Scalia v. Wynnewood Ref. Co., No. 19-9533

• Decision Date: 27 October 2020
• Docket Number: No. 19-9533, No. 19-9578
• Citation: 978 F.3d 1175
• Parties: Eugene SCALIA, Secretary of Labor, Petitioner/Cross-Respondent, v. WYNNEWOOD REFINING CO., LLC; Respondent/Cross-Petitioner, and Occupational Safety & Health Review Commission, Respondent. Corn Refiners Association ; National Oilseed Processors Association; American Chemistry Counsel; American Fuel & Petrochemical Manufacturers; American Petroleum Institute, Amici Curiae. Eugene Scalia, Secretary of Labor, Petitioner/Cross-Respondent, v. Wynnewood Refining Co., LLC; Respondent/Cross-Petitioner, and Occupational Safety & Health Review Commission, Respondent. Corn Refiners Association ; National Oilseed Processors Association; American Chemistry Counsel; American Fuel & Petrochemical Manufacturers; American Petroleum Institute, Amici Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

978 F.3d 1175

Eugene SCALIA, Secretary of Labor, Petitioner/Cross-Respondent,

v.WYNNEWOOD REFINING CO., LLC; Respondent/Cross-Petitioner,andOccupational Safety & Health Review Commission, Respondent.

Corn Refiners Association ; National Oilseed Processors Association; American Chemistry Counsel; American Fuel & Petrochemical Manufacturers; American Petroleum Institute, Amici Curiae.

Eugene Scalia, Secretary of Labor, Petitioner/Cross-Respondent,

v.Wynnewood Refining Co., LLC; Respondent/Cross-Petitioner,andOccupational Safety & Health Review Commission, Respondent.

Corn Refiners Association ; National Oilseed Processors Association; American Chemistry Counsel; American Fuel & Petrochemical Manufacturers; American Petroleum Institute, Amici Curiae.

No. 19-9533

No. 19-9578

United States Court of Appeals, Tenth Circuit.

FILED October 27, 2020

Eric J. Conn and Micah R. Smith, Conn Maciel Carey LLP, Washington, D.C., for Respondent/Cross-Petitioner.

Ronald J. Gottleib, Senior Trial Attorney, United States Department of Labor, Washington, D.C. (Kate S. O'Scannlain, Solicitor of Labor, Edmund C. Baird, Associate Solicitor of Labor for Occupational Safety and Health, Charles F. James, Counsel for Appellate Litigation, United States Department of Labor, Washington, D.C., with him on the briefs), for Petitioner/Cross-Respondent.^*

Michele Schoeppe, American Chemistry Counsel, Washington, D.C.; Johnathan L. Snare and Alana Genderson, Morgan Lewis & Bockius LLP, Washington D.C.; Richard Moskowitz, American Fuel & Petrochemical Manufacturers, Washington, D.C.; and Maryam Hatcher, American Petroleum Institute, Washington, D.C., filed an amicus curiae brief on behalf of Respondent/Cross-Petitioner, for American Chemistry Counsel, American Fuel & Petrochemical Manufacturers, and American Petroleum Institute.

James H. Hulme, Mark S. Dreux, and Alexandra M. Romero, Arent Fox LLP, Washington, D.C., filed an amicus curiae brief on behalf of Respondent/Cross-Petitioner, for the Corn Refiners Association and National Oilseed Processors Association.

Before BACHARACH, MURPHY, and MORITZ, Circuit Judges.

MORITZ, Circuit Judge.

After a boiler exploded at a refinery, the Occupational Safety and Health Administration (OSHA) cited the refinery's owner, Wynnewood Refining Co., LLC, (Wynnewood or Wynnewood LLC), for violating 29 C.F.R. § 1910.119, which sets forth requirements for the management of highly hazardous chemicals. The Occupational Safety and Health Review Commission (the Commission) upheld the violations. In doing so, it noted that the refinery had previously violated § 1910.119. But it determined that these prior violations occurred before Wynnewood LLC owned the refinery and that they therefore occurred under a different employer. Accordingly, the Commission did not classify the violations as "repeat[ ] violations" under 29 U.S.C. § 666(a), which permits increased penalties for "employer[s] who willfully or repeatedly violate[ ]" the regulation.

Wynnewood appeals from the Commission's order, arguing that § 1910.119 does not apply to the boiler that exploded. Because we find that § 1910.119 ’s plain text unambiguously applies to the boiler, we affirm the portion of the Commission's order upholding the violations. Secretary of Labor Eugene Scalia (the Secretary) also appeals from the order, arguing that the Commission erred in failing to characterize the violations as repeat violations. Because we agree with the Commission that Wynnewood LLC is not the same employer as the refinery's previous owner, we also affirm the portion of the order concluding that these violations were not repeat violations.

Background

Before December 2011, Wynnewood Inc., a subsidiary of Gary-Williams Energy Corporation, owned the refinery. In December 2011, CVR Energy, Inc., (CVR Energy) "acquired all the stock of Gary-Williams Energy Corporation and its subsidiaries, including Wynnewood, Inc." App. vol. 21, 1145. After the purchase, Wynnewood Inc. became Wynnewood LLC.

In September 2012, one of the refinery's boilers—the Wickes boiler—exploded after too much natural gas entered its firebox, which burns gas to heat the boiler. As a result of the explosion, two employees died. Neither party asserts that the Wickes boiler contains highly hazardous chemicals. But it is connected to two other parts of the refinery that do—the fluid catalytic cracking unit (FCCU) and the alkylation unit.

Shortly after the explosion, OSHA began an inspection of the refinery. After investigating, OSHA cited Wynnewood for various violations of the Occupational Safety and Health Act (OSH Act). Relevant here, these citations included violations of § 1910.119, several of which OSHA characterized as repeat violations. An administrative law judge (ALJ) affirmed all but one of these violations. But because OSHA based its repeat-violations finding on violations that occurred under Wynnewood Inc. and not Wynnewood LLC, the ALJ changed the characterization of several of the violations from repeat to serious. The Commission affirmed the ALJ's decision.

Analysis

Both parties appeal the Commission's decision. Wynnewood argues that the regulation at issue does not apply to the Wickes boiler and that the Commission therefore erred in affirming these violations. The Secretary argues that the Commission erred by characterizing the violations as serious rather than repeat.

I. Application of § 1910.119 to the Wickes Boiler

Wynnewood argues that the regulation, which creates a standard for process safety management (PSM) of highly hazardous chemicals, does not apply to the Wickes boiler. The PSM regulation—which the parties also refer to as the PSM standard—sets out "requirements [employers must follow] for preventing or minimizing the consequences of catastrophic releases of toxic, reactive, flammable, or explosive chemicals." § 1910.119. The regulation applies only to "process[es] which involve[ ]" a threshold amount of highly hazardous chemicals. § 1910.119(a)(1). And the regulation provides a specific definition of "process":

Process means any activity involving a highly hazardous chemical including any use, storage, manufacturing, handling, or the on-site movement of such chemicals, or combination of these activities. For purposes of this definition, any group of vessels which are interconnected and separate vessels which are located such that a highly hazardous chemical could be involved in a potential release shall be considered a single process.

§ 1910.119(b).

Below, the Commission determined that the Wickes boiler could be part of a process even though it did not contain any highly hazardous chemicals. The Commission then analyzed the text of § 1910.119(b) and found that the Wickes boiler was part of a process covered by the regulation—in other words, that it was part of a "PSM-covered process" or was "PSM-covered"—for two independent reasons. App. vol. 21, 1150. First, the Commission determined that the Wickes boiler was interconnected with the FCCU and the alkylation unit, both of which are covered by the PSM standard. Second, and alternatively, the Commission determined that the Wickes boiler "was covered by the PSM standard because it was ‘located such that a highly hazardous chemical could be involved in a potential release.’ " Id. at 1152 (quoting § 1910.119(b) ).

On appeal, Wynnewood argues that (1) the Wickes boiler was not PSM-covered because it did not contain any highly hazardous chemicals, (2) the Wickes boiler was not PSM-covered because of either its interconnection with or location near a process, and (3) we should not defer to the Secretary because his new interpretation deprived Wynnewood of fair notice. And, citing Kisor v. Wilkie , Wynnewood urges us to interpret the regulation by examining its "text, structure, history, and purpose," even if the text of the regulation is unambiguous. ––– U.S. ––––, 139 S. Ct. 2400, 2415, 204 L.Ed.2d 841 (2019).

At the outset, we note that Wynnewood's proposed interpretive method rests on a misunderstanding of Kisor . There, the Supreme Court emphasized that a reviewing court should defer to an agency's interpretation of its own regulations only where the regulations are "genuinely ambiguous." Id. at 2414. In doing so, the Court reiterated that a reviewing court cannot conclude that a regulation is genuinely ambiguous until after it thoroughly considers "the text, structure, history, and purpose of a regulation." Id. at 2415. But Kisor did not indicate that courts must consider these sources before finding a statute unambiguous . Thus, nothing in Kisor changes our longstanding approach to regulatory interpretation: begin with the text of the regulation, and, if the meaning is clear, look no further. See Mitchell v. Comm'r , 775 F.3d 1243, 1249 (10th Cir. 2015) ; cf. Callahan v. U.S. Dep't of Health & Human Servs. Through Alex Azar II , 939 F.3d 1251, 1259 n.9, 1262 (11th Cir. 2019) (noting, post- Kisor , that courts need not "consult extra[ ]textual evidence concerning ‘history’ and ‘purpose’ " of regulation where "text is clear"; explaining that " Kisor itself disclaims any groundbreaking"). And, post- Kisor , we have determined on at least three occasions that a regulation was not ambiguous by relying on the text alone. See Sierra Club v. EPA , 964 F.3d 882, 891 (10th Cir. 2020) (citing Kisor and concluding that "regulation is not ambiguous" after analyzing only regulation's text); In re MDL 2700 Genentech Herceptin (Trastuzumab) Mktg. & Sales Practice Litig. , 960 F.3d 1210, 1234 (10th Cir. 2020) (citing Kisor and determining that "the regulatory language resolves the question" of whether regulation is ambiguous); Reyes-Vargas v. Barr , 958 F.3d 1295, 1306 (10th Cir. 2020) (citing Kisor and finding regulation unambiguous based on only "plain language").

Accordingly, when interpreting the PSM regulation, we "begin by examining the plain language of the text, giving each word its ordinary and customary meaning. If, after engaging in this textual...