Bd. for Asbestos and Lead v. ABATECO SERV., Record No. 1719-99-2

• Citation: 534 S.E.2d 352,33 Va. App. 473
• Decision Date: 26 September 2000
• Docket Number: Record No. 1780-99-2.,Record No. 1719-99-2
• Court: Court of Appeals of Virginia
• Parties: DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION, BOARD FOR ASBESTOS AND LEAD v. ABATECO SERVICES, INC. Abateco Services, Inc. v. Department of Professional and Occupational Regulation, Board for Asbestos and Lead.

534 S.E.2d 352

33 Va. App. 473

DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION, BOARD FOR ASBESTOS AND LEAD v. ABATECO SERVICES, INC.

Abateco Services, Inc. v. Department of Professional and Occupational Regulation, Board for Asbestos and Lead.

Record Nos. 1719-99-2, 1780-99-2.

Court of Appeals of Virginia, Richmond.

September 26, 2000.

Brian J. Goodman, Assistant Attorney General (Mark L. Earley, Attorney General; Richard B. Zorn, Senior Assistant Attorney General; John B. Purcell, Jr., Assistant Attorney General, on briefs), for Department of Professional and Occupational Regulation, Board for Asbestos and Lead.

Joseph W. Kaestner (Brian R. Pitney; Kaestner, Pitney & Jones, on briefs), Richmond, for Abateco Services, Inc.

Present: BENTON, COLEMAN and HUMPHREYS, JJ.

HUMPHREYS, Judge.

The Board for Asbestos and Lead of the Department of Professional and Occupational Regulation (the "Board") appeals from a decision of the Circuit Court of the City of Hopewell reversing the Board's decision to impose a fine on Abateco Services, Inc. ("Abateco") for refusing to provide the Department of Labor and Industry (the "Department") access to its records. The Board contends the trial court erred in finding that: (1) Abateco did not violate an existing state or federal standard regarding asbestos removal; (2) a state or federal standard did not exist at the time of the violation; (3) Abateco acted in good faith and, therefore, any violation was not willful; and (4) the fine imposed by the Board violated the Excessive Fines clauses of both the United States and Virginia Constitutions. In addition, Abateco appeals the trial court's denial of its request for attorneys' fees. We consolidated these appeals and, for the reasons that follow, we affirm in part and reverse in part and remand.

I. BACKGROUND

In November, 1994 Abateco was under contract to remove insulation containing asbestos from the Staunton Correctional Center, a facility owned and operated by the Virginia Department of Corrections. The contractual arrangement between Abateco and the Commonwealth required Abateco to keep certain records regarding asbestos removal and to produce the records on demand by state regulators. In addition to the contractual arrangement, various regulations adopted by the Department required that these records be maintained and produced upon demand.¹

On November 22, 1994, an inspector from the Department requested certain records from Abateco, including employee medical records, employee asbestos training, employee exposure to asbestos, and a hazard communications document. After consulting with its counsel, Abateco refused to produce the documents in the absence of a search warrant, citing its privacy rights under the Fourth Amendment.

As a result of its refusal to provide the requested records, the Commissioner of the Department issued a citation and notification of penalty to Abateco, proposing a civil penalty totaling $20,000. Abateco appealed the penalty assessment to the Circuit Court of the City of Staunton. The trial court found Abateco guilty of four willful violations of the health and safety standards, and it assessed a total penalty of $9,665. We affirmed that decision in Abateco Services, Inc. v. Bell, 23 Va.App. 504, 477 S.E.2d 795 (1996).

Following our decision, the Board notified Abateco that its failure to meet applicable state or federal standards when performing an asbestos project also constituted grounds for additional disciplinary action by the Board pursuant to Code § 54.1-516(A)(3) and Asbestos Licensing Program Regulation 13.6.A.1. See 18 VAC XX-XX-XXX. The matter was referred for an informal conference pursuant to Code § 9-6.14:11. In his proposed findings of fact, the hearing officer found that Abateco acted in good faith reliance on the advice of counsel in refusing to provide the records. The hearing officer further found no federal or state standard relating to Abateco's right to demand a search or inspection warrant at the time of the violations.

The Board adopted the facts in the hearing officer's report, but found clear and convincing evidence that Abateco had failed to meet applicable state standards and had willfully violated Code § 54.1-516(A)(3). The Board also found Abateco failed to meet state standards in violation of Asbestos Licensing Program Regulation 13.6.A.1. See 18 VAC XX-XX-XXX. The Board imposed a sixty-day inoperative suspension of Abateco's license and a $2,000 fine.

Abateco appealed the Board's decision to the Circuit Court of the City of Hopewell, pursuant to the Virginia Administrative Process Act.² Abateco also requested an award of its attorneys' fees. By letter opinion, the trial court reversed the Board's judgment and vacated the suspension and fine. The trial court also denied Abateco's request for attorneys' fees. These appeals followed,

H. VIOLATION OF AN EXISTING STATE STANDARD

Because the issues are interconnected, we consider together the Board's arguments that the trial court erred in reversing the Board's finding that Abateco violated an existing federal or state standard and that the trial court erred in finding that no federal or state standard existed. Abateco successfully argued below that it did not violate any state or federal standard based on our previous holding that Abateco contractually consented to access to its records without the requirement of a warrant. See Abateco, 23 Va.App. at 518,

477 S.E.2d at 801-02. Abateco contends this holding left open the issue of whether the records would have been available without a search warrant. Abateco does not dispute that the regulations promulgated by the Board existed on November 22, 1996, but contends the regulations were not enforceable unless and until we determined whether, absent a waiver, a search or inspection warrant was required pursuant to Code §§ 40.1-49.8 and 40.1-49.9.

We find this argument unpersuasive. In reviewing an agency decision, the trial court must determine: (1) whether the agency acted in accordance with law; (2) whether the agency made a procedural error which was not harmless error; and (3) whether the agency had sufficient evidential support for its findings of fact. See Johnston-Willis v. Kenley, 6 Va.App. 231, 242, 369 S.E.2d 1, 7 (1988)

.

Whether a warrant is necessary is a legal, procedural issue, not a safety and health standard. The level of deference accorded to an agency decision depends upon the nature of the question involved. "[W]here the question involves an interpretation which is within the specialized competence of the agency and the agency has been entrusted with wide discretion by the General Assembly, the agency's decision is entitled to special weight in the courts." Id. at 244, 369 S.E.2d at 8. Heightened deference is not required where the issue is one in which the courts have a special competence. See id. at 243-44, 369 S.E.2d at 7-8. "Thus, where the legal issues require a determination by the reviewing court whether an agency has, for example, accorded constitutional rights, failed to comply with statutory authority, or failed to observe required procedures, less deference is required . ..." Id. at 243, 369 S.E.2d at 7-8.

Based upon this standard of review, we find that a safety and health standard existed that required the production on demand of the required records. The issue of whether Abateco could interpose any protection under the Fourth Amendment to require a warrant is a legal issue, falling outside the specialized competence of the Board. Therefore, "little deference [wa]s required to be accorded the [Board's] decision" by the trial court. Id. at 246, 369 S.E.2d at 9.

However, the trial court was bound to apply our prior finding that Abateco contractually consented to produce the records on demand and without requiring a warrant. See Abateco, 23 Va.App. at 518,

477 S.E.2d at 801-02. Therefore, the trial court erred in reversing the Board's findings that standards existed requiring the production of certain records and that Abateco violated these standards.

III. GOOD FAITH AS NEGATING A WILLFUL VIOLATION

We previously affirmed a finding on these facts by the Circuit Court of the City of Staunton that Abateco's refusal to produce the records constituted a willful violation of Code § 40.1-51.21. See Abateco, 23 Va.App. at 518,

477 S.E.2d at 802. Nevertheless, Abateco argued, and the trial court agreed, that the hearing officer's finding that Abateco acted "in good faith reliance on the advice of counsel," when adopted by reference by the Board in its final order, negates any legal conclusion that Abateco acted willfully to violate such state standards. We disagree.

"Good faith" and "willfulness" are not mutually exclusive terms. An act is deemed to have been committed in good faith if it is done honestly and without fraud or deceit. See Lawton v. Walker, 231 Va. 247, 251, 343 S.E.2d 335, 337-38 (1986)

. "[C]onduct is `willful' when it is intentional." Angstadt v. Atlantic Mut. Ins. Co., 254 Va. 286, 293, 492 S.E.2d 118, 122 (1997) (quoting RF & P Corp. v. Little, 247 Va. 309, 320, 440 S.E.2d 908, 915 (1994)). The word "willful" also has been defined, in a non-criminal law context, as denoting an act that is intentional, knowing, or voluntary. See United States v. Murdock, 290 U.S. 389, 394, 54 S.Ct. 223, 225, 78 L.Ed. 381 (1933),

overruled in part, on other grounds, by Murphy v. Waterfront Comm'n, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678 (1964). In the context of the federal Occupational Safety and Health Act (OSHA), "willful" has been defined as "`an intentional disregard of, or plain indifference to, OSHA requirements'" Reich v. Trinity Indus., Inc., 16 F.3d 1149, 1152 (11th Cir.1994) (citation omitted). An employer's good faith belief is irrelevant to the question of whether an employer "willfully" violated the law. Id. at 1154. Thus, regardless of whether Abateco could constitutionally demand that the Board obtain a...