June 14, 2019

U.S. Supreme Court Reaffirms Primacy of Federal Law on Outer Continental Shelf

Holland & Knight Transportation Blog
Vincent J. Foley | J. Michael Cavanaugh | Mark C. Kalpin

U.S. Supreme Court reaffirms primacy of federal law on Outer Continental Shelf holding state law may not be adopted where federal law already addresses the issue.

In Parker Drilling Management Services Ltd. v. Newton, 587 U.S. __ (2019), the Supreme Court of the United States resolved a conflict between the Courts of Appeal for the Ninth and Fifth Circuits interpreting the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et seq., and holding that where federal law addresses the relevant issue, state law is not adopted as surrogate federal law on the Outer Continental Shelf (OCS). The underlying action involved a class action lawsuit by a worker on drilling platforms off the coast of California. The worker had shifts during which he worked 12 hours per day on duty, and 12 hours per day on standby. The worker was paid above California and federal minimum wages for his time on duty, but was not paid for his standby time. The issue was whether the California laws, which provided more protection and higher wages than federal law, were "applicable and not inconsistent" with the Federal Labor Standards Act (FLSA) for the services performed on the offshore drilling platform. The Court found that the FLSA addressed the issue, and that the OCSLA did not permit the California state law to be adopted where the federal law already addressed the issue. The Court concluded by emphasizing: "Our consistent understanding of the OCSLA remains: All law on the OCS is federal, and state law serves a supporting role to be adopted only where there is a gap in federal law's coverage."

In 1953, Congress enacted the OCSLA which affirmed that the Federal Government exercised exclusive control over the OCS, defined as all submerged lands beyond the lands reserved to the States up to the edge of the United States' jurisdiction and control. The OCSLA defined the body of law applicable to the OCS and provided that federal law applied to the same extent as if the OCS were an area of exclusive federal jurisdiction (or a federal enclave) located within a state. In addition, the OCLSA provided that "all such applicable laws shall be administered and enforced by the appropriate officers and courts of the United States." Because federal law serves a limited function in a federal system, and might be inadequate to cope with the full range of potential legal problems, the OCSLA "supplemented gaps in the federal law with state law through the adoption of state law as the law of the United States." The OCSLA provides that state laws be adopted as federal law of the OCS "to the extent that they are applicable and not inconsistent" with other federal law. The decision noted that "the OCSLA sought to make all OCS law federal yet also 'provide a sufficiently detailed legal framework to govern life' on the OCS." However, "once that federal framework is established, the text and context of OCSLA suggest that state law is not adopted to govern the OCS where federal law is on point." Thus, the OCSLA requires an exclusive federal law system, but does not adopt state law "where there is no gap to fill." Following this principle, the Court held that on the OCS state laws can be "applicable and consistent" with federal law only if federal law does not address the relevant issue.

The decision in Parker Drilling reaffirmed the primacy of federal law on the OCS, and that state law has no role if federal law applies. This provides clear guidance as to the applicable law for offshore workers, and for companies that engage in operations on the OCS.

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