The Battle Between the LHWCA and the LWCA What’s a Substantial Nexus to the OCS?

The Battle Between the LHWCA and the LWCA

What’s a Substantial Nexus to the OCS? 

Written By: Lisa Grose

Edited By: Andrew Lifsey

Mays v. Chevron Pipe Line Co., 2016 U.S. Dist. LEXIS 23047; 2016 WL 762615  (W.D. La., February 23, 2016)The widow of James Mays, Peggy Mays, brought an action in tort for damages resulting from the death of her husband that occurred on a platform within Louisiana territorial waters while changing an operator cap/bonnet cover plate from a gear operator. Mays was an employee of Furmanite America, Inc., which was under a Master Services Contract with Chevron Pipe Line Co., doing work on the Lighthouse Point platform owned by Chevron Midstream Pipeline, LLC (a wholly owned subsidiary of Chevron Pipe Line Co.). Both Midstream and Chevron Pipe Line argue they are not liable for tort damages under the LWCA because they were Mays’ statutory employers “by virtue of the Master Services Contract between Chevron Pipe Line and Furmanite.” This case is a motion for summary judgment filed on behalf of defendants.The court held that without a service order or the Master Services Contract naming Midstream, it could not be considered a statutory employer of Mays.As to Chevron Pipe Line, the claimant asserted that as she was receiving death benefits under the Longshore and Harbor Workers Compensation Act pursuant to the Outer Continental Shelf Lands Act, the statutory employer defense would nonetheless be foreclosed. The court examined whether Mays would have been entitled to benefits under the LHWCA at the time of his death. If Mays were not covered under the LHWCA, the Louisiana Workers Compensation Act would apply affording Chevron Pipe the potential statutory employer defense and immunity in tort.The plaintiff relied on the U.S. Supreme Court decision in Pac. Operators Offshore, LLP v. Valladolid, which adopted the substantial nexus test between the employee’s injury and the employer’s extractive operations on the Outer Continental Shelf. Chevron Pipe Line asserted that the claimants failed to meet the substantial nexus test, because: (1) they put forth no evidence that the decedent’s direct employer, Furmanite, had any extractive operations on the OCS at the time of his death; or (2) in the alternative, they failed to show a substantial nexus between Mr. Mays' death and Chevron Pipe Line's Outer Continental Shelf operations.Regarding the first element of the Chevron Pipe argument, the court stated there was no jurisprudential support to limit the test to the direct employer’s operations; it also failed to consider the potential statutory employer issue. However, the court declined to decide that legal issue, finding instead that the claimants failed to establish a substantial nexus between the death and Chevron Pipe’s offshore extractive operations. This requires a causal link between the OCS operations and the injury. The only allegation was that the valve he was removing was on a pipeline carrying natural gas from the Outer Continental Shelf. To accept this as sufficient to sustain the substantial nexus “would come perilously close to the ‘but for’ analysis rejected by the Supreme Court….”.