Baldwin Haspel Burke & Mayer LLC

Maritime Update: Fifth Circuit Limits Outer Continental Shelf Lands Act Regulations

Bill Schwartz - 

On September 27, 2017, the Fifth Circuit affirmed the District Court decision to dismiss criminal charges by the government in the case of “USA v. Don Moss, Curtis Dantin, Grand Isle Shipyards, and Christopher Srubar”. The criminal charges arose under Outer Continental Shelf Lands Act (OCSLA) from a fatal welding accident at an offshore platform.

By way of background, Congress enacted OCSLA in 1953, granting the Department of the Interior authority to promulgate and enforce safety and environmental regulations on “any holder of a lease or permit under [OCSLA].” For over 60 years, the federal government did not regulate or prosecute oilfield contractors, as opposed to lessees, permittees, or well operators, under OCSLA.

A month after the 2010 Deepwater Horizon spill, however, the Secretary of the Department of the Interior reorganized the Minerals Management System (MMS), tasked with enforcing OCSLA, into three agencies: the Office of Natural Resources Revenues (ONRR), the Bureau of Ocean Energy Management (BOEM), and the Bureau of Safety and Environmental Enforcement (BSEE). The newly created BSEE started aggressively enforcing OCSLA and its regulations against a series of contractors.

This fatal welding accident occurred on an offshore oil platform in the Gulf of Mexico in November 2012. Three years after that incident, the government indicted the owner and operator of the platform and several oil platform contractors, charging criminal violations of the OCSLA, the Clean Water Act, as well as involuntary manslaughter. The defendants moved to dismiss. The district court left all of the charges in place except for the OCSLA charges against the contractor defendants, Grand Isle Shipyards, Inc. (GIS), Don Moss, Christopher Srubar, and Curtis Dantin. The charges under OCSLA were dismissed for failure to state an offense.

The government appealed the dismissal of the charges. Without actually conceding its asserted OCSLA enforcement powers had never before been exercised against contractors and subcontractors, the government took the position that the statute and regulations had always been broad enough to embrace such powers. According to the government, the lack of prior use demonstrated, at most, the exercise of prosecutorial discretion.

BSEE and its predecessors enforced the regulations here at issue for over sixty years only against lessees, permittees and designated operators of offshore production rights. The agency placed responsibility, both civil and potentially criminal, on the named parties for ensuring compliance with the regulations by all of the many contractors, subcontractors and individual employees whose efforts were necessary to develop the OCS. The agency explicitly disclaimed imposing direct regulatory control on the subordinate parties. The Appeals Court noted in this decision that the agency’s 2011 about-face “flatly contradicts” the agency’s earlier, contemporaneous interpretation of the regulations.

The Fifth Circuit concluded, “No prior judicial decision countenanced this action, which is at odds with a half century of agency policy, and we will not do so now.” They, therefore, affirmed the lower court’s dismissal of the criminal charges.

The full decision can be found here: http://www.ca5.uscourts.gov/opinions/pub/16/16-30561-CR0.pdf

If you have any questions regarding this maritime matter, please contact Bill Schwartz at (504) 569-2900 or wschwartz@bhbmlaw.com.


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