Reich v. Montana Sulphur & Chemical Co.

• Citation: 32 F.3d 440
• Decision Date: 26 August 1994
• Docket Number: No. 93-35076,93-35076
• Parties: 16 O.S.H. Cas. (BNA) 1977, 1994 O.S.H.D. (CCH) P 30,511 Robert B. REICH, * Secretary of Labor, United States Department of Labor, Petitioner-Appellee, v. MONTANA SULPHUR & CHEMICAL COMPANY, Respondent-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 440

32 F.3d 440

16 O.S.H. Cas. (BNA) 1977, 1994 O.S.H.D. (CCH)

P 30,511

Robert B. REICH, ^* Secretary of Labor, United States Department of Labor, Petitioner-Appellee, v. MONTANA SULPHUR & CHEMICAL COMPANY, Respondent-Appellant.

No. 93-35076.

United States Court of Appeals Ninth Circuit.

Argued and Submitted June 7, 1994.

Decided Aug. 26, 1994.

Brian K. Gallik, James H. Goetz, Goetz, Madden & Dunn, Bozeman, MT, for respondent-appellant.

Terri P. DeLeon, Barbara Werthmann, U.S. Dept. of Labor, Washington, DC, for petitioner-appellee.

Appeal from the United States District Court for the District of Montana.

Before: POOLE, BRUNETTI and KLEINFELD, Circuit Judges.

POOLE, Circuit Judge:

In this appeal from a subpoena enforcement order, we revisit the boundaries limiting an administrative agency's ability to conduct preliminary investigations.

I

Montana Sulphur & Chemical Company (MSCC) is a chemical manufacturer which deals with hazardous materials, including hydrogen sulfide. On December 10, 1991, the Billings office of the Occupational Safety & Health Administration (OSHA) received a phone call from an individual purporting to be an employee of MSCC. The individual revealed a detailed knowledge of MSCC's plant and described numerous alleged health hazards. On request, the individual agreed to come to OSHA's office to sign a written complaint.

The signed complaint alleged six unsafe conditions; the only allegation relevant to this case was a contention that MSCC did not x-ray its welds or certify its welders. If true, this posed a safety hazard because improper welding could rupture and result in the release of lethally toxic chemicals. ¹ OSHA's area director reviewed the complaint and, based on the complaint and the information provided in the telephone call, determined that an inspection was warranted. OSHA arranged with MSCC to inspect its plant in January.

Two OSHA inspectors visited MSCC's plant over a five or six day period for several hours each day. During this visit, they interviewed MSCC managers and employees. They were permitted to review MSCC documents. The inspectors learned that MSCC welders were certified by a private company, Chen Northern. Employees interviewed said they could not remember having ever x-rayed welds. Supervisor Ronald Benson explained that MSCC tested its welds using water pressure tests instead.

Subsequent to this visit, OSHA sought six general categories of documents to supplement what it had learned. The request was framed in general terms, and sought documents relating to "1) Welding procedures utilized. 2) Procedures used in the qualification of welders. 3) Filler metal control procedures. 4) X-ray specifications. 5) Design specifications. 6) Piping and instrument diagrams." At this point, MSCC refused further cooperation unless OSHA provided it with a copy of the original complaint and specific citation to its regulatory authority for requesting the listed documents. MSCC also expressed concern that some of the documents covered by the request were proprietary in nature. OSHA's response failed to satisfy MSCC. ²

When further negotiations proved fruitless, OSHA consulted with its welding expert and prepared a subpoena seeking seventeen categories of documents. ³ When MSCC refused to produce the documents, OSHA sought court enforcement. MSCC resisted enforcement and sought discovery, alleging that OSHA was issuing the "expanded" subpoena as retaliation for MSCC refusal to comply with the earlier document request. A magistrate held a one-day evidentiary hearing to resolve contested issues and, concluding that the subpoena had been filed for a legitimate purpose, recommended enforcement and denial of MSCC's motion for further discovery. The district court adopted the magistrate's conclusions and ordered enforcement.

On appeal, MSCC raises numerous objections to the enforcement order. MSCC argues that the subpoena is unauthorized because it is both unrelated to any OSHA regulations and unrelated to the complaint that generated it. The company also contends that the subpoena violates its Fourth Amendment rights. In any event, according to MSCC, the subpoena should have been quashed because it was issued for an improper purpose.

We review de novo the district court's decision regarding enforcement of an agency subpoena. See EPA v. Alyeska Pipeline Serv. Co., 836 F.2d 443, 446 (9th Cir.1988). ⁴

II

OSHA, like most government agencies, has the power to require the production of documents through the issuance of administrative subpoenas. 29 U.S.C. Sec. 657(b). This power is not self-enforcing; if OSHA's subpoena is resisted, it must seek judicial enforcement. Id. The test for whether the courts should enforce such an administrative subpoena is well-established:

The scope of the judicial inquiry in an EEOC or any other agency subpoena enforcement proceeding is quite narrow. The critical questions are: (1) whether Congress has granted the authority to investigate; (2) whether procedural requirements have been followed; and (3) whether the evidence is relevant and material to the investigation.

EEOC v. Children's Hosp. Medical Ctr., 719 F.2d 1426, 1428 (9th Cir.1983) (en banc); see Reich v. National Eng'g & Contracting Co., 13 F.3d 93, 98 (4th Cir.1993) (applying same test to OSHA subpoena).

We consider in turn whether each part of this test is met. ⁵

A

OSHA is authorized by 29 U.S.C. Sec. 657(f), Sec. 8(f) of the OSH Act, to conduct investigations in response to employee complaints to determine whether an alleged "violation or danger" exists. MSCC contends that this authorization does not justify the document request OSHA made.

MSCC's argument rests on two contentions regarding the appropriate scope of OSHA's authority in seeking documents. First, it argues that OSHA is limited by the presence or absence of specific regulations addressing the problem raised in the complaint. Second, it argues that OSHA is strictly limited by the scope of the complaint in response to which OSHA is investigating.

We disagree. Neither the OSH Act nor past precedent warrant constricting OSHA's authority in these ways.

1.

In MSCC's view, the pivotal fact in this case is that OSHA has no regulations regarding the x-raying of welds or the certification of welders. MSCC reasons that because no OSHA regulations govern welding, there are no regulations which MSCC could be violating, and thus there was nothing for OSHA to investigate. Because OSHA could not identify any regulations which might be being violated, its investigation amounted to a fishing trip in the hopes of finding violations.

Even assuming MSCC is correct and no regulations apply, we reject this argument for two reasons. First, it reverses the investigatory process long since approved by the Supreme Court by requiring OSHA to charge first and investigate later. The power of an agency to investigate "is more analogous to the Grand Jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not." United States v. Morton Salt Co. 338 U.S. 632, 642-43, 70 S.Ct. 357, 363-64, 94 L.Ed. 401 (1950). For an agency to subpoena corporate records, "[i]t is not necessary ... that a specific charge or complaint of violation of law be pending or that the order be made pursuant to one. It is enough that the investigation be for a lawfully authorized purpose, within the power of Congress to command." Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 208-09, 66 S.Ct. 494, 505-06, 90 L.Ed. 614 (1946). See also Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 508-09, 63 S.Ct. 339, 343, 87 L.Ed. 424 (1943) (reversing district court for having insisted that Secretary of Labor establish other elements of violation before issuing subpoena); EPA v. Alyeska Pipeline Serv. Co., 836 F.2d 443, 447 (9th Cir.1988) ("An administrative agency, unlike parties relying on the judicial discovery process, need not first allege a violation of the law before it can investigate.")

Second, MSCC's argument misconstrues the OSH Act as a series of unconnected stars in space, in between which no standards govern and no investigation is proper. To the contrary, the Act consists of a general duty clause augmented in particular areas by specific regulations. The general duty clause provides "Each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards...." 29 U.S.C. Sec. 654(a)(1). "OSHA contemplates that the Secretary will promulgate specific safety standards to insure safe and healthful working conditions ... The general duty clause applies when there are no specific standards." Donovan v. Royal Logging Co., 645 F.2d 822, 829 (9th Cir.1981) (citations omitted). OSHA's regulations may amplify and augment 29 U.S.C. Sec. 654, but they do not displace OSHA's statutory obligation to continue to enforce the general duty clause as a minimum standard.

Consequently, the regulations also do not define the entire universe of OSHA's investigatory authority. To the contrary, OSHA is as entitled to conduct Sec. 8(f) investigations of complaints alleging violations of the general duty clause as it is to investigate those alleging violation of any specific regulation. See Reich v. Kelly-Springfield Tire Co., 13 F.3d 1160, 1166-67 (7th Cir.1994). In light of the structure of the OSH Act, we view the absence of specific regulations dealing with welding as of no special significance.

2.

However, MSCC has another arrow in its quiver. As MSCC sees it, the initial employee complaint mentions only two isolated problems: ⁶ no x-raying of welds, and failure to certify welders. MSCC presumes that these two precise circumstances are the only conditions OSHA was thereby authorized to investigate, and that any other investigation, even into the general adequacy of the...