author: THEIS, Judge.

text:
    Conrad P. MARCOTTE, Plaintiff, v. SECRETARY OF DEFENSE, et al., Defendants.
    Civ. A. No. 76-309-C6.
    United States District Court, D. Kansas.
    Aug. 21, 1985.

      Jim Lawing, Wichita, Kan., for plaintiff.
    Stephen K. Lester, Asst. U.S. Atty., Wichita, Kan., for defendants.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

THEIS, Judge.

This aged case, now over nine years old and the oldest active case on the Court’s docket, was tried to the Court on May 28 and 29, 1985. The parties called only one witness each and offered a total of forty exhibits. Since trial, both parties have submitted post-trial briefs although neither party has submitted proposed findings of fact and conclusions of law. Nevertheless, after hearing all of the testimony, weighing and evaluating the credibility of all the witnesses, examining the voluminous exhibits admitted at trial, and reviewing the post-trial briefs of the parties, the Court is now ready to enter judgment in this case pursuant to Rule 52 of the Federal Rules of Civil Procedure.

I. FINDINGS OF FACT

1. The plaintiff, Conrad P. Marcotte, is a resident of Wichita, Kansas.

2. On October 14, 1958, Marcotte enlisted in the United States Air Force [Air Force] and on March 30, 1960 was promoted to the grade of Staff Sergeant or E-5.

3. Marcotte was given a commission in the Air Force Reserve as a Second Lieutenant on June 21, 1960.

4. On September 19, 1963, Marcotte accepted a commission in the Regular Air Force and was promoted to the grade of permanent First Lieutenant.

5. Marcotte was promoted to the grade of permanent Captain in the Regular Air Force on June 21, 1967.

6. While an officer in the Air Force, Marcotte, like every other officer, had officer effectiveness reports [OERs] prepared on his performance. The purpose of the OER is “to provide the Air Force with reliable information upon which to base personnel actions.” Exhibit 7, Air Force Manual 36-10, at ¶ 5-1. Since 1963, officers are given a final rating on their OERs that consists of two numbers, such as 9-4. The first number represents the over-all evaluation and is a number between one (1), which represents an unsatisfactory rating, and nine (9), which represents an absolutely superior rating. The second number represents promotion potential and is a number between one (1), which means the rated officer “[d]oes not demonstrate a capability for promotion at this time,” and four (4), which means “[outstanding growth potential based on demonstrated performance. Promote well ahead of contemporaries.” Id., at Ull 6-5, 6-6.

7. After June of 1962, Marcotte received the following OER ratings:

Period Covered by OER Date of OER Rating
June 1, 1962-Feb. 18, 1963 Feb. 15, 1963 7-3
Feb. 19, 1963-July 14, 1963 July 14, 1963 8-3
July 15, 1963-Dec. 1, 1963 May 19, 1964 9-4
Dec. 2, 1963-Oct. 29, 1964 Oct. 29, 1964 7-2
Oct. 30, 1964-Sept. 5, 1965 Sept. 5, 1965 7-2
Dec. 18, 1965-July 31, 1966 July 31, 1966 6-2
Aug. 1, 1966-Mar. 10, 1967 Mar. 10, 1967 7-3
Mar. 11, 1967-Aug. 31, 1967 Aug. 31, 1967 7-3
Sept. 1, 1967-Aug. 31, 1968 Sept. 5, 1968 8-3
Sept. 1, 1968-Dec. 19, 1968 Dec. 20, 1968 8-3
Dec. 20, 1968-Dec. 19, 1969 Dec. 19, 1969 8-3
Dec. 20, 1969-June 19, 1970 June 19, 1970 9-4
June 20, 1970-Apr. 21, 1971 Apr. 21, 1971 9-4
Apr. 22, 1971-Apr. 21, 1972 Apr. 21, 1972 9-3
Apr. 22, 1972-Apr. 21, 1973 Apr. 21, 1973 9-3
Apr. 22, 1973-Apr. 21, 1974 Apr. 21, 1974 9-4
Apr. 22, 1974-Oct. 18, 1974 Oct. 18, 1974 9-4

8. In 1969, 1970, 1971, and 1972, Marcotte was “passed over” or not selected for promotion to temporary major by the Air Force Temporary Major Selection Boards for those years,

9. On August 20, 1973, Marcotte was passed over for promotion to permanent major by the Air Force Permanent Major Selection Board.

10. On September 17, 1973, Marcotte was passed over for the fifth time by the Air Force Temporary Major Selection Board.

11. On May 15, 1974, Marcotte made an application to the Office Personnel Records Review Board [Review Board] of the Air Force for action concerning several OERs he had received. The Review Board, composed solely of Air Force officers, is empowered to correct administrative errors on OER’s or to void ■ OERs entirely. Marcotte’s application requested the following actions on the following OER’s:

Date of OER Rating Requested Action
May 19, 1964 9-4 Correct duty title and description, void indorsement and indorsing official’s rating changes
Oct. 29, 1964 7-2 Void the OER
Sept. 5, 1965 7-2 Void the OER
July 31, 1966 6-2 Void the OER
Aug. 31, 1967 7-3 Void the OER

See Ex. 14.

12. On May 20, 1974, Marcotte was recommended for decoration with the Air Force Commendation Medal by Colonel Leroy P. Brunner, Assistant Chief of Staff, Data Systems. This decoration was recommended because of Marcotte’s exemplary performance and meritorious service from January 6, 1969 to April 30, 1974 at the March Strategic Air Command Automated Command Control System at March Air Force Base, California. The medal was approved on June 28, 1974 and awarded on July 1, 1974.

13. On July 8, 1974, Marcotte was passed over for the second time by the Air Force Permanent Major Selection Board. The fact that Marcotte had been recommended for and awarded the Air Force Commendation Medal was not reflected in the selection folder on Marcotte reviewed by the Air Force Permanent Major Selection Board.

14. On June 25,1974, a recommendation that Marcotte be decorated with the Air Force Commendation Medal was initiated by the 22d Combat Support Group Commander. This recommendation covered the same time period as the recommendation for decoration by Colonel Brunner. On July 10, 1974, Colonel Robert A. Wickland removed this record endation from official channels and returned it to the 22d Combat Support Group Commander because a similar decoration for Marcotte covering the same time period had already been approved.

15. On July 11, 1974, the Review Board rendered a decision on Marcotte’s May 15, 1974 request for action on five OERs. The Review Board granted Marcotte’s request to make the duty title changes requested on the OER dated May 19, 1964 and to void that OER’s indorsement and the indorsing official’s rating changes. However, the Review Board denied all other relief requested by Marcotte as to the other four OERs.

16. On October 7, 1974, Marcotte was sent notice that he had been passed over for promotion to permanent major for the second time and that he would therefore be forced to resign his commission by March 31, 1975.

17. Faced with being forced to resign his commission, Marcotte made an application for correction of records to the Air Force Board for the Correction of Military Records [Corrections Board] on October 14, 1974. The Corrections Board is a board composed of Air Force civilians empowered to correct any Air Force record when necessary to correct or remedy an injustice. Marcotte requested that the Corrections Board void the four OER’s dated October 29, 1964, September 5, 1965, July 31, 1966, and August 31, 1967. Marcotte also asked the Corrections Board to promote him retroactively to temporary major as of December 21, 1972 and to permanent major as of June 21, 1974.

18. On October 24,1974, Marcotte made an action request to the Inspector General of the Air Force [Inspector General]. The Inspector General is empowered to investigate allegations that Air Force procedures and regulations are being violated. Marcotte alleged that the failure to include notice of the recommendation and award of the Air Force Commendation Medal in his selection folder reviewed by the Air Force Permanent Major Selection Board violated Air Force regulations. Marcotte also alleged that Colonel Wicklund had no authority to remove the second recommendation for the Air Force Commendation Medal from official channels and that such conduct violated Air Force regulations.

19. On November 21, 1974, Captain Jean M. Kibbey of the Directorate of Personnel Program Actions of the Air Force wrote a memorandum to the Corrections Board explaining the basis for the Review Board’s refusal to grant Marcotte’s request to void the four OERs dated October 29, 1964, September 5, 1965, July 31, 1966, and August 31, 1967. On December 17, 1974, Colonel Derwin L. Bohne of the Directorate of Personnel Program Actions signed a similar memorandum to the Corrections Board that had been written by Lillian Kinsala. Both memoranda, referred to by the parties as “staff advisories,” recommended that the Corrections Board deny Marcotte’s application.

20. No specific request was made by the Corrections Board to the Review Board for its opinions and views on the merits of Marcotte’s appeal. However, the staff advisories were prepared in response to a standing request for such information, evidenced by a memorandum from James P. Goode, Deputy Assistant Secretary for Personnel Policy, Department of the Air Force dated May 22, 1973. While the memorandum uses as an example appeals to the Corrections Board involving airmen, not officers, it is clear that the request for “review, comment or opinion, and recommendation” applies to all matters appealed to the Corrections Board. See Ex. 38, p. 3.

21. The Inspector General replied on January 7, 1975 to Marcotte’s October 24, 1974 action request. The Inspector General stated that Colonel Wickland’s removal of the second Air Force Commendation Medal recommendation from official channels did not violate Air Force regulations since two medals or awards could not be given for the same period of service. The Inspector General also stated that the Corrections Board, in determining whether to promote Marcotte to the grades of temporary or permanent major, was considering the citation accompanying the Air Force Commendation Medal which had been awarded to Marcotte. No further action was taken by the Inspector General on Marcotte’s complaint.

22. On March 12, 1975, the Corrections Board found that Marcotte had “fail[ed] to establish a showing of probable error or injustice____” Ex. 2. The Corrections Board therefore denied all relief requested.

23. On March 30, 1975, Marcotte resigned his commission in the Regular Air Force. On March 31, 1975, Marcotte reenlisted in the Regular Air Force and was given the grade of sergeant or E-4.

24. On December 22, 1975, Marcotte wrote a letter to Keith G. Sebeluis, who was at that time a member of the U.S. House of Representatives representing the First District of the State of Kansas. In this letter, Marcotte explained the problems he was facing with the Air Force and outlined his appeal efforts.

25. On February 12,1976, Rep. Sebelius wrote a letter to the Secretary of the Air Force inquiring about what was being done with regard to Marcotte’s appeals and included as an attachment, a copy of Marcotte’s letter to Sebelius. The letter from Sebelius was answered by a letter from David P. Taylor, Assistant Secretary of the Air Force for Manpower and Reserve Affairs. This letter explained that Marcotte’s appeals had been considered but that no error or injustice had been demonstrated and, therefore, Marcotte’s requested relief was denied. A copy of this letter was forwarded by Rep. Sebelius to Marcotte. Marcotte also sent a letter to Robert Dole, a U.S. Senator from the state of Kansas, similar to the letter he had sent to Rep. Sebelius. The letter to Sen. Dole was likewise forwarded to the Air Force which, in turn, replied and defended to Sen. Dole the action taken by the Air Force with respect to Marcotte.

26. On March 21, 1976, Marcotte filed a second action request with the Inspector General. This action request alleged numerous violations of Air Force regulations arising primarily out of consideration of the staff advisories by the Corrections Board when ruling upon Marcotte’s October 14, 1974 application for the correction of records. Marcotte also complained that the letter from Taylor to Rep. Sebelius quoted verbatim from the allegedly illegal staff advisories.

27. On June 4, 1976, the Inspector General sent a memorandum to the Corrections Board with an attached copy of Marcotte’s second Inspector General action request. The memorandum “[r]equest[ed] information upon which to base a reply.” Ex. 36.

28. In response to the Inspector General’s request, Major Charles R. Price prepared a document entitled “SUBJECT: Chronology of Events/Communiques — Sgt Marcotte.” Ex. 28. This three-page document, referred to by the parties as “the talking paper,” is a chronology of Marcotte’s attempts to have his OERs voided and to get promoted to major. It also included references to Marcotte’s congressional correspondence and the Air Force’s replies to the inquires by Rep. Sebelius and Sen. Dole.

29. The Court finds that the talking paper was reasonably accurate, complete, and relevant and was necessary to enable the Inspector General to respond properly to Marcotte’s action request. Marcotte’s primary complaint concerning the talking paper is that the talking paper, as a summary of information gleaned from his records, is necessarily not as complete as the records themselves. Merely stating this truism, however, falls far short of demonstrating that the information contained in the talking paper is not reasonably complete. Marcotte failed to point to any substantial omission or inaccuracy in the talking papers. The Court finds the talking paper to contain all of the material information necessary to respond to the Inspector General’s information request in a reasonably accurate fashion.

Marcotte also complains that some of the information in the talking paper, primarily the mention of his congressional correspondence, is irrelevant. Yet once again, Marcotte failed to demonstrate the irrelevance of any statement in the talking paper. The discussion in the talking paper about Marcotte’s congressional correspondence was clearly prompted by Marcotte’s action request to the Inspector General. In that action request, Marcotte alleged improprieties in the Air Force’s response to the inquiries made by Rep. Sebelius and Sen. Dole at Marcotte’s insistence. The mention of Marcotte’s congressional correspondence was necessary to put the facts underlying Marcotte’s allegations in context and to enable the Inspector General to frame an adequate response.

30. On June 24, 1976, the Corrections Board responded to the Inspector General’s request for information by way of a memorandum signed by Colonel R.W. Haganer, Director of Personnel Program Actions. The memorandum responded in detail to Marcotte’s allegations of violations by the Corrections Board of Air Force regulations and defended the use and accuracy of the staff advisories. Accompanying this memorandum was a copy of the talking paper prepared by Major Price.

31. On July 6, 1976, the Inspector General responded to Marcotte’s second action request challenging the legality of the staff advisories. The Inspector General concluded that the staff advisories were neither improper nor inaccurate.

32. Marcotte filed this lawsuit on July 9, 1976.

33. On March 20, 1978, Marcotte filed a second request with the Review Board, again requesting that the OER dated October 29, 1964 be voided. In support of this request, Marcotte included letters of recommendation by Daniel M. Bussiere, a retired Air Force major who had been Marcotte’s direct supervisor from January 10, 1964 until April 9, 1964, a period of time encompassed by the review period of the challenged OER.

34. On April 11, 1978, the Review Board found that Marcotte had failed to demonstrate the invalidity or inaccuracy of the challenged OER by a preponderance of the evidence and therefore denied Marcotte’s request for relief.

35. On May 26, 1978, Marcotte filed a second application for relief with the Corrections Board. In this application, Marcotte requested that he be awarded two Air Force medals, that the four previously challenged OER’s be voided, that the resignation of his commission be voided, that his previous pass-overs by the Air Force Temporary Major and Permanent Major Selection Boards be set aside, that he be promoted to temporary major, and that he be considered for promotion to permanent major.

36. On June 21, 1978, Frank S. Dispenza acknowledged receipt of Marcotte’s second application for relief by the Corrections Board and stated that the application would be given consideration.

37. On June 28, 1978, Dispenza wrote another letter to Marcotte explaining why no written statement had been prepared of the reasons for the Corrections Board’s denial of Marcotte’s first application for relief to the Corrections Board. The letter further stated that:

It is my opinion that you do not believe the Board had given you a fair consideration. I, and members of my staff, have counselled you at great length on the procedures of the Board.
By this letter I recommend to you that you seek further redress of your grievances with the civil courts. Maybe they can satisfy your bitterness. It appears that no matter what the Air Force says to you, you refuse to believe it.
Please let me know of your future plans within the next 60 days.

Ex. 4, p. 2.

38. On August 8, 1978, Dispenza wrote a letter , advising Marcotte that his second application to the Corrections Board was being filed without action.

39. On August 31,1978, Marcotte wrote a letter to the Corrections Board asking that his second application to the Corrections Board be given consideration. This letter was never answered and his second application to the Corrections Board remains filed without action.

40. Marcotte requests that this Court find that the talking paper was a violation of the Privacy Act, 5 U.S.C. § 552a, that the action of the Corrections Board is arbitrary and capricious, and that upon his reenlistment in the Air Force after resigning his commission, he was entitled to the rank of Staff Sergeant or E-5. Marcotte asks for damages resulting from the Privacy Act violation and asks that the Corrections Board be ordered to correct his OERs and consider whether he should be retroactively promoted to major.

II. CONCLUSIONS OF LAW

1. The Court has jurisdiction over the subject matter of this case pursuant to 28 U.S.C. § 1331 and, since plaintiff resides in this district, venue is proper in this district under 28 U.S.C. § 1391(e)(4).

2. Marcotte asserts that the talking paper prepared by Major Price was a record maintained in violation of 5 U.S.C. § 552a(e)(5) because it is inaccurate, incomplete, and irrelevant. The Privacy Act does not require that perfect records be maintained; rather, records must be maintained only “with such accuracy, relevance, timeliness, and completeness as is reasonably necessary to assure fairness to the individual in the determination.” 5 U.S.C. § 552a(e)(5) (emphasis added). See also Edison v. Department of the Army, 672 F.2d 840 (11th Cir.1982). The Court has found that the information in the talking paper was reasonably accurate, complete and relevant. The Court has previously rejected Marcotte’s argument that the maintenance of records of his congressional correspondence violated his First Amendment rights. See Dk. No. 61. Hence, the creation and maintenance of such a document is not a violation of the Privacy Act.

3. The Inspector General and the Corrections Board are separate entities but are both encompassed within a single agency for the purposes of the Privacy Act. “Agency” is defined as “any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch of the Government (including the Executive Office of the President), or any independent regulatory agency.” 5 U.S.C. § 552(e) (as adopted by 5 U.S.C. § 552a(a)(1)). The Department of the Air Force is a single agency for purposes of the Privacy Act because it is a military department, although it is subdivided into separate entities. See 32 C.F.R. § 806.1 to 806.18 (regulations implementing the Privacy Act and Freedom of Information Act for entire Department of the Air Force). Cf. Rowe v. State of Tennessee, 431 F.Supp. 1257, 1264 (E.D.Tenn.1977) (Department of the Air Force is the proper party defendant in action brought under the Privacy Act). See generally Anno., 57 A.L.R.Fed. 295 (1982). Thus, the agency that maintained the talking paper as a record is, for purposes of the Privacy Act, the Department of the Air Force.

4. Disclosure of the talking paper to the Inspector General by the Corrections Board did not violate the Privacy Act because such disclosure falls within the scope of 5 U.S.C. § 522a(b)(l). That provision states that:

No agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains, unless the disclosure of the record would be—
(1) to those officers and employees of the agency which maintains the record who have a need for the record in the performance of their duties____

5 U.S.C. § 552a(b)(l). The Inspector General is an officer or employee of the agency that maintained the record, the Department of the Air Force. The Court has held that the Inspector General had a need for the talking paper in order to adequately perform his duties, responding to Marcotte’s action request challenging the propriety of the staff advisories. The disclosure of the talking paper to the Inspector General without the prior written consent of Marcotte did not violate the Privacy Act. Therefore, Marcotte’s claims under the Privacy Act are without merit.

5. The standard for reviewing action by the Corrections Board is very strict:

Once a plaintiff has sought relief from the Corrections Board, such plaintiff is bound by that board’s determination unless he can meet the difficult standard of proof that the Corrections Board’s decision was illegal because it was arbitrary, or capricious, or in bad faith, or unsupported by substantial evidence, or contrary to law, regulation, or mandatory published procedure of a substantive nature by which plaintiff has been seriously prejudiced____ See, e.g., Skinner v. United States, [594 F.2d 824 (Ct.Cl.1979) ]; Boyd v. United States, 207 Ct.Cl. 1 (1975), cert. denied 424 U.S. 911 [96 S.Ct. 1106, 47 L.Ed.2d 314] (1976); Cooper v. United States, 203 Ct.Cl. 300, 304 (1973).

Sanders v. United States, 594 F.2d 804, 811 (Ct.Cl.1979). Thus, Marcotte must meet a heavy burden in order to demonstrate that the action of the Corrections Board should be reversed.

6. The conduct of the Corrections Board in filing Marcotte’s second application without action is arbitrary and capricious and shall be overturned. Marcotte made very clear to the Corrections Board his desire that his application be considered on its merits. The Corrections Board, by failing to consider or address the merits of Marcotte’s application, failed to exercise its discretion. A decision of the Corrections Board is given great latitude because it is an exercise of discretion assigned to the Corrections Board by Congress. See 10 U.S.C. § 1552(a). However, the failure to decide a question when the question has been properly presented for decision is arbitrary and capricious. See, e.g., Matzke v. Block, 564 F.Supp. 1157 (D.Kan.1983) (failure to enact standards and regulations found an abuse of discretion although the decision on what specific standards to enact and their application is purely discretionary). Therefore, the Court shall direct the Corrections Board to consider Marcotte’s second application and reach a decision on its merits.

7. Marcotte has also requested that this Court order the Corrections Board to void the four OERs that he challenges and to set aside his pass overs by the temporary and permanent major selection boards. This the Court cannot do. The refusal by the Corrections Board to void the four challenged OERs and to set aside the pass overs must be upheld unless arbitrary or capricious. Sanders, 594 F.2d at 819. The Court should refrain from interfering with the inherently subjective process of officers evaluating other officers “unless there is clear and convincing evidence of factors adversely affecting the ratings which had no business being in the rating process.” Guy v. United States, 608 F.2d 867, 871 (Ct.Cl.1979) (emphasis in original) (citations omitted). No such evidence was presented by Marcotte, either before the Corrections Board or before this Court. The Corrections Board considered the evidence in the files as well as the evidence submitted by Marcotte with his first application and determined that no relief was warranted. Such a decision is not so unsupported by the evidence as to be arbitrary or capricious, and this Court shall not disturb it.

8. Marcotte has also asked the Court to find that the use of staff advisories by the Corrections Board in this case is a violation of Air Force Regulation 31-3 (codified at 32 C.F.R. § 865). That regulation provides, in pertinent part:

At the request of the Board, the appropriate staff office will assemble the original or certified copies of. all available military records pertinent to the corrective action requested. Such records together with the application and all supporting papers will be transmitted to the Board with a certification from the staff office designated by by the Chief of Staff, USAF, that the corrective action requested cannot be granted through administrative action by any staff office. The facilities of all staff offices will be made available as required to assist the Board in accomplishing its function. Upon request of the Board, personnel of the Air Staff will be made available for presentation before the Board of matters within their functional areas and which relate to the issues under consideration.

32 C.F.R. § 865.16 (emphasis added). Marcotte concedes that if the Corrections Board had made a specific request for the staff advisories in his case, their submission and consideration would have been proper. However, since no specific request for staff advisories was made in his case, Marcotte asserts that their submission to the Corrections Board violates Air Force regulations.

The defendants contend that a standing request for such advisories had been made by the Corrections Board and that such a standing request is not prohibited by regulations. The Court agrees. Nothing in Air Force Regulation 31-3 requires that a separate request for staff advisories be made in each individual case, nor does that regulation prohibit the use of a standing request for such information. There was no evidence that the Corrections Board uniformly adopts the recommendations contained in the staff advisories so as to amount to a de facto delegation of its statutory duties. Instead the memorandum from Goode states that such recommendations will only be considered as “expert opinions.” Ex. 38, p. 4. The Court finds that the use of the staff advisories by the Corrections Board in the consideration of Marcotte’s first application was neither a violation of Air Force regulations nor contrary to the spirit behind the establishment of the Corrections Board.

9. Marcotte has also asked that this Court require the Corrections Board to grant him a hearing on his second application. This, again, the Court cannot do because the decision to grant a hearing is discretionary with the Corrections Board. See Knehans v. Callaway, 403 F.Supp. 290, 297 (D.D.C.1975); see also 32 C.F.R. § 865.7(a).

10. Similarly, the Court cannot order the Corrections Board to convene a relook board to determine whether Marcotte would have been promoted by the earlier selection boards. The Court agrees that the use of a relook board may be indicated in this case. A relook board is a reconstituted selection board of Air Force officers convened for the purpose of looking at a corrected selection folder of a candidate for promotion and determining whether, on the basis of that corrected record, the candidate should have been promoted originally. See generally Dilley v. Alexander, 603 F.2d 914, 919 (D.C.Cir.1979). The Court finds it highly significant that Marcotte had been recommended for the Air Force Commendation Medal by two different commanders, see Findings of Fact, supra, # 12-14, but that Marcotte’s selection folder failed to reflect either of these recommendations or the fact that one of the recommendations had been approved and Marcotte awarded the Air Force Commendation Medal. Since no evidence was offered at trial as to the significance and importance of the Air Force Commendation Medal or as to the difficulty of attaining it, the Court cannot hold as a matter of law that its presence in Marcotte’s selection folder would have caused him to be promoted. Nonetheless, it is an apparently important addition to Marcotte’s selection folder and should be given careful and appropriate consideration by those in the best position to do so properly, an Air Force selection board. The Court would strongly recommend, therefore, that the Corrections Board convene a relook board in this case. However, while the use of a relook board in this case may be adviseable, the final decision of whether to convene a relook board is committed to the sound discretion of the Corrections Board. See Jones v. Alexander, 609 F.2d 778, 783 (5th Cir.1980).

11. The issue of at what rank Marcotte was entitled to reenlist is solely one of statutory interpretation. The pertinent statute is 10 U.S.C. § 8258 which reads:

Any former enlisted member of the Regular Air Force who has served on active duty as a reserve officer of the Air Force, or who was discharged as an enlisted member to accept a temporary appointment as an officer of the Air Force, is entitled to be reenlisted in the Regular Air Force in the enlisted grade that he held before his service as an officer, without loss of seniority or credit for service, regardless of the existence of a vacancy in his grade or of a physical disability incurred or having its inception in line of duty, if (1) his service as an officer is terminated by an honorable discharge or he is relieved from active duty for a purpose other than to await appellate review of a sentence that includes dismissal or dishonorable discharge, and (2) he applies for reenlistment within six months (or such other period as the Secretary of the Air Force prescribes for exceptional circumstances) after termination of that service.

(emphasis added). The parties have cited no cases, and the Court’s research has disclosed none, which discuss whether § 8258 grants reenlistment rights to a person who was a former enlisted member of the Regular Air Force who served on active duty as an officer in the Air Force Reserves but then was given a commission and served on active duty as an officer in the Regular Air Force. However, another virtually identical statute has been interpreted with respect to this issue. The U.S. Court of Appeals for the District of Columbia Circuit has interpreted 10 U.S.C. § 3258 as not granting reenlistment rights to a former enlisted man in the Army who accepts a commission as an officer first in the Army Reserves and later in the Regular Army. Perry v. Commanding Officer, Headquarters, 547 F.2d 662 (1976). That statute, § 3258, is identical to § 8258 except that it substitutes the word “Army” wherever the words “Air Force” appear in § 8258. See Letter from Wilber M. Brucher, Secretary of the Army to Honorable Sam Rayburn, Speaker of the House of Representatives, January 15, 1957, 1958 U.S.Code & Adm.News 3298 (“Title 10, United States Code, sections 8258 and 8448(d) contain provisions which are identical to those pertaining to Army personnel in sections 3258 and 3448(d) respectively.”). Compare § 3258 with § 8258. Indeed, § 3258 and § 8258 were both enacted by Congress as part of the same statute but were merely codified in different places. See July 14, 1939, ch. 267, § 1; see also Pub.L. 85-603, §§ 1(1) and (3), 72 Stat. 526.

In Perry, the Court of Appeals carefully examined the legislative history of § 3258 including its predecessor statutes. After this thorough analysis, which this Court need not repeat here, that court stated:

The statute [§ 3258] grants reenlistment rights to former enlisted men on the termination of their service as officers on temporary active duty with Reserve components but denies the same reenlistment rights to former enlisted men who accept Reserve commissions and subsequestly are commissioned as officers in the Regular Army — even though the latter may be the better qualified men. In doing so, the statute distinguishes between temporary service with Reserve components and permanent service with Regular Army components.

Perry, 547 F.2d, at 672 (emphasis in original).

The Court finds the decision in Perry to be thoughtful and persuasive. The Court further finds that the interpretations given to § 3258 are very helpful and enlightening since the two statutes are so similar. See, e.g., Northcross v. Bd. of Education of Memphis City Schools, 412 U.S. 427, 93 S.Ct. 2201, 37 L.Ed.2d 48 (1973). This is especially true in this case where the interpretation given to § 3258 by the D.C. Court of Appeals was largely based upon its legislative history which is shared with § 8258. The Court therefore holds that Marcotte has no reenlistment rights under § 8258 because those rights extend to former enlisted men only six months from the termination of their temporary service with the Reserve Air Force, not their permanent service with the Regular Air Force. Marcotte’s right to reenlist under § 8258 thus expired six months after he accepted a commission in the Regular Air Force on September 19, 1963.

III. FINAL JUDGMENT

1. Judgment shall be entered in favor of the defendants on Marcotte’s claim under the Privacy Act.

2. Judgment shall be entered in favor of Marcotte on his claim that the Corrections Board acted arbitrarily and capriciously. The Corrections Board is ordered to give normal consideration to and either grant or deny on its merits Marcotte’s application for the corrections of records dated May 26, 1978. The Corrections Board shall give Marcotte a reasonable time in which to submit any additional evidence in support of his application which he may have found in the seven years since he filed his application. The Corrections Board need not grant a hearing if, in the sound exercise of its discretion, it determines that a hearing is not necessary.

3. Judgment shall be entered in favor of the defendants on Marcotte’s claim of reenlistment rights under 10 U.S.C. § 8258.

4. The clerk is hereby directed to prepare a journal entry of judgment in accord with the above findings or fact and conclusions of law and submit it for this Court’s approval pursuant to Rule 58 of the Federal Rules of Civil Procedure.

IT IS SO ORDERED.


source: Caselaw Access Project

author: VERON, District Judge.

license: Public Domain

text:
    Ferdinand J. HEBERT v. KERR-McGEE CORPORATION, et al.
    Civ. A. No. 83-0274.
    United States District Court, W.D. Louisiana, Lake Charles Division.
    Aug. 22, 1985.

      Stephen R. Streete, Salter, Streete & Hale, Lake Charles, La., for plaintiff, Hebert.
    Bert M. Cass, Eileen R. Madrid, Deutsch, Kerrigan & Stiles, New Orleans, La., for Kerr-McGee Corp.
    W. Gerald Gaudet, Robert L. Ellender, Voorhies & Labbe, Lafayette, La., for Electrical & Instrumentation Unlimited, Inc.
    Robert W. Clements, Stockwell, Sievert, Viccellio, Clements & Shaddock, Lake Charles, La., for Crain Bros., Inc.
    A.R. Johnson, IV, Plauche, Smith & Nieset, Lake Charles, La., for CNA Ins. Co. and CE Natco.
   RULING

VERON, District Judge.

This matter comes before the Court on the motion of third-party defendant Electrical & Instrumentation Unlimited, Inc. [EIU] for partial summary judgment in its favor dismissing the portion of Kerr-McGee Corporation’s third party complaint that seeks contractual indemnity from EIU. The plaintiff in this suit, Ferdinand Hebert, alleges that he was injured when he slipped and fell on an oily deck while employed by C-E Natco on an offshore platform owned and operated by Kerr-McGee on the Outer Continental Shelf off of the Texas coast. Hebert sued Kerr-McGee under the Outer Continental Shelf Lands Act, 43 U.S.C. § 1333. Kerr-McGee in turn third-partied EIU alleging that Hebert’s claim was encompassed by an indemnity provision contained in a master service agreement between Kerr-McGee and EIU.

The master service agreement between EIU and Kerr-McGee is dated September 15, 1980. Paragraph 6 of the contract obligates EIU to defend and indemnify Kerr-McGee against the various described claims “whether the same is caused or contributed to by the negligence of Kerr-McGee, its agents or employees.” On March 27, 1981, Kerr-McGee issued a work order to EIU for an electrical installation job on Kerr-McGee’s High Island Block 508-A platform. The plaintiff allegedly slipped on oil leaking from an EIU temporary generator while operations under the work order were still in progress, on January 24, 1982.

I. ISSUES

In pursuing its motion, EIU contends that the indemnity agreement is invalid under the Louisiana Oilfield Anti-Indemnity Act, La.R.S. 9:2780, or, alternatively, if Louisiana law is not applicable, that Texas law applies to invalidate the agreement, under Tex.Civ.Stat.Ann. art. 2212b. Kerr-McGee in turn responds alternatively (1) that the state anti-indemnity statutes are inconsistent with controlling federal law and that they are therefore inapplicable under the Lands Act, (2) that, if Texas law is in fact applicable, the indemnity provision is enforceable to the extent that EIU has procured insurance pursuant to the master service agreement, and (3) that, if Louisiana law applies, that section 2780 is nonetheless inapplicable on the facts of this case. These varied alternative contentions all lead to one initial issue: Which body of law governs the contractual indemnity claim asserted in this case?

II. CHOICE OF LAW

Federal Law

The laws of the adjacent state are applicable on the Shelf “[t]o the extent that they are applicable and not inconsistent with [OCSLA] or with other Federal laws and regulations of the Secretary [of the Interior].” 43 U.S.C. § 1333(a)(2)(A). In United States v. Seckinger, 397 U.S. 203, 90 S.Ct. 880, 25 L.Ed.2d 224 (1970), the Supreme Court held that, under the federal common law governing contracts entered into by the United States, an indemnitee is permitted to recover for claims arising out of its own negligence. 397 U.S. at 209-17, 90 S.Ct. at 884-88. Kerr-McGee points to the inconsistency between the state anti-indemnity statutes and the rule permitting indemnity in Seckinger and urges that the statutes are therefore displaced under the Lands Act. This same contention is now being considered by a panel of the Fifth Circuit. See Doucet v. Gulf Oil Corp., No. 84-3711 (5th Cir., argued July 10, 1985) (pending decision), noted in 2 Fifth Cir.Rep. 465 (1985). The Court will accordingly do little more than note its concurrence with the view that Seckinger is not itself applicable to purely private contracts on the Shelf and that, in any event, the phrase “other Federal laws” in section 1333(a)(2)(A) refers not to federal common law but instead to federal statutory law. See Frazier v. Columbia Gas Development Corp., 596 F.Supp. 429, 430-31 (W.D.La.1984); Greer v. Services Equipment and Engineering, Inc., 593 F.Supp. 1075, 1077-78 (E.D.Tex.1984); see also S.Rep. No. 411, 83d Cong., 1st Sess. 23 (1953), quoted in Rodrigue v. Aetna Casualty and Surety Company, 395 U.S. 352, 357-58, 89 S.Ct. 1835, 1838, 23 L.Ed.2d 360 (1969) (“Paragraph (2) adopts State law as Federal law, to be used when Federal statutes or regulations of the Secretary of the Interior are inapplicable.”) (emphasis added); cf. Rigby v. Tenneco Oil Co., 607 F.Supp. 1247 (E.D.La.1985) (the Longshoreman’s Act does not bar application of section 2780 on the Shelf except where the 1984 amendments are applicable). The Court therefore holds that the rule enunciated in Seckinger does not displace an adjacent state anti-indemnity statute on the Shelf.

Adjacent State Conflicts Law Under the Lands Act

The interests and contentions of the parties have shifted somewhat during the course of briefing and arguments on this motion. Initially, EIU urged that Texas conflicts law applied here in a fashion that mandated resort to Louisiana contractual indemnity law. As the arguments developed, however, it soon became apparent that this particular contention might better serve Kerr-McGee. The Louisiana Oilfield Anti-Indemnity Act might not apply to bar this particular indemnity claim because the specific work order involved here was issued prior to the statute’s effective date. Yet, regardless of these shifting interests, the preliminary issue remains before the Court of whether the Lands Act incorporates the choice-of-law principles of the adjacent state as surrogate federal law.

Broad language in a recent case by the Supreme Court and in another recent case by the Fifth Circuit indicates that the Lands Act supersedes normal choice-of-law rules such that the adjacent state’s law of contractual indemnity automatically governs indemnity provisions applicable on the Shelf. See Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 482 n. 8, 101 S.Ct. 2870, 2877 n. 8, 69 L.Ed.2d 784 (1981); Mills v. Zapata Drilling Co., 722 F.2d 1170, 1174 (5th Cir.1983). Yet in neither case was the issue squarely presented of whether the Lands Act carries the adjacent state’s choice of law rules out on to the Shelf where those rules merely apply state law that otherwise would govern if the action in fact had arisen within the adjacent state. That precise issue has been raised in this case. The analysis of the question necessarily begins with the Supreme Court’s decision in Chevron Oil Company v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971).

In Chevron, the Supreme Court held that Louisiana’s one-year prescriptive period, rather than the maritime doctrine of laches, applied to a personal injury action arising on a platform on the Shelf off the Louisiana coast. The court of appeals below had applied maritime law on the theory that, under Louisiana conflicts law, the one-year prescriptive period contained in former article 3536 was not binding outside of a Louisiana forum and that, hence, article 3536 was not applicable in a federal forum hearing a Lands Act case. See Chevron, 404 U.S. at 101-02, 92 S.Ct. at 353. In reversing this decision, the Chevron Court observed:

[A] federal court applying Louisiana law under § 1333(a)(2) of the Lands Act is applying it as federal law — as the law of the federal forum. Since the federal court is not, then, applying the law of another forum in the usual sense, ordinary conflict of laws principles have no relevance. Article 3536 is “applicable” in federal court under the Lands Act just as it would be applicable in a Louisiana court.

404 U.S. at 102-03, 92 S.Ct. at 353 (emphasis in original). As this Court reads this language, Chevron does not prohibit resort to conflicts principles of the adjacent state in a Lands Act case. Instead, Chevron proceeds from the fundamental premise that adjacent state law applies as the law of the federal forum and demonstrates that, accordingly, the federal forum must be viewed as the local, rather than a foreign, forum when the adjacent state’s conflicts principles are applied as surrogate federal law. That is, the error of the lower court lay not in the fact that it applied Louisiana choice of law principles, but in the fact that the court effectively treated the federal Lands Act forum as a foreign forum when it applied those principles as the surrogate law of that forum. Repetition of this error is all that Chevron prohibits. The decision does not bar, and is entirely consistent with, application of adjacent state conflicts law on the Shelf, so long as the Lands Act forum is treated as the local forum for purposes of the conflicts analysis.

This reading of Chevron is consistent with the law in other contexts in which state law is adopted as surrogate federal law. For example, the Federal Tort Claims Act provides for adoption of “the law of the place where the act or omission occurred.” 28 U.S.C. § 1346(b). In Richards v. United States, 369 U.S. 1, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962), the Supreme Court reviewed this provision and held that the Tort Claims Act requires application of the whole law of the State where the act or omission occurred, including its conflicts law. 369 U.S. at 11, 82 S.Ct. at 592. Indeed, the Chevron court itself addressed this decision, remarking that “[ijnsofar as Richards bears on the present case, it supports our holding that federal courts should not create interstitial federal common law when the Congress has directed that a whole body of state law shall apply.” 404 U.S. 105 n. 8, 92 S.Ct. 345 n. 8. Significantly, this comment proceeds on the assumption that the Lands Act, like the Tort Claims Act, refers to the whole body of state law. The passage further emphasizes the point that the concern in Chevron was not with the application of adjacent state conflicts rules per se, but rather with the use of those rules to apply federal common law principles that would not otherwise be applicable if the cause of action had arisen within the adjacent state. Thus, the Chevron decision not only does not prohibit resort to adjacent state conflicts principles in a Lands Act case, but, instead, Chevron goes further and indicates that a decision not to apply this facet of the adjacent state’s law would contravene the Congressional directive.

Construing the Lands Act to permit resort to the adjacent state’s conflicts law certainly requires no tortured construction of the statutory language. Section 1333(a)(2)(A) states simply that, where applicable and not inconsistent with other Federal law, “the civil and criminal laws of each adjacent State, now in effect or hereafter adopted, amended, or repealed are declared to be the law of the United States for ... artificial islands and fixed structures erected” on the Shelf. Looking solely on the face of the statute, the phrase “civil ... laws” can surely encompass a state’s civil laws concerning choice of law in contract actions.

Nor does construing the Act in this manner conflict with the underlying purposes evidenced in its legislative history. The prime motivating factor in Congress’ decision to adopt adjacent state law as surrogate federal law was the perceived undesirability of application of federal admiralty law to Shelf structures. See Rodrigue, 395 U.S. at 361-66, 89 S.Ct. at 1840-42 (discussion of this aspect of the legislative history). The legislative history nowise indicates that Congress was concerned with application of the law of other states through the choice of law principles of the adjacent state. Congress was concerned with “the special relationship between the men working on these artificial islands and the adjacent shore to which they commute to visit their families.” 395 U.S. at 365, 89 S.Ct. at 1842. Yet application of the adjacent state’s conflicts law on the Shelf does not in any way compromise this interest. So long as the Lands Act forum is regarded as the local forum in the conflicts analysis, the same law will apply to the injured worker’s claim that would apply if he were injured in the adjacent state.

Accordingly; pursuant to the foregoing review Of the jurisprudence, the statutory language and the relevant legislative history, the Court concludes that the Outer Continental Shelf Lands Act, and in particular 43 U.S.C. § 1333(a)(2)(A), incorporates the conflicts-of-law rules of the adjacent state as surrogate federal law in cases arising on the Shelf, subject to the reservation under Chevron that the Lands Act forum must be treated as the local forum for purposes of the conflicts analysis. The Court will now turn to the question of how the conflicts law of the adjacent state, Texas, operates in this case.

Application of Texas Conflicts Principles

If an action similar to this one were to arise shoreside in Texas, the basic contractual choice-of-law scheme could be stated in fairly simple terms. At the outset, in the absence of a contrary manifestation, the initial presumption is that the parties intend for the law of the jurisdiction where the contract is made to govern. E.g., Lockwood Corp. v. Black, 669 F.2d 324, 327 (5th Cir.1982). Where a contract made in one jurisdiction is to be performed entirely in another jurisdiction, however, the law of the place of performance governs. E.g., Teas v. Kimball, 257 F.2d 817, 823 (5th Cir.1958); Docutel Corporation v. S.A. Matra, 464 F.Supp. 1209, 1215 (N.D.Tex.1979). Yet the initial presumption that the law of the place of execution governs is again controlling if the contract is to be performed in more than one place. E.g., Associated Press v. Berger, 460 F.Supp. 1003, 1006 (W.D.Tex.1978); see also Restatement (Second) of Conflict of Laws, Section 188, comment (e) (1971) (the place of performance bears little weight under the significant relationship test when the place of performance is uncertain or unknown at the time of contracting or when performance is spread across two or more jurisdictions with varying rules of law on a particular issue).

Although the background conflicts principles are easily stated, the question of how those principles apply in the instant case is not as easily resolved. A critical issue arises as to whether these fundamental principles should be applied to the master service agreement, or instead to the specific work order for the electrical work on the Texas Shelf platform. If the master service contract is the relevant agreement, then Louisiana substantive law would probably apply to the indemnity claim presented here. No particular location for performance of services was contemplated when the parties executed the blanket agreement. Thomas Stokes dep. at 16. EIU may well have performed services under the agreement on platforms governed by Louisiana law in addition to platforms, such as the one in the instant case, that are governed by Texas law. Id. at 14. As the place of performance was unspecified and was in fact spread across the two jurisdictions, Texas conflicts law would point to application of the law where the agreement was executed. The negotiations leading up to this master service agreement were all conducted in Louisiana and the signatures required to execute the agreement were all affixed in Louisiana. Under Texas law, the agreement was therefore made in Louisiana. See, e.g., Diaz v. Southeastern Drilling Co., 324 F.Supp. 1, 4 (N.D.Tex.1969). Thus, if the master service agreement is the relevant agreement for the Texas conflicts analysis, then the law of Louisiana, rather than Texas, would most likely govern Kerr-McGee’s claim for contractual indemnity. If, on the other hand, the work order is the relevant contract, then Texas substantive law will apply because the work order was to be performed wholly in a jurisdiction governed by Texas law. Thus, the Court must determine which contract is the relevant contract for the Texas conflicts analysis.

The specific work order issued for the electrical installation work on the Texas Shelf platform constitutes the relevant contract for the contractual choice-of-law analysis. As this Court has noted in a related context, a master service agreement does not itself bind the parties to perform any services. It merely sets forth their agreement to abide by certain terms should they contract to perform services in the future. Moser v. Aminoil, U.S.A., Inc., 618 F.Supp. 774, 779 (W.D.La.1985). Each work order issued that incorporates the terms of the blanket agreement is therefore a separate and independent contract. Accord Credeur v. Union Oil Company, No. 82-0275, (W.D.La., June 27, 1983) (reprinted as an appendix to Moser). As each work order initiates a distinct contractual enterprise which merely incorporates the terms of the master service agreement by reference, the work order stands as the most appropriate contract for the choice-of-law analysis.

Keying the conflicts analysis to the work order rather than the master service agreement is particularly appropriate on the facts of this case. The parties executed the master service agreement here in 1980, over seven years after the passage of the Texas statute barring indemnification against an indemnitee’s negligence in oilfield contracts. To resort to the master service agreement as the relevant contract for the conflicts analysis here would effectively permit the parties to avoid controlling Texas law on the point by merely incorporating terms from a contract executed in another jurisdiction into a separate and independent contract that is to be performed wholly in a jurisdiction governed by Texas law. Parties should not be permitted to avoid the law of one jurisdiction by executing in another jurisdiction a blanket agreement that specifies the terms of distinct contracts that they may subsequently perform wholly in the first jurisdiction. Cf. Moser, 618 F.Supp. at 779 n. 2 (parties to work orders cannot avoid changes in the law by resort to blanket service agreements).

Thus, for the foregoing reasons, the Court concludes that Texas conflicts principles direct the application of Texas internal law to the indemnity claim presented here.

III. ARTICLE 2212b

Kerr-McGee does not dispute that, absent some statutory exception, Section 2 of the Texas statute pertaining to oilfield indemnity, Tex.Civ.Stat.Ann. art. 2212b will bar its indemnity claim. Instead, Kerr-McGee relies upon the exception contained in section 4(c) of the Act, which provides:

(c) The provisions of Section 2 of this Act shall not apply to any agreement providing for indemnity with respect to claims for personal injury or death to indemnitor’s employees or agents, or the employees or agents of indemnitor’s sub-contractors if the parties agree in writing that such indemnity obligation will be supported by available liability insurance coverage to be furnished by indemnitor, provided, however, that such indemnity obligation shall be only to the extent of the coverages and dollar limits of insurance agreed to be furnished; but in no event shall said insurance be required in an amount in excess of twelve times state basic limits for bodily injury, approved by the Board of Insurance Commissioners in accordance with Article 5.15 of the Texas Insurance Code.

Yet EIU has established in response that Hebert was an employee of CE Natco, which is a subcontractor not of the indemnitor, EIU, but rather of the indemnitee, Kerr-McGee. The exception in section 4(c) is therefore inapplicable because the instant claim does not fall within the ambit of “claims for personal injury ... to indemnitor’s employees or agents, or the employees or agents of indemnitor’s subcontractors.” Thus article 2212b applies to bar Kerr-McGee’s claim for contractual indemnity.

Accordingly, the motion of third party defendant Electrical & Instrumentation Unlimited, Inc. for partial summary judgment in its favor dismissing the third-party demand of third-party plaintiff Kerr-McGee Corporation for contractual indemnity is GRANTED.

      . It is settled law that the Act is not applicable to an indemnity claim under a master service contract where the alleged injury occurs before September 11, 1981. See Smith v. Shell Oil Co., 746 F.2d 1087, 1093-94 (5th Cir. 1984); Tobin v. Gulf Oil Corp., 535 F.Supp. 116, 117 (E.D.La.1982); Great Atlantic Ins. v. Martin Services International, 445 So.2d 146, 148-49 (La.App. 3d Cir.1984). Also well-established is the rule that the Act does apply to indemnity claims under master service contracts where both the issuance of the specific work order and the alleged injury occur after September 11, 1981. See Rigby v. Tenneco Oil Co., 607 F.Supp. 1247, 1248 (E.D.La.1985); Durant v. Chevron U.S.A., Inc., 594 F.Supp. 527, 535-36 (E.D.La.1984); Aucoin v. Pelham Marine, Inc., 593 F.Supp. 770, 775-76 (W.D.La.1984); Home Insurance Co. v. Garber Industries, Inc., 588 F.Supp. 1218, 1221-22 & n. 6 (W.D.La.1984); see also Livings v. Service Truck Lines of Tex., Inc., 467 So.2d 595 (La.App. 3d Cir.1985) (the court adopts Judge Shaw’s reasoning in the Garber case and applies the Act to 1971 and 1979 master service contracts, but does not specify the date of either the alleged injury or the issuance of the work order). The question of whether section 2780 applies to claims under pre-Act work orders for alleged injuries that occur after the effective date of the Act is unresolved, however.

      . See also Chevron, 404 U.S. at 103-04, 104-05, 92 S.Ct. at 354:
      The Court of Appeals acknowledged that Rodrigue forecloses direct applicability of the "inconsistent" laches doctrine through admiralty law. But, by applying laches as a matter of federal common law, it sought to reintroduce the doctrine through a back door. This approach subverts the congressional intent documented in Rodrigue, id. [395 U.S.]. at 359-66, 89 S.Ct., at 1839-42, that admiralty doctrines should not apply under the Lands Act.
      ... Congress made clear provision for filling in the "gaps" in federal law; it did not intend that federal courts fill in those “gaps" themselves by creating new federal common law. (emphasis in original) (footnote deleted).

      . In its Chevron opinion, the Supreme Court stated that its directive that Louisiana Civil Code article 3536 apply on the Shelf "is not to imply that a federal court adjudicating a claim under state law as absorbed in the Lands Act must function as it would in a diversity case.” 404 U.S. at 103 n. 5, 92 S.Ct. at 353 n. 5. This Court’s holding on EIU’s motion similarly does not imply that a federal court must function as it would in a diversity case in hearing a Lands Act case. In a diversity case, the district court applies the choice of law rules of the forum state, i.e., the state in which it sits, when the action is brought originally in that district court. E.g., Klaxon Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Davis v. National Gypsum Co., 743 F.2d 1132, 1133 (5th Cir.1984). In a federal Lands Act case, however, the district court applies the choice of law rules of the state adjacent to the portion of the Shelf where the claim arose, regardless of whether that state is the state in which the court sits. The basic facts of the instant case provide a ready example of how this distinction operates. If this claim had arisen under Texas law and had been brought here solely on diversity of citizenship, then the Court would have looked to the law of Louisiana, the forum state, in order to determine which body of law applied to the indemnity claim. But as the claim arises under the Lands Act and as it is therefore here under the Court’s federal question jurisdiction, the Court must look to the law of Texas, the state that is adjacent to the portion of the Shelf involved, for the choice of law rules. The choice-of-rules law of the forum state, Louisiana, which would have been controlling had this been a diversity case, are completely irrelevant in this regard. Thus, the method for choosing the applicable choice-of-law rules in a Lands Act case is functionally distinct from the method employed in a diversity case.

      . The Court respectfully disagrees with, and declines to follow, the contrary holding in Greer, 593 F.Supp. at 1078-79, for the reasons assigned in the text.

      . The approach to the choice of law question presented here is compatible with Texas case law. In Grace v. Orkin Exterminating Co., Inc., 255 S.W.2d 279 (Tex.Civ.App. — Beaumont 1953, writ ref’d n.r.e.), the plaintiff sought to enforce a covenant not to compete contained in an employment contract with its former employee. The restrictive covenant was valid in Texas but was invalid in Louisiana. The former employee had served as a manager over a district encompassing eight separate units, six of which were in Texas and two of which were in Louisiana. On these facts, the Grace court found that the operation and performance of the contract in Texas was severable from the operation of the contract in Louisiana. 255 S.W.2d at 295, 296-97. The court therefore applied the Texas law permitting the covenants to the Texas units of the management district.
      Similarly, even if the master service contract is initially resorted to as the relevant contract for the conflicts analysis, the operations under the March 27, 1981 work order can be easily severed from other operations subject to the master service agreement. As the parties have not manifested a contrary intent, Texas law therefore can apply to these particular operations even though operations subject to the Louisiana-executed master service contract are also pursued in other jurisdictions. This refinement in the choice of law analysis under Grace is also consonant with other federal decisions which look to the precise contractual obligation involved in determining the law applied to the subsidiary indemnity obligation. Cf. O’Dell v. North River Ins. Co., 614 F.Supp. 1556 (W.D.La.1985) (the district court applied maritime law to an indemnity obligation arising out of catering services that were provided to a vessel subject to a master service contract that contemplated performance on land drilling rigs, special purpose vessels, and fixed offshore platforms); Hale v. Co-Mar Offshore Corp., 588 F.Supp. 1212 (W.D.La.1984) (the district court applied maritime law to an indemnity claim under a provision in a platform drilling contract where the injured employee was engaged in providing separable maritime services contemplated by the drilling contract.


text:
    Roger MOSER v. AMINOIL, U.S.A., INC., et al.
    Civ. A. No. 83-0284.
    United States District Court, W.D. Louisiana, Lake Charles Division.
    Aug. 22, 1985.

      Lucius A. Hornsby, Jr., Hornsby & Landry, Lafayette, La., for plaintiff, Moser.
    David A. Hurlburt, Hurlburt & Privat, Lafayette, La., for Aminoil, U.S.A., Inc.
    James E. Williams, Earl G. Pitre, Woodley, Barnett, Williams, Fenet & Palmer, Lake Charles, La., for Sweco, Inc., Liberty Mut. Ins. Co.
   RULING

VERON, District Judge.

This matter comes before the Court on (1) the motion of defendant Sweco, Inc. for summary judgment in its favor dismissing the demands against it by plaintiff Roger Moser, (2) the motion of defendant Aminoil, U.S.A., Inc. for summary judgment in its favor dismissing the demands against it by Moser, and (3) the motion of Sweco, as cross-defendant, and third-party defendant Liberty Mutual Insurance Company for summary judgment in their favor dismissing the cross-claim of Aminoil for contractual indemnity and its third-party demand for recognition as an additional insured under Sweco’s policy with Liberty Mutual. At the conclusion of oral argument on these motions the Court granted Sweco’s and Aminoil’s motions for summary judgment on Moser’s claims and took the motions by Sweco and Liberty Mutual under advisement. As this order did not adjudicate all of the claims as to all parties in this action, it did not terminate the action as to any party and is subject to revision at this time. Fed.Rule Civ.Pro. 54(b). The review of the motion under advisement has required a review and reexamination of the other motions filed and, accordingly, the Court now VACATES those prior rulings on a sua sponte motion for reconsideration. The Court will now rule anew on a clean slate.

Moser’s complaint alleges that he was injured on February 9, 1982 while being transported in a personnel basket from a fixed platform located fifty miles off the Louisiana coast, the East Cameron 195, Well No. A7, to a vessel, the Glomar Tender No. 2. Moser seeks relief from Sweco under the Jones Act. He seeks relief from Aminoil on the alternative theories (1) that Aminoil was responsible for the alleged negligence of the vessel under Aminoil’s control as charterer, owner and operator, and, (2) that Aminoil was responsible as platform owner for alleged negligence in the operation of the platform. Moser also seeks relief from Global Marine Drilling Company in its alleged capacity as owner of the vessel. Aminoil has cross-claimed against Sweco for contractual indemnity and has third-partied Liberty Mutual for recognition as an additional insured in a Sweco policy with Liberty Mutual.

I. ISSUES

The various motions before the Court raise the following issues:

(1) Whether the plaintiff is a member of the crew of the Glomar Tender No. 2;
(2) Whether Aminoil is entitled to tort immunity under section 5(a) of the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. § 905(a), as to the plaintiff’s claims; and
(3) If Aminoil is not entitled to such immunity, whether Aminoil’s contractual indemnity claim is barred by the Louisiana Oilfield Anti-Indemnity Act, La.R.S. 9:2780.

The Court will now consider each of these issues in turn.

II. SEAMAN’S STATUS

Sweco urges that Moser’s Jones Act claim must be dismissed because he does not qualify as a seaman. Moser contends that, had he continued working in 1982, he would have been permanently assigned to the Glomar Tender No. 2. The uncontroverted deposition testimony does not bear out Moser’s contention and instead confirms Sweco’s argument that Moser was not a seaman at the time of his injury.

The record establishes the following facts for the purposes of this motion. Sweco rents and sells solids control equipment for use in the oil industry. Solids control equipment separates certain solids from drilling fluid for reuse. At the time of his injury, Moser had been employed for six or seven months as a service representative for Sweco. A service representative is responsible for the installation, upkeep and repair of equipment rented by Sweco. In the course of this employment, Moser would go out on calls to inland and offshore rigs to either install equipment or to trouble-shoot problems with previously-rented equipment. He worked indiscriminately on land-based rigs, fixed offshore platforms, and special purpose drilling vessels, depending upon the needs of Sweco’s various customers. If he installed a particular piece of equipment, he would service that item on an as-called basis unless and until the rig was moved, out of Moser’s territory. Yet Moser would stay at the job site only long enough to complete the job in question, subject to the usual delays occasioned by weather, transportation, and other operations on the rig in question.

In February 1982, Moser was sent out to the East Cameron 195 Well No. A7 platform to install a mud cleaner and an electric pump skid. This platform was a fixed platform situated on the Outer Continental Shelf approximately fifty miles off the coast of Louisiana. The drilling crew ate and slept aboard a tender anchored adjacent to the platform, the Glomar Tender No. 2. When Moser and his assistant arrived, they had to wait eight to ten hours on the tender while the rig was being “skidded over” on the platform — an operation whereby the rig is moved from one well site on the platform to another well site on the same platform. After this wait, Moser and his assistant went onto the rig and installed the Sweco equipment. Upon completion of the job, Moser proceeded to return to the tender by way of a steep stairway that was hinged to the platform and which was lowered toward the deck of the tender. Moser allegedly was injured during this descent. Shortly thereafter, a helicopter arrived as scheduled to transport Moser and his assistant back shoreside.

Nothing in the record in any way intimates that the Glomar Tender No. 2 was to be Moser’s base of operations for his offshore work with Sweco. The Glomar Tender No. 2 was not a special purpose vessel used by Sweco in order to transport and serve as a base of operations for its service representatives. Rather, the vessel was used by Sweco’s customer, Aminoil, to quarter the drilling crew for the fixed platform. The vessel was anchored securely by that platform. Under these circumstances, it would not have made any difference if Moser had lived continuously on the tender while performing his servicing duties on the platform. Eating and sleeping aboard a tender associated with a fixed platform does not confer seaman’s status on workers engaged in platform-related activities on the platform. Keener v. Transworld Drilling Co., 468 F.2d 729, 731 (5th Cir.1972); see also Munguia v. Chevron Company, U.S.A., 768 F.2d 649 (5th Cir.1985) (a roving “jack of all trades” roustabout who used various small vessels as transportation to and from his work on various fixed platforms did not qualify as a seaman because his primary duties involved platform work); Poole v. Marlin Drilling Co., 592 F.Supp. 60 (W.D.La.1984) (a roughneck on a fixed platform did not become a seaman while eating and sleeping on an associated vessel during the dismantling and transportation of the rig to; another platform). Thus, the Court holds that Moser does not qualify as a seaman.

III. TORT IMMUNITY

In seeking to have Moser’s claim against it dismissed, Aminoil contends that it is entitled to tort immunity under section 4(a) of the LHWCA because Sweco has secured the payment of compensation benefits for its employees, including Moser. Aminoil relies on Washington Metropolitan Area Transit Authority v. Johnson, 467 U.S. 925, 104 S.Ct. 2827, 81 L.Ed.2d 768 (1984), and Doucet v. Atlantic Richfield Co., No. 83-0351, (W.D.La., July 27, 1984), the latter of which directly supports its position and which is reprinted as an appendix in Aucoin v. Pelham Marine, Inc., 593 F.Supp. 770, 777-78 (W.D.La.1984). At the time that Aminoil filed its motion, the decisions in Washington Metropolitan and Doucet constituted the only-law on the subject. Congress has subsequently amended the LHWCA to the effect that the securing of compensation benefits by the subcontractor does not entitle the contractor to immunity from tort claims by the subcontractors employees. See generally Maraist, Developments in the Law, 1983-84 — Admiralty, 45 La.L.Rev. 179, 191-92 & n. 82 (1984). The Fifth Circuit has held that this amendment applies retroactively to all claims, such as this one, that were pending as of the enactment of the amendment. Weathersby v. Conoco Oil Co., 752 F.2d 953, 958 (5th Cir.1984); Martin v. Ingalls Shipbuilding, Division of Litton Systems, Inc., 746 F.2d 231, 232 (5th Cir.1984). A panel of the court accordingly has reversed the district court’s decision in Doucet. Doucet v. Atlantic Richfield Co., 753 F.2d 1074 (5th Cir.1985). The Fifth Circuit has also held that the retroactive application of this amendment is constitutional. Louviere v. Marathon Oil Co., 755 F.2d 428, 430 (5th Cir.1985). Thus, Aminoil has no claim to immunity under the Longshoremen’s Act from Moser’s tort suit.

IY. LOUISIANA OILFIELD ANTI-INDEMNITY ACT

Sweeo and Liberty Mutual contend that Aminoil’s claims pursuant to the indemnity and insurance provisions in a master service agreement between Sweeo and Aminoil are barred by the Louisiana Oilfield Anti-Indemnity Act, La.R.S. 9:2780. Section 2780 renders indemnity agreements in oilfield contracts void to the extent that they provide for defense and indemnification based on the indemnitee’s sole or concurrent fault. Aminoil urges in response (1) that the Act is inconsistent with federal law and therefore inapplicable on the Outer Continental Shelf under 43 U.S.C. § 1333(a)(2)(A), (2) that the Act cannot be retroactively applied to this master service agreement, which was entered into prior to its effective date, and (3) that, if applicable, the Act does not mandate complete dismissal of its cross-claim and third-party demands.

The indemnity provision in question here provides:

[Sweeo] shall hold harmless, defend and indemnify [Aminoil] from and against all losses, damages, demands, claims, suits, and other liabilities, including counsel fees and other expenses of litigation, arising out of or related to services performed by [Sweeo], its agents, or employees, or subcontractors; unless such liabilities or losses result from the sole negligence or willful misconduct of [Aminoil], its agents, or employees.

The parties have not briefed the question of whether this provision encompasses claims based upon the concurrent negligence of Aminoil. The Court will assume, but expressly does not decide, that the provision does encompass such a claim.

Application on the Outer Continental Shelf

In its first argument, Aminoil contends that section 2780 does not apply on the Shelf because the Act is inconsistent with the common law rule enunciated in United States v. Seckinger, 397 U.S. 203, 90 S.Ct. 880, 25 L.Ed.2d 224 (1970). Seckinger holds that, under the federal common law governing contracts entered into by the United States, an indemnitee is permitted to recover for claims arising out of its own negligence. 397 U.S. at 209-217, 90 S.Ct. at 884-88. The Court rejects this argument for the reasons it has assigned in this regard in Hebert v. Kerr-McGee Corporation, 618 F.Supp. 767, 768-769 (W.D.La.1985).

Constitutional Challenges

Aminoil next urges that the Act cannot be applied to its agreement with Sweeo because to do so would violate the prohibitions against ex post facto laws and laws impairing the obligations of contracts under the United States and Louisiana constitutions. Aminoil and Sweco entered into the master service agreement on July 6, 1978, which date is some three years before the Act’s effective date, September 11, 1981. Yet Aminoil issued the work order for the specific job involved here in February of 1982. It is well-established that the Act applies to indemnity claims under master service agreements executed prior to the effective date of the Act where both the issuance of the specific work order and the alleged injury occur after September 11, 1981. See Rigby v. Tenneco Oil Co., 607 F.Supp. 1247, 1248 (E.D.La.1985); Durant v. Chevron U.S.A., Inc., 594 F.Supp. 527, 535-36 (E.D.La.1984); Aucoin v. Pelham Marine Inc., 593 F.Supp. 770, 775-76 (W.D.La.1984); Home Insurance Co. v. Garber Industries, Inc., 588 F.Supp. 1218, 1221-22 & n. 16 (W.D.La.1984); Livings v. Service Truck Lines of Tex., Inc., 467 So.2d 595 (La.App. 3d Cir.1985). Aminoil does not challenge this construction of the Act, but contends that this manner of applying the statute violates the aforementioned constitutional guarantees.

The prohibitions against ex post facto laws under the constitutions of Louisiana and the United States of course apply only to criminal and not to non-penal civil statutes. E.g., Harisiades v. Shaughnessy, 342 U.S. 580, 594-95, 72 S.Ct. 512, 521-22, 96 L.Ed. 586 (1952); United States v. Tex-La Electric Cooperative, Inc., 693 F.2d 392, 404 n. 15 (5th Cir.1982); Cooper v. Lykes, 218 La. 251, 49 So.2d 3, 4 (1950). The only constitutional question remaining before the Court in this regard therefore is whether section 2780 violates state and federal constitutional prohibitions against the impairment of the obligations of contracts.

A statute cannot unconstitutionally impair an obligation that did not exist at the time of its enactment. E.g., Texaco, Inc. v. Short, 454 U.S. 516, 531, 102 S.Ct. 781, 793, 70 L.Ed.2d 738 (1982). In the instant case, no contractual obligations arose from the 1978 master service agreement. The agreement does not bind either party to perform any services. It merely sets forth their agreement to abide by certain terms should they enter into contractual relations in the future. At best, the master service agreement creates a contingent and speculative obligation that is subject to a purely potestative suspensive condition on the part of the obligee, which obligation does not become valid and enforceable until the condition is fulfilled. See Durant, 594 F.Supp. at 531, 533. In short, no valid obligation arises until the platform operator, Aminoil, requests the services of the subcontractor, Sweco, and, at that point, the terms of the master service agreement are incorporated automatically into the written or verbal contract to perform the specified services. See also Credeur v. Union Oil Company, No. 82-0275, (W.D.La., June 27, 1983) (reprinted as an appendix to this ruling). Thus, when section 2780 is applied to an indemnity obligation arising out of a work order issued after September 11, 1981, the statute does not operate retroactively to impair any contractual obligation existing as of its effective date. Accord Reding v. Texaco, Inc., 598 F.2d 513, 519-20 (9th Cir.1979) (application of the 1969 Wyoming anti-indemnity act to a 1973 drilling bid contract incorporating the terms of a blanket standard drilling contract did not impair a contract existing at the time of the statute’s enactment); see also Lirette v. Union Texas Petroleum Corporation, 467 So.2d 29, 33 (La.App. 1st Cir.1985) (the statute does not in fact provide for retroactive effect).

Moreover, even if application of section 2780 in this manner does impair a contractual obligation existing at the time of its enactment, the impairment does not violate constitutional prohibitions against the impairment of contracts. State regulations may permissibly create even substantial impairments of existing contractual obligations if (1) the state has a significant and legitimate public purpose behind the regulation, and, (2) the impairment of the rights and responsibilities of the contracting parties is based upon reasonable conditions and is of a character appropriate to the public purpose justifying the statute’s adoption. Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 103 S.Ct. 697, 705, 74 L.Ed.2d 569 (1983). Where the impairment is of private contracts, courts properly defer to the legislative judgment as to the necessity and reasonableness of a particular measure. Energy Reserves Group, Inc., 103 S.Ct. at 706. Section 2780 is prompted by significant and legitimate public interests in that it seeks “to protect Louisiana workers and the oil industry in general from less than optimum safety measures.” Bryant v. Platform Well Service, Inc., 563 F.Supp. 760, 763 (E.D.La.1983). Moreover, any consequent impairment of indemnity obligations in oilfield contracts by section 2780 is based upon reasonable conditions and is appropriately related to this public purpose. The observations made by Judge Collins in rejecting an equal protection challenge to the Act are equally applicable oh these points:

The mineral industry is one of the most important industries in this state. Additionally, it is well known that the exploration for oil and gas is an extremely hazardous undertaking. It is the size of the minerals industry and the vast number who work in it which motivated the legislature to move to limit indemnity agreements.
LSA-R.S. 9:2780 on its face prevents one company (indemnitee) from requiring another company (indemnitor) to indemnify it for its own negligence or fault. If the indemnitee can by contract insulate itself from exposure for injuries to workers, where it creates the hazard causing the injury, there is less motivation to follow the safest work practices. If the indemnitee is prevented from contracting away the responsibility, then it will be more likely to take the extra needed steps to avoid injury to workers. This statute, is a rational way to protect Louisiana workers and the oil industry in general from less than optimum safety measures.

Bryant, 563 F.Supp. at 763. That the public interest in oilfield safety is sufficiently broad to support any consequent impairment of indemnity provisions set forth in master service agreements can not be seriously doubted. Not only is the safety of workers engaged in the industry implicated, but the threat to person and property in the general public from unsafe oilfield operations is involved as well. Application of the Act to work orders issued after its effective date directly furthers the goal of the Act by encouraging oilfield safety in the future.

Thus, for the foregoing reasons, the Court holds that application of the Louisiana Oilfield Anti-Indemnity Act to a work order issued after its effective date that incorporates terms of indemnity found in a master service agreement drafted prior to the statute’s effective date does not violate Louisiana or federal constitutional guarantees against legislation impairing the obligations of contracts. The work order pertinent to this case was issued after the effective date of section 2780. The Act therefore applies to the contractual indemnity claim presented here.

Effect of Section 2780

Lastly, Aminoil urges that, if section 2780 is applicable here, that the Act does not mandate complete dismissal of its cross-claim, relying on the decision in Home Insurance Company v. Garber Industries, Inc., 588 F.Supp. 1218 (W.D.La.1984) . In Garber, the district court held that section 2780 did not prohibit payment of the costs of defense if the indemnitee is ultimately found free from fault by the trier of fact. 588 F.Supp. at 1222-23. The court relied upon the statutory language in subsection (B) of the Act which provides that an oilfield agreement “is void and urn enforceable to the extent that it purports to or does provide” for defense and indemnity against the sole or concurrent negligence of the indemnitee or other interests delineated in the statute. See 588 F.Supp. at 1223. Yet, at the time that it rendered its decision, the district court in Garber did not have the benefit of the Fifth Circuit’s opinion in Sullen v. Missouri Pacific Railroad Company, 750 F.2d 428 (5th Cir.1985) , which clarifies its earlier expressions regarding the prerequisites for defense and indemnity under Louisiana law.

Under Sullen’s construction of Louisiana law, the matter of whether a party is obliged to tender a defense to another party depends entirely upon the allegations in the plaintiff’s precipitating pleadings. 750 F.2d at 433. The ultimate outcome of the case before the trier of fact has no impact on the duty to defend. Id. Thus, the indemnitor must defend the indemnitee only if (1) the contract specifically provides for the costs of defense as a separate item of indemnification, and (2) the petition alleges facts which, if proven, would be properly covered by the indemnity agreement. 750 F.2d at 433-34. In the instant case, Moser’s complaint is based on the alleged concurrent negligence of Aminoil, Sweco and Global Marine. Section 2780 will not permit Sweco to defend or indemnify Aminoil for its concurrent negligence. Thus, as the plaintiff’s precipitating pleadings do not allege facts which, if proven, would be properly covered by the indemnity agreement, the claim for contractual indemnity must fall in toto. See also Frazier v. Columbia Gas Development Corp., 605 F.Supp. 200 (W.D.La.1985), on reconsideration of the ruling in Frazier v. Columbia Gas Development Corp., 596 F.Supp. 429 (W.D.La.1984) (on rehearing, the Frazier court departed from Garber and applied Sullen to dismiss the entire claim for defense and indemnity).

A question does remain of what the Louisiana legislature intends by the use of the phrase “to the extent” in section 2780. Perhaps the legislature intended for the phrase to validate agreements to indemnify an indemnitee for no-fault species of vicarious liability. That question, however, must await another day.

Accordingly, the motion of Sweco, Inc. for summary judgment in its favor dismissing the demands against it by plaintiff Roger Moser is GRANTED, the motion of defendant Aminoil, U.S.A., Inc. for summary judgment in its favor dismissing the demands against it by plaintiff Moser is DENIED, and the motion of cross-defendant Sweco, Inc. and third-party defendant Liberty Mutual Insurance Company for summary judgment in their favor dismissing the cross-claim and third-party demand made against them by Aminoil, U.S.A., Inc. is GRANTED.

APPENDIX

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE-OPELOUSAS DIVISION

ARTHUR CREDEUR VS. UNION OIL COMPANY OF CALIFORNIA ET AL

CIVIL ACTION NO. 820275

RULING ON MOTION

This is an action to recover for personal injuries sustained by Credeur, an employee of SHRM Catering Services, Ltd., while working aboard a fixed platform. The platform, Vermilion 67-B, is owned by Union and was located in Vermilion Block 76 off the Louisiana coast. SHRM was providing catering services to Union. A blanket service agreement had been execured by the parties on January 13, 1981. Credeur was injured on or about October 20, 1981.

Suit was brought against Union pursuant to 43 U.S.C.A. § 1331, et seq. Union in turn filed a third party demand against SHRM for contractual indemnity as provided by the written agreement between the two. SHRM has now moved for summary judgment.

SHRM argues that Union’s third party demand for contractual indemnity is barred by LSA-RS 9:2780 (the act), which renders certain indemnity agreements null as against public policy. The act became effective on September 11, 1981, prior to the date of plaintiff’s injury but subsequent to the execution of the continuing SHRM-Union agreement.

The contract between the parties is a blanket agreement whereby SHRM agrees “from time to time and upon receipt from Union of instructions specifying the specific service to be performed and/or materials to be supplied, [to] furnish equipment and personnel to perform services normally provided by contractor when requested by Union____” (Union contract, II1) It is expressly understood between the parties that no performance is required by SHRM until Union gives specific instructions to that effect. The blanket contract only serves to establish the terms and conditions of performance pursuant to those instructions.

Under the blanket contract, a separate, independent contract was perfected on each occasion that SHRM provided equipment and personnel on instructions of Union.

The affidavit of Charles Wilson, personnel manager for SHRM, establishes that the services and equipment on the job in question were ordered by Union after September 11, 1981, the effective date of the accident. I conclude therefore that the act nullifies the indemnity obligation which SHRM assumed under the blanket contract for performance of the job in question. The motion of SHRM is therefore granted.

Lafayette, Louisiana, this 16th day of June, 1983.

/s/ W. Eugene Davis Judge, United States District Court

      . See U.S. Const, art. I, § 10, cl. 1; La. Const, art. I, § 23 (1974).

      . The Contracts Clause apparently prohibits the impairment of executory contracts. See Home Building & Loan Ass'n. v. Blaisdell, 290 U.S. 398, 429 n. 8, 54 S.Ct. 231, 236 n. 8, 78 L.Ed. 413 (1934); Farrington v. Tennessee, 95 U.S. (5 Otto) 679, 24 L.Ed. 558, 559 (1878). A master service agreement is not an executory contract, however. An executory contract is an agreement to do something in the future. E.g., Farrington, supra. A master service agreement, on the other hand, is an agreement to abide by certain terms if the parties agree to do something in the future. As such, "modification” of the master service agreement by subsequent legislation does not violate the Contracts Clause because the obligation of a contract within the meaning of that clause "is a valid, subsisting obligation, not a contingent or speculative one.” Ochiltree v. Iowa Railroad Contracting Company, 88 U.S. (21 Wall.) 249, 252, 22 L.Ed. 546, 548 (1875). Put simply, parties cannot avoid future changes in the law by entering into blanket agreements specifying the terms of all contracts that they might enter into in the future.

      . Garber was followed on this particular point by the Louisiana Third Circuit Court of Appeal in Livings v. Service Truck Lines of Texas, Inc., 467 So.2d 595, 599-600 (La.App. 3d Cir.1985). While the Court is bound to apply section 2780 in this Lands Act case as surrogate federal law on the Shelf, the Court does not consider itself any more bound by the decisions of intermediate appellate state courts than it would in a diversity case. Under Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), the decision of lower state courts are not controlling where the state’s highest court has not spoken on the point. The federal courts must follow these decisions, however, absent a strong showing that the state’s highest court would hold otherwise. E.g., Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 1782, 18 L.Ed.2d 886 (1967); NCH Corporation v. Broyles, 749 F.2d 247, 250 n. 4 (5th Cir.1985). The decision in Sullen provides just such a strong showing that the Louisiana Supreme Court would not follow the holding in Livings on this point.