OSHA Takes a Dip in the Sea: Chao v Mallard Bay
Drilling, Inc.
August 2002
Mike Orlando discusses a recent Supreme Court
ruling expanding OSHA's jurisdiction to uninspected drilling barges, which must
now comply with both Coast Guard and the more stringent OSHA safety and health
regulations.
by Michael
A. Orlando*
Meyer Orlando,
LLC
On June 16, 1997, four employees of Mallard Bay Drilling, Inc., were killed
and two other employees were seriously injured when an explosion occurred on
a barge drilling a well in the territorial waters of Louisiana. The Coast Guard
conducted an investigation of the incident and concluded that Mallard had not
violated any Coast Guard regulations. The Occupational Health and Safety Administration
(OSHA) also conducted an investigation and cited Mallard for three violations
of the Occupational Safety and Health Act for (1) failure to promptly evacuate
employees after the explosion, (2) failure to develop an adequate emergency
response plan and (3) failure to train employees to respond to an emergency.
The Administrative Law Judge
OSHA's citation was brought before an administrative law judge (ALJ). Mallard
did not deny these charges, but contested OSHA's jurisdiction to issue the citation
as the drilling barge was not a "workplace" within the meaning of Section 4(a)
of the Act and OSHA was preempted due to the Coast Guard's exclusive authority
to regulate occupational safety and health on vessels in navigable waters pursuant
to Section 4(b)(1) of the Act. The ALJ rejected both arguments.
The ALJ held the drilling barge was a "workplace" within the meaning of the
Act since Mallard's employees were not performing navigational-related activities
and the drilling barge was stationary within the territorial boundaries of Louisiana.
The ALJ, accordingly, concluded the Mallard employees were not seamen. Also,
the ALJ emphasized a federal agency cannot preempt OSHA's jurisdiction under
Section 4(b)(1) unless that agency actually exercises its statutory authority
to regulate a particular working condition. The Occupational Safety and Health
Review Commission declined review of the ALJ's decision.
The U.S. Court of Appeals for the Fifth Circuit
The U.S. Court of Appeals for the Fifth Circuit reversed. Without addressing
the "workplace" issue, the Fifth Circuit found Mallard's employees were seamen
and emphasized the Coast Guard has exclusive authority over the working conditions
of seamen—even those working on uninspected vessels. [See Mallard Bay Drilling, Inc. v Herman, 212 F3d
898 (5th Cir 2000).]
The U.S. Supreme Court
The U.S. Supreme Court granted certiorari to resolve a conflict among the
circuits vis-à-vis interpretation of the preemptive force of Section 4(b)(1).
[Chao v Mallard Bay Drilling, Inc., 531 U.S.
1143 (2001).] On January 9, 2002, Justice John Paul Stevens, writing for a unanimous
Court (although Justice Antonin Scalia did not participate), focused on the
active exercise by another agency of its power to control workplace conditions,
to the preemption of OSHA. Specifically, the Court concluded the Coast Guard
had engaged in a limited exercise of its authority to regulate working conditions
on uninspected vessels and, therefore, OSHA's regulation of uninspected vessels
had not been preempted. [Chao v Mallard Bay Drilling,
Inc., 534 U.S. 235 (2002).]
The Court noted although the Coast Guard regulates fire extinguishers, life
preservers, and emergency floating equipment on uninspected vessels, these regulations
fail to address overall safety and health. Since the Coast Guard does not affirmatively
regulate working conditions on uninspected vessels, the Court observed, OSHA
properly exercised its jurisdiction over the uninspected drilling barge. The
Court stated, and OSHA conceded, the Coast Guard sufficiently regulates safety
and health on inspected vessels as to preempt OSHA regulation.
The Court also found the drilling barge was a "workplace" within the meaning
of Section 4(a) of the Act because it was located within a geographic area (i.e.,
Louisiana) delineated in the Act, and gave no significance to the fact that
it was anchored in navigable waters.
Analysis
Interestingly, since the Court's ruling, no federal or state court—save one—has
so much as cited the decision for any proposition. Recently, a state court plaintiff,
who had appealed the trial court's decision, attempted to use the Court's decision
in support of a remand argument. Specifically, the plaintiff wanted the trial
court to consider previously excluded evidence of the defendant's violation
of OSHA regulations. The state appellate court rightfully found the plaintiff's
argument misplaced. [See Muhammad v Diamond Offshore
Co., 2002 WL 1468206 (La App 3rd Cir July 10, 2002).]
It is unclear why we have seen so little appellate activity related to this
quite important development. Perhaps OSHA inspectors are adhering too religiously
to their 1983 Memorandum of Understanding with the Coast Guard in which the
two agencies agree that Coast Guard standards and regulations are sufficient
to regulate the working conditions of seamen aboard inspected vessels.
On the same date of the Mallard Bay Court's
decision, however, the Fifth Circuit held that OSHA has authority to regulate
workplace conditions on an inspected vessel which was being repaired in a shipyard
by non-seamen shipyard workers. [See Chao v Transocean
Offshore, Inc., 276 F3d 725 (5th Cir 2002).]
The impact of these recent decisions appears to be that owners of uninspected
vessels, such as certain tugs and barges, and shipyard owners working on uninspected
and inspected vessels must now comply with
both Coast Guard and the more stringent OSHA safety and health regulations.
Armed with these judicial victories, OSHA inspectors may soon exercise their
statutory duties over more maritime employers.
With budgetary constraints and a new vision for the Coast Guard post September
11, it should be a surprise to no one to see OSHA exercising greater scrutiny
over areas that have been traditionally within the sole realm of the Coast Guard.
In particular, operators of uninspected towing vessels and barges will almost
certainly have OSHA personnel investigating deaths aboard their vessels when
in state territorial waters, which are the normal waterways in which they ply.
Unlike most things in a maritime setting in which gray predominates over
black or white, here the Supreme Court appears to give some fairly bright lines.
If it is an uninspected vessel operating in state waters, and the issue involved
in the incident is one in which the Coast Guard has not actually exercised regulatory
authority, then OSHA has jurisdiction. In most instances of an accident aboard
an inspected vessel, regardless of whether in state, federal, or international
waters, OSHA will not have jurisdiction. The gray areas appear to arise in two
settings: (1) when the injured worker is not a Jones Act seaman but is hurt
aboard an inspected vessel; and (2) when a Jones Act seaman who is performing
traditional seaman's duties is injured aboard an uninspected vessel.
There appear to be some anomalies that defy logical explanation concerning
the jurisdictional overlap created in Chao v Mallard
Bay Drilling. The Coast Guard and other federal agencies, such as the
Minerals Management Service, regulate uninspected drilling vessels on the outer
continental shelf. Yet, the OSHA jurisdictional statute specifically lists the
outer continental shelf as a workplace within OSHA jurisdiction. Under the current Mallard Bay decision, it would appear that the
Coast Guard regulations would preempt OSHA.
On the other hand, the OSHA jurisdictional statute does not list state territorial
waters as a potential workplace, but the Coast Guard does not regulate uninspected
drilling vessels operating within state territorial waters, and thus OSHA has
decided to take a dip in the sea. It makes very little logical sense for the
Coast Guard to regulate, and thus preempt OSHA, for drilling vessels on the
outer continental shelf, but for the opposite to be true when the drilling vessel
is operating within state territorial waters.
In conclusion, while at first glance the issuance of the Mallard Bay Drilling decision would appear to
give some bright lines guidance, as with most matters that touch the water,
the bright lines become murky when applied to the myriad of factual circumstances
occurring in maritime commerce. Undoubtedly, we have not seen the end of the
issue of the extent of OSHA's jurisdiction over matters maritime.
*The author greatfully
acknowledges that assistance of James Azzarello,
Legge, Farrow, Kimmitt, McGrath & Brown, L.L.P.
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