O.E.C. CORPORATION

OSHRC Docket No. 78-4195

Occupational Safety and Health Review Commission

April 21, 1980

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Before: CLEARY, Chairman, BARNAKO and COTTINE, Commissioners.  

COUNSEL:

Baruch A. Fellner, Office of the Solicitor, USDOL

William S. Kloepfer, Associate Regional Solicitor, USDOL

Robert J. Bux, for the employer

Clyde G. Kanz, Pres., O.E.C. Corp., for the employer

OPINION:

DECISION

BY THE COMMISSION:

This is a case under the Occupational Safety and Health Act of 1970, 29 U.S.C. § §   651-678 ("the Act").   A decision of Administrative Law Judge Paul L. Brady is before the Commission for review under section 12(j) of the Act, 29 U.S.C. §   661(i).   Judge Brady held that Respondent committed three nonserious violations of the Act by failing to comply with 29 C.F.R. § §   1903.2(a)(1), 1910.22(a)(1), and 1910.23(c)(1).   For the latter two violations he assessed penalties of $100 and $175, respectively.   Judge Brady specifically rejected Respondent's challenge to the validity of the inspection warrant, concluding that the Commission lacked authority to rule on that claim.

Neither party filed a petition for discretionary review of the judge's decision.   Pursuant to 29 C.F.R. §   2200.91a(a), n1 Commissioner Cottine directed review of this case sua sponte on the following issues:

1) whether the judge [*2]   erred in concluding that the Commission lacks authority of consider the validity of a search warrant issued by a United States Magistrate, and

2) whether the judge erred in affirming the citations based on Respondent's failure to present a defense on the merits.

The Secretary has filed a brief on review.   However, Respondent, the party aggrieved by the judge's disposition of the issues directed for review, has not responded to the direction for review or otherwise demonstrated an interest in having the case reviewed by the Commission.

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n1 Section 2200.91a has subsequently been redesignated section 2200.92.   See 44 Fed. Reg. 70,106, 70,111 (1979).

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We therefore conclude that the aggrieved party apparently lacks any interest in having this case reviewed.   We also conclude that the case lacks compelling public interest. Accordingly, we decline to pass upon the issues directed for review.   We affirm the judge's decision without review.   Abbott-Sommer, Inc., 76 OSAHRC 21/A2, 3 BNA OSHC 2032, 1975-76 CCH OSHD P20,428 [*3]   (No. 9507, 1976).   See Crane Co., 76 OSAHRC 37/A2, 4 BNA OSHC 1015, 1975-76 CCH OSHD P20,508 (No. 3336, 1976).   The judge's decision is accorded the precedential value of an unreviewed judge's decision.   Leone Construction Co., 76 OSAHRC 12/E6, 3 BNA OSHC 1979, 1975-76 CCH OSHD P20,387 (No. 4090, 1976), appeal withdrawn, No. 76-4070 (2d Cir. May 17, 1976).

IT IS SO ORDERED.  

DISSENTBY: COTTINE

DISSENT:

COTTINE, Commissioner, dissenting:

The majority's decision not to consider this case on review is devoid of any support in law or policy.   Their disposition fundamentally conflicts with the Congressional delegation of administrative appellate jurisdiction to the Commission, Keco Industries, Inc., 79 OSAHRC    , 7 BNA OSHC 2048, 1979 CCH OSHD P24,117 (No. 78-661, 1979) (Cottine, dissenting), and each Commissioner's statutory authority to direct cases for review.   See also Hurlock Roofing Co., 79 OSAHRC 7/A2, 7 BNA OSHC 1108, 1979 CCH OSHD P23,358 (No. 76-357, 1979) (Cottine, concurring).

Despite the apparent lack of party interest, compelling public interest demands that the Commission review this case.   Accordingly, this opinion addresses the unique facts of this case (Part [*4]   I), the constitutional issues presented by the record (Part II), and the Commission's responsibility to rule on challenges to the validity of inspection warrants in order to provide guidance to its administrative law judges and the affected parties (Part III).

I

On June 22, 1978, William Lacy, an OSHA compliance officer, attempted to inspect Respondent's facility in Medina, Ohio.   The compliance officer presented Respondent with a copy of the complaint of hazardous working conditions that precipitated the inspection. The name of the complaining party was deleted from the copy.   Respondent refused to permit Lacy to enter unless Lacy first provided the name of the person who filed the complaint.   Lacy refused to divulge the person's name and consequently left the facility.   After conferring with his superiors, Lacy applied for and obtained a search warrant from a United States Magistrate.   On August 10, 1978, Lacy returned to Respondent's plant and, despite the objection of Respondent's President, conducted an inspection pursuant to the warrant.

As a result of that inspection, Respondent was issued two citations.   Citation No. 1 alleged two serious violations of the Act for noncompliance [*5]   with 29 C.F.R. § §   1910.22(a)(1) and 1910.23(c)(1).   A penalty of $300 was proposed for each violation contained in this citation.   Citation No. 2 alleged a nonserious violation of the Act for noncompliance with 29 C.F.R. §   1903.2(a)(1) and proposed no penalty.   Respondent contested all the alleged violations and proposed penalties.   In its answer to the Secretary's complaint, Respondent generally denied the alleged violations.   It also contended that the Secretary's complaint, citations, warrant, and search were "illegal and insufficient as a matter of law" and violated Respondent's rights under the Constitutions of the United States and the State of Ohio.

The Secretary's only witness at the hearing was Compliance Officer Lacy.   In his testimony, he briefly described the three cited conditions that he observed during his walk-through of the plant on August 10.   The compliance officer also described the factors he considered in assessing penalties.

Respondent's President, Clyde Kanz, was Respondent's sole respresentative at the hearing as well as its sole witness. n1 He contended that the complaint to OSHA was not made by a neutral party, an interested person, or an employee of Respondent,   [*6]   and thus contravened the requirements set forth in Marshall v. Barlow's, Inc., 436 U.S. 307 (1978) ("Barlow's"). n2 In support of that assertion, Kanz offered into evidence a letter dated June 23, 1978, that he had written and sent to the OSHA office in Cleveland, Ohio.   Kanz also submitted a list of Respondent's employees for the week when the complaint was made. n3 He argued that the inspection of Respondent's facility on August 10, 1978, was invalid because the inspection warrant was issued without probable cause. He contended that the evidence acquired as a result of that inspection must be stricken from the record.

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n1 Kanz stated at the hearing that he is not an attorney.   He also stated that he had previously contacted the attorney who had filed Respondent's answer and requested that this attorney not be present at the hearing.

n2 When asked on cross-examination whether Respondent was selected for an inspection based on a formal complaint by an employee, Lacy replied, "The complaint stemmed from someone that worked within that work facility." When asked whether the person worked for Respondent at the time the complaint was filed, Lacy testified that he could not say.   Moreover, Lacy seemed to recall that the Magistrate asked the same question before issuing the warrant.   Lacy stated that he did not know if the Magistrate issued the warrant based on the person who filed the complaint being an employee of Respondent at the time the complaint was made.

n3 While the letter is not part of the record, it was described in Kanz's testimony.   Kanz testified that he wrote a letter to "Mr. Bowman" at the OSHA Area Office in Cleveland on June 23, 1978, stating that Respondent would provide its own attorney with a list of all employees as of the date of the complaint, i.e., the week ending May 13, 1978, so that Bowman could verify with Respondent's attorney whether the person who filed the complaint was an employee.   Kanz further testified that Respondent's attorney did read the list over the telephone to someone at the OSHA Area Office.   In response, the person contacted at OSHA indicated that the complaining party was not on that list of Respondent's employees, but that an application for an inspection warrant would be made nonetheless.

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Judge Brady told Kanz at the hearing that he lacked authority to rule on the validity of the inspection warrant. Accordingly, the judge refused to admit Respondent's letter or its list of employees into evidence. n4 The judge also denied Respondent's motion to strike the Secretary's evidence.   However, the judge indicated that he would allow Respondent to present procedural objections in order to preserve the issue on appeal.   With regard to the merits of the violation and in response to the judge's questions, Kanz testified that he was neither taking issue with Lacy's testimony nor admitting that the alleged violations occurred.

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n4 In its post-hearing brief, Respondent named the "disgruntled former employee" who, it believed, filed the complaint with OSHA.   Respondent also attached the list of its employees, which was not admitted by the judge, to its post-hearing brief as Exhibit A.

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In his decision, Judge Brady affirmed the alleged [*8]   violations on the basis of Lacy's "unchallenged testimony" and Respondent's "failure to proceed on the merits." However, the judge determined that the record failed to support the allegation that the two violations set forth in Citation No. 1 were serious under section 17(k) of the Act.   With respect to Respondent's constitutional claims, the judge ruled that the Commission lacks authority to consider the validity of a search warrant issued by a United States Magistrate.   Judge Brady relied on Electrocast Steel Foundry, Inc., 78 OSAHRC 34/B7, 6 BNA OSHC 1562, 1978 CCH OSHD P22,702 (No. 77-3170, 1978) to support his ruling.   Review of this case was directed on the following specific issues:

1) whether the judge erred in concluding that the Commission lacks authority to consider the validity of a search warrant issued by a United States Magistrate, and

2) whether the judge erred in affirming the citations based on Respondent's failure to present a defense on the merits. n5

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n5 This direction is statutorily authorized, 29 U.S.C. §   661(i), and consistent with Commission rules regarding directions for review, 29 C.F.R. §   2200.91a, redesignated 29 C.F.R. §   2200.92, 44 Fed. Reg. 70,106, 70,111 (1979).

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II

In Barlow's, supra, the United States Supreme Court held that section 8(a) of the Act, 29 U.S.C. §   657(a) n6 violates the Fourth Amendment of the United States Constitution to the extent that it purports to authorize inspections without a warrant or its equivalent.   Respondent in this case exercised its fourth amendment right by initially denying a warrantless entry. After the Secretary secured a warrant following the employer's refusal to permit entry, Respondent permitted the OSHA compliance officer to enter its facility though Respondent had initally objected to the warrantless entry. n7 Respondent then pursued its constitutional claim in the Commission proceeding on its contest of the OSHA citations.   First, O.E.C. Corp. answered the Secretary's complaint in this case by asserting that its fourth amendment rights had been violated in the inspection of its facility.   Second, Respondent specifically argued at the hearing that the warrant was invalid because it was not based on probable cause.

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n6 This section provides:

In order to carry out the purposes of this Act, the Secretary, upon presenting appropriate credentials to the owner, operator, or agent in charge, is authorized --

(1) to enter without delay and at reasonable times any factory, plant, establishment, construction site, or other area, workplace or environment where work is performed by an employee of an employer; and

(2) to inspect and investigate during regular working hours and at other reasonable times, and within reasonable limits and in a reasonable manner, any such place of employment and all pertinent conditions, structures, machines, apparatus, devices, equipment, and materials therein, and to question privately any such employer, owner, operator, agent or employee.

In response to Barlow's, the Secretary altered compliance officer credentials by removing material paraphrasing section 8(a) of the Act.  

n7 In Barlow's, the employer also initially denied warrantless entry. The Secretary subsequently petitioned the federal district court to issue an order compelling the employer to admit the inspector.   In response to that court's issuance of the order, the employer again refused admission and sought its own relief in the form of an injunction in federal district court against the warrantless searches assertedly authorized by section 8(a) of the Act.   That court held that a warrant was necessary for the OSHA search and granted the requested injunction.

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In Chromalloy American Corp., 79 OSAHRC    , 7 BNA OSHC 1547, 1979 CCH OSHD P23,707 (No. 77-2788, 1979), the Commission asserted its authority to rule on challenges to the validity of OSHA inspection warrants in OSHA enforcement proceedings. n8 Accord, Babcock and Wilcox Co. v. Marshall and OSHRC, 610 F.2d 1128 (3d Cir. 1979); Quality Products, Inc., 592 F.2d 611 (1st Cir. 1979); Kama Corp. v. Marshall, No. 78-1146 (M.D. Pa. April 3, 1980).   In Babcock and Wilcox, supra, the Third Circuit concluded that the Commission is statutorily competent to resolve claims regarding the legality of OSHA inspections. However, the court noted that the Commission and its judges do not sit to review a Magistrate's decision to issue a warrant.   Instead, the court concluded that the issue to be resolved by the Commission is "whether to use the evidence" obtained by the OSHA inspection. Id. at 1136. The court specifically concluded that the Commission was to independently determine the constitutional issues involved in the inspection and ultimately to decide whether to apply the exclusionary [*11]   rule as a remedy. n9 Consequently, the Commission must dispose of warrant challenges de novo. Unfortunately, the Commission has done no more than assert its authority.   Chromalloy American Corp., supra. No explanation of the nature, scope, or format of this obviously complicated inquiry has been forthcoming.   See Daniel International Corp., supra. With this decision, my colleagues perpetuate this vacuum.

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n8 The Commission did not overrule Electrocast Steel Foundry, Inc., supra, but rather explained that Electrocast merely held that prior to the Supreme Court's decision in Barlow's the Commission lacked the authority to pass upon the validity of OSHA inspection warrants because it had no authority to rule upon the constitutionality of section 8(a) of the Act.   The Commission's decision in Chromalloy is consonant with the obligation to address constitutional claims, imposed on the Commission by the supremacy and oath of office clauses of the United States Constitution.   Art VI, cls. 2 and 3; See Hurlock Roofing Co., supra. (Cottine, concurring).

n9 The latter question is an issue not yet ruled upon by the Commission in the context of an inspection conducted subsequent to the issuance of Barlow's, such as the one in the instant case.   In Meadows Industries, Inc., 79 OSAHRC    , 7 BNA OSHC 1709, 1979 CCH OSHD P23,847 (No. 76-1463, 1979), the Commission held that the exclusionary rule is not available to remedy warrantless OSHA inspections conducted prior to the date of the Barlow's decision by the Supreme Court.

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III

The Commission has the statutory responsibility to develop and integrate a national body of occupational safety and health law.   S & H Riggers & Erectors, Inc., 79 OSAHRC 23/A2, 7 BNA OSHC 1260, 1979 CCH OSHD P23,480 (No. 15855, 1979), appeal filed, No. 79-2358 (5th Cir. June 7, 1979).   The Third Circuit recognized this responsibility in Babcock and Wilcox, supra. that court also expected the exercise of our statutory responsibility when it stated:

Although the Review Commission may not, in its early stages, have developed expertise in deciding, for example, what constitutes administrative probable cause and a reasonable inspection under the Act, the thought that expertise on those issues will be developed by the Review Commission reinforces our conclusion that exhaustion of administrative remedies is required in this case.

610 F.2d at 1140. Compelling public interest requires the Commission to inform affected parties at the earliest opportunity of the inquiry that will be conducted when the validity of an inspection warrant is challenged.   Obviously, the Commission's administrative [*13]   law judges as well as the affected parties are entitled to appropriate guidance on the criteria to be employed in adjudicating claims that inspection warrants were issued without probable cause. n10 Equally necessary is adjudicatory guidance regarding the burden of proof with respect to the constitutionality of the inspection. Moreover, the Commission has not yet considered the admissibility in a Commission hearing of evidence relevant to the legality of the inspection when that evidence was not presented for the Magistrate's consideration with the warrant application. Commission judges, employers, and the Secretary also must be informed about the availability of the exclusionary rule as a remedy for searches conducted in violation of the probable cause requirement established in Barlow's. Moreover, the Commission's statutory obligation to formulate a uniform national law regarding these significant constitutional issues is sacrificed by the majority's failure to adjudicate this case.   Finally, additional delay in providing adjudicatory guidance on these issues increases the possibility of erroneous and inconsistent adjudication by Commission judges of these constitutional claims,   [*14]   inevitably adding to the Commission's caseload.

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n10 In Barlow's, the Court stated that criminal probable cause is not necessary for the issuance of an OSHA inpection warrant.   436 U.S. at 320. Although the federal district courts have disposed of contentions that OSHA inspection warrants were invalid, these decisions provide no national guidance to Commission judges and the affected parties on factors to be considered in determining probable cause for administrative search warrants.   See, e.g., Marshall v. Horn Seed Co., Inc., No. CIV-78-1308-T (W.D. Okla. March 16, 1979); In the Matter of Inspection of: Central Mine Equipment Co., No. 78 MISC 93 (E.D. Mo. February 1, 1979) (aff'g Magistrate's memorandum and order).   Numerous factors clearly are potentially relevant to administrative probable cause. See also Camara v. Municipal Court of San Francisco, 387 U.S. 525 (1967); See v. City of Seattle, 387 U.S. 541 (1967); See generally Rothstein, OSHA Inspections After Marshall v. Barlow's, Inc., 1979 Duke L.J. 63, 90-98; F. Grad, Public Health Law Manual 90-107 (1973).

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IV

The record before the Commission in this case reveals that Respondent's fourth amendment claim involves factual questions that cannot be resolved without additional evidence of record. n11 Therefore, I would remand this case to Judge Brady for further proceedings with respect to administrative probable cause and the appropriate relief to be afforded Respondent.   I would also instruct the judge to hear any contentions of Respondent concerning the merits of the case.   Respondent appeared at the hearing pro se, and the judge's ruling that the Commission lacked authority to determine the legality of the search may have adversely affected the Respondent's decision on whether to defend on the merits.   Therefore, I would allow Respondent to litigate the merits of the citations if the judge rejects Respondent's fourth amendment challenge.

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n11 Respondent claimed that the inspection was unreasonable because there is not probable cause to support a warrant when that probable cause is based on a complaint to OSHA by a disgruntled former employee. The employment status of the complaining person is not determinative.   In Quality Stamping Products Co., 79 OSAHRC 28/F11, 7 BNA OSHC 1285, 1979 CCH OSHD P23,520 (No. 78-235, 1979), the Commission stated that an inspection is valid under the general inspection authority of section 8(a) of the Act even if it was prompted by a complaint from someone who is neither an employee nor a representative of employees and whose alleged aim is to harass the employer.   But cf. Kama Corp. v. Marshall, supra, slip op. at 11-13, citing Franks v. Delaware, 438 U.S. 154 (1978) (fraudulent misrepresentation in warrant application).   Moreover, the Commission has also held that any rights granted by section 8(a) should be read as coextensive with those granted by the fourth amendment.   Titanium Metals Corp. of America, 80 OSAHRC    , 7 BNA OSHC 2172, 1980 CCH OSHD P24,199 (No. 14080, 1980).   Accordingly, the reliability of the complaining individual and ultimately the complaint remain issues to be considered in ascertaining whether there was probable cause to inspect.

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Commission resolution of the issues of compelling public interest presented by this case is fundamental to the effective performance of our adjudicatory responsibilities.   Accordingly, I dissent from the decision to summarily deny review.