S.A. Healy Co. v. Occupational Safety and Health Review Com'n

• Decision Date: 18 September 1996
• Docket Number: 95-2907,Nos. 95-2421,s. 95-2421
• Citation: 96 F.3d 906
• Parties: , 17 O.S.H. Cas. (BNA) 1737, 1997 O.S.H.D. (CCH) P 31,239 S.A. HEALY COMPANY, Petitioner, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION and Robert B. Reich, Secretary of Labor, Respondents.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 906

96 F.3d 906

65 USLW 2204, 17 O.S.H. Cas. (BNA) 1737,

1997 O.S.H.D. (CCH) P 31,239

S.A. HEALY COMPANY, Petitioner, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION and Robert B. Reich, Secretary of Labor, Respondents.

Nos. 95-2421, 95-2907.

United States Court of Appeals Seventh Circuit.

Argued Feb. 22, 1996.

Decided Sept. 18, 1996.

Juris Kins (argued), James L. Fox, Abramson & Fox, Chicago, IL, for petitioner.

Steven J. Mandel, Allen H. Feldman, Department of Labor, Appellate Litigation, Washington, DC, Richard J. Fiore, Department of Labor, Chicago, IL, Edward D. Sieger (argued), Thomas S. Williamson, Jr., Department of Labor, Office of Solicitor, Washington, DC, for respondent Robert B. Riech.

Steven J. Mandel, Allen H. Feldman, Department of Labor, Appellate Litigation, Washington, DC, Edward D. Sieger (argued), Ray Darling, Jr., Occupational Safety & Health Review Commission, Washington, DC, for respondent Occupational Safety and Health Review Commission.

Before CUMMINGS, EASTERBROOK, and DIANE P. WOOD, Circuit Judges.

EASTERBROOK, Circuit Judge.

On November 10, 1988, three employees died in a methane gas explosion in the Crosstown Seven North Tunnel, a sewage tunnel S.A. Healy Company was building in Milwaukee. The Occupational Safety and Health Administration (OSHA) investigated the explosion and cited Healy for 68 wilful violations of its standards. 29 U.S.C. § 666(a). Forty-nine of the violations related to standards that apply when explosive gas is likely to be present. The Secretary issued the citation under the "egregious" or "instance-by-instance" policy, which penalizes each distinct violation of a standard, instead of assessing one penalty for each standard violated. For example, five violations related to Healy's failure to instruct employees in the recognition and avoidance of unsafe conditions: one violation for each employee that Healy failed to instruct. The Secretary proposed the maximum penalty of $10,000 per violation. Healy contested the citation, so the Secretary filed a complaint with the Occupational Safety and Health Review Commission, and the case was assigned to an administrative law judge for resolution.

The Department of Labor also referred the matter to the Department of Justice for criminal prosecution. The administrative proceeding was stayed meanwhile. Healy was indicted under 29 U.S.C. § 666(e) for wilful violations of OSHA standards that caused the death of an employee. The manager of the tunnel project also was indicted under this section, but those charges were dismissed because the statute applies only to employers. United States v. Doig, 950 F.2d 411 (7th Cir.1991). A jury found Healy guilty on all three counts (one for each deceased employee), and the judge assessed a total fine of $750,000. The criminal conviction established that Healy committed the 49 violations of the standards related to work where explosive gas may be present. Healy did not appeal.

After the completion of the criminal proceedings, the Secretary resumed the administrative proceedings on all 68 violations. Healy and OSHA settled 19 violations, leaving only the 49 that had been the subject of the criminal conviction. The Secretary moved for partial summary judgment, asserting that issue preclusion (collateral estoppel) barred Healy from contesting liability because the criminal conviction established that it committed the 49 violations. Healy did not deny this. Far from it--Healy's reply thanked the Secretary for admitting that the administrative proceeding concerned the same conduct as the criminal conviction, and it argued that the double jeopardy clause prohibits any administrative fines. Healy maintained that fines under OSHA's instance-by-instance policy are punitive and would constitute a second punishment for the same offense. Any second punishment imposed in a separate proceeding would violate the double jeopardy clause of the fifth amendment. See United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989).

The ALJ ruled that Healy was precluded from contesting liability, rejected its double jeopardy defense, and held a hearing to determine the appropriate fine. The ALJ imposed a fine of $318,500, or $6,500 per violation, after considering the four statutory factors: the employer's size, the gravity of the violations, good faith, and previous violations. See 29 U.S.C. § 666(j). According to the ALJ, the administrative fine was not punishment because it is "rationally related to the Government's costs of investigation and prosecution." On appeal, the Commission agreed, stating that, because the costs of investigating and prosecuting Healy (in the criminal and administrative actions combined) exceeded the maximum fine of $490,000, the double jeopardy clause does not prohibit such a fine. 17 O.S.H. Cas. 1145 (1995). The Commission also concluded that the goal of assuring compliance with OSHA standards is non-punitive, and that fines serving the end of deterrence are not punishment. Id. at 1150-51. Then the Commission remanded the case, because the ALJ had not applied the factor of gravity in determining the fine. On remand, OSHA and Healy agreed that the fine would be $5,100 per violation, for a total of $249,900.

Healy's petition for review of the final order is limited to the question whether the double jeopardy clause prohibits the administrative fine. One potential response would be that the double jeopardy clause is no more applicable to organizations than is the self-incrimination clause. See Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370, 50 L.Ed. 652 (1906) (corporation is not a "person" for purposes of the privilege against self-incrimination); United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542 (1944) (neither is a labor union); Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974) (or a partnership). The fifth amendment says that no person may "be subject for the same offence to be twice put in jeopardy of life or limb". Corporations cannot be imprisoned, and even dissolution (the closest approximation of a loss of corporate "life") does not diminish the investors' ability to carry on the business; another corporation can be created at minimal cost. Only money is at stake; a fine imposed in a criminal prosecution of a corporation is more like an award of punitive damages than like a criminal conviction of a natural person. Nonetheless, the Secretary does not question United States v. Hospital Monteflores, Inc., 575 F.2d 332 (1st Cir.1978), which applied the double jeopardy clause to corporations. A footnote to the Secretary's brief "assume[s] for purposes of this appeal that a corporation such as Healy is a 'person' protected by the Double Jeopardy Clause." We take this case as the parties have presented it, without expressing any view on the merits of Hospital Monteflores. The Secretary also conceded at oral argument that the administrative and criminal proceedings satisfy the "same elements" approach of Blockburger v. United States, 284 U.S. 299, 52 S.Ct. 180, 76 L.Ed. 306 (1932); we accept that concession without exploring the subject independently.

The double jeopardy clause prohibits cumulative punishments imposed in separate proceedings. The United States commenced separate administrative and criminal proceedings. That both were pending at the same time is no matter. Montana Department of Revenue v. Kurth Ranch, 511 U.S. 767, ---- n. 21, 114 S.Ct. 1937, 1947 n. 21, 128 L.Ed.2d 767 (1994); United States v. Torres, 28 F.3d 1463, 1465 (7th Cir.1994). Although the administrative proceeding began first, jeopardy first attached in the criminal trial when the jury was impaneled and sworn. Crist v. Bretz, 437 U.S. 28, 32-36, 98 S.Ct. 2156, 2159-61, 57 L.Ed.2d 24 (1978). This makes the administrative hearing the second jeopardy, but only if it sought to impose "punishment." For, as the Supreme Court recently confirmed, not all exactions are punishment for purposes of the double jeopardy clause. United States v. Ursery, --- U.S. ----, 116 S.Ct. 2135, 135 L.Ed.2d 549 (1996), holds that "in rem civil forfeiture is a remedial civil sanction, distinct from potentially punitive in personam civil penalties such as fines, and does not constitute a punishment under the Double Jeopardy Clause." Id. at ----, 116 S.Ct. at 2142. Nonetheless, "under the Double Jeopardy Clause a defendant who already has been punished in a criminal prosecution may not be subjected to an additional civil sanction to the extent that the second sanction may not fairly be characterized as remedial, but only as a deterrent or retribution." Halper, 490 U.S. at 448-49, 109 S.Ct. at 1902. See also Austin v. United States, 509 U.S. 602, 113 S.Ct. 2801, 125 L.Ed.2d 488 (1993).

To answer the question whether the OSHA fine is punishment, we must first determine where the Occupational Safety and Health Act (29 U.S.C. §§ 651-78, or "the Act") fits in the Court's conception of punishment. As it read until 1990, § 666(a) provided:

Any employer who willfully or repeatedly violates ... any standard, rule, ... or regulation[ ] prescribed pursuant to this chapter, may be assessed a civil penalty of not more than $10,000 for each violation.

(The 1990 amendments are not relevant to the events of 1988, so we disregard them throughout this opinion.) In deciding the amount of the penalty, the Commission "shall ... giv[e] due consideration ... to the size of the business of the employer being charged, the gravity of the violation, the good faith of the employer, and the history of previous violations." 29 U.S.C. § 666(j). The amount of the fine depends on the seriousness of the employer's misconduct (both past and present) and the employer's ability to pay. Nothing in the statute allows for consideration of the loss suffered by the government, or the costs of investigation and prosecution. Fines under the OSHA statute are in personam civil penalties.

Halper...