SCOTUS Case Preview: Should State Law Govern Offshore Wages?

April 12, 2019 by Dan McCue

This is one of five noteworthy Supreme Court cases that will be heard between April 16 and April 23. You can read the other previews here:

On Tuesday, April 16 the justices will be asked to overturn a Ninth Circuit ruling that the Outer Continental Shelf Lands Act allows laws of adjacent states to apply to drilling platforms as long as state law is “applicable” and “not inconsistent” with federal law.

The ruling by the Ninth Circuit in the wage-and-hour related case, vacated a lower court’s dismissal of litigation, and could, if allowed to stand, result in oil and gas companies owing past and present workers hundreds of millions of dollars in back-pay.

The plaintiff in the underlying case is Brian Newton, who worked for Parker Drilling Management services on an oil drilling platform off the coast of Santa Barbara, California.

In his lawsuit, Newton said his shifts on the platform lasted 14 days, and that he regularly works 12 hours a day. But the central issue in the cases revolved around meals. Newton claimed he typically ate a fast lunch and dinner without clocking out, and did so because his employer did not provide 30-minute meal periods for every five hours worked, as is required under California law.

After Parker Drilling fired him, Newton sued the company in state court asserting claims for wage-and-hour violations under state law. Parker Drilling successfully asked that the case be moved to federal court and promptly asked the case be dismissed.

A federal district court judge sided with the employer, holding that under the Outer Continental Shelf Lands Act, the federal Fair Labor Standards Act is a comprehensive statutory scheme that leaves no room for state law to address wage and hour grievances.

The Ninth Circuit disagreed, ruling the Outer Continental Shelf Lands Act allows the laws of adjacent states to apply to drilling platforms and that in this case, California’s wage and hour laws are not inconsistent with the Fair Labor Standards Act.

Until the Ninth Circuit’s ruling, every court that had considered similar cases uniformly agreed that federal, not state law applied.

For instance, in the 1969 case Cont’l Oil Co.v. London Steam-Ship Owners’ Mut. Ins. Ass’n,  the Fifth Circuit affirmed dismissal of a lawsuit filed under Louisiana law, explaining that federal law already provided the plaintiffs with a complete set of “substantive rights and remedies” to govern their dispute. Because there was “no void” and “no gaps” in the coverage of federal law, the Louisiana statute did not apply as surrogate federal law.

The case is 18-389 Parker Drilling Mgmt. Services v. Newton.

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