Opinion ID: 348764
Heading Depth: 2
Heading Rank: 1

Heading: The Plaintiffs' Theory and Shell's Rebuttal.

Text: 13 The plaintiffs' theory of recovery is rather simple. They argue that the Outer Continental Shelf Lands Act empowers the Secretary of the Interior to make regulations for operation upon platforms such as Shell's. Specifically, 43 U.S.C. § 1334(a)(1) provides:The Secretary shall administer the provisions of this subchapter relating to the leasing of the outer Continental Shelf, and shall prescribe such rules and regulations as may be necessary to carry out such provisions. The Secretary may at any time prescribe and amend such rules and regulations as he determines to be necessary and proper in order to provide for the prevention of waste and conservation of the natural resources of the outer Continental Shelf, and the protection of correlative rights therein, and, notwithstanding any other provisions herein, such rules and regulations shall apply to all operations conducted under a lease issued or maintained under the provisions of this subchapter. 14 The plaintiffs assert that pursuant to this statutory authority the Secretary of the Interior issued the following regulations which are applicable in our controversy: 15 1) 30 C.F.R. § 250.30 Lease Terms, Regulations, Waste, Damage and Safety 16 The lessee shall comply with the terms of applicable laws and regulations, the lease terms, OCS Orders and other written orders and rules of the supervisor, and with oral orders of the supervisor . . . . The lessee shall take all necessary precautions to prevent damage to or waste of any natural resource or injury to life, or property, or the aquatic life of the seas. 17 2) 30 C.F.R. § 250.45 Accidents, Fires, and Malfunctions 18 In the conduct of all its operations, the lessee shall take all steps necessary to prevent accidents and fires. . . . 19 3) 30 C.F.R. § 250.46 Workmanlike Operations 20 The lessee shall perform all operations in a safe and workmanlike manner and shall maintain equipment for the protection of the lease and its improvements, for the health and safety of all persons, and for the preservation and conservation of the property and the environment. 21 It is argued by the plaintiffs that the above regulations are presumptively valid and that they are applicable to our factual situation. They further argue that Shell (as a lessee of submerged land on the Outer Continental Shelf) breached these regulations, and that this breach visits liability upon Shell regardless of whether or not Shell was in fact negligent. In support of this theory of liability, the plaintiffs cite to us Armstrong v. Chambers & Kennedy, 340 F.Supp. 1220 (S.D.Tex.1972), aff'd on other grounds sub nom. In Re Dearborn Marine Service, Inc., 499 F.2d 263 (5th Cir. 1974). In Chambers & Kennedy, the trial court approved a similar theory of strict liability for breach of these regulations. The court stated: 22 This court must interpret the congressional intent and the Secretary's reasons for promulgating the regulations as imposing certain nondelegable duties upon C & K, as the lessee and owners of the platform. The public policy indicated by these legislative and administrative acts are imperative to the common good and protection of our national community. Thus, any violation, even a nonfeasance, of the guidelines set as preventive measures to accidents must expose the lessee to ultimate liability in tort. 23 Id. at 1233, 1234. 24 Shell counters this argument by asserting that the Secretary's regulations are invalid. It contends that the enabling statute gives both the Secretary of the Interior and the head of the department in which the Coast Guard is operating authority to issue regulations, 3 and it was the Coast Guard exclusively that was given the authority to issue safety regulations. Shell specifically contends that:. . . the regulations upon which Judge Singleton relied in Armstrong v. Chambers & Kennedy, 340 F.Supp. 1220 (S.D.Tex.,1972), being the same ones relied upon by plaintiffs in this action (30 CFR 250.45-250.46), if construed as safety and health regulations for the protection of life and property on the offshore platforms so as to create strict liability in the lease owner, so extend and so modify the granting statute, 43 U.S.C.A. 1334, as to exceed the authority granted by the enabling legislation. 25 Brief for appellee at 31. To support this view, Shell delves deeply into the legislative history of the Outer Continental Shelf Lands Act only to emerge without really proving their point. If the legislative history of the statute shows anything, it is merely that nothing was specifically said one way or the other as to whether or not the Secretary of the Interior has the authority to issue safety regulations. It does not necessarily follow, as Shell alleges, that merely because the Coast Guard is given the authority to regulate in the area of safety, other agencies are devoid of this power. 26 Shell, however, does not rest its case solely on the delegation of power theory. In the alternative, they adopt the position taken by the trial court. The trial court held that the regulations were validly promulgated, but were inapplicable to this particular factual setting. The court states specifically: 27 It is true, as a general proposition, that a civil remedy may be implied for those clearly within the protective realm of legislation or regulations in the public interest. Euresti v. Stenner, 458 F.2d 1115, 1119 (10th Cir. 1972); Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969). See Note, Implying Civil Remedies from Federal Regulatory Statutes, 77 Harv.L.Rev. 285 (1963). The workers in this case were not clearly within the protective realm, however, since it appears that the regulations in question were not meant to apply to the housing module in this case. . . . Both the wording of the statutes and regulations, and the legislative history of the statutes, indicate that the authority of the Secretary of the Interior concerns drilling and operation practices and conservation. . . . The Coast Guard, on the other hand, is given the broad authority to regulate safety practices which, in places other than fixed platforms, is given by the Longshoremen's and Harbors Workers' Compensation Act to the Secretary of Labor. . . . The Court finds that the operation of an independent housing module on a platform is not a production or drilling operation regulated by the Secretary of the Interior but is rather a matter of general platform safety properly supervised by the Coast Guard. . . . Armstrong v. Chambers & Kennedy, 340 F.Supp. 1220 (S.D.Tex.1972), on which the plaintiff relies, concerned implied liability for violations of the Secretary of the Interior's Regulations but in that case the violations in question resulted from oil drilling and storage operations, and they were properly within the reach of the Secretary's regulatory authority. 28 Minute Entry of Trial Court, June 6, 1974. (App. 729-731).