January 11, 2012

Supreme Court Decides Pacific Operators Offshore, LLP v. Valladolid

On January 11, 2012, the Supreme Court decided Pacific Operators Offshore, LLP v. Valladolid, No. 10-507, holding that under an extension of the Outer Continental Shelf Lands Act, an injured employee may pursue benefits under the Harbor Workers' Compensation Act if the employee can establish a substantial nexus between the injury and the employer's extractive operations on the Outer Continental Shelf (OCS). 

The Outer Continental Shelf Lands Act (OCSLA) extends the federal workers' compensation scheme estab­lished in the Longshore and Harbor Workers' Compensa­tion Act (LHWCA) to injuries "occurring as the result of operations conducted on the outer Continental Shelf" for the purpose of extracting natural resources from the shelf.  Plaintiff's decedent, a laborer, spent 98% of his time working on an offshore platform, but was killed in an accident while working at his employer's onshore facility.  The plaintiff widow sought benefits under the LHWCA, but the administrative law judge and the Labor Department's Benefits Review Board both rejected the claim because the accident occurred on land, not on the OCS.  The Ninth Circuit reversed, holding that a claimant may receive LHWCA benefits if the claimant can establish a substantial nexus between the injury and extractive opera­tions on the OCS.    

The Supreme Court affirmed, rejecting several alternative rules and agreeing with the Ninth Circuit that the OCSLA extends coverage to an injured employee who can establish a substantial nexus between the injury and the employer's extractive operations on the OCS.  The Court rejected a "situs-of-injury" test as inconsistent with the OCSLA, which contains no such geographical limits.  The Court also rejected a "but-for" test as an overbroad rule that would extend coverage to any employee of a company engaged in OCS operations without regard to the employee's actual work.  Finally, the Court rejected the suggestion that coverage extend only to employees whose duties contribute to operations on the OCS and who perform work that is substantial in both duration and nature on the OCS itself, holding that such a rule would impermissibly ignore the statute's focus on causation. 

Justice Thomas delivered the opinion of the Court, in which Chief Justice Roberts and Justices Kennedy, Ginsberg, Breyer, Sotomayor, and Kagan joined. Justice Scalia filed an opinion concurring in part and concurring in the judgment, in which Justice Alito joined.

Download Opinion of the Court

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