Term: 2018
Docket: 18-389
Parker Drilling Management Services, Ltd. v. Newton
- Pro
18-389 PARKER DRILLING MANAGEMENT SERVICES, LTD. V. NEWTON DECISION BELOW: 881 F.3d 1078 CERT. GRANTED 1/11/2019 QUESTION PRESENTED: In the Outer Continental Shelf Lands Act ("OCSLA"), Congress declared federal law to be the exclusive source of law on the Outer Continental Shelf ("OCS"). To fill the gaps in the coverage of federal law, Congress provided that the law of the adjacent state would be borrowed as federal law, to the extent that such state law is "applicable" and "not inconsistent with" existing federal law. Consistent with this Court's decisions, the Fifth Circuit has long held that state law is not borrowed as surrogate federal law under OCSLA unless there is a gap in federal law, as with a garden-variety contract claim. In the decision below, the Ninth Circuit expressly disagreed with the Fifth Circuit and held that state law should be borrowed as federal law governing the OCS whenever state law pertains to the subject matter of a lawsuit and is not preempted by inconsistent federal law, regardless of whether there is a gap in federal law. It thus held that California's wage-and-hour laws apply to claims filed by workers on drilling platforms on the OCS, even though the Fair Labor Standards Act already provides a comprehensive set of federal rights and remedies. The result is wholly unanticipated and potentially massive liability for OCS operators that fully complied with the FLSA. The question presented is: Whether, under OCSLA, state law is borrowed as the applicable federal law only when there is a gap in the coverage of federal law, as the Fifth Circuit has held, or whenever state law pertains to the subject matter of a lawsuit and · is not preempted by inconsistent federal law, as the Ninth Circuit has held. LOWER COURT CASE NUMBER: 15-56352
In the case of Parker Drilling Management Services, Ltd. v. Newton, 2018, the U.S Supreme Court was asked to decide on whether California's wage-and-hour laws apply to drilling workers off the coast of California on federal Outer Continental Shelf (OCS) lands. Brian Newton had worked for Parker Drilling and filed a class action lawsuit in state court alleging that he was entitled to certain wage protections under California law which were more generous than those provided by federal law. The company argued that only federal law applied as per OCS Lands Act which extends all applicable and not inconsistent Federal laws onto the OCS. The Ninth Circuit ruled in favor of Newton stating that where there is a gap in federal law, state law can be borrowed if it is applicable and not inconsistent with existing federal laws. However, this decision was reversed by the Supreme Court ruling unanimously against Newton stating that under OCSLA when a Federal statute addresses relevant issues then State Law cannot be adopted as surrogate Federal Law.
In the dissenting opinion for Parker Drilling Management Services, Ltd. v. Newton, Justice Ginsburg argued that federal law should not displace state law on the Outer Continental Shelf (OCS) unless there is a significant conflict between them. She pointed out that California's minimum wage laws could coexist with federal laws without causing any operational disruption or inconsistency in the oil drilling industry on OCS lands off California’s coast. The majority opinion held that only federal law applies to these areas and thus rejected an employee's claim under California labor laws for unpaid wages and penalties against his employer operating on an offshore drilling platform in this area. However, Justice Ginsburg disagreed stating it was unnecessary to interpret "all applicable" state laws as being replaced by federal ones when they can function harmoniously together.
