Lakeland Enter Inc v. Chao, Elaine L.

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-3697
LAKELAND ENTERPRISES OF
RHINELANDER, INCORPORATED,
Petitioner,
v.
ELAINE L. CHAO, Secretary of Labor,
Respondent.
____________
Petition for Review of an Order
of the Department of Labor.
No. 02 CB 1909
____________
ARGUED OCTOBER 26, 2004—DECIDED MARCH 28, 2005
____________
Before EASTERBROOK, ROVNER, and SYKES, Circuit Judges.
SYKES, Circuit Judge. This is a review of a decision of the
Occupational Safety and Health Review Commission
(OSHRC) assessing a $49,000 civil penalty against Lakeland
Enterprises of Rhinelander, Inc., for willful violation of 29
C.F.R. § 1926.652(a)(1), which requires that workers in
excavation trenches be protected from cave-ins. Lakeland
argues that the evidence collected at its excavation site
should have been suppressed because the surprise inspec-
2 No. 03-3697
tion by a compliance officer from the Occupational Safety
and Health Administration (OSHA) was conducted without
a warrant. Lakeland also challenges the administrative law
judge’s (ALJ) exclusion of certain expert testimony and
attacks the sufficiency of the evidence regarding the code
violation and the ALJ’s finding of willfulness. We deny the
petition for review.
I. Background
Lakeland is a northern Wisconsin sewer and water
contractor. In August 2002 the company was engaged in an
excavation project to install sewer and water lines on a
public street in the Mill Creek Industrial Park development
in Marshfield, Wisconsin. The citation at issue here arose
from an August 28 impromptu inspection conducted by
Chad Greenwood, an OSHA compliance officer who was
driving by the industrial park project and noticed the exca-
vation in progress. Greenwood parked his car, walked past
some traffic cones blocking street traffic from the site, and
observed Lakeland employee Ron Krueger excavating a
trench with a backhoe. Greenwood also observed another
Lakeland employee, Tony Noth, working at the bottom of
the trench. The trench contained neither a ladder nor a
trench box, a device used to prop up the walls and prevent
collapse.
Greenwood began videotaping the scene, at which point
Jim Gust, the project superintendent, asked him to step back
and informed him that the road was closed. Greenwood
explained that he was an OSHA compliance officer and
indicated the nature of the inspection.1 While Gust and
1
29 C.F.R. § 1903.7(a) instructs as follows: “At the beginning of
an inspection, Compliance Safety and Health Officers shall pre-
sent their credentials to the owner, operator, or agent in charge
at the establishment; explain the nature and purpose of the
(continued...)
No. 03-3697 3
Greenwood were speaking, Noth began climbing up one of
the walls of the trench. Greenwood observed loose dirt fall-
ing back into the trench, apparently unsettled by Noth’s
feet as he scaled the slope. Krueger later admitted that he
knew Noth was not supposed to be working in the trench
and that he failed to remove him. After Noth climbed out of
the trench, Krueger told him he should not have been
working in the trench without a trench box. Krueger then
resumed the excavation.
The slope of the trench walls concerned Greenwood. Slop-
ing is “a method of protecting employees from cave-ins by
excavating to form sides of an excavation that are inclined
away from the excavation so as to prevent cave-ins.” 29
C.F.R. § 1926.650(b). Eyeballing the trench, Greenwood
believed the walls were too steep and there was a fair
chance they could collapse. Greenwood measured the slope
of the trench walls and recorded a west wall slope of 35
degrees, an east wall slope of 50 degrees, a north wall slope
of 38 degrees, and a south wall slope of 49 degrees.2 After
Greenwood left, Lakeland employees measured the trench
wall slopes and produced a different result for the south
wall only: Lakeland’s measurement found the south wall to
be sloped at 45 degrees.
Greenwood also measured the length and width of the
trench at the surface and found that it was approximately
31 feet wide, east to west, and 39 feet long. However, be-
cause Krueger had widened the trench in the process of
1
(...continued)
inspection; and indicate generally the scope of the inspection and
the records specified in § 1903.3 which they wish to review.”
2
Greenwood’s testimony at the administrative hearing attributes
a 48-degree slope to the south wall, and this discrepancy between
his report and his testimony is unexplained. The discrepancy does
not matter, however; both a 48-degree slope and a 49-degree slope
are too steep for the soil type. See pp. 11-13, infra.
4 No. 03-3697
“grooming” it after Noth climbed out, the 31-foot-width
measurement overstated the width of the trench at the time
Noth was in it. Greenwood testified the “grooming” process
added about 5 feet to the width of the trench. Lakeland
contended the trench was actually 34 feet wide and 38 feet
long. There is no dispute the trench was approximately 18
feet deep and 6 feet wide at the bottom.
In addition to his other measurements, Greenwood also
took soil samples. Not all soil is the same, and different
types of soil will behave differently under the pressure of
holding up a trench wall. See Globe Contractors, Inc. v.
Herman, 132 F.3d 367, 369 (7th Cir. 1997). For instance, a
trench dug in firm clay will hold up better than a trench
dug in loose, sandy soil. In addition to the composition of
the soil, several other factors contribute to soil’s relative
stability, including water saturation levels, fissures, and
previous digging in the soil. OSHA recognizes such soil dif-
ferences by classifying soil into several categories. Type A
soil is the most stable, followed by Types B and C. OSHA
regulations allow trenches dug in Type A soil to be sloped
up to 53 degrees (¾ horizontal to 1 vertical); walls dug in
Type B soil may be sloped no steeper than 45 degrees (1
horizontal to 1 vertical), and in Type C soil no steeper than
34 degrees (1½ horizonal to 1 vertical). See 29 C.F.R.
§ 1926, subpt. P, app. B.
Greenwood’s soil samples came from a “spoil pile”—a pile
of soil that had been removed from the trench. His field
tests found the soil was Type B. He also sent two soil sam-
ples to an OSHA lab, which classified one sample as Type
B and the other as Type C. After Greenwood left the site,
Krueger took his own soil samples and sent them to a pri-
vate engineering firm, STS Consultants; the firm classified
the soil as Type A. Later, when the trench had been filled
in, STS took on-site samples which it determined to be both
Type A and B soil.
Based on the soil samples and Greenwood’s measurements
of both the soil quality and the trench dimensions, OSHA’s
No. 03-3697 5
office in Madison, Wisconsin, issued three citations to
Lakeland, including the citation at issue on this review—
willfully permitting an employee to work in a trench with-
out adequate protection (inadequately sloped trench walls),
in violation of 29 C.F.R. § 1926.652(a)(1).3 Lakeland timely
contested the citations, see 29 U.S.C. § 659(c), and an ALJ
conducted a two-day evidentiary hearing. Lakeland moved
to suppress the evidence from the inspection, asserting that
Greenwood’s search of the excavation site violated the
Fourth Amendment because it was conducted without a
warrant. The ALJ denied the motion, concluding that
Lakeland had no right of privacy on the excavation site
because “that land and that road was [a] public road that
they [Lakeland] did not own,” and further that “it was cov-
ered by the open fields doctrine.” The ALJ also concluded
that any Fourth Amendment claim was waived because
Lakeland did not object to the inspection and ask for a
warrant at the site.
On the merits, Lakeland disputed both the soil type and
the dimensions and slope of the trench, and also maintained
that any violation of 29 C.F.R. § 1926.652(a)(1) was not
willful because it had a safety program in place and had
attempted to comply in good faith with the applicable
regulations. Greenwood testified for the Secretary of Labor.
The Secretary also called three expert witnesses: two OSHA
soil analysts and an OSHA engineer. Krueger, Gust, and
Lakeland President Gary Taylor testified for Lakeland. The
company also presented the testimony of Thomas O’Neill,
3
The code provision states as follows: “Each employee shall be
protected from cave-ins by an adequate protective system de-
signed in accordance with paragraph (b) or (c) of this section.” 29
C.F.R. § 1926.652(a)(1). Subsection (b) prescribes requirements for
trench sloping systems, and subsection (c) prescribes require-
ments for other protective devices such as shield systems (trench
boxes).
6 No. 03-3697
a soil engineer at STS Consultants; Harry Butler, a safety
consultant; and a union operating engineer familiar with
Lakeland’s jobsites. The ALJ affirmed all three citations
and held that the trench wall violation was willful.
The ALJ rejected the testimony of Krueger, Gust, and
Taylor as “neither credible nor plausible,” and accepted the
Secretary’s evidence regarding soil type and trench dimen-
sions over the evidence produced by Lakeland’s tests and
measurements. The ALJ found the on-site testing done by
Lakeland after the inspection was nothing more than a
“post-facto reconstruction of the facts,” and concluded that
Greenwood’s measurements and soil tests, which were con-
temporaneous with the alleged violation, more accurately
reflected both the trench’s dimensions and its soil classi-
fication. The ALJ also held Lakeland’s violation of the
trench wall safety regulation was willful because: (1)
Greenwood’s videotape depicted “a deep, dangerous trench
with steep sides, with visibly running soil”; (2) Krueger and
Gust were trained supervisory personnel with “years of
trenching experience” and were aware of Noth’s improper
presence in the trench; and (3) Lakeland had a history of
trenching citations. The ALJ assessed a penalty of $49,000.
Lakeland petitioned for discretionary review by the Occupa-
tional Safety and Health Review Commission. Review was
declined, the ALJ’s decision became the final order of the
Commission, and Lakeland sought review in this court. See
29 U.S.C. §§ 659(c), 660(a), 661(j).
II. Discussion
A. Fourth Amendment
Lakeland argues that Greenwood’s warrantless inspection
violated the Fourth Amendment and that the evidence
seized in the inspection should have been suppressed. The
ALJ denied Lakeland’s suppression motion, concluding that
Lakeland had no right of privacy on a jobsite on a public
No. 03-3697 7
roadway and that the excavation site was covered by the
“open fields” doctrine. The ALJ also found waiver because
Lakeland did not object to the inspection and ask for a war-
rant at the scene.
As a threshold matter, it is an open question in this
circuit whether the exclusionary rule applies to OSHA civil
enforcement proceedings. Donovan v. Fed. Clearing Die
Casting Co., 695 F.2d 1020, 1023 (7th Cir. 1982) (applying
a good faith exception without directly deciding the appli-
cability of the exclusionary rule). In INS v. Lopez-Mendoza,
468 U.S. 1032, 1050 (1984), the Supreme Court held that the
exclusionary rule does not apply to civil deportation actions.
The Court applied the framework established in United
States v. Janis, 428 U.S. 433 (1976), for determining the
applicability of the exclusionary rule in noncriminal con-
texts. The Court initially noted that it had “never applied
[the exclusionary rule] to exclude evidence from a civil pro-
ceeding, federal or state.” Lopez-Mendoza, 468 U.S. at 1041-42(quoting Janis, 428 U.S. at 447). The Janis framework,
reiterated in Lopez-Mendoza, requires courts to “weigh the
likely social benefits of excluding unlawfully seized evidence
against the likely costs” of suppression. Lopez-Mendoza, 468
U.S. at 1041 (citing Janis, 428 U.S. at 446).
The Court in Lopez-Mendoza limited its inquiry on the
“benefit side of the balance” to the exclusionary rule’s pri-
mary purpose of deterring Fourth Amendment violations,
because “the ‘prime purpose’ of the [exclusionary] rule, if not
the sole one, ‘is to deter future unlawful police conduct.’ ” Id.(quoting Janis, 428 U.S. at 446). On the “cost side of the
balance” the Court focused on the “loss of often probative
evidence and all the secondary costs that flow from the less
accurate or more cumbersome adjudication” that results
from suppression. Id.The Court considered the deterrence value of applying the
exclusionary rule in deportation cases to be only marginal,
because “the INS has already taken sensible and reasonable
8 No. 03-3697
steps to deter Fourth Amendment violations by its officers.”
Lopez-Mendoza, 468 U.S. at 1050. On the other hand, the
Court considered the costs of applying the exclusionary rule
in the deportation context to be “high” because suppression
would overburden immigration judges, result in the loss of
reliable evidence and “oversuppression” of evidence lawfully
obtained, and “would compel the courts to release from
custody persons who would then immediately resume their
commission of a crime through their continuing, unlawful
presence in this country.” Id. at 1048-50.
The Court noted that “[a]pplying the exclusionary rule
in proceedings that are intended not to punish past trans-
gressions but to prevent their continuance or renewal would
require the courts to close their eyes to ongoing violations
of the law.” Id. at 1046. Employing an example with
potential relevance in the OSHA enforcement context, the
Court said: “[p]resumably no one would argue that the
exclusionary rule should be invoked to prevent an agency
from ordering corrective action at a leaking hazardous
waste dump if the evidence underlying the order had been
improperly obtained.” Id. The Court concluded that “the
Janis balance between costs and benefits comes out against
applying the exclusionary rule in civil deportation hearings
held by the INS.” Id. at 1050.
The Fifth and Sixth Circuits have applied Lopez-Mendoza
in the context of OSHA civil enforcement proceedings and
have drawn a distinction between proceedings to order
corrective action against unsafe working conditions and
proceedings to assess monetary penalties against employers
for past OSHA violations. In Smith Steel Casting Co. v.
Brock, 800 F.2d 1329, 1334 (5th Cir. 1986), the Fifth Circuit
held that the exclusionary rule is not applicable in OSHA
proceedings that seek to terminate or remediate occupational
health and safety violations. The court also held, however,
that “the exclusionary rule applies where the object is to
assess penalties against the employer for past violations of
No. 03-3697 9
OSHA regulations.” Id. In Trinity Industries, Inc. v. OSHRC,
16 F.3d 1455, 1462 (6th Cir. 1994), the Sixth Circuit followed
Smith Steel and held that the exclusionary rule applies to
OSHA penalty proceedings.
We need not decide here whether to join the Fifth and
Sixth Circuits in distinguishing between corrective and
punitive OSHA proceedings for purposes of the applicability
of the exclusionary rule. Lakeland loses even if the rule
applies in this context. The excavation site in question was
a public street, not Lakeland’s private property; there is no
reasonable expectation of privacy in an open trench dug on
a public roadway. See L.R. Willson & Sons, Inc. v. OSHRC,
134 F.3d 1235, 1238-39 (4th Cir. 1998) (no reasonable expec-
tation of privacy on construction jobsite easily observable by
passersby); Donovan v. A.A. Beiro Const. Co., Inc., 746 F.2d
894 (D.C. Cir. 1984) (no expectation of privacy in con-
struction areas open to plain view by the public); Marshall
v. Western Waterproofing Co., Inc., 560 F.2d 947, 951 (8th Cir.
1977) (no reasonable expectation of privacy in construction
site scaffolding readily observable by public); Accu-Namic,
Inc. v. OSHRC, 515 F.2d 828, 833 (5th Cir. 1975), cert. denied,
425 U.S. 903 (1976) (no violation of construction contractor’s
Fourth Amendment rights because trench inspection
occurred on public street).
Moreover, the ALJ correctly concluded that any Fourth
Amendment objection was waived because Lakeland did not
object to Greenwood’s inspection and request a warrant at
the scene. The evidence indicates that although Gust
initially told Greenwood that the road was closed, when
Greenwood identified himself as an OSHA compliance officer
and announced the reason for his presence, Lakeland em-
ployees acquiesced and cooperated in the inspection. Al-
though perhaps more properly characterized as consent
rather than waiver, the ALJ’s conclusion that Lakeland
waived any Fourth Amendment objection to the inspection
is consistent with case law in this circuit. See Kropp Forge
10 No. 03-3697
Co. v. Sec’y of Labor, 657 F.2d 119, 122 (7th Cir. 1981)
(“Since Kropp’s representatives were present at all times
during those inspections and did not raise any objections
when informed of the intended sampling, any Fourth
Amendment objection to those surveys was waived.”).
B. The Violation
On the merits, Lakeland challenges the sufficiency of the
evidence to support the ALJ’s findings on the trenching
violation, and also contends the ALJ erroneously prohibited
one of its experts from testifying about the physical charac-
teristics of the trench. The ALJ’s factual findings are
conclusive if supported by substantial evidence in the record
considered as a whole. Sierra Resources, Inc. v. Herman,
213 F.3d 989, 992 (7th Cir. 2000). Credibility determina-
tions are not overturned unless contradicted by incontro-
vertible evidence. Id. (citing Faultless Div., Bliss &
Laughlin Indus., Inc. v. Sec’y of Labor, 674 F.2d 1177, 1182
(7th Cir. 1982)). The ALJ’s evidentiary decisions are
reviewed for abuse of discretion. Freeman United Coal Min.
Co. v. Benefits Review Bd., U.S. Dept. of Labor, 909 F.2d
193, 196 (7th Cir. 1990) (ALJ has broad discretion in the
admission of evidence).
Taking Lakeland’s arguments in reverse, we cannot see
how the ALJ’s limitation on the expert’s testimony was
reversible error. Harry Butler, Lakeland’s safety consultant,
testified about his safety consulting work at Lakeland and his
experiences at other Lakeland jobsites. When his direct
examination turned to the jobsite in question in this case,
counsel for the Secretary objected to two questions: one
asking whether the soil at the trench site had been previ-
ously disturbed, and the other asking the witness about the
north-south position of the trench on the excavation site, by
reference to a photographic exhibit. Each objection was
based on the expert’s lack of personal knowledge, his
No. 03-3697 11
testimony having previously established that he had never
actually seen the trench but only reviewed the documentary
record of the citations.
Lakeland argues Butler should have been permitted to
answer these questions because an expert need not have
personal knowledge about the facts upon which he bases his
opinion. See Fed. R. Evid. 703; Nutrasweet Co. v. X-L
Engineering Co., 227 F.3d 776, 789 (7th Cir. 2000); see also
29 C.F.R. § 2200.71 (Federal Rules of Evidence are applica-
ble in OSHRC proceedings); DCS Sanitation Management,
Inc. v. Occupational Safety & Health Review Comm’n, 82
F.3d 812, 814-15 (8th Cir. 1996). This is correct, but imma-
terial on this review. The questions to which objections
were sustained asked about facts that were testified to by
other witnesses. The expert’s answers would have been
cumulative, so no harm was done in excluding them. The
ALJ did not categorically exclude Butler’s opinion testimony.
Lakeland’s counsel did not follow up by asking Butler to
render an opinion about the safety of the trench based on
facts in the documentary record or testified to by other wit-
nesses; it appears that the entire line of questioning was
simply dropped. Any evidentiary error was harmless.
As to the sufficiency of the evidence of the code violation,
Lakeland acknowledges the deferential standard of review
but invites us to take what amounts to a fresh look at the
evidence. As it did before the ALJ, Lakeland argues here
about the soil classification and the adequacy of the trench
wall slopes. With respect to the soil classification, Lakeland
would have us substitute its soil samples and test results
for OSHA’s. The ALJ accepted Greenwood’s soil samples as
more accurately reflecting the soil composition at the time
of Noth’s exposure in the trench. The ALJ’s reasons for pre-
ferring OSHA’s samples over Lakeland’s are not suspect:
Greenwood’s samples came from an undisturbed pile of soil
that had been removed from the trench, while Lakeland’s
samples were collected later, after Krueger finished groom-
12 No. 03-3697
ing the excavation, and also included borings taken outside
the immediate area of the trench and thus appeared to the
ALJ to be “calculated to mislead.”
In addition, the ALJ found that Lakeland’s soil test re-
sults did not comport with the visual evidence of the exca-
vation. The judge’s written decision notes that “Greenwood’s
videotape show[s] a steep excavation made entirely in loose
sandy soil.” Given two competing analyses of soil classifi-
cation, the ALJ was entitled to credit OSHA’s over
Lakeland’s, and his reasons for doing so are supported by
the record. The ALJ’s finding of fact that the trench soil was
a mixture of Type B and Type C is supported by substantial
evidence.
As to the slope of the trench, Lakeland takes issue with
Greenwood’s measurement of the trench’s south wall slope.
Greenwood testified the south wall slope was 48 degrees, a
measurement he arrived at by using an engineering rod and
a protractor. Type B soil requires a slope no steeper than 45
degrees (1 horizontal to 1 vertical), and Type C soil requires
a slope no steeper than 34 degrees (1½ horizontal to 1
vertical). Lakeland calculated the south wall slope at 45
degrees. The company argues that its measurement was
more reliable than Greenwood’s because it is difficult for
one person using an engineering rod and protractor to get
an accurate measurement, and the company used three
employees to take its measurement.
Lakeland also contests the width and length of the trench.
Greenwood testified that the trench was 31 feet wide and 39
feet long; this measurement was taken after Krueger had
completed “grooming” the excavation, which added 5 feet to
the trench’s width. Lakeland contends the trench was 34
feet wide and 38 feet long. The parties agree that the trench
was 6 feet wide at the bottom and 18 feet deep.
Lakeland’s argument about the inaccuracy of Greenwood’s
rod-and-protractor measurement misses the mark, because
No. 03-3697 13
the ALJ relied upon the evidence of the trench’s length,
width, and depth to determine the slope violation. The judge
noted that in Type B soil an 18-foot-deep trench, 6 feet wide
at the bottom, would have to be at least 42 feet long to
comply with the Type B soil requirement of wall slopes no
greater than 45 degrees (1 horizontal to 1 vertical or 18 + 6
+ 18). Anything less than 42 feet would involve at least one
wall sloped too steeply. For a trench in Type C soil, the ALJ
observed, a 60-foot length would be necessary to maintain
the required trench slope of 34 degrees (1½ horizontal to 1
vertical or 27 + 6 + 27). Accordingly, the ALJ held, accept-
ing either Lakeland’s measurements of the length and
width of the trench or Greenwood’s, the walls were too steep
for the regulatory standard. At either 38 or 39 feet long, the
trench fell short of the 42-foot length that would be required
for Type B soil and the 60-foot length required for Type C
soil.
Furthermore, regardless of the dispute over the slope of
the south wall, the parties agreed that the east wall of the
trench was sloped at 50 degrees, well in excess of the re-
quired 45 degrees for Type B soil and 34 degrees for Type C
soil. Having rejected Lakeland’s contention that the soil was
classified as Type A, the undisputed 50-degree slope of the
east wall violated the applicable standard. The ALJ’s
conclusion that Noth was exposed to a cave-in hazard in
violation of 29 C.F.R. § 1926.652(a)(1) was supported by
substantial evidence.
C. Willfulness
Willful OSHA violations can result in fines of up to
$70,000. See 29 U.S.C. § 666(a). “An OSHA violation is
willful if it is committed with intentional disregard of, or
plain indifference to, the requirements of the statute.”
Caterpillar, Inc. v. OSHRC, 122 F.3d 437, 440 (7th Cir.
1997) (citing Valdak Corp. v. OSHRC, 73 F.3d 1466, 1468
14 No. 03-3697
(8th Cir. 1996)). We review the ALJ’s fact-finding on the
issue of willfulness under the substantial evidence rule; the
ALJ’s decision on willfulness will be sustained if it is not
arbitrary and capricious and is in accordance with the law.
Id.The ALJ found willfulness here largely because Noth was
working in the inadequately sloped trench in plain view of
two Lakeland supervisors—Krueger and Gust. Krueger
never told Noth to get out of the trench, although upon
Noth’s exit Krueger warned him that he should not have
been in it without a trench box in place. There was evidence
that Noth was in the trench to protect a sewer line from
breaking during the excavation. The ALJ concluded that
“[a]t worst Gust and Krueger expected or encouraged Noth
to enter the trench to protect the pipe from breakage; at
best they acquiesced to Noth’s presence in the trench.” In
Globe Contractors, we held that ignoring obvious violations
of OSHA safety standards amounts to “plain indifference”
for purposes of a finding of willfulness. Globe Contractors,
132 F.3d at 373. It is undisputed that Lakeland supervisors
knew Noth was in the trench without adequate protection
from cave-in and did nothing to eliminate the obvious
danger or remove him from the trench. That, in itself,
constitutes plain indifference to the requirements of the
statute and regulations.
But there was more to the ALJ’s willfulness finding—it
was also based on Lakeland’s history of OSHA citations.
Greenwood testified Lakeland had received six OSHA cita-
tions since 1990, including one for a trench-related fatality
in 1996. Lakeland disputes the number of citations, as-
serting that some were dismissed and one was settled.
Lakeland concedes at least three prior citations, however,
including the one relating to the trenching fatality. The ALJ
concluded Lakeland’s citation history demonstrated that the
contractor possessed a “heightened awareness” of its
responsibility to comply with OSHA safety regulations, thus
No. 03-3697 15
providing further support for a finding of willfulness. This
conclusion cannot be characterized as arbitrary and capri-
cious. The ALJ’s willfulness finding was supported by
substantial evidence, was consistent with applicable law,
and was not arbitrary and capricious.
For the foregoing reasons, the petition for review is
DENIED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-28-05