Offshore wind and state laws

Offshore wind and state laws

June 19, 2019 | By Keith Martin in Washington, DC

Offshore wind projects more than 12 miles offshore are less likely to be subject to state laws after a US Supreme Court decision in mid-June.

Brian Newton worked for Parker Drilling on oil rigs on the outer continental shelf off the California coast. He worked 14-day stretches at a time, with 12 hours each day on duty and 12 hours on “standby.” California minimum-wage and overtime laws would have required Parker to compensate him for the time he spent on standby. The federal “Fair Labor Standards Act” does not.

Newton filed a class action suit against Parker seeking compensation.

The parties agreed that federal law applies on the outer continental shelf, but they disagreed over how to interpret a phrase in the federal “Outer Continental Shelf Lands Act” that treats the law of the adjacent state as the governing law to the extent the state law is “applicable and not inconsistent with” federal law.

The court said the federal Fair Labor Standards Act is a comprehensive statute governing overtime and minimum-wage issues and leaves no gap for the state to fill. Under this standard, state laws would only apply when they deal with subjects that federal law has not already addressed.

The case is Parker Drilling Management Services, Ltd. v. Newton.

Between 1793 and 1988, the United States treated its territory as extending three miles out to sea. President Reagan issued a proclamation in 1988 extending the US territorial sea to 12 miles after 104 other countries had already extended their own boundaries this distance in a United Nations law-of-the-sea treaty. Both the US and British navies had been resisting the extension, as both wanted free passage closer to shore for naval vessels.

There has been tension for decades between the federal government and the states over who has control of the waters out to the three-mile — and more recently 12-mile — limit.

The tension has been largely over control of mineral rights rather than how other laws are applied.

For example, the US government sued in the 1940s to block California from continuing to lease private parties the rights to remove oil, gas and other mineral deposits within three miles offshore. The US Supreme Court granted an injunction on grounds that the federal government has “paramount rights and power over” the territorial sea. Texas and Louisiana continued carrying out activities in the territorial sea, and the United States also secured injunctions against them.

Having lost the legal battle, the states turned to the political arena. President Eisenhower made it a campaign issue, and worked with Congress after the election on passage of the “Submerged Lands Act” in 1953 giving the states ownership over the submerged lands in the territorial sea. The Submerged Lands Act gave states control over the submerged lands for the first three miles into the Atlantic and Pacific Oceans and to the international boundary with Canada in the Great Lakes, and it gave the states along the Gulf of Mexico the opportunity to prove claims as far out as nine miles. In 1960, the Supreme Court approved the claims of Texas and Florida to nine miles in the Gulf, but denied the claims of Louisiana, Mississippi and Alabama. Texas had entered the Union with a nine-mile boundary while Florida had been readmitted to the Union by Congress after the Civil War with a constitution specifying a nine-mile maritime boundary in the Gulf of Mexico.

As a companion measure, Congress also adopted the “Outer Continental Shelf Lands Act” in 1953 establishing federal jurisdiction over the continental shelf beyond the territorial sea.

The outer continental shelf is treated like a federal enclave within the adjacent state. The US government enforces the law, but applies the civil and criminal laws of the adjacent state. The state tax laws do not apply. The latest Supreme Court decision establishes a standard for determining what other state laws apply.