Reich v. D.M. Sabia Co.

• Decision Date: 29 July 1996
• Docket Number: No. 95-3697,95-3697
• Citation: 90 F.3d 854
• Parties: , 17 O.S.H. Cas. (BNA) 1680, 1996 O.S.H.D. (CCH) P 31,117 Robert B. REICH, Secretary of Labor, United States Department of Labor, Petitioner, v. D.M. SABIA COMPANY and Occupational Safety and Health Review Commission, Respondents.
• Court: U.S. Court of Appeals — Third Circuit

Page 854

90 F.3d 854

65 USLW 2114, 17 O.S.H. Cas. (BNA) 1680,

1996 O.S.H.D. (CCH) P 31,117

Robert B. REICH, Secretary of Labor, United States Department of Labor, Petitioner, v. D.M. SABIA COMPANY and Occupational Safety and Health Review Commission, Respondents.

No. 95-3697.

United States Court of Appeals Third Circuit.

Argued June 24, 1996.

Decided July 29, 1996.

J. Davitt McAteer, Acting Solicitor of Labor, Joseph M. Woodward, Associate Solicitor for Occupational Safety and Health, Ann Rosenthal, Counsel for Appellate Litigation, Terri P. Deleon (argued), U.S. Department of Labor, Washington, D.C., for Petitioner.

Thomas J. McGoldrick, Robert T. Carlton, Jr. (argued), McAleese, McGoldrick & Susanin, King of Prussia, PA, for Respondents.

Before: ALITO, McKEE and GARTH, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge.

The Secretary of Labor's petition for review of the decision of the Occupational Safety and Health Review Commission ("Commission") ¹ presents the question of whether respondent D.M. Sabia Company ("Sabia") committed a "repeated" violation of a safety standard within the meaning of 29 U.S.C. § 666(a). Applying the definition of "repeated" announced in Bethlehem Steel Corp. v. OSHRC, 540 F.2d 157 (3d Cir.1976), the Commission concluded that Sabia had not committed a "repeated" violation.

The Secretary contends that we are neither bound by Bethlehem nor bound by that court's 1976 definition of the term "repeated" as that term then appeared in the text of 29 U.S.C. § 666(a).

Sabia, on the other hand, argues that Bethlehem controls the decision in this case and cannot be overruled by us as a subsequent panel of this court. ²

In Bethlehem, we held that the Secretary, in order to establish a "repeated" violation, under the Occupational Safety and Health Act of 1970 ("Act"), 29 U.S.C. § 651 et seq., must prove that the employer had violated an Occupational Safety and Health Administration (OSHA) standard on at least two previous occasions; and that the employer had "flaunted" the requirements of the Act. Id. at 162. In 1990, however, 29 U.S.C. § 666(a) was amended. In light of that amendment the rationale and logic of Bethlehem, while binding until the 1990 amendment, thereafter did not retain the requisite precedential authority that would preclude us from taking a fresh look at the now-amended section 666(a).

Our fresh look has resulted in a new definition: we now deem an OSHA violation to be "repeated" "if, at the time of the alleged repeated violation, there was a Commission final order against the same employer for a substantially similar violation." Secretary of Labor v. Potlatch Corp., 7 O.S.H. Cas. (BNA) 1061, 1063 (Rev. Comm'n 1979). Applying this interpretation, we conclude that Sabia committed a "repeated" violation. Accordingly, we will reverse.

I.

The Commission had jurisdiction under 29 U.S.C. § 659(c). We have appellate jurisdiction over the Commission's final order under 29 U.S.C. § 660.

The Commission's findings of fact must be upheld if supported by substantial evidence in the record as a whole. 29 U.S.C. § 660(a); D. Harris Masonry Contracting, Inc. v. Dole, 876 F.2d 343, 344 (3d Cir.1989). Legal conclusions may be set aside if they are "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); Atlantic & Gulf Stevedores v. OSHRC, 534 F.2d 541, 547 (3d Cir.1976). In addition, we must defer to an agency's reasonable interpretation of an ambiguous administrative statute. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843-46, 104 S.Ct. 2778, 2781-84, 81 L.Ed.2d 694 (1984).

II.

Sabia, a Pennsylvania corporation, is a masonry contractor which employs approximately 152 employees. On October 26, 1993, Mark Stelmack, an OSHA compliance officer, observed Sabia employees setting block from two "non-stop" scaffold towers located along the north wall of a construction site at 315 North York Road, Willow Grove, Pennsylvania. The scaffold platforms were sixteen to twenty feet above the ground. No guardrails or toeboards were provided on the ends of the scaffold towers or on the inside of the eastern tower where it extended beyond the end of the wall. Hence, Sabia employees working on the scaffold towers were exposed to the danger of falling off the scaffolds, which could result in serious injuries or death.

On November 26, 1993, based on Stelmack's inspection, OSHA issued two citations, only one of which is relevant to this appeal. The relevant citation alleged a "repeat" ³ violation of 29 C.F.R. § 1926.451(a)(4) ⁴ for failure to install standard guardrails and toeboards on all open sides and ends of platforms above the ground. Sabia had been cited on three previous occasions for the same or similar violations, each of which resulted in a final order: July 22, 1974; January 23, 1985; and May 16, 1991. Jt.App. 20 (Stipulation of Facts).

Relying on a stipulated record ⁵ and on Potlatch, the ALJ held that Sabia had "repeatedly" violated section 1926.451(a)(4) "because 'at the time of the alleged repeated violation, there was a Commission final order against the same employer for a substantially similar violation....' " Jt.App. 14 (quoting Potlatch, 7 O.S.H. Cas. at 1063). Accordingly, the ALJ assessed a $4,000 fine.

The ALJ acknowledged that the Commission's definition of "repeated," as articulated in Potlatch, differed from the Third Circuit's definition, as enunciated in Bethlehem Steel Corp. v. OSHRC, 540 F.2d 157 (3d Cir.1976). The ALJ nevertheless applied the Potlatch definition rather than Bethlehem 's definition, based upon the ALJ's reading of Jersey Steel Erectors v. Secretary of Labor, 16 O.S.H. Cas. (BNA) 1162 (Rev. Comm'n 1993), aff'd, 19 F.3d 643 (3d Cir.1994).

The ALJ interpreted the Commission's decision in Jersey Steel as requiring application of the Potlatch definition even in cases arising within the jurisdiction of the Third Circuit. The Commission, however, rejected the ALJ's interpretation of Jersey Steel. The Commission explained that in Jersey Steel, it had found that the employer's violations would be considered "repeated" under either definition. In so holding, the Commission recognized that Bethlehem 's definition differed from the Secretary's definition, as articulated in Potlatch. Hence, in a decision dated October 30, 1995, the Commission reversed the ALJ's order.

The Commission first noted its disagreement with our analysis in Bethlehem, but then indicated that it felt compelled to apply the Bethlehem definition of "repeatedly" in cases arising within the Third Circuit. Applying the Bethlehem test, the Commission concluded that the Secretary had failed to prove that Sabia's violation was "repeated." Specifically, the Commission found that while Sabia's four violations of the same regulation over a period of years met the first prong of the Bethlehem test (i.e., that the employer had committed more than two violations), the Secretary had not established the second prong of Bethlehem (i.e., that the employer had "flaunted" the Act). Finding that the challenged violation was "serious," ⁶ the Commission assessed a $1,000 penalty.

The Secretary of Labor filed a timely petition for review of the final order of the Commission.

III.

The central, and indeed the only, issue on this appeal is whether Sabia's violation of 29 C.F.R. § 1926.451(d) constituted a "repeated" violation within the meaning of 29 U.S.C. § 666(a). Applying the Potlatch standard, the Secretary contends that "[a] violation is repeated under section 17(a) of the Act if, at the time of the alleged repeated violation, there was a Commission final order against the same employer for a substantially similar violation." 7 O.S.H. Cas. at 1063.

As stipulated by the parties, Sabia had been cited for the same or similar violation of section 1926.451(a)(4) on three previous occasions, and "each citation went to a final order." Jt.App. 20. Hence, the stipulated facts, under the Secretary's theory, establish a "repeated" violation under the Potlatch standard.

As noted earlier in this opinion, the Commission had held that the Potlatch standard could not be applied in this circuit as it conflicted with the standard articulated in Bethlehem. In Bethlehem, which was the first court of appeals decision to construe the term "repeatedly" as it appeared in the unamended 29 U.S.C. § 666(a), we held that a violation is "repeated" if (1) the employer had violated the same standard on at least two previous occasions; ⁷ and (2) the employer "flaunted" the requirements of the Act. ⁸ Bethlehem 540 F.2d at 162. In determining whether an employer had "flaunted" the requirements of the Act, the Bethlehem court considered the following factors:

the number, proximity in time, nature and extent of violations, their factual and legal relatedness, the degree of care of the employer in his efforts to prevent violations of the type involved, and the nature of the duties, standards, or regulations violated.

Id. at 162. The Commission found that the stipulated facts in the present case were insufficient to establish that Sabia had "flaunted" the requirements of the Act.

The Secretary asserts, however, that Bethlehem has been superseded, in light of the 1990 amendment to 29 U.S.C. § 666(a). ⁹ Sabia, on the other hand, argues that Bethlehem continues to be "good law" and will continue to be binding precedent until overruled by this court en banc.

We agree with the Secretary that Bethlehem does not control the disposition of this case. Although a panel of this court is bound by, and lacks authority to overrule, a published decision of a prior panel, see supra note 2, a panel may reevaluate a precedent in light of intervening authority and amendments to statutes or regulations. See United States v. Joshua, 976 F.2d 844, 853 (3d Cir.1992) (holding that a panel is "free to consider the [Sentencing] Commission's [newly adopted...