Newton v. Parker Drilling Mgmt. Servs., Ltd.

• Citation: 881 F.3d 1078
• Decision Date: 05 February 2018
• Docket Number: No. 15-56352,15-56352
• Parties: Brian NEWTON, an individual, Plaintiff–Appellant, v. PARKER DRILLING MANAGEMENT SERVICES, LTD., Erroneously Sued as Parker Drilling Management Services, Inc., Defendant–Appellee, and Parker Drilling Management Services, Inc., a Nevada Corporation, Defendant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

881 F.3d 1078

Brian NEWTON, an individual, Plaintiff–Appellant,

v.PARKER DRILLING MANAGEMENT SERVICES, LTD., Erroneously Sued as Parker Drilling Management Services, Inc., Defendant–Appellee,andParker Drilling Management Services, Inc., a Nevada Corporation, Defendant.

No. 15-56352

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 7, 2017 Pasadena, California

Filed February 5, 2018

Michael Strauss (argued), Strauss & Strauss APC, Ventura, California, for Plaintiff–Appellant.

Ronald J. Holland (argued), Ellen M. Bronchetti, and Karin Dougan Vogel, Sheppard Mullin Richter & Hampton LLP, San Francisco, California, for Defendant–Appellee.

Before: Richard A. Paez, Marsha S. Berzon, and Morgan Christen, Circuit Judges.

CHRISTEN, Circuit Judge:

This case presents the novel question whether claims under state wage and hour laws may be brought by workers employed on drilling platforms fixed on the outer Continental Shelf. Brian Newton worked on such a platform off the coast of Santa Barbara. His shifts lasted fourteen days and he regularly worked twelve hours per day. After Parker Drilling ("Parker") terminated him, Newton sued in state court for wage and hour violations under California law. Parker removed the case to federal district court and filed a motion for judgment on the pleadings. The district court granted the motion, concluding that the Fair Labor Standards Act is a comprehensive statutory scheme that is exclusive of California wage and hour laws. Newton appeals. We have jurisdiction pursuant to 28 U.S.C. § 1291.

We hold that the absence of federal law is not, as the district court concluded, a prerequisite to adopting state law as surrogate federal law under the Outer Continental Shelf Lands Act, 43 U.S.C. § 1333(a)(2)(A). We thus reject the proposition that "necessity to fill a significant void or gap," Cont'l Oil Co. v. London S.S. Owners' Mut. Ins. Ass'n , 417 F.2d 1030, 1036 (5th Cir. 1969), is required in order to assimilate "applicable and not inconsistent," 43 U.S.C. § 1333(a)(2)(A), state law into federal law governing drilling platforms affixed to the outer Continental Shelf. We therefore vacate the district court's dismissal of Newton's claims and remand for further proceedings consistent with this opinion.

I. FACTUAL & PROCEDURAL BACKGROUND

Newton worked as a roustabout and painter for Parker on drilling platforms in the Santa Barbara Channel from approximately January 2013 to January 2015. It is uncontested that the drilling platforms where he worked were located more than three miles offshore and fixed to the seabed of the outer Continental Shelf. His fourteen-day shifts, known in the industry as "hitches," comprised twelve hours on duty followed by twelve hours on "controlled standby." Newton was paid for twelve hours of work per day and he was not able to leave the platform during his shifts. Newton alleges that he usually took fifteen to thirty minutes during his shifts to eat without clocking out or ate while not working and remaining on call, and that Parker did not provide thirty-minute meal periods for each five hours worked, as required by California law. Parker paid Newton twice per month. In addition to compensation for twelve hours per day, his pay stubs showed pay for "two hours for the boat ride out, back and debriefing with the next crew."

Newton filed a putative class action in California state court on February 17, 2015. Although Parker paid an hourly rate well above California and federal minimum wage, Newton maintained that California law required Parker to pay him for the twelve hours he was on controlled standby each day. The First Amended Complaint (FAC) alleged that Newton's final paycheck did not include all the wages owed to him, "including the overtime/doubletime and meal period wages." In all, Newton brought seven causes of action under California law for: (1) minimum wage violations; (2) failure to pay overtime and doubletime; (3) pay stub violations; (4) failure to pay timely final wages; (5) failure to provide lawful meal periods; (6) civil penalties under the Private Attorney General Act of 2004 (PAGA); and (7) unfair competition.

Parker removed the action to federal court and filed a motion for judgment on the pleadings. Parker argued that, under the Outer Continental Shelf Lands Act, 43 U.S.C. §§ 1331 – 1356b (OCSLA), the Fair Labor Standards Act (FLSA) is a comprehensive statutory scheme that leaves no room for state law to address wage and hour grievances arising on the OCS.¹ For his part, Newton contended that California's more protective wage and hour laws may be applied concurrently with the minimum guarantees of their federal counterpart. See 29 U.S.C. § 201, et seq. Newton's opposition did not explain the complaint's allegation that some of Parker's allegedly unlawful conduct occurred in California rather than on the OCS, but did request that if the district court were to grant Parker's motion, it do so "without prejudice to allow Plaintiff to correct any deficiencies."²

The district court granted Parker's motion for judgment on the pleadings, reasoning that "under [the] OCSLA, federal law governs and state law only applies to the extent it is necessary ‘to fill a significant void or gap’ in federal law." Finding no significant voids or gaps in the FLSA, the district court held that Newton could not invoke California wage and hour laws as surrogate federal law. The district court reached this decision after considering the Department of Labor (DOL) regulations elaborating the FLSA. While recognizing that the FLSA has a savings clause that expressly allows for more protective state minimum wage and overtime laws, the district court nevertheless concluded that California wage and hour claims were unavailable to Newton. The district court did not address Newton's request for leave to amend. Newton timely appealed.

II. STANDARD OF REVIEW

A dismissal on the pleadings pursuant to Rule 12(c) is reviewed de novo . Lyon v. Chase Bank USA, N.A. , 656 F.3d 877, 883 (9th Cir. 2011). "Dismissal without leave to amend is improper unless it is clear, upon de novo review, that the complaint could not be saved by any amendment." Thinket Ink Info. Res., Inc. v. Sun Microsystems, Inc. , 368 F.3d 1053, 1061 (9th Cir. 2004).

III. DISCUSSION

Except for any claims that may have arisen while Newton was transiting to and from the offshore drilling platforms where he worked, Newton's grievances relate to his employment on the OCS, and the parties agree that the fate of Newton's appeal rests on the OCSLA's choice of law provision. See 43 U.S.C. § 1333(a)(2)(A).

A. The Outer Continental Shelf Lands Act

1. OCSLA's Choice of Law Provision

The outer Continental Shelf generally refers to submerged lands lying more than three miles offshore, outside the territorial jurisdiction of the states. See 43 U.S.C. §§ 1331(a), 1301(a)(2) ; Valladolid v. Pac. Operations Offshore, LLP , 604 F.3d 1126, 1130 (9th Cir. 2010). Subject to certain exceptions and conditions, the OCSLA declares that the Constitution and laws of the United States extend to the outer Continental Shelf, as well as "all artificial islands, and all installations and other devices permanently or temporarily attached to the seabed ... for the purpose of exploring for, developing, or producing resources therefrom ... 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) (emphasis added). OCSLA's assertion of jurisdiction is unique because it comprises the ocean floor but not the waters above it. "[T]he jurisdiction asserted is a ‘horizontal jurisdiction’ and does not affect the status of superjacent waters." Warren M. Christopher, The Outer Continental Shelf Lands Act: Key to a New Frontier , 6 Stan. L. Rev. 23, 34 (1953) (citing S. Rep. No. 83–411, at 2 (1953)). The OCSLA's choice of law provision declares:

To the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws and regulations of the Secretary now in effect or hereafter adopted, the civil and criminal laws of each adjacent State, now in effect or hereafter adopted, amended, or repealed are declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf , and the President shall determine and publish in the Federal Register such projected lines extending seaward and defining each such area.

43 U.S.C. § 1333(a)(2)(A) (emphasis added). Because the OCSLA makes plain that the laws of the adjacent state are to apply to drilling platforms fixed to the seabed of the outer Continental Shelf as long as state law is "applicable and not inconsistent with ... Federal laws," the parties' dispute turns on the interpretation of the terms "applicable" and "not inconsistent." Id.

The Supreme Court has not been called upon to decide a case involving wage and hour laws on the OCS. Both Newton and Parker ask us to look to the Fifth Circuit's interpretation of the OCSLA for guidance. Though the parties disagree as to the Fifth Circuit's prevailing test for choice of law on the OCS, they both argue that we ought to follow the Fifth Circuit's lead and adopt the approach it has taken in cases involving injury, wrongful death, and contract claims arising on the OCS. Newton urges that the Fifth Circuit's test is the one set out in Union Texas Petroleum Corp. v. PLT Engineering, Inc. , 895 F.2d 1043 (5th Cir. 1990) ( PLT ). According to Newton, platform workers may bring state wage and hour claims to the extent that state law is not inconsistent with existing federal law, see Breton Energy, L.L.C. v. Mariner Energy Res., Inc. , 764 F.3d 394, 398 (5th Cir. 2014), and California's wage and hour laws are not...