U.S. High Court: Widow Of Offshore Drilling Employee Can Pursue Injury Claims under Outer Continental Shelf Lands Act

U.S. High Court: Widow Of Offshore Drilling Employee Can Pursue Injury Claims under Outer Continental Shelf Lands Act

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on Jan. 11 held that the Outer Continental Shelf Lands Act (OCSLA) "extends coverage to an employee who can establish a substantial nexus between his injury and his employer's extractive operations" on the Outer Continental Shelf (OCS), affirming a Ninth Circuit U.S. Court of Appeals decision in a fatal workplace accident action (Pacific Operators Offshore, LLP, et al. v. Luisa L. Valladolid, et al., No. 10-507, U.S. Sup.) (lexis.com subscribers may access Supreme Court briefs for this case).

Juan Valladolid worked for defendant Pacific Operators Offshore LLP as a roustabout, stationed primarily on one of Pacific's two offshore drilling platforms.  He was killed on the grounds of Pacific's onshore oil-processing facility when he was crushed by a forklift. 

His widow, Luisa Valladolid, sought workers' compensation benefits under OCSLA and the Longshore and Harbor Workers' Compensation Act (LHWCA).  After informal proceedings before the local district director of the Department of Labor's Office of Workers' Compensation Programs, the matter was referred to an administrative law judge (ALJ). 

Claims Denied

The ALJ denied Luisa Valladolid's OCSLA claim on the grounds that Juan Valladolid's injury had occurred outside the geographic situs of the outer continental shelf.  The ALJ denied the LHWCA claim because Juan Valladolid was not engaged in maritime employment and he was not injured on a maritime situs.

The Benefits Review Board upheld the ALJ's ruling on OCSLA benefits and affirmed the denial of the LHWCA benefits on the maritime situs ground.  It did not reach the maritime employment issue. 

Luisa Vallodolid appealed to the Ninth Circuit, which on May 13, 2010, ruled that "the OCSLA workers' compensation provision . . . applies to any injury resulting from operations on the outer continental shelf, regardless of the location of the injury."  However, the appellate panel affirmed the denial of workers' compensation benefits under the LHWCA. 

Pacific Operators and Insurance Company of the State of Pennsylvania petitioned the high court on Oct. 13, 2010.  The petition was granted Feb. 22.

The Supreme Court affirmed, agreeing with the Ninth Circuit "substantial-nexus" test.  It concluded that it was proper for the Ninth Circuit to remand the case to the Benefits Review Board to apply the "substantial-nexus" test.

Causal Link

"We understand the Ninth Circuit's test to require the injured employee to establish a significant causal link between the injury that he suffered and his employer's on-OCS operations conducted for the purpose of extracting natural resources from the OCS," Justice Clarence Thomas wrote for the court.  "Although the Ninth Circuit's test may not be the easiest to administer, it best reflects the text of [43 U.S. Code] §1333(b),  which establishes neither a situs-of-injury nor a 'but for' test.  We are confident that ALJs and courts will be able to determine whether an injured employee has established a significant causal link between the injury he suffered and his employer's on-OCS extractive operations."

Chief Justice John G. Roberts Jr. and Justices Anthony M. Kennedy, Ruth Bader Ginsburg, Stephen G. Breyer, Sonia Sotomayor and Elena Kagan joined in the opinion.

Justice Antonin Scalia filed an opinion concurring in the judgment but noted that he would hold that "an employee may recover under §1333(b) if his injury was proximately caused by operations on the Outer Conti­nental Shelf (OCS)."  Justice Samuel Anthony Alito Jr. joined in Justice Scalia's opinion.

David C. Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington represents Luisa Valladolid.  Peter Abrahams of Horvitz & Levy in Encino, Calif., represents Pacific Operators and the insurance company.

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