Reich v. Arcadian Corp.

• Decision Date: 28 April 1997
• Docket Number: No. 96-60126,96-60126
• Citation: 110 F.3d 1192
• Parties: , 17 O.S.H. Cas. (BNA) 1929, 1997 O.S.H.D. (CCH) P 31,311 Robert B. REICH, Secretary of Labor, Petitioner, v. ARCADIAN CORPORATION; and Occupational Safety and Health Review Commission, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1192

110 F.3d 1192

65 USLW 2722, 17 O.S.H. Cas. (BNA) 1929,

1997 O.S.H.D. (CCH) P 31,311

Robert B. REICH, Secretary of Labor, Petitioner, v. ARCADIAN CORPORATION; and Occupational Safety and Health Review Commission, Respondents.

No. 96-60126.

United States Court of Appeals,Fifth Circuit.

April 28, 1997.

Bruce Foster Justh, Thomas S. Williamson, Jr., Ann S. Rosenthal, United States Department of Labor, Office of the Solicitor, Washington, DC, for Petitioner.

Stephen Charles Yohay, Arthur G. Sapper, McDermott, Will & Emery, Washington, DC, for Arcadian Corporation.

Ray H. Darling, Executive Secretary, Occupational Safety Health Administration, Washington, DC, for Occupational Safety and Health Review Commission.

Jeremiah A. Collins, George H. Cohen, Bredhoff & Kaiser, Washington, DC, Jonathan P. Hiatt, Washington, DC, for American Federation of Labor and Congress of Industrial Organization, Amicus Curiae.

Robert P. Davis, Washington, DC, Stephen A. Bokat, Mona C. Zeiberg, Washington, DC, for Chamber of Commerce of the United States of America (Chamber), Amicus Curiae.

Richard Abbott Samp, Washington, DC, for Washington Legal Foundation, Amicus Curiae.

Robert E. Williams, Daniel V. Yager, Washington, DC, Susan S. Nussbaum, McGuiness & Williams, Washington, DC, for Labor Policy Assn, Amicus Curiae.

Petition for Review of a Final Order of the Occupational Safety and Health Review Commission.

Before POLITZ, Chief Judge, and WIENER and STEWART, Circuit Judges.

STEWART, Circuit Judge:

Today we interpret the meaning of the General Duty Clause of the Occupational Safety and Health Act of 1970 (OSH Act) (29 U.S.C. §§ 651-678). This case presents the question of whether the Secretary of Labor (Secretary) was correct when he decided to

fine Arcadian Corporation (Arcadian) on a per-employee basis for violating the Clause. The Occupational Safety and Health Review Commission (Commission) reversed the Secretary's decision, holding that the unit of prosecution under the Clause is the condition that poses a hazard to employees, and not the affected employee(s). The Secretary filed this petition for review. We deny the petition and hold that the General Duty Clause unambiguously provides that the violative condition, not the employee, is the unit of prosecution.

BACKGROUND

Arcadian Corporation (Arcadian) manufactures fertilizer at a plant in Lake Charles, Louisiana. A terrible accident occurred on July 28, 1992. That day, a urea reactor at the plant exploded, scattering the reactor and its contents over a 600-acre area. The reactor's 19,000 pound steel head was blown 500 feet, and ammonia and carbon dioxide, heated to 370 oF, were released into the atmosphere. According to the Secretary, Arcadian had detected leaks in the liner of the reactor's pressure vessel prior to the explosion and failed to take steps to eliminate the hazard, such as shutting down the reactor, implementing a program to monitor the vessel's leak detection system, and assuring that critical welds were performed according to industry standards and design specifications. Eighty-seven Arcadian employees were exposed to the danger of being struck by flying debris, suffering heat and chemical burns, and asphyxiation by toxic gases.

PROCEDURAL HISTORY

In January 1993, the Occupational Safety and Health Administration (OSHA) cited Arcadian for violations of the OSH Act. The Secretary of Labor argued that Arcadian willfully violated the OSH Act's General Duty Clause, which requires employers to provide a place of employment free from hazards that cause or are likely to cause death or serious physical harm to employees. 29 U.S.C. § 654(a)(1). Citation 2, Item 1 alleged that Arcadian had failed to provide Mary Poullard Smith with safe employment because the catastrophic explosion in the pressure vessel constituted a violation of the General Duty Clause. OSHA alleged that the violation was willful and proposed a penalty of $50,000 and several other corrective measures. ¹ Items 2 through 87 of Citation 2 were identical to Item 1 except for the identity of the employee exposed to the hazard. When all was said and done, Arcadian was assessed a penalty of $4,350,000.

Pursuant to the OSH Act, Arcadian contested the citations before an administrative law judge (ALJ) on the ground that the unit of prosecution for violating the General Duty Clause is the violative condition, not the employee or employees exposed to that condition. After some discovery, Arcadian moved for partial summary judgment and requested that Items 2 through 87 be vacated and their allegations consolidated with Item 1. The Secretary of Labor filed a cross-motion for summary judgment. At the time the motions were filed, the record consisted essentially of the citations and a deposition transcript of Raymond Donnelly, Director of OSHA's Office of General Industry Compliance Assistance. Donnelly provided uncontradicted evidence that the number 87 was a "multiplier" which represented the number of employees exposed to a single hazardous condition. He admitted that Arcadian was only required to correct the condition once, not 87 times.

The ALJ sided with Arcadian, holding that Arcadian's failure to properly inspect and maintain the reactor was a single course of conduct that could support only one violation of the General Duty Clause. The Occupational Safety and Health Review Commission (Commission) affirmed the ALJ. In a 2-1 decision, the majority concluded that the General Duty Clause unambiguously provided that employers should be fined on a per- The Chairman of the Commission dissented. He argued that the Commission had upheld violation-by-violation citations in other cases, including per-employee citations, under various OSH Act standards. In his opinion, the permissibility of such citations depends on the language of the cited provision. He concluded that the Secretary's interpretation was compatible with the Act and did not conflict with the plain language of the General Duty Clause. The Chairman also stated that although the Secretary's interpretations of the OSH Act are not generally entitled to deference from the Commission, deference was due here because "whether and how to cite under [the General Duty Clause] relates directly to the Secretary's prosecutorial discretion and goes to the heart of his enforcement authority."

violation, rather than a per-employee, basis. Four reasons justified the Commission's conclusion. First, the majority argued that issuing identical abatement orders for each employee exposed to the same hazard would increase administrative and legal costs and would be inconsistent with congressional intent. Second, according to the majority, the General Duty Clause referred to employees as a group, rather than as individuals; the phrase "each of his employees" in § 654(a) merely refers to all employees as opposed to some. Third, the majority viewed the Secretary's interpretation of the General Duty Clause as a departure from previous practices, which had allowed separate citations for each individual hazard but not for each exposed employee. This approach was unreasonable, concluded the Commission, because the Secretary had not explained the reason for his departure from earlier practice. Finally, the Commission concluded that it did not owe deference to the Secretary's interpretation of the General Duty Clause because the Commission viewed itself as the final adjudicator of the OSH Act and because the statutory authority to assess penalties rested squarely with the Commission.

The Commission ultimately remanded the case to the ALJ to provide the Secretary an opportunity to amend the citations. The Secretary, however, declined to do so. The ALJ thereafter reentered an order vacating Items 2-87 and severing them from the rest of the case. The order became the final order of the Commission, and the Secretary filed this petition for review.

DISCUSSION

I. STANDARD OF REVIEW

We begin with the now-familiar two-step process for reviewing an administrative agency's interpretation of a statute. Our guide is the Supreme Court's decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), in which the Court held that we must first apply traditional principles of statutory construction to determine congressional intent. Id. at 842, 104 S.Ct. at 2781. "If the intent of Congress is clear," wrote the Court, "that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 843, 104 S.Ct. at 2781. Second, assuming the plain language of the statute is ambiguous (i.e., susceptible of two reasonable interpretations) or silent on the matter at issue, "the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id.; see United Servs. Auto. Ass'n v. Perry, 102 F.3d 144, 146 (5th Cir.1996).

II. IS THE GENERAL DUTY CLAUSE AMBIGUOUS?

A. Principles of Statutory Construction

Step one of Chevron requires us to apply "traditional principles of statutory construction" to determine whether Congress expressed a clear intent with regard to the meaning of the General Duty Clause. "In a statutory construction case, the beginning point must be the language of the statute, and when a statute speaks with clarity to an issue[,] judicial inquiry into the statute's meaning, in all but the most extraordinary circumstances, is finished." Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475, 112 S.Ct. 2589, 2594, 120 L.Ed.2d 379 (1992). When we evaluate the terms of a statute, the Supreme Court has cautioned us to abide by a "fundamental principle of statutory construction (and, indeed, of language itself) that the meaning of a word cannot be determined

                in isolation, but must be drawn from the context in which it is used."  Deal v. United States, 508 U.S. 129, 132, 113 S.Ct. 1993,

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