Chao v. Mallard Bay

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MC/SandT/01/02
Elaine L. Chao, Secretary of Labor, Petitioner v. Mallard Bay Drilling, Inc.
United States Supreme Court: Judgment delivered by Stevens J.: 2002 U.S. LEXIS 403 January 2002
ACCIDENT ON DRILLING RIG IN LOUSIANA WATERS: JURISDICTION OF US COAST GUARD: UNINSPECTED VESSEL: OCCUPATIONAL SAFETY AND HEALTH ACT 1970: PRE-EMPTION OF OSH ADMINISTRATION JURISDICTION: EXERCISE OF COAST GUARD’S AUTHORITY: MEANING OF EXERCISE: MERE POSSESSION OF UNEXERCISED AUTHORITY: MINIMAL EXERCISE OF SOME AUTHORITY
Case note contributed by Healy & Baillie LLP of New York, attorney Alan M. Weigel

DMC Rating Category: Developed

Summary
The United States Supreme Court, in a 8-0 decision, reversed the decision of the Fifth Circuit Court of Appeals. The Supreme court held that the United States Coast Guard’s exclusive jurisdiction over the regulation of seamen’s working conditions aboard vessels such as Mallard Bay Drilling’s uninspected drilling barge did not automatically pre-empt the Occupational Safety and Health Administration’s ("OSHA") regulation of such vessel under s.4(b)(1) of the Occupational Safety and Health Act of 1970.

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Facts
While Rig 52, an oil and gas exploration barge owned by Mallard Bay Drilling, was drilling a well in the territorial waters of Louisiana in June 1997, an explosion occurred on board, killing four members of the crew and injuring two others. The US Coast Guard conducted an investigation into the casualty, the cause of which it attributed to sparks from the pump room igniting natural gas that had leaked from the well. The report made factual findings about the actions of the crew, but did not accuse Mallard Bay Drilling of violating any Coast Guard regulations. The Coast Guard report explained that, although Rig 52 held a Coast Guard Certificate of Documentation, it had never been inspected by the Coast Guard and was not required to hold a Certificate of Inspection or be inspected by the Coast Guard.
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[Note: Under the US Coast Guard Act, vessels are divided into two classes, inspected vessels and uninspected vessels. Inspected vessels are those subject to inspection by the Coast Guard pursuant to a substantial body of rules mandated by the US Congress. Uninspected vessels are defined as vessels that are not subject to inspection. In the context of uninspected vessels, such as the Mallard Bay Drilling barge, the Coast Guard’s regulatory authority and its exercise is more limited, focusing on matters relating to marine safety.]
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Based largely on information obtained from the Coast Guard report, the Occupational Safety & Health Administration (‘OSHA’) cited Mallard Bay Drilling for three violations of the OSH Act of 1970. Mallard Bay Drilling did not deny the charges but challenged OSHA’s jurisdiction on the grounds a) that Rig 52 was not a ‘workplace’ within the meaning of s.4(b)(1) of the Act and b) that s.4(b)(2) of the Act pre-empted OSHA jurisdiction because the Coast Guard had exclusive authority to prescribe and enforce standards concerning occupational safety and health on vessels in navigable waters. S.4(b)(2) reads:
"Nothing in this chapter shall apply to working conditions of employees with respect to which other Federal agencies…… exercise exclusive authority to prescribe or enforce standards or regulations affecting occupational safety and health."
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The Administrative Law Judge, who first heard the case, rejected both jurisdictional challenges. His decision was, however, reversed on appeal to the Court of Appeals for the Fifth Circuit. 
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Judgment
The Supreme Court held that in relation to uninspected vessels, the Coast Guard had not exercised its authority under the Act, because it had neither affirmatively regulated the working conditions at issue in the case, nor asserted comprehensive regulatory jurisdiction over working conditions on uninspected vessels. Mere possession by the Coast Guard of unexercised authority or minimal exercise of some authority over certain conditions on uninspected vessels was insufficient to preempt all OSHA regulation of all uninspected vessels. The Court found that, with respect to uninspected vessels, the Coast Guard’s general maritime safety regulations did not address the occupational safety and health concerns faced by inland drilling operations on uninspected vessels, and, thus, did not pre-empt OSHA’s authority under Section 4(b)(1) of the Act.
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The Court also found that the drilling barge was a "workplace" under s.4(a) of the Act because it was located within a geographic area described in s.4(a) -- a State -- and s.4(a) attached no significance to the fact that it was anchored in navigable waters.

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Comments
The lesson to be learnt from this judgment is that, even though owners of uninspected vessels may have complied with all applicable Coast Guard regulations, now they must also ensure that they comply with all applicable OSHA regulations, including any applicable notification and reporting requirements.

 

 

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