Sturm Ruger & Co. v. Secretary of Labor ( 2005 )

Not For Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 04-1836
STURM RUGER & CO.,
Petitioner,
v.
ELAINE CHAO, SECRETARY OF LABOR,
Respondent.
ON PETITION FOR REVIEW OF A FINAL ORDER OF
THE OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
Before
Howard, Circuit Judge,
Cyr and Stahl, Senior Circuit Judges.
Richard D. Wayne with whom Brian E. Lewis and Hinkley, Allen
& Snyder LLP were on brief, for petitioner.
Ronald J. Gottlieb, Attorney, U.S. Department of Labor with
whom Howard M. Radzely, Solicitor of Labor, Joseph M. Woodward,
Associate Solicitor of Occupational Safety and Health and Ann
Rosenthal, Counsel for Appellate Litigation, were on brief, for
Respondent.
April 18, 2005
Per Curiam. Sturm Ruger & Co. petitions for review of an
order of the Occupational Safety and Health Review Commission (the
Commission) denying its motion to suppress evidence obtained during
an Occupational Safety and Health Administration (OSHA) inspection
of one of its establishments. Sturm Ruger also challenges certain
of the Commission's discovery rulings. We deny the petition for
review.
I.
In 1996, OSHA launched an annual survey called the Data
Collection Initiative (DCI). See 29 C.F.R. § 1904.17 (1998).
Under the DCI, OSHA required certain employers to report the number
of work related injuries and illnesses, as well as the number of
employees and the number of hours worked during the survey period.
The survey required that each employer report the requested
information on a "per establishment" basis. OSHA used the survey
data to calculate the rate of injury or illness per establishment.
OSHA then used the resulting rates to target certain establishments
for inspection as part of its Interim Plan for Inspection Targeting
(ITP).
Sturm Ruger has manufacturing facilities in Newport, New
Hampshire. Sturm Ruger's Pine Tree Castings Division is housed
within one of the buildings at Sturm Ruger's Newport facility.
Pine Tree produces steel investment castings for use by Sturm Ruger
and third parties. In April 1997, OSHA sent Sturm Ruger a DCI
survey for its Pine Tree establishment. Sturm Ruger complied with
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the survey by providing OSHA all of the requested information for
Pine Tree.
Based on the data provided, OSHA determined that Pine
Tree had a higher than average injury/illness rate and targeted it
for inspection under the ITP. In June 1998, two OSHA inspectors
attempted to inspect Pine Tree. Sturm Ruger management withheld
consent for the inspection. Consequently, OSHA requested and
obtained an administrative search warrant from a judge of the
United States District Court for the District of New Hampshire.
When the inspectors returned to Pine Tree to execute the warrant,
Sturm Ruger again refused them entry and subsequently moved to
quash the warrant in the district court.
Sturm Ruger's main argument to quash the warrant was that
the regulation authorizing the DCI only permitted OSHA to collect
data on an "employer" basis, and therefore OSHA did not have the
power to request data solely for an employer's "establishments."
The company also argued that the warrant did not comport with the
Fourth Amendment requirements for an administrative search. In
detailed opinions, a magistrate judge and a second district court
judge rejected Sturm Ruger's arguments. See Sturm Ruger v. United
States, No. 98-418JD, 1999 U.S. Dist. LEXIS 22533 (D.N.H. Jan. 22,
1999) (district court opinion); Sturm Ruger v. United States, No.
98-418JD (Dec. 8, 1999) (report and recommendation of magistrate
judge). Sturm Ruger appealed to this court and sought a stay of
the inspection. We denied the stay and eventually dismissed the
appeal. See Sturm Ruger v. United States, No. 99-1160 (Mar. 4,
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1999) (order denying stay); Sturm Ruger v. United States, 186 F.3d
63 (1st Cir. 1999) (opinion dismissing appeal). OSHA subsequently
inspected Pine Tree. As a result of the inspection, OSHA issued
Sturm Ruger citations for safety violations.
In accordance with the Occupational Safety and Health
Act's (the Act) review procedures, Sturm Ruger contested the
citations before an administrative law judge appointed by the
Commission. In this proceeding, Sturm Ruger reiterated its prior
arguments and also claimed that the DCI was unlawful because the
Act only permitted OSHA to collect information from an employer
which was "made and kept" pursuant to regulations issued by the
Secretary of Labor -- a putative prerequisite that was not
satisfied here. The administrative law judge rejected this
argument (as well as Sturm Ruger's other challenges to the DCI) on
the ground that Sturm Ruger had provided the survey information
willingly and therefore had waived any objection it might have to
the DCI.
Sturm Ruger sought and obtained from the Commission
discretionary review of the administrative law judge's decision.
The company repeated its arguments concerning the legality of the
DCI and the unconstitutional nature of the warrant. It also argued
that it was unfairly denied discovery before the administrative law
judge concerning the legality of the DCI and whether OSHA had
vindictively targeted it for inspection under the ITP. The
Commission rejected Sturm Ruger's arguments against the validity of
the warrant and concluded that, even if the warrant was ultra
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vires, OSHA obtained the warrant in good faith and therefore was
entitled to introduce any evidence obtained as a result of its
execution. The Commission also rejected Sturm Ruger's discovery
complaints because its challenges to the DCI were purely legal and
because Sturm Ruger had not made a threshold showing that OSHA
vindictively targeted it for inspection under the ITP.
II.
In its petition for review, Sturm Ruger has challenged
the legality of the DCI, the constitutionality of the warrant, and
the fairness of the discovery rulings. It has not, however,
challenged the Commission's decision that, regardless of the
legality of the warrant, suppression of the evidence obtained from
the inspection was not required because OSHA obtained the warrant
in good faith. Indeed, Sturm Ruger only acknowledged the
Commission's good faith ruling in its reply brief, after OSHA
focused on it as the primary ground for affirming the Commission's
order.
A party may not raise an argument for the first time in
a reply brief. See United States v. Torres, 162 F.3d 6, 11 (1st
Cir. 1998); United States v. Nueva, 979 F.2d 880, 885 n.8 (1st Cir.
1992). Applying this rule is particularly appropriate where, as
here, the petitioner ignored one of the lower court's (or in this
case the agency's) clearly stated grounds for decision. Cf.
Anheuser-Busch, Inc. v. Caught-on-Bleu, Inc., 105 Fed. Appx. 285,
287 (1st Cir. 2004) (per curiam) (explaining that appellant has an
obligation to address with specificity the grounds for the lower
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court's decision), cert. denied, --U.S.--, 2005 WL 637213 (Mar. 21,
2005). Sturm Ruger's challenge to the good faith ruling is
therefore most likely waived, see Torres, 162 F.3d at 11, and, at
best, is forfeited and only can be considered for plain error, see
United States v. Rodriguez-Leon, 311 F.3d 435, 437 (1st Cir. 2002).
We will assume arguendo that plain error review is available.
For Sturm Ruger to demonstrate plain error, it must show
that there was a clear error that affected its substantial rights
and undermines the fairness, integrity, or public reputation of the
judicial process. See Diaz-Seijo v. Fajardo-Velez, 397 F.3d 53, 55
(1st Cir. 2005). Sturm Ruger stumbles at the threshold as it
cannot demonstrate that the Commission's good faith ruling was
obviously wrong.
The parties agree that the exclusionary rule would apply
to evidence obtained from an unlawful OSHA inspection. They also
agree that the good faith exception to the exclusionary rule would
apply to at least some searches conducted pursuant to an
administrative warrant. See United States v. Leon, 468 U.S. 897,
918-21 (1984) (explaining the rationale for not applying the
exclusionary rule to evidence garnered from an unlawful warrant
that was obtained in objective good faith). Sturm Ruger's position
is that the good faith exception does not apply here because OSHA's
request for a warrant was based on an erroneous interpretation of
its legal authority to conduct the inspection. The caselaw does
not support this proposed limitation to the good faith rule.
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In Trinity Industries v. Occupational Safety & Health
Review Commission, 16 F.3d 1455 (6th Cir. 1994), the Sixth Circuit
considered an employer's challenge to an OSHA warrant on the ground
that the OSHA regulation authorizing the inspection was illegal.
The court agreed with the employer that the regulation was unlawful
and that the warrant should not have been issued. Id. at 1459-60.
The court nevertheless declined to invoke the exclusionary rule
because OSHA had obtained the warrant in objective good faith. Id.
at 1462. In so ruling, the court pointed out that the warrant
application was detailed and specific, and that the warrant's
validity had been upheld by a magistrate judge and district court
judge before it was executed. Id; see also Donovan v. Fed.
Clearing Die Casting Co., 695 F.2d 1020, 1022-24 (7th Cir. 1982)
(admitting evidence seized pursuant to an improper OSHA warrant
because the district court had upheld the validity of the warrant
in pre-execution litigation).
This case closely resembles Trinity and Donovan. The
warrant application that OSHA submitted was detailed and accurate.
More importantly, before executing the warrant, OSHA successfully
litigated the validity of the warrant before a magistrate and
district court judge and defeated Sturm Ruger's motion to stay the
warrant's execution in this court.
There is, however, one significant difference between
this case and Trinity and Donvoan. In the latter two cases, the
employer raised all of its arguments against the validity of the
warrant in the motion to quash so all issues had been litigated
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before OSHA executed the warrant. Here, Sturm Ruger raised only
the employer/establishment argument and the Fourth Amendment claim
in the motion to quash proceeding and reserved the "number of
employees/hours worked" argument until the Commission proceeding.
We can base our good faith conclusion on the fact that the warrant
was upheld in pre-execution judicial proceedings only for the
arguments resolved in those proceedings (viz., the
employer/establishment argument and the Fourth Amendment argument).
We must consider independently whether the "number of
employees/hours worked" argument is so obviously meritorious that
OSHA clearly was not acting in good faith by seeking a warrant
based on data obtained from the DCI. See Leon, 468 U.S. at 922(stating that good faith exception does not apply if the inspecting
authority "ha[d] no reasonable grounds for believing that the
warrant was properly issued").
The regulation authorizing the DCI required employers to
report to OSHA "the number of workers . . . employed and [the]
number of hours worked . . . for periods designated in the Survey
Form." 29 C.F.R. § 1904.17 (1998). Sturm Ruger argues that this
requirement was unlawful because the Act only permits OSHA to
require employers to file reports "on the basis of records made and
kept pursuant" to regulations promulgated by the Secretary of
Labor, 29 U.S.C. § 673(e) (emphasis supplied), and there is no
regulation requiring employers to keep records of the number of
employees and the number of hours worked per establishment.
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Sturm Ruger's contention rests on the statutory language
"on the basis of records made and kept." It reads this language to
mean that reports required by OSHA must be based solely on
information contained in records that the Secretary of Labor
requires employers to keep. OSHA reads this language as giving it
flexibility to require the reporting of some information not
required to be kept so long as the foundation for the report is
information that an employer must maintain.
OSHA's reading of the statute is not plainly wrong.
Courts have found that similar "based on" language is synonymous
with "arising from" and ordinarily refers to a "starting point" or
a "foundation", see McDaniel v. Chevron Corp., 203 F.3d 1099,
1111-12 (9th Cir. 2000) (collecting cases), and have resisted
reading this phrase to mean "based solely on," see United States
ex rel. Kreindler & Kreindler v. United Tech Corp., 985 F.2d 1148,
1158 (2d Cir. 1993). The language in the Act is therefore at least
reasonably read as granting OSHA a modicum of discretion to require
the reporting of additional information -- at least where, as here,
the foundation for the report is information maintained in records
which employers, by regulation, must keep.1 See Sierra Club v.
1
There is no dispute that the Secretary of Labor required
employers to keep logs on the incidences of work place injuries and
illnesses. This was the foundational information for the DCI. The
number of employees and the hours worked were background
information that allowed OSHA to generate a rate of injury or
illness for each establishment. As OSHA explained in its brief,
"the raw numbers of injuries and illnesses occurring at a workplace
would be meaningless without information on how that number
compared to the amount of work performed there."
Since the inspection of Pine Tree, the Secretary has
promulgated a regulation requiring employers to keep records of the
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EPA, 356 F.3d 296, 305-06 n.7 (D.C. Cir. 2004) (stating that the
statutory term "based on" unambiguously granted agency discretion
to apply some additional criteria to those stated in the statute).
That being the case, the Commission did not plainly err in
declining to suppress the evidence under Leon.
The only remaining issue is Sturm Ruger's challenge to
the denial of discovery on its claims that the DCI was illegal and
that OSHA vindictively targeted it for inspection. An
administrative agency's discovery rulings are reviewed for an abuse
of discretion and will be overturned only if the complaining party
demonstrates prejudice. See Markland v. Office of Pers. Mgmt., 140
F.3d 1031, 1036 (Fed. Cir. 1998). "The extent of discovery to
which a party to an administrative proceeding is entitled is
primarily determined by the particular agency . . ." Pac. Gas &
Elec. Co. v. FERC, 746 F.2d 1383, 1387 (9th Cir. 1984).
The Commission's ruling that Sturm Ruger was not entitled
to discovery on the legality of the DCI was within its discretion.
Sturm Ruger has provided only a conclusory statement that it needed
discovery to prove that the DCI was unlawful. But we fail to see
how discovery on this question would have yielded information
number of employees and the number of hours worked. See 29 C.F.R.
§ 1904.32 (2004). We do not believe that the promulgation of this
regulation demonstrates that OSHA did not act in good faith in
asking for information before the regulation was adopted on the
number of employees and the number of hours worked. OSHA may well
have believed that it had the authority to request this information
without the regulation and that the promulgation of the new
regulation merely clarified its preexisting authority.
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relevant to whether the regulation creating the DCI violated the
Act. As the Commission explained, this is a question of law.
Sturm Ruger also has failed to meet its burden for
overturning the discovery ruling concerning its claim of vindictive
targeting under the ITP. The Commission rejected Sturm Ruger's
discovery request because Sturm Ruger "had not shown a colorable
basis for [its] claim." We discern nothing improper in the
Commission requiring Sturm Ruger to make a threshold showing that
the agency acted vindictively in targeting it for inspection.
Similar requirements exist in analogous areas. Cf. United States
v. Armstrong, 517 U.S. 456, 468-69 (1996) (holding that the accused
must make a threshold showing to obtain discovery on a selective
prosecution claim); Franks v. Delaware, 438 U.S. 154, 171-72 (1978)
(holding that a party must provide an offer of proof of a falsely
procured search warrant to obtain an evidentiary hearing). Sturm
Ruger alleged that it was vindictively targeted because it had
vigorously opposed a prior OSHA initiative, but it provided no
facts to support this assertion. The Commission did not abuse its
discretion in concluding that this allegation was insufficient to
warrant discovery.
III.
For the reasons stated, we deny the petition for review
and enforce the Commission's order.
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