(CN) – A bolt maker must pay Chevron more than $1 million for shipping defective bolts used to secure an oil rig to the ocean floor, the 5th Circuit ruled. The court found the company partially liable for the bad bolts, but ruled that it did not have to pay attorney’s fees.
A jury found T-3 Custom Coating Applicators, formerly known as Lone Star, 35 percent liable for a $3 million damage award to Chevron. The jury said the bolts Lone Star shipped to Chevron to secure part of an oil rig were flawed.
Chevron’s engineer had ordered the bolts from Lone Star, a well-known bolt maker, but Lone Star did not have the ones Chevron requested. It sent a different bolt from another manufacturer, but the substitute bolts couldn’t withstand as much torque.
Chevron took Lone Star and other manufacturers to court and was awarded $3 million in damages and more than $150,000 in attorney’s fees.
On appeal, Lone Star challenged the award of attorney’s fees, claiming that Louisiana products liability law bars attorney’s fees.
The three-judge panel held that Lone Star was liable as the manufacturer for selling a faulty product to Chevron, but ruled that the award of attorney’s fees should be reversed, because Chevron did not suffer “economic loss” in repairing the damage caused by the bad bolts.
“That damage is not economic loss-the claim is not that the bolts were ‘a waste of money’ or caused lost profits,” Judge E. Grady Jolly wrote for the New Orleans-based panel.