Allstates Refractory Contractors, LLC v. Walsh
| Decision Date | 02 September 2022 |
| Docket Number | 3:21 CV 1864 |
| Parties | Allstates Refractory Contractors, LLC, Plaintiff, v. Martin J. Walsh, et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
Plaintiff Allstates Refractory Contractors, LLC (“Allstates”) filed this suit against the Secretary of Labor and the Occupational Safety and Health Administration (collectively “OSHA”). Allstates asks this Court to declare OSHA's statutory power to promulgate permanent “safety standards” unconstitutional, and to issue a permanent injunction preventing OSHA from enforcing those standards. The parties filed dueling Motions for Summary Judgment, which is appropriate only where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Federal Civil Rule 56(a). This Court heard oral argument and the matter is fully briefed (Docs. 23-26).
Congress passed the Occupational Safety and Health Act (“Act”) in 1970, declaring the Act's “purpose and policy” was “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions.” 29 U.S.C. § 651(b). Under the Act, Congress gave the Secretary of Labor the power “to set mandatory occupational safety and health standards,” 29 U.S.C § 651(b)(3), and vested the Secretary with “broad authority . . . to promulgate different kinds of standards” for health and safety in the workplace.” Indus. Union Dep't, AFL-CIO v. Am Petroleum Inst., 448 U.S. 607, 611 (1980) (“Benzene”)).
The Act tasks OSHA with ensuring “safe and healthful working conditions” in American workplaces. 29 U.S.C. § 651(b). OSHA accomplishes this goal by issuing and enforcing health and safety standards. 29 U.S.C. § 655(b). There are three types of standards: interim, permanent, and emergency. Relevant here are the permanent standards issued under Section 6(b).
Allstates is a general contractor that provides furnace services to various glass, metal, and petrochemical facilities (Doc. 23-1 at 13). The company has four full-time employees, but also hires “up to 100” part-time employees, depending on the job (id. at 14). “Allstates prides itself on its commitment to worker safety” and spends “thousands” on training employees and complying with OSHA safety standards (id.). Allstates has also experienced OSHA penalties firsthand. In 2019, OSHA cited the company for standards violations, including a “serious violation after a catwalk brace fell and injured a worker below” (Doc. 24-1 at 14). Allstates did not contest the citation or seek judicial review (id. at 15). Instead, it settled the violation for $5,967 in December 2019 (id.).
Allstates argues that OSHA's authority to issue safety standards under Section 6(b) is unconstitutionally broad. It further alleges OSHA imposes penalties in a way that is “arbitrary and abusive” (Doc. 23-1 at 9), and that “a number of OSHA standards are unnecessarily burdensome or dangerous” (id. at 14).
Before turning to the merits of the constitutional challenge, this Court must first address the threshold issue of jurisdiction. The answer to that question lies in the Act's administrative-review framework.
There are essentially two types of challenges to OSHA safety standards -- enforcement and pre-enforcement. Section 658(a) controls enforcement challenges, i.e., situations where OSHA has issued a citation against a company. An employer has fifteen days to notify OSHA that it plans to contest the standard. If the employer timely challenges the standard, it is entitled to an administrative hearing and administrative appeal. Section 655(f) outlines the specific process for “pre-enforcement” challenges, i.e., situations in which OSHA has issued a standard, but not yet enforced that standard against the employer. Any “petition challenging the validity” of an OSHA safety standard must be filed: (1) “prior to the sixtieth day after such standard is promulgated,” and (2) “with the United States court of appeals for the circuit wherein [the petitioner] resides or has [their] principal place of business.” 29 U.S.C. § 655(f). This 60-day limit is strictly enforced. See Am. Fed'n of Labor & Cong. of Indus. Orgs. v. OSHA, 905 F.2d 1568, 1570 (D.C. Cir. 1990) () (citations omitted).
Defendants argue the administrative-review framework applies in this case -- meaning Allstates is too late and in the wrong court. But can Allstates sidestep the procedural bars outlined above? According to Allstates, it “is challenging the facial constitutionality of OSHA's enabling statute, not its standards, rendering the [G]overnment's jurisdictional objection beside the point” (Doc. 25 at 5).
Generally, procedures “designed to permit agency expertise to be brought to bear on particular problems . . . are to be exclusive.” Whitney Nat'l Bank in Jefferson Par. v. Bank of New Orleans & Tr. Co., 379 U.S. 411, 420 (1965). Judicial review is barred where the “statutory scheme” displays a “fairly discernible” intent to limit jurisdiction, and the claims at issue “are of the type Congress intended to be reviewed within th[e] statutory structure.” Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 207, 212 (1994) (citation and internal quotation marks omitted). However, judicial review is not always foreclosed by a statutory framework. As noted by the Supreme Court, “we presume that Congress does not intend to limit jurisdiction if ‘a finding of preclusion could foreclose all meaningful judicial review'; if the suit is ‘wholly collateral to a statute's review provisions'; and if the claims are ‘outside the agency's expertise.'” Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477, 489 (2010) (quoting Thunder Basin, 510 U.S. at 212213). So the question becomes: Does this type of constitutional challenge fall within the OSHA administrative-review framework?
Plaintiff points to Free Enterprise Fund, where the Supreme Court examined a challenge to the Public Company Accounting Oversight Board, created under the Sarbanes-Oxley Act of 2002. 561 U.S. 477. The Board, composed of five members selected by the Securities and Exchange Commission (“SEC”), had the authority to investigate all details of an accounting practice, including hiring, promotion, business relationships, internal-inspection protocols, and professional ethics. Id. at 485. The SEC had oversight of the Board, but could remove members only for good cause. Id. at 486. Similarly, the President could remove the SEC Commissioners only for good cause, meaning they could not be removed absent “inefficiency, neglect of duty, or malfeasance in office.” Id. at 487 (quoting Humphrey's Ex'r v. United States, 295 U.S. 602, 620 (1935)). This resulted in a dual layer of “good-cause tenure.” Id. The Supreme Court held that the statutory-review scheme did not bar judicial review, because: (1) forcing plaintiff to wait to be sanctioned was not a “meaningful” avenue of relief; and (2) the constitutional claims were “outside the Commission's competence and expertise,” “and the statutory questions involved do not require technical considerations of agency policy.” Id. at 490-91 (cleaned up).
The same logic applies here. First, Allstates has no other meaningful avenue of relief. If this Court does not have jurisdiction to hear this constitutional claim, Allstates would be forced to “bet the farm” by waiting to incur OSHA penalties in order to challenge the constitutionality of OSHA itself (Doc. 25 at 19). Second, Congress did not intend for the agency to review such a claim. Indeed, OSHA has no expertise in adjudicating “broad, systemic constitutional challenges to the [Act] and [OSHA's] administration of it that are not tied to any individual enforcement challenges.” Elk Run Coal Co. v. U.S. Dep't of Labor, 804 F.Supp.2d 8, 22 (D.D.C. 2011). See also Ohio Coal Ass'n v. Perez, 192 F.Supp.3d 882, 898 (S.D. Ohio 2016) ().
In short, Allstates challenges the constitutionality of the underlying statute -- not any particular safety standard. Because this challenge is “‘collateral' to any [OSHA] orders or rules from which review might be sought,” Free Enterprise Fund, 561 U.S. at 490, this Court proceeds to address the merits of the claim.
To demonstrate a permanent injunction is warranted, a party must show: “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006).
The parties agree that the irreparable-injury prong is satisfied. And “the harm to the opposing party and the public interest factors merge when the Government is the opposing party.” Wilson v. Williams, 961 F.3d 829, 844 (6th Cir. 2020) (citation and internal quotation marks omitted). To prevail, Allstates must show “actual success” on the merits with respect to the constitutionality of OSHA's permanent safety standards. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 32 (2008) (citation omitted).
So what is an acceptable permanent safety standard?...
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