Justices Tout 9th Circuit Theory in Benefits Claim

(CN) - A widow can seek workers' compensation benefits under the Outer Continental Shelf Lands Act, even though her husband was killed on an onshore oil-processing facility, the Supreme Court ruled Wednesday.

The unanimous opinion confirms a May decision by the 9th Circuit, which became the third federal appeals court to consider the question.

Before he was crushed to death by a forklift, Luisa Valladolid's late husband, Juan, worked for Pacific Operations Offshore as a roustabout. The court noted that Juan spent 98 percent of his working time doing maintenance work aboard one of Pacific's offshore oil-drilling platforms, the Hogan, located more than 3 miles off the California coast.

Once every two years, Juan had to collect scrap metal with a forklift at the onshore oil flocculation facility. After Juan was killed, his widow received death benefits under California's workers' compensation scheme. She then filed a claim for benefits under the Outer Continental Shelf Lands Act and another law for longshore and harbor workers.

An administrative law judge denied Valladolid's claims, and an appeals board upheld the decision. The three-judge appellate upheld the decision as to the Longshore And Harbor Workers Compensation Act, but it found that a worker need not be injured or killed on the outer continental shelf to qualify for benefits under that act. It is enough to suffer injuries resulting from outer continental shelf operations.

Wednesday's decision clarified how lower courts should define the phrase "any injury occurring as the result of operations conducted on the outer continental shelf," which appears in section 1333(b) of the Outer Continental Shelf Lands Act. The justices took up the case last year after each of the three circuits to consider the question reached a different answer, and the Solicitor General suggested yet a fourth interpretation to the justices.

After dismissing competing standards to qualify under the act, the Supreme Court concluded that the 9th Circuit correctly based its decision on whether Valladolid could establish a "substantial nexus" between his injury and his employer's extractive operations on the outer continental shelf.

"We understand the Ninth Circuit's test to require the injured employee to establish a significant causal link between the injury that he suffered and his employer's on-OCS operations conducted for the purpose of extracting natural resources from the OCS," Justice Clarence Thomas wrote for the court.

"Although the Ninth Circuit's test may not be the easiest to administer, it best reflects the text of §1333(b), which establishes neither a situs-of-injury nor a 'but for' test. We are confident that ALJs and courts will be able to determine whether an injured employee has established a significant causal link between the injury he suffered and his employer's on-OCS extractive operations. Although we expect that employees injured while performing tasks on the OCS will regularly satisfy the test, whether an em­ployee injured while performing an off-OCS task quali­fies - like Valladolid, who died while tasked with onshore scrap metal consolidation - is a question that will depend on the individual circumstances of each case. The Ninth Circuit remanded the case for the Benefits Review Board to apply the 'substantial-nexus' test in the first instance, and we agree with that disposition."

But the "substantial nexus" did not please every member of the court, with Justice Antonin Scalia taking an opportunity to rib the 9th Circuit.

"The court indulges in con­siderable understatement when it acknowledges that this test 'may not be the easiest to administer,'" according to the concurring opinion, authored by Scalia and co-signed by Justice Samuel Alito. "'Substantial nexus' is novel legalese with no established meaning in the present context. I agree with the court's rejection of some of the clearer rules proposed by the parties - which, though easier to apply, are unmoored from the text of §1333(b). But if we must adopt an inde­terminate standard (and the statute's 'as the result of' language leaves us no choice) I prefer the devil we know to the devil of the Ninth Circuit's imagining. I would hold that an employee may recover under §1333(b) if his injury was proximately caused by operations on the outer conti­nental shelf.

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