Brown v. Offshore Specialty Fabricators, Inc., 10–40936.
| Citation | 2012 A.M.C. 76,663 F.3d 759 |
| Decision Date | 23 November 2011 |
| Docket Number | No. 10–40936.,10–40936. |
| Parties | Lee BROWN; Richard Badon; Bruce Crutchfield; Eric Lena; Watkins Jackson; Timothy Harmon; Raymond Johnson; Mark Johnson; Donald Wiggins; Roberto Cantu; Raymond Balderas; Michael Amsbary; Brian Bradshaw, Plaintiffs–Appellants, v. OFFSHORE SPECIALTY FABRICATORS, INC.; Horizon Offshore, Inc.; Horizon Offshore Contractors, Inc.; O.W.I. Limited (Oceanwide International); Oceanwide Houston, Inc.; Cal Dive International, Inc.; C–Mar America, Inc.; Humares BV; Oceanwide Offshore Services; C–Mar Group Holdings, Ltd.; C–Mar Group Holdings, Inc.; Global Industries Offshore, L.L.C.; Global Industries, Ltd.; Horizon Vessels, Inc.; Offshore Express, Inc.; C–Mar Services (UK) Limited; Helix Energy Solutions Group, Inc., Defendants–Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
OPINION TEXT STARTS HERE
James Thomas Liston, Francis I. Spagnoletti (argued), Spagnoletti & Company, Houston, TX, for Plaintiffs–Appellants.
Laurence Eliot Stuart, Robert Glen Rigby, Stuart & Associates, P.C., Glenn Richard Legge, Legge, Farrow, Kimmitt, McGrath & Brown, L.L.P., Robert Prentice Vining, LeBlanc Bland, P.L.L.C., Lawrence L. Bellatti, Cameron Phair Pope, Andrews Kurth, L.L.P., Kevin Patrick Walters, Chaffe McCall, L.L.P., Seth A. Nichamoff, Nichamoff & King, P.C., Houston, TX, Mark Aaron Cunningham, Laura F. Ashley, Erica N. Beck, David G. Radlauer (argued), Jones Walker, New Orleans, LA, John B. Greer, III, Greer & Miller, L.L.P., Robert W. Weber, Smith Weber, L.L.P., Texarkana, TX, Gregory S.C. Huffman, Christopher Lyn Chauvin, Nicole Williams, Thompson & Knight, L.L.P., Dallas, TX, for Defendants–Appellees.
Appeal from the United States District Court for the Eastern District of Texas.
Before JOLLY, HIGGINBOTHAM and SOUTHWICK, Circuit Judges.
This appeal involves a putative class action brought against several oil and gas companies and several companies that provide labor for offshore oil and gas projects. The plaintiffs allege violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Outer Continental Shelf Lands Act (OCSLA). Under the OCSLA, the plaintiffs pursue both a personal right of action for economic damages and an enforcement action under the OCSLA's citizen suit provision for injunctive relief. The district court disposed of all of the plaintiffs' claims over time, dismissing some and granting summary judgment against others. The court then entered a final judgment dismissing all claims. For the reasons that follow, the district court's judgment is AFFIRMED.
The plaintiffs contend that the defendants maintain a hiring scheme to employ foreign workers on the Outer Continental Shelf, in violation of RICO and the OCSLA. According to the plaintiffs, the defendants employ workers who are neither citizens nor workers authorized to be in the United States. The plaintiffs argue that the defendants' conduct violates the Immigration and Nationality Act (INA), and therefore qualifies as racketeering activity prohibited by RICO. Although the OCSLA provides more specific rules for employing foreign workers on the Outer Continental Shelf—the OCSLA “manning requirements”—the plaintiffs contend that the defendants also violate these requirements. The plaintiffs further assert that this unlawful hiring scheme results in depressed wages and degraded working conditions to the detriment of U.S. citizens and legal residents who work on the Outer Continental Shelf.
The initial complaint was filed on December 17, 2004. Numerous amendments changed the claims and parties involved, but only three claims have survived for this appeal: (1) a RICO claim against the “Service Defendants,”1 (2) an OCSLA damages claim against all defendants, and (3) an OCSLA enforcement claim against all defendants.
On January 30, 2008, the district court dismissed the OCSLA damages claim upon the defendants' motion, holding that the statute does not create a private cause of action for damages.
On July 21, 2008, the district court ordered threshold discovery on the issues raised by the RICO claim, specifically on the applicability of the INA to the Service Defendants' conduct, the existence of exemptions to the OCSLA, and the standing and status of the named plaintiffs. One year later, when threshold discovery concluded, the Service Defendants moved separately for summary judgment. The district court granted summary judgment to the Service Defendants on the RICO claim for two reasons: (1) The laws of the United States, including the INA, extend only to installations and devices attached to the seabed of the Outer Continental Shelf. Because the Service Defendants operate free-floating vessels they cannot have violated the INA and thus cannot have violated RICO. (2) The Service Defendants possess Coast Guard-issued exemptions to the OCSLA manning requirements that allow them to lawfully employ foreign workers on the Outer Continental Shelf. The plaintiffs failed to present evidence to undercut the validity of these exemptions.
The defendants then filed a joint motion to dismiss and, in the alternative, a joint motion for summary judgment on the OCSLA enforcement claim. On August 17, 2010, the district court granted this motion, holding that the plaintiffs had failed to comply with the OCSLA's pre-suit notification requirements, and that the plaintiffs lacked standing. The court entered an appealable final judgment the same day, dismissing all claims. The plaintiffs appeal.
We review summary judgments and dismissals for failure to state a claim de novo. Copeland v. Wasserstein, Perella & Co., Inc., 278 F.3d 472, 477 (5th Cir.2002). Summary judgment is proper if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In reviewing a dismissal for failure to state a claim, “[w]e must accept the allegations in the complaint as true and view them in the light most favorable to the plaintiff.” Miller v. Nationwide Life Ins. Co., 391 F.3d 698, 699–700 (5th Cir.2004).
We begin by reviewing the district court's grant of summary judgment dismissing the plaintiffs' RICO claim. The plaintiffs contend that the district court erred in granting summary judgment because, regardless of the free-floating character of the Service Defendants' vessels, the INA still applies to the Service Defendants' conduct. In the plaintiffs' view, the INA is triggered when foreign workers step foot on U.S. soil before being taken to the Outer Continental Shelf, and remains effective even if those workers perform their work on a free-floating vessel. The plaintiffs argue that the Service Defendants do not follow the strictures of the INA in employing foreign workers, and thus engage in racketeering activity under RICO. See 18 U.S.C. § 1961(1)(F).
We disagree. Violations of the INA can, of course, constitute racketeering activity prohibited by RICO. Id. The sections of the INA that qualify as racketeering activity, however, do not on their own terms include the Outer Continental Shelf within their territorial reach. See 8 U.S.C. §§ 1101(a)(38), 1324, 1327, 1328 (). United States law, including the INA, is made applicable to the Outer Continental Shelf through the OCSLA. 43 U.S.C. § 1333(a)(1). See also Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 217–20, 106 S.Ct. 2485, 91 L.Ed.2d 174 (1986) (). The OCSLA provides:
The Constitution and laws ... of the United States are extended to the subsoil and seabed of the outer Continental Shelf and to all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed, which may be erected thereon for the purpose of exploring for, developing, or producing resources therefrom, or any such installation or other device (other than a ship or vessel) for the purpose of transporting such resources, to the same extent as if the outer Continental Shelf were an area of exclusive Federal jurisdiction located within a State ....
43 U.S.C. § 1333(a)(1). The plaintiffs concede that the Service Defendants' vessels are free floating, and are neither permanently nor temporarily attached to or erected on the seabed. The OCSLA does not, therefore, extend the reach of United States law, including the INA, to the Service Defendants' vessels. The plaintiffs cite no authority for their theory that the INA, once triggered by workers stepping foot on U.S. soil, remains effective forever, and we are unpersuaded by such argument. We hold that the Service Defendants do not violate RICO because the law that would make their conduct racketeering activity—the INA—does not apply in the place where that conduct occurred, namely vessels floating on the waters of the Outer Continental Shelf.
The plaintiffs further contend that the exemptions the Service Defendants possess to the OCSLA manning requirements do not shield them from RICO liability because those exemptions were fraudulently obtained. We now consider that argument.2
The OCSLA manning requirements provide that vessels, rigs, platforms, and other structures operating on the Outer Continental Shelf must “be manned or crewed ... by citizens of the United States or aliens lawfully admitted to the United States for permanent residence.” 43 U.S.C. § 1356(a)(3). This requirement is subject to exemptions that the OCSLA empowers the United States Coast Guard to issue. 43 U.S.C. § 1356. The vessels exempt from the manning requirements include any vessel “over 50 percent of which is owned by citizens of a foreign nation or with respect to which the citizens of a foreign nation have the right...
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