Indus. Servs. Grp. v. Dobson
| Decision Date | 07 January 2022 |
| Docket Number | 1:21-cv-00090-MR-WCM |
| Parties | INDUSTRIAL SERVICES GROUP, INC., d/b/a UNIVERSAL BLASTCO, Plaintiff, v. JOSH DOBSON, in his official capacity as North Carolina Commissioner of Labor, and KEVIN BEAUREGARD, in his official Capacity as Director of the Occupational Safety and Health Division of the North Carolina Department of Labor, Defendants. |
| Court | U.S. District Court — Western District of North Carolina |
INDUSTRIAL SERVICES GROUP, INC., d/b/a UNIVERSAL BLASTCO, Plaintiff,
v.
JOSH DOBSON, in his official capacity as North Carolina Commissioner of Labor, and KEVIN BEAUREGARD, in his official Capacity as Director of the Occupational Safety and Health Division of the North Carolina Department of Labor, Defendants.
No. 1:21-cv-00090-MR-WCM
United States District Court, W.D. North Carolina, Asheville Division
January 7, 2022
MEMORANDUM AND RECOMMENDATION
W. Carleton Metcalf, United States Magistrate Judge
This matter is before the Court on Defendants' “Motions to Dismiss and for Judgment on the Pleadings” (the “Motion, ” Doc. 13), which has been referred to the undersigned pursuant to 28 U.S.C. § 636 for the entry of a recommendation.
I. Relevant Procedural History
On March 31, 2021, Plaintiff Industrial Services, d/b/a Universal Blastco (“Plaintiff”) filed its Complaint against Josh Dobson, who is the North Carolina Commissioner of Labor, and Kevin Beauregard, who is the Director of the
Occupational Safety and Health Division of the North Carolina Department of Labor (“NC OSHA”). Doc 1, at ¶¶ 8, 9.
On June 4, 2021, Defendants filed an Answer. Doc. 12.
That same day, Defendants filed their Motion with a supporting memorandum. Docs. 13, 13-1. Plaintiff subsequently responded in opposition and Defendants replied. Docs. 14, 15. A hearing on the Motion was conducted on December 9, 2021.
II. Plaintiff's Allegations
Plaintiff's Complaint alleges as follows:
A. Allegations Regarding OSHA and the North Carolina State Plan
The federal Occupational Safety and Health Act of 1970 (“OSH Act”) created a regulatory scheme for ensuring safe and healthy working conditions. The OSH Act created the federal Occupational Safety and Health Administration (“OSHA”) to administer and enforce the OSH Act. Doc. 1 at ¶ 10.
The OSH Act “encourage[ed] the States to assume the fullest responsibility for the administration and enforcement of their occupational safety and health laws.” Id. at ¶ 11 (quoting 29 U.S.C. § 651(b)(11)). To that end, a state may develop a “State plan” and submit it to OSHA for approval to assume responsibility for the development and enforcement of safety and health standards within the state. Id. at ¶ 11. A “State plan” must provide
standards “at least as effective in providing safe and healthful employment” as OSHA's standards as well as “a program for the enforcement of the State standards which is, or will be, at least as effective as that provided in the Act….” Id. at ¶¶ 11 & 12 (quoting 29 U.S.C. § 667(c)(2); 29 C.F.R. § 1902.3(d)(1)).
Once OSHA approves a “State plan, ” it continues to evaluate the manner in which the state is carrying out its plan; if OSHA determines that the state has failed to “comply substantially with any provision of the State plan (or assurance contained therein), ” OSHA may withdraw its approval. Id. at ¶ 13 (quoting 29 U.S.C. § 667(f)).
North Carolina operates an OSHA-approved State plan. Id. at ¶ 14. Defendants administer North Carolina's State plan. Id. at ¶ 1.
Plaintiff alleges that Defendants are administering the North Carolina State plan in violation of the OSH Act. Id. Specifically, the OSH Act prohibits “us[ing] the results of enforcement activities, such as the number of citations issued or penalties assessed, to evaluate employees directly involved in” enforcing occupational safety and health standards and also prohibits “impos[ing] quotas or goals with regard to the results of such activities.” Id. at ¶ 2 (quoting 29 U.S.C. § 657(h)). Plaintiff contends that the job performance of NC OSHA compliance officers is evaluated based on, among other things, “the number of inspections opened and closed, and the number of citations issued
and upheld” - an incentivization policy or practice that “directly violates and is preempted by § 657(h).” Id. at ¶ 2.
B. Allegations Regarding the Citations
In September 2020, Plaintiff provided laminating services at the Evergreen Packaging paper mill facility in Canton, North Carolina. Id. at ¶ 29.
On September 21, 2020, NC OSHA received a report of work-related fatalities at the facility and “opened inspections of Evergreen Packaging, LLC…and [Plaintiff] related to that incident.” Id. at ¶ 30.[1]
Plaintiff contends that on March 16, 2021, “under its improper program for incentivizing inspectors to issue citations, ” NC OSHA issued thirteen “citation items” to Plaintiff related to the September 21, 2020 incident, including six that were related to a single-entry permit. Id. at ¶ 33.
Plaintiff asserts that without this Court's intervention, NC OSHA will continue its improper enforcement activities, specifically, its practice of “illegally incentivizing” its compliance officers to issue citations. Id. at ¶ 34.
C. Plaintiff's Claims
The Complaint asserts the following claims:
1. For a declaration pursuant to 28 U.S.C. §§ 2201 and 2202 that Defendants' official policy or practice of evaluating compliance officers' performance based on the number of citations issued or penalties assessed violates § 657(h) of the OSH Act and “has placed Defendants'
administration of the North Carolina State Plan out of compliance with the stated terms of the Plan itself”;
2. For a declaration pursuant to 28 U.S.C. §§ 2201 and 2202 that Defendants' policy or practice of evaluating compliance officers' performance based on the number of citations issued or penalties assessed is preempted by § 657(h) of the OSH Act; and
3. A claim pursuant to 42 U.S.C. § 1983 for violation of the Due Process Clause of the Fourteenth Amendment.
Plaintiff also seeks a preliminary and permanent injunction prohibiting Defendants from engaging in enforcement activities against Plaintiff or other employers who have been inspected or received citations in violation of § 657(h).
III. Legal Standards
Defendants have moved to dismiss all of Plaintiff's claims, arguing that this Court lacks federal subject matter jurisdiction, that Plaintiff's claims are barred by sovereign immunity, and that Plaintiff has failed to its exhaust administrative remedies. Additionally, Defendants contend that Plaintiff has failed to state a claim and failed to join a necessary party.[2]
A. Rule 12(b)(1)
A motion to dismiss made pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure addresses whether the court has subject-matter jurisdiction to hear the dispute. See Fed.R.Civ.P. 12(b)(1). “Subject matter jurisdiction is
a threshold question that relates to the power of the court to hear a case and must be resolved before a court addresses the merits of a case.” Cap. Associated Indus., Inc. v. Cooper, 129 F.Supp.3d 281, 299 (M.D. N.C. 2015) (citing Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 479-80 (4th Cir. 2005). Here, Plaintiff bears the burden of proving that subject matter jurisdiction exists. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982).
B. Rule 12(b)(6)
When considering a motion made pursuant to Rule 12(b)(6), the court accepts the allegations in the complaint as true and construes them in the light most favorable to the plaintiff. See Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009); Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009).
The court, however, is not required to accept “legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement.” Consumeraffairs.com, 591 F.3d at 255; see Giacomelli, 588 F.3d at 192. That is, while “detailed factual allegations” are not required, the complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); see Consumeraffairs.com, 591 F.3d at 255. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);
accord Consumeraffairs.com, 591 F.3d at 255. In short, the well-pled factual allegations must move a plaintiff's claim from conceivable to...
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