Marathon Pipe Line Company v. Drilling Rig Rowan/Odessa

761 F.2d 229 (5th Cir. 1985)

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Nature of the Case

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Facts

A jack-up drilling vessel, owned by P, was being towed across an oil pipeline owned by Marathon Pipeline Company (Marathon) and lying beneath the sea on the bed of the Outer Continental Shelf adjacent to the state of Louisiana. A leg of the vessel ruptured the pipeline, necessitating extensive repairs. These were undertaken by Marathon. A repair crew began installing a set of sleeve-like 'hydrocouples' designed by D to join the severed ends of the pipeline. The completed hydrocouples failed during routine testing procedures, causing a second rupture in the pipeline. The next day Marathon began repairing its pipeline through a more conventional method: installation of flanges, a process successfully completed in four days. D tested the hydrocouples and found that their failure had been caused by a defect in their manufacture. D did not charge Marathon for the services it rendered in connection with the hydrocouple installation and agreed to correct the defects in the other hydrocouples Marathon had purchased. D did not pay for other repair expenses Marathon incurred as a result of the failure, including barge time, support vessel expenses, and diving and repair crew expenses for the four days spent installing the defective hydrocouples. These expenses amounted to $47,080 per day, thus making the extra repair costs attributable to the hydrocouple failure $188,320. Marathon sued P and other parties, but not D, seeking damages and repair expenses. The district court found P solely liable for the collision. P appealed this judgment and also filed a third party demand against D seeking indemnity or contribution for any repair costs attributable to the hydrocouple failure that P would be compelled to pay. The district court granted D's motion to dismiss P's third party demand, finding the demand time-barred under either the admiralty doctrine of laches or the Louisiana law of prescription. P appealed. P and Marathon settled the amount and paid for the total repair expenses incurred by Marathon, including the $188,320 attributable to the hydrocouple failure.