Insituform Tech. v. Employment Appeal Bd.

• Decision Date: 16 February 2007
• Docket Number: No. 05-0740.,05-0740.
• Citation: 728 N.W.2d 781
• Parties: INSITUFORM TECHNOLOGIES, INC., Appellant, v. EMPLOYMENT APPEAL BOARD, a Unit of the Department of Inspections and Appeals, and Labor Commissioner, Appellees.
• Court: Iowa Supreme Court

728 N.W.2d 781

INSITUFORM TECHNOLOGIES, INC., Appellant, v. EMPLOYMENT APPEAL BOARD, a Unit of the Department of Inspections and Appeals, and Labor Commissioner, Appellees.

No. 05-0740.

Supreme Court of Iowa.

February 16, 2007.

Rehearing Denied March 27, 2007.

Mark A. Lies II and James L. Curtis of Seyfarth Shaw, LLP, Chicago, Illinois, and Joan M. Fletcher of Dickinson, Mackaman, Tyler & Hagen, P.C., Des Moines, for appellant.

Rick Autry, Des Moines, and Gail Sheridan-Lucht, Des Moines, for appellees.

WIGGINS, Justice.

The sewer-relining accident causing the Iowa occupational safety and health (IOSH) bureau to cite Insituform Technologies, Inc. for nine serious violations and eleven willful violations of the IOSH standards is the same accident described in City of Des Moines v. Employment Appeal Board, 722 N.W.2d 183, 187-88 (Iowa 2006). As a result of that accident, two people died and five people were seriously injured. The IOSH bureau proposed $38,250 in penalties for the nine serious violations and $770,000 in penalties for the eleven willful violations for a total of $808,250 in penalties.

Insituform filed a notice of contest to the citation and the matter was transferred to the employment appeal board (Board). The Board assigned the matter to an administrative law judge (ALJ) for a hearing. The ALJ applied the general industry permit-required confined spaces standards, as found in 29 C.F.R. section 1910.146. He affirmed most of the penalties, but modified, dismissed, and combined some of the others. The ALJ reduced the penalties from $808,250 to $158,000.

Insituform appealed the decision of the ALJ to the Board. The Board adopted the ALJ's findings of fact and the ALJ's determination that the general industry permit-required confined spaces standards rather than the construction employment standards applied to the work done by Insituform. The Board disagreed with the ALJ's dismissal of some violations and his reduction of the penalties. The Board reinstated all but one of the serious violations and all but one of the willful violations and assessed a total penalty of $733,750.

Insituform filed a petition for judicial review. The district court affirmed the Board's decision applying the general industry permit-required confined spaces standards rather than the construction employment standards. However, the district court reinstated the ALJ's assessment and grouping of the violations and penalties. The total penalty assessed against Insituform by the district court was $158,000.

Insituform, the Board, and the commissioner appealed the decision of the district court. We transferred the case to the court of appeals. Relying on its decision in City of Des Moines v. Employment Appeal Board, No. 04-1763, 2006 WL 127955, at *4-*5 (Iowa Ct.App. Jan.19, 2006), the court of appeals held the general industry permit-required confined spaces standards were not applicable. The court of appeals then dismissed all but two of the serious violations and all of the willful violations because the commissioner based these violations on the general industry permit-required confined spaces standards. The court of appeals affirmed the district court's combination of the penalties for the remaining serious violations reducing the total penalty to $4500.

The Board and the commissioner sought further review, which we granted.

I. Issues.

There are four issues on appeal: (1) whether the Board erred in applying the general industry permit-required confined spaces standards to the work done by Insituform; (2) whether the application of these standards is constitutional; (3) whether substantial evidence supports the Board's determination that Insituform violated the standards; and (4) whether the district court erred in combining the civil penalties assessed by the Board.

II. Scope of Review.

The Iowa Administrative Procedure Act governs a district court's review of administrative action. IBP, Inc. v. Harpole, 621 N.W.2d 410, 414 (Iowa 2001) (citing Iowa Code § 17A.19(8)). When reviewing the decision of the district court's judicial review ruling, we determine if we would reach the same result as the district court in our application of the Iowa Administrative Procedure Act. City of Des Moines v. Employment Appeal Bd., 722 N.W.2d 183, 189-90 (Iowa 2006). If a decision of the agency is incorrect under a ground specified in the Act, and a party's substantial rights have been prejudiced, the district court may reverse or modify an agency's decision. Iowa Code § 17A.19(10) (2001). As we discuss each issue raised on appeal, we will note the applicable scope of review.

III. Analysis.

A. Whether the Board erred in applying the general industry permit-required confined spaces standards to the work done by Insituform. Because the legislature gave the labor commissioner the authority to interpret the IOSH standards, we will only reverse the agency's interpretation of its standards if it is "irrational, illogical, or wholly unjustified." City of Des Moines, 722 N.W.2d at 193-94 (citing Iowa Code §§ 17A.19(10)(l), (11)(c)).

In City of Des Moines, we agreed with the Board's interpretation that in order to determine whether the general industry permit-required confined spaces standards or the construction employment standards apply, the Board must determine, on a case-by-case basis, whether the task being performed is maintenance or repair.¹ Id. at 194. If the Board determines the task is maintenance, then the general industry permit-required confined spaces standards apply. Id. If the Board determines the task is repair, then the construction employment standards apply. Id. We also stated, "[i]f the question is close as to whether the work constitutes repair or maintenance, the agency should apply the standards that provide more protection to the employees, depending on the hazard." Id. In the present case, the ALJ found the general industry permit-required confined spaces standards applied to the sewer-relining project, and interpreted these standards using the same analysis as we did in City of Des Moines. The Board adopted these findings as its own. Because the ALJ, and hence the Board, employed the proper analysis to interpret the applicable standards, the Board's interpretation was not irrational, illogical, or wholly unjustifiable. Accordingly, we will not reverse the Board's interpretation.

As a case-by-case analysis of the facts is necessary to determine whether the work being performed is maintenance or repair, it is necessary for us to determine if substantial evidence supports the Board's analysis and finding that the work done in the sewer was maintenance. If substantial evidence supports the Board's findings, these findings are binding on us. United Fire & Cas. Co. v. St. Paul Fire & Marine Ins. Co., 677 N.W.2d 755, 759 (Iowa 2004).

In City of Des Moines, we held substantial evidence supported the Board's decision that the work done by Insituform on the sewer project was maintenance; therefore, the general industry permit-required confined spaces standards were applicable to that work. City of Des Moines, 722 N.W.2d at 194-95. The record in this case contains substantially the same evidence as was introduced in City of Des Moines. Consequently, for the reasons stated in City of Des Moines, we find substantial evidence exists in this record to affirm the Board's decision that the work done by Insituform on the sewer project is governed by the IOSH general industry permit-required confined spaces standards.

B. Whether the application of the general industry permit-required confined spaces standards is constitutional. When a party raises a constitutional issue in an appeal of agency action, our review is de novo. ABC Disposal Sys., Inc. v. Dep't of Natural Res., 681 N.W.2d 596, 605 (Iowa 2004). Thus, we apply a de novo review to Insituform's claim that the Board's application of the general industry permit-required confined spaces standards is unconstitutional.

Insituform claims the commissioner failed to provide fair warning and "prior clear regulatory guidance to Insituform and others" indicating when an employer is subject to the specific requirements of the general industry permit-required confined spaces standards. Insituform states because of this lack of fair warning and the vagueness contained in the standards, the commissioner's application of the general industry permit-required confined spaces standards to Insituform violates the Due Process Clause of both the United States Constitution and the Iowa constitution.

Due process requires that "no person shall be deprived of life, liberty, or property, without due process of law." Iowa Const. art. I, § 9; U.S. Const. amends. V, XIV, § 1. Both the federal and state Due Process Clauses prohibit vague statutes. State v. Todd, 468 N.W.2d 462, 465 (Iowa 1991). A civil statute is unconstitutionally vague when the language of the statute fails to convey a definite warning of the proscribed conduct. ABC Disposal Sys., Inc., 681 N.W.2d at 605. A statute is not unconstitutionally vague if its meaning can be ascertained by reference to "generally accepted and common meaning of words used, or by reference to the dictionary, related or similar statutes, the common law, or previous judicial constructions." Id. "To avoid a rule from unduly restricting the regulation of certain matters, a certain degree of indefiniteness is necessary." Id. Finally, "[t]here is a presumption of constitutionality and a litigant can only rebut this presumption by `negating every reasonable basis on which the statute can be sustained.'" Id. (citation omitted).

Insituform argues it was unable to identify with "`ascertainable certainty' that the Commissioner expected it to conform to the more detailed requirements of the general industry confined spaces standards." The commissioner argues, as this court found in City of Des Moines, Insituform was not engaged in the construction of new...