Shell Oil Co. v. U.S. Dept. of Labor

• Decision Date: 12 July 2000
• Docket Number: Civil Action No. 97-1205 (PLF).
• Citation: 106 F.Supp.2d 15
• Parties: SHELL OIL COMPANY, et al., Plaintiffs, v. U.S. DEPARTMENT OF LABOR, et al., Defendants.
• Court: U.S. District Court — District of Columbia

106 F.Supp.2d 15

SHELL OIL COMPANY, et al., Plaintiffs, v. U.S. DEPARTMENT OF LABOR, et al., Defendants.

Civil Action No. 97-1205 (PLF).

United States District Court, District of Columbia.

July 12, 2000.

Francis Edwin Froelich, Washington, DC, for Plaintiffs.

Marina Utgoff Braswell, U.S. Attorney's Office, Washington, DC, Kimberly Brown, Powers, Pyles, Sutter & Verville, P.C., Washington, DC, Edward G. Weil, Deputy Atty. Gen., Cal. Atty. Gen.'s Office, Oakland, CA, for Defendants.

OPINION

PAUL L. FRIEDMAN, District Judge.

Plaintiffs brought this lawsuit to challenge the approval by the Occupational Safety and Health Administration ("OSHA") of an amendment to the California state plan for the development and enforcement of occupational safety and health standards and to challenge OSHA's policy of letting California enforce the amendment before receiving approval. Upon consideration of the parties' cross-motions for summary judgment, the Court concludes that plaintiffs' challenge to OSHA's pre-approval enforcement policy is moot and therefore is no longer properly before the Court. With regard to plaintiffs' challenge to the approval of the amendment, the Court finds that OSHA's actions were not arbitrary, capricious or contrary to law. It therefore will grant summary judgment in favor of defendants.

I. BACKGROUND

Under the Occupational Safety and Health Act ("OSHAct"), states are generally preempted from regulating any health or safety issue that is governed by a federal OSHA requirement. The sole means by which a state may regulate such issues is for the state to submit a "state plan" to OSHA and for the plan to receive OSHA approval. Under the OSHAct:

Any State which, at any time, desires to assume responsibility for development and enforcement therein of the occupational safety and health standards relating to any occupational safety or health issue with respect to which a Federal standard has been promulgated under section 655 of this title shall submit a State plan for the development of such standards and their enforcement.

29 U.S.C. § 667(b). Upon approval by OSHA, the state plan "pre-empt[s] federal regulation entirely." Gade v. National Solid Wastes Management Ass'n, 505 U.S. 88, 97, 112 S.Ct. 2374, 120 L.Ed.2d 73 (1992).

Criteria for the approval of state plans, and any amendments thereto, are found in Section 18(c) of the OSHAct. See 29 U.S.C. § 667(c). Of relevance in this case is Section 18(c)(2), which provides that no plan or amendment can be approved unless it is "at least as effective" in protecting safety and health as the statutes and enforcement regimen of OSHA itself. 29 U.S.C. § 667(c)(2). In addition, if the plan or amendment applies to products that "are distributed or used in interstate commerce," state standards that differ from federal standards must be "required by compelling local conditions" and may not "unduly burden interstate commerce." Id.

OSHA initially approved California's state plan in 1973. In 1986, California voters passed Proposition 65, entitled the Safe Drinking Water and Toxic Enforcement Act, requiring new state regulation of toxic chemicals. Among other things, Proposition 65 required that any person doing business in California must give a "clear and reasonable warning" before exposing any individual to "a chemical known to cause cancer." CAL. HEALTH & SAFETY CODE § 25249.6 (West 1999). The provisions of Proposition 65 could be enforced through civil actions brought by the California attorney general, district attorneys, and city attorneys, as well as by private citizens. Id. § 25249.7.

Proposition 65 took effect in February 1988, but initially was not made part of California's state plan. In 1990, however, the California Court of Appeals held that the provisions of Proposition 65 must be incorporated into California's state plan. See California Labor Federation, AFLCIO v. Occupational Safety & Health Standards Bd., 221 Cal.App.3d 1547, 271 Cal.Rptr. 310 (1990). California then drafted an amendment to its state plan incorporating the provisions of Proposition 65 and submitted the amendment to OSHA for approval. Pursuant to long-standing OSHA policy, California was allowed to enforce the modifications to its state plan prior to OSHA's review and approval of the amendment.

After over four years of discourse between OSHA and the state regarding the proposal, OSHA sought public comment regarding the amendment's approval in late 1996. After receiving and reviewing over 200 public comments, OSHA approved the amendment to the plan in a lengthy decision issued on June 6, 1997 — with three conditions: (1) that the existing methods of providing warnings under federal or state hazard communication provisions could be used to provide any necessary warnings under Proposition 65; (2) that the state would take action to ensure that court decisions brought by private citizens would not result in a standard that is less effective than the federal standard; and (3) that the standard would not be enforced against out-of-state manufacturers. See 62 Fed.Reg. 31,180 (1997). Plaintiffs immediately filed this lawsuit challenging OSHA's decision.

II. DISCUSSION

Plaintiffs have moved for summary judgment on three grounds, arguing that OSHA acted unlawfully because: (1) its policy of allowing a state to enforce modifications before approval was not adopted properly under the Administrative Procedure Act and is contrary to the OSHAct; (2) OSHA incorrectly found that the Proposition 65 amendment met the criteria of the OSHAct; and (3) the Proposition 65 amendment improperly regulates maritime employers in violation of the Admiralty Clause of the United States Constitution. Defendants have filed a cross-motion for summary judgment. The Attorney General of California and the California Division of Occupational Health intervened as defendants to contest plaintiff's position. The Court will address each argument in turn.

A. Enforcement Before Approval

Plaintiffs first argue that California should not have been permitted to enforce the amendment to the plan prior to OSHA approval. In particular, plaintiffs contend that OSHA's policy of allowing pre-approval enforcement is a legislative rule that should have been promulgated using notice and comment procedures. Plaintiffs also contend that the policy is contrary to the clear and unambiguous language of the OSHAct. The Court will not reach either of these issues, however, because OSHA's subsequent approval of the amendment in June 1997 has rendered the question moot.

The undisputed fact is that California is no longer enforcing Proposition 65 without approval. "Where an action has no continuing adverse impact and there is no effective relief that a court may grant, any request for judicial review of the action is moot .... Past exposure to illegal conduct does not itself show a present case or controversy ... if unaccompanied by any continuing, present adverse effects." Southwestern Bell Tel. Co. v. FCC, 168 F.3d 1344, 1350 (D.C.Cir.1999) (quoting O'Shea v. Littleton, 414 U.S. 488, 495-96, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974)); see also Branton v. F.C.C,, 993 F.2d 906, 909 (D.C.Cir.1993) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 103, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983)) ("[P]ast wrongs do not in themselves amount to that real and immediate threat of injury necessary to make a case or controversy"). Plaintiffs have claimed no continuing adverse effects from California's pre-approval enforcement of Proposition 65.

OSHA's pre-approval enforcement policy nevertheless would be reviewable if it was "capable of repetition, yet evading review." Southwestern Bell Tel. Co. v. FCC, 168 F.3d at 1351. The parties agree, however, that OSHA routinely employs this policy, and there is no indication that the issue is evading review. This issue therefore easily could be litigated and resolved in one of the many other instances where OSHA implements the policy. In fact, at least one court has already upheld OSHA's pre-approval enforcement policy in the face of such a challenge. See Florida Citrus Packers v. California, 545 F.Supp. 216, 219 (N.D.Cal.1982). Because the question is clearly not "capable of repetition, yet evading review," the issue of OSHA's pre-approval enforcement policy is moot.

B. Approval

Plaintiffs contest OSHA's approval of the Proposition 65 amendment on several grounds. Plaintiffs first argue that OSHA incorrectly placed the burden of proof on the parties challenging the Proposition 65 amendment. They maintain that because OSHA's decision in this matter was a formal adjudication under the Administrative Procedure Act, the burden of proof was on OSHA. Plaintiffs then argue that OSHA did not meet its burden when it found that (1) the modifications to the state plan were required by compelling local conditions, (2) the modifications did not unduly burden interstate commerce, (3) the state plan modifications were "as effective" as the federal standards, and (4) the modifications satisfied the requirements that the standards be enforced by a state agency and by qualified personnel. Finally, plaintiffs argue that OSHA did not consider all of the relevant factors required by Section 18(c) of the OSHAct. See 29 U.S.C. § 667(c).

1. Burden of Proof

In a formal adjudication, the burden of proof is on "the proponent of the rule or order," in this case OSHA. 5 U.S.C. § 556(d). Despite plaintiffs' arguments to the contrary, however, OSHA's decision to approve Proposition 65 was not a formal adjudication. An adjudication is formal only when the decision is "required by statute on the record after opportunity for an agency hearing." 5 U.S.C. § 554(a). While it is not clear what specific statutory language is required by the APA to trigger a formal adjudication, there must at least be some language instructing the agency to conduct some sort of hearing. See United States v. Florida East Coast Railway Co., 410 U.S. 224, 241, 93...