June 10, 2019

Supreme Court Decides Parker Drilling Management Services, Ltd. v. Newton

On June 10, 2019, the Supreme Court of the United States decided Parker Drilling Management Services, Ltd. v. Newton, No. 18-389, holding that state law does not apply to the Outer Continental Shelf when federal law addresses the relevant issue, and that a conflict between state and federal law is not required.

The Outer Continental Shelf Lands Act, 43 U.S.C. § 1331, et seq. gives the federal government complete control of and jurisdiction over the Outer Continental Shelf (Outer Shelf) of the United States. The Act provides that all law on the Outer Shelf is federal law, administered by federal officials, and that adjacent states’ laws are deemed to be federal law “[t]o the extent that they are applicable and not inconsistent with” other federal law.

Brian Newton worked for Parker Drilling Management Services on drilling platforms located on the Outer Shelf off the California coast. This required him to work 12 hours per day on duty and spend the remaining 12 hours per day on standby, during which he could not leave the platform. Newton filed a class action against Parker in California state court, alleging that California wage and hour laws required Parker to compensate him for his standby time on the platform. The question was whether California’s wage and hour laws were “applicable and not inconsistent” with federal law such that they were deemed to be federal law that applied on the Outer Shelf.

The district court sided with Parker, ruling that California wage and hour laws could not apply to the Outer Shelf. But the Ninth Circuit reversed, holding that California’s wage and hour laws were “applicable” on the Outer Shelf because they concerned the subject matter at issue, and that such laws were “not inconsistent” with federal law because they were not “incompatible, incongruous, [or] inharmonious” with federal wage and hour law (chiefly the Fair Labor Standards Act), they simply gave workers more protection than federal law.

The Supreme Court reversed and remanded. The Court refused to employ a typical preemption analysis, under which state law will apply unless it affirmatively conflicts with federal law, because preemption analysis applies to cases where the federal and state governments have overlapping, dual jurisdiction. The Outer Shelf is not subject to overlapping federal and state jurisdiction; to the contrary, the federal government has exclusive jurisdiction over the Outer Shelf and federal law is the only law on the Outer Shelf, with federal law simply adopting state law when it is “applicable and not inconsistent” with federal law. In that context, the Court held, state law is “applicable and not inconsistent” with federal law only when state law applies to an issue that federal law does not address at all. “Put another way, to the extent federal law applies to a particular issue, state law is inapplicable.” Because federal law already addresses wages and hours for time an employee spends on standby, the Court concluded that California law on those topics does not apply to the Outer Shelf. Thus, Newton’s claims relying on that California law failed. The Court remanded the case so that claims that had not been analyzed by the Ninth Circuit could be adjudicated.

Justice Thomas delivered the opinion for a unanimous court.

Download Opinion of the Court.

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