Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud,
Speaker 1: and on Bloomberg dot com slash podcasts. It was unfamiliar
Speaker 1: subject matter for the justices on the Supreme Court applied
Speaker 1: to an unfamiliar setting, a platform anchored more than three
Speaker 1: miles off the California coast. Last week, the Court considered
Speaker 1: whether California's wage and Hour's law applies to workers on
Speaker 1: such platforms, meaning that workers would have to be paid
Speaker 1: for all their time on a rig depending on how
Speaker 1: the justices rule. Joining me as Brandon Barnes, Bloomberg Intelligence
Speaker 1: Senior litigation analyst. So Brandon, tell us a little about
Speaker 1: the case. Yeah, this is a really it's sort of
Speaker 1: a small case that's got real large implications. Um, Basically,
Speaker 1: one of the workers on a rig suit saying I
Speaker 1: should be paid because I I'm sleeping on this rig
Speaker 1: and under California state law, should be paid for that
Speaker 1: time even though I'm operating in federal waters. And so
Speaker 1: it sets up a very interesting issue for these justices
Speaker 1: where they have to weigh what's going on in California
Speaker 1: against what could potentially also happen in the Gulf of
Speaker 1: Mexico where of offshore US development occurs. So offshore rig
Speaker 1: operators in the whole Pacific then would have to pay
Speaker 1: hourly workers for their time. That's part to California law,
Speaker 1: that's right, and it's it's different than federal law. And
Speaker 1: that's really what the crux of the issue here is
Speaker 1: is where's that line when we're on in offshore waters
Speaker 1: in this Outer Continental Shelf or the o CS. Here
Speaker 1: we're talking only about the Pacific, which is you know,
Speaker 1: the West Coast plus Alaska has implications, but economically not
Speaker 1: as big as if this we're applying directly to Gulf
Speaker 1: of Mexico. So put some numbers on this, that's a
Speaker 1: that's a good question. So it's a lot of back
Speaker 1: back of envelope, but um for direct liability for someone
Speaker 1: like Parker Drilling or other operators who have similar lawsuits,
Speaker 1: you know, looking at back pay in the order of
Speaker 1: fifty to a hundred million generally just based on Hey,
Speaker 1: I was on this rig for four years, so were
Speaker 1: two hundred other people, and we should have been paid
Speaker 1: at overtime and for all the time we were sleeping,
Speaker 1: et cetera. And then you know that that cost has
Speaker 1: to be carried forward. So we're looking at double triple
Speaker 1: wage costs moving forward, and those are potentially big numbers
Speaker 1: aggregated when margins aren't great for the offshore. So you
Speaker 1: were predicting that the Court would overturn the Ninth Circuit
Speaker 1: decision in February. Did the justices questioning reinforce your opinion?
Speaker 1: You know, it's always a dangerous game you play when
Speaker 1: you try and you have to write. So if I
Speaker 1: was scoring this out, I think I'm I'm still confident
Speaker 1: in my my analysis that this gets overturned at the
Speaker 1: Ninth Circuit. And I think that the Supreme Court is
Speaker 1: either on a six, three or five or based on
Speaker 1: the questioning hard to say, obviously we're Thomas Goes since
Speaker 1: he doesn't ask any questions, but um, you could get
Speaker 1: a feel for where the justice rat based on the question.
Speaker 1: So who are the four or three? So I think
Speaker 1: if you look at how they opened the questioning during argument,
Speaker 1: you had soda Mayor was absolutely firing on all cylinders
Speaker 1: when it came to Parker Drilling's counsel being there or
Speaker 1: the United States who are for overturning the Ninth Circuit.
Speaker 1: You also had Kagan who was involved, and Ginsburg, So
Speaker 1: I think you had sort of a trifecta of the
Speaker 1: female justices all sort of indicating maybe with their questioning
Speaker 1: and the tenor of their questions, which way they were leaning. UM.
Speaker 1: And then obviously I think Briar would typically be considered
Speaker 1: moving maybe in that camp, but he was showing that
Speaker 1: he might not be completely comfortable with going all the
Speaker 1: way there. So is this a one off case when
Speaker 1: the Supreme Court decides this is at the end of
Speaker 1: the game. So it depends because really, for first, there
Speaker 1: are at least seven other lawsuits that directly involved the
Speaker 1: same actions, just a different platform. It's it's exactly the
Speaker 1: same They're all pending in in in the Ninth Circuit
Speaker 1: out in California, UM, so direct read through there. Now,
Speaker 1: how this plays out in other jurisdictions is open based
Speaker 1: on which way the court goes. So in this case,
Speaker 1: did the Ninth Circuit, which we know is very liberal
Speaker 1: and goes its own way, did it just go a
Speaker 1: different way and say the way this has been going
Speaker 1: for years is wrong. We have to apply California lost
Speaker 1: state law to these rigs. That's I mean, that's basically right.
Speaker 1: You have, as as Briar put it, you have fifty
Speaker 1: years of precedent in the Fifth Circuit, which is Gulf
Speaker 1: of Mexico, Texas Louisiana. That go the other way. Let's say, look,
Speaker 1: when you're out on the rigs, federal law applies. You
Speaker 1: don't have sort of a gap filler or a rising
Speaker 1: off the floor of federal off with state law. But
Speaker 1: this is the first time we've seen that happen. And
Speaker 1: I think it may be just the case that this
Speaker 1: didn't hit the Ninth Circuit. It didn't get in front
Speaker 1: of them until now. So this case did not get
Speaker 1: much attention in the press. Why do you think the
Speaker 1: justices took it in the first place. Well, if you
Speaker 1: think about sort of how the Supreme Court decides what
Speaker 1: it's going to take, it's usually they need they need
Speaker 1: a circuit split, they need real public policy issues, they
Speaker 1: need federal state issues, and we certainly have all of
Speaker 1: those here. And I think that that to me, when
Speaker 1: we were looking at this case coming out of the
Speaker 1: Ninth Circuit. I was thinking this is this has definitely
Speaker 1: got all the marking of something the Court want to take,
Speaker 1: particularly because of how much impact it could have on
Speaker 1: that Fifth Circuit on the Gulf of Mexico. Has the
Speaker 1: Fifth Circuit ruled on this, because that's a very conservative circuit.
Speaker 1: It has ruled in various capacities on this, but not
Speaker 1: directly in the sense. It's mostly because I think Texas
Speaker 1: and Louisiana have basically given to federal uh labor law
Speaker 1: in this case. They don't have the same kind of
Speaker 1: structure that California has here. So when might we hear
Speaker 1: a decision? Good question, again, just like trying to game
Speaker 1: out which justices go which way. I think if you
Speaker 1: look at the stats, we're probably looking at late two
Speaker 1: Q three q UM. This might be one of those
Speaker 1: cases that's a little more complex because of the issues
Speaker 1: are pretty novels, and maybe we push into four Q
Speaker 1: but probably this year. Okay, Well, you know everyone says
Speaker 1: that you can't judge by what the justice questions are,
Speaker 1: but nine times out of ten you end up with
Speaker 1: their questions signaling which way they'll go. Well, thanks so much, Brandon.
Speaker 1: That's Brandon Barnes, Bloomberg Intelligence Senior litigation analyst. You can
Speaker 1: read more of Brandon analysis at b I go on
Speaker 1: the Bloomberg Terminal. Thanks for listening to the Bloomberg Law Podcast.
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Speaker 1: and on Bloomberg dot com slash podcast. I'm June Brosso.
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