Monday, June 10, 2019
The Supreme Court ruled today that federal law does not borrow state labor law on the Outer Continental Shelf. The unanimous ruling reverses the Ninth Circuit.
Given the unusual statutory provision at issue, and given the federal enclave status of the OCS, the ruling is quite narrow, based only on the particular statutory language, and does not say anything more general about the Court's preemption or federalism jurisprudence.
The case, Parker Drilling Management Services, Ltd. v. Newton, tested an unusual provision in federal law that applies to the OCS. That provision says that the laws of the adjacent state will apply to the OCS "[t]o the extent that they are applicable and not inconsistent with [federal law]." In other words, federal law applies on the OCS, and federal law borrows state law when it's "applicable and not inconsistent with" federal law.
So what happens when state law is more generous to workers than federal law? Does the state law apply (as it would under ordinary preemption analysis), or does the federal law apply?
A unanimous Supreme Court said that federal law applies. Justice Thomas, writing for the Court, noted first that the OCS is a federal enclave, where only federal law applies. (Remember, under the Act federal law borrows state law as its own.) He said that in that situation, ordinary preemption analysis doesn't apply; instead, the Court needs to determine what the phrase "applicable and not inconsistent" means in a location where the default is that only federal law applies.
Taken together, these provisions convince us that state laws can be "applicable and not inconsistent" with federal law under [the Act] only if federal law does not address the relevant issue. As we have said before, [the Act] makes apparent "that federal law is 'exclusive' in its regulation of [the OCS], and that state law is adopted only as surrogate federal law." [The Act] extends all federal law to the OCS, and instead of also extending state law writ large, it borrows only certain state laws. These laws, in turn, are declared to be federal law and are administered by federal officials. Given the primacy of federal law on the OCS and the limited role of state law, it would make little sense to treat the OCS as a mere extension of the adjacent State, where state law applies unless it conflicts with federal law. That type of pre-emption analysis is applicable only where the overlapping, dual jurisdiction of the Federal and State Governments makes it necessary to decide which law takes precedence. But the OCS is not, and never was, part of a State, so state law has never applies of its own force.