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Houston Exploration Co. v. Halliburton Energy Services, Inc.

Gross negligence is substantially and appreciably higher in magnitude than ordinary negligence.

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Appeal from the United States District Court For the Eastern District of Louisiana

The Houston Exploration Company (“THEC”) sued Halliburton Energy Services, Inc. (“Halliburton”) for damages incurred when THEC’s gas well blew out after Halliburton conducted drill stem testing on the well. At trial, Halliburton argued that it was shielded from liability under an indemnity agreement between Halliburton and THEC, which required THEC to release and indemnify Halliburton. Finding that Halliburton’s conduct constituted gross negligence, the district court refused to enforce the indemnity agreement and entered a judgment for THEC. Halliburton now appeals, arguing that it was not grossly negligent, and thus, that the indemnity agreement should be enforced. Because we conclude that the district court clearly erred in finding that Halliburton’s conduct amounted to gross negligence, we vacate the judgment of the district court and remand the case for further proceedings consistent with this opinion.

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