related adjustments, resulting in a final offense level calculation.
  3. A defendant’s criminal history is then calculated using rules for assessing or excluding points for convictions which land each defendant in one of six categories.
  4. These two calculations – offense level and criminal history category – come together on the sentencing table to produce the sentencing guidelines range.

Definition of “Amount of Loss”

For many economic crimes, the starting point for calculating offense level is §2B1.1 of the Guidelines Manual, which addresses theft, embezzlement, and fraud offenses. Amount of loss is a specific offense characteristic within §2B1.1 which can add between 2 and 30 levels to a defendant’s offense level calculation. Not surprisingly, amount of loss is typically a primary factor determining a white-collar defendant’s sentencing range.

This begs the question – should “amount of loss” be the actual loss to a victim, or the amount of loss intended by the defendant?

For years, the Sentencing Commission’s guidance, contained in the “commentary” portion of §2B1.1, dictated that “amount of loss” is the greater of actual or intended loss. Over the years, most courts applied that loss definition. Then, in 2022, the United States Court of Appeals for the Third Circuit issued a decision defining loss as the loss the victim actually suffered (actual loss).[2] In response, in 2024 the Sentencing Commission moved its more expansive loss definition from commentary directly into §2B1.1.[3]

Will the Sentencing Commission shift focus from amount of loss to culpability factors?

In August of 2025, the Sentencing Commission issued a “Notice of Proposed 2025-2026 Priorities.”[4] One such priority is “reassessing the role of actual loss, intended loss, and gain.” Other priorities include considering an adjustment to simplify the amount of loss table or adjust it for inflation, assessing the impact of a defendant’s aggravating or mitigating role in an offense, and weighing the impact of the adjustment for who and how many were victimized.[5]

A practical read of these recent signals from the Sentencing Commission is that it may move to decrease emphasis on amount of loss and increase the focus on culpability factors like role (leader or minor participant), level of planning and sophistication, the abuse of a trust enhancement, and the type and quantity of victims. A big year is ahead. Any shift in focus should be top of mind for practitioners defending financial fraud and economic crime cases.

Chris Dippel and Alexandra Rossi Roland are members of Kean Miller’s White-Collar Investigations & Criminal Defense group, which defends and navigates clients through a wide range of matters involving criminal allegations of financial and securities fraud, health fraud, theft of government funds, embezzlement, public corruption, and other forms of white-collar crime.

[1] https://www.ussc.gov/about/who-we-are/organization.

[2] United States v. Banks, 55 F.4th 246, 255-58 (3d Cir. 2022).

[3] https://guidelines.ussc.gov/apex/r/ussc_apex/guidelinesapp/guidelines?app_gl_id=%C2%A72B1.1.

[4] https://www.ussc.gov/policymaking/federal-register-notices/federal-register-notice-proposed-2025-2026-priorities.

[5] https://www.ussc.gov/sites/default/files/pdf/training/primers/Primer_Victims.pdf.

Workers’ compensation is a critical safety net for both employees and businesses. In Louisiana, navigating a claim for noise-induced hearing loss can be a complex process. For employers, understanding the legal landscape is essential to ensure compliance, reducing exposure, raising appropriate defenses, and avoid penalties. Below is a general guide to handling and defending workers’ compensation hearing loss claims in Louisiana.

Hearing Loss is Defined as an “Occupational Disease,” Not an “Accident” in Louisiana

There is a crucial distinction in Louisiana law is between an “accidental injury” and an “occupational disease.” Gradual, noise-induced hearing loss is classified as an occupational disease under Louisiana law and Louisiana Supreme Court jurisprudence. This simply means that the alleged hearing loss is not the result of a single, sudden event, but rather a condition that develops over time due to “causes and conditions characteristic of and peculiar to the particular trade, occupation, process, or employment.”

The Burden of Proof and Causation

While workers’ compensation is a “no-fault” system, the employee or former employee still bears the burden of proving that their hearing loss was contracted during the employment and was a result of the nature of work performed. This must be established by a reasonable probability – it must be more than a mere possibility. Employers should not automatically assume each hearing loss claim is valid. The employee must provide medical evidence that demonstrates the hearing loss was caused by their work environment.

The “Last Injurious Exposure” Rule

Many employees who file hearing loss claims have worked for multiple employers in loud environments over a lengthy career. Louisiana law provides that the last employer whose employment contributed to the employee’s disabling occupational disease is generally responsible for the entire workers’ compensation obligation. This means that if a former employee files a hearing loss claim against an employer, the employer may be liable for the full cost of all workers’ compensation benefits if that employer was the last employer where the employee experienced “injurious exposure” to noise. This is true even if the employee worked elsewhere for years. While undoubtedly a harsh result, courts have consistently applied this standard in these claims.

How Late Can a Hearing Loss Claim be Brought?

The prescriptive period for an occupational disease claim is one year. This one-year clock does not start until all three of the following conditions are satisfied:

  1. The occupational disease manifested itself (i.e., the symptoms are noticed).
  2. The employee is disabled from working as a result of the disease.
  3. The employee knows or has reasonable grounds to believe the disease is job-related.

This differs from a traditional injury claim, which typically must be commenced within one year of the injury occurring. As a result, many of these hearing loss claims are filed years after the employee has left your employment, whether by retirement or termination. Periodic hearing tests of employees, noise studies throughout the employers’ facility, sound reduction protocols, personal protective equipment signage, and thorough record keeping can be helpful in defending these claims.

Benefits Available to Hearing Loss Claimants

If a hearing loss claim is successful, the employer can be liable for related medical treatment. In addition to medical treatment, the employer could be liable for an employee’s hearing aids and indemnity (or wage) benefits. Although gradual hearing loss does not qualify for permanent disability benefits, an employee with established noise induced hearing loss could be eligible for Supplemental Earnings Benefits (“SEBs”). The employer may be required to pay SEBs if the employee can establish that their hearing loss condition prevents them from earning 90% or more of their pre-injury average weekly wage (“AWW”). Employee-Claimant’s typically offer their treating physician’s opinion that their hearing loss prevents them from holding the occupation they previously held. Notably, SEB payments are limited by law to a maximum of 104 weeks – still substantial exposure.

Calculating the Average Weekly Wage (AWW)

Accurately calculating the AWW is critical for determining indemnity benefits – whether SEBs or otherwise. The AWW rate can also be affected by the date that the employee stopped working. By statute, there is a maximum cap on the weekly rate of indemnity benefits that an employee can recover, which differs based on the employee’s final date of employment.

Avoiding Penalties and Attorney’s Fees

Louisiana law provides for penalties and attorneys’ fees if an employer fails to “reasonably controvert” a claim. Generally, this requires the employer to conduct a thorough, factual investigation before denying benefits.

In summary, managing a workers’ compensation claim for gradual, noise-induced hearing loss requires a proactive and informed approach. By understanding the unique legal standards and procedural requirements outlined above, employers can effectively and efficiently handle hearing loss claims while maintaining compliance with Louisiana law.

Forrest Guedry and Lance Delrie are members of Kean Miller’s Casualty and Mass Tort Litigation group, which manages litigation dockets and tries cases for some of the leading companies in the United States. The team defends clients locally, regionally, and nationally in a wide variety of claims involving wrongful death, bodily injury, industrial accidents, chemical release or exposure, products liability, medical malpractice, workers compensation, as well as breach of contract and business disputes.

Some states, such as Louisiana, have restrictive statutes against contracting for defense and indemnity provisions. Under federal maritime law, however, these defense and indemnity provisions may be permitted. This distinction creates frequent tension in offshore injury lawsuits between the application of the bordering state law (which may prohibit defense and indemnity provisions) and the application of federal maritime law (which may permit defense and indemnity provisions).

The Outer Continental Shelf Lands Act’s Role

For federal maritime law to apply, the Outer Continental Shelf Lands Act (“OCSLA”)[1] must be invoked, which governs oil and gas exploration and production on the Outer Continental Shelf (“OCS”). In 1953, Congress enacted OCSLA and extended federal maritime law to “all artificial islands,” “installations and other devices . . . attached to the seabed,” and other artificial structures in the OCS.[2]

Importantly, for our purposes here, Congress chose not to treat offshore oil and gas platforms as vessels, but instead “as island[s] or as federal enclaves within a landlocked State.”[3] Therefore, in cases regarding contracts pertaining to offshore oil and gas platforms, OCSLA adopts the law of the state adjacent to the relevant part of the OCS as surrogate federal law. Where the relevant contract is a “maritime contract,” however, federal maritime law is applicable.[4] The significant legal implications of contract classification in this context make the question of “what is a maritime contract?” an important one.

The Davis & Sons Six-Factor Test

For decades, district courts within United States Court of Appeals for the Fifth Circuit evaluated this question using the 6-factor test from Davis & Sons, Inc. v. Gulf Oil Corp.[5] The Davis factors focused mainly on the nature of the work being performed and included the following questions:

  1. what does the specific work order in effect at the time of the injury provide?
  2. what work did the crew assigned under the work order actually do?
  3. was the crew assigned to work aboard a vessel in navigable waters?
  4. to what extent did the work being done relate to the mission of that vessel?
  5. what was the principal work of the injured worker? and
  6. what work was the injured worker actually doing at the time of injury?

Courts often criticized this laborious test.

The Fifth Circuit Adopts Simplified Two-Step Test

In 2017, the Fifth Circuit, in In Re Larry Doiron, Inc.,[6] set forth a “simpler, more straightforward” analysis and adopted a two-prong test to determine whether a contract is a maritime contract.[7] Under Doiron, a maritime contract exists if:

  1. the contract is one to provide services to facilitate the drilling or production of oil and gas on navigable waters and
  2. the contract provides or the parties to the contract expect that a vessel will play a substantial role in the completion of the project. Id.

Our team wrote about this case when the Fifth Circuit adopted it: Out with Davis & Sons and in with Doiron: The 5th Circuit Simplifies Maritime Contract Test.

Genesis Energy v. Danos Gives Clarity to the Doiron Test

Recently, the Fifth Circuit, in Genesis Energy, L.P. v. Danos, L.L.C.,[8] provided further clarification to the maritime contract test laid out in Doiron. The court in Genesis added to the analysis and placed an emphasis on the question of where the equipment used to perform the maritime work is located when the work takes place. Specifically, the Court focused on whether the equipment is located on the vessel in question or on the platform.

Genesis Case Background

In this case, Genesis Energy, L.P. (“Genesis”) owned an offshore platform located on the Outer Continental Shelf. In 2020, the platform sustained damages from catastrophic Hurricane Laura. Thereafter, Genesis contracted with Danos, L.L.C. (“Danos”) to perform repairs to the platform. Together, Genesis and Danos chartered a vessel from a third party, L&M Botruc Rental, LLC (“Botruc”) to facilitate the repairs to the platform. While working on the repairs, a Danos employee, Maximo Sequera (“Sequera”), suffered injuries after falling from a personnel basket during a vessel-to-platform transfer.

Sequera filed a personal injury suit in Texas state court against Danos, Genesis, and Botruc. Danos removed the action to the U.S. Southern District of Texas. Genesis then filed a cross-claim for defense and indemnity against Danos.

In response, Danos moved for summary judgment on the basis that defense and indemnity was precluded under Louisiana law. Specifically, Danos argued that Louisiana law, and not federal maritime law, applied because none of the contracts between the parties could properly be classified a “maritime contract.” The trial court agreed and granted Danos’s motion for summary judgment. Because there was no maritime contract between Genesis and Danos, Louisiana state law applied, and precluded Genesis’s claim for defense and indemnity. The Fifth Circuit affirmed the trial court’s ruling. In doing so, the Fifth Circuit applied the two-prong analysis set forth by the court in Doiron.

Applying the Doiron Test: Substantial v. Ancillary Vessel Roles

As is frequently the case in a maritime dispute, the classification of the contract in Genesis came down to the second prong of the Doiron analysis. Namely, “does the contract provide or did the parties to the contract expect that a vessel would play a substantial role in the completion of the project?”

Historically, the Fifth Circuit appreciates that “[f]or a vessel to have a ‘substantial role,’ there must be a ‘direct and substantial link between the contract and the operation of the ship, its navigation, or its management afloat.’”[9]

When work is performed in part on a vessel and in part on a platform or on land, we should consider not only time spent on the vessel but also the relative importance and value of the vessel-based work to completing the contract.” Doiron, 879 F.3d at 576 n.47. The focus “should be on whether the contract calls for substantial work to be performed from a vessel.” Id. at 573. This analysis “ignores the need for vessels to transport equipment and crew to the platform and considers only the other roles the vessels played.” In re: Crescent Energy Servs., L.L.C., 896 F.3d 350, 360 (5th Cir. 2018); see also Doiron, 879 F.3d at 576 n.47 (explaining that the substantial role “calculus would not include transportation to and from the job site”).[10]

The Court’s Analysis of the Parties’ Expectations

Following Fifth Circuit precedence, the Court in Genesis reviewed the parties’ contracts and then turned to evidence of the parties’ expectations. The Court determined that because the contracts only provided that “crews will live on the vessel and transfer to the platform daily via man basket,” the contracts did not establish a “direct and substantial link between the contract and the operation of the ship, its navigation, or its management afloat.” Earnest, 90 F.4th at 813.”[11]

With respect to evidence of the parties’ expectations, Genesis argued that the parties contemplated a unique arrangement wherein the extensive nature of the damage to the platform made it necessary to position the Vessel alongside the platform for the duration of the repairs. Genesis asserted that the continuous use of the Vessel was necessary to complete the repair work because:

  1. the Vessel would be used for living quarters and a mess hall,
  2. the Vessel would maintain a position alongside the Platform for the duration of the repairs,
  3. each morning personnel aboard the Vessel were to meet for daily safety meetings,
  4. the Platform’s crane would transfer crewmembers from the Vessel to the Platform where they would work, and
  5. the Vessel would house necessary equipment and cargo that would be transferred to the Platform as needed.

Based on the foregoing, Genesis argued that the second prong of the Doiron analysis was satisfied.

In response, Danos argued that it understood that the Vessel would be providing initial transportation and mobilization and living quarters for the crew.

Why Genesis’s Arguments Were Unpersuasive

The Fifth Circuit was unpersuaded by Genesis’s argument and noted that “vessels are often necessary for offshore work” but that necessity may not equate with the Vessel’s role being substantial as required to satisfy the second prong of the Doiron analysis.

In support of its conclusion, the court referenced the prior Fifth Circuit cases wherein the Court determined that a contract did meet the requirements of a maritime contract. In re: Crescent Energy Services, LLC,[12] the Fifth Circuit determined that a contract to plug and abandon three offshore wells was maritime because the work therein required the use of a barge for “its crane, the wireline unit, and other equipment that could not be moved onto a platform.”[13] “The wireline operation, which was ‘substantially controlled from the barge,’ comprised about 50% of the job.”[14] The Court also cited Barrios v. Centaur, L.L.C.,[15] wherein the parties contracted for the use of a barge with a crane which was to be used as a “necessary work platform, an essential storage space for equipment and tools, and a flexible area for other endeavors related to the construction work.”[16]

The court also cited Doiron, wherein the Fifth Circuit determined the contract at issue was not a maritime contract, and stated:

In Doiron itself, on the other hand, the vessel’s role was insubstantial. There, the parties contracted to repair a gas well that was accessible only from a platform. After work began, the parties encountered an unexpected problem that required them to charter a crane barge to lift equipment onto the platform. We concluded that “lift[ing] the equipment [onto the platform] was an insubstantial part of the job and not work the parties expected to be performed.”[17]

Comparing Genesis to Prior Cases

The court distinguished between Barrios and Crescent versus Doiron and Genesis and stated that in Barrios and Crescent the work was performed from the vessel itself, and the equipment was affixed to or at least located on the vessel while the work was being performed. In contrast, in Genesis and Doiron, the equipment involved was used while physically on the platform, not the vessel. Thus, the Court appeared to place great emphasis on where the work in question was primarily performed.

Narrowing the Scope of Doiron

The Court here also emphasized the importance of the nature of the work and whether that work is connected to the heart of the contract at issue. For instance, the court stated that the pumping of non-potable water and diesel fuel onto the platform in Genesis did not comprise “work” under the contract, but rather “transportation of supplies” in furtherance of the work contemplated under the contract. In other words, the Genesis Court suggested that ancillary work performed to facilitate the essential work under the contract should not be considered under the Doiron analysis.

Key Takeaway for Offshore Contracts

The Court here indicated that to be “substantial” as required under the Doiron analysis, the vessel must play an essential role, not a supporting role. Practically, this means the contemplation of the use of a vessel for housing, transportation, facilitation of supplies, etc. is insufficient to satisfy the Doiron analysis and deem a contract maritime. For these purposes, “essential” means “prominent” or “central to the mission” rather than merely “necessary for completion of the task.” As the court succinctly provided: “Although the parties anticipated that the Vessel would perform some ancillary purposes like housing and transportation, those uses do not reveal that ‘substantial work [was] to be performed from’ the Vessel.”[18]

In short, while transportation to and from the worksite were clearly excluded from the prior maritime analysis, the Fifth Circuit in Genesis clarified that housing and “ancillary functions that facilitate the platform repairs” also do not count towards the “substantial” role of the vessel in performing the work of the contract. This decision provides further clarity in the maritime contract analysis and decisively narrows the scope of the analysis as set forth in Doiron.

Additional insights are available in Lauren Guichard Hoskin‘s recent blog post on this topic: The United States Fifth Circuit Narrows Maritime Contract Scope: Where the Fifth Circuit Stands After Earnest and Offshore Oil Services.

Ambrose Stearns and Taylor Ashworth are members of Kean Miller’s Offshore Energy & Marine group, which represents a wide range of clients in litigation, transactions, and regulatory matters involving offshore oil and gas exploration, decommissioning, drilling activities, barges, tugs and towage, marine insurance, and other maritime and energy related matters.

[1] 43 U.S.C. §§ 1331–1356b.

[2] 43 U.S.C. § 133(a)(2)(A); OCSLA, Pub. L. No. 83-212, 67 Stat. 462 (1953).

[3] Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S. 352, 361 (1969).

[4] Willis v. Barry Graham Oil Serv., L.L.C., 122 F.4th 149, 156 (5th Cir. 2024).

[5] 919 F.2d 313 (5th Cir. 1990).

[6] 879 F.3d 568, 576 (5th Cir. 2018) (en banc).

[7] 879 F.3d 568, 576 (5th Cir. 2018) (en banc).

[8] No. 24-20357, 2025 WL 2642490 (5th Cir. Sept. 15, 2025).

[9] Id. at *2.

[10] Id. at *2.

[11] Id. at *3.

[12] 896 F.3d 350, 361 (5th Cir. 2018).

[13] Id.

[14] Genesis at *4 (citing Crescent at 361-62).

[15] 942 F.3d 670 (5th Cir. 2019).

[16] Barrios at 681.

[17] Genesis at *5 (citing Doiron at 577).

[18] Genesis at *7 (citing Doiron at 573).

In offshore operations, whether a contract is deemed “maritime” has major consequences. The classification determines the application of either federal maritime law or state law, along with its oilfield or construction anti-indemnity statutes for states such as Texas or Louisiana. The difference often decides whether the defense, indemnity, and insurance-related obligations in the contract survive (under maritime law) or are voided (under certain state’s laws), directly impacting risk allocation between operators and contractors.

Current Fifth Circuit Framework

Two recent United States Fifth Circuit Court of Appeals decisions highlight where the law currently stands, and what contractors and operators should keep in mind when drafting and enforcing service contracts. This is particularly important given that the case law generally ignores or gives little weight to contractual choice-of-law provisions in these types of contracts, even when the parties designate federal maritime law under the hope that the indemnity obligations will be enforceable.

The Doiron Two-Step Test

Since 2018, courts within the Fifth Circuit have applied the two-inquiry test from In Re Larry Doiron, Inc., 879 F.3d 568 (5th Cir. 2018):

  1. Does the contract to provide services to facilitate the drilling or production of oil and gas on navigable waters?; and
  2. Does the contract provide or do the parties expect that a vessel will play a substantial role in the completion of the contract?

An affirmative answer to both questions classifies the contract as maritime, subject to federal maritime law. Whereas, a negative answer to either question means that state law applies, either directly if the claim arose onshore or in state waters, or through the Outer Continental Shelf Lands Act (“OCSLA”) if the claim arose offshore on the OCS.

Earnest v. Palfinger: Vessel’s Role, Not Its Use, Guides Maritime Contract Classification

Recently, the Fifth Circuit has narrowed the scope of maritime contract classification, specifically with regard to the role of a vessel in a contract. In Earnest v. Palfinger Marine USA, Incorporated, 90 F.4th 804 (5th Cir. 2024), the Fifth Circuit reversed the district court and held that a contract for the upkeep of lifeboats on an oil production platform was a maritime contract.

In finding that the contract was not a maritime contract, the district court focused on the fact that the lifeboats were not used in connection with traditional maritime activities but were instead safety equipment required for the operation of an OCS platform. The Fifth Circuit disagreed and emphasized that the “use” of the vessel is less important than whether a vessel plays a substantial role in the performance of the contract. The lifeboats were central to Palfinger’s contract, even though they weren’t used to perform the work. This decision is significant in clarifying that a contract may still be deemed maritime even if the vessels involved are not directly engaged in “maritime commerce” at the moment of the contracted services, so long as they play an integral role in facilitating a maritime commercial activity.

Offshore Oil Services v. Island Operating Company: Incidental Vessel Use Isn’t Enough

Just this month, the Fifth Circuit reached the opposite conclusion in Offshore Oil Services, Inc. v. Island Operating Company, Inc., et al, 2025 WL 2541914 (5th Cir. Sept. 4, 2025). In this case, the dispute arose after a contract operator was injured during a personnel basket transfer from a vessel onto a platform on the Outer Continental Shelf.

The issue before the Court was whether the Master Service Contract (“MSC”) between the operator and owner of the platform was a maritime contract, such that indemnity would be owed to the vessel owner and platform operator from the contractor’s employer. The Fifth Circuit found that the MSC covered lease and production operations, not vessel services, and therefore was not a maritime contract.

According to the Fifth Circuit, the vessel use was limited to transportation, which was merely incidental to the work itself. The Court emphasized that simply referencing vessels, or using them for crew transport, does not transform a contract into a maritime one. The Court rejected arguments that actual vessel use (e.g., water transfers, equipment loading) automatically made the contract maritime, clarifying that such tasks do not override the parties’ expectations or the contract’s scope.

Further, the Court distinguished Earnest, noting that the contract there involved repair and maintenance of vessels necessary to support offshore drilling and production of oil and gas (i.e., maritime commerce), which inevitably gave the vessel a substantial role. By contrast, the MSC at issue contemplated no requirements resembling such work, but instead called for services traditionally related to oil and gas production that courts have consistently considered nonmaritime, even when performed on an offshore platform. The Fifth Circuit echoed Doiron’s central holding: contracts for non-maritime services do not become maritime simply because employees occasionally perform vessel-related tasks.

Key Takeaways for Operators and Contractors

These cases confirm that the Fifth Circuit is applying Doiron narrowly. Contracts for non-maritime services do not become maritime merely because they reference vessels or employees occasionally perform vessel-related tasks. The existence of a vessel and the contemplation between the parties of the role that a vessel will play in the execution of the contract is crucial. The vessel must play an integral role in facilitating a maritime commercial activity for the contract to be deemed maritime. Operators and contractors should draft MSCs with this framework in mind, as classification can determine whether indemnity obligations survive under maritime law or are invalidated by a state’s anti-indemnity laws.

Lauren Guichard Hoskin is a member of Kean Miller’s Offshore Energy & Marine group and practices in the firm’s New Orleans office. She has successfully handled and resolved lawsuits involving maritime personal injury claims, oil and gas casualty and property damage claims, drilling accidents, well blowouts, and various breach of contract disputes.

Since 1968, Louisiana law has recognized nonprofit corporations as a distinct business entity, providing organizations with a structured legal framework to pursue charitable, religious, educational, and other nonprofit purposes while benefiting from important legal and financial advantages. In 2015, Louisiana enacted the current Louisiana Nonprofit Corporation Act (the “Louisiana Nonprofit Act”),[1] which modernized governance, clarified member and director rights and obligations, and aligned with aspects of the Louisiana Business Corporation Act. By incorporating as a nonprofit corporation, organizations can gain limited liability protection for its founders, members and directors, ensuring that personal assets are not at risk for the organization’s debts or legal obligations. Nonprofit corporations may also qualify for federal and state tax-exempt status, allowing the organization to receive tax-deductible donations and grants that can significantly enhance funding opportunities; however, to take full advantage of these benefits, it is crucial to understand and comply with both state and federal laws and regulations.

1. Forming a Nonprofit Corporation in Louisiana

The two primary organizational documents of any nonprofit corporation are its articles of incorporation and bylaws.

(a) Nonprofit Articles of Incorporation

The articles of incorporation serve as the legal foundation of a nonprofit corporation in Louisiana, officially establishing it as a legal entity once filed with the Louisiana Secretary of State. Properly drafting this document is crucial for compliance with state law and for securing federal tax-exempt status.

Under the Louisiana Nonprofit Act,[2] the articles of incorporation must contain certain mandatory provisions in order for a nonprofit corporation to be validly formed and registered in Louisiana, including:

  • the name of the corporation;
  • the purpose for which the corporation is formed;
  • the duration of the corporation (perpetual or limited);
  • that is a nonprofit corporation;
  • the location and address of its registered office;
  • the name and address of its registered agent;
  • the names, addresses, and terms of office of the initial directors; and
  • whether the corporation is to be formed on a stock basis or a non-stock basis, or both;[3] and
  • the taxpayer identification number of the nonprofit corporation.

In addition to these mandatory provisions, the Louisiana Nonprofit Act permits nonprofit corporations to include a range of optional provisions that allow the incorporators to shape the organization’s governance and structure, including:

  • whether the nonprofit will have members and, if so, what rights or classes of membership exist;
  • how assets will be distributed upon dissolution, which is especially important for nonprofits seeking federal tax-exempt status; and
  • whether directors and officers will be shielded from certain liabilities to the fullest extent permitted by law.

The articles of incorporation may also provide governance rules for the organization such as director qualifications, quorum or voting requirements, and amendment procedures, which enhance organizational stability, reduces the likelihood of disputes, and demonstrates to regulators, donors, and funding organizations that the nonprofit has adopted a strong and deliberate governance framework from the outset.

(b) Nonprofit Bylaws

While the articles of incorporation establish a nonprofit corporation as a legal entity, the bylaws serve as the organization’s internal operating manual. Although not mandatory under the Louisiana Nonprofit Act, like the articles of incorporation, a clear and comprehensive set of bylaws is critical to a nonprofit corporation’s success, as they provide organizational clarity, reduce the potential for conflict among the organization’s stakeholders, and ensure the organization operates consistently with applicable federal and state law and its stated mission.

Unlike the articles of incorporation, the Louisiana Nonprofit Act does not impose a fixed set of mandatory bylaw provisions. Rather, bylaws are intentionally flexible, and can be tailored to the unique needs, size, and mission of each organization. That said, certain provisions are universally recommended and should be included in every set of bylaws, including:

  • the structure of the board of directors, including the number of directors, their qualifications, terms of office, and the process for their election or appointment;
  • the roles and duties of officers, such as the president, secretary, and treasurer, to ensure clarity in day-to-day operations;
  • meeting procedures for both the board and members, such as notice requirements, quorum rules, and voting procedures, to establish consistent decision-making practices;
  • if the nonprofit corporation has members, membership rights and eligibility, classes of membership, and termination procedures; and
  • a process for amending the bylaws, providing a clear method for adapting the governance framework as the organization evolves.

In addition to these core provisions, a nonprofit corporation may benefit from including additional guidelines tailored to its distinct operations and risk profile, such as director qualifications (e.g., residency or professional expertise), conflict-of-interest policies to promote ethical decision-making, the establishment of committees to handle specific functions, and indemnification provisions to protect directors and officers from personal liability to the fullest extent permitted by law. Bylaws may also address financial oversight responsibilities, including budgeting, audits, and fiscal controls. Including these provisions not only promotes transparency and accountability, but also demonstrates to donors, funding organizations, and regulators that the nonprofit corporation has adopted a strong governance framework. Ultimately, strategically written bylaws help build trust with stakeholders, safeguard the organization against internal disputes, and ensure the nonprofit corporation is equipped to carry out its mission effectively over the long term.

(c) Key Structural Considerations for Louisiana Nonprofits

When forming a nonprofit corporation in Louisiana, organizers must make important structural decisions that shape how the organization will be governed and how it interacts with its stakeholders. Two of the most significant considerations are whether the nonprofit will have members and whether it will be formed on a stock or non-stock basis.

(i) Nonprofit Membership

A Louisiana nonprofit corporation may be formed either with or without members. Members of a nonprofit corporation function similarly to shareholders in a for-profit corporation, though without any ownership rights in the organization. Members may be granted voting power to elect directors, approve amendments to the articles of incorporation or bylaws, and authorize other significant corporate actions. Member-based nonprofit corporations are common for trade associations, professional and advocacy groups, and organizations where active participation and accountability to a defined constituency are central to the mission of the organization.

By contrast, many Louisiana nonprofit corporations choose to operate without members, with governance and operational authority residing solely with the board of directors. This structure simplifies decision-making, reduces administrative costs, and insulates the organization from membership disputes. For most public charities, especially those seeking federal tax-exempt status, this structure is often preferable because it allows the directors to focus on the organization’s mission without navigating internal politics.

(ii) Stock vs. Non-Stock Basis

Louisiana law also requires the articles of incorporation to provide whether the nonprofit corporation will be organized on a “stock” or “non-stock” basis, or both. In practice, most Louisiana nonprofit corporations are formed on a non-stock basis, meaning the organization does not issue shares of stock and ownership is not divided into transferable equity interests, reinforcing the nonprofit corporation’s mission-driven character and ensuring that organizational assets remain dedicated to nonprofit purposes. By contrast, a stock-based nonprofit corporation, while rare, is permitted, and may be useful in certain circumstances, such as cooperative-style organizations where issuing stock to members facilitates participation or financing. Regardless of the approach, the nonprofit must operate without distributing profits to private individuals, consistent with the Louisiana Nonprofit Act and federal tax-exemption requirements.

2. Federal Tax-Exempt Status of a Nonprofit Corporation

Creating a nonprofit corporation under Louisiana law establishes the organization at the state level, but securing federal tax-exempt status is essential to unlock the financial and fundraising benefits on which most nonprofit organizations depend. To obtain exemption from federal income tax and the ability to receive tax-deductible donations, an organization must apply for recognition as a tax-exempt entity with the Internal Revenue Service (“IRS”). For most charitable organizations, this means seeking recognition under Section 501(c)(3) of the Internal Revenue Code.[4]

The application requires detailed disclosures regarding the nonprofit corporation’s structure, governance, programs, and finances, to confirm that the organization is both organized and operated exclusively for exempt purposes and that none of its earnings improperly benefit private individuals. Because the tax exemption application process can be technical and time-intensive, many nonprofit corporations seek assistance from legal or accounting professionals to draft compliant organizational documents, prepare accurate financial disclosures, and ensure adherence to IRS requirements. A well-prepared application improves the chances of prompt approval and provides the organization with a strong foundation for long-term success.

Conclusion

Establishing and operating a nonprofit corporation in Louisiana is a complex process that requires both careful planning and strict adherence to statutory requirements. The articles of incorporation and bylaws form the foundation of the organization, while structural decisions regarding membership and governance dictate how the nonprofit corporation will function over time. A properly structured Louisiana nonprofit corporation provides a durable framework for carrying out charitable, educational, religious, or civic purposes, allowing the organization to make a meaningful impact on its community and the purposes it serves.

Forming and operating a nonprofit corporation in Louisiana involves important legal and structural considerations. Experienced legal counsel can guide you through the formation process, ensure compliance with state and federal requirements, and help you establish a strong foundation so that your organization can focus on achieving its mission.

Tim Robinson is a member of the Business & Corporate group and practices in the firm’s Baton Rouge office. Tim advises clients on the legal aspects of commercial agreements, corporate governance, and business transactions. Committed to serving as outside counsel, Tim helps businesses navigate complex legal issues while maximizing operation efficiency and protecting their long-term investments.

[1] La. R.S. 12:201-12:269.

[2] La. R.S. 12:203.

[3] La. R.S. 12:203B(10)-(11) provides certain additional mandatory provisions depending on whether the nonprofit corporation is organized on a stock or non-stock basis.

[4] Section 501(c)(3) tax-exempt status is the most common for charitable, religious, and educational organizations; however, the Internal Revenue Code provides additional exemptions for other types of nonprofits, including social welfare organizations under §501(c)(4), labor and agricultural organizations under §501(c)(5), business leagues and trade associations under §501(c)(6), and social clubs under §501(c)(7). Each classification carries its own eligibility requirements and limitations on activities.

Within the last year, the legal industry has witnessed a surge in AI-based programs designed to improve workflow, legal research, and legal drafting, such as Westlaw Co-counsel. AI technology, although new, offers significant benefits for helping attorneys enhance their workflow. However, it is not a substitute for an attorney’s legal knowledge, skill, and independent judgment.

Recent headlines highlight egregious examples of attorneys using AI to write briefs, which include fictional cases, or a pro se plaintiff attempting to use an AI-generated attorney in court. Although these are extreme examples, they underscore the importance of sound legal judgment when using AI. Attorneys’ use of AI technologies will not only become standard practice but will also be essential for improving productivity and streamlining case workflow.

How AI Can Help Attorneys Improve Workflow in a Typical Case

  • Electronically Stored Information and Discovery: One of the most significant advancements in legal AI involves discovery. In written discovery, AI can assist in generating standard questions tailored to specific legal issues. This not only saves time but also helps attorneys formulate effective questions in unfamiliar areas of law. Regarding document productions and electronically stored information (ESI), AI can analyze large volumes of ESI to identify specific information. For example, AI can review and prepare a timeline based on the underlying documents and identify documents that involve specific factual or legal issues, e.g., evidence of fraud or breaches of contract. Again, AI is not a replacement for independently reviewing documents or preparing discovery requests, but it can be used as a starting point to give context to an issue or start the document review process.
  • Initial and Niche Research: AI can also provide a valuable resource when conducting legal research. For example, Westlaw has an integrated AI mechanism to help conduct legal research. Not perfect, but the AI search engine can help identify case law, secondary sources, or code articles relevant to the underlying issue. This method is usually a good starting point when researching a new area of law or a niche legal issue. At the bare minimum, using AI to conduct legal research will identify common legal terms or issues associated with the underlying issue, which can help generate more pointed Boolean searches.
  • Deposition Preparation and Completion: From start to finish, AI can help attorneys both before and after a deposition. Before taking a deposition, AI can help prepare potential questions for a witness based on case documents. For example, if there is an upcoming expert deposition, AI can compare prior expert deposition (great for witnesses who have testified before or multiple times), identify gaps in the expert’s reasoning or analysis, and compare and analyze prior expert testimony. After the deposition, AI can help: (i) summarize the deposition for client correspondence or internal records; and (ii) identify and cite to a witness’s testimony on specific topics to use at trial. These uses do not relieve an attorney from verifying the information or checking the AI’s analysis but can drastically increase productivity.
  • Alleviate Writer’s Block: Writing briefs, motions, exceptions, or letters can sometimes be a daunting task for any attorney. Young and old attorneys alike will, at some point in their writing careers, find themselves trying to figure out how to structure a sentence or organize a paragraph. Previously, the options were to push through or delay figuring out the best structure or organization, but now AI can alleviate some pressure and potentially break writer’s block. For example, AI can review sentences and paragraphs, providing suggested revisions or alternative sentence structure. Simple suggestions or revisions can improve motions, briefs, or other written materials. Additionally, AI can be a useful tool for editing and revising grammar or spelling errors.

As indicated, AI has its uses in the legal field. Is it perfect? Is it going to replace attorneys? The answer – no. Attorneys still need to exercise legal judgment, review documents, draft briefs/motions, and double check AI’s work because AI hallucinations and false information continue to be a major pitfall in using the technology. However, AI can and will need to be used to help attorneys improve their workflow and become more efficient. Arguably, AI will allow attorneys to get back to what they do best – think, strategize, and plan.

In summary, AI is not a substitute for the experience and judgment of a skilled attorney, but it can be a powerful tool for making legal work more efficient. When attorneys use AI for tasks like discovery, research, depositions, and drafting, they can spend more time on strategy and planning. Still, it’s important for lawyers to use their own judgment, double check AI’s work and keep ethical standards in mind when working with AI, always respecting their clients’ policies and/or restrictions on AI use. As AI develops, it will likely play an even bigger role in legal practice, opening new ways to work smarter and more effectively.

Michael Levatino, Kelicia Raya, and Claire Juneau are members of Kean Miller’s Energy & Environmental Litigation group, which represents energy and petrochemical clients in litigation involving environmental contamination claims related to oil, gas, and petrochemical operations; wetlands, land loss, and erosion claims; NORM defense; superfunds; and midstream operations and pipelines.

In February of 2020, Great Lakes Dredge and Dock Company wrote to the U.S. Customs and Border Protection (“CBP”) requesting guidance on whether the Jones Act would work to protect their interests with regard to ongoing offshore wind construction efforts being undertaken off the coast of Martha’s Vineyard. Specifically, they wanted to know whether the Jones Act’s cabotage restrictions would apply to vessels transporting scour protection material (layers of rock placed on the seafloor around offshore wind turbines to protect them from erosion) from U.S. locations to pristine or undeveloped points on the Outer Continental Shelf (“OCS”).

CBP’s Initial Ruling and Course Correction

In response, CBP issued a ruling explaining that the Jones Act would indeed apply to any vessel carrying scour protection material from a U.S. point to a prospective wind farm on the OCS, since doing so would constitute the transportation of “merchandise” between “coastwise” points.

However, CBP reversed course on this ruling two months later through a subsequent modification to the aforementioned ruling. The modified ruling announced that the Jones Act’s cabotage restrictions would not apply until after the first delivery of scour protection material onto the seafloor. By way of explanation for this modified ruling, CBP proclaimed that a pristine/undeveloped point on the OCS is not a coastwise point until there has first been some deposit or installation of material on the seabed. Thus, the initial deposit of scour material necessary for constructing an offshore wind farm can be achieved without the use of a coastwise compliant vessel.

Great Lakes Challenges CBP’s Regulatory Shift

Understandably, this regulatory shift caused substantial consternation for decision makers within Great Lakes. Not only did this ruling expose the larger offshore wind sector to significant foreign competition, but it also came down just as Great Lakes had begun constructing the very first Jones Act compliant subsea rock installation vessel, an asset specifically intended to meet the growing demand for coastwise complaint construction vessels in this sphere. As such, Great Lakes took the position that CBP’s modified ruling unjustifiably created a regulatory loophole that substantially undermines the interests of the domestic maritime industry.

Great Lakes thereafter filed suit against the CBP in the Southern District of Texas, arguing that their modified ruling should be set aside by virtue of conflicts with the Jones Act, the Outer Continental Shelf Lands Act, and the Administrative Procedure Act. The American Petroleum Institute (“API”) subsequently intervened in that suit in order to contest Great Lake’s standing to bring this action under Article III, to which Great Lakes responded by arguing that because CBP’s ruling opened them up to competition from foreign vessels, they suffered a redressable injury which empowers them to bring suit. The District Court sided with API and dismissed Great Lakes’ action for lack of standing.

Modified CBP Ruling Remains in Effect

On February 7, 2025, the U.S. Fifth Circuit similarly declined to reach the merits of Great Lakes’ challenge by dismissing their claim and appeal for lack of standing. In so ruling, the Court explained that the mere possibility that Great Lakes may face increased competition in the future is not enough to create standing; rather, a party seeking to rely on “competitor standing” is required to show that the government action at issue has caused them to suffer an actual or imminent increase in competition. Great Lakes could not make this showing because their “injury” was merely hypothetical; they did not presently have a vessel capable of handling similar projects, nor could they point to any prospective projects that called for scour protection to be sourced from U.S. points. Therefore, they lacked standing to contest CBP’s ruling.

The Fifth Circuit’s refusal to consider the merits of Great Lakes challenge to the modified ruling means that it remains in force, for the time being. As such, voyages originating from a point within the United States carrying merchandise to pristine locations on the Outer Continental Shelf may permissibly be undertaken by foreign-flagged, foreign built, and/or foreign-crewed vessels. However, once an initial deposit/installation has been made onto the seafloor, any further voyages to that location from the United States will be subject to the Jones Act’s cabotage requirements (so long as that initial deposit or installation was made for the purpose of exploring for, developing, or producing resources, including non-mineral resources such as wind energy).

Matthew Gaar is a member of Kean Miller’s Offshore Energy & Marine group and practices in the firm’s New Orleans office. His Certificate of Concentration in Maritime Law from Tulane Law School uniquely qualifies Matthew to represent clients in all areas of admiralty law, including Jones Act regulatory compliance, maritime tort litigation, and contractual maritime litigation.

On April 13, 2021, the SEACOR Power, a 234-foot lift boat, encountered a powerful thunderstorm after departing Port Fourchon, Louisiana. The localized severe weather event produced heavy rain, 2- to 4-foot seas, and winds in excess of 80 knots. As the crew of the SEACOR Power attempted to lower the vessel’s legs to the sea floor to ride out the storm, the vessel capsized, resulting in multiple casualties.

How Private Entities Qualify for Federal Officer Jurisdiction

In April 2024, personal representatives of the SEACOR Power’s crew members filed suit against the American Bureau of Shipping (“ABS”) and related companies in Texas state court asserting personal injury and wrongful death claims. In response, ABS filed for the removal of the case to the Southern District of Texas under the federal officer removal statute, 28 U.S.C. § 1442(a)(1). The plaintiffs moved to remand back to state court, and the district court granted their motion. After an unsuccessful motion to reconsider, ABS appealed the remand decision to the U.S. Fifth Circuit.

The federal officer removal statute grants federal jurisdiction over a claim against a nongovernmental defendant “acting under” the direction of the United States through one of its agencies or officers. To be eligible for federal officer jurisdiction, a defendant must meet four criteria:

  1. the defendant’s federal defense must be colorable;
  2. the defendant must be a “person” within the meaning of the statute;
  3. the defendant must have acted under direction of a federal officer; and
  4. the charged conduct is connected or associated with actions taken pursuant to the directions of a federal officer.

A private entity can generally satisfy these elements if it can show that it acted to assist or carry out the duties assigned to it by a federal officer exercising control over the entity.

How ABS Met the Federal Officer Standard

ABS is a unique entity. ABS serves as a classification society, setting safety and design standards for ships and marine-related facilities, but it also inspects ships and other facilities for compliance with United States laws and commercial standards. As part of its inspection program, ABS serves the U.S. Coast Guard (“USCG”) as a “Recognized Organization.” This means that the USCG has delegated authority to ABS to perform mandatory vessel inspections on its behalf. The relationship between the USCG and ABS is memorialized in a written agreement titled “Agreement Governing the Delegation of Statutory Certification and Services for United States of America Flag Ships.”

With respect to the SEACOR Power, ABS provided classification and technical services for the vessel, including reviewing plans and documentation during its design and construction, surveying the vessel, and supervising critical testing. In their suit, the plaintiffs alleged that ABS failed “to ensure the vessel met necessary stability requirements.”

In its decision on appeal, the U.S. Fifth Circuit found that given its special relationship with the USCG, ABS met the criteria for federal officer jurisdiction for several reasons. ABS performs duties, including performing vessel inspections and issuing inspection certificates, that by law the USCG would otherwise have to do itself. The USCG maintains “comprehensive and targeted oversight” over the ABS through a specific office setup exclusively for that purpose. Numerous statutes and regulations expressly charge ABS with the performance of duties on behalf of the USCG.

The USCG has also adopted detailed regulations with respect to “Recognized Organizations,” including ABS, defining their scope of responsibility. Given all of these ties between ABS and the USCG, which existed at the time relevant to the SEACOR Power casualty, the U.S. Fifth Circuit found that ABS satisfied the standard for “acting under” the direction of a federal officer, and ABS had properly invoked federal officer jurisdiction with respect to the claims of the plaintiffs.

Other Private Entities May Also Qualify for Federal Officer Jurisdiction

ABS is a highly specialized organization that the USCG relies on to perform important regulatory functions, but ABS is not entirely unique in this regard. The USCG partners with private entities in a number of areas to accomplish tasks on its behalf, including Subchapter M compliance, mariner training, and maritime security. With respect to these and other areas where the USCG deputizes private entities to perform regulatory functions, the possible exercise of federal officer jurisdiction should be considered in the event of a casualty or dispute.

Daniel Stanton is a member of Kean Miller’s Offshore Energy & Marine group. He has more than a decade of experience litigating complex and catastrophic accident and injury cases in federal and state courts in Louisiana, Texas, Alabama, and North Carolina.

In maritime law, the “Act of God” defense – also known as force majeure – was once a reliable shield for operators facing liability after a natural disaster. If a storm, hurricane, or earthquake caused damage that no human skill could have prevented, the party could, in theory, escape legal responsibility. But in practice – especially in today’s technologically advanced world – this defense is extremely difficult to successfully invoke due to several strict requirements and the inherent nature of maritime operations.

To successfully invoke the Act of God defense, a party must show that the accident could not have been prevented by human skill and precaution and a proper display of nautical skills. In other words, the Act of God event must be the sole and exclusive cause of the damage or injury. This definition alone makes it challenging to apply, as even seemingly natural disasters can be influenced or exacerbated by human actions or inactions.

Additionally, maritime law places a duty on vessel owners and operators to exercise reasonable care to ensure the safety of their vessels and those onboard. This includes taking precautions against foreseeable weather conditions, even if severe. This duty of care often makes it hard to argue that the effects of a natural event could not have been avoided by reasonable prudence and diligence. And Courts look at whether the party causing the damage ought to have been in that predicament and examine the actions taken in the days preceding a weather event to assist in such an analysis.

The recent United States Court of Appeal for the Fifth Circuit decision in Gulf Island Shipyards, L.L.C. v. LaShip, L.L.C., No. 24-30464, 2025 WL 2171133 (5th Cir. July 30, 2025), illustrates just how difficult it is to successfully invoke the Act of God defense.

In Gulf Island Shipyards, Hurricane Ida’s catastrophic landfall in August 2021 spawned a complex web of breakaways and collisions along the Houma Navigation Canal in Louisiana. Gulf Island Shipyards, a marine construction company, had two incomplete service vessels moored at the Bollinger Dock Yard. These vessels had no propulsion systems and were secured with a mooring plan involving unburied 25-ton blocks and stationary bollards. While Gulf Island initially planned to reinforce the moorings with crawler cranes before the storm, it ultimately did not follow through.

When Hurricane Ida hit, one of Gulf Island’s vessels broke free and collided with the M/V BETTY CHOUEST. Reel Pipe, owner of the BETTY CHOUEST, filed a claim for damages, and Gulf Island attempted to invoke the Act of God defense. After a six-day bench trial, the district court rejected the Act of God defense, and found that Gulf Island’s deficient mooring practices, not the hurricane alone, proximately caused the vessel’s breakaway. On appeal, the Fifth Circuit upheld the ruling. It emphasized that extreme weather does not immunize negligence if “human skill and precaution” could have averted the damage.

This case reflects a broader trend in maritime law – Courts rarely accept the Act of God defense today, especially in cargo claims, collision cases, and marine insurance disputes. Given the availability of advanced weather forecasting, modern engineering, and risk planning, maritime operators are now expected to anticipate and prepare for even extreme weather. If any human oversight or negligence contributed, even slightly, the defense will likely fail.

The takeaway here – the Act of God defense once held legitimate weight in maritime law, but in the modern era where risk is monitored, managed, and forecasted, the chances of invoking it successfully have dwindled to near zero. Unless a truly extraordinary, unpreventable, and well-documented natural disaster occurs, courts are likely to view the defense with suspicion. In most cases, even the slightest operational misstep will erase its applicability.

For maritime operators, the lesson is simple: Don’t rely on the Act of God. Invest in prevention, documentation, and compliance. Because in today’s risk-aware environment, claiming helplessness is no longer a strong legal strategy, but rather, a liability. Courts expect operators to act with foresight, skill, and diligence, and when disaster strikes, the burden is on you to prove you did all you reasonably could.

Lauren Guichard Hoskin is a member of Kean Miller’s Offshore Energy & Marine group and practices in the firm’s New Orleans office. She has successfully handled and resolved lawsuits involving maritime personal injury claims, oil and gas casualty and property damage claims, drilling accidents, well blowouts, and various breach of contract disputes.