831 F.2d 1211 (3rd Cir. 1987), 86-3546, Pennsylvania Steel Foundry and Mach. Co. v. Secretary of Labor

Docket Nº:86-3546.
Citation:831 F.2d 1211
Party Name:P 28,071 PENNSYLVANIA STEEL FOUNDRY AND MACHINE COMPANY, Petitioner, v. SECRETARY OF LABOR, Respondent, United Steelworkers of America, AFL-CIO-CLC, Intervenor.
Case Date:October 20, 1987
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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831 F.2d 1211 (3rd Cir. 1987)

P 28,071




United Steelworkers of America, AFL-CIO-CLC, Intervenor.

No. 86-3546.

United States Court of Appeals, Third Circuit

October 20, 1987

Argued April 10, 1987.

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Robert D. Moran (argued), Vorys, Sater, Seymour and Pease, Washington, D.C., for petitioner.

Sandra Lord (argued), Asst. Counsel for Appellate Litigation, George R. Salem, Sol. of Labor, Cynthia L. Attwood, Associate Sol. for Occupational Safety and Health, Joseph M. Woodward, Counsel for Appellate Litigation, U.S. Dept. of Labor, Washington, D.C., for respondent.

Mary Win O'Brien, United Steelworkers of America, Pittsburgh, Pa., for intervenor.

Before SLOVITER, BECKER and GARTH, Circuit Judges.


SLOVITER, Circuit Judge.

The principal issue before us is whether the Occupational Safety and Health Review Commission (OSHRC or the Commission) erred in failing to suppress evidence from an inspection authorized by an ex parte warrant. The contested evidence was the basis of the agency's decision that Pennsylvania Steel Foundry (Penn Steel) committed numerous violations of the Occupational Safety and Health Act (the Act), 29 U.S.C. Sec. 651 et seq. (1982). An additional issue is whether the Commission improperly enforced a settlement agreement from which Penn Steel contends it withdrew before the agreement was final.



On June 13, 1977, OSHA compliance inspectors sought to conduct a comprehensive inspection of Penn Steel's Hamburg, Pennsylvania foundry. Penn Steel refused to permit the inspection without a warrant. On August 15, 1977, OSHA made an ex parte application to a federal magistrate for an inspection warrant. The application set forth that the foundry had been cited in 1973 for three violations, 1 that Penn Steel contested the citation but subsequently withdrew its contest on the ground that the violations had been abated; that after a follow-up inspection in 1974 two more citations were issued, one for a "repeated" violation of the silica dust standards; that ultimately the foundry withdrew its contest to these violations, representing that the violations had been or would be abated; and that an attorney for Penn Steel advised OSHA by letter dated March 5, 1976 that some abatement controls previously agreed to as to dust levels and noise controls were either economically or technically infeasible. The warrant application also described the National Emphasis Program (NEP) which had been established in 1976 "to reduce hazards in industries reporting a higher than average rate of injuries and illnesses." App. at 72. The application further stated that iron and steel foundries were among the first target industries selected for inspections, citing foundry illness and injury rates of 26.6 per 100 workers as compared to the national average of 8.8.

On August 25, 1977, the magistrate issued an inspection warrant for Penn Steel's foundry to be conducted "in accordance with the guidelines set forth in the OSHA National Emphasis Program for Foudries." App. at 66. The warrant stated that it was ordered pursuant to section 8(a) of the Act, 29 U.S.C. Sec. 657(a), which provides for inspection of the entire workplace "within reasonable limits." Pursuant to the warrant, OSHA compliance officers conducted a full-scope health and safety inspection of the entire worksite where the foundry is located. OSHA issued citations for 298 violations of OSHA standards.

A hearing on the citations before an administrative law judge began on January

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15, 1979. After three days, the hearing was recessed to allow the parties to attempt to negotiate a settlement. In August 1979, Penn Steel moved in the Commission for summary judgment on the grounds, inter alia, that there was no probable cause for the warrant as required by the Supreme Court's decision in Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), and that ex parte warrants in OSHA cases were invalid under Cerro Metal Products v. Marshall, 467 F.Supp. 869 (E.D.Pa.1979).

Without reaching the merits of either of these objections, the ALJ expressed the opinion "that the Supreme Court would not apply the exclusionary rule retroactively under circumstances similar to those of this case," App. at 442, and, after noting that ex parte warrants had been "standard practice" in OSHA cases prior to Barlow's, appeared to apply a good faith exception. App. at 443.

The parties settled 240 citations and notified the ALJ, who recommenced the administrative hearing on December 5, 1979, to hear evidence on the remaining fifty-eight items. On June 27, 1980, the ALJ issued a preliminary decision and order affirming some items, vacating others and reducing the characterization of still others.

The parties executed a Stipulation of Settlement in June 1981 regarding the 240 settled citations which provided that the "disposition set forth [in the ALJ's preliminary decision] shall take effect ... on the date this stipulation becomes a final order of the Commission." App. at 80. Both parties reserved their rights under the Act, 29 U.S.C. Sec. 660, to petition for review of the ALJ's decision. On July 13, 1981, the ALJ issued a Final Decision and Order "fully implement[ing]" the preliminary decision on the fifty-eight litigated items, approving the settlement, assessing a $5,000 fine provided in the settlement, and requiring abatement as provided for by the settlement. App. at 77-79.

In its petition for review to the Commission Penn Steel sought suppression of all evidence and dismissal on the probable cause and ex parte warrant grounds raised before the ALJ. Both Penn Steel and the Secretary contested the ALJ's rulings on some of the fifty-eight litigated items. The Commission initially directed review on certain of the litigated items. There was no action in the case between January 1983 and February 1986. 2

In January 1986, the Commission requested supplemental briefs on several issues, including the applicability of a good faith exception to the exclusionary rule and the effect of this court's decision in Cerro Metal Products v. Marshall, 620 F.2d 964 (3d Cir.1980), affirming the district court's order holding ex parte warrants to be invalid. In its brief to the Commission dated October 25, 1982, Penn Steel stated, for the first time, that, "[i]n its exercise of its right to do so, Respondent withdraws from the pending settlement agreement." App. at 166.

The Commission, by a two-to-one vote, refused to suppress the evidence obtained from the inspection. The Commission treated Penn Steel's statement of withdrawal from the settlement as a motion to withdraw, which it denied, and held that judgment on the 240 unlitigated items should be entered in accordance with the settlement agreement, which included an assessment of a $5,000 penalty. 3 Penn Steel petitions for review of the Commission's order.


Existence of a Quorum

As a preliminary matter, Penn Steel argues that no part of the Commission's decision can be affirmed because there were not two affirmative votes on the existence or absence of probable cause.

The Act provides that "two members of the Commission shall constitute a quorum and official action can be taken

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only on the affirmative vote of at least two members." 29 U.S.C. Sec. 661(f). All three members of the Commission participated in the decision. However, Chairman Buckley declined to take part in the probable cause determination because he believed that the Commission, as an administrative agency within the executive branch, cannot perform functions committed to the judicial branch and hence cannot review a magistrate's determination of probable cause. The other two Commissioners reached the merits but were divided on probable cause. Penn Steel argues that it was deprived of "its due process right to a decision on each exception presented" because a quorum did not make a finding of probable cause. Petitioner's Brief at 5.

This court considered a similar argument in Marshall v. Sun Petroleum Products Co., 622 F.2d 1176 (3d Cir.), cert. denied, 449 U.S. 1061, 101 S.Ct. 784, 66 L.Ed.2d 604 (1980), where Sun argued that a divided decision by two members of OSHRC was not a final order for purposes of this court's review. We rejected that contention, quoting the Fourth Circuit's statement that "[a] review of the legislative history of Sec. 12 of the Act [29 U.S.C. Sec. 661] reveals no intent to limit judicial review of the Commission's decisions." George Hyman Construction Co. v. OSHRC, 582 F.2d 834, 837 n. 5 (4th Cir.1978), quoted in Sun Petroleum, 622 F.2d at 1180.

Penn Steel's couching of its argument in due process terms does not alter the result. In Sun Petroleum, we stated: "Like the decision of an equally divided court, the action of an equally divided Commission may be examined by the next link in the hierarchal chain of review." 622 F.2d at 1180.


Validity of the Warrant

We turn to Penn Steel's argument that all evidence from the inspection should have been suppressed because the warrant was not supported by an adequate showing of probable cause and was issued ex parte in violation of the agency's own regulation.


Probable Cause

In Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), the Supreme Court held that a search warrant supported by probable cause is constitutionally required for OSHA inspections. 4 However, the Court distinguished between "[p]robable cause in the criminal law sense" and probable cause for an administrative search. Id. at 320, 98 S.Ct. at 1824. In the latter case, "a warrant may be based not only on...

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