Injury to Worker in Territorial Waters Had "Substantial Nexus" to Shelf

by Matthew H. Ammerman on February 11th, 2020

There are only a handful of federal district court opinions addressing the contours of the Supreme Court’s “substantial nexus” test from Pacific Operators Offshore, LLP v. Vallodolid.[1] That test is used to determine whether a worker is covered by the Outer Continental Shelf Lands Act (OCSLA) extension of the LHWCA. Specifically, OCSLA applies where there is a “…significant causal link between the injury that [the worker] suffered and his employer's on-OCS [Outer Continental Shelf] operations conducted for the purpose of extracting natural resources from the OCS.”[2]

The district court in Mays v. Chevron Pipe Line Company[3] entered a judgment based on a jury’s $2.9M verdict to the widow and family of a worker, James Mays, who was killed doing pipeline maintenance on a drilling platform in Louisiana’s territorial waters. The jury found a “substantial nexus” between Mays’ death and his employer’s operations on the OCS.[4] Chevron moved for judgment as a matter of law that the court misapplied the law in focusing on Chevron’s operations on the OCS instead of Mays’ payroll employer, Furmanite. Presumably, as a labor supply company, Furmanite did not have direct extractive operations on the OCS because Chevron’s extractive operations were highlighted by the Mays’ plaintiffs. Chevron did not want OCSLA to apply because it would enjoy immunity as a “statutory employer” if the Louisiana workers’ compensation statute applied instead of OSCLA.

The district court rejects Chevron’s argument because Vallodolid did not adjudicate the meaning of “employer” under Section 43 U.S.C. § 1333(b).[5] That section defines an employer as “an employer any of whose employees are employed in such [extractive] operations.” The court instead looks to the pre-Vallodolid opinion from Barger v. Petroleum Helicopters, Inc., 692 F.2d 337 (5th Cir. 1982). There, the Fifth Circuit holds that the OCSLA’s definition of “employer” applied to cover a helicopter pilot’s employer, even though the helicopter company was not engaged in extractive operations on the OCS. Writing for the panel in Barger, Judge Rubin reasoned that helicopter pilots who transport workers to and from the Shelf play “an important role in developing the Shelf.”[6] Therefore, such workers “should not be treated differently on the basis of who their immediate employer is.”[7]

The district court in Mays applies Barger to reason that Mays also played an “important role” in extractive operations because he serviced valves on pipelines transporting gas from the OCS.[8] Therefore, the district court denies Chevron’s motion for judgment as a matter of law or for new trial.

This case brings into focus what import we should ascribe to the Justice Thomas’s reference to the employer’s “on-OCS” operations in the substantial nexus test from the Valladolid case. The Supreme Court’s opinion in Vallodolid twice recites that the injury must have a substantial nexus, or significant causal link, to the “…employer's on-OCS operations conducted for the purpose of extracting natural resources from the OCS.”[9] That limiting factor also provides a level of predictability to the employer, who should have control over whether it operates on the OCS, as well as litigants.[10] Also, in 2016, the Fifth Circuit in the Baker case considered an employer’s lack of on-OCS operations as one of the factors to deny OCSLA coverage to a carpenter injured on land who was building offshore living quarters destined for the OCS.[11]

On the other side of the coin, in addition to the Barger case, the 1988 panel opinion in Mills v. Director, OWCP—which was one year later reversed en banc by the now-rejected situs-of-injury test—did not focus on the employer’s operations on the OCS.[12] Instead, the Fifth Circuit panel focused on the connection between the platform being constructed on land in Amelia, Louisiana, which was destined specifically for the OCS, and “operations on the Shelf.”[13]

The Mays case is before the Fifth Circuit where this issue may be sorted out by early next year.[14] [end].
   [1] 565 U.S. 207, 132 S.Ct. 680, 181 L.Ed.2d. 675 (2012).
   [2] Id., 565 U.S. 207, 222, 132 S. Ct. 680, 691 (emphasis added).
   [3] 2019 U.S. Dist. LEXIS 103751, 2019 WL 2517864 (W.D. La. June 18, 2019).
   [4] Id. at *8.
   [5] Id. at *5.
   [6] Id. at *7, citin  Barger, 692 F.2d 337, 340 (5th Cir. 1982).
   [7] Id.
   [8] Id.
   [9] Valladolid, 565 U.S. 207, 222, 132 S. Ct. 680, 691 (2012).
   [10] There is also arguably a statutory basis, which is not discussed in the Mays case. The extension of the LHWCA through OCSLA at 43 U.S.C. § 1333(b) refers to “operations” conducted on the OCS, and an employer is later defined in a subsection as an entity that employs workers in “such operations”:
With respect to disability or death of an employee resulting from any injury occurring as the result of operations, conducted on the outer Continental Shelf for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources, or involving rights to the natural resources, of the subsoil and seabed of the outer Continental Shelf compensation shall be payable under the provisions of the Longshoremen’s and Harbor Workers’ Compensation Act [Longshore and Harbor Workers’ Compensation Act] [33 USCS §§ 901 et seq.].
* * *
(2) the term “employer” means an employer any of whose employees are employed in such operations; ….”
43 U.S.C. § 1333(b)(emphasis added).

   [11] Baker v. Director, OWCP, 834 F.3d 542, 549 (5th Cir. 2016)(“And although [employer] Gulf Island manufactured the living quarters for Big Foot, the company had no role in moving Big Foot to, installing Big Foot on, or operating Big Foot once placed on the OCS.”).
   [12] 846 F.2d 1013, 1015 (5th Cir. 1988)(“…the requirement that the claimant show a nexus between the work being done and operations on the shelf similar to the proximate cause test in tort law; it requires that the work ‘further[s] the operation of a fixed rig on the shelf and [is] in the regular course of extractive operations on the shelf.’”)(internal citation omitted), rev’d, 877 F.2d 356 (5th Cir. 1989) (en banc), rev’d, Valladolid, 565 U.S. 207 (2012).
   [13] Id.
   [14] Doc. 255, Case 6:14-cv-03098-BAJ-CBW, Peggy Mays, et al. v. Chevron Pipe Line Company, et al.; in the Western District of Louisiana, Lafayette Division (July 1, 2019).

Posted in not categorized    Tagged with Outer Continental Shelf Lands Act, Outer Continental Shelf Lands Act



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