Marshall v. Huffhines Steel Co.

• Decision Date: 27 November 1979
• Docket Number: No. CA 3-79-0842-G.,CA 3-79-0842-G.
• Citation: 488 F. Supp. 995
• Parties: Ray MARSHALL, Secretary of Labor v. HUFFHINES STEEL COMPANY.
• Court: U.S. District Court — Northern District of Texas

488 F. Supp. 995

Ray MARSHALL, Secretary of Labor v. HUFFHINES STEEL COMPANY.

No. CA 3-79-0842-G.

United States District Court, N. D. Texas, Dallas Division.

November 27, 1979.

Barbara G. Heptig, Dallas, Tex., Carin Ann Clauss, Washington, D. C., James E. White, Jack F. Ostrander, U. S. Dept. of Labor, Dallas, for plaintiff.

Robert E. Rader, Jr., McCarty & Wilson, Ennis, Tex., for defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

PATRICK E. HIGGINBOTHAM, District Judge.

This is an action by the Secretary of Labor seeking an order holding defendant in contempt of this court for its refusal to comply with an administrative inspection warrant issued pursuant to the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq. Defendant asserts that the warrant is invalid inasmuch as it was obtained ex parte and without an adequate showing of probable cause, and that the scope of the warrant is overly broad.¹

I. Facts.

On May 30, 1979, Occupational Safety and Health Administration (hereinafter "OSHA") Safety Compliance Officer Susan J. Darland attempted to conduct an inspection of the premises of Huffhines Steel Company in Dallas, Texas. This attempt at inspection had been prompted by a written complaint by a Huffhines employee alleging numerous safety hazards within the Huffhines plant. Ms. Darland advised Huffhines of her intention to conduct a complete safety inspection, pursuant to the complaint, of the three shops and one office building which comprise the Huffhines facility. Ms. Darland was refused permission to inspect by Alan Huffhines, president of Huffhines Steel.

On June 21, 1979, Ms. Darland, following consultation with the regional office of the Solicitor of Labor, filed an ex parte application with the United States Magistrate for an administrative inspection warrant. Ms. Darland submitted an affidavit to the Magistrate setting forth the above facts together with a list of the alleged safety hazards. The affidavit provided the Magistrate with substantially all the information submitted to OSHA by the Huffhines employee on OSHA's official complaint form, with the exception of the location of the alleged hazards within the Huffhines facility.

The Magistrate issued the requested warrant on the form set forth by this court in its Miscellaneous Order No. 23 of December 4, 1978. On June 25, 1979, George Davis, another OSHA Safety Compliance Officer, appeared at Huffhines, presented the inspection warrant to its president, and was refused admission. The Secretary then brought this action seeking to have Huffhines held in contempt. Defendant has responded to this court's show cause order by presenting the defenses set forth above. Defendant has also counterclaimed for declaratory and injunctive relief.

II. Exhaustion of Administrative Remedies.

The Secretary has raised a threshold question which must be resolved before turning to the merits of defendant's arguments. He argues that defendant's counterclaim must be dismissed and its defenses disregarded because defendant has an adequate administrative remedy by which the questions which it raises may be resolved. Citing In Re Worksite Inspection of Quality Products, Inc., 592 F.2d 611 (1st Cir. 1979), and Blocksom & Co. v. Marshall, 582 F.2d 1122 (7th Cir. 1978), he argues that defendant must submit to inspection and then challenge the Secretary's entitlement to an inspection warrant in any subsequent enforcement proceeding which OSHA might commence.

The cases cited by the Secretary in support of this contention are procedurally distinguishable. In the Quality Products case, supra, an inspection had already taken place, and the employer sought to retroactively quash the warrant, thereby prohibiting any future use of the evidence obtained through the inspection. The First Circuit rightly held that the proper forum in which to urge suppression of the evidence was the statutory enforcement proceeding, if any, instituted by OSHA, or any appeal from that proceeding in the court of appeals. Likewise, in the Blocksom & Co. case, supra, the employer refused to allow a second inspection after permitting the first, and brought suit to declare both inspections illegal. The Seventh Circuit held that the employer could not "assert its defenses to the Secretary's citations issued as a result of the first inspection or its generalized interest in the Act's nonenforcement," 582 F.2d at 1124, in the district court, and that the proper mode of review was through the Occupational Safety & Health Review Commission and ultimately through the court of appeals. The court expressly noted, however, that the employer could assert its defenses in a proceeding brought by the Secretary seeking an adjudication of civil contempt for failure to honor the second warrant.

The Secretary's suggested administrative alternatives to district court review provide no relief against the inspection itself. This court has already noted in an analogous context that "independent of any adverse consequences which might flow from an inspection, the right of a business to be free of searches not authorized by law is worthy of judicial protection." State Fair of Texas v. United States Consumer Product Safety Commission, No. CA-3-79-1367-G (N.D.Tex. Nov. 3, 1979) (memorandum order denying motion for preliminary injunction). This holding echoes the language of the Seventh Circuit in Weyerhaeuser Co. v. Marshall, 592 F.2d 373 (7th Cir. 1979), where it was stated that

The injury resulting from an illegal inspection is clearly separate from injury relating to the citations, as the former would exist even if OSHA had found no violations of the Act. A company has a fourth amendment right to conduct its business free of unreasonable administrative inspections. Citing Michigan v. Tyler, 436 U.S. 499, 504-05, 98 S.Ct. 1942, 1947, 56 L.Ed.2d 486 (1978); Barlow's, supra; and See v. Seattle, 387 U.S. 541, 87 S.Ct. 1737, 18 L.Ed.2d 943 (1967).

592 F.2d at 376. Accord, Cerro Metal Products v. Marshall, 467 F.Supp. 869, 882 (E.D. Pa.1979). In the absence of a showing that OSHA provides an adequate forum in which the employer may contest the search before it takes place, there is no administrative remedy to exhaust, and the Secretary's contentions on this point must be rejected.

III. Authority of the Secretary to Obtain an Ex Parte Warrant.

Defendant's first contention is that the Secretary and his agents have no authority to obtain an administrative inspection warrant ex parte and without notice to the party under investigation, as was done in the present case. This argument turns on the proper interpretation to be given the Secretary's inspection regulations as they existed prior to December 22, 1978, and on the effectiveness of an amendment to those regulations promulgated on that date.

A. The Secretary's Authority Under 29 C.F.R. § 1903.4 Before Its Amendment.

Prior to December 22, 1978, and at the time of the Supreme Court's decision in Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), the Secretary's regulations provided that "upon the refusal to permit a Compliance Safety and Health officer, in the exercise of his official duties, to enter without delay and at reasonable times any place of employment or any place therein, . . . the Regional Solicitor . . . shall promptly take appropriate action, including compulsory process, if necessary." 29 C.F.R. § 1903.4 (emphasis supplied). The question of whether the italicized language includes an ex parte administrative inspection warrant forms a major area of dispute between the parties, echoing the disagreement among the few cases to have considered the question.

The starting point for any inquiry into the meaning of the Secretary's unamended regulation must be the Barlow's case itself. In Barlow's, Justice White held for the Court that 29 U.S.C. § 657(a), the provision under which inspection was sought both in Barlow's and in the instant case, was unconstitutional insofar as it purported to authorize a nonconsensual warrantless search. In so holding, the Court dealt with the regulation quoted above at some length. In response to the contention that advance notice to employers of impending searches would permit concealment of violations, thereby frustrating the purposes of the Act, the Court noted that there was no indication that the Secretary's practice of requiring compliance officers to seek a warrant after being refused admission had had such an effect. The Court went on: "Indeed, the kind of process sought in this case and apparently anticipated by the regulation provides notice to the business operator." 436 U.S. at 318, 98 S.Ct. at 1823 (emphasis supplied). That the Court appeared to view the regulation as it then stood as requiring notice to the employer prior to issuance of a warrant is further indicated by the sentences which follow:

If this safeguard endangers the efficient administration of OSHA, the Secretary should never have adopted it, particularly when the Act does not require it. Nor is it immediately apparent why the advantages of surprise would be lost if, after being refused entry, procedures were available for the Secretary to seek an ex parte warrant and to reappear at the premises without further notice to the establishment being inspected.

436 U.S. at 319-20, 98 S.Ct. at 1823-24 (emphasis supplied). The Court indicated in a footnote that a regulation expressly providing for ex parte warrants would be within the Secretary's statutory authority. 436 U.S. at 320 n.15, 98 S.Ct. at 1824 n.15.

That the Court thus viewed the regulation as not authorizing ex parte warrants seems clear. The Court's view on this point was no doubt influenced by the Solicitor General's representations in his jurisdictional statement and at oral argument to the effect that ex parte warrants were not currently being sought.² While there is considerable uncertainty as to whether the Solicitor General was referring to the...