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.
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.
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 gratefully acknowledges that assistance of James Azzarello, Legge, Farrow, Kimmitt, McGrath & Brown, L.L.P.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.