On January 27, IADC member Stephen Scheve and his law partner, Kenneth Broughton, both of Reed Smith LLP in Houston, obtained a defense verdict on behalf of Jindal Saw Ltd. in district Court in a jury trial in Harris County, Texas.
The lawsuit, entitled ZaZa Energy v. Jindal Saw, et al. resulted from the failure of a coupling used to join strands of casing in a 17,000 foot deep oil and gas exploratory well in Walker County, Texas. The failure of the coupling allegedly caused casing two miles underground to collapse making the oil and gas well non-productive. Plaintiff claimed in excess of $40 million in damages. Jindal Saw is one of the world’s largest manufacturers of steel products used in the oil and gas industry. Jindal Saw was alleged to have made the raw coupling stock which in turn was used by a different finished product manufacturer to make the failed coupling. The case gave rise to many legal issues, including challenges to the availability of strict liability in tort under the so-called “con-tort” doctrine and the application of the sophisticated user and sophisticated intermediary doctrines to plaintiff’s failure to warn claims.
All other defendants (i.e., finished product manufacturer, intermediate sellers) settled out of the case prior to trial, leaving Jindal Saw as the only defendant presenting evidence at trial. After nearly four weeks of evidence, the case went to the jury solely on a manufacturing defect theory. The jury rejected plaintiff’s claim after four hours of deliberations by a 10-2 vote. This was a significant win for Jindal Saw, which has a growing presence in the United States and abroad. As efforts to drill oil and gas wells occasionally fail, much was at stake for this raw material supplier who was alleged to be responsible for a finished product it played no role in designing or manufacturing.