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Overview Of Recent U.S. Supreme Court Decision Concerning Federal Longshore And Harbor Workers’ Compensation Act

Your lawyers in Charleston at Howell and Christmas are experienced in representing individuals covered under the Federal Longshoremen and Harbor Workers’ Compensation Act in South Carolina. But while the same Act is at discussed in this entry, it has an impact far removed from the Palmetto State. With that being said, the issue of law left to the discretion of the Supreme Court is nonetheless interesting and thought provoking to your Charleston attorneys. Hopefully our readers will injury

Petitioner, Pacific Operations Offshore, LLP (Pacific), operates two drilling platforms on the Outer Continental Shelf (OCS) off the coast of California, as well as an onshore oil and gas processing facility. Juan Valladolid was employed as a general manual laborer in Pacific’s oil exploration and extraction business, performing such maintenance tasks as picking up litter, emptying trashcans, washing decks, painting, maintaining equipment, and helping load and unload the platform crane. Mr. Valladolid spent 98 percent of his time on Pacific’s drilling platforms, performing said tasks. The remainder of his time was spent at Pacific’s onshore processing facility, located in Ventura County, California. At Pacific’s onshore facility Mr. Valladolid was responsible for such maintenance duties such as painting, sandblasting, pulling weeds, cleaning drain culverts, and operating a forklift.

While operating a forklift at Pacific’s onshore facility, Mr. Valladolid was involved in a work related accident, which resulted in his death. Respondent, Mr. Valladolid’s widow filed a claim seeking benefits under the Longshoreman and Harbor Workers’ Compensation Act (LHWCA) pursuant to the extension of that contained within the Outer Continental Shelf Lands Act (OCSLA). Section 1333(b) of OSCLA, the provision involved in this case, makes LHWCA benefits available for the “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 extracting its natural resources.

The parties agree that §1333(b) covers employees such as oilrig and drilling platform workers working directly on the OCS to extract its natural resources. However, the parties disagree as to whether employees who are involved in extraction operations, but who are injured beyond the OCS (i.e. an onshore operating facility) are also covered under OSCLA.

This dispute focuses on the scope of §1333(b), particularly the meaning of the phrase “any injury occurring as the result of operations on the outer Continental Shelf.” Thus, the question arises, is Respondent entitled to benefits under the provisions of the LHWCA pursuant to the extension of that Act within OCSLA?

After a hearing, an Administrative Law Judge (ALJ) dismissed Respondent’s claim by reasoning that Mr. Valladolid’s fatal work injury was not covered under §1333(b) because his accident occurred on land at Pacific’s oil and gas facility, rather than on one of Pacific’s drilling platforms located on the OCS.

On appeal, the ALJ’s ruling was affirmed by the United States Department of Labor’s Benefits Review Board (Board), concluding that Congress, in writing OCSLA, intended to limit the coverage of the Act to injuries suffered by employees within the “geographical locale” of the OCS.

The United State Court of Appeals for the Ninth Circuit reversed the ALJ and Board’s decisions, holding that §1333(b) neither contains a “situs-of-injury” requirement, nor imposes a “but for” causation requirement, rejecting standards set by prior Fifth and Third Circuit holdings, respectively. The Ninth Circuit concluded, “the claimant must establish a substantial nexus between the injury and extractive operations on the shelf” to qualify for workers’ compensation benefits under OCSLA.

The Supreme Court of the United States (Court) granted Pacific’s petition for a writ of certiorari to resolve the conflict and affirmed the Ninth Circuit’s “substantial nexus” standard and remanded to the Court of Appeals for further proceedings

The Court determined that there was no basis for Pacific’s assertion that the Fifth Circuit’s “situs-of-injury” requirement presents the best interpretation of §1333(b). Pacific claims that because Mr. Valladolid was injured on dry land, his death did not occur as the result of extraction operations conducted directly on the OCS, and therefore Respondent is ineligible for LHWCA workers’ compensation benefits. The Court found nothing in the language of §1333(b) to suggest that an employee’s injury must occur while working on the OCS. According to the Court’s opinion, §1333(b) indicates two requirements: “The extractive operations must be ‘conducted on the outer Continental Shelf,’ and the employee’s injury must occur ‘as the result of’ those operations.”

Furthermore, the Court points directly to the text of §1333(b) to refute Pacific’s argument that Congress intended to limit the geographical extension of the LHWCA. Had that been the goal of Congress, as the Court points out, it could have easily done so by omitting “as the result of operations conducted” from §1333(b). It is under these, among other considerations, that the Court concluded that the Ninth Circuit’s “substantial nexus” test better reflects the text of §1333(b) than precedent handed down by the Fifth and Third Circuits. The “substantial nexus” requires the injured employee to establish a significant causal link between the work injury that he/she suffered and his employer’s on-OCS operations conducted for the purpose of extracting natural resources from the OCS.

The Court admits that this test may not be the easiest to administer, but remains confident that ALJs and courts will be able to determine, based on individual circumstances, whether a substantial nexus (or causal link) exists for an employee injured while performing an off-OCS task—like Mr. Valladolid.

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