United States v. Black Elk Energy Offshore
872 F.3d 304
| 5th Cir. | 2017

Background

  • In Nov. 2012 a welding explosion on an offshore platform killed three people; lessee/operator Black Elk and several contractors (GIS, Moss, Srubar, Dantin) were later indicted under OCSLA regulations and related statutes.
  • The indictment charged contractors with knowing and willful violations of 30 C.F.R. § 250.113 (hot-work/welding rules) under 43 U.S.C. § 1350(c); Black Elk faced additional OCSLA, Clean Water Act, and manslaughter counts.
  • The district court dismissed the OCSLA counts against the contractor-appellees for failure to state an offense, holding the relevant regulations apply to “You” (lessees/holders/designated operators), not contractors.
  • The government appealed, arguing (1) OCSLA’s criminal provision applies to “any person,” (2) 30 C.F.R. § 250.146(c) makes the person actually performing the activity jointly and severally responsible, and (3) prior precedent supports penalizing violators.
  • The Fifth Circuit affirmed: the regulatory definition of “You” (30 C.F.R. § 250.105) excludes contractors; § 250.146(c) imposes leaseholder/operator obligations and civil-style joint-and-several responsibility, not direct criminal liability on contractors.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether OCSLA criminal provision (43 U.S.C. § 1350(c)) reaches contractors Government: “any person” includes contractors/individuals; corporations/officers can be criminally liable Appellees: statutory scheme (esp. § 1348) limits duties to lessees/permittees; contractors not within regulated duty group Court assumed arguendo §1350(c) could reach contractors but resolved case on regulatory scope; did not decide broad statutory question and dismissed OCSLA counts because regs did not apply to contractors
Whether 30 C.F.R. § 250.146(c) makes contractors criminally liable as “person actually performing the activity” Government: §250.146(c) makes the person performing the activity jointly and severally responsible, so contractors can be criminally liable Appellees: §250.105 defines “You” (lessee/operator/etc.) and excludes contractors; §250.146(c) is aimed at leaseholder/operator responsibilities and civil joint-and-several liability, not criminalizing contractors Held: §250.146(c) does not override the specific definition of “You”; it preserves operator/lessee responsibility for contractors and does not impose direct criminal liability on contractors
Whether agency practice and prior enforcement give fair notice that contractors could be criminally prosecuted Government: recent agency actions after Deepwater Horizon and an interim policy signaled potential enforcement; contractors therefore had notice Appellees: 60+ years of agency practice regulated lessees/operators only; sudden change creates unfair surprise and lacks prior contemporaneous agency interpretation Held: long-standing agency practice and prior statements that contractors were not regulated undermine agency’s new position; due process concerns against applying novel criminal construction
Whether general provisions (e.g., definition of “person” or “violator”) override specific regulatory provisions directed at “You” Government: broader regulatory definitions (“person”, “violator”) allow penalizing any responsible person Appellees: canon that specific governs general; the welding provisions expressly address “You,” so general definitions cannot expand criminal scope to contractors Held: specific regulatory language excluding contractors controls; general penalty/violator provisions cannot be read to subject contractors to criminal liability

Key Cases Cited

  • United States v. Kaluza, 780 F.3d 647 (5th Cir.) (standard of review for statutory/regulatory interpretation)
  • Anthony v. United States, 520 F.3d 374 (5th Cir.) (de novo review of regulatory interpretation)
  • United States v. Fafalios, 817 F.3d 155 (5th Cir.) (interpret regulations by plain language)
  • United States v. CITGO Petroleum Corp., 801 F.3d 477 (5th Cir.) (strict construction where regulations carry criminal penalties)
  • United States v. Clark, 412 F.2d 885 (5th Cir.) (principle against enlarging criminal regulations by analogy)
  • Diamond Roofing Co. v. OSHRC, 528 F.2d 645 (5th Cir.) (regulations imposing private sanctions must be clear)
  • United States v. Onick, 889 F.2d 1425 (5th Cir.) (in pari materia canon for related provisions)
  • RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 132 S. Ct. 2065 (Sup. Ct.) (specific governs general)
  • United States v. Ho, 311 F.3d 589 (5th Cir.) (criminal enforcement of environmental regulations under different statute)
  • Floyd S. Pike Elec. Contractor, Inc. v. OSHRC, 576 F.2d 72 (5th Cir.) (civil enforcement for regulatory violation)
  • Fruge ex rel. Fruge v. Parker Drilling Co., 337 F.3d 558 (5th Cir.) (no implied private cause of action; characterization of regulatory obligations)
  • United States v. Brennan, 183 F.3d 139 (2d Cir.) (no precedent for criminal liability like this case)
  • Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (Sup. Ct.) (agency inconsistency undermines deference)
  • Auer v. Robbins, 519 U.S. 452 (Sup. Ct.) (deference to agency interpretation in civil context)
  • United States v. Lanier, 520 U.S. 259 (Sup. Ct.) (due process forbids novel criminal constructions)
  • General Elec. Co. v. Gilbert, 429 U.S. 125 (Sup. Ct.) (declining to follow agency guideline that conflicts with earlier agency position)
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