Manua's, Inc. v. Eugene Scalia

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 4, 2019 Decided January 28, 2020
No. 18-1307
MANUA'S, INC., D/B/A MANUA'S DISCOUNT STORE,
PETITIONER
v.
EUGENE SCALIA, SECRETARY OF LABOR,
RESPONDENT
On Petition for Review of a Final Order of the
Occupational Safety & Health Review Commission
Daniel E. Mooney argued the cause for petitioner. With
him on the briefs was John D. Seiver.
Susannah Maltz, Attorney, U.S. Department of Labor,
argued the cause for respondent. With her on the brief were
Edmund C. Baird, Associate Solicitor of Labor for
Occupational Safety and Health, and Heather R. Phillips,
Counsel for Appellate Litigation. Louise M. Betts, Attorney,
entered an appearance.
Before: ROGERS and SRINIVASAN, Circuit Judges, and
SILBERMAN, Senior Circuit Judge.
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Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: The Occupational Safety and
Health Act delegates to the Secretary of Labor, acting through
the Occupational Safety and Health Administration (“OSHA”),
the authority to promulgate and enforce mandatory
occupational safety and health standards. 29 U.S.C.
§ 651(b)(3). OSHA enforces those standards by inspecting
workplaces, id. § 657(a), and issuing citations and fines to
employers for violations, id. §§ 658–659. An employer may
contest a citation before an administrative law judge (“ALJ”),
and either the employer or the Secretary may thereafter petition
the Occupational Safety and Health Review Commission for
discretionary review. Id. §§ 659, 661(j); 29 C.F.R. §
2200.91(a)–(b).
Generally, an employer is responsible for ensuring that its
workplace is safe and, therefore, for any violations of OSHA
standards. See Sec’y of Labor v. Pride Oil Well Serv., 15
O.S.H. Cas. (BNA) 1809, at *8 (Rev. Comm’n 1992); see also
Brock v. City Oil Well Serv. Co., 795 F.2d 507, 511–12 (5th
Cir. 1986). The instant case implicates a narrow exception to
that rule: An employer may rely on a specialty contractor to
ensure compliance with safety standards within the purview of
the contractor’s expertise. Sec’y of Labor v. Sasser Elec. &
Mfg. Co., 11 O.S.H. Cas. (BNA) 2133, at *3 (Rev. Comm’n
1984). An employer will be “justified in relying upon the
specialist to protect against hazards related to the specialist’s
expertise so long as the reliance is reasonable and the employer
has no reason to foresee that the work will be performed
unsafely.” Id. In Sasser, the employer hired a crane operator
to lift a generator off the ground and place it on a trailer. Id. at
*1. The employer had hired the crane operator for this kind of
work on roughly six separate past occasions. Id. There were
overhead power lines at the work site, about which the
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employer warned the crane operator. Id. The crane operator
successfully moved the generator onto the trailer but touched a
live power line as he was moving the crane back to its starting
position, causing the death of one Sasser employee and the
injury of another. Id. Sasser was cited for violating the OSHA
regulation that prohibited bringing the crane within 10 feet of
a live power line. Id. at *2. The Commission decided that
Sasser’s reliance on the crane operator had been reasonable
because Sasser had no expertise in operating cranes and only
the operator was in direct control of the crane. Id. at *4. Also,
the entire job took only a few minutes. See id. at *2.
This court elaborated on the Sasser exception in Fabi
Construction Co. v. Secretary of Labor, 508 F.3d 1077 (D.C.
Cir. 2007). The court explained that reliance is unreasonable
when “an employer has reason, by way of expertise, control,
and time, to foresee a danger to its employees.” Id. at 1083. In
Fabi, the employer construction company was hired to build a
hotel and had hired two contractors to prepare shop drawings
to provide specific building directions to its construction
workers. Id. at 1079–80. The shop drawings contained errors
and, after Fabi poured concrete in accord with the drawings,
several floors of the hotel parking garage collapsed, killing four
of Fabi’s employees and injuring many others. Id. at 1080.
Fabi was cited for several violations of OSHA standards and
defended on the ground that it was not responsible for them
because it reasonably relied on the contractor that provided the
shop drawings. Id. This court disagreed, because Fabi’s
reliance had not been reasonable. Id. at 1083. In Sasser, the
employer had no experience in crane operations, the operator
had sole control over the crane, and the violation was quite
sudden, as the job itself took only a few minutes. Id. In Fabi,
in contrast, the employer had expertise in shop drawings, and
it had reviewed and revised the drawings. Id. Furthermore, the
evidence showed that the contractor was not in sole control;
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Fabi shared control, because it interpreted the shop drawings
and its employees were responsible for executing the plans
directed by the drawings. Id. The court also noted that the
hazard in Fabi — that is, concrete poured pursuant to the
incorrect drawings — was present for weeks, which gave Fabi
ample time to recognize and abate the hazard. Id.
Manua’s, Inc. (“the Company”) petitions for review of an
order of the Commission finding that it violated regulations
promulgated by OSHA. In January 2017, the Company hired
APECS, a construction contractor with which it had done
business in the past, to remove steel beams from four shipping
containers by crane. During the unloading, the APECS crane
operator touched an overhead power line with the crane,
causing the electrocution of three Company employees and
injury to several others. Relying on Sasser, the Company
contends that the Commission erred in failing to rule that the
Company was not responsible for the cited violations because
it reasonably relied on APECS. For the reasons that follow, we
disagree.
I.
The Company operates several retail stores in American
Samoa. In January 2017, the Company was expanding one of
its stores and purchased construction materials for the project,
including steel beams. At the Company’s direction, the
shipping containers were placed on the empty lot adjacent to
the store that was being expanded.
Connie Corpuz, the Company’s human resources
manager, contacted multiple construction contractors to inquire
about hiring a crane to remove the beams from the shipping
containers. Corpuz and Glenhall Chen, the owner and CEO of
the Company, decided to hire APECS, a contractor known to
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them. Corpuz discussed the job with Bonnie Glenn Sabio, an
APECS project manager who had been involved with past
projects that APECS had performed for the Company. Corpuz
and Sabio agreed that APECS would provide a boom truck and
a crane operator, and that the Company would pay $125 per
hour. Sabio also informed Corpuz that the Company needed to
provide employees to assist with the project by attaching the
steel beams to the crane while in the containers and then
detaching them once they had been removed and were on the
ground. APECS memorialized the agreement in a
“Confirmation Letter” specifying only the price of the
“equipment rental.” Neither Corpuz nor anyone else from the
Company inquired about the safety measures that APECS
would take, and no internal discussions about safety were held
by the Company.
On January 11, 2017, the first day of the job, the APECS
crane operator, Melchor Sunier, drove the boom truck to the
vacant lot. He was accompanied by Sabio and a handful of
other APECS employees. Sabio and Sunier noticed a power
line running above the vacant lot and decided it did not present
a safety hazard, but apparently never measured the distance
from the boom truck to the power line. Several of the
Company’s maintenance and warehouse workers were present
and were told to rig the beams — that is, assist with attaching
them to the crane, as the Company had instructed them in
advance. Managers from the Company were also present at the
work site, but never inquired about the safety measures that
APECS would be taking for the unloading project. APECS
employees showed the Company employees how to do the
rigging work, but did not provide safety information or training
to the Company’s on-site employees. APECS also took no
safety measures of its own, such as marking the boundaries of
the work zone or determining whether the crane could come
within twenty feet of a power line. During the day, when
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APECS’s signal person, who gave hand or voice signals to the
crane operator guiding his operation of the crane, left the job
site, a Company employee, Misi Fa’amoana, assumed those
responsibilities. Otherwise, the work proceeded without
incident.
The job continued on January 14. Again, Sunier drove the
boom truck to the job site, accompanied by Sabio and one other
APECS employee. As on the first day, Fa’amoana gave basic
signals to Sunier, and Company employees rigged the steel
beams. Late in the morning, while unloading the beams, the
crane touched a live overhead power line. Three Company
employees were electrocuted and several others were injured.
II.
Following the January 2017 accident, an OSHA inspector
conducted an inspection and cited the Company for four
“serious” violations of OSHA regulations, see Citation and
Notification of Penalty, No. 1203732, at 6–9 (June 19, 2017),
namely failing to: (1) define the work area, in violation of 29
C.F.R. § 1926.1408(a)(1); (2) take precautions necessitated by
the fact that the crane could come within 20 feet of the power
line, in violation of 29 C.F.R. § 1926.1408(a)(2); (3) train the
employees assigned to the rigging work on safety hazards and
proper procedures while working near power lines, in violation
of 29 C.F.R. § 1926.1408(g)(1); and (4) ensure that Fa’amoana
met training and qualification requirements for a signal person,
in violation 29 C.F.R. § 1926.1428(a). OSHA assessed the
Company a penalty of $35,492.
Rejecting the Company’s objections to the citations, the
Secretary of Labor filed a complaint before the Commission
seeking affirmance of the citations. Following discovery, the
Secretary moved for summary judgment. In opposing
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summary judgment, the Company did not contest that the
violations had occurred but instead relied on Sasser to argue
that it was not responsible for the violations because it had no
experience in crane operations and had reasonably relied on
APECS to be responsible for the safety measures associated
with the job.
An ALJ concluded that the Company’s reliance on APECS
had not been reasonable and granted summary judgment for the
Secretary. The three-member Commission granted the
Company’s petition for discretionary review and, over one
dissent, affirmed the grant of summary judgment for the
Secretary. The Commission agreed that the Company’s
reliance on APECS had not been reasonable because this was
the first time that the Company had hired APECS to do crane
work and it had assumed, without inquiry, that APECS would
be responsible for safety precautions. Sec’y of Labor v.
Manua’s, Inc., O.S.H.R.C. No. 18-1059, at 4–5 (Sept. 28,
2018) (“Comm’n Dec.”). The Company now petitions for
review of the Commission’s decision.
III.
The Company makes several arguments, none of which is
persuasive on this record. First, it argues that the Commission
erred as a matter of law in failing to treat Sasser as controlling
the outcome here, rendering the Commission’s decision
arbitrary and capricious. The Company points to several
factual similarities with Sasser. In both cases, a crane operator
was hired “under a broad and undefined scope of work.”
Appellant’s Br. 31. Neither Sasser nor the Company inquired
about the safety measures that would be used, and the
respective agreements with the crane operators did not mention
safety measures. Both Sasser’s employees and the Company’s
employees worked on the job at the direction of the crane
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operator. A Sasser employee and a Company employee both
gave signals to the crane operator. The Company contends that
the Commission “arbitrarily disregarded” these factual
similarities and instead improperly relied on this court’s
decision in Fabi. Appellant’s Br. 35.
The court deferentially reviews decisions of the
Commission to ensure they are supported by substantial
evidence, 29 U.S.C. § 660(a), and are not “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with the
law,” AJP Constr., Inc. v. Sec’y of Labor, 357 F.3d 70, 72–73
(D.C. Cir. 2004) (quoting 5 U.S.C. § 706(2)(A)). The
Commission acts arbitrarily and capriciously if it fails to adhere
to its own precedent, see Jicarilla Apache Nation v. U.S. Dep’t
of Interior, 613 F.3d 1112, 1120 (D.C. Cir. 2010), or treats
similar cases dissimilarly, see Westar Energy, Inc. v. FERC,
473 F.3d 1239, 1241 (D.C. Cir. 2007), or fails to offer a
reasoned basis for departing from or distinguishing its
precedent, see Brusco Tug & Barge Co. v. NLRB, 247 F.3d 273,
278 (D.C. Cir. 2001); see also Nat’l Cable & Telecomm. Ass’n
v. Brand X Internet Servs., 545 U.S. 967, 981 (2005).
Doubtless there are similarities between the instant case
and Sasser, but the Commission adequately explained why it
viewed the circumstances here as different from Sasser and
more akin to Fabi. The Commission found that the Company
employees were more “intimately involved in the work” and
that “Manua’s and its employees shared responsibility for
safety.” Comm’n Dec. at 5. The Commission explained that,
unlike in Sasser, this was the first time that the Company had
hired APECS to perform crane work, so “there was no history
of safe crane practices in compliance with the Act upon which
to base reasonable reliance.” Id. Further, the Commission
stated the potential duration of exposure to the violative
condition was different. In Sasser, the work site was compliant
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with OSHA regulations until the moment that the crane came
into contact with the power line. Here, there were several
violative conditions — the failure from the outset of the project
to identify the work zone or to determine whether the boom
truck could come within twenty feet of a power line. Also, in
Sasser, only two of the employer’s employees were assisting
the contractor, while here, the Company “had assigned a crew
consisting of approximately a dozen employees” who “were
integrally involved in the rigging and unloading work” “to
work with APECS for two days.” Id. at 7. The Commission
reasoned that “when very few employees are involved for only
a brief period, the[ir] work is likely to be incidental in nature
and a more limited inquiry by the employer may be
reasonable,” id. at 6, but those were not the circumstances in
the instant case.
The Commission’s treatment of this case as
distinguishable from Sasser was thus reasoned and the
Commission has not failed to adhere to its own precedent, see
Jicarilla Apache Nation, 613 F.3d at 1120. The Commission’s
decision not to treat Sasser as dictating the outcome here was
therefore not arbitrary.
The Company next argues that the Commission
misapplied the summary judgment standard by failing to
acknowledge genuine disputes of material fact. Summary
judgment is appropriate only when there is no genuine dispute
of material fact, and the moving party is entitled to judgment
as a matter of law. Sec’y of Labor v. Van Buren–Madawaska
Corp., 13 O.S.H. Cas. (BNA) 2157, at *2 (Rev. Comm’n
1989).
The Company contends that the Commission disregarded
disputed material facts regarding the scope of its agreement
with APECS, whether its prior dealings with APECS were
10
sufficient to render its reliance reasonable, who was
responsible for determining the position of the shipping
containers, and whether the safe completion of the first day of
work justified the Company’s reliance on APECS. But there is
no genuine dispute about the scope of the agreement between
the Company and APECS. Rather, the evidence shows, at
most, that the Company had a unilateral and unjustified
expectation — not an agreement — that APECS would be
responsible for the safety of the project. Similarly, the
Company’s prior dealings with APECS and the fact that the
work proceeded without incident on the first day are not
disputed factual issues; rather, the Company simply objects to
the significance the Commission attached to undisputed
evidence. And the Company’s argument that it decided on the
placement of the shipping containers in consultation with
APECS, not unilaterally, concerns an immaterial factual
dispute because the analysis would not be changed even if the
Company’s version of events were true. The significance of
the Company’s role in placing the shipping containers is that it
shows that the Company shared control over the project with
APECS. See Fabi, 508 F.3d at 1083. That fact remains
regardless of whether the Company alone decided where to
place the containers or did so in consultation with APECS.
The Company also contends that the Commission’s
suggestion that the accident was foreseeable implicitly and
impermissibly decided disputed factual questions. The
Company points to the OSHA inspector’s testimony that the
cause of the accident was not easily explained. In the
Company’s view, this suggests that it could not have foreseen
the accident. APECS never informed it of the boom truck’s
maximum working radius, information essential to determining
the work zone. Yet again, neither of these arguments
implicates a factual dispute, and these facts are immaterial
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because, even if true, the Commission’s decision, and its
distinction of Sasser, was nevertheless reasonable.
Finally, the Company contends that the Commission
improperly decided that Fa’amoana was “signaling” within the
meaning of the OSHA regulation. Specifically, the Company
argues that the Commission disregarded the testimony of the
OSHA inspector suggesting that a signal person was not
needed. This argument does not implicate a factual dispute
because it is undisputed what Fa’amoana did: The Company
conceded in the agency proceedings that Fa’amoana “gave
basic signals to the crane operator.” Resp. to Req. for Admis.
at 7 (O.S.H.R.C. No. 17-12089). Consequently, “[w]hether
this made the cited signal requirements of the standard
applicable or not is a legal, not factual[,] issue,” Comm’n Dec.
at 6 n.5, and is therefore not a basis for denying a motion for
summary judgment.
Accordingly, because the Commission reasonably
distinguished Sasser and properly applied the summary
judgment standard, we deny the Company’s petition for
review.