Case Scenario: CHAO V. MALLARD BAY DRILLING, INC. 534 U.S. 235 (U.S. Supreme Court 2002)

Stevens, J. Respondent operates a fleet of barges used for oil and gas exploration. On April 9, 1997, one of those barges, "Rig 52," was towed to a location in the territorial waters of Louisiana, where it drilled a well over two miles deep. On June 16, 1997, when the crew had nearly completed drilling, an explosion occurred, killing four members of the crew and injuring two others. Under United States Coast Guard regulations, the incident qualified as a "marine casualty" because it involved a commercial vessel operating "upon the navigable waters of the United States." Pursuant to its statutory authority, the Coast Guard conducted an investigation of the casualty. The resulting report was limited in scope to what the Guard described as "purely vessel issues," and noted that the Guard "does not regulate mineral drilling operations in state waters, and does not have the expertise to adequately analyze all issues relating to the failure of an oil/natural gas well." The Coast Guard determined that natural gas had leaked from the well, spread throughout the barge, and was likely ignited by sparks in the pump room. The report made factual findings concerning the crew's actions, but did not accuse respondent of violating any Coast Guard regulations. Indeed, the report noted the limits of the Coast Guard's regulation of vessels such as Rig 52: The report explained that, although Rig 52 held a Coast Guard Certificate of Documentation, it had "never been inspected by the Coast Guard."

In Coast Guard terminology, Rig 52 was an "uninspected vessel," as opposed to one of the 14 varieties of "inspected vessels" subject to comprehensive Coast Guard regulation. Based largely on information obtained from the Coast Guard concerning this incident, the Occupational Safety and Health Administration (OSHA) cited respondent for three violations of the Occupational Safety and Health Act of 1970 (OSH Act or Act), implementing regulations. The citations alleged that the respondent failed promptly to evacuate employees on board the drilling rig; failed to develop and implement an emergency response plan to handle anticipated emergencies; and failed to train employees in emergency response. Respondent did not deny the charges, but challenged OSHA's jurisdiction to issue the citations on two grounds: that Rig 52 was not a"workplace" within the meaning of sec. 4(a) of the Act; and that sec. 4(b)(1) of the Act pre-empted OSHA occupational safety and health on vessels in navigable waters. Congress has assigned a broad and important mission to the Coast Guard. Its governing statute provides, in part: The Coast Guard shall administer laws and promulgate and enforce regulations for the promotion of safety of life and property on and under the high seas and waters subject to the jurisdiction of the United States covering all matters not specifically delegated by law to some other executive department 14 U.S.C. 2 (2000 ed.). Under this provision, the Guard possesses authority to promulgate and enforce regulations promoting the safety of vessels anchored in state navigable waters, such as Rig 52. As mentioned above, however, in defining the Coast Guard's regulatory authority, Congress has divided the universe of vessels into two classes: "inspected vessels" and "uninspected vessels."

Congress has listed 14 types of vessels that are "subject to inspection" by the Guard pursuant to a substantial body of rules mandated by Congress. The parties do not dispute that OSHA's regulations have been pre-empted with respect to inspected vessels, because the Coast Guard has broad statutory authority to regulate the occupational health and safety of workers aboard inspected vessels, and it has exercised that authority. Indeed, the Coast Guard and OSHA signed a "Memorandum of Understanding" (MOU) on March 17, 1983, evidencing their agreement that, as a result of the Guard's exercise of comprehensive authority over inspected vessels, OSHA "may not enforce the OSH Act with respect to the working conditions of seamen aboard inspected vessels." The MOU recognizes that the exercise of the Coast Guard's authority- and hence the displacement of OSHA jurisdiction-extends not only to those working conditions on inspected vessels specifically discussed by Coast Guard regulations, but to all working conditions on inspected vessels, including those "not addressed by the specific regulations."

Uninspected vessels such as Rig 52, however, present an entirely different regulatory situation. Nearly all of the Coast Guard regulations responsible for displacing OSHA's jurisdiction over inspected vessels, as described in the MOU, do not apply to uninspected vessels like Rig 52. Rather, in the context of uninspected vessels, the Coast Guard's regulatory authority-and exercise thereof-is more limited. With respect to uninspected vessels, the Coast Guard regulates matters related to marine safety, such as fire extinguishers, life preservers, engine flame arrestors, engine ventilation, and emergency locating equipment. Because these general marine safety regulations do not address the occupational safety and health concerns faced by inland drilling operations on uninspected vessels, they do not pre-empt OSHA's authority under sec. 4(b)(1) in this case. We think it equally clear that Rig 52 was a "workplace" as that term is defined in sec. 4(a) of the Act. The vessel was located within the geographic area described in the definition: "a State," namely Louisiana. Nothing in the text of sec. 4(a) attaches any significance to the fact that the barge was anchored in navigable waters. Rather, the other geographic areas described in sec 4(a) support a reading of that provision that includes a State's navigable waters. Accordingly, the judgment of the Court of Appeals is reversed.

Case Questions: 1. Why didn't the Coast Guard conduct inspections of vessels such as Rig 52?

2. Since the Coast Guard has chosen not to inspect such vessels, should OSHA inspect them? Does it have the legal right to inspect them under this Supreme Court decision?

3. Since neither the USCG nor OSHA chose to inspect Rig 52 in the past, is it fair to fine the owners of the vessel for OSH Act violations?

4. Since OSHA piggybacked its citations and penalties upon another agency's investigation/inspection, should the cited owners/employers have objected that OSHA's decision was based on inadmissible or unreliable information?