U.S. v. Agronics Inc., 94-2258

• Decision Date: 22 January 1999
• Docket Number: No. 94-2258,94-2258
• Citation: 164 F.3d 1343
• Parties: 19 O.S.H. Cas. (BNA) 1620, 1999 CJ C.A.R. 478 UNITED STATES of America, Plaintiff-Counter-Defendant-Appellee, and United States Department of Labor; Federal Mine Safety & Health Administration, Counter-Defendants-Appellees, v. AGRONICS INCORPORATED, Defendant-Counter-Claimant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1343

164 F.3d 1343

19 O.S.H. Cas. (BNA) 1620, 1999 CJ C.A.R. 478

UNITED STATES of America, Plaintiff-Counter-Defendant-Appellee,

and

United States Department of Labor; Federal Mine Safety &

Health Administration, Counter-Defendants-Appellees, v. AGRONICS INCORPORATED, Defendant-Counter-Claimant-Appellant.

No. 94-2258.

United States Court of Appeals, Tenth Circuit.

Jan. 22, 1999.

John J. Kelly, United States Attorney, John W. Zavitz, Assistant U.S. Attorney, Albuquerque, NM, for Plaintiff-Counter-Defendants-Appellees.

Peter V. Domenici, Jr., Albuquerque, NM, for Defendant-Counter-Claimant-Appellant.

Before BRORBY, McKAY, and BRISCOE, Circuit Judges.

BRISCOE, Circuit Judge.

Plaintiff United States of America brought this action to recover a civil penalty imposed by the Federal Mine Safety and Health Administration (MSHA) against defendant Agronics, Incorporated in connection with its operation of a humate mining and processing facility in Sandoval County, New Mexico. Under the applicable statutory scheme, the district court had limited jurisdiction to order payment of this administratively final and conclusive penalty, without collateral review of the merits. See 30 U.S.C. §§ 816(a)(1), 820(j). In response, Agronics filed a counterclaim for damages under the Federal Tort Claims Act, alleging MSHA had breached a statutory duty to exercise complete and exclusive regulatory jurisdiction over the Agronics facility, resulting in inconsistent and commercially adverse enforcement action by another agency. The district court dismissed the counterclaim under the "discretionary function" exception of the FTCA, 28 U.S.C. § 2680(a). Following the entry of judgment for the government on recovery of the penalty, Agronics appealed the dismissal of its counterclaim. We affirm for the reasons stated below. ¹

Discretionary Function

Agronics alleged that at various times MSHA improperly ceded authority over parts of the Sandoval County facility to the Occupational Safety and Health Administration (OSHA), whose designee, the New Mexico Environmental Department (NMED), ² caused direct financial harm through penalty assessments and closure orders, and indirect losses through injury to Agronics' reputation and goodwill. The district court held MSHA's determination of its own jurisdictional reach, and consequently the scope of OSHA's subordinated authority, ³ was a matter of administrative policy and dismissed Agronics' counterclaim under the discretionary function exception, obviating any need to resolve the merits of the underlying question of administrative jurisdiction. See generally United States v. Gaubert, 499 U.S. 315, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991); Berkovitz ex rel. Berkovitz v. United States, 486 U.S. 531, 108 S.Ct. 1954, 100 L.Ed.2d 531 (1988). We review this decision de novo. See Duke v. Department of Agric., 131 F.3d 1407, 1409 (10th Cir.1997).

Agronics contends MSHA's cession of regulatory authority to OSHA does not implicate the discretionary function exception because, whatever discretion an agency like MSHA may have with respect to how it regulates activities within its jurisdiction, it does not have discretion to abdicate that legislatively invested authority. At places in its brief, the government appears to be broadly insisting that, in light of potentially difficult questions raised by the statutory specification of MSHA's jurisdiction, especially vis-a-vis OSHA's overlapping mission, the determination and assumption of that jurisdiction is perforce discretionary. However, the government cites no authority indicating that a regulatory agency's legislatively designated jurisdiction, whether simple or complicated, is something the agency may freely construe and assume, alter, or decline. Indeed, such a laissez-faire view regarding agency modification of legislatively invested authority could have significant, and thus far unexamined, administrative law implications well beyond the compass of the present FTCA context. ⁴ Because we can dispose of this case on another rationale, we need not decide as a general matter whether agencies possess such autonomy in this regard as would invoke the FTCA's discretionary function exception.

The government also argues in support of a much narrower basis for upholding its discretionary function defense, one which the district court explicitly relied on for its disposition of the case. The district court gleaned an express grant of discretionary authority to the Secretary of Labor specifically with respect to MSHA/OSHA jurisdictional questions from the following statutory language:

"[C]oal or other mine" [ ⁵] means ... structures, facilities, equipment, machines, tools, or other property ... used in, or to be used in, or resulting from, the work of extracting ... minerals ... or used in, or to be used in, the milling of such minerals.... In making a determination of what constitutes mineral milling for purposes of this chapter, the Secretary shall give due consideration to the convenience of administration resulting from the delegation to one Assistant Secretary of all authority with respect to the health and safety of miners employed at one physical establishment.

30 U.S.C. § 802(h)(1) (emphasis added). The legislative history indicates the "Assistant Secretar[ies]" referred to are the administrators of MSHA and OSHA. See H.R. Conf. Rep. No. 95-655, at 38 (1977), reprinted in 1977 U.S.S.C.A.N. 3485, 3486 (noting the statute "authorize[s] the Secretary, in cases of possible overlapping jurisdictions between the Mine Safety and Health Administration and OSHA, to assign enforcement responsibilities to a single agency" (emphasis added)). And, in fact, MSHA and OSHA have executed an interagency agreement to coordinate their respective jurisdictions pursuant to this statutory authority. See 44 Fed.Reg. 22827 (1979), amended by 48 Fed.Reg. 7521 (1983).

In the district court's view, this direction to the Secretary to consider such a matter of economic/political policy as administrative convenience betokens a "judgment or choice" which "can be said to be grounded in the policy of the regulatory regime" and which, therefore, falls within the discretionary function exception. Gaubert, 499 U.S. at 322, 325, 111 S.Ct. 1267; see Berkovitz, 486 U.S. at 536-37, 108 S.Ct. 1954. In a different but still informative context, the District of Columbia Circuit similarly concluded that the same statutory language "gives the Secretary discretion, within reason, to determine what constitutes mineral milling, and thus indicates his determination is to be reviewed with deference both by the [Federal Mine Safety and Health Review] Commission and the courts." Donovan v. Carolina Stalite Co., 734 F.2d 1547, 1552 (D.C.Cir.1984).

A persuasive case can thus be made that, at least as to decisions falling within the pertinent clause of § 802(h)(1), i.e., where milling activities at a mine could give rise to a dual MSHA/OSHA presence, the Secretary of Labor has discretion to override the split regulatory jurisdiction and grant one or the other agency full authority. However, Agronics asserts MSHA had exclusive jurisdiction and improperly relinquished part to OSHA, an action the statute does not specifically sanction. Again, we need not address this unsettled question regarding agency control over legislatively designated authority, as there is a more basic problem with Agronics' claim, one which bars its use of the FTCA as a vehicle for second-guessing MSHA's jurisdictional determinations regardless of whether these determinations are discretionary or not.

Statutory Duty/Private Analog

"It is virtually axiomatic that the FTCA does not apply 'where the claimed negligence arises out of the failure of the United States to carry out a [federal] statutory duty in the conduct of its own affairs.' " Sea Air Shuttle Corp. v. United States, 112 F.3d 532, 536 (1st Cir.1997) (quoting Johnson v. Sawyer, 47 F.3d 716, 727-28 (5th Cir.1995) (en banc)). Other courts invoke the same rule by the shorthand expressions of immune "quasi-legislative" or "quasi-judicial" action. See, e.g., C.P. Chem. Co. v. United States, 810 F.2d 34, 37-38 (2d Cir.1987); Jayvee Brand, Inc. v. United States, 721 F.2d 385, 390 (D.C.Cir.1983). The underlying principle is that the FTCA's waiver of sovereign immunity is limited to conduct for which a private person could be held liable under state tort law, see 28 U.S.C. §§ 1346(b), 2674, and federal statutory duties regarding peculiarly administrative acts generally involve "a type of conduct that private persons could not engage in, and hence could not be liable for under local law." Sea Air Shuttle, 112 F.3d at 537 (quotation omitted); see also Dorking Genetics v. United States, 76 F.3d 1261, 1266 (2d Cir.1996) ("[I]t is hard to imagine how state law could recognize a duty of a private person [in connection with] ... regulation ... which is reserved exclusively to the federal government.").

Thus, for example, courts have rejected FTCA claims premised upon such administrative/regulatory acts or omissions as (1) the FAA's failure to take enforcement action against an entity not complying with federal laws and rules, see Sea Air Shuttle, 112 F.3d at 536-37; (2) the USDA's failure to prohibit the exportation of...