Pacific Operators Offshore, LLP v. Valladolid

Background

Pacific Operators Offshore runs two drilling platforms on the Outer Continental Shelf and an onshore processing facility in California. Juan Valladolid, a roustabout who worked mostly on the offshore platform, died in a forklift accident at the onshore facility. His widow filed for federal workers’ compensation under the Longshore and Harbor Workers’ Compensation Act as extended by the Outer Continental Shelf Lands Act. An administrative law judge and the Department of Labor’s Benefits Review Board denied coverage because the injury occurred on land; the Ninth Circuit reversed and adopted a “substantial nexus” test.

Reasoning

The Court interpreted the OCSLA phrase “injury occurring as the result of operations conducted on the outer Continental Shelf” to require a causal link, not a strict geographic rule. It rejected a bright-line rule that limits coverage to injuries on the shelf and also rejected a “but-for” test that would be too broad. Instead, the Court affirmed the Ninth Circuit’s approach that an employee must show a significant causal connection between the injury and on-OCS extractive operations to qualify for benefits. The Court remanded for the Benefits Review Board to apply that test to Valladolid’s case.

Real world impact

Going forward, injured workers who are hurt off the shelf may qualify for federal OCSLA/LHWCA benefits if their injury is substantially linked to offshore extraction work. Many cases will require fact-specific hearings; a successful claim depends on the particular facts and proof of a significant causal link.

Dissents or concurrances

Justice Scalia, joined by Justice Alito, agreed with the judgment but urged a familiar “proximate cause” standard instead of the Court’s new “substantial nexus” phrasing, warning the latter is vague.