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Maritime Casualty

U.S. Fifth Circuit Discusses Removal Of OCSLA Claims

In a February 2013 opinion, Barker v. Hercules Offshore, Inc., 706 F.3d 680 (5th Cir. 2013), the U.S. Fifth Circuit Court of Appeals expounded on procedural issues involving removal of cases to federal court pursuant to the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C.A. 1331, et seq (West 2012). The opinion cleared up problematic issues of subject matter jurisdiction, removal jurisdiction, and substantive law, which had created divergent holdings in the district courts.

Outer Contentinental Shelf Lands Act

OCSLA was enacted in 1953 during the boom of oil and gas production and allocated federal jurisdiction over “the subsoil and seabed of the Outer Continental Shelf.” Pursuant to the Act’s statutory authority, federal courts have original jurisdiction over all claims “arising out of, or in connection with, any operation conducted on the outer Continental Shelf” involving mineral exploration, development, or production. According to Fifth Circuit jurisprudence, OCSLA will confer federal subject matter jurisdiction when (1) the facts underlying the complaint occurred on the proper situs, (2) the plaintiff’s employment furthered mineral development on the Shelf, and (3) the plaintiff’s injury would not have occurred but for his employment.

Maritime Law and Removal of OCSLA Claims

When cases arise under OCSLA, general maritime law will frequently be the applicable substantive law for those claims. However, federal courts generally do not have removal jurisdiction over maritime claims that are brought in state court. This creates a clear conflict. Some district courts had held that when maritime law applies to an OCSLA claim, maritime law will deprive that suit of original federal question jurisdiction. Other district courts recognized that subject matter jurisdiction was entirely independent from a choice-of-law analysis and allowed removal.

The Barker court held the latter: “Maritime law, when it applies under OCSLA, displaces federal law only as to the substantive law of decision and has no effect on the removal of an OCSLA action.” The Court further held that removal of maritime cases is permissible as long as there is an independent basis of federal jurisdiction. In other words, federal courts can retain their original federal question jurisdiction under OCSLA even when maritime law eventually provides the substantive rule of decision.

Moreover, because OCSLA confers federal question subject matter jurisdiction, the “home-state defendant rule” does not apply. According to that rule, cases cannot be removed to federal court when the defendants are citizens of the state in which the action was brought. However, the Barker court held that the “home-state defendant rule” only applies when diversity is the sole basis of federal subject matter jurisdiction. Because maritime law does not supplant OCSLA’s grant of federal jurisdiction, OCSLA cases involving maritime claims are removable “without regard to the citizenship or residence of the parties.”

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.