Reversing Fifth Circuit precedent and settling a circuit split, the United States Supreme Court held in Pacific Operators Offshore LLP v. Valladolid, 132 S.Ct. 680 (2012), that the Outer Continental Shelf Lands Act, 43 U.S.C.A. § 1333(b), extends LHWCA benefits to an employee who can establish a “substantial nexus” between his injury and his employer’s extractive operations on the outer continental shelf (OCS). OCSLA governs those who work on oil drilling platforms and other fixed structures beyond state maritime boundaries. Under OCSLA, 43 U.S.C.A. § 1333(b), workers are eligible for LHWCA benefits for “any injury occurring as the result of operations conducted on the [OCS].”
The Supreme Court first addressed § 1333(b)’s situs requirements in Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207 (1986). In dictum, the Tallentire Court opined that within § 1333, only subsection (b) “superimposes a status requirement on the otherwise determinative OCSLA situs requirement.” 477 U.S. at 219 n.2. However, that conclusion was not supported by meaningful discussion and led to confusion in the lower courts regarding the interpretation of § 1333(b)’s “as the result of” language. Subsequently, the Third Circuit adopted a broad “but for” test. Curtis v. Schlumberger, 849 F.2d 805 (3d Cir. 1988). Employing the narrower “situs-of-the-injury” test urged by Pacific was the Fifth Circuit in Mills v. Director, Office of Workers Compensation Programs, 877 F.2d 356 (5th Cir. 1989) (en banc). In the case sub justice, the Ninth Circuit took the middle ground, adopting the “substantial nexus” test.
Juan Valladolid worked for Pacific Operations Offshore and spent ninety-eight percent of his working time on an offshore drilling platform, but was killed on the grounds of Pacific Operations’ onshore oil processing facility when he was crushed by a forklift he was operating. Pacific argued that Valladolid was not entitled to LHWCA benefits under OCSLA because his accident did not occur on the OCS. The Supreme Court disagreed and affirmed the Ninth Circuit’s decision in favor of Valladolid’s estate:
Although the Ninth Circuit’s test may not be the easiest to administer, it best reflects the text of §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. Although we expect that employees injured while performing tasks on the OCS will regularly satisfy the test, whether an employee injured while performing an off-OCS task qualifies—like Valladolid, who died while tasked with onshore scrap metal consolidation—is a question that will depend on the individual circumstances of each case.
Author: Charles E. Rothermel