A.E. Staley Mfg. Co. v. Secretary of Labor

• Decision Date: 23 July 2002
• Docket Number: No. 00-1530.,00-1530.
• Citation: 295 F.3d 1341
• Parties: A.E. STALEY MANUFACTURING CO., Petitioner, v. SECRETARY OF LABOR, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

295 F.3d 1341

A.E. STALEY MANUFACTURING CO., Petitioner, v. SECRETARY OF LABOR, Respondent.

No. 00-1530.

United States Court of Appeals, District of Columbia Circuit.

Argued January 17, 2002.

Decided July 23, 2002.

COPYRIGHT MATERIAL OMITTED

On Petition for Review of an Order of the Occupational Safety and Health Review Commission.

Sally J. Scott argued the cause for petitioner. With her on the briefs was Robert E. Mann.

Scott Glabman, Attorney, U.S. Department of Labor, argued the cause for respondent. With him on the brief were Joseph M. Woodward, Associate Solicitor, and Bruce F. Justh, Counsel.

Before: EDWARDS, HENDERSON, and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge GARLAND.

GARLAND, Circuit Judge:

A.E. Staley Manufacturing Company petitions for review of a final order of the Occupational Safety and Health Review Commission (OSHRC). The Commission found that Staley committed 89 willful violations of 29 C.F.R. § 1910.307(b) (the "hazardous locations standard"), which mandates that electrical equipment in hazardous locations be approved for use in such locations. OSHRC also concluded that Staley committed two willful violations of 29 C.F.R. § 1910.1200(h) (the "hazard communication standard"), which requires employers to provide employees with effective information and training regarding hazardous chemicals in their work areas. Staley does not dispute that it committed the violations, but contends that the Commission erred in deeming them willful. Finding no error, we deny the petition for review.

I

Staley is a corn refiner that produces corn starch, corn oil, fructose, and dextrose at a number of facilities. This case concerns Staley's Decatur, Illinois plant. In 1990, the plant included over 130 buildings and had approximately 833 hourly employees. In July of that year, the Occupational Safety and Health Administration (OSHA)¹ began an inspection of the plant, prompted by a May 1990 accident in which an employee was fatally asphyxiated. As a result of the inspection, the Secretary of Labor, acting through OSHA, issued two sets of citations alleging hundreds of violations of the Occupational Safety and Health Act ("OSH Act"), 29 U.S.C. §§ 651-678. One set of citations alleged violations of safety standards, including the hazardous locations standard, 29 C.F.R. § 1910.307(b). The other set charged violations of health standards, including the hazard communication standard, id. § 1910.1200(h), and the asbestos standard, id. § 1910.1001(j)(2), (k)(1).

Partial settlements led to the withdrawal of all citations for non-willful violations. Staley contested the remaining 177 safety and four health citations, and the Commission assigned an Administrative Law Judge (ALJ) to hear the case. The ALJ upheld 171 of the safety citations and all four of the health citations. However, he concluded that only 87 of the safety violations (all for hazardous locations) and two of the health violations (both for asbestos) were willful. He found the remaining violations, including the two violations of the hazard communication standard, to be serious but not willful.² Both parties appealed the ALJ's decision to OSHRC.

The Commission affirmed all of the ALJ's findings of violations, as well as all of his findings of willfulness. In addition, it upgraded several violations from serious to willful, including two further hazardous locations violations (making a total of 89) and the two hazard communication violations (which it grouped as one for penalty purposes). In finding willfulness, the Commission relied on evidence that previous dust explosions, internal audits, and a survey by the National Institute for Occupational Safety and Health had put Staley on notice of serious safety and health problems, including the location of non-approved electrical equipment in the vicinity of combustible dust and a lack of employee training concerning dangerous chemicals. The Commission concluded that Staley's continued failure to take corrective action in the face of these widespread problems supported a determination of willfulness. A.E. Staley Mfg. Co., 19 O.S.H. Cas. (BNA) 1199, 1221-22 (O.S.H.R.C.2000). Staley then filed a petition for review in this court pursuant to section 10(c) of the OSH Act, 29 U.S.C. § 659(c).

II

A reviewing court must uphold the factual findings of the Commission if they are "supported by substantial evidence on the record considered as a whole," 29 U.S.C. § 660(a), and must uphold its other conclusions as long as they are not arbitrary, capricious, an abuse of discretion, or otherwise contrary to law, 5 U.S.C. § 706(2)(A). See Anthony Crane Rental, Inc. v. Reich, 70 F.3d 1298, 1302 (D.C.Cir. 1995). Moreover, "[w]e defer to the Secretary's interpretation of the Act and regulations, upholding such interpretations so long as they are consistent with the statutory language and otherwise reasonable." Id. (citing Martin v. OSHRC, 499 U.S. 144, 150-51, 111 S.Ct. 1171, 1175-76, 113 L.Ed.2d 117 (1991)).

Staley does not contest the Commission's findings that it committed serious violations of the OSH Act. It disputes only the findings that the 89 hazardous locations and two hazard communication violations were willful. In the OSH Act context, a willful violation is "an act done voluntarily with either an intentional disregard of, or plain indifference to, the Act's requirements." Kaspar Wire Works, Inc. v. Secretary of Labor, 268 F.3d 1123, 1127 (D.C.Cir.2001) (quoting Conie Constr., Inc. v. Reich, 73 F.3d 382, 384 (D.C.Cir.1995)). The Commission based its findings of willfulness on its determination that Staley was plainly indifferent to the requirements of the Act.

Staley argues that the Commission committed two errors in deeming its violations willful. First, Staley contends that substantial evidence does not support the Commission's determination that the company was plainly indifferent to its violations of OSHA standards. Second, with respect to the hazardous locations standard, Staley maintains that even if there were evidence of its plain indifference to that standard, the Commission legally erred in finding willfulness without finding that the company knew of each specific violation cited by OSHA. We consider these two arguments in Parts III and IV below.

III

The Commission found Staley willful because it demonstrated plain indifference to its violations of the standards requiring it: (1) to use only approved electrical equipment in hazardous locations, and (2) to train and inform its employees regarding hazardous chemicals in their work areas. Staley maintains that there is an absence of substantial evidence to support findings of plain indifference with respect to either standard. We disagree.

A

The 89 violations of the hazardous locations standard, affirmed by the Commission and undisputed by Staley, all involved the presence of non-approved electrical equipment in Class II, Division 2 locations.³ The equipment at issue included exposed wiring, bulbs without protective globes, and improperly sealed junction boxes — all potential ignition sources for combustible dust. The evidence of Staley's plain indifference to those violations is as follows.

In May 1987, Staley conducted a mock OSHA inspection and found unsafe electrical equipment in places that Staley considered Class II, Division 2 locations, including the elevators and Buildings 9, 44, and 75 — all places in which OSHA inspectors subsequently found violations at issue in this case. Joint Appendix (J.A.) at 325, 327-28, 339. Two years later, in April 1989, an internal audit conducted by Staley safety engineer Ken Page turned up more instances of unprotected electrical equipment in hazardous locations. Page's handwritten report warned that Building 44 had "literally gone to hell in a handbasket" and contained "hundreds of safety type violations." J.A. at 361. Page testified that those violations included uncovered electrical boxes and exposed wires. Supplemental Appendix (S.A.) at 47-48. He recommended that a wall-to-wall audit of the plant be conducted as soon as possible, and noted that Staley's potential liability for OSHA penalties was very high. J.A. at 361-62.

Page's recommendation for a wall-to-wall audit was not approved. Page testified that his supervisor, Lynn Elder, director of Staley's department of environmental sciences and safety, told Page that he had advised Bob Jansen, corporate vice president of operations, of Page's findings. Jansen reportedly replied that he was aware of the problems in the plant, but that another Staley project had priority. Page also testified that Elder told him that he should not distribute his report because "the legal department would crucify us." Instead, Elder suggested that Page's report be either destroyed, or stamped "privileged and confidential" and sent to the legal department. Page, however, did not destroy the report. He kept a copy for himself and gave copies to three others, including Bob Trent, Decatur's chief of plant protection, and Jim Brinkmeyer, the corporate industrial hygienist. Elder did permit Page to make an oral presentation to plant staff during which he explained his findings in detail. But Elder assigned another auditor, J.B. Webb, the supervisor of the Decatur safety department, to revise Page's written report. The revised report substantially toned down Page's language and omitted references to hundreds of the specific electrical and safety violations that Page had observed. J.A. at 363-65; S.A. at 38-43, 51-52.

In May 1989, a major dust explosion and fire occurred at the Decatur plant. It was not the first: other explosions and fires had occurred in several buildings over the years. In the same month, an insurance loss-control report for Building 44 noted open electrical junction boxes, and warned that "[m]oisture, lint, dust and combustible materials can easily come in contact with the exposed wiring and create a potential ignition."...