Case Information
*1 No. 73 December 26, 2014 IN THE SUPREME COURT OF THE STATE OF OREGON OREGON OCCUPATIONAL SAFETY & HEALTH DIVISION, Petitioner on Review, v.
CBI SERVICES, INC., Respondent on Review.
(WCB 0900126SH; CA A147558; SC S061183) En Banc
On review from the Court of Appeals.* Argued and submitted November 4, 2013.
Rebecca M. Auten, Assistant Attorney General, argued the cause and filed the brief for petitioner on review. With her on the brief were Ellen F. Rosenblum, Attorney General, and Anna M. Joyce, Solicitor General.
Carl B. Carruth, McNair Law Firm, Columbia, South Carolina, argued the cause for respondent on review. Joel S. DeVore, Luvaas Cobb, Eugene, filed the brief for respondent on review.
LANDAU, J.
The decision of the Court of Appeals is affirmed on other grounds. The case is remanded to the Workers’ Compensation Board for further proceedings.
______________
* Judicial review from Workers’ Compensation Board.
P3d 660 (2013).
The Oregon Occupational Safety and Health Division (OR-OSHA) cited employer with two serious safety violations, after an OR-OSHA safety inspector saw two employees working without required fall protection. An administrative law judge (ALJ) vacated one of the charges but affirmed the other, concluding that employer could have known of the violation had it been reasonably diligent. The Court of Appeals found that the ALJ erred in vacating the first charged item, but reversed the ALJ’s ruling on the second, on the ground that OR-OSHA had failed to meet its burden to prove that employer knew, or, with the exercise *2 of reasonable diligence, should have known, of the employees’ violations. Held : ORS 654.086(2), which provides that employer is not liable for a serious violation if (1) it exercised “reasonable diligence” but (2) still “could not * * * know” of the violation, refers to what an employer was capable of knowing under the circum- stances (and not what the employer “should” know), but, respecting reasonable diligence, the court will defer to OR-OSHA’s determination under the circum- stances of each case as long as the agency’s determination is within the limits of its discretion under the policy of the statute. In this case, the Court of Appeals erroneously faulted the ALJ for failing to consider what employer “ should ” have known in the circumstances, rather than what the employer “ could ” have known, as the statute requires, but the Supreme Court is unable to review the ALJ’s conclusion that employer could have known of the violations if it had exercised reasonable diligence, because the ALJ’s order lacks any explanation supporting a determination as to employer’s reasonable diligence. The decision of the Court of Appeals is affirmed, on other grounds. The case is remanded to the Workers’ Compensation Board for further proceedings. LANDAU, J.
ORS 654.086(2) provides that an employer is not lia-
ble for a “serious” violation of the Oregon Safe Employment
Act (OSEA) if “the employer did not, and could not with the
exercise of reasonable diligence, know of the presence of the
violation.” At issue in this case is what the statute means
when it says that an employer “could not with the exercise
of reasonable diligence know” of a violation. The Court of
Appeals held that the statutory phrase refers not to whether
an employer “could” know—in the sense of being capable
of knowing—of the violation; rather, the phrase refers to
whether, taking into account a number of specified factors,
an employer “should” know of the violation.
OR-OSHA v. CBI
Services, Inc.
,
I. BACKGROUND
The relevant facts are not in dispute. Employer CBI *3 Services, Inc., a contractor, performed work on a water treat- ment tank that was under construction. At that time, the tank consisted of a 32-foot-high wall that created a circular enclosure about 130 feet in diameter. It did not yet have a roof. Around the inside of the tank, there was a carpenter’s scaffold, about four feet below the tank’s top edge. The scaf- fold would prevent falls to the inside of the tank. There was, however, no such scaffolding on the outside of the tank.
An Oregon Occupational Safety and Health Division (OR-OSHA) safety compliance officer, Brink, conducted a safety inspection of the construction site. As he approached the water tank, he saw a worker sitting on its top rim. The worker, later identified as Crawford, was welding and did not appear to be using fall protection. Brink took several pictures. He then approached the site supervisor, Vorhof, who was working at ground level, inside the entrance to the tank, rigging anchor cables. Brink and Vorhof were about 65 feet from Crawford, who was visible from where they stood. Brink told Vorhof what he had seen. Vorhof looked up at Crawford, who was still sitting on the rim of the tank. Crawford was not wearing a safety harness and lanyard. Vorhof told Crawford to get down.
While Brink was talking to Vorhof, he noticed a second worker, Bryan, also working without required fall protection. Bryan was operating a lift, several feet from the ground. He was wearing a harness with a lanyard, but he had not attached the lanyard to the lift. Bryan also was about 65 feet from where Vorhof was working. Brink pointed to Bryan and said to Vorhof, “Hey, that man is not tied off.” Vorhof then asked Bryan whether he was tied off, at which point Bryan noticed that he had not secured the lanyard to the lift and quickly did so. Bryan had been on the lift with- out fall protection for about 10 minutes.
Brink later issued employer a citation and notifica- tion of penalty for two “items,” that is, two serious safety violations. Item one cited employer for failing to ensure that Bryan used required personal fall protection while work- ing on the lift, while item two cited employer for failing to ensure that Crawford used fall protection when working while exposed to a 32-foot fall hazard. Employer disciplined Crawford, Bryan, and Vorhof as a result of the citation.
At the time, employer had in place safety rules, precautions, and training mechanisms—including fall-pro- tection training and mandatory worksite safety meetings. Employer’s fall-protection rules required, among other things, the use of either protective scaffolding or a lanyard attached to a body harness whenever a worker was exposed to a fall hazard of six feet or more.
Employer requested a hearing before an adminis- trative law judge (ALJ) with the Hearings Division of the Workers’ Compensation Board. At the beginning of the hear- ing, employer moved to dismiss the citation on the ground that OR-OSHA had failed to carry its burden of proving, as part of its prima facie case, that employer knew of the alleged *4 violations. Employer did not dispute that, under applicable rules, a supervisor’s knowledge is imputed to an employer. It argued instead that OR-OSHA had failed to establish that its supervisor, Vorhof, had not been reasonably diligent in monitoring employees and enforcing safety rules. According to employer, OR-OSHA had mistakenly assumed that Vorhof was under the obligation to keep constant watch over his workers. OR-OSHA responded that Vorhof was within 65 feet of the violations and had reasonable time to observe them.
The ALJ denied the motions to dismiss, explaining: “Employer argues that continuous observation of employees is neither required [n]or possible and that the conditions existed in such a short window of time that Vorhof did use reasonable diligence in supervising his crew. However, * * * I find that there was sufficient time for Vorhof to observe either or both of the workers subject to the citation.”
At the hearing itself, employer contested Brink’s observation that Crawford was sitting atop the water tank. It also argued that, in any event, it was excused from lia- bility because any violations were a result of “unprevent- able employee misconduct.” OR-OSHA responded that Brink’s testimony and the photographs that he took sup- ported his report that Crawford was sitting on the tank. As for employer’s affirmative defense, OR-OSHA argued that employer failed to meet its burden of establishing that it took reasonable steps to discover the violation.
The ALJ vacated item one of the citation and affirmed item two. Beginning with item one, pertaining to Bryan’s use of the lift without adequate fall protection, the ALJ concluded that applicable rules did not require the use of fall protection at heights of less than six feet and that OR-OSHA had failed to prove how high the lift was at the time of the alleged violation. As for item two, pertaining to Crawford’s failure to use fall protection when working atop the 32-foot tank wall, the ALJ found that, as Brink had tes- tified, Crawford in fact was sitting on top of the water tank at the time of the violation. The ALJ further concluded that Vorhof could have known of the violation with the exercise of reasonable diligence, based on his proximity to Crawford and the duration of the violation. The ALJ further concluded that employer had failed to establish the affirmative defense of unpreventable employee misconduct, an element of which is that employer took reasonable steps to discover the viola- tion. Apparently referring to his prior ruling on the motion to dismiss, the ALJ explained that he had “previously determined [the] element of employer knowledge, the deter- mination that [employer] did not exercise reasonable dili- gence to detect the violation and established constructive knowledge of the violation.”
Employer sought judicial review in the Court of Appeals of the part of the ALJ’s order affirming citation item two. Employer argued that the ALJ had used an incorrect legal standard to determine whether OR-OSHA had met its prima facie burden to prove employer knowledge and that the ALJ misinterpreted and misapplied the elements of the unpreventable employee misconduct affirmative defense. OR-OSHA cross-petitioned for judicial review, challenging the part of the ALJ’s order vacating citation item one.
The Court of Appeals agreed with both parties and reversed and remanded on both the petition and the cross- petition for review.
On the petition, the Court of Appeals began its
analysis by stating that, under ORS 654.086(2), OR-OSHA
bore the burden of proving that employer knew or, with
the exercise of reasonable diligence, could have known of
Crawford’s violation.
CBI Services, Inc.
,
“For purposes of this section, a serious violation exists in a place of employ- ment if there is a substantial probability that death or serious physical harm could result from a condition which exists, or from one or more practices, means, methods, operations, or processes which have been adopted or are in ate to turn to federal case law to determine what OR-OSHA was required to prove to make out a prima facie case of Vorhof’s knowledge of Crawford’s violation. Id. at 474-75.
The court noted that the body of federal case law that
has developed in connection with the federal OSHA has iden-
tified a number of factors for assessing whether an employer
knew or, with the exercise of reasonable diligence, could know
of a violation.
Id
. at 477. Those factors include the foreseeabil-
ity of the violations, the general circumstances and level of
danger inherent in the work, the potential need for continuous
supervision, the nature and extent of the supervisor’s other
*6
duties, the supervised workers’ training and experience, and
the extent and efficacy of the employer’s safety programs and
precautions.
Id
. at 477-78, 481. The Court of Appeals reported
that “most federal courts have determined—applying the
same statutory language defining a serious violation set forth
in ORS 654.086(2)—that the relevant inquiry in proving a
serious violation is whether ‘an employer knew or
should
have
known of a hazardous condition.’ ”
Id
. at 478-79 (quoting
American Wrecking Corp v. Secretary of Labor
,
The court concluded that, “to the extent that federal case law dictates” such an approach to the issue of employer knowledge, “the ALJ’s inquiry in this case was critically shortsighted.” Id . at 479. In particular, the ALJ failed to consider that Crawford’s violation “was entirely unforesee- able.” Id . Moreover, the court added, “the ALJ failed to take into account employer’s extensive safety protocols, including worksite-specific fall-protection planning,” as well as “the evidence indicating that Vorhof had no reason to believe that Crawford was exposed to a potential fall hazard at all.” Id . at 480.
Turning to the cross-petition, concerning the dis- missal of item one based on OR-OSHA’s failure to establish use, in such place of employment unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation .” (Emphasis added.)
that Bryan was working at a height covered by the fall- protection rules, the Court of Appeals concluded that the ALJ had erred. Id . at 485. In the court’s view, the ALJ erro- neously interpreted the applicable rules to include a height requirement. Id .
II. ANALYSIS
OR-OSHA petitioned for review in this court, arguing that the Court of Appeals erred when it held that, under ORS 654.086(2), the agency must prove that an employer knew or should have known , after considering a list of required factors, of a violation, rather than that the employer knew or could have known of the violation, based on whatever factors the agency considers relevant—in this case, time and proximity. Employer, for its part, asserts that OR-OSHA seeks an “unprecedented strict liability rule” that a prima facie case of employer knowledge may be made merely by establishing that a supervisor was on the job site during the occurrence of a serious violation that the supervi- sor could have seen if he had looked in the right direction at the right time. Employer argues that, under Oregon law and federal OSHA cases interpreting ORS 654.086(2)’s identi- cal federal counterpart, the ALJ must consider the several factors that the Court of Appeals identified, besides mere proximity and time, in determining whether an employer knew or should have known of a serious violation. Employer *7 does not challenge the portion of the Court of Appeals’ deci- sion reversing on the cross-petition. The sole issue before us, then, is whether the Court of Appeals correctly interpreted ORS 654.086(2) to require OR-OSHA to establish that employer knew or should have known of the violation, tak- ing into account various factors identified in federal court case law.
A. Controlling principles
The parties’ arguments about that issue present an
issue of statutory construction, which we resolve by applying
familiar principles set out in
PGE v. Bureau of Labor and
Industries
, 317 Or 606, 610-12, 859 P2d 1143 (1993), and
State v. Gaines
,
Determining the intended meaning of a statute
ultimately is a question of law.
Bergerson v. Salem-Keizer
School District
, 341 Or 401, 411, 144 P3d 918 (2006). But,
depending on the nature of the statutory term at issue, an
administrative agency’s construction of a statute neverthe-
less may be entitled to a measure of deference.
See generally Springfield Education Assn v. School Dist
.,
Exact terms “impart relatively precise meanings,”
and “[t]heir applicability in any particular case depends
upon agency factfinding.”
Id.
at 223-24. Appellate courts
review an agency’s application of exact terms for substan-
tial evidence.
Coast Security Mortgage Corp. v. Real Estate
Agency
,
We begin our analysis of the statute with a brief bit of background to provide context. The Oregon legisla- ture enacted the Oregon Safe Employment Act in 1973. Or *8 Laws 1973, ch 833; see generally Keith Skelton, Workmen’s Compensation in Oregon: Ten Years After , 12 Willamette LJ 1, 6-7 (1975) (summarizing legislative history of OSEA). The Act was patterned after the federal OSHA, which the United States Congress enacted in 1970. Pub L 91-596 (1970). The purpose of the OSEA is “to assure as far as possible safe and healthful working conditions for every working man and woman in Oregon.” ORS 654.003. To effectuate that purpose, the Act imposes on every employer the burden of “furnish[ing] employment and a place of employment which are safe and healthful for employees therein.” ORS 654.010. At the same time, the Act requires that “[n]o employer shall construct or cause to be constructed or maintained any place of employment that is unsafe or detrimental to health.” ORS 654.015.
The OSEA vests the director of the Department of Consumer and Business Services (DCBS) with the responsi- bility for enforcing the terms of the OSEA. ORS 654.025(1). It authorizes the director and the Workers’ Compensation Board (which operates within the DCBS) to promulgate workplace safety rules to carry out the purposes of the Act. ORS 654.025(2); ORS 654.035. It also authorizes the direc- tor to cite an employer for violations of those rules and to impose civil penalties. ORS 654.031; ORS 654.086(1). The amount of the fine that the director may impose depends on whether the violation qualifies as “serious,” whether the violation was willful or repeated, and whether the employer made any false statements in connection with the enforce- ment of the rules. ORS 654.086(1).
A “serious” violation occurs “if there is a substantial probability that death or serious physical harm could result from a condition which exists, or from one or more practices, means, methods, operations, or processes which have been adopted or are in use, in such place of employment unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation.”
ORS 654.086(2). The issue in this case is whether employer committed a “serious” violation within the meaning of that statute. There is no contention that Crawford’s and Bryan’s failures to use proper fall protection were not conditions or practices with a substantial probability of resulting serious *9 physical harm. Rather, as noted, the issue in contention is whether employer “did not, and could not within the exercise of reasonable diligence, know” of those violations.
An employer’s supervisor’s knowledge of an employ- ee’s violation is imputed to the employer itself. OR-OSHA v. Don Whitaker Logging, Inc. , 329 Or 256, 263, 985 P2d 1272 (1999); see also former OAR 437-001-0760(3)(c) (2009) (supervisors are agents of their employers in the discharge of their authorized duties); OAR 437-001-0015 (defining “[a] gent of the employer” as “[a]ny supervisor or person in charge or control of the work or place of employment including, but not limited to, any manager, superintendent, foreperson, or lead worker”). In this case, all parties agree that, if Vorhof had sufficient knowledge of the violation, employer also had the requisite knowledge.
OR-OSHA has the burden of proving a “denied vio-
lation” by a preponderance of the evidence. OAR 438-085-
0820(1), (3).
[2]
As we have noted, the Court of Appeals stated
in this case that OR-OSHA must prove employer knowledge
as one of the elements of a denied violation.
CBI Services,
Inc.
, 254 Or App at 474. OR-OSHA does not contest that
statement regarding its burden; and employer affirmatively
agrees with it. For the purposes of this opinion, we accept
that as a given, as we have in at least one other case.
Don
Whitaker Logging, Inc.
,
[2] OAR 438-085-0820 provides:
“(1) OR-OSHA has the burden of proving: “(a) A denied violation;
“* * * * * “(3) The party having the burden of proving a fact must establish it by a preponderance of the evidence.” edge; rather, it says that an employer is liable for certain dangerous conditions “ unless the employer did not , and could not with the exercise reasonable dili- gence, know of the presence of the violation.” ORS 654.086(2) (emphasis added). It could be argued that the phrasing that follows the word “unless”—ordinarily a word of limitation—sets out an affirmative defense. The parties, however, have not briefed that issue, and we do not address it in this opinion. [3] The statute does not say that OR-OSHA has to establish employer knowl- B. Application: The meaning of ORS 654.086(2)
We turn then to the meaning of the phrase, “unless
the employer did not, and could not with the exercise of rea -
sonable diligence, know of the presence of the violation.” In
particular, we focus on the meaning of the disputed part of
that phrase—“could not with the exercise of reasonable dil-
igence, know” of the violation. In construing that phrase, we
pay careful attention to its wording.
State v. Vasquez Rubio
,
The wording of the disputed phrase in ORS 654.086(2), on its face, states that an employer is not liable for a serious violation if the employer had exercised “rea- sonable diligence” and still “could not * * * know” of the vio- lation. Thus, there are two components of that phrase that require parsing—one referring to an employer’s exercise of “reasonable diligence” and the other referring to what an employer exercising such reasonable diligence “could not * * * know.”
As earlier noted, in determining the meaning of
each of those components, we must ascertain whether it is
exact, inexact, or delegative in nature, so that we may apply
the appropriate standard of review. Whether legislation is
exact, inexact, or delegative is itself a question of statutory
construction, requiring us to examine the text of the stat-
ute in its context.
J. R. Simplot Co. v. Dept. of Agriculture
,
We begin with the phrase “could not * * * know,” as it is used in ORS 654.086(2), starting with a determination whether the phrase is exact, inexact, or delegative. In this case, we readily conclude that the phrase is inexact. It is not so precise as to require only factfinding. Nor is it an open-ended phrase that necessitates further administrative agency policy making. Accordingly, our task is to determine the intended meaning of the phrase, applying the ordinary tools of statutory construction.
As used in this context, the word “could” is the past tense of the word “can” and, as used in its auxiliary func- tion, expresses the “past conditional.” Webster’s Third New International Dictionary 517 (unabridged ed 2002). The word “can,” in turn, is defined as “to be able to do, make, or accomplish.” Id . at 323. See also The American Heritage Dictionary of the English Language 416 (5th ed 2011) (defin- ing “could” as “the past tense of can * * * used to indicate ability or permission in the past”). In ordinary usage, it con- notes capability, as opposed to obligation. The same is true in legal usage. See Bryan A. Garner, A Dictionary of Modern Legal Usage 98 (1987) (“Generally can expresses physical ability <he can lift 500 pounds>.”) (emphasis in original).
In the absence of evidence to the contrary, we
assume that the legislature intended words of common usage
to be given their ordinary meanings.
Ogle v. Nooth
, 355 Or
570, 578,
We turn, then, to the phrase “reasonable diligence.”
It is not an exact term; it lacks a meaning so precise as
to require only factfinding. The more difficult question is
whether it is inexact or delegative. This court’s prior cases
have described delegative terms as those that “express incom-
plete legislative meaning that the agency is authorized to
complete,”
Coast Security Mortgage Corp
.,
First, the court often has compared a disputed term
to those the court already has concluded are delegative in
nature.
See, e.g.
,
Bergerson
,
With those considerations in mind, we turn to the
phrase “reasonable diligence” as it is used in ORS 654.086(2).
On its face, the term is very similar to the sort of terms
that the court has regarded as delegative in prior cases. In
fact, the term “unreasonable” was one that the court listed
as an example of delegative terms in
Springfield Education
Assn.
To recap, then: ORS 654.086(2) provides that an
employer is liable for a serious violation of the OSEA and its
implementing rules unless the employer “did not, and could
not with the exercise of reasonable diligence, know of the
presence of the violation.” That means that an employer is
not liable for a serious violation if the employer had exercised
“reasonable diligence” and still “could not * * * know” of the
violation. In reviewing an agency’s decision about whether
an employer is excused from liability under ORS 654.086(2),
there are two components, each of which triggers a different
standard of review. First, as a matter of law, the reference
in the statute to whether an employer “could not * * * know”
of a violation refers to what an employer was capable of
knowing under the circumstances. Second, we will defer to
OR-OSHA’s determination about what constitutes “reason-
able diligence” under the circumstances of each case as long
as the agency’s determination “remains within the range
of discretion allowed by the general policy of the statute.”
Springfield Education Assn.
,
As we have noted, the Court of Appeals concluded that federal case law construing the federal-law counterpart of ORS 654.086(2) years after enactment of the state stat- ute “dictates” a different reading of that law. Specifically, the court concluded that, in accordance with those federal cases, ORS 654.086(2) requires OR-OSHA, as a matter of law, to consider a list of particular factors in determining whether an employer “should” have known of a violation. The court predicated its conclusion that those federal cases are controlling on its reading of this court’s decision in Don Whitaker Logging, Inc.
In
Don Whitaker Logging, Inc.
, the issue was
whether, under an administrative rule adopted to implement
the OSEA, proof of a supervisor’s safety violation established
the employer’s knowledge of the violation.
The Court of Appeals in this case read that obser- vation as implicitly holding that, if an Oregon rule does have a counterpart in federal law, later federal court cases interpreting that law become authoritative. In so doing, the court erred for at least two reasons. First, to draw that gen- eral principle from the court’s observation is logically falla- cious. [4] Second, to the extent that the court’s statement in Don Whitaker Logging, Inc. , could be taken to suggest the appropriateness of resorting to some federal case law when an Oregon statute finds a federal counterpart, it does not go so far as to support the notion that federal case law issued after the enactment of the Oregon statute is authoritative. In fact, the law is to the contrary.
Basic principles of Oregon statutory construction require that we focus on the meaning of the statute most likely intended by the legislature that adopted it. State v. Perry , 336 Or 49, 52, 77 P3d 313 (2003) (proper focus of Oregon statutory construction is the discernment of “the intent of the legislature that passed [the] statute”). That means that we attempt to determine what the legislature actually intended at the time of enactment . As this court explained in Holcomb v. Sunderland , 321 Or 99, 105, 894 P2d 457 (1995), “[t]he proper inquiry focuses on what the legislature intended at the time of enactment and discounts later events.”
say, “if Oregon law has no federal counterpart, then federal law does not control”
(if not P, then not Q) does not necessarily mean that, “if Oregon law does have
a federal counterpart, then federal law does control” (if P, then Q). For example,
to say if it does not rain, then there will be no crop harvest, does not necessarily
mean that if it does rain, then there will be a crop harvest, because the existence
of a harvest could depend on any number of other factors than rain. Locusts,
perhaps.
[4]
To be precise, it suffers from the fallacy of the denying the antecedent. To
That, for example, is why this court looks to dic-
tionaries that are contemporaneous with the time of enact-
ment when determining the ordinary meaning of a statu-
tory word or phrase.
See, e.g.
,
State v. Glushko/Little
, 351 Or
297, 312,
The same reasoning applies to the use of case law.
Court decisions that existed at the time that the legislature
enacted a statute—and that, as a result, it could have been
aware of—may be consulted in determining what the legis-
lature intended in enacting the law as part of the context for
the legislature’s decision.
See, e.g.
,
Comcast of Oregon II, Inc.
v. City of Eugene
,
Case law published after enactment—of which the
legislature could not have been aware—is another matter.
That is not to say that later-decided federal cases cannot
be persuasive. Decisions from other jurisdictions may carry
weight, based on the force of the reasoning and analysis that
supports them.
See, e.g.
,
State v. Walker
,
At issue in this case is the meaning of statutory wording that the Oregon legislature borrowed from federal law. The United States Congress enacted the federal OSHA in 1970. Pub L 91-596, § 17, 84 Stat 1590 (1970). Included in that legislation was, as we have described, what is now codified at 29 USC § 666(k). In 1973, the Oregon legisla- ture adopted the OSEA, one section of which—now codified at ORS 654.086(2)—was patterned after the federal law. Or Laws 1973, ch 833, § 21. The issue, then, is what the Oregon legislature intended when it enacted that section at that time, and any controlling federal case law that existed at that time certainly would be relevant to making that determination.
In this case, the Court of Appeals principally relied
on two unpublished federal cases, both of which were decided
in the last few years.
CBI Services, Inc.
,
None of those cases was decided before the Oregon legislature enacted what is now ORS 654.086(2). Consequently, none of them sheds light on what the leg- islature had in mind when it adopted that statute in 1973.
Still, the cases on which the Court of Appeals relied could be persuasive, depending on the force of their own reasoning. The Court of Appeals relied on post-enactment federal cases for its conclusions that “reasonable diligence” *15 within the meaning of ORS 654.086(2) requires, as a mat- ter of statutory interpretation, an evaluation of a number of factors, particularly foreseeability, and that, as a result, the statute essentially requires proof that an employer should have known of the OSEA violation. CBI Services, Inc. , 254 Or App at 476-79.
As to the first point—whether “reasonable dili- gence” requires consideration of specific factors—in each of the cases on which the Court of Appeals relied, the fed- eral courts reviewed factors that a federal agency had adopted pursuant to the federal OSHA. See, e.g. , Public Utilities Maintenance, Inc. , 417 Fed Appx at 63 (“OSHRC [the Occupational Safety and Health Review Commission] has previously indicated that ‘reasonable diligence’ for the purposes of constructive knowledge involves” a number of factors.); Kokosing Construction Co. , 232 Fed Appx at 512 (“ ‘Reasonable diligence involves several factors * * *,’ ” quot- ing agency order).
Under federal law, review of an agency’s interpre-
tation of a statute is subject to a deferential standard of
review. That is, the court does not determine what the stat-
ute means; rather, it determines whether the agency’s inter-
pretation of the statute is reasonable.
See generally Chevron,
USA, Inc. v. Natural Resources Defense Council, Inc.
, 467 US
837, 842-44,
As to the second point—whether the statutory ref-
erence to whether an employer “could” know of a violation
really means whether the employer “should” know—in each
of the cases on which the Court of Appeals relied, the fed-
eral court used that phrasing without any explanation or
analysis. In
American Wrecking Corp. v. Secretary of Labor
,
Employer insists that the Court of Appeals cor- rectly construed ORS 654.086(2). In employer’s view, “fed- eral OSHA law back to its inception” has treated the word “could” in 29 USC 666(k) to mean “should” in light of vari- ous factors and that nothing in the wording or the history of ORS 654.086(2) suggests that the Oregon legislature intended to depart from that understanding. The earliest case that employer cites in support of that proposition, how- ever, is Jerry Botchlet Masonry Constr. Co. , 5 BNA OSHC 1506, 1507 (No 13-135, 1977) (evidence was insufficient to support a finding that the foreman “should have known of the [hazardous] condition”). That case was decided well after the adoption of ORS 654.086(2).
Employer also claims support for its position from
Oregon tort cases in which this court held that, to prove
constructive knowledge of an undiscovered hazard, a plain-
tiff must show that the defendant should have discovered
it with the exercise of reasonable diligence.
See
,
e.g.
,
Diller
v. Safeway Stores, Inc.
, 274 Or 735, 738, 548 P2d 1304
(1976);
Cowden v. Earley
¸ 214 Or 384, 387, 327 P2d 1109
(1958). Even assuming that employer’s characterization
of this state’s case law is accurate, the fact remains that
the legislature, in adopting ORS 654.086(2), used phras-
ing different from this court’s decisions involving tort lia-
bility. Ordinarily, such differences in phrasing are taken to
signify differences in intended meaning.
See, e.g.
,
Dept. of
Transportation v. Stallcup
,
Employer further contends that the Court of Appeals’ decision is supported by the “black-letter principle” that both the federal OSHA and the OSEA are fault-based. In employer’s view, permitting liability to rest on the mere capability of an employer to be aware of serious violations implicitly requires employers to “provide one-on-one con- stant supervision of each and every employee to assure that some fleeting violation which ‘could’ be discovered, if the *17 supervisor happened to be looking at that precise time [,] was discovered.”
Employer again is accurate enough in describing the federal OSHA and the OSEA as “fault-based.” This court recognized that much in Don Whitaker Logging, Inc. , 329 Or at 263 (“OSHA is a fault-based system.”). Employer’s con- clusion, however, does not follow from that premise. Under our construction of ORS 654.086(2), the statute remains fault-based. Employers are not liable based solely on the fact of a violation. If they did not know of the violation, and if they could not have known of that violation with the exer- cise of reasonable diligence, they are excused from liability. Moreover, an employer remains free to offer relevant evi- dence that, in the particular circumstances, it should not be held responsible for the employees’ safety violations, such as, for example, that the employer took reasonable steps to discover the violations, or that the employee misconduct was unpreventable.
C. Application: The ALJ’s order
It remains for us to apply our understanding of ORS 654.086(2) to the final order at issue in this case. The ALJ determined that “there was sufficient time for Vorhof to observe either or both the workers subject to the cita- tions and that constructive knowledge was established.” In reaching that conclusion, the ALJ correctly quoted from the statute and appears to have correctly construed whether employer “could not * * * know” to refer to what employer was capable of knowing or discovering. What is not clear is how the ALJ interpreted or applied the “reasonable dili- gence” element.
As earlier noted, the term “reasonable diligence” in ORS 654.086(2) is delegative in nature. That means that we ordinarily review an agency’s interpretation and appli- cation of the term to determine whether they comport with the range of discretion afforded the agency under the law. Springfield Education Assn. , 290 Or at 229. That may be accomplished by administrative rule or by adequate expla- nation in a final agency order following adjudication. See Salem Firefighters Local 314 , 300 Or at 667-68 (Although “[d]elegated policy most obviously occurs when the terms of a statute * * * authorize and direct the adoption of reg- ulations, * * * statutory terms often leave important value judgments for direct application without prior specification by rules.”). In this case, however, neither has occurred. The term has not been fleshed out by administrative rule. Nor does the ALJ’s order explain how he arrived at the conclu- sion that employer could have known of Crawford’s violation had it exercised reasonable diligence.
In that regard, this case parallels what happened
in
McPherson
. In that case, an Employment Division referee
denied unemployment compensation benefits on the ground
that the petitioner had left work without “good cause.”
McPherson
,
In this case, somewhat similarly, the ALJ appears to have made his decision unaware of the delegative nature of the statutory standard of “reasonable diligence.” As we have noted, the ALJ simply observed that “there was suffi- cient time for Vorhof to observe either or both of the work- ers subject to the citations and that constructive knowledge was established.” The ALJ thus appears to have assumed that, given the Vorhof’s physical proximity to the violations, it was possible for him to have observed them, and that that is enough to establish constructive knowledge under ORS 654.086(2). That it was possible for Vorhof to have viewed the violations, however, is only half of the statutory equation. ORS 654.086(2) provides that the possibility of discovering the violation must be evaluated in the context of “reasonable diligence.” The ALJ’s order in this case lacks any explana- tion supporting a determination as to employer’s reasonable diligence.
For us to review an agency’s decision for consistency
with the discretion delegated to the agency by law, it must
be evident that the agency exercised that discretion in the
first place.
Cf., State v. Mayfield
,
The decision of the Court of Appeals is affirmed on other grounds. The case is remanded to the Workers’ Compensation Board for further proceedings.