In the case Gulf Offshore Co., a Division of Pool Co. v. Mobil Oil Corp et al., 1980, the U.S Supreme Court was tasked with determining whether federal or state law should apply in disputes arising from operations on the Outer Continental Shelf (OCS). The dispute arose when employees of Gulf Offshore Company, who were injured while working on drilling platforms off the coast of Louisiana, sued their employer and Mobil Oil Corporation under Louisiana law for damages. The defendants argued that only federal law applied to OCS activities based on provisions within the Outer Continental Shelf Lands Act (OCSLA). However, lower courts had ruled in favor of applying state laws due to lack of specific federal statutes governing such issues. The Supreme Court reversed these decisions and held that although OCSLA allows application of relevant and applicable state laws as surrogate federal law where necessary gaps exist in its coverage over offshore facilities; it does not permit direct application or incorporation into Federal Law itself. Therefore, any claim brought forward must be fundamentally grounded upon an alleged violation under existing Federal Law.

In the dissenting opinion for Gulf Offshore Co. v. Mobil Oil Corp., Justice Rehnquist disagreed with the majority's decision to apply federal law, rather than state law, in this case involving a dispute over an offshore drilling platform located on the Outer Continental Shelf (OCS). He argued that Congress intended for state laws to be applied as surrogate federal laws on OCS lands unless they were inconsistent with federal interests. According to him, there was no clear evidence of such inconsistency in this case and thus saw no reason why Texas tort law should not govern. Furthermore, he criticized the majority's use of balancing tests which he believed led them away from congressional intent and into unnecessary policy considerations.