Usery v. Lacy, 76-2201

Citation628 F.2d 1226
Decision Date24 September 1980
Docket NumberNo. 76-2201,76-2201
Parties8 O.S.H. Cas.(BNA) 2060, 1980 O.S.H.D. (CCH) P 24,833 W. J. USERY, Jr., Secretary of Labor, Petitioner, v. Franklin R. LACY (Aqua View Apartments), and Occupational Safety and Health Review Commission, Respondents.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Diane Burkley, Washington, D.C., for petitioner.

Franklin R. Lacey, William McLaughlin, Washington, D.C., for respondents.

On Petition to Review an Order of the Occupational Safety and Health Review Commission.

Before TRASK and KENNEDY, Circuit Judges, and KELLEHER, * District judge.

KENNEDY, Circuit Judge:

This appeal presents the question whether an employer can be cited for violating the Occupational Safety and Health Act (OSHA), 29 U.S.C. §§ 651-678 (1976), in the course of constructing a medium-sized apartment building, or whether his contacts with interstate commerce are too attenuated or uncertain to bring him within the Act's coverage.

An administrative law judge dismissed the complaint against respondent on December 16, 1974, because the "Secretary has failed to meet his burden of proving that Respondent was 'engaged in a business affecting commerce.' " (quoting 29 U.S.C. § 652(5) (1976)). Franklin R. Lacy, 4 O.S.H.C. (BNA) 1115 (1974). The Occupational Safety and Health Review Commission (OSHRC) affirmed this dismissal on April 5, 1976, with Commissioner Cleary dissenting. The Secretary of Labor petitioned this court, pursuant to 29 U.S.C. § 660(b) (1976), to set aside the decision of the OSHRC on the jurisdictional issue and to remand the case for a decision on the merits. The employer in this case employed approximately forty workers for the construction of a fifteen-unit apartment building. The OSHRC held that, under the facts of the case, the employer was not shown to be engaged in a business affecting commerce. We think that interpretation of OSHA is not in accordance with law, and therefore reverse. See Titanium Metals Corp. v. Usery, 579 F.2d 536, 540 (9th Cir. 1978).

It may be helpful to contrast here two of the principal formulations of statutory jurisdiction that have evolved from the congressional history of regulating the employment relation. If a statute covers businesses "in commerce," a fairly specific showing must be made of a connection between the particular employer regulated and interstate commerce. See, e. g., Fair Labor Standards Act, 29 U.S.C. § 201 et seq., (1976). See Mitchell v. Lublin, McGaughty & Assocs., 358 U.S. 207, 211, 79 S.Ct. 260, 263, 3 L.Ed.2d 243 (1959); A. B. Kirschbaum Co. v. Walling, 316 U.S. 517, 62 S.Ct. 1116, 86 L.Ed. 1638 (1942); United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609 (1941); Houser v. Matson, 447 F.2d 860 (9th Cir. 1971); Wirtz v. Idaho Sheet Metal Works, Inc., 335 F.2d 952 (9th Cir. 1964). This is the interpretation apparently followed by the OSHRC in the instant case, inasmuch as it focused on the allegations and proof concerning whether the employer used materials and tools supplied by interstate manufacturers. 1

On the other hand, a statute may require only that the particular business "affect" commerce. See, e. g., National Labor Relations Act, 29 U.S.C. §§ 151 et seq. OSHA is a statute which employs this formulation. In such cases there is statutory jurisdiction so long as the business is in a class of activity that as a whole affects commerce. NLRB v. Reliance Fuel Oil Corp., 371 U.S. 224, 83 S.Ct. 312, 9 L.Ed.2d 279 (1963); Polish Nat. Alliance v. NLRB, 322 U.S. 643, 647-48, 64 S.Ct. 1196, 1198-99 88 L.Ed. 1509 (1944); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 34-39, 57 S.Ct. 615, 622-625, 81 L.Ed. 893 (1937). OSHA is an example of this broader jurisdiction, which covers the full reach of Congress' power under the commerce clause.

The regulations which implement OSHA state, essentially, that all employers are covered, with some specific exceptions, such as for those who employ domestic help. See 29 C.F.R. §§ 1975.4, 1975.6 (1979). The coverage of the regulations is consistent with the congressional purpose to reach as broadly as constitutionally permissible in regulating employee safety, since nonuniform coverage would give unsafe employers a competitive advantage. 2 See S. Rep. No. 91-1282, 91st Cong., 2d Sess. 4 (1970), reprinted in Staff of Subcomm. on Labor of the Senate Comm. on Labor and Public Welfare, Legislative History of the Occupational Safety and Health Act of 1970 (S. 2193, P.L. 91-596), 92d Cong., 1st Sess. 144 (Comm. Print 1971) (hereinafter cited as Legislative History), reprinted in (1970) U.S. Code Cong. & Ad.News 5177, 5180. See also Legislative History at 343, 444, 854. We need not here decide whether the regulations are valid as to every conceivable instance of their application. It suffices to say that here the employer hired approximately forty workers for the construction of a fifteen-unit apartment building, and that is a business that affects commerce as a matter of law, for it is within the class of activities that it was Congress' intent to regulate, in extending the Act to employers whose activities in the aggregate affect commerce. 3 See Godwin v. Occupational Safety and Health Review Comm'n, 540 F.2d 1013 (9th Cir. 1976); United States v. Dye Constr. Co., 510 F.2d 78 (10th Cir. 1975); Brennan v. Occupational Safety and Health Review Comm'n, 492 F.2d 1027 (2d Cir. 1974) (Friendly, J.); Marshall v. Kraynak, 457 F.Supp. 907 (W.D.Pa. 1978), aff'd, 604 F.2d 231 (3rd Cir. 1979), cert. denied, 444 U.S. 1014, 100 S.Ct. 664, 62 L.Ed.2d 643 (1980). Whatever might have been said about the correctness of cases such as Hiatt v. Schlecht, 400 F.2d 875 (9th Cir. 1968), at the time of their decision, their value as precedent is significantly eroded by the more recent cases in this and other circuits just cited.

Finally, we follow other recent decisions that have held Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), not retroactively applicable to enforce an exclusionary rule against OSHA for warrantless inspections. See Savina Home Indus. Inc. v. Secretary of Labor, 594 F.2d 1358 (10th Cir. 1979); Todd Shipyards Corp. v. Secretary of Labor, 586 F.2d 683 (9th Cir. 1978).

The decision of the OSHRC is therefore REVERSED and REMANDED for further proceedings not inconsistent with this opinion. The Review Commission may, in its discretion, consider whether the lapse of time between the violations and the date of this decision is a factor to be considered in mitigating the amount of the fines levied against Respondent. Each side shall bear its own costs of this appeal.

KELLEHER, District Judge:

Respectfully, I dissent.

I.

The result achieved by the majority is so patently wrong that any basis upon which it can be avoided seems desirable. The warrantless inspection of the job site made here by the OSHA inspector over the continued objection of Respondent Lacy should bring this case within the rule of Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S.Ct. 1816, 56 L.Ed.2d 305 (1978), which proscribes warrantless inspections by OSHA's inspectors. Barlow's should have retrospective application in a case where, as here, the inspection was made over the continued protests by Respondent, at the time the inspection was made, of its unlawfulness, impropriety, and impermissibility. Lacy was merely a bit more prescient and perceptive than most; he anticipated the rule in Barlow's, and he told the inspector to cease and desist from the inspector's unlawful activities. The unfairness herein articulated is rendered no less fundamentally objectionable by the fact that the warrantless inspection in the case at hand came before, rather than after, Barlow's.

However, the protracted, drawn-out, and oppressive proceedings here involved are what constitute such an unwarranted burden upon Lacy and make unacceptable the result of holding him liable. It should be noted that Lacy assumed the burden of resistance when the inspector first came unlawfully upon the Respondent's premises and subsequently by filing an answer to the complaint brought by the OSHA inspector. He apparently concluded that the day was carried when the Administrative Law Judge dismissed the complaint approximately eighteen months after the unlawful inspection of the job site had been made. But Lacy offered no further defense and, when the matter came before the Occupational Safety and Health Review Commission, he made no appearance there and filed no opposition. Nevertheless, Respondent Lacy prevailed there also. It should be noted that when the Secretary of Labor petitioned this Court to set aside the decision of OSHRC, Respondent Lacy made no appearance in opposition, filed no brief, and offered no oral argument before this Court. This is clearly a case where a person, situated as Lacy, simply gave up to the vast power of the Federal Government (since only approximately $250.00 in fines was involved), and having made his position clear, let the matter pursue its course. In doing so, Lacy reflected some confidence that this Court would give appropriate attention to his fundamental rights. It is time we did so.

II.

Lacy was not engaged in a business affecting commerce. As the Administrative Law Judge found, Lacy was in the business of owning, operating, and maintaining a small apartment building and was not a member of the "construction industry." Only incidentally, if at all, was he engaged in activities which, by the majority's broad-brush treatment, can be said in any way to involve interstate commerce, viz., he was making some additions under his own direction at his apartment building. This activity did not put him in a business "affecting interstate commerce"; rather, his business was owning, operating, and maintaining an apartment building.

The majority would hold that the employer's activity affects commerce as a matter of law, impliedly...

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