Globe Contractors, Inc. v. Herman, 96-4206

• Decision Date: 18 December 1997
• Docket Number: No. 96-4206,96-4206
• Parties: 18 O.S.H. Cas. (BNA) 1109, 1998 O.S.H.D. (CCH) P 31,488 GLOBE CONTRACTORS, INC., Petitioner, v. Alexis M. HERMAN, * Secretary, United States Department of Labor, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 367

132 F.3d 367

18 O.S.H. Cas. (BNA) 1109, 1998 O.S.H.D. (CCH)

P 31,488

GLOBE CONTRACTORS, INC., Petitioner, v. Alexis M. HERMAN, ^* Secretary, United States Department of Labor, Respondent.

No. 96-4206.

United States Court of Appeals Seventh Circuit.

Argued Sept. 19, 1997.

Decided Dec. 18, 1997.

Charles B. Palmer (argued), Waukesha, WI, for Petitioner.

Barbara Werthmann, Barbara A.W. McConnell (argued), Department of Labor, Occupational Safety Health Review, Washington, DC, Ray Darling, Jr., Occupational Safety & Health Review Commission, Washington, DC, David Zeigler, Occupational Safety & Health Administration, Office of the Director, Washington, DC, for Respondent.

Before POSNER, Chief Judge, and MANION and DIANE P. WOOD, Circuit Judges.

MANION, Circuit Judge.

Globe Contractors, Inc. (Globe) excavates and installs underground utility pipes. As a result of an inspection by the Occupational Safety and Health Administration (OSHA), Globe was cited for a willful violation of 29 C.F.R. § 1926.652(a)(1), for failing to shore up or slope the trench walls in an excavation. OSHA proposed a fine of $56,000. Globe challenged this citation. After notice and a hearing, the administrative law judge found Globe to have committed a willful violation, but reduced the fine to $20,000. Globe sought discretionary review by the Occupational Safety and Health Review Commission, which adopted the ALJ's decision by refusing to review the case. Globe now appeals. We affirm.

I.

Globe Contractors, Inc., a Wisconsin corporation, excavates and installs underground utility pipes. Globe is considered a medium-sized business, with at least 50 employees. On October 21, 1994, Globe dug a trench in a public road in Appleton, Wisconsin, and began installing sanitary and storm sewer pipes in the trench. The trench extended from the middle of the public road toward a private residence along the side of the street. The trench had a depth which varied between ten and a half feet and eleven and a half feet, and at one end, there was a back-filled slope where workers could exit. The trench was as narrow as four feet across the bottom of the trench, and eight feet across the top. The walls of the trench were nearly vertical, and the trench was excavated in type B and C soil (type C soil being the most likely to collapse). A water main pipe, sixteen inches in diameter, extended for the length of the trench, five to seven feet below ground level.

On the morning of October 21, the OSHA office in Appleton received an anonymous phone call alerting it to possible violations at the Globe construction site. OSHA Compliance Officer Tom Crandall went to the site and saw two persons, one of them identified as Dean Van Straten, climbing out of the trench, using a ladder. Before climbing out of the trench, these men had not been visible in the trench. The trench walls were not shored up, and no trench box was in place. Crandall approached the trench, using profanity and acting in an unprofessional and belligerent manner. He then identified himself as an OSHA compliance officer and conducted an inspection in the presence of Kevin Van Straten, Globe's foreman. ¹ The inspection lasted 15-30 minutes, and then Crandall left.

Two and a half hours later, Crandall returned to the work site with another compliance officer, Gordon Krohn. They discovered that Dean Van Straten, who had been seen climbing out of the trench in the morning, was standing in the trench. Additionally, no trench box was in place and the walls of the trench had not been shored up. Dean Van Straten was standing on the water main. The compliance officers approached the trench, while taking photographs of Dean Van Straten exiting the trench.

As a result of these inspections, OSHA issued three citations against Globe, only one of which is at issue here: a citation for willfully failing to protect employees from a possible cave-in by using a protective system such as a trench box. Globe challenged this citation, and a hearing was held before an Administrative Law Judge (ALJ). At the hearing, Globe argued that the evidence from the inspections should be suppressed because the search violated the Fourth Amendment and OSHA's proscriptions against certain inspections. The ALJ, however, ruled that, although traffic was blocked due to the construction, Globe did not have an expectation of privacy on the public road. Also, he ruled that the compliance officers substantially complied with OSHA's requirements, and that Crandall's belligerent conduct did not prejudice Globe in preparing its defense. Further, the ALJ believed the testimony of the OSHA compliance officers and upheld the citation. However, the ALJ also found that no employees had been on the floor of the trench without a trench box in place. Thus, the ALJ found that the employees' exposure to this hazard was less serious, and reduced the sanction from $56,000 to $20,000.

Globe filed a Petition for Discretionary Review ² before the OSH Review Commission, but did not raise the suppression argument. Any member of the Commission could have requested that the case be reviewed by the Commission, but none did so. The Commission thereby adopted the order of the ALJ as its own. 29 U.S.C. § 661(j). Globe appeals directly to this court, contending that the ALJ improperly denied its suppression motion. Globe also contends that the Secretary of Labor did not present evidence of a reasonable interpretation of an OSHA standard, ³ and that Globe did not receive adequate notice of this interpretation. Finally, Globe complains that there is insufficient evidence to support a finding of willfulness.

II.

A. Waiver of Suppression Argument

Globe seeks to suppress the evidence obtained as a result of the two inspections by the compliance officers, because the belligerent conduct of the officers rendered the inspection unreasonable, and because no search warrant was obtained. It is undisputed that Globe failed to raise these arguments to the OSH Review Commission in the Petition for Discretionary Review. ⁴ Rather, it contends that it did not have to make the argument to the Commission to preserve the issue on appeal. In the alternative, it maintains that even if the suppression argument is not preserved, extraordinary circumstances justify appellate review of this issue.

The OSH Act provides that in a review of an order by the U.S. Court of Appeals, "no objection that has not been argued before the Commission shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances." 29 U.S.C. § 660(a). ⁵ In In re Establishment Inspection of Kohler Co., 935 F.2d 810 (7th Cir.1991), this court dismissed an appeal because Kohler had challenged an OSHA safety inspection warrant before the federal district court, instead of proceeding through OSHA's appeal process. We reasoned that "[u]nless administrative hearings take place, there will be no occasion to suppress evidence." Id. at 812. Therefore, we concluded, the objections should be addressed first in proceedings before the Commission. While Kohler did not specifically differentiate between review by the administrative law judge and review by the Commission, the holding of the case was that review by the Commission is a prerequisite to review by this court. Id. at 814 ("We ... now join the other circuits that require parties challenging completed OSHA inspections on Fourth Amendment grounds to address their arguments to the Review Commission before turning to the federal courts."). Congress could have chosen to provide that raising an issue before a hearing examiner is sufficient for appellate review, as it did in the National Labor Relations Act, but it chose not to. Cf. 29 U.S.C. § 160(e) ("No objection that has not been urged before the Board, its member, agent or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.") (emphasis added); see also Keystone Roofing Co. v. OSHRC, 539 F.2d 960, 963 (3d Cir.1976).

Globe relies on Weyerhaeuser Co. v. Marshall, 592 F.2d 373, 375-77 (7th Cir.1979). Weyerhaeuser arose out of a challenge to a safety inspection warrant sought by OSHA and issued by a district court. Prior to the Weyerhaeuser case, the OSHA Review Commission announced that it categorically refused to rule on the constitutionality of administrative search warrants. Weyerhaeuser held that because raising the issue to the Commission would therefore be futile, Weyerhaeuser was excused from having to exhaust its administrative remedies. Id. at 376; accord, Federal Casting Div. v. Donovan, 684 F.2d 504, 507-08 (7th Cir.1982); see also Kohler, 935 F.2d at 813. Kohler distinguished Weyerhaeuser on the grounds that the Commission now considers constitutional challenges to OSHA inspection warrants. 935 F.2d at 813-14. Kohler controls, and unless extraordinary circumstances excuse raising the suppression argument in the Petition for Discretionary Review, we will not review it.

B. Extraordinary Circumstances

Globe asserts that the Secretary's interpretation of Section 8 of the OSH Act (pertaining to reasonable inspections) changed between filing of the Petition for Discretionary Review and this appeal, and that this change excuses its failure to raise the suppression argument in the PDR. Globe specifically points to two decisions, Secretary v. L.R. Willson & Sons, Inc., 1997 WL 111084 (March 11, 1997, OSHRC), and Secretary v. Regional Scaffolding & Hoisting Co, Inc., 1997 WL 111082 (March 11, 1997, OSHRC), ⁶ which held that Section 8 of OSH Act and the Fourth Amendment are not coextensive. Globe notes that when a change in the interpretation of a statute is announced between the time of a lower court's determination and the filing of an appeal, the issue is not waived on appeal. See, e.g., Santos v. United States, 417 F.2d 340, 345 (...