1
00:00:03,480 --> 00:00:07,560
Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

2
00:00:07,640 --> 00:00:10,440
Speaker 1: day we bring you insight and analysis into the most

3
00:00:10,480 --> 00:00:13,399
Speaker 1: important legal news of the day. You can find more

4
00:00:13,480 --> 00:00:18,040
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud,

5
00:00:18,320 --> 00:00:22,840
Speaker 1: and on Bloomberg dot com slash podcasts. It was unfamiliar

6
00:00:22,880 --> 00:00:26,040
Speaker 1: subject matter for the justices on the Supreme Court applied

7
00:00:26,079 --> 00:00:29,320
Speaker 1: to an unfamiliar setting, a platform anchored more than three

8
00:00:29,360 --> 00:00:32,559
Speaker 1: miles off the California coast. Last week, the Court considered

9
00:00:32,600 --> 00:00:36,000
Speaker 1: whether California's wage and Hour's law applies to workers on

10
00:00:36,040 --> 00:00:38,840
Speaker 1: such platforms, meaning that workers would have to be paid

11
00:00:38,880 --> 00:00:42,400
Speaker 1: for all their time on a rig depending on how

12
00:00:42,479 --> 00:00:45,479
Speaker 1: the justices rule. Joining me as Brandon Barnes, Bloomberg Intelligence

13
00:00:45,479 --> 00:00:48,680
Speaker 1: Senior litigation analyst. So Brandon, tell us a little about

14
00:00:48,680 --> 00:00:51,080
Speaker 1: the case. Yeah, this is a really it's sort of

15
00:00:51,120 --> 00:00:56,080
Speaker 1: a small case that's got real large implications. Um, Basically,

16
00:00:56,080 --> 00:00:58,920
Speaker 1: one of the workers on a rig suit saying I

17
00:00:58,960 --> 00:01:01,200
Speaker 1: should be paid because I I'm sleeping on this rig

18
00:01:01,240 --> 00:01:03,840
Speaker 1: and under California state law, should be paid for that

19
00:01:03,880 --> 00:01:07,840
Speaker 1: time even though I'm operating in federal waters. And so

20
00:01:08,319 --> 00:01:11,600
Speaker 1: it sets up a very interesting issue for these justices

21
00:01:11,680 --> 00:01:14,080
Speaker 1: where they have to weigh what's going on in California

22
00:01:14,080 --> 00:01:17,080
Speaker 1: against what could potentially also happen in the Gulf of

23
00:01:17,120 --> 00:01:24,920
Speaker 1: Mexico where of offshore US development occurs. So offshore rig

24
00:01:24,959 --> 00:01:27,800
Speaker 1: operators in the whole Pacific then would have to pay

25
00:01:27,840 --> 00:01:30,880
Speaker 1: hourly workers for their time. That's part to California law,

26
00:01:31,280 --> 00:01:34,320
Speaker 1: that's right, and it's it's different than federal law. And

27
00:01:34,319 --> 00:01:36,280
Speaker 1: that's really what the crux of the issue here is

28
00:01:36,280 --> 00:01:39,920
Speaker 1: is where's that line when we're on in offshore waters

29
00:01:39,920 --> 00:01:43,480
Speaker 1: in this Outer Continental Shelf or the o CS. Here

30
00:01:43,480 --> 00:01:45,720
Speaker 1: we're talking only about the Pacific, which is you know,

31
00:01:45,959 --> 00:01:50,920
Speaker 1: the West Coast plus Alaska has implications, but economically not

32
00:01:51,000 --> 00:01:53,440
Speaker 1: as big as if this we're applying directly to Gulf

33
00:01:53,440 --> 00:01:56,640
Speaker 1: of Mexico. So put some numbers on this, that's a

34
00:01:56,840 --> 00:01:58,320
Speaker 1: that's a good question. So it's a lot of back

35
00:01:58,600 --> 00:02:03,440
Speaker 1: back of envelope, but um for direct liability for someone

36
00:02:03,480 --> 00:02:07,000
Speaker 1: like Parker Drilling or other operators who have similar lawsuits,

37
00:02:07,320 --> 00:02:09,160
Speaker 1: you know, looking at back pay in the order of

38
00:02:09,240 --> 00:02:12,600
Speaker 1: fifty to a hundred million generally just based on Hey,

39
00:02:13,000 --> 00:02:15,200
Speaker 1: I was on this rig for four years, so were

40
00:02:15,200 --> 00:02:18,320
Speaker 1: two hundred other people, and we should have been paid

41
00:02:18,440 --> 00:02:21,360
Speaker 1: at overtime and for all the time we were sleeping,

42
00:02:21,360 --> 00:02:24,280
Speaker 1: et cetera. And then you know that that cost has

43
00:02:24,320 --> 00:02:27,280
Speaker 1: to be carried forward. So we're looking at double triple

44
00:02:27,280 --> 00:02:30,280
Speaker 1: wage costs moving forward, and those are potentially big numbers

45
00:02:30,280 --> 00:02:33,520
Speaker 1: aggregated when margins aren't great for the offshore. So you

46
00:02:33,560 --> 00:02:37,160
Speaker 1: were predicting that the Court would overturn the Ninth Circuit

47
00:02:37,400 --> 00:02:42,760
Speaker 1: decision in February. Did the justices questioning reinforce your opinion?

48
00:02:43,080 --> 00:02:45,399
Speaker 1: You know, it's always a dangerous game you play when

49
00:02:45,400 --> 00:02:48,680
Speaker 1: you try and you have to write. So if I

50
00:02:48,760 --> 00:02:52,600
Speaker 1: was scoring this out, I think I'm I'm still confident

51
00:02:52,600 --> 00:02:55,919
Speaker 1: in my my analysis that this gets overturned at the

52
00:02:55,960 --> 00:02:58,280
Speaker 1: Ninth Circuit. And I think that the Supreme Court is

53
00:02:58,320 --> 00:03:00,520
Speaker 1: either on a six, three or five or based on

54
00:03:00,560 --> 00:03:03,040
Speaker 1: the questioning hard to say, obviously we're Thomas Goes since

55
00:03:03,120 --> 00:03:05,840
Speaker 1: he doesn't ask any questions, but um, you could get

56
00:03:05,880 --> 00:03:08,600
Speaker 1: a feel for where the justice rat based on the question.

57
00:03:09,240 --> 00:03:12,760
Speaker 1: So who are the four or three? So I think

58
00:03:12,800 --> 00:03:16,040
Speaker 1: if you look at how they opened the questioning during argument,

59
00:03:16,639 --> 00:03:22,040
Speaker 1: you had soda Mayor was absolutely firing on all cylinders

60
00:03:22,080 --> 00:03:25,280
Speaker 1: when it came to Parker Drilling's counsel being there or

61
00:03:25,360 --> 00:03:29,440
Speaker 1: the United States who are for overturning the Ninth Circuit.

62
00:03:29,639 --> 00:03:33,160
Speaker 1: You also had Kagan who was involved, and Ginsburg, So

63
00:03:33,200 --> 00:03:35,160
Speaker 1: I think you had sort of a trifecta of the

64
00:03:35,480 --> 00:03:40,040
Speaker 1: female justices all sort of indicating maybe with their questioning

65
00:03:40,080 --> 00:03:43,560
Speaker 1: and the tenor of their questions, which way they were leaning. UM.

66
00:03:43,600 --> 00:03:47,000
Speaker 1: And then obviously I think Briar would typically be considered

67
00:03:47,040 --> 00:03:49,880
Speaker 1: moving maybe in that camp, but he was showing that

68
00:03:49,960 --> 00:03:52,080
Speaker 1: he might not be completely comfortable with going all the

69
00:03:52,080 --> 00:03:55,200
Speaker 1: way there. So is this a one off case when

70
00:03:55,200 --> 00:03:57,400
Speaker 1: the Supreme Court decides this is at the end of

71
00:03:57,400 --> 00:04:02,040
Speaker 1: the game. So it depends because really, for first, there

72
00:04:02,080 --> 00:04:06,280
Speaker 1: are at least seven other lawsuits that directly involved the

73
00:04:06,400 --> 00:04:10,280
Speaker 1: same actions, just a different platform. It's it's exactly the

74
00:04:10,360 --> 00:04:13,160
Speaker 1: same They're all pending in in in the Ninth Circuit

75
00:04:13,200 --> 00:04:17,680
Speaker 1: out in California, UM, so direct read through there. Now,

76
00:04:18,760 --> 00:04:22,440
Speaker 1: how this plays out in other jurisdictions is open based

77
00:04:22,440 --> 00:04:24,839
Speaker 1: on which way the court goes. So in this case,

78
00:04:25,080 --> 00:04:28,440
Speaker 1: did the Ninth Circuit, which we know is very liberal

79
00:04:28,520 --> 00:04:31,320
Speaker 1: and goes its own way, did it just go a

80
00:04:31,360 --> 00:04:34,000
Speaker 1: different way and say the way this has been going

81
00:04:34,040 --> 00:04:37,279
Speaker 1: for years is wrong. We have to apply California lost

82
00:04:37,320 --> 00:04:40,400
Speaker 1: state law to these rigs. That's I mean, that's basically right.

83
00:04:40,760 --> 00:04:43,880
Speaker 1: You have, as as Briar put it, you have fifty

84
00:04:43,920 --> 00:04:46,000
Speaker 1: years of precedent in the Fifth Circuit, which is Gulf

85
00:04:46,040 --> 00:04:50,400
Speaker 1: of Mexico, Texas Louisiana. That go the other way. Let's say, look,

86
00:04:50,760 --> 00:04:54,040
Speaker 1: when you're out on the rigs, federal law applies. You

87
00:04:54,160 --> 00:04:58,400
Speaker 1: don't have sort of a gap filler or a rising

88
00:04:58,440 --> 00:05:00,919
Speaker 1: off the floor of federal off with state law. But

89
00:05:01,640 --> 00:05:04,200
Speaker 1: this is the first time we've seen that happen. And

90
00:05:04,320 --> 00:05:06,800
Speaker 1: I think it may be just the case that this

91
00:05:06,839 --> 00:05:09,680
Speaker 1: didn't hit the Ninth Circuit. It didn't get in front

92
00:05:09,720 --> 00:05:13,960
Speaker 1: of them until now. So this case did not get

93
00:05:14,040 --> 00:05:17,359
Speaker 1: much attention in the press. Why do you think the

94
00:05:17,440 --> 00:05:21,120
Speaker 1: justices took it in the first place. Well, if you

95
00:05:21,160 --> 00:05:24,160
Speaker 1: think about sort of how the Supreme Court decides what

96
00:05:24,160 --> 00:05:26,200
Speaker 1: it's going to take, it's usually they need they need

97
00:05:26,240 --> 00:05:30,200
Speaker 1: a circuit split, they need real public policy issues, they

98
00:05:30,240 --> 00:05:33,479
Speaker 1: need federal state issues, and we certainly have all of

99
00:05:33,480 --> 00:05:35,960
Speaker 1: those here. And I think that that to me, when

100
00:05:35,960 --> 00:05:37,640
Speaker 1: we were looking at this case coming out of the

101
00:05:37,720 --> 00:05:40,359
Speaker 1: Ninth Circuit. I was thinking this is this has definitely

102
00:05:40,360 --> 00:05:43,400
Speaker 1: got all the marking of something the Court want to take,

103
00:05:43,520 --> 00:05:47,000
Speaker 1: particularly because of how much impact it could have on

104
00:05:47,080 --> 00:05:49,279
Speaker 1: that Fifth Circuit on the Gulf of Mexico. Has the

105
00:05:49,279 --> 00:05:52,560
Speaker 1: Fifth Circuit ruled on this, because that's a very conservative circuit.

106
00:05:53,480 --> 00:05:58,440
Speaker 1: It has ruled in various capacities on this, but not

107
00:05:58,560 --> 00:06:01,320
Speaker 1: directly in the sense. It's mostly because I think Texas

108
00:06:01,320 --> 00:06:06,680
Speaker 1: and Louisiana have basically given to federal uh labor law

109
00:06:06,720 --> 00:06:09,000
Speaker 1: in this case. They don't have the same kind of

110
00:06:09,000 --> 00:06:12,240
Speaker 1: structure that California has here. So when might we hear

111
00:06:12,240 --> 00:06:16,560
Speaker 1: a decision? Good question, again, just like trying to game

112
00:06:16,600 --> 00:06:19,279
Speaker 1: out which justices go which way. I think if you

113
00:06:19,320 --> 00:06:21,440
Speaker 1: look at the stats, we're probably looking at late two

114
00:06:21,520 --> 00:06:25,000
Speaker 1: Q three q UM. This might be one of those

115
00:06:25,000 --> 00:06:27,119
Speaker 1: cases that's a little more complex because of the issues

116
00:06:27,160 --> 00:06:29,400
Speaker 1: are pretty novels, and maybe we push into four Q

117
00:06:29,600 --> 00:06:34,159
Speaker 1: but probably this year. Okay, Well, you know everyone says

118
00:06:34,240 --> 00:06:37,400
Speaker 1: that you can't judge by what the justice questions are,

119
00:06:37,440 --> 00:06:40,760
Speaker 1: but nine times out of ten you end up with

120
00:06:40,800 --> 00:06:44,680
Speaker 1: their questions signaling which way they'll go. Well, thanks so much, Brandon.

121
00:06:44,760 --> 00:06:48,520
Speaker 1: That's Brandon Barnes, Bloomberg Intelligence Senior litigation analyst. You can

122
00:06:48,520 --> 00:06:50,960
Speaker 1: read more of Brandon analysis at b I go on

123
00:06:51,040 --> 00:06:56,599
Speaker 1: the Bloomberg Terminal. Thanks for listening to the Bloomberg Law Podcast.

124
00:06:56,960 --> 00:07:01,040
Speaker 1: You can subscribe and listen to the show on Apple Podcast, Asked, SoundCloud,

125
00:07:01,120 --> 00:07:05,000
Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.

126
00:07:05,480 --> 00:07:12,240
Speaker 1: This is Bloomberg m