Pacific Operators Offshore, LLP v. Valladolid, 565 U.S. 207 (2012)

Justia Opinion Summary and Annotations

Respondent, widow of an employee of Pacific Operators Offshore, sought benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901 et seq., pursuant to the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1333(b), which extended LHWCA coverage to injuries "occurring as the result of operations conducted on the [OCS]" for the purpose of extracting natural resources from the shelf. The ALJ dismissed her claim, reasoning that section 1333(b) did not cover the employee's fatal injury because his accident occurred on land, not on the OCS. The Labor Department's Benefits Review Board affirmed, but the Ninth Circuit reversed. The Court concluded that the Ninth Circuit's "substantial-nexus" test was more faithful to the text of section 1333(b). The Court understood 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.

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321 .

SUPREME COURT OF THE UNITED STATES

Syllabus

PACIFIC OPERATORS OFFSHORE, LLP, et al. v. VALLADOLID et al.

certiorari to the united states court of appeals for the ninth circuit

No. 10–507. Argued October 11, 2011      —Decided January 11, 2012

Petitioner Pacific Operators Offshore, LLP (Pacific), operates two drilling platforms on the Outer Continental Shelf (OCS) off the California coast and an onshore oil and gas processing facility. Employee Juan Valladolid spent 98 percent of his time working on an offshore platform, but he was killed in an accident while working at the onshore facility. His widow, a respondent here, sought benefits under the Longshore and Harbor Workers’ Compensation Act (LHWCA), 33 U. S. C. §901 et seq., pursuant to the Outer Continental Shelf Lands Act (OCSLA), which extends LHWCA coverage to injuries “occurring as the result of operations conducted on the [OCS]” for the purpose of extracting natural resources from the shelf, 43 U. S. C. §1333(b). The Administrative Law Judge dismissed her claim, reasoning that §1333(b) did not cover Valladolid’s fatal injury because his accident occurred on land, not on the OCS. The Labor Department’s Benefits Review Board affirmed, but the Ninth Circuit reversed. Rejecting tests used by the Third and the Fifth Circuits, the Ninth Circuit concluded that a claimant seeking benefits under the OCSLA “must establish a substantial nexus between the injury and extractive operations on the shelf.”

Held: The OCSLA extends coverage to an employee who can establish a substantial nexus between his injury and his employer’s extractive operations on the OCS. Pp. 3–14.

     (a) The Courts of Appeals have offered competing interpretations of §1333(b)’s scope. According to the Third Circuit, because Congress intended LHWCA coverage to be expansive, §1333(b) extends to all injuries that would not have occurred “but for” operations on the OCS. Thus, an employee who worked on a semisubmersible drill rig, but who died in a car accident on his way to board a helicopter to be flown to the rig, was eligible for benefits because he would not have been injured but for his traveling to the rig. In contrast, the Fifth Circuit has concluded that Congress intended to establish “a bright-line geographic boundary,” extending §1333(b) coverage only to employees whose injuries or death occurred on an OCS platform or the waters above the OCS. Under its “situs-of-injury” test, a welder injured on land while constructing an offshore oil platform was ineligible for §1333(b) benefits. In the decision below, the Ninth Circuit held that §1333(b) extends coverage to injured workers who can establish a “substantial nexus” between their injury and extractive operations on the OCS. The Solicitor General offers a fourth interpretation, which would provide coverage for off-OCS injuries only to those employees whose duties contribute to operations on the OCS and who perform work on the OCS itself that is substantial in both duration and nature. Pp. 3–6.

     (b) Contrary to Pacific’s position, the Fifth Circuit’s “situs-of-injury” test is not the best interpretation of §1333(b). Pp. 6–12.

          (1) Nothing in the text of §1333(b) suggests that an injury must occur on the OCS. The provision has only two requirements: The extractive operations must be “conducted on the [OCS],” and the employee’s injury must occur “as the result of” those operations. If, as Pacific suggests, the purpose of §1333(b) was to geographically limit the scope of OCSLA coverage to injuries that occur on the OCS, Congress could easily have achieved that goal by omitting from §1333(b) the words “as the result of operations conducted.” Moreover, Congress’ decision to specify situs limitations in other subsections, but not in §1333(b), indicates that it did not intend to so limit §1333(b). This conclusion is not foreclosed by Herb’s Welding, Inc. v. Gray, 470 U. S. 414 , or Offshore Logistics, Inc. v. Tallentire, 477 U. S. 207 , neither of which held that §1333(b) coverage was limited to on-OCS injuries. Section 1333(b)’s text also gives no indication that Congress intended to exclude OCS workers who are eligible for state benefits from LHWCA coverage. To the contrary, the LHWCA scheme incorporated by the OCSLA explicitly anticipates that injured employees might be eligible for both state and federal benefits. Pp. 6–10.

          (2) Also unpersuasive is Pacific’s alternative argument that §1333(b) imports the LHWCA’s strict situs-of-injury requirement, which provides benefits only for injuries occurring “upon the navigable waters” of the United States, 33 U. S. C. §903(a). It is unlikely that Congress intended to restrict the scope of the OCSLA workers’ compensation scheme through a nonintuitive and convoluted combination of two separate legislative Acts. In addition, under Pacific’s alternative theory, LHWCA coverage would not be extended to the navigable waters above the shelf. Thus, even employees on a crew ship immediately adjacent to an OCS platform who are injured in a platform explosion would be excluded from §1333(b) coverage. That view cannot be squared with §1333(b)’s language. Pp. 11–12.

          (3) Pacific’s policy concerns also cannot justify an interpretation of §1333(b) that is inconsistent with the OCSLA’s text. P. 12.

     (c) Neither the Solicitor General’s status-based inquiry nor the Third Circuit’s “but for” test are compatible with §1333(b). The Solicitor General’s inquiry has no basis in the OCSLA’s text, because §1333(b)’s “occurring as the result of operations” language plainly suggests causation. And when taken to its logical conclusion, the Third Circuit’s test, though nominally based on causation, is essentially a status-based inquiry because it would extend coverage to all employees of a business engaged in extracting natural resources from the OCS, no matter where those employees work or what they are doing at the time of injury. Because LHWCA coverage was extended only to injuries “occurring as the result of operations conducted on the [OCS],” §1333(b)’s focus should be on injuries resulting from those “operations.” Pp. 12–14.

     (d) The Ninth Circuit’s “substantial-nexus” test is more faithful to §1333(b)’s text. This Court understands that test to require the injured employee to establish a significant causal link between his injury and his employer’s on-OCS extractive operations. The test may not be the easiest to administer, but Administrative Law Judges and courts should be able to determine if an injured employee has established the required significant causal link. Whether an employee injured while performing an off-OCS task qualifies will depend on the circumstances of each case. It was thus proper for the Ninth Circuit to remand this case for the Benefits Review Board to apply the “substantial-nexus” test. P. 14.

604 F. 3d 1126, affirmed and remanded.

     Thomas, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Ginsburg, Breyer, Sotomayor, and Kagan, JJ., joined. Scalia, J., filed an opinion concurring in part and concurring in the judgment, in which Alito, J., joined.

SUPREME COURT OF THE UNITED STATES

_________________

No. 10–507

_________________

PACIFIC OPERATORS OFFSHORE, LLP, et al., PETITIONERS v. LUISA L. VALLADOLID et al.

on writ of certiorari to the united states court of appeals for the ninth circuit

[January 11, 2012]

     Justice Scalia, with whom Justice Alito joins, concurring in part and concurring in the judgment.

     I join the Court’s judgment that the Ninth Circuit prop- erly remanded this case to the Benefits Review Board, and I agree with almost all of the Court’s opinion. My disagreement is limited to the last two substantive paragraphs of Part IV, which endorse the Ninth Circuit’s “substantial-nexus” test for determining the scope of cover- age under 43 U. S. C. §1333(b). The Court indulges in con- siderable understatement when it acknowledges that this test “may not be the easiest to administer,” ante, at 14. “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 (OCS).

     The term “proximate cause” is “shorthand for a concept: Injuries have countless causes, and not all should give rise to legal liability.” CSX Transp., Inc. v. McBride, 564 U. S. ___, ___ (2011) (slip op., at 5). Life is too short to pursue every event to its most remote, “but-for,” consequences, and the doctrine of proximate cause provides a rough guide for courts in cutting off otherwise endless chains of cause-and-effect. See Holmes v. Securities Investor Protection Corporation, 503 U. S. 258, 287 (1992) (Scalia, J., concurring in judgment). Thus, as the Court notes in rejecting the Third Circuit’s “but for” test for §1333(b) coverage, we have interpreted statutes with language similar to §1333(b) as prescribing a proximate-cause standard. See ante, at 13–14.

     Although the doctrine of proximate cause is rooted in tort law and most commonly applied in negligence actions, it can also provide a useful guide in no-fault compensation schemes like this one. In Brown v. Gardner, 513 U. S. 115, 119 (1994) , we considered a no-fault veterans’ compensation statute covering injuries that occurred “as the result of” medical treatment (precisely the language at issue here); we suggested that the requisite “causal connection” between the injury and medical treatment may be “limited to proximate causation so as to narrow the class of compensable cases . . . by eliminating remote conse- quences.” Similarly, some state workers’ compensation laws use the concept of proximate cause to determine entitlement. See, e.g., Ex parte Patton, __ So. 3d __, __ (Ala. 2011); Marandino v. Prometheus Pharmacy, 294 Conn. 564, 591, 986 A. 2d 1023, 1041 (2010); Grant v. Grant Textiles, 372 S. C. 196, 201, 641 S. E. 2d 869, 871 (2007). Indeed, the statutory law of California, where Mr. Valladolid died while at work, limits workers’ compensation liability to cases “[w]here the injury is proximately caused by the employment, either with or without negligence.” Cal. Lab. Code Ann. §3600(a)(3) (West 2011).* I see no reason why the scope of 43 U. S. C. §1333(b) could not similarly be cabined by the familiar limits of proximate causation.

     To be sure, proximate cause is an imperfect legal doctrine; I have no illusions that its tenets are easy to describe or straightforward to apply. Judicial opinions do not provide a uniform formulation of the test, and borderline cases are rarely clear. But “it is often easier to disparage the product of centuries of common law than to devise a plausible substitute.” McBride, 564 U. S., at ___ (Roberts, C. J., dissenting) (slip op., at 2–3). Unlike the substantial-nexus test, proximate cause provides a “vocabulary” for answering questions like the one raised by the facts of this case. It may be productive, for example, to consider whether the injury was “within the scope of the risk” created by OCS operations, or whether some “superseding or intervening cause” exists. Id., at ___ (slip op., at 15). In addition to that vocabulary, precedents on proximate cause “furnish illustrations of situations which judicious men upon careful consideration have adjudged to be on one side of the line or the other.” Exxon Co., U. S. A. v. Sofec, Inc., 517 U. S. 830, 839 (1996) (internal quotation marks omitted).

     “Substantial nexus,” by contrast, is an indeterminate phrase that lacks all pedigree. Our case law has used it as a term of art in only one context, first appearing in Justice Blackmun’s opinion for the Court in Complete Auto Transit, Inc. v. Brady, 430 U. S. 274, 279 (1977) : We sustain state taxes against Commerce Clause challenges if they are, inter alia, “applied to an activity with a substantial nexus with the taxing State.” Oklahoma Tax Comm’n v. Jefferson Lines, Inc., 514 U. S. 175, 183 (1995) (emphasis added; internal quotation marks omitted). “[S]uch a nexus is established when the taxpayer ‘avails itself of the substantial privilege of carrying on business’ in that jurisdiction.” Polar Tankers, Inc. v. City of Valdez, 557 U. S. 1, 11 (2009) . That clarification—and any further clarification in the Commerce Clause context—will not be remotely helpful to lower courts attempting to apply the substantial-nexus test in the very different legal context of workers’ compensation under §1333(b). In this latter context, I assume the Court means by “substantial nexus” a substantial causal nexus—since §1333(b)’s “as the result of” language “plainly suggests causation,” ante, at 13. Like the word “nexus” itself, the definition of “substantial nexus” in our state-tax cases does not require any causal relationship whatsoever. The proximate-cause test, by comparison, represents a much more natural interpretation of a statute that turns on causation.

     Does the Court mean to establish, by the novel “substantial [causal] nexus” test, a new tertium quid of causality—somewhere between but-for causality and proximate cause? One might think so, since there is no other sensible reason to (1) reject but-for cause, (2) say nothing about the natural alternative (proximate cause), and (3) embrace the “substantial [causal] nexus” novelty. On the other hand, the Court’s opinion suggests at least some connection (that is to say, in the Court’s favored lawspeak, some “nexus”) between the proximate-cause standard and the substantial-nexus test, since it cites one of our proximate-cause cases just before concluding that “[a]ccordingly, . . . the Ninth Circuit’s ‘substantial-nexus’ test is more faithful to the text of §1333(b)” than the Third Circuit’s but-for test. Ante, at 13–14. In the opinion below, moreover, the Ninth Circuit purported to endorse the Fifth Circuit’s pre-1989 case law, which required “ ‘ that the claimant show a nexus . . . similar to the proximate cause test in tort law.’ ” 604 F. 3d 1126, 1140 (CA9 2010) (quoting Mills v. Director, Office of Workers’ Compensation Programs, 846 F. 2d 1013, 1015 (CA5 1988), rev’d en banc, 877 F. 2d 356 (1989)). Who knows whether this is a tertium quid or not? The Court has given us a new test whose contours are entirely undescribed, and which has nothing to be said for it except that it will add complexity to the law and litigation to the courts.

     Finally, I must note an additional uncertainty (or else a peculiarity) that the Court’s opinion creates: The statutory text at issue requires compensation for “disability or death of an employee resulting from any injury occurring as the result of operations conducted on the outer Continental Shelf . . . .” §1333(b) (emphasis added). Before today, I would have thought it clear that courts must apply proximate-cause analysis to the “resulting from” provision; but that would seem quite peculiar if (as the Court holds today) we apply substantial-nexus analysis to the neighboring “occurring as the result of” provision. Surely both phrases express the same concept. What a tangled web we weave.

     I would affirm the Ninth Circuit’s judgment to remand the case to the Benefits Review Board, but with instructions to apply a proximate-cause test.

Notes

1 * Strange to say, the California Supreme Court has held that this unmistakable term-of-art reference to a rule found in the common law of torts does not establish a rule “identical to that found in the common law of torts,” but merely “elaborat[es] the general requirement that the injury arise out of the employment.” LaTourette v. Workers’ Compensation App. Bd., 17 Cal. 4th 644, 651, n. 1, 951 P. 2d 1184, 1187, n. 1 (1998) (internal quotation marks omitted). Perhaps (who knows?) later California Supreme Court cases will “clarify” this general requirement by saying that it requires a “substantial nexoos” between the employment and the injury.
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