Court Holds OCSLA Regulations Do Not Apply to Offshore Contractors, Subcontractors or Service Providers in Criminal Enforcement Matter


On September 27, the U.S. Court of Appeals for the Fifth Circuit issued its long-awaited opinion in the case of U.S. v. Moss, et al. The Fifth Circuit affirmed the District Court’s ruling that the Outer Continental Shelf Lands Act (OCSLA) regulations do not apply to the appellees.

Following a fatal November 2012 welding accident on an offshore oil platform in the Gulf of Mexico operating on a lease acquired by Black Elk Energy Offshore Operations, the government indicted the owner and operator of the platform and several oil platform contractors for alleged criminal violations of the OCSLA, the Clean Water Act (CWA) and involuntary manslaughter under 18 U.S.C. § 1112.

The District Court dismissed the OCSLA charges against the contractors, holding that the OCSLA rules did not apply to these contactors, a decision the Fifth Circuit affirmed in a unanimous ruling. The Fifth Circuit remarked that for more than 60 years, the federal government did not regulate or prosecute oil field contractors under the OCSLA.

This policy changed after the occurrence of the Deepwater Horizon oil spill. The Department of the Interior’s Minerals Management Service was reorganized into three agencies: the Office of Natural Resources Revenues, the Bureau of Ocean Energy Management, and the Bureau of Safety and Environmental Enforcement (BSEE). BSEE announced in 2011 and 2012 that enforcement actions could now be taken against contractors as well as the owner and operator.

The Fifth Circuit noted that the pertinent regulations, as written, were addressed to “You” for ease of understanding, and that “You,” as employed by these rules, did not include contractors, subcontractors and service providers. By way of contrast, the Fifth Circuit found that only the newer BSEE rules expressly include contractors in their ambit and states that:

The consistency of over sixty administrative practice in eschewing direct regulatory control over contractors, subcontractors and individual employees supports the district court’s conclusion that these regulations do not apply nor do they potentially criminalize the appellees’ conduct.

The Fifth Circuit found that the government’s claims to the contrary are unavailing, and its “new position is hardly entitled to deference in the criminal context,” much less in the criminal arena.