Hodges v. Archer Daniels Midland Co.

474 F.Supp.3d 956

Ryan HODGES, Plaintiff,

v.ARCHER DANIELS MIDLAND COMPANY, Schlumberger N.V. (Schlumberger Limited), and Schlumberger Carbon Services, a division of Schlumberger Technology Corporation, Defendants.

Archer-Daniels-Midland Company, Defendant/Third-Party Plaintiff

v.Pioneer Oil Field Services, LLC, Third-Party Defendant

Schlumberger N.V., et al., Defendants/Crossclaim Plaintiffs,

v.Pioneer Oil Field Services, LLC, Crossclaim Defendant.

Case No. 17-CV-2087

United States District Court, C.D. Illinois, Urbana Division.

Signed July 27, 2020

Jack A. Strellis, Strellis & Field Chartered, Waterloo, IL, Gregg E. Strellis, Strellis & Field, Chicago, IL, for Plaintiff.

Michael P. Mayer, Anthony Matthew Durkin, Jeffrey John Huelskamp, Melanie Laiyee Lee, Winston & Strawn LLP, Chicago, IL, for Defendants.

Michael P. Mayer, Winston & Strawn LLP, Chicago, IL, for Third-Party Plaintiff/Crossclaim Plaintiffs.

John P. Cunningham, Denise Baker-Seal, Brown & James PC, Belleville, IL, for Third Party Defendant/Crossclaim Defendant.

ORDER

COLIN S. BRUCE, U.S. DISTRICT JUDGE

Plaintiff, Ryan Hodges, filed an Amended Complaint (#13) on May 22, 2017, alleging negligence against Defendants Archer Daniels Midland Company ("ADM"), Schlumberger N.V. ("Schlumberger Limited"), and Schlumberger Carbon Services ("Schlumberger Carbon") for injuries he received on a work site in 2015. Defendants filed a Motion for Summary Judgment (#70) on March 6, 2020, to which Plaintiff filed a Response (#76) on April 13, 2020. Defendants filed a Reply (#78) on April 27, 2020. For the following reasons, Defendants’ Motion for Summary Judgment (#70) is GRANTED in part and DENIED in part.

BACKGROUND¹

The ICCS Project

Defendant ADM is an American global food processing and commodities trading corporation. In 2010, ADM entered into an agreement with the U.S. Department of Energy for the "Industrial Carbon Capture and Storage Project" ("ICCS Project"). The ICCS Project would be a collaboration between ADM and the Department of Energy to capture carbon dioxide generated by the operations of ADM's biofuel plant in Decatur, Illinois, and to sequester the carbon dioxide deep underground through the use of an injection well. The ICCS Project involved the building of surface facilities by ADM to capture and compress the carbon dioxide, as well as the design and construction of a subsurface well into which the captured carbon dioxide would be stored. Eric Berlin, Well Site Safety Representative for Schlumberger Carbon, testified that ADM owned the site of the project.

The Contract Between ADM and Schlumberger Carbon

On December 23, 2010, ADM signed and executed an agreement ("Subaward Agreement") with Schlumberger Carbon for performance related to the ICCS Project. Pioneer Oil Field Services, LLC, ("Pioneer"), the employer of Plaintiff Ryan Hodges, is not a signatory to the Subaward Agreement. Throughout the Subaward Agreement, "Subawardee" refers to Schlumberger Carbon, and lists Schlumberger Carbon as an independent contractor. Section 3.3 of the Subaward Agreement, entitled "Progress Reporting," states that Schlumberger Carbon "is responsible and shall submit regular progress reports to ADM on [Schlumberger Carbon's] Scope of Work ..." "Article I - Scope of Work" states that Schlumberger Carbon "shall furnish the necessary personnel, materials, services, facilities, and equipment, and otherwise do all things necessary for the performance of the work detailed ..." "Article XII - Standards of Work" states that work "shall conform to high professional and/or academic standards and/or Good Industry Standard Practice ..."

The Contract Between Schlumberger Carbon and Pioneer

In August 2012 Schlumberger Carbon and Pioneer entered into an "International Association of Drilling Contractors Model Turnkey Contract" ("Turnkey Contract") through which Pioneer would drill a well at the ICCS Project site in exchange for payment by Schlumberger Carbon. According to the University of Texas's Petroleum Extension Service's A Dictionary for the Oil and Gas Industry , a "turnkey contract" is defined as when "the contractor furnishes all materials and labor and controls the entire drilling operation, independent of operator supervision."

The Turnkey Contract between Schlumberger Carbon and Pioneer stated that "[Schlumberger Carbon] engages [Pioneer] as an independent contractor to drill the hereinafter designated well." Further, the Turnkey Contract provides that "[Pioneer] shall furnish equipment, labor, and perform services as herein provided to drill a well," and that it "shall direct, supervise and control drilling operations and assumes certain liabilities to the extent specifically provided herein."

Pioneer also agreed to assume sole responsibility for employee and equipment safety. Section 18.14.8 of the Turnkey Contract stated:

[Pioneer] is an independent contractor set forth in this agreement, and directly controls the physical work site defined as the drilling rig and regulated equipment required to perform the work under this Agreement and the physical area which bounds this equipment and this work conducted under this agreement. [Pioneer] is responsible for providing and maintaining a safe and healthful work environment for all personnel at the work site. All personnel at the work site are required to comply with [Pioneer's] efforts to provide and maintain a safe and healthful work environment at the work site and to coordinate all work at the work site with [Pioneer].

The Turnkey Contract outlines the safety program and equipment that Pioneer must maintain on the work site; requires Pioneer's personnel to be trained and qualified according to industry standards; provides Schlumberger Carbon with the "right, but not the obligation, to periodically inspect [Pioneer's] operations and the work site"; provides Schlumberger Carbon with the right to notify Pioneer if it fails to comply with safety regulations and directs Pioneer to correct them; and finally, provides Schlumberger Carbon with the right to stop all work should Pioneer not correct the safety issues.

Schlumberger Limited's Position

Defendant Schlumberger Limited is the parent company of Defendant Schlumberger Carbon. Schlumberger Limited was not a signatory to either the Subaward Agreement or the Turnkey Contract between Pioneer and Schlumberger Carbon.

ADM's Responsibilities On Site

During the relevant period, ADM employee Scott McDonald served as the Project Manager on the ICCS Project. McDonald testified that ADM is not a construction contractor, nor does it have any experience with drilling oil or gas wells. Thus, in executing the ICCS Project, ADM contracted with subject matter experts on specific areas of the project. ADM had no control or supervisory authority over how Pioneer hired or trained its employees. ADM did not have any control or supervisory authority over how Pioneer selected, maintained, repaired, or replaced its equipment, including the hoses to be used on the mud pumps, in connection with drilling the ICCS well. ADM had no control or supervisory authority over Pioneer's drilling process used to drill the ICCS well, but ADM did have supervisory power to cause accurate reporting of work site conditions to be included in daily reports.

ADM did not have such control or supervisory authority, according to McDonald, because it did not have expertise in drilling wells or the equipment used to drill wells, and it relied upon its contractors to provide ADM with that expertise. Other non-ADM employees on site confirmed that ADM did not direct the drilling work or have a regular role in safety with respect to operating the drilling equipment.

In a document entitled "ADM Concerns," in answer to a question of who were the responsible personnel/contractors for the supply of equipment, materials, plans and procedures, the document states "Wellsite responsibility resides with Well Site Supervisor Merl Richards supported by Schlumberger Drilling Engineer Russell Wagstaff. Final responsibility resides with Jim Kirksey Carbon Services Well Engineering Manager in consultation with John Medler SCS ICCS Project Manager[.]" After the word "Manager," someone, it is not identified by the parties who it was, drew an arrow and wrote in "Flow down to Pioneer."

Schlumberger Carbon's Responsibilities On Site

At the time of the incident, Schlumberger Carbon employee John Medler served as a Project Manager on the ICCS Project. According to Medler, Schlumberger Carbon was not responsible for helping Pioneer fix its equipment, nor was it responsible for becoming an expert in Pioneer equipment.

At the time of the incident, Russell Wagstaff, a Schlumberger Carbon employee, served as a Drilling Engineer on the ICCS Project. According to Wagstaff, no one from Schlumberger Carbon had responsibility over operating, inspecting, or maintaining Pioneer's mud pump equipment.

At the time of the incident, Schlumberger Carbon employee James Kirksey served as Engineering Manager on the ICCS Project. According to Kirksey, Schlumberger Carbon had no responsibility for operating, maintaining, inspecting, or repairing Pioneer's equipment.

Schlumberger Carbon employee Nicholas Malkewicz was a Project Manager under Medler on the ICCS Project. According to Malkewicz, Schlumberger Carbon had no experience or expertise with Pioneer's drilling equipment.

Richards Energy Services employee Merl Richards served as an independent contractor for Schlumberger Carbon, and was responsible for collecting data and pricing on the ICCS Project. Richards had no responsibility for operating, maintaining, inspecting, or repairing Pioneer's equipment.

At the time of the incident, New Tech Global contractors Eric Berlin and Scott Ramsey worked on the ICCS Project as health, safety, and environmental coordinators. Ramsey and Berlin's role on the ICCS Project was limited to facilitating communications between the various vendors and promoting safety awareness in an advisory role....