Supreme Court Rules State Law Does Not Apply to Outer Continental Shelf

Supreme Court Rules State Law Does Not Apply to Outer Continental Shelf
A fin whale surfaces near offshore oil rigs off the southern California coast near Long Beach, Calif., on Jan. 29, 2012. (David McNew/Getty Images)
Matthew Vadum

WASHINGTON—The Supreme Court unanimously rejected a California-based offshore oil rig worker’s claim that he should be paid for off-the-clock time on the oil platforms, as California law requires, because federal law alone governs the facilities that are based on the Outer Continental Shelf.

After Texas and North Dakota, California is the third-largest oil-producing state. Oil is reportedly produced on 32 offshore platforms and artificial islands in Southern California alone.

The ruling, which overturns a decision by the oft-reversed 9th Circuit Court of Appeals, is a victory for the Trump administration, which sided with the employer in the case, Houston, Texas-based company Parker Drilling Management Services Ltd.

The financial claim was brought by Brian Newton, who worked on the company’s drilling platforms in the Santa Barbara Channel from 2013 to 2015. Newton worked 14-day segments, with 12 hours on duty and 12 hours off on what his attorneys call “controlled standby.” A number of employees shared his schedule, but others worked the other 12-hour shifts, which let the platforms function 24 hours a day.

Newton was given his base pay for the first 40 hours each week, plus 44 hours at the overtime rate. He also was compensated for travel time to and from the platform, as well as for time spent debriefing alternating crew members. Newton wanted to be paid for off-work time spent at the facility, including sleeping. Federal law doesn’t require employers to cover off-work time but California law does. Newton alleged the company violated state minimum wage laws, didn’t pay double-time rates, and failed to offer meal breaks.

In a decision written by Justice Clarence Thomas, the court found that “federal law is the only law” that applies on the Outer Continental Shelf (OCS), and “there has never been any overlapping state and federal jurisdiction there.”

“The question under the OCSLA [Outer Continental Shelf Lands Act] is whether federal law addresses the minimum wage on the OCS. It does. Therefore, the California minimum wage is not adopted as federal law and does not apply on the OCS.”

OCLSA, enacted in 1953, states that federal law applies on the Outer Continental Shelf but provides that laws of the adjacent state are to be deemed to be federal law to the extent they are “applicable and not inconsistent” with other federal law. If “federal law applies to a particular issue, state law is inapplicable,” the court found.

Federal law already addresses off-the-clock time spent on oil rigs and doesn’t require workers to be paid for sleeping and other non-work activities, the court determined.

Justices seemed unsympathetic to Newton’s position during oral arguments before the court on April 16.

Justice Samuel Alito rejected one of the contentions made by Newton’s lawyer, David C. Frederick, telling him it amounted to saying that California “extends 200 miles out to sea.”

“However, within this part of California, federal officials will enforce the law,” the justice added.

Frederick replied, saying California law applies here because “our client’s shift begins and ends in California onshore in the uplands. The first two to three hours of every one of his shifts is exclusively within California, when he gets briefed for safety, when he gets the bus down to the port” to be transported to the platform.

Justice Ruth Bader Ginsburg told Frederick in April that “a state is not sovereign” over the shelf.