Baldwin Metals Co., Inc. v. Donovan

Citation642 F.2d 768
Decision Date13 April 1981
Docket NumberNos. 79-2548,79-2870,s. 79-2548
Parties9 O.S.H. Cas.(BNA) 1568, 1981 O.S.H.D. (CCH) P 25,325 BALDWIN METALS COMPANY, INC., Plaintiff-Appellee, v. Raymond J. DONOVAN, Secretary of Labor, Etc., and Occupational Safety and Health Review Commission, Defendants-Appellants. MOSHER STEEL COMPANY, a Division of Trinity Industries, Plaintiff-Appellee, v. Raymond J. DONOVAN, Secretary of Labor et al., Defendants-Appellants. . Unit A
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Laura V. Fargas, Carin A. Clauss, Sol. of Labor, Allen H. Feldman, Acting Counsel for Appellate Litigation, Charles I. Hadden, Acting Asst. Counsel for Appellate Litigation, Ann D. Nachbar, Benjamin W. Mintz, Associate Sol., U. S. Dept. of Labor, Washington, D. C., Jamie C. Boyd, U. S. Atty., Jeremiah Handy, Asst. U. S. Atty., San Antonio, Tex., James E. White, Regional Sol., U. S. Dept. of Labor, Dallas, Tex., for Donovan.

Al J. Daniel, Ronald R. Glancz, Appellate Staff, Civ. Div., U. S. Dept. of Justice, Washington, D. C., for O.S.H.R.C.

McCarty & Wilson, Robert E. Rader, Jr., Ennis, Tex., for plaintiffs-appellees.

Charles A. Blackmar, Jane Ellen Nelson, Christopher S. Bond, Kansas City, Mo., for Frisco Engineering Fabrication Erection Co., Inc., amicus curiae.

Appeals from the United States District Court for the Northern District of Texas.

Appeal from the United States District Court for the Western District of Texas.

Before GOLDBERG, POLITZ and SAM D. JOHNSON, Circuit Judges.

GOLDBERG, Circuit Judge:

In Marshall v. Barlows, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), the Supreme Cartographer placed us on the Constitutional highway governing the validity of search warrants issued for OSHA 1 investigations. Although this is the Fifth Circuit's first trip along this road, possible routes and destinations have been mapped out by four of our sister circuits. 2 Because we believe that the geodetics proposed by the First, Third and Eighth Circuits provide the better approaches, we now number ourselves among the mapmakers sanctioning these routes.

I. Beginning the Journey: Checking the Rearview Mirror

Prior to 1978, it was thought that section 8(a) of the Occupational Safety and Health Act of 1970 3 authorized warrantless searches by OSHA officials. See Secretary of Labor v. Chromalloy American Corp., OSHRC No. 77-2788, 7 OSHC (BNA) 1547 (Rev.Comm'n July 17, 1979). Problems associated with reviewing the validity of OSHA search warrants never arose, since there was no need to obtain a warrant in order to conduct an OSHA search. However, once the Supreme Court in Barlows, supra, held that the authorization of warrantless OSHA searches was unconstitutional, the courts were forced to decide when and where challenges to the OSHA search warrants were to be litigated.

The problem of reviewing the validity of OSHA search warrants was especially troublesome when Occupational Safety and Health Review Commission (OSHRC) proceedings had already been initiated. In such cases, tension was created between district court review of federal magistrates and the time-honored doctrine of exhaustion of administrative remedies. Since the warrants are issued by federal magistrates, and since review of magistrates' decisions is ordinarily entrusted to the district court, 4 the federal district courthouse would seem to be the best place to litigate the validity of OSHA warrants. However, once the administrative process has begun, the exhaustion of administrative remedies doctrine would preclude judicial review until a final agency decision is rendered. Since OSHRC decisions are directly appealable to the circuit courts of appeals, judicial review of a warrant's validity would not take place until the appellate stage, thereby totally bypassing district court review of the magistrate's decision to issue a warrant. With these conflicting policies and rules of law in mind, we begin our journey through the OSHA enforcement process.

II. A Drive Through Baldwin Metals and Mosher Steel

The consolidated appeals before us present strikingly similar cases in which the pertinent facts are virtually undisputed. No. 79-2548 involves Baldwin Metals Co. ("Baldwin") of Dallas, Texas. In November 1978, OSHA officials attempted to investigate safety conditions at Baldwin's plant and were refused admission. They subsequently applied for and were granted an inspection warrant issued by a United States Magistrate for the Northern District of Texas. The OSHA officials returned to the plant armed with the warrant and were allowed to enter. 5 Based upon the evidence uncovered during the search, OSHA citations were issued against Baldwin in January 1979. Baldwin subsequently filed a complaint in district court seeking a declaration that the warrant was unconstitutional, an order suppressing the use of any evidence obtained pursuant to the warrant, and an injunction prohibiting OSHA from taking further action based on the allegedly unconstitutional search. In addition, in order to prevent any immediate OSHA action, Baldwin asked for a preliminary injunction seeking essentially the same relief. The district court granted the preliminary injunction and this appeal followed.

No. 79-2870 involves Mosher Steel Co. ("Mosher") and its plant in San Antonio, Texas. On November 27, 1978, OSHA officials, having already obtained an inspection warrant, attempted to search Mosher's plant but were not permitted entry. Two days later the officials returned, and were allowed to enter over the protests of Mosher's representatives. 6 The officials conducted a search of the premises, and issued citations based on the evidence seized during the search. Mosher filed a complaint in federal district court seeking a declaration that the warrant was unconstitutional, an order suppressing the use of any evidence obtained pursuant to the warrant, and an injunction prohibiting OSHA from taking further action based on the allegedly unconstitutional search. The district judge granted the declaratory and injunctive relief requested by Mosher, and this appeal followed.

The issue presented in both cases is whether a federal district court may properly declare an OSHA search warrant to be invalid, and may enjoin the use of evidence seized pursuant to the warrant, before a final administrative decision has been rendered. We now examine this issue, first in light of the exhaustion of remedies doctrine, and then in light of the exercise of equitable jurisdiction.

III. The First Stop Along the Road: Trouble With the Exhaust System

Any examination of the exhaustion of administrative remedies doctrine should begin with the classic pronunciation by the United States Supreme Court that "no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463, 82 L.Ed. 638 (1938); see McClendon v. Jackson Television, Inc., 603 F.2d 1174 (5th Cir. 1979); In re Restland Memorial Park, 540 F.2d 626 (3d Cir. 1976); Barnes v. Chatterton, 515 F.2d 916 (3d Cir. 1975). However, the rule has numerous exceptions and exhaustion of remedies is not required in all circumstances. See, e. g., Weyerhaeuser, supra; Cerro Metal Products v. Marshall, 620 F.2d 964 (3d Cir. 1980); Rhodes v. United States, 574 F.2d 1179 (5th Cir. 1978); American Federation of Government Employees, Local 1668 v. Dunn, 561 F.2d 1310 (9th Cir. 1977). In the cases at bar we must thus determine whether the policies behind the exhaustion of remedies rule would be served by requiring exhaustion, and whether any exception to the exhaustion rule applies to the facts before us.

The reasons for the exhaustion of administrative remedies doctrine include protecting administrative autonomy, deferring to agency expertise, facilitating judicial review through creation of a factual record by the agency, and conserving the time and energy of the courts since the judicial controversy may be mooted if the agency grants the relief sought. See Dunn, supra, 561 F.2d at 1314; Ecology Center of Louisiana, Inc. v. Coleman, 515 F.2d 860 (5th Cir. 1975). In a case similar to the ones at bar today, the Seventh Circuit held that because the reasons underlying the exhaustion doctrine did not fit the facts of the case before it, exhaustion of remedies was not required. Weyerhaeuser, supra, 592 F.2d at 376. Since the constitutional challenges in the cases at bar and in the Seventh Circuit's case all involve the facial validity of a warrant, a factual record is not required for judicial review, and we agree with the Seventh Circuit's rejection of this rationale. Moreover, we agree with the Seventh Circuit's conclusion that interests of agency expertise do not require exhaustion, since agency officials have no special expertise which would make them adept at handling issues concerning the constitutional validity of warrants. However, we disagree with the determination that constitutional issues may not be mooted by an agency decision in favor of the allegedly aggrieved party, and we find that interests of administrative autonomy weigh in favor of requiring exhaustion of remedies in cases like the ones at bar. Therefore, we disagree with the conclusion of the Seventh Circuit, and we hold that the exhaustion of remedies rule applies to the present cases.

The Seventh Circuit found that there was no possibility of mooting the issue of the warrant's constitutionality, since if the warrant and subsequent search were unconstitutional, the fourth amendment injury would remain even if the citations were dismissed. Id. at 376. The court thus distinguished between the injury resulting from the citations and the injury resulting from the search, and held that while a favorable ruling by OSHRC might relieve the former, it could not affect the latter. However, the declaratory and injunctive relief sought in cases like the one...

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