Federal Casting Div., Chromalloy American Corp. v. Donovan

• Decision Date: 26 July 1982
• Docket Number: 81-2103,Nos. 81-2026,s. 81-2026
• Citation: 684 F.2d 504
• Parties: 10 O.S.H. Cas.(BNA) 1801, 1982 O.S.H.D. (CCH) P 26,158 FEDERAL CASTING DIVISION, CHROMALLOY AMERICAN CORPORATION, Plaintiff-Appellant, Cross-Appellee, v. Raymond J. DONOVAN, Secretary of Labor, et al., Defendants-Appellees, Cross-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 504

684 F.2d 504

10 O.S.H. Cas.(BNA) 1801, 1982 O.S.H.D. (CCH)

P 26,158

FEDERAL CASTING DIVISION, CHROMALLOY AMERICAN CORPORATION, Plaintiff-Appellant, Cross-Appellee, v. Raymond J. DONOVAN, Secretary of Labor, et al.,

Defendants-Appellees, Cross-Appellants.

Nos. 81-2026, 81-2103.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 22, 1982.

Decided July 20, 1982.

As Amended July 26, 1982.

Clifford B. Buelow, Milwaukee, Wis., for plaintiff-appellant (Buelow).

Charles I. Hadden, Washington, D.C., for defendants-appellees (Hadden).

Before SPRECHER ^* and CUDAHY, Circuit Judges, and DOYLE, Senior District Judge. ^**

CUDAHY, Circuit Judge.

This case concerns the validity of an inspection by the Occupational Safety and Health Administration ("OSHA") conducted more than two years after the warrant for the inspection was issued. In light of the particular facts of this case, we affirm the district court's decision finding that the inspection was valid.

I

On April 20, 1977, a federal magistrate issued an inspection warrant to OSHA, permitting it to inspect the foundry of Chromalloy American Corporation's Federal Casting Division ("Federal Casting"). Probable cause for the warrant was based upon the National Emphasis Program (the "NEP"), an administrative inspection plan developed by OSHA to inspect the nation's foundries. The warrant authorized a health and safety inspection, and, by its terms, was to be returned within ten days. When inspectors arrived at Federal Casting's foundry on April 20, however, the company refused to permit the inspection. OSHA returned the unexecuted warrant to the magistrate and, on May 17, 1977, the Secretary of Labor (the "Secretary") initiated civil contempt proceedings against Federal Casting in the district court for failure to comply with the warrant.

On July 12, 1977, the district court found Federal Casting in civil contempt. Marshall v. Chromalloy American Corp., Federal Malleable Division, 433 F.Supp. 330 (E.D.Wis.1977). The court in its contempt and purge order directed the company to permit OSHA to conduct the inspection authorized by the warrant "forthwith." The court rejected Federal Casting's claims that federal magistrates were not empowered to issue OSHA inspection warrants, that the warrant lacked probable cause and that the scope of the warrant was unconstitutionally broad.

Federal Casting filed a notice of appeal on July 19, 1977, and moved for a stay of the district court's order pending appeal. The district court issued a temporary stay, but then dissolved it on July 25, 1977. OSHA returned to Federal Casting's foundry the next day and, pursuant to the district court's purge order, began a safety and health inspection. The inspection was interrupted, however, on July 29, 1977, when this court issued a temporary stay of the district court order. At that time, the safety portion of the inspection, but not the health portion, had been completed.

The stay remained in effect until January 2, 1979, when this court issued a decision rejecting Federal Casting's objections to the warrant in issue. Marshall v. Chromalloy American Corp., Federal Malleable Division, 589 F.2d 1335 (7th Cir. 1979). ¹ Federal Casting's petition for rehearing was denied on March 14, 1979.

On March 26, 1979, Federal Casting filed for a stay of this court's mandate pending review by the Supreme Court. This motion was denied on April 9, 1979. Federal Casting filed a petition for a writ of certiorari on June 12, 1979, which was denied on October 2, 1979. Chromalloy American Corp., Federal Malleable Division v. Marshall, 444 U.S. 884, 100 S.Ct. 174, 62 L.Ed.2d 113 (1979).

OSHA returned to finish its inspection of the foundry on December 3, 1979. The company refused to permit the inspection, however, alleging that the warrant was no longer valid. The inspectors insisted, on the other hand, that the inspection was pursuant to the district court's contempt order, not the warrant. Following a telephone conversation between the parties, in which OSHA threatened to bring contempt proceedings, Federal Casting permitted the inspection to be completed "under protest" beginning December 11, 1979. As a result of the inspection, OSHA issued two citations, which were presented to the Occupational Safety and Health Review Commission.

On August 7, 1980, Federal Casting filed this action in district court, claiming that the December 11, 1979, inspection had violated Federal Casting's Fourth Amendment rights. The company sought an order declaring that the warrant had been invalid when executed, prohibiting the use of the evidence obtained in the inspection, quashing the citations which had issued and enjoining further administrative proceedings before the Review Commission.

Federal Casting and the Secretary of Labor filed cross-motions for summary judgment. The company argued that, because the NEP had been abolished since the initial issuance of the warrant, there was no probable cause for the inspection. Further, the company claimed that the warrant had, by its items, expired ten days after it was issued and therefore was not a valid basis for the inspection. The Secretary argued, however, that abolition of the NEP did not render the inspection unconstitutional because the inspection had originally been sought pursuant to the plan. The passage of time, due in large part to the company's actions, ought not to serve to invalidate an inspection which was valid in the first instance.

The district court granted the Secretary's motion for summary judgment on May 28, 1981. Federal Casting Division, Chromalloy American Corp. v. Donovan, 514 F.Supp. 617 (E.D.Wis.1981). The court found that because the warrant had been issued pursuant to a general administrative inspection plan derived from neutral sources, the later abandonment of the plan did not render the warrant invalid. The court found that the essential purpose of the Occupational Safety and Health Act ("the Act"), 29 U.S.C. § 651 et seq., would be defeated if an employer could avoid inspection under a general administrative inspection plan by first litigating the validity of the warrant and then, having lost, litigating the issue whether the warrant had become stale in the meantime. Further, because the warrant had initially been issued pursuant to neutral criteria, the court reasoned that it was less likely to become stale than a warrant based on employee complaints of specific workplace hazards. Federal Casting appeals this decision.

II

Initially, we face a jurisdictional question. The Secretary argues that, because Federal Casting failed to exhaust its administrative remedies, we should not consider its Fourth Amendment claim. The Secretary admits that in order to reach such a result we would have to overrule our decision in Weyerhaeuser Co. v. Marshall 592 F.2d 373 (7th Cir. 1979). ² We decline this invitation. While there has not been universal agreement with Weyerhaeuser, ³ the Secretary has not convinced us that the reasoning of that decision was in error. Here, as in Weyerhaeuser, there is no need for agency development of the record to aid in determining whether a Fourth Amendment violation has occurred, and no agency decision can render the constitutional issue moot. Weyerhaeuser Co. v. Marshall, 592 F.2d at 376. Thus, the purposes underlying the exhaustion doctrine would not be served by precluding Federal Casting from pursuing this action. See Neavear v. Schweiker, 674 F.2d 1201, 1203 (7th Cir. 1982).

III

We turn, therefore, to an examination whether OSHA violated the Fourth Amendment by completing its inspection of Federal Casting's foundry on December 11, 1979. Federal Casting argues that the inspection was not supported by probable cause because the administrative program on which the warrant was based was no longer in existence at the time the inspection was completed. In the alternative, Federal Casting argues that probable cause had dissipated because OSHA failed to complete its inspection in a timely manner. We reject both of these contentions and uphold the district court's finding that, as a matter of law, the inspection was constitutionally valid.

It is well-settled that administrative inspections of business establishments must conform to the Fourth Amendment. Marshall v. Barlow's, Inc., 436 U.S. 307, 311, 98 S.Ct. 1816, 1819, 56 L.Ed.2d 305 (1978); Michigan v. Tyler, 436 U.S. 499, 506, 98 S.Ct. 1942, 1948, 56 L.Ed.2d 486 (1978). The Fourth Amendment requires a finding of probable cause to support an administrative search. See v. City of Seattle, 387 U.S. 541, 545, 87 S.Ct. 1737, 1740, 18 L.Ed.2d 943 (1967). Thus, a warrant supported by probable cause is required for a non-consensual OSHA inspection. Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978). It is clear, however, that, to support an OSHA search, "(p)robable cause in the criminal sense is not required." Marshall v. Barlow's, Inc., 436 U.S. 307, 320, 98 S.Ct. 1816, 1824, 56 L.Ed.2d 305 (1978). Accord, In re Establishment Inspection of Gilbert & Bennett Manufacturing Co., 589 F.2d 1335, 1339 (7th Cir. 1979). When an agency seeks to conduct an administrative inspection, "probable cause justifying the issuance of a warrant may be based not only on specific evidence of an existing violation but also on a showing that 'reasonable legislative or administrative standards for conducting an ... inspection are satisfied with respect to a particular (establishment).' " Marshall v. Barlow's, Inc., 436 U.S. 307, 320, 98 S.Ct. 1816, 1824, 56 L.Ed.2d 305 (1978) (footnote omitted) (quoting Camara v. Municipal Court, 387 U.S. 523, 538, 87 S.Ct. 1727, 1735, 18 L.Ed.2d 930 (1967)). "(R)easonableness is ... the ultimate standard." Camara v. Municipal Court, 387 U.S. 523, 539, 87 S.Ct. 1727, 1736, 18 L.Ed.2d 930 (1967). Thus, administrative probable cause is a flexible requirement, balancing "the public interest in the inspection (against) the...