Supreme Court to Decide Offshore Rig Workers Pay

miles off the California coast. Last week, the Court considered whether California's wage and Hour's law applies to workers on such platforms, meaning that workers would have to be paid for all their time on a rig depending on how the justices rule. Joining me as Brandon Barnes, Bloomberg Intelligence Senior litigation analyst. So Brandon, tell us a little about the case. Yeah, this is a really it's sort of

a small case that's got real large implications. Um, Basically, one of the workers on a rig suit saying I should be paid because I I'm sleeping on this rig and under California state law, should be paid for that time even though I'm operating in federal waters. And so it sets up a very interesting issue for these justices where they have to weigh what's going on in California against what could potentially also happen in the Gulf of

Mexico where of offshore US development occurs. So offshore rig operators in the whole Pacific then would have to pay hourly workers for their time. That's part to California law, that's right, and it's it's different than federal law. And that's really what the crux of the issue here is is where's that line when we're on in offshore waters

in this Outer Continental Shelf or the o CS. Here we're talking only about the Pacific, which is you know, the West Coast plus Alaska has implications, but economically not as big as if this we're applying directly to Gulf of Mexico. So put some numbers on this, that's a

that's a good question. So it's a lot of back back of envelope, but um for direct liability for someone like Parker Drilling or other operators who have similar lawsuits, you know, looking at back pay in the order of fifty to a hundred million generally just based on Hey, I was on this rig for four years, so were two hundred other people, and we should have been paid at overtime and for all the time we were sleeping, et cetera. And then you know that that cost has

to be carried forward. So we're looking at double triple wage costs moving forward, and those are potentially big numbers aggregated when margins aren't great for the offshore. So you were predicting that the Court would overturn the Ninth Circuit decision in February. Did the justices questioning reinforce your opinion? You know, it's always a dangerous game you play when

you try and you have to write. So if I was scoring this out, I think I'm I'm still confident in my my analysis that this gets overturned at the Ninth Circuit. And I think that the Supreme Court is either on a six, three or five or based on the questioning hard to say, obviously we're Thomas Goes since he doesn't ask any questions, but um, you could get a feel for where the justice rat based on the question.

So who are the four or three? So I think if you look at how they opened the questioning during argument, you had soda Mayor was absolutely firing on all cylinders when it came to Parker Drilling's counsel being there or the United States who are for overturning the Ninth Circuit. You also had Kagan who was involved, and Ginsburg, So I think you had sort of a trifecta of the female justices all sort of indicating maybe with their questioning

and the tenor of their questions, which way they were leaning. UM. And then obviously I think Briar would typically be considered moving maybe in that camp, but he was showing that he might not be completely comfortable with going all the way there. So is this a one off case when the Supreme Court decides this is at the end of the game. So it depends because really, for first, there are at least seven other lawsuits that directly involved the

same actions, just a different platform. It's it's exactly the same They're all pending in in in the Ninth Circuit out in California, UM, so direct read through there. Now, how this plays out in other jurisdictions is open based on which way the court goes. So in this case, did the Ninth Circuit, which we know is very liberal and goes its own way, did it just go a different way and say the way this has been going for years is wrong. We have to apply California lost

state law to these rigs. That's I mean, that's basically right. You have, as as Briar put it, you have fifty years of precedent in the Fifth Circuit, which is Gulf of Mexico, Texas Louisiana. That go the other way. Let's say, look, when you're out on the rigs, federal law applies. You don't have sort of a gap filler or a rising off the floor of federal off with state law. But this is the first time we've seen that happen. And I think it may be just the case that this

didn't hit the Ninth Circuit. It didn't get in front of them until now. So this case did not get much attention in the press. Why do you think the justices took it in the first place. Well, if you think about sort of how the Supreme Court decides what it's going to take, it's usually they need they need a circuit split, they need real public policy issues, they need federal state issues, and we certainly have all of

those here. And I think that that to me, when we were looking at this case coming out of the Ninth Circuit. I was thinking this is this has definitely got all the marking of something the Court want to take, particularly because of how much impact it could have on that Fifth Circuit on the Gulf of Mexico. Has the Fifth Circuit ruled on this, because that's a very conservative circuit. It has ruled in various capacities on this, but not

directly in the sense. It's mostly because I think Texas and Louisiana have basically given to federal uh labor law in this case. They don't have the same kind of structure that California has here. So when might we hear a decision? Good question, again, just like trying to game out which justices go which way. I think if you look at the stats, we're probably looking at late two

Q three q UM. This might be one of those cases that's a little more complex because of the issues are pretty novels, and maybe we push into four Q but probably this year. Okay, Well, you know everyone says that you can't judge by what the justice questions are, but nine times out of ten you end up with their questions signaling which way they'll go. Well, thanks so much, Brandon.

That's Brandon Barnes, Bloomberg Intelligence Senior litigation analyst. You can read more of Brandon analysis at b I go on the Bloomberg Terminal. Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcast, Asked, SoundCloud, and on Bloomberg dot com slash podcast. I'm June Brosso. This is Bloomberg m