Dir. v. Technologies

• Decision Date: 31 May 2011
• Docket Number: No. 29908.,29908.
• Citation: 257 P.3d 236,125 Hawai'i 223
• Parties: DIRECTOR, DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS, Petitioner/Appellant–Appellant,v.PERMASTEELISA CLADDING TECHNOLOGIES, LTD., Defendant/Appellee–Appellee.
• Court: Hawaii Court of Appeals

125 Hawai'i 223

257 P.3d 236

DIRECTOR, DEPARTMENT OF LABOR AND INDUSTRIAL RELATIONS, Petitioner/Appellant–Appellant,

v.PERMASTEELISA CLADDING TECHNOLOGIES, LTD., Defendant/Appellee–Appellee.

No. 29908.

Intermediate Court of Appeals of Hawai‘i.

May 31, 2011.

Frances E.H. Lum and Herbert B.K. Lau, Deputy Attorneys General, on the briefs, for Petitioner/Appellant–Appellant.James C. McWhinnie, Tred R. Eyerly, (Damon Key Leong Kupchak Hastert), Douglas M. Poulin (admitted pro hac vice), (Pepe & Hazard LLP), on the briefs, for Respondent/Appellee–Appellee.Valri Lei Kunimoto, on the briefs, for Hawaii Labor Relations Board, Agency/Appellee–Appellee.FOLEY and FUJISE, JJ.; NAKAMURA, C.J., concurring separately.Opinion of the Court by FOLEY, J.

In this secondary appeal of an administrative agency decision, Petitioner/Appellant–Appellant the Director of the Department of Labor and Industrial Relations (Director) appeals from the “Judgment on Decision and Order Affirming Hawai‘i Labor Relations Board's Decision No. 24, Dated November 24, 2008” filed on May 28, 2009 in the Circuit Court of the First Circuit ¹ (circuit court). The circuit court entered judgment in favor of Respondent/Appellee–Appellee Permasteelisa Cladding Technologies, Ltd. (Permasteelisa) and Agency/Appellee–Appellee Hawai‘i Labor Relations Board (HLRB) and against Director, pursuant to the court's May 28, 2009 “Decision and Order Affirming Hawai‘i Labor Relations Board's Decision No. 24, Dated November 24, 2008.”

On appeal, Director contends:

(1) The circuit court erred in affirming HLRB's conclusion that Permasteelisa complied with the standard set out in 29 C.F.R. § 1926.501(b)(1) (Hawaii Administrative Rules (HAR) Chapter 12–121.2). In connection therewith, Director contends that in HLRB's “Findings of Fact, Conclusions of Law, and Order” issued November 24, 2008, the portion of Finding of Fact (FOF) 33 stating “[t]he Board accepts Flippo's ² opinion, that [Permasteelisa] provided protection for [Frank Montayre, Jr. (Montayre) ] from fall hazards by providing him a functional personal fall arrest system and thereby complied with 29 C.F.R. § 1926.501” is clearly erroneous and Conclusion of Law (COL) 8 is wrong.

(2) Permasteelisa did not plead or present any evidence of an affirmative defense and, therefore, cannot now raise the defense to negate the violation.

I.

A. Factual Background

Hawaii Dredging Construction Company subcontracted with Permasteelisa to design and install the exterior facade, consisting of aluminum frame and glass, of the East and West Towers of the Moana Pacific Condominium project (the project). On March 14, 2007, Montayre, an ironworker employed by Permasteelisa, while briefly working alone, fell to his death from the 46th floor of the East Tower. Montayre and his work partner had just taken a fifteen-minute break on another floor. When Montayre left the break area, he neglected to take his personal fall arrest protection equipment, even though he was going to work in a condominium unit on the 46th floor that required the use of a fall protection system. Not all of the glass panels had been installed on the lanai³ of the unit, which presented a danger that a worker could fall.

Safety standards required a fall protection system to be utilized when an employee was on a working surface “with an unprotected side or edge which is 6 feet (1.8 m) or more above a lower level.” 29 C.F.R. § 1926.501(b)(1). Permasteelisa had provided Montayre with a personal fall arrest system⁴ and installed a claw anchor hole in the floor of the unit, into which a worker could insert a retractable anchor bolt attached to his personal fall arrest system. Montayre had been trained and directed by Permasteelisa to use this system. The fall arrest system would engage in the event a worker fell and prevent the worker from falling to his death. There is nothing in the record to indicate that Permasteelisa was on notice that Montayre had not used or would not use the fall arrest system as trained and directed by Permasteelisa.

B. Procedural Background

On August 8, 2007, the Director, through the Hawaii Occupational Safety and Health Division (HIOSH), issued a Citation and Notification of Penalty to Permasteelisa for violations of the Hawaii Occupational Safety and Health Law, Hawaii Revised Statutes (HRS) Chapter 396. Specifically, the Director cited Permasteelisa for violations of fall protection standards 29 C.F.R. § 1926.501(b)(1) (Citation 1, Item 1); 29 C.F.R. § 1926.502(a)(2) (Citation 1, Item 2a); 29 C.F.R. § 1926.502(b)(2) (Citation 1, Item 2b); and 29 C.F.R. § 1926.503(b)(1) (Citation 2, Item 1)—all incorporated from the federal regulations under HAR Chapter 12–121.2.1.

On August 31, 2007, Permasteelisa contested the citations. Director forwarded the contested case to HLRB and the Department of the Attorney General.

HLRB heard the case on February 12 and 13, 2008 and issued its “Decision No. 24 Findings of Facts, Conclusions of Law, and Order” on November 24, 2008. HLRB vacated Citation 1, Items 1, 2a, and 2b, and affirmed Citation 2, Item 1. Director filed a motion for reconsideration. On December 17, 2008, HLRB denied the motion, with the exception of a correction on page 2 to language in the introduction of the decision.

On December 26, 2008, Director filed an appeal to the circuit court. The circuit court, after oral argument, affirmed HLRB's decision and filed a judgment on May 28, 2009. Director timely appealed.

II.

A. Secondary Appeal

“ ‘Review of a decision made by a court upon its review of an administrative decision is a secondary appeal. The standard of review is one in which [the appellate] court must determine whether the court under review was right or wrong in its decision.’ ” Leslie v. Bd. of Appeals of County of Hawaii, 109 Hawai‘i 384, 391, 126 P.3d 1071, 1078 (2006) (quoting Lanai Co., Inc. v. Land Use Comm'n, 105 Hawai‘i 296, 306–07, 97 P.3d 372, 382–83 (2004) (other citation omitted)). The standards as set forth in HRS § 91–14(g) (1993) are applied to the agency's decision. Ka Pa'akai O Ka'aina v. Land Use Comm'n, 94 Hawai‘i 31, 40, 7 P.3d 1068, 1077 (2000). HRS § 91–14(g) provides:

(g) Upon review of the record the court may affirm the decision of the agency or remand the case with instructions for further proceedings; or it may reverse or modify the decision and order if the substantial rights of the petitioners may have been prejudiced because the administrative findings, conclusions, decisions, or orders are:

(1) In violation of constitutional or statutory provisions; or

(2) In excess of the statutory authority or jurisdiction of the agency; or

(3) Made upon unlawful procedure; or

(4) Affected by other error of law; or

(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6) Arbitrary, or capricious, or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

“ ‘Under HRS § 91–14(g), conclusions of law are reviewable under subsections (1), (2), and (4); questions regarding procedural defects under subsection (3); findings of fact under subsection (5); and an agency's exercise of discretion under subsection (6).’ ” Sierra Club v. Office of Planning, State of Hawai'i, 109 Hawai‘i 411, 414, 126 P.3d 1098, 1101 (2006) (quoting In re Hawaiian Elec. Co., 81 Hawai‘i 459, 465, 918 P.2d 561, 567 (1996) (other citation omitted)).

“ ‘An agency's findings are not clearly erroneous and will be upheld if supported by reliable, probative and substantial evidence unless the reviewing court is left with a firm and definite conviction that a mistake has been made.’ ” Poe v. Hawai'i Labor Relations Bd., 105 Hawai‘i 97, 100, 94 P.3d 652, 655 (2004) (quoting Kilauea Neighborhood Ass'n v. Land Use Comm'n, 7 Haw.App. 227, 229–30, 751 P.2d 1031, 1034 (1988)). “ ‘The courts may freely review an agency's conclusions of law.’ ” Lanai Co., 105 Hawai‘i at 307, 97 P.3d at 383 (quoting Dole Hawaii Div.-Castle & Cooke, Inc. v. Ramil, 71 Haw. 419, 424, 794 P.2d 1115, 1118 (1990) (other citation omitted)). “Abuse is apparent when the discretion exercised clearly exceeds the bounds of reason or disregards rules or principles of law or practice to the substantial detriment of a party litigant.” Kimura v. Kamalo, 106 Hawai‘i 501, 507, 107 P.3d 430, 436 (2005) (internal quotation marks and citation omitted).

Brescia v. North Shore Ohana, 115 Hawai‘i 477, 491–92, 168 P.3d 929, 943–44 (2007) (brackets in original omitted).

B. Deference to Administrative Agency Decision

In determining whether an agency determination should be given deference, the standard to be applied is as follows:

[W]hen reviewing a determination of an administrative agency, we first decide whether the legislature granted the agency discretion to make the determination being reviewed. If the legislature has granted the agency discretion over a particular matter, then we review the agency's action pursuant to the deferential abuse of discretion standard (bearing in mind that the legislature determines the boundaries of that discretion). If the legislature has not granted the agency discretion over a particular matter, then the agency's conclusions are subject to de novo review.

Paul's Electrical Service, Inc. v. Befitel, 104 Hawai‘i 412, 419–20, 91 P.3d 494, 501–[02] (2004).

Olelo: The Corp. for Cmty. Television v. Office of Info. Practices, 116 Hawai‘i 337, 344, 173 P.3d 484, 491 (2007).

“[I]n deference to the administrative agency's expertise and experience in its particular field, the courts should not substitute their own judgment for that of the administrative agency where mixed questions of fact and law are presented. This is particularly true where the law to be applied is not a statute but an administrative rule promulgated by the same agency interpreting it.” Camara v. Agsalud, 67 Haw. 212, 216, 685 P.2d 794, 797 (1984) (citation omitted).

Where an administrative agency has adopted wholesale...