GULF OFFSHORE CO. V. MOBIL OIL CORP., 453 U. S. 473 (1981)

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U.S. Supreme Court

Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473 (1981)

Gulf Offshore Co. v. Mobil Oil Corp.

No. 80-590

Argued March 31, 1981

Decided July 1, 1981

453 U.S. 473


Respondent Mobil Oil Corp. contracted with petitioner for the latter's performance of certain operations on offshore oil drilling platforms. Under the agreement, petitioner promised to indemnify Mobil for all claims resulting directly or indirectly from the work. One of petitioner's employees (also a respondent), working on an oil drilling platform above the seabed of the Outer Continental Shelf, was injured while, because of a storm, he was being evacuated from the platform aboard a boat chartered by Mobil. The employee brought suit for damages in a Texas state court, alleging negligence by Mobil and the boat owner. Mobil filed a third-party complaint for indemnification against petitioner. The trial court rejected petitioner's contention that the court lacked subject matter jurisdiction over the third-party complaint because Mobil's cause of action arose under the Outer Continental Shelf Lands Act (OCSLA), which vested exclusive subject matter jurisdiction in a federal district court. During the trial, the court denied petitioner's request to instruct the jury that personal injury damages awards are not subject to federal income taxation and that they should not increase or decrease an award in contemplation of tax consequences. The jury found Mobil negligent and awarded the employee $900,000 for his injuries. It also found that the employee sustained his injuries while performing work subject to the contract of indemnification. The court then entered judgment against petitioner in the amount of $900,000. The Texas Court of Civil Appeals affirmed, and the Texas Supreme Court denied review.


1. Federal courts do not have exclusive jurisdiction over personal injury and indemnity cases arising under OCSLA. Nothing in the language, structure, legislative history, or underlying policies of OCSLA suggests that Congress intended federal courts to exercise exclusive jurisdiction over such actions. Pp. 453 U. S. 477-484.

(a) As a general principle, state courts may assume subject matter jurisdiction over a federal cause of action absent provision by Congress to the contrary or disabling incompatibility between the federal claim and state court adjudication. Pp. 453 U. S. 477-478. chanrobles.com-red

Page 453 U. S. 474

(b) Congress did not explicitly grant federal courts exclusive jurisdiction over cases arising under OCSLA. And the OCSLA plan -- declaring the Outer Continental Shelf to be an area of "exclusive federal jurisdiction" and adopting "applicable and not inconsistent" law of the adjacent States to fill the substantial "gaps" in the coverage of federal law -- is not inimical to state court jurisdiction over personal injury actions. Nothing inherent in exclusive federal sovereignty or political jurisdiction over a territory precludes a state court from entertaining a suit concerning events occurring in the territory and governed by federal law. Nor can OCSLA's legislative history be read to rebut the presumption of concurrent state court jurisdiction, given Congress' silence on the subject in the statute itself. Pp. 453 U. S. 478-483.

(c) The operation of OCSLA, which borrows state law to govern claims arising under it, will not be frustrated by state court jurisdiction over personal injury actions. And allowing personal injury and contract actions in state courts will advance interests identified by Congress in enacting OCSLA concerning the special relationship between the men working on offshore platforms and the adjacent shore to which they commute to visit their families. Pp. 453 U. S. 483-484.

2. Whether petitioner was entitled to an instruction cautioning the jury that personal injury damages awards are not subject to federal income taxation depends on matters that were not addressed by the court below, and that should be initially considered by it on remand of the case. Subsequent to the Texas Court of Civil Appeals' determination that petitioner was not entitled to such an instruction under then-current federal case law, this Court decided Norfolk & Western R. Co. v. Liepelt, 444 U. S. 490. In that case, an action under the Federal Employers' Liability Act, this Court, in the absence of any guidance in the statute, articulated a federal common law rule that a defendant in a federal personal injury action is entitled to an instruction that damages awards are not subject to federal income taxation. However, OCSLA mandates that the law of the adjacent State (Louisiana here) applies as federal law "[t]o the extent [it is] not inconsistent" with federal law. The question whether this incorporation of state law precludes a court from finding that state law is "inconsistent" with the federal common law rule announced in Liepelt need be answered here only if Louisiana law would not require that the damages instruction be given upon timely request. Thus, the case is remanded to the Court of Civil Appeals to determine whether Louisiana law requires the instruction, and, if it does not, whether Liepelt displaces the state rule in an OCSLA case. Pp. 453 U. S. 484-488.

594 S.W.2d 496, affirmed in part, vacated in part, and remanded. chanrobles.com-red

Page 453 U. S. 475

POWELL, J., delivered the opinion of the Court, in which BURGER, C.J.,and WHITE, REHNQUIST, and STEVENS, JJ., joined, and in Parts I and II of which BRENNAN, MARSHALL, and BLACKMUN, JJ., joined. BLACKMUN, J., filed an opinion concurring in part and concurring in the result, in which BRENNAN and MARSHALL, JJ., joined, post, p. 453 U. S. 488. STEWART, J., took no part in the consideration or decision of the case.


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