WEBVTT - Supreme Court to Decide Offshore Rig Workers Pay

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud,

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<v Speaker 1>and on Bloomberg dot com slash podcasts. It was unfamiliar

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<v Speaker 1>subject matter for the justices on the Supreme Court applied

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<v Speaker 1>to an unfamiliar setting, a platform anchored more than three

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<v Speaker 1>miles off the California coast. Last week, the Court considered

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<v Speaker 1>whether California's wage and Hour's law applies to workers on

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<v Speaker 1>such platforms, meaning that workers would have to be paid

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<v Speaker 1>for all their time on a rig depending on how

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<v Speaker 1>the justices rule. Joining me as Brandon Barnes, Bloomberg Intelligence

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<v Speaker 1>Senior litigation analyst. So Brandon, tell us a little about

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<v Speaker 1>the case. Yeah, this is a really it's sort of

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<v Speaker 1>a small case that's got real large implications. Um, Basically,

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<v Speaker 1>one of the workers on a rig suit saying I

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<v Speaker 1>should be paid because I I'm sleeping on this rig

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<v Speaker 1>and under California state law, should be paid for that

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<v Speaker 1>time even though I'm operating in federal waters. And so

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<v Speaker 1>it sets up a very interesting issue for these justices

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<v Speaker 1>where they have to weigh what's going on in California

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<v Speaker 1>against what could potentially also happen in the Gulf of

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<v Speaker 1>Mexico where of offshore US development occurs. So offshore rig

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<v Speaker 1>operators in the whole Pacific then would have to pay

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<v Speaker 1>hourly workers for their time. That's part to California law,

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<v Speaker 1>that's right, and it's it's different than federal law. And

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<v Speaker 1>that's really what the crux of the issue here is

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<v Speaker 1>is where's that line when we're on in offshore waters

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<v Speaker 1>in this Outer Continental Shelf or the o CS. Here

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<v Speaker 1>we're talking only about the Pacific, which is you know,

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<v Speaker 1>the West Coast plus Alaska has implications, but economically not

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<v Speaker 1>as big as if this we're applying directly to Gulf

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<v Speaker 1>of Mexico. So put some numbers on this, that's a

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<v Speaker 1>that's a good question. So it's a lot of back

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<v Speaker 1>back of envelope, but um for direct liability for someone

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<v Speaker 1>like Parker Drilling or other operators who have similar lawsuits,

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<v Speaker 1>you know, looking at back pay in the order of

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<v Speaker 1>fifty to a hundred million generally just based on Hey,

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<v Speaker 1>I was on this rig for four years, so were

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<v Speaker 1>two hundred other people, and we should have been paid

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<v Speaker 1>at overtime and for all the time we were sleeping,

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<v Speaker 1>et cetera. And then you know that that cost has

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<v Speaker 1>to be carried forward. So we're looking at double triple

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<v Speaker 1>wage costs moving forward, and those are potentially big numbers

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<v Speaker 1>aggregated when margins aren't great for the offshore. So you

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<v Speaker 1>were predicting that the Court would overturn the Ninth Circuit

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<v Speaker 1>decision in February. Did the justices questioning reinforce your opinion?

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<v Speaker 1>You know, it's always a dangerous game you play when

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<v Speaker 1>you try and you have to write. So if I

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<v Speaker 1>was scoring this out, I think I'm I'm still confident

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<v Speaker 1>in my my analysis that this gets overturned at the

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<v Speaker 1>Ninth Circuit. And I think that the Supreme Court is

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<v Speaker 1>either on a six, three or five or based on

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<v Speaker 1>the questioning hard to say, obviously we're Thomas Goes since

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<v Speaker 1>he doesn't ask any questions, but um, you could get

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<v Speaker 1>a feel for where the justice rat based on the question.

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<v Speaker 1>So who are the four or three? So I think

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<v Speaker 1>if you look at how they opened the questioning during argument,

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<v Speaker 1>you had soda Mayor was absolutely firing on all cylinders

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<v Speaker 1>when it came to Parker Drilling's counsel being there or

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<v Speaker 1>the United States who are for overturning the Ninth Circuit.

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<v Speaker 1>You also had Kagan who was involved, and Ginsburg, So

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<v Speaker 1>I think you had sort of a trifecta of the

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<v Speaker 1>female justices all sort of indicating maybe with their questioning

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<v Speaker 1>and the tenor of their questions, which way they were leaning. UM.

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<v Speaker 1>And then obviously I think Briar would typically be considered

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<v Speaker 1>moving maybe in that camp, but he was showing that

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<v Speaker 1>he might not be completely comfortable with going all the

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<v Speaker 1>way there. So is this a one off case when

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<v Speaker 1>the Supreme Court decides this is at the end of

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<v Speaker 1>the game. So it depends because really, for first, there

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<v Speaker 1>are at least seven other lawsuits that directly involved the

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<v Speaker 1>same actions, just a different platform. It's it's exactly the

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<v Speaker 1>same They're all pending in in in the Ninth Circuit

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<v Speaker 1>out in California, UM, so direct read through there. Now,

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<v Speaker 1>how this plays out in other jurisdictions is open based

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<v Speaker 1>on which way the court goes. So in this case,

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<v Speaker 1>did the Ninth Circuit, which we know is very liberal

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<v Speaker 1>and goes its own way, did it just go a

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<v Speaker 1>different way and say the way this has been going

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<v Speaker 1>for years is wrong. We have to apply California lost

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<v Speaker 1>state law to these rigs. That's I mean, that's basically right.

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<v Speaker 1>You have, as as Briar put it, you have fifty

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<v Speaker 1>years of precedent in the Fifth Circuit, which is Gulf

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<v Speaker 1>of Mexico, Texas Louisiana. That go the other way. Let's say, look,

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<v Speaker 1>when you're out on the rigs, federal law applies. You

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<v Speaker 1>don't have sort of a gap filler or a rising

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<v Speaker 1>off the floor of federal off with state law. But

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<v Speaker 1>this is the first time we've seen that happen. And

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<v Speaker 1>I think it may be just the case that this

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<v Speaker 1>didn't hit the Ninth Circuit. It didn't get in front

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<v Speaker 1>of them until now. So this case did not get

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<v Speaker 1>much attention in the press. Why do you think the

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<v Speaker 1>justices took it in the first place. Well, if you

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<v Speaker 1>think about sort of how the Supreme Court decides what

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<v Speaker 1>it's going to take, it's usually they need they need

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<v Speaker 1>a circuit split, they need real public policy issues, they

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<v Speaker 1>need federal state issues, and we certainly have all of

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<v Speaker 1>those here. And I think that that to me, when

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<v Speaker 1>we were looking at this case coming out of the

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<v Speaker 1>Ninth Circuit. I was thinking this is this has definitely

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<v Speaker 1>got all the marking of something the Court want to take,

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<v Speaker 1>particularly because of how much impact it could have on

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<v Speaker 1>that Fifth Circuit on the Gulf of Mexico. Has the

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<v Speaker 1>Fifth Circuit ruled on this, because that's a very conservative circuit.

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<v Speaker 1>It has ruled in various capacities on this, but not

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<v Speaker 1>directly in the sense. It's mostly because I think Texas

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<v Speaker 1>and Louisiana have basically given to federal uh labor law

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<v Speaker 1>in this case. They don't have the same kind of

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<v Speaker 1>structure that California has here. So when might we hear

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<v Speaker 1>a decision? Good question, again, just like trying to game

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<v Speaker 1>out which justices go which way. I think if you

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<v Speaker 1>look at the stats, we're probably looking at late two

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<v Speaker 1>Q three q UM. This might be one of those

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<v Speaker 1>cases that's a little more complex because of the issues

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<v Speaker 1>are pretty novels, and maybe we push into four Q

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<v Speaker 1>but probably this year. Okay, Well, you know everyone says

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<v Speaker 1>that you can't judge by what the justice questions are,

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<v Speaker 1>but nine times out of ten you end up with

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<v Speaker 1>their questions signaling which way they'll go. Well, thanks so much, Brandon.

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<v Speaker 1>That's Brandon Barnes, Bloomberg Intelligence Senior litigation analyst. You can

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<v Speaker 1>read more of Brandon analysis at b I go on

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<v Speaker 1>the Bloomberg Terminal. Thanks for listening to the Bloomberg Law Podcast.

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<v Speaker 1>You can subscribe and listen to the show on Apple Podcast, Asked, SoundCloud,

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<v Speaker 1>and on Bloomberg dot com slash podcast. I'm June Brosso.

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<v Speaker 1>This is Bloomberg m