Solus Indus. Innovations, LLC v. Superior Court of Orange Cnty., S222314

Decision Date08 February 2018
Docket NumberS222314
Citation4 Cal.5th 316,410 P.3d 32,228 Cal.Rptr.3d 406
CourtCalifornia Supreme Court
Parties SOLUS INDUSTRIAL INNOVATIONS, LLC, et al., Petitioners, v. The SUPERIOR COURT of Orange County, Respondent; The People, Real Party in Interest.

Fox Rothschild, David F. Faustman, San Francsico; Jones Day, Brian A. Sun and Frederick D. Friedman, Los Angeles for Petitioners.

Luke A. Wake; Alston & Bird and Damien M. Schiff, Sacramento for National Federation of Independent Business Small Business Legal Center as Amicus Curiae on behalf of Petitioners.

Shook, Hardy & Bacon, Phil Goldberg, Cary Silverman, Patrick Gregory, San Francisco; Manufacturers' Center for Legal Action, Linda E. Kelly and Patrick N. Forrest for National Association of Manufacturers as Amicus Curiae on behalf of Petitioners.

Lawrence H. Kay for Construction Employers Association as Amicus Curiae on behalf of Petitioners. No appearance for Respondent.

Tony Rackauckas, District Attorney, and Kelly A. Ernby, Deputy District Attorney, for Real Party in Interest.

Mark Zahner, Sacramento for California District Attorneys Association as Amicus Curiae on behalf of Real Party in Interest.

Christopher Jagard, Mi Kim, Amy D. Martin, Pasadena, Suzanne P. Marria, South San Francisco and Kathryn J. Woods, Los Angeles for State of California Department of Industrial Relations, Division of Occupational Safety and Health as Amicus Curiae on behalf of Real Party in Interest.


The Orange County District Attorney brought an action for civil penalties under this state's unfair competition law (UCL; Bus. & Prof. Code, § 17200 ) and fair advertising law (FAL; id ., § 17500) against an employer. The action alleged the employer violated workplace safety standards established by the state occupational safety and health law (Cal/OSHA; Lab. Code, § 6300 et seq. ) and attendant regulations. The employer contended, and the Court of Appeal concluded, that the district attorney's action was preempted by the federal Occupational Safety and Health Act of 1970 (federal OSH Act; 29 U.S.C. § 651 et seq. ).

For the reasons set forth below, we conclude that the federal act does not preempt unfair competition and consumer protection claims based on workplace safety and health violations when, as in California, there is a state plan approved by the federal Secretary of Labor. The district attorney's use of UCL and FAL causes of action does not encroach on a field fully occupied by federal law, nor does it stand as an obstacle to the accomplishment of the federal objective of ensuring a nationwide minimum standard of workplace protection. In addition, the federal act's structure and language do not reflect a clear purpose of Congress to preempt such claims. Therefore, we reverse the judgment of the Court of Appeal.

I. Background
A. Factual and procedural history

Our statement of facts and procedure is based largely on the opinion of the Court of Appeal.

Solus Industrial Innovations, LLC (Solus) manufactures plastics at its Orange County facility. In 2007, it installed at the facility an electric water heater that was designed for residential use. In March 2009, the water heater exploded, killing two employees.

The Division of Occupational Safety and Health1 investigated and "determined the explosion had been caused by a failed safety valve and the lack of ‘any other suitable safety features on the heater’ due to ‘manipulation and misuse.’ " In an administrative proceeding, the agency charged Solus with five violations of state occupational safety and health regulations. ( Cal. Code Regs., tit. 8, § 467, subd. (a) [failure to provide a proper safety valve]; id ., § 3328, subds. (a) [permitting unsafe operation of machinery and equipment], (b) [improper maintenance of machinery and equipment], (f) [failing to use good engineering practices], (h) [permitting unqualified and untrained personnel to operate and maintain machinery and equipment].) The Division also cited Solus with a willful violation for failing to maintain the water heater in a safe condition.

In addition, because two employees had died and there was evidence of violations of law, the Division forwarded the investigation results to the District Attorney of Orange County. (See Lab. Code, § 6315, subd. (g).) In March 2012, the district attorney filed criminal charges against Solus's plant manager and its maintenance supervisor for felony violations of Labor Code section 6425, subdivision (a).

The district attorney also filed the present civil action against Solus. The complaint alleged four causes of action, "all based on the same worker health and safety standards placed at issue in the administrative proceedings." Only two of the causes of action are at issue here. One "allege[d] that Solus's failure to comply with workplace safety standards amount[ed] to an unlawful, unfair and fraudulent business practice under Business and Professions Code section 17200, and the district attorney request[ed] imposition of civil penalties as a consequence of that practice, in the amount of up to $2,500 per day, per employee, for the period from November 29, 2007, through March 19, 2009." The second was a claim that Solus "made numerous false and misleading representations concerning its commitment to workplace safety and its compliance with all applicable workplace safety standards, and as a result of those false and misleading statements, Solus was allegedly able to retain employees and customers in violation of Business and Professions Code section 17500." The district attorney requested imposition of civil penalties in the same amount for the same period.2

Solus demurred on the ground that the two causes of action were preempted by the federal OSH Act. ( 29 U.S.C. § 651 et seq. ) The trial court overruled the demurrer. Solus challenged the order and the Court of Appeal summarily denied Solus's petition for writ of mandate. This court granted the petition for review filed by the district attorney and transferred the matter back to the Court of Appeal with directions to issue an order to show cause.

The Court of Appeal issued its order to show cause and concluded that the federal OSH Act preempted the district attorney's UCL and FAL claims. Its conclusion was based in part on a misapprehension concerning the date that unfair competition penalty provisions were enacted compared with the date the federal Secretary of Labor approved California's occupational safety and health plan. This court granted review and transferred the matter back to the Court of Appeal for reconsideration in light of former section 3370.1 of the Civil Code, a provision enacted in 1972. As the Court of Appeal acknowledged in its second opinion, this statute, which provided penalties for unfair competition, "was in effect when California's plan was approved" by the federal Secretary of Labor. The Court of Appeal nonetheless concluded that the UCL and FAL claims were preempted by the federal statute. In its view, federal law preempted any state occupational safety and health standard or method of enforcing such a standard that did not appear in the California occupational safety and health plan submitted to and approved by the federal Secretary of Labor.

This court granted the district attorney's petition for review.

B. Relevant federal and state laws
1. Federal law

As explained below, the federal OSH Act ( 29 U.S.C. § 651 et seq. ) provides that the federal Secretary of Labor shall adopt standards for occupational safety and health, but federal law does not preempt state authority when (1) there is no federal standard or (2) there is a state plan for occupational safety and health that has been approved at the federal level.

It is settled that the purpose of the 1970 federal enactment was to supply a nationwide floor of protection for workers. ( 29 U.S.C. § 651(b) [Congress's intent was "to assure so far as possible every working man and woman in the Nation safe and healthful working conditions"]; United Air Lines, Inc. v. Occupational Safety & Health Appeals Bd. (1982) 32 Cal.3d 762, 772, 187 Cal.Rptr. 387, 654 P.2d 157 ( United Air Lines ) [the federal act intended "to address the problem of uneven and inadequate state protection of employee health and safety" and "establish a nationwide ‘floor’ of minimally necessary safeguards"].)

The federal OSH Act grants the federal Department of Labor the authority to provide and enforce mandatory national standards. ( 29 U.S.C. § 651(b)(3) ; see also id ., § 655 [calling for promulgation of standards].) The federal Secretary of Labor has delegated certain authority to the federal Occupational Safety and Health Administration (hereafter sometimes federal OSHA) to adopt standards. ( Gade v. National Solid Wastes Management Ass'n (1992) 505 U.S. 88, 92, 112 S.Ct. 2374, 120 L.Ed.2d 73 ( Gade ) (plur. opn. of O'Connor, J.).) If the Secretary of Labor has not promulgated a federal standard with respect to an occupational safety or health issue, states may supply their own standards. ( 29 U.S.C. § 667(a) ["Nothing in this chapter shall prevent any State agency or court from asserting jurisdiction under State law over any occupational safety or health issue with respect to which no standard is in effect under section 655 of this title"].)3

Moreover, even when there are federal standards on an issue relating to occupational safety and health, a state may assume responsibility for developing and enforcing state standards on such issues by developing and submitting to the Secretary of Labor a plan to "preempt" federal standards. In a provision entitled "Submission of State plan for development and enforcement of State standards to preempt applicable Federal standards," the federal OSH Act states: "Any State which, at any time, desires to assume responsibility for development and enforcement therein of occupational safety and health standards relating to any occupational safety or health issue with respect to which a Federal...

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