R. ALEXANDER ACOSTA, Secretary, Department of Labor, Petitioner, v. HENSEL PHELPS CONSTRUCTION COMPANY, Respondent.
No. 17-60543
United States Court of Appeals for the Fifth Circuit
November 26, 2018
Before GRAVES and COSTA, Circuit Judges, and BENNETT, District Judge.*
Thirty-seven years ago, this court, in a tort case, announced that “OSHA regulations protect only an employer‘s own employees.” Melerine v. Avondale Shipyards, Inc., 659 F.2d 706, 711 (5th Cir. Unit A Oct. 1981). That decision has endured despite the seismic shift brought about by Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and the decades of administrative-law aftershocks that followed.
Today we reexamine Melerine, and the precedent on which it relies,1 in the light of that shift. In this appeal, the Secretary of Labor asks the court to decide whether he has the authority—under either the Occupational Safety and Health Act,
I
The parties have stipulated to the relevant factual and procedural history in this action. In 2010, Respondent Hensel Phelps Construction Company entered into a contract with the City of Austin to build a new public library. Hensel Phelps, as general contractor, maintained control over the worksite through the presence of on-site management personnel, including superintendents, project engineers, and project managers. In 2014, Hensel Phelps contracted with subcontractor Haynes Eaglin Watters, LLC (HEW), to do certain work on the project‘s Seaholm Substation East Screen Wall. Later that year, HEW contracted with sub-subcontractor CVI Development, LLC, to complete demolition, excavation, and other work as required for the East Screen Wall.
On the rainy morning of March 4, 2015, CVI was assigned to reinstall reinforcing rods (“rebar“) at the base of this excavated wall of soil, preliminary to pouring concrete footings. The wall was not properly sloped or otherwise protected from cave-in hazards, and had not been for several days. Concerned about the combination of the weather and the instability of the excavation wall, CVI owner Karl Daniels sent his employees to work on another area of the site while he awaited instructions from HEW or Hensel Phelps on how to proceed at the excavation area. A City of Austin inspector saw the CVI employees working at the other location and told Daniels that his employees should work only at the excavation. The inspector also reported to Hensel Phelps’ area superintendent that CVI employees were working at the other location. The superintendent instructed Daniels to have his employees return to the excavation and not to do any other work until the excavation work was completed. Daniels sent an email to HEW‘s senior project manager, stating that “[P]lacing rebar in the mud and rain is unorthodox and very dangerous.” The project manager gave only a cursory reply that CVI should comply with its instructions. Daniels thereafter removed his employees from the other work area and sent them back to the excavation area to install rebar.
That same day, the OSHA Area Office in Austin received a complaint of hazardous working conditions at the library project excavation area. A compliance officer conducted an inspection of the site and discovered three CVI employees working at the base of the unprotected wall of excavated soil. The city inspector, Hensel Phelps’ superintendent, and both Hensel Phelps’ and HEW‘s project superintendents were present at the wall, as well, with full views of the CVI employees working there.
OSHA cited both CVI and Hensel Phelps for willfully violating
Hensel Phelps timely contested the citation. In the proceedings before the Occupational Safety and Health Review Commission ALJ, the parties stipulated that (1) the excavation was not adequately protected; (2) Hensel Phelps knew that the excavation was not adequately protected because its supervisors observed CVI employees working next to the unprotected excavation; (3) and Hensel Phelps had management authority over the entire library project and had the specific authority to prevent the violation by correcting the hazardous conditions or by stopping CVI‘s employees from working in the area. The ALJ determined that Hensel Phelps met the requirements to be considered a “controlling employer” who has a duty under the Occupational Safety and Health Act,
But this finding was not the end of the matter, for “[w]here it is highly probable that a Commission decision would be appealed to a particular circuit, the Commission [] generally applie[s] the precedent of that circuit in deciding the case—even if it may differ from the Commission‘s precedent.” Kerns Bros. Tree Serv., 18 BNA OSHC 2064 (No. 96-1719, 2000); see also Smith Steel Casing Co. v. Donovan, 725 F.2d 1032, 1035 (5th Cir. 1984) (“A holding by a court of appeals on a legal question is binding on the [] Commission in all cases arising within that circuit until and unless the court of appeals or the Supreme Court overturns that holding. . . .“). Because this citation arose within the jurisdiction of the Fifth Circuit, the ALJ found that Fifth Circuit precedent foreclosed the citation. ALJ Decision at *6. Specifically citing Melerine v. Avondale Shipyards, Inc., 659 F.2d 706, 711 (5th Cir. Unit A Oct. 1981), which stated that “OSHA regulations protect only an employer‘s own employees,” the ALJ concluded that an employer at a worksite within the Fifth Circuit cannot be held in violation of the Act when the employees exposed to the hazard were employees of a different employer. ALJ Decision at *6–7. The ALJ vacated the citation.
The Secretary sought discretionary review of the ALJ‘s decision. The Commission did not grant it, so the decision became a final order of the Commission. See
II
Because the ALJ‘s decision became a final order of the Commission, we review that decision on appeal. W.G. Yates & Sons Constr. Co. v. Occupational Safety & Health Review Comm‘n, 459 F.3d 604, 606 (5th Cir. 2006). The issues the Secretary raises are purely issues of law, and the court reviews the Commission‘s legal conclusions “for whether they are ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.‘” Aus. Indus. Specialty Servs., L.P. v. Occupational Safety & Health Review Comm‘n, 765 F.3d 434, 438–39 (5th Cir. 2014) (per curiam) (quoting Trinity Marine Nashville, Inc. v. Occupational Safety & Health Review Comm‘n, 275 F.3d 423, 427 (5th Cir. 2001)).
III
A court reviewing an agency‘s interpretation of its authority under the statute it administers must engage with the two-step framework established in Chevron. See W. Ref. Sw., Inc. v. FERC, 636 F.3d 719, 723 (5th Cir. 2011). At the first step, “applying the ordinary tools of statutory construction, the court must determine ‘whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.‘” City of Arlington v. FCC, 569 U.S. 290, 296 (2013) (quoting Chevron, 467 U.S. at 842–43).5 “But if the statute is silent or ambiguous with respect to the specific issue, the question for the court” at the second step “is whether the agency‘s answer is based on a permissible construction of the statute.” Id. (internal quotation marks omitted) (quoting Chevron, 467 U.S. at 843). If both criteria are met, that is, “[i]f a statute is ambiguous, and if the implementing agency‘s construction is reasonable,” then ”Chevron requires a federal court to accept the agency‘s construction of the statute, even if the agency‘s reading differs from what the court believes is the best statutory interpretation.” Elgin Nursing & Rehab. Ctr. v. U.S. Dep‘t of Health & Human Servs., 718 F.3d 488, 492 n.3 (5th Cir. 2013) (citation omitted); see also City of Arlington, 569 U.S. at 297 (“No matter how it is framed, the question a court faces when confronted with an agency‘s interpretation of a statute it administers is always, simply, whether the agency has stayed within the bounds of its statutory authority.” (emphasis in original)); BNSF Ry. Co. v. United States, 775 F.3d 743, 751 (5th Cir. 2015) (“[W]e do not . . . impose [our] own construction on the statute.” (quoting Chevron, 467 U.S. at 843)). We will likewise defer to an agency‘s reasonable interpretation of its own regulations when the text of the regulation is ambiguous. Martin v. Occupational Safety & Health Review Comm‘n, 499 U.S. 144, 152 (1991); Delek Ref., Ltd. v. Occupational Safety & Health Review Comm‘n, 845 F.3d 170, 175 (5th Cir. 2016).
It is undisputed that none of Hensel Phelps’ employees were exposed to the excavation wall hazard. Despite this, the Secretary maintains that he has the authority under both the Act and the implementing regulations to issue citations to controlling employers, like Hensel Phelps, at multi-employer worksites. It is also undisputed that the Secretary‘s position is contrary to this court‘s decision in Melerine, in which we reaffirmed precedent finding both the Act and OSHA regulations protect only an employer‘s own employees. 659 F.2d at 710-12 (citing Se. Contractors, Inc. v. Dunlop, 512 F.2d 675 (5th Cir. 1975) (per curiam), Horn v. C.L. Osborn Contracting Co., 591 F.2d 318, 321 (5th Cir. 1979), and Barrera v. E.I. DuPont de Nemours & Co., 653 F.2d 915 (5th Cir. Unit A Aug. 1981)).
That said, Melerine and the cases it relies on all predate Chevron. In such a
”Brand X demands that we reexamine pre-Chevron precedents through a Chevron lens.” Dominion Energy Brayton Point, LLC v. Johnson, 443 F.3d 12, 17 (1st Cir. 2006). Thus, to resolve the issues in this appeal, our analysis proceeds by answering the following four questions. First, is the Secretary‘s interpretation of the Act “otherwise entitled to Chevron deference“? Brand X, 545 U.S. at 982. In other words, if we were looking at this issue for the first time, post-Chevron, and assuming Melerine and its underlying cases never existed, would the Secretary‘s interpretation be entitled to deference? See id. (directing courts undertaking this analysis to “review[] the agency‘s construction on a blank slate“). Second, if yes, did Melerine and the underlying cases hold that their interpretation of the Act “follow[ed] from the unambiguous terms of the statute and thus leave no room for agency discretion“? Id. Third, if no, should the court rule that Melerine and the underlying cases must no longer be followed? And fourth, if yes, free from the confines of Melerine and its forebears, is the ALJ‘s decision vacating the citation arbitrary, capricious, an abuse of discretion, or not otherwise in accordance with the law?6
A
The Secretary argues that two particular sections of the Act grant him authority to cite controlling employers at multi-employer worksites:
(a) Each employer—
(1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees;
(2) shall comply with occupational safety and health standards promulgated under this chapter.
1
At Chevron step one, we ask whether Congress, through
Even a cursory glance at the plain language of
This reading is bolstered by combining the text of
For Hensel Phelps to successfully pretermit the analysis at Chevron step one, it must show that the language of
Hensel Phelps argues that the controlling employer policy violates section
We also reject Hensel Phelps’ argument that the Secretary‘s purported authority under the Act is improperly premised on an expansive definition of “employer” and “employee,” contrary to the Supreme Court‘s holding in Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318, 322–24 (1992), that Congress intends the term “employee” to connote a traditional common-law master-servant relationship if a statute does not set forth a different definition. The Eighth Circuit previously addressed and rejected this argument. In Summit Contractors, that court explained that the controlling-employer citation policy does not conflict with Darden because
At bottom, even assuming that
It may be . . . that (a)(2) was intended to create a specific duty requiring an employer to comply with OSHA safety standards for the good of all employees—even those employed by others—at a common worksite. If so, however, it is plausible that Congress would have chosen more direct phrasing to implement such a scheme. . . . Subsection (2) on its face does not limit an employer‘s duty to comply with safety standards only to the employer‘s employees. Nor is there any patently compelling reason to assume merely because liability under (a)(1) is limited to situations where an employer‘s own employees are exposed to hazards, liability under (a)(2) is likewise limited. . . . Given the ambiguities of the statute, we are not prepared to conclude
the plain language of the statute alone or its nonexistent legislative history on this issue permits us to accept or reject the multi-employer doctrine.
182 F.3d at 729. Consistent with this reading, we find that Congress‘s intent in promulgating
2
At step two, ”Chevron directs courts to accept an agency‘s reasonable resolution of an ambiguity in a statute that the agency administers.” Michigan v. EPA, 576 U.S. 743, 751 (2015). “The agency‘s view ‘governs if it is a reasonable interpretation of the statute—not necessarily the only possible interpretation, nor even the interpretation deemed most reasonable by the courts,‘” Coastal Conserv‘n Ass‘n v. U.S. Dep‘t of Commerce, 846 F.3d 99, 106 (5th Cir. 2017) (quoting Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 218 (2009)), provided that the interpretation is not “arbitrary, capricious, or manifestly contrary to the statute,” EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 513 (2014) (quoting Chevron, 467 U.S. at 844). See also Chevron, 467 U.S. at 843 n.11 (“The court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.“). “[T]he whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency,” Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 742 (1996), so “[i]f the agency‘s reasons and policy choices conform to minimal standards of rationality, then its actions are reasonable and must be upheld,” Louisiana v. U.S. Army Corps of Eng‘rs, 834 F.3d 574, 587 (5th Cir. 2016) (quoting Tex. Oil & Gas Ass‘n v. EPA, 161 F.3d 923, 934 (5th Cir. 1998)).
The Secretary‘s interpretation of
We disagree with Hensel Phelps that anything in United States v. Mead Corp., 533 U.S. 218 (2001), counsels against our finding the Secretary‘s interpretation of
We find that the Secretary‘s construction of the statute as granting authority to issue citations to controlling employers is a “reasonably defensible” one. Sara Lee Bakery Grp., Inc. v. NLRB, 514 F.3d 422, 428 (5th Cir. 2008) (quoting Asarco, Inc. v. NLRB, 86 F.3d 1401, 1406 (5th Cir. 1996)). Accordingly, under Chevron, we must defer to it.
B
Continuing along on our Brand X journey, we must next look at our previous cases—Southeast Contractors, Horn, Barrera, and Melerine—to determine the provenance of the principle that the Act protects only an employer‘s employees, and decide whether it “follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.” Brand X, 545 U.S. at 982. To reiterate, ”[o]nly a judicial precedent holding that the statute unambiguously forecloses the agency‘s interpretation, and therefore contains no gap for the agency to fill, displaces a conflicting agency construction.” Id. at 982–83.
The two times9 this court previously dealt with Brand X, we followed our pre-Chevron precedent because our prior opinions on the issue had not indicated any ambiguity in the provisions they were interpreting.
The first case, Silva-Trevino v. Holder, 742 F.3d 197 (5th Cir. 2014), involved interpretation of a provision of the Immigration and Nationality Act that renders inadmissible “any alien convicted of . . . a crime involving moral turpitude.”
In the second case, Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d 380 (5th Cir. 2014), we declined to set aside our prior interpretation of a Federal Energy Regulatory Commission regulation. Previously, in Power Resource Group, Inc. v. Public Utility Service Commission, 422 F.3d 231, 239 (5th Cir. 2005), we had held that the “plain text” of a regulation failed to mandate whether all “Qualifying Facilities” were allowed to form “Legally Enforceable Obligations.”11 FERC later interpreted its own regulation to allow all Qualifying Facilities to form Legally Enforceable Obligations. The Exelon Wind plaintiff urged the court to defer to FERC‘s interpretation. Following a “straight-forward application” of Brand X, we rejected the plaintiff‘s argument, explaining that Power Resource “makes clear that our prior reading of FERC‘s Regulation unambiguously forecloses the interpretation offered by Exelon.” Exelon Wind, 766 F.3d at 397.12 We deemed our application of Brand X to be consistent with cases that had invoked it to overrule a previous judicial construction: “In those cases, the courts emphasize that their prior decisions also noted ambiguity in the text at issue.” Id. at 398.
In both Silva-Trevino and Exelon Wind, we had previously construed the relevant statute or regulation in keeping with its plain, unambiguous text. And in both cases, we rejected an agency‘s subsequent interpretation that was directly at odds with our prior interpretation.
Just the opposite here: Melerine expressly recognized that the court decided to come down on one side of a “complex debate.” What is more, Melerine and most of the cases predating it analyzed an OSHA regulation, not the text of the statute in which we and other circuits have found ambiguity.
Some courts have held that, given the language of [the Act]‘s clauses on the duties of employers, [the Act]‘s broad statement of purpose, and [the Act]‘s generally broad language, OSHA regulations protect not only an employer‘s own employees, but all employees who may be harmed by the employer‘s violation of the regulations. This court, however, along with others, has held that OSHA regulations protect only an employer‘s own employees.
Id. at 710-11 (footnotes omitted).13 Looking specifically at
We cannot ignore the glaring reality that Melerine is silent on the scope of any provision of the Act. Save one statement that the Act did not create “a civil cause of action against either a plaintiff‘s employer or a third party who is not the plaintiff‘s employer,” id. at 709, Melerine‘s holding (and the reasoning supporting it) extends no further than to the OSHA regulations:
[I]n this negligence action, we reject the argument that the failure of a third party that was not the plaintiff‘s employer to follow OSHA regulations establishes that third party‘s negligence. . . .
Melerine does not . . . contend that the OSHA regulations create a civil cause of action against Avondale. He urges instead that their violation establishes Avondale‘s negligence per se in a cause of action given him by general maritime law. . . .
The threshold issue . . . is whether Melerine was a member of the class that the OSHA regulations were intended to protect. . . .
This court, . . . along with others, has held that OSHA regulations protect an employer‘s own employees. . . .
In this circuit, . . . the class protected by OSHA regulations comprises only employers’ own employees. . . . [T]his interpretation
of the scope of coverage of OSHA regulations also accords with the scope of coverage explicitly given to the specific OSHA regulations at issue in this case.
Id. at 707, 709–12 (emphases added).14 Even were we to assume that Melerine‘s discussion of regulations applies to the Act as well, the decision proves, in obvious terms, that this court‘s prior construction of the Act was just a choice of one side of a “complex debate.” The court acknowledged that it is plausible to interpret the statute, as the Secretary does, in a way that gives weight to the lack of limiting language in
Melerine, if it reveals anything pertinent to this analysis, reveals the court‘s view that the statute is open to the Secretary‘s interpretation. The decision is, quite simply, the opposite of “judicial precedent holding that the statute unambiguously forecloses the agency‘s interpretation.” Brand X, 545 U.S. at 982–83. Again, assuming arguendo that its analysis applies to the Act, the Melerine court was guided by what it deemed “the best reading” of the Act; it did not hold that its reading “was the only permissible reading.” Brand X, 545 U.S. at 984 (emphases in original). Thus, its interpretation is vulnerable to being supplanted by the Secretary‘s current interpretation.15
The decision in Southeast Contractors—a one-paragraph, per curiam opinion—turned, not on any interpretation of
Horn also does not carry the day. The question raised in that case was whether a subcontractor‘s employee could hold a general contractor liable on a theory of negligence per se under Georgia law based on the general contractor‘s alleged violation of
He explained that an employer cannot be held in violation of
[§ 654(a)] if [h]is employees are not affected by the noncompliance with a standard. And if there was ever any doubt as to what he meant by “[h]is employee” this was eliminated by his reiteration of the general rule that a contractor is not responsible for the acts of his subcontractors or their employees. In light of this precedent and because it is conceded that [the plaintiff] was an employee of [the subcontractor], we must hold this “statutory duty” exception inapplicable.
Id. We find that this discussion does not rise to the level required by Brand X. The Horn court‘s holding does not at all approximate a holding that
Barrera is wholly irrelevant. The decision in that case, an appeal by a defendant found liable for $300,000 of personal injury damages, was that the trial court correctly refused to instruct the jury that there could be no liability if the plaintiff was unusually susceptible to emotional disturbance and the defendant lacked knowledge of that susceptibility, because Texas law did not recognize that defense. Barrera, 653 F.2d at 917–20. The sole reference to the Act in Barerra comes under the heading “Two Small Matters,” where the court chided the district court for the (ultimately) harmless error of including in its jury charge a statement that the Act required the defendant to furnish invitees a hazard-free place of employment: “[the Act] does not create duties between employers and invitees, only between employers and their employees; and it has long been settled in this circuit that, even between these latter, it creates no private cause of action.” Id. at 920. The decision has no force here.
“Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency‘s, the court must hold that the statute unambiguously requires the court‘s construction.” Brand X, 545 U.S. at 985. None of Southeast Contractors, Horn, Barrera, and Melerine did so. The Secretary‘s reasonable interpretation of the ambiguous statute must therefore govern.
C
“It is a well-settled Fifth Circuit rule of orderliness that one panel of our court may not overturn another panel‘s decision . . . .” Jacobs v. Nat‘l Drug Intelligence Ctr., 548 F.3d 375, 378 (5th Cir. 2008). “If, however, a Supreme Court decision ‘expressly or implicitly overrules one of our precedents, we have the authority and obligation to declare and implement this change in the law.‘” United States v. Tanksley, 848 F.3d 347, 350 (5th Cir. 2017) (quoting United States v. Kirk, 528 F.2d 1057, 1063 (5th Cir. 1976)). We will also revisit precedent where “an intervening Supreme Court decision fundamentally change[s] the focus” of the relevant analysis. Robinson v. J&K Admin. Mgmt. Servs., Inc., 817 F.3d 193, 197 (5th Cir. 2016).
D
This brings us to the ultimate question: what of the ALJ‘s decision? The ALJ cited Commission precedent that an employer has a duty under
IV
In sum, we conclude that the Secretary of Labor has the authority under section
The Petition for Review is GRANTED, the Final Order of the Occupational Safety and Health Review Commission is REVERSED, and this cause is REMANDED to the Commission for further proceedings consistent with this opinion.
Notes
Grossman Steel & Aluminum Corp., 4 BNA OSHC 1185 (No. 12775, 1976).Typically, a construction job will find a number of contractors and subcontractors on the worksite, whose employees mingle throughout the site while work is in progress. In this situation, a hazard created by one employer can foreseeably affect the safety of employees of other employers on the site. Conversely, as a practical matter it is impossible for a particular employer to anticipate all the hazards which others may create as the work progresses, or to constantly inspect the entire jobsite to detect violations created by others. Indeed, . . . it would be unduly burdensome to require particular crafts to correct violations for which they have no expertise and which have been created by other crafts. [O]n a construction site, the safety of all employees can best be achieved if each employer is responsible for assuring that its own conduct does not create hazards to any employees on the site, and that imposing liability on this basis would not place an unreasonable or unachievable duty on contractors. . . .
Additionally, the general contractor normally has responsibility to assure that the other contractors fulfill their obligations with respect to employee safety which affect the entire site. The general contractor is well situated to obtain abatement of hazards, either through its own resources or through its supervisory role with respect to other contractors. It is therefore reasonable to expect the general contractor to assure compliance with the standards insofar as all employees on the site are affected. Thus, we will hold the general contractor responsible for violations it could reasonably have been expected to prevent or abate by reason of its supervisory capacity.
Silva-Trevino, 742 F.3d at 200-01.[W]e need not speculate as to what is meant by the phrase “convicted of a crime of moral turpitude, because Congress had the foresight to tell us. The statutory definitions indicate that “conviction means, with respect to an alien, a formal judgment of guilt. . . .” The statute then includes a list of the seven official documents that may be considered as proof of such a conviction.
Id. § 1229a(c)(3)(B) . There is no mention of any additional evidence; and the introductory phrasing, “any of the following documents or records” gives no indication that extrinsic evidence is contemplated.
Exelon Wind, 766 F.3d at 397–98 (alterations in original) (emphasis removed) (quoting Power Resource, 422 F.3d at 239).If FERC had determined it necessary to set more specific guidelines concerning [Legally Enforceable Obligations], it could have done so. For example, the FERC regulations could have mandated that the [Qualifying Facilities] must be able to lock in purchase rates with a [Legally Enforceable Obligation] prior to construction of a facility. The plain text of the FERC regulation, however, fails to mandate that requirement. Rather, defining the parameters for creating a [Legally Enforceable Obligation] is left to the states and their regulatory agencies.