Continental Can Co., U.S.A. v. Marshall

• Decision Date: 12 July 1979
• Docket Number: No. 78-2144,78-2144
• Citation: 603 F.2d 590
• Parties: 7 O.S.H. Cas.(BNA) 1521, 1979 O.S.H.D. (CCH) P 23,696 CA 79-2617 CONTINENTAL CAN COMPANY, U. S. A., a Member of the Continental Group, Inc., Plaintiff-Appellee, v. Ray MARSHALL, Secretary of Labor, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 590

603 F.2d 590

7 O.S.H. Cas.(BNA) 1521, 1979 O.S.H.D. (CCH) P 23,696

CA 79-2617 CONTINENTAL CAN COMPANY, U. S. A., a Member of

the Continental Group, Inc., Plaintiff-Appellee, v. Ray MARSHALL, Secretary of Labor, et al., Defendants-Appellants.

No. 78-2144.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 11, 1979.

Decided July 12, 1979.

Dennis Kade, Asst. Counsel for App. Litigation, U. S. Dept. of Labor, Washington, D. C., for defendants-appellants.

Charles M. Chadd, Chicago, Ill., for plaintiff-appellee.

Before PELL and WOOD, Circuit Judges, and KIRKLAND, District Judge. ^*

PELL, Circuit Judge.

The primary issue in this appeal is whether the district court erred in enjoining the Secretary of Labor (Secretary) from prosecuting all pending and future citations against Continental Can Company (Continental) pursuant to the Occupational Safety and Health Act (OSHA) regulations regarding excessive noise, 29 C.F.R. § 1910.95 (b)(1). Before addressing the application of collateral estoppel, exhaustion, and due process to the resolution of this issue, we will review the underlying facts as they are critical to our decision.

I

Continental operates approximately eighty metal can manufacturing plants located throughout the country. In 1973, the Secretary issued citations alleging that Continental violated the noise standard set forth at 29 C.F.R. § 1910.95(b)(1) ¹ in three of its plants in California. The cases were consolidated for hearing. Prior to the conclusion of the hearing, the Secretary issued five more citations to Continental for similar noise violations in plants in other states. After the hearing but before a decision was rendered, the parties stipulated that the record developed at the hearing would govern the disposition of the other five cases that the decision as to the feasibility of engineering controls in the three California plants would govern the five other cases.

Continental took the position at the hearing that the only valid interpretation of the noise regulation was that engineering controls could be required only if they were economically feasible in view of the available alternatives for protecting employee hearing. The Secretary contended that the issue of economic feasibility was not relevant and that technical feasibility was the only consideration. ² Nevertheless, he introduced into evidence the Standard & Poor's financial report on Continental.

The administrative law judge (ALJ) issued his decision on October 1, 1974. He vacated the citations and held the noise standard invalid as interpreted by the Secretary insofar as it required the use of technically feasible administrative and engineering controls as opposed to personal protective equipment. The Secretary then petitioned for review by the Occupational Safety and Health Review Commission (Commission). 29 U.S.C. § 661(i); 29 C.F.R. § 2200.91. On August 24, 1976, the Commission affirmed in part the ALJ's decision. In this opinion, hereinafter referred to as Continental I, the Commission held that the noise regulation only required implementation of those engineering controls which were economically as well as technically feasible and that the Secretary failed to sustain its burden of proving the economic feasibility of engineering controls. The Secretary appealed to the Ninth Circuit, but then withdrew the appeal.

During these proceedings, the Secretary issued citations for similar noise violations at several other Continental plants. ³ After Continental obtained the favorable decision in Continental I it moved for summary judgment in the pending cases on the ground of collateral estoppel. On December 12, 1977, the Commission (in Continental II) held that Continental did not satisfy the requirements for the application of collateral estoppel and thus denied its motions for summary judgment and remanded the cases for hearings.

Continental then filed suit in the district court seeking to enjoin the Secretary from further prosecution of these noise cases. It alleged, in essence, that each of its eighty can manufacturing plants use the same machines to make the same product and thus produce the same excessive noise hazards. It had successfully litigated before the Commission the feasibility of engineering controls to reduce noise levels to acceptable standards in eight plants. Because the same issue was raised in the pending cases, it alleged that the Commission should have collaterally estopped the Secretary from relitigating the issue with regard to other plants throughout the country. The Commission's refusal to grant summary judgment on this basis, alleged Continental, would subject it to "needless, duplicative, and vexatious litigation" and accordingly would deprive it of due process of law. The district court agreed and entered an order enjoining further prosecution of the pending cases and issuance of any future citations charging excessive noise. It did not totally immunize Continental from all further noise regulation by the Secretary. The injunction was qualified, See note 7, Infra.

II

The first and primary issue is whether the Commission in Continental II should have applied collateral estoppel to dismiss the pending cases. If collateral estoppel should have been applied, then we must determine whether Continental could properly raise the issue in a collateral action in district court or whether it should have exhausted its administrative remedies and raised it on review to the court of appeals. Finally, if the district court was an acceptable forum to seek relief from the Commission's refusal to apply collateral estoppel, we must determine whether that refusal constituted harassment and thus a violation of due process so as to justify the injunctive relief.

The doctrine of res judicata, of which collateral estoppel is a part, ⁴ is stated in § 1 of the Restatement of Judgments (1942) Where a reasonable opportunity has been afforded to the parties to litigate a claim before a court which has jurisdiction over the parties and the cause of action, and the court has finally decided the controversy, the interests of the State and of the parties require that the validity of the claim and any issue actually litigated in the action shall not be litigated again by them.

Accord Bowen v. United States, 570 F.2d 1311, 1320 (7th Cir. 1978). The underlying policy of the doctrine was articulated by Lord Justice Blackburn over a century ago:

The object of the rule of res judicata is always put upon two grounds the one public policy, that it is the interest of the State that there should be an end of litigation and the other, the hardship of the individual, that he should be vexed twice for the same cause.

Lockyer v. Ferryman, 2 App.Cas. 519, 530 (1877). Earlier this century the courts were unwilling to apply collateral estoppel to administrative determinations. Pearson v. Williams, 202 U.S. 281, 284-85, 26 S.Ct. 608, 50 L.Ed. 1029 (1906). The courts slowly eroded this position so that by 1966 the Supreme Court could state that "(w)hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose." United States v. Utah Construction & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642 (1966). More recently, courts have expanded the application of collateral estoppel to serve the principle that one opportunity to litigate an issue fully and fairly is enough. ⁵

In the present case, Continental argues that the only engineering controls that are technically feasible are machine enclosures and that it litigated the economic feasibility of these enclosures in Continental I. Because the Commission held that they were not feasible, the Secretary should be estopped from relitigating the issue for each of Continental's plants. To analyze the cogency of this argument, we must determine whether the issue decided in Continental I is the same as that raised in the subsequent cases, whether the issue was actually litigated, whether the decision in Continental I depended on the resolution of the issue, ⁶ and whether that decision was final. 1B Moore's Federal Practice P 0.441(2) (2d ed. 1974); Restatement of Judgments § 68 (1942).

We agree with the district court that the issue raised by the Secretary in the several cases the Commission remanded for a hearing in Continental II is the same as an issue decided in Continental I. In Continental I the Secretary had issued citations to Continental alleging that the plants in question did not use feasible engineering controls to reduce sound levels to acceptable levels as required by 29 C.F.R. § 1910.95(b)(1). The same allegations were made in the Continental II cases with respect to different plants. The identity of the issue depends on whether the different plants involved were plagued by similar excessive noise problems and whether the engineering controls available to reduce the noise levels were similar for purposes of determining their technological and economic feasibility.

The district court concluded that all of Continental's can manufacturing plants presented similar noise problems as a result of similar machinery. We agree. The parties stipulated that all plants have similar machinery and sound levels in excess of those permitted by the regulation. The stipulation states further that the 80 plants contain approximately 6,600 separate machines, 6,300 of which have been classified by Continental into nineteen families of basically similar machines for noise control purposes. The accuracy of this stipulation is buttressed by the fact that the Secretary in Continental I agreed without hesitation to consolidate the three California plants for hearing, and subsequent to the hearing agreed that the record developed at the hearing would govern the disposition of citations...