DOWN WITH THE DEVIL: THE RISE AND FALL OF SUBSTANTIAL NEXUS.

• Author: Baudean, Aubrey

1. Overview 3 A. The Era of the Free Seas 4 B. The First UN Conference on the Law of the Sea (1958) 4 C. What is the Continental Shelf? 5 D. Post-World War II: The Truman Proclamation 5 II. The Outer Continental Shelf Lands Act 6 A. The 1953 Submerged Lands Act 6 B. The Enactment of OCSLA 7 C. OCSLA: 1978 Amended 7 E. Overview of [section]1333(b) 9 F. Language of [section]1333(b) OCSLA 9 G. Breakdown of [section]1333(b) 10 H. Ramifications of the Language 10 III. The Administrative Process 11 A. Informal Conference 11 B. Formal Hearing 11 C. Appeal to the Benefits Review Board 11 IV. Overview of the Inter-Circuit Split and the Rise 12 of Substantial Nexus A. Background 12 B. The Third Circuit: "But For" Test 12 C. The Fifth Circuit: "Situs of Injury" Requirement 13 D. The Ninth Circuit: The "Substantial Nexus" Test 16 E. The Three Circuit Split and The Supreme Court 17 F. The Supreme Court's Reasoning in Valladolid II 18 G. Justice Scalia and "The Devil of the Ninth 19 Circuit's Imaginings" V. Post-Valladolid II: Mays v. Chevron Pipe Line Co. 20 A. Background 20 B. District Court's Analysis 20 C. Reconsideration 20 D. Mays and the Fifth Circuit Court of Appeals 21 VI. Conclusion: What Comes Next? 23 I. Overview

   The Mays v. Chevron Pipe Line Co. (1) decision represents another domino falling for employers connected with extractive operations on the outer continental shelf in a line of many to follow in future employee benefits claims unless Congress steps in to intervene on the matter. Initially, Congress enacted the Outer Continental Lands Act (hereafter referred to as OCSLA) in 1953 to extend federal jurisdiction so "the area in the outer Continental Shelf beyond boundaries of the States may be leased and developed by the Federal Government." (2) To enact a body of law that governs the subsoil, seabed, artificial islands, and all other installations or devices permanently or temporally attached to the outer continental shelf (hereafter referred to OCS) to exploring for, develop, and produce the shelf's resources, Congress also had to consider the employees developing the OCS operations.

   In steps 43 U.S.C. [section]1333(b) of OCSLA, which under the Longshore and Harbor Workers' Compensation Act (3) (hereafter referred to as LHWCA) extends workers' compensation benefits to employees whose injuries occur "as the result of operations" conducted on the outer continental shelf. (4) Congress intended for the body of law that makes up the OCSLA to apply "beyond the boundaries of the States." (5) As a whole, the provisions within OCSLA apply only to the OCS and declare the OCS an "exclusive Federal jurisdiction located within a state," (6) However, at the same time, it gives no "interest or jurisdiction" to the adjacent states. (7) Why should a worker injured in an area covered under state jurisdiction be covered by an employee compensation scheme extending from an Act (OCLSA) that predominately deals with the government imposing federal jurisdiction over the OCS? Nevertheless, the Supreme Court applies a substantial nexus standard to OCSLA benefits claims to determine employee eligibility and does not interpret [section]1333(b) as requiring for recovery an employee's injury to occur on an OCS platform or the waters above the OCS. (8)

   As a result, the outcome of some claims do not align with the congressional intent behind enacting OCSLA. For example, an employee may be covered via OCSLA even though the employee's injuries occurred outside of the OCS in an area already covered by state workers' compensation law, as long as the employee's injury took place while performing work connected to an employer's operations on the OCS. This comment argues that interpreting [section]1333(b) in such a manner is historically against congressional intent while it also places an unjust burden on certain employers to purchase both state and federal liability insurance for their employees. Most importantly, this comment puts forth that the simplest way to satisfy congressional intent and solve the ambiguity of [section]1333(b) is for Congress to amend the provision by adding a situs of injury requirement to recover OCSLA benefits claims.

   To better understand the present status, Part I of this comment gives a brief overview of the history of the OCS leading up to Congress' 1953 enactment of OCSLA; Part II of this comment gives the legislative history of the OCSLA and breakdown of [section]1333(b)'s language; Part III explores the administrative process of an OCSLA claim; Part IV examines several cases that preceded the Mays decision: Curtis v. Schlumberger Offshore Service, Inc., (9) Mills v. Director, Office of Workers' Compensation Programs, (10) and Valladolid v. Pacific Operations Offshore LLP. (11) Part V discusses the ramifications of the most recent OCSLA benefits claim to appear in front of the Fifth Circuit Court of Appeals. Lastly, Part VI offers conclusions and remarks.

   1. The Era of the Free Seas

      Before World War II, there was little economic interest in mineral resources beyond the territorial sea. (12) Technological barriers limited offshore drilling predominantly to waters closer to the shore. (13) Scholars refer to this oceanic period leading up to World War II as the free seas era, as vessels from all countries were free to traverse the high seas beyond the territorial seas. (14) Each country exercised its jurisdiction over the waters and seabed three nautical miles around their nation's coast within the territorial seas. Before the Truman Proclamation in 1945, in which the United States exercised its jurisdiction over the mineral resources extending beyond a nation-state's traditional territorial waters, no other nation had attempted such a bold move for hundreds of years. (15) However, in the aftermath of World War II, the discovery of oil and gas on the continental shelf in conjunction with developing technologies sparked global interest in the resources beyond the territorial seas buried within the seabed and subsoil of the continental shelf. (16) Furthermore, with the Truman Proclamation, the United States ignited a wave by which other nations worldwide began to extend their jurisdiction to the high seas. (17)

   2. The First UN Conference on the Law of the Sea (1958)

      After World War II, the world soon saw a global increase in the oil demand, and thereby many coastal nations sought to unilaterally extend their jurisdiction over the resources on the continental shelf, beyond the territorial seas off their nations' coast. (18) In 1947, the UN General Assembly created the International Law Commission (ILC) to help regulate this process with a goal in mind for the ILC to develop and further codify international law. (19) The report on "Articles Concerning the Law of the Sea" emerged as the fruits of the ILC's labor as the report became the groundwork for the discussions at the First United Nations Conference on the Law of the Sea (UNCLOS I). (20)

      In 1958, representatives from eighty-six nations met in Geneva to draft UNCLOS I, and the meeting concluded with the adoption of four conventions. (21) The 1958 Geneva Conventions broke down the ocean into three distinct categories: internal waters, territorial sea, and high seas. (22) The Geneva Convention defined "territorial seas" as the belt of sea adjacent to a nation's coast, beyond its land territory and its internal water by which the sovereignty of a nation is extended. (23) Whereas the term "high seas" encapsulates all the parts of the sea that are not the territorial sea or the nation's internal waters. (24) Most significant to this comment, the Geneva Convention enacted a governing body of law for the continental shelf and thereby solidified the shelf as a legal institution by adopting the "Convention on the Continental Shelf." (25)

   3. What is the Continental Shelf?

      In geographic terms, the continental shelf is an area adjacent to a continent submerged under the ocean. (26) The continental shelf is part of the same continental mass that forms the lands above the water. (27) A continental shelf's outer boundary begins where the continental mass begins to decline steeply into the ocean's depths. (28) The United Nations Convention on Law of the Sea (LOSC) outlined the criteria for determining the outer limits of the continental shelf beyond 200 nautical miles in Article 76(1), which states,

      The continental shelf of a coastal State comprises the seabed and subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is measured where the outer edge of the continental margin does not extend up to that distance. (29) For the Atlantic coast of the United States, the average distance from the shore to the continental shelf's outer edge is roughly 70 miles, whereas, in the Gulf of Mexico, the average distance is slightly above 90 miles. (30) The continental shelf area extending off the coasts of the United States is an estimated 290,000 square miles. (31) Existing in this expansive area of submerged lands are valuable natural resources such as oil and gas that now power the United States' economy and, consequently, spurred Congress's need to legislate a new body of law governing this vast territory.

   4. Post-World War II: The Truman Proclamation

      The United States, arising out of World War II as a global power, then set its sights on the wealth of resources located on the continental shelf. (32) In September of 1945, to seize control of petroleum and other mineral resources beyond the U.S. territorial seas, President Truman defied international precedent and issued a proclamation declaring "...the natural resources of the subsoil and the sea bed of the continental shelf beneath the high seas but contiguous to the coast of the United States, subject to...