ISSUES: Outer Continental Shelf Lands Act

You may have heard that the Longshore Act is going to the U.S. Supreme Court, by way of the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. 1331 et.seq.).

The OCSLA is an extension of the Longshore and Harbor Workers’ Compensation Act.  Other extensions are the Defense Base Act and the Nonappropriated Fund Instrumentalities Act.

The OCSLA was enacted in 1953 for the purpose of establishing a body of law governing activities on the outer continental shelf (OCS).  Among other parts, OCSLA applies the provisions of the Longshore and Harbor Workers’ Compensation Act to workers injured or killed as a result of operations on the OCS conducted for the purpose of exploring for, developing, removing, or transporting by pipeline the natural resources of the seabed of the OCS.  The offshore energy industry had started up on a large scale, but the area was outside the coverage of state laws.  The OCSLA provided that non-maritime federal law would apply on the OCS, and in the instance where no federal law applied then the law of the adjacent state would apply as surrogate federal law.

The outer continental shelf consists of all submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in the Submerged Lands Act and of which the subsoil and seabed appertain to the United States and are subject to its control.

The Supreme Court has granted the petition for a writ of certiorari in the case of Pacific Operations Offshore LLP v Valladolid, Docket No. 10-507, a case recently decided by the U.S. Circuit Court of Appeals for the Ninth Circuit (Washington, Oregon, Montana, Idaho, California, Nevada, Arizona, Alaska, and Hawaii).  The issue is whether or not the OCSLA contains a situs of injury provision for workers’ compensation purposes.

The question is whether the injury causing disability or death giving rise to a claim must occur actually on the outer continental shelf, or rather may the injury occur anywhere during activities as a result of operations conducted on the outer continental shelf.  Put another way, the question is whether or not section 1333(a) of the OCSLA, which broadly extends federal jurisdiction to the OCS, provides a situs requirement for section 1333(b), the benefits provision that extends Longshore Act workers’ compensation benefits to workers injured “as a result of operations conducted on the outer continental shelf ….”

The fatally injured worker in the Valladolid case was employed by an employer engaged in operations covered by the OCSLA.  He was doing work covered by OCSLA.  Most of his work was performed on the employer’s offshore drilling platforms, but the accident occurred on land at the employer’s onshore facility.

The Supreme Court has granted the petition because there is a conflict among the federal circuits on the issue of whether or not there is a workers’ compensation situs test in the OCSLA.  The Fifth Circuit (Louisiana, Texas, and Mississippi) has held that the injury must occur on the OCS to be covered by OCSLA.  The Third Circuit (Pennsylvania, New Jersey, Delaware, and the U.S. Virgin Islands), and now the Ninth Circuit, have held that there is no situs requirement, but rather that the injury may occur (presumably) anywhere but only that it must arise out of or in connection with OCSLA covered operations.

The expectation is that the Supreme Court will resolve the conflict, and provide a test for OCSLA coverage.

This case should be watched closely by all employers involved in operations on the OCS for the purpose of exploring for, developing, removing or transporting by pipeline the natural resources of the OCS.  The decision may mean that many of these employers have an OCSLA exposure that they previously have not recognized or anticipated.

Yes, AEU does provide OCSLA coverage.

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