Donovan v. Hackney, Inc.

• Decision Date: 23 March 1984
• Docket Number: No. Civ. 82-871-R.,Civ. 82-871-R.
• Parties: Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. HACKNEY, INC., and Wayne Schwedland, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

583 F. Supp. 773

Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. HACKNEY, INC., and Wayne Schwedland, Defendants.

No. Civ. 82-871-R.

United States District Court, W.D. Oklahoma.

March 23, 1984.

Robert A. Fitz and John Richards, U.S. Dept. of Labor, SOL, Dallas, Tex., for plaintiff.

Robert E. Rader, Jr., McCarty, Wilson, Rader & Mash, Ennis, Tex., R. Stephen Haynes, Oklahoma City, Okl., for defendants.

MEMORANDUM OPINION

DAVID L. RUSSELL, District Judge.

This action was instituted by the Secretary of the United States Department of Labor, Occupational Safety and Health Administration (OSHA), upon its Petition for Adjudication in Contempt. The petition alleges that the Defendants, Hackney, Inc. and Hackney's plant manager, Wayne Schwedland, violated an order of this Court in refusing to allow an OSHA inspection after being served with a duly issued search warrant. The Defendants have counterclaimed for a declaratory judgment that OSHA's program for selection of establishments to be inspected is invalid as violative of the fourth and fifth amendments to the United States Constitution. The case was tried to the Court on July 28, 1983. The Court now issues this Opinion, which constitutes its findings of fact and conclusions of law as required by Rule 52 of the Federal Rules of Civil Procedures.

On January 26, 1982, OSHA Compliance Officer Landis Powell appeared at Hackney's plant in Enid, Oklahoma, to conduct a regularly programmed inspection of the premises. Plant manager Wayne Schwedland refused to allow that inspection, and on March 30, 1982, James Brown, III, a Supervisor Industrial Hygienist with OSHA, appeared before Magistrate Paul Lindsey to obtain an administrative search warrant. The magistrate reviewed the affidavit of Brown and other attached materials and concluded that administrative probable cause had been established. The magistrate then issued the Inspection Warrant ordering Hackney's to permit the OSHA inspection.

Brown gave the warrant to Compliance Officer Heather Hartman, who appeared at the Enid plant at 8:30 A.M. the following day. Hartman presented her credentials and the inspection warrant to Schwedland, who asked her to wait while he called Hackney's attorney. Hartman waited in the lobby until 9:30, returning to Schwedland's office only to find that she would have longer to wait. At 11:00 she called Brown, who instructed her to stand by while Schwedland determined if the inspection would be permitted. Hartman waited through the lunch period, and again called Brown at 1:00 P.M. and at 2:30 P.M. At this point Brown spoke by telephone with Schwedland, advising the plant manager that Hartman was being sent to her next inspection location. Brown further requested that Schwedland advise him when Schwedland decided if the inspection would be allowed. Hartman left the plant at this time, never having conducted the ordered inspection. At some time after 4:00 P.M., Schwedland telephoned Brown to inform him that no inspection would be allowed.

Thus, the issue before the Court is whether Hackney and Schwedland should be adjudged in contempt of court for refusal to comply with the Inspection Warrant. However, the Defendants' counterclaim raises the preliminary issue of the scope of review to be used by the Court in determining the sufficiency of the warrant issued by the magistrate. This issue arose first in the context of pretrial discovery; OSHA resisted the Defendants' attempts to discover materials other than those presented to the magistrate with the warrant application. The Defendants filed a Motion to Compel, to which OSHA responded by filing a Motion for a Protective Order. The Court referred the dispute to Magistrate Lindsey, who heard argument and ultimately foreclosed discovery on matters outside the warrant application. This order, issued September 3, 1982, was appealed to and affirmed by this Court on December 30, 1982. Thus, the Defendants were prevented from discovering materials alleged to support their counterclaim for declaratory judgment.

The issue was not yet resolved, however, as the Court permitted testimony at trial concerning matters other than those relevant to the warrant application. Now the Court must determine whether such evidence was properly admitted, and if so, whether Hackney and Schwedland can prevail on their counterclaim.

In Marshall v. Barlow's, 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), the United States Supreme Court put to rest the notion that administrative inspections could be forced upon an unwilling business without a search warrant. A problem not put to rest, however, was the question of what scope of review should be used to examine a magistrate's probable cause finding in administrative search cases. In Franks v. Delaware, 438 U.S. 154, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), the Supreme Court reaffirmed the position that review of a search warrant must be limited to examination of materials presented to the magistrate, in the absence of intentional or grossly negligent false statements made to the issuing magistrate. Although Franks involved warrant review in a criminal case, it is generally accepted that the same reasoning applies to administrative inspection warrants. See, e.g., West Point-Pepperell, Inc. v. Donovan, 689 F.2d 950, 959 (11th Cir.1982); Marshall v. Horn Seed Co., Inc., 647 F.2d 96, 100 (10th Cir. 1981). Thus, the traditional requirement that review of the warrant be confined to the "four corners" of the application is applicable to review of administrative inspection warrants.

The four corners requirement is often considered unsatisfactory in the administrative setting because it tends to preclude certain constitutional challenges during contempt proceedings. For example in Marshall v. Barlow's, the Supreme Court held that administrative probable cause could be established by showing that the selected workplace had been chosen for the inspection on the basis of an administrative plan derived from neutral sources. 436 U.S. at 321, 98 S.Ct. at 1825. Thus, the plan itself plays a key role in review of the inspection warrant. However, certain aspects of the plan not considered by the issuing magistrate in his probable cause finding might make the plan subject to challenge despite the fact that probable cause otherwise exists. If applied by the reviewing court, the four corners requirement would prohibit review on those bases. It is this apparent "Catch 22" that is highlighted by the Defendants' counterclaim in this case; they seek to challenge the OSHA plan, CPL 2.25B, because it was allegedly improperly promulgated¹ and because it has an alleged discriminatory effect. Neither allegation is one which could have been considered by the magistrate in issuing the search warrant.

Thus, the question to be answered is how one may attack the validity of an OSHA selection plan, absent some indication of invalidity within the four corners of the warrant application. It would be gross understatement to say the courts have struggled in attempting to find a satisfactory answer to that question, but two basic methods have emerged. The more recent approach is that the party named in the inspection warrant refuses to permit the inspection and raises its challenges to the plan in contempt proceedings. Some courts have allowed parties in this posture to conduct discovery and present evidence outside the four corners requirement for purposes of attacking the validity of the plan. See, e.g., Donovan v. Athenian Marble Corp., 535 F.Supp. 176, 180 (W.D. Okla.1982) (per Brett, J.). The obvious problem with this procedure is that it ignores the four corners requirement of warrant review. See, e.g., Donovan v. Gretna Ironworks, Inc., No. CIV-82-1507 (E.D.La. Aug. 24, 1983) (Magistrate's Order finding Franks inapplicable to the administrative search setting).

The second approach is that the named party allows the search and attacks the validity of the plan in subsequent citation proceedings before the OSHA Review Commission. This procedure has the advantage of allowing the concerned agency to rule on its own challenged regulation before recourse is taken to the federal courts. See Parisi v. Davidson, 405 U.S. 34, 37-8, 92 S.Ct. 815, 817-8, 31 L.Ed.2d 17 (1972). After this administrative remedy is exhausted, federal appellate court review is available pursuant to 29 U.S.C. § 660 (1982). Baldwin Metals Co., Inc. v. Donovan, 642 F.2d 768 (5th Cir.1981); In re Worksite Inspection of Quality Products, Inc., 592 F.2d 611 (1st Cir.1979). The criticism of this approach is that although the procedure protects the aggrieved party from citations based on the invalid selection plan, it does not protect against the unreasonable search itself. Weyerhauser Co. v. Marshall, 592 F.2d 272, 276 (7th Cir.1979); Marshall v. Huffhines Steel Co., 488 F.Supp. 995, 997 (N.D.Tex.1979), aff'd 645 F.2d 288 (5th Cir.1981). For this reason, some courts find this procedure appropriate only where the allegedly unreasonable search has already taken place. See, e.g., Baldwin Metals Co., Inc., 642 F.2d at 774 n. 13.

It is into this Sargasso Sea that the Court must navigate in determining the viability of the Defendants' counterclaim. The Defendants assert that the exclusive method to challenge the validity of the plan is to refuse to allow the inspection and present their case at these contempt proceedings. As has been mentioned above, this is not an exclusive remedy, but only one of two possible approaches. It devolves upon the Court to determine whether the procedure chosen by the Defendants is appropriate in the case at bar.

The Court concludes that the latter approach is preferable for purposes of the instant case. To adopt the pre-inspection approach would render the four corners requirement meaningless in review of inspection warrants.² The Court cannot conclude that the Supreme Court imposed the warrant requirement on...