SOLUS INDUSTRIAL INNOVATIONS, LLC, et al., Petitioners, v. THE SUPERIOR COURT OF ORANGE COUNTY, Respondent; THE PEOPLE, Real Party in Interest.
S222314
IN THE SUPREME COURT OF CALIFORNIA
Filed 2/8/18
Ct.App. 4/3 G047661
Orange County Super. Ct. No. 30-2012-00581868
For the reasons set forth below, we conclude that the federal act does not preempt unfair competition and consumer protection claims based on workplace safety and health violations when, as in California, there is a state plan approved by the federal Secretary of Labor. The district attorney‘s use of UCL and FAL causes of action does not encroach on a field fully occupied by federal law, nor does it stand as an obstacle to the accomplishment of the federal objective of ensuring a nationwide minimum standard of workplace protection. In addition, the federal act‘s structure and language do not reflect a clear purpose of Congress to preempt such claims. Therefore, we reverse the judgment of the Court of Appeal.
I. Background
A. Factual and procedural history
Our statement of facts and procedure is based largely on the opinion of the Court of Appeal.
Solus Industrial Innovations, LLC (Solus) manufactures plastics at its Orange County facility. In 2007, it installed at the facility an electric water heater that was designed for residential use. In March 2009, the water heater exploded, killing two employees.
The Division of Occupational Safety and Health1 investigated and “determined the explosion had been caused by a failed safety valve and the lack of ‘any other suitable safety features on the heater’ due to ‘manipulation and misuse.’ ” In an administrative proceeding, the agency charged Solus with five violations of state occupational safety and health regulations. (
The district attorney also filed the present civil action against Solus. The complaint alleged four causes of action, “all based on the same worker health and safety standards placed at issue in the administrative proceedings.” Only two of the causes of action are at issue here. One “allege[d] that Solus‘s failure to comply with workplace safety standards amount[ed] to an unlawful, unfair and fraudulent business practice under
Solus demurred on the ground that the two causes of action were preempted by the federal OSH Act. (
The Court of Appeal issued its order to show cause and concluded that the federal OSH Act preempted the district attorney‘s UCL and FAL claims. Its conclusion was based in part on a misapprehension concerning the date that unfair competition penalty provisions were enacted compared with the date the federal Secretary of Labor approved California‘s occupational safety and
This court granted the district attorney‘s petition for review.
B. Relevant federal and state laws
1. Federal law
As explained below, the federal OSH Act (
It is settled that the purpose of the 1970 federal enactment was to supply a nationwide floor of protection for workers. (
The federal OSH Act grants the federal Department of Labor the authority to provide and enforce mandatory national standards. (
Moreover, even when there are federal standards on an issue relating to occupational safety and health, a state may assume responsibility for developing and enforcing state standards on such issues by developing and submitting to the Secretary of Labor a plan to “preempt” federal standards. In a provision entitled “Submission of State plan for development and enforcement of State standards to preempt applicable Federal standards,” the federal OSH Act states: “Any State which, at any time, desires to assume responsibility for development and enforcement therein of occupational safety and health standards relating to any occupational safety or health issue with respect to which a Federal standard has been promulgated under section 655 of this title shall submit a State plan for the development of such standards and their enforcement.” (
The Secretary of Labor is required to approve a state‘s plan or any modification of its plan if, in the Secretary‘s judgment, a number of conditions are met. (
The Secretary of Labor retains some ongoing authority over state plans. For example, the Secretary must “make a continuing evaluation of the manner in which each State having a plan . . . is carrying out such plan.” (
Finally, the federal OSH Act contains a broad savings clause: “Nothing in this chapter shall be construed to supersede or in any manner affect any workmen‘s compensation law or to enlarge or diminish or affect in any other manner the common law or statutory rights, duties, or liabilities of employers and employees under any law with respect to injuries, diseases, or death of employees arising out of, or in the course of, employment” (
2. Cal/OSHA
Long before the federal enactment, California regulated occupational safety and health. (United Air Lines, supra, 32 Cal.3d at p. 766.) As we have recounted: ” ‘In 1913 . . . the Legislature enacted a . . . bill creating the Industrial Accident Commission, and vested that body, inter alia, with broad authority to adopt regulations relating to the safety and welfare of employees.’ ” (Ibid.) That ” ‘broad authority to regulate safety in places of employment’ ” was transferred to another body in 1945 and then, “[i]n 1973, as part of a comprehensive revision of California‘s occupational health and safety statutes in response to the Federal Occupational Safety and Health Act of
The 1973 legislation largely mirrored earlier state enactments. (
The Department of Industrial Relations (Department) was assigned the overall task of administering the state plan for “development and enforcement of occupational safety and health standards” relating to issues covered by the federal OSH Act standards (
The state law includes various enforcement and civil and criminal penalty provisions. (See
The Division‘s authority over “places of employment” is not exclusive, and does not include places “where the health and safety jurisdiction is vested by law in, and actively exercised by, any state or federal agency other than the division.” (
The Department submitted a Cal/OSHA plan to the federal Secretary of Labor, and it was approved in May 1973. (
and other unnecessarily codified information . . . . The purpose of these revisions is to eliminate the unnecessary codification of
Cal/OSHA standards have undergone revisions that were submitted for and secured federal approval. For example, in response to a state court action by labor representatives, the state Board amended the state standards to reflect the requirements of the state‘s then-newly adopted Safe Drinking Water and Toxic Enforcement Act of 1986. (
In 1987, the Governor of California attempted to reassign exclusive control over occupational safety and health matters to the federal government. He notified the federal Secretary of Labor of his intent and reduced the Department‘s budget. (See Cal. Labor Federation, supra, 221 Cal.App.3d at p. 1552.) The voters, however, in 1988 approved a proposition that defeated the Governor‘s plan and affirmed the central role of state law in these matters. (
C. General preemption principles
” ‘The supremacy clause of the United States Constitution establishes a constitutional choice-of-law rule, makes federal law paramount, and vests Congress with the power to preempt state law.’ [Citations.] Similarly, federal agencies, acting pursuant to authorization from Congress, can issue regulations that override state requirements. [Citations.] Preemption is foremost a question of congressional intent: did Congress, expressly or implicitly, seek to displace state law?” (Quesada v. Herb Thyme Farms, Inc. (2015) 62 Cal.4th 298, 307-308 (Quesada).)
We “conduct[] the search for congressional intent through the lens of a presumption against preemption. [Citations.] The presumption is founded on ‘respect for the
“We have identified several species of preemption. Congress may expressly preempt state law through an explicit preemption clause, or courts may imply preemption under the field, conflict, or obstacle preemption doctrines.” (Quesada, supra, 62 Cal.4th at p. 308.) Implied preemption, for its part, may be found “(i) when it is clear that Congress intended, by comprehensive legislation, to occupy the entire field of regulation, leaving no room for the states to supplement federal law [citation]; (ii) when compliance with both federal and state regulations is an impossibility [citation]; or (iii) when state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ ” (Bronco Wine Co. v. Jolly (2004) 33 Cal.4th 943, 955, italics added; see also Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1087.) Because preemption questions turn on Congressional intent, a reviewing court begins with the text of the federal statute, “the source of the best evidence concerning the breadth of Congress‘s preemptive intent.” (Quesada, supra, 62 Cal.4th at p. 308.)
D. Federal OSH Act preemption principles announced by the high court
The United States Supreme Court examined the preemptive effect of the federal OSH Act in Gade, supra, 505 U.S. 88. The high court‘s plurality and concurring opinions offer helpful interpretive guidance, but as explained below, in Gade, there was no approved state plan, so the extent to which an approved state plan displaces federal authority was not at issue.
The high court‘s plurality opinion used an implied preemption analysis. The plurality found that when a federal occupational safety and health standard exists and the state has not presented a plan to the Secretary of Labor and obtained approval, the application of a state occupational safety and health standard would be an obstacle to achieving Congress‘s goal that only a single regime of occupational safety and health regulation should apply. The plurality held that “nonapproved state regulation of occupational safety and health issues for which a federal standard is in effect is impliedly pre-empted as in conflict with the full purposes and objectives of the OSH Act. [Citation.] The design of the statute persuades us that Congress intended to subject employers and employees to only one set of regulations, be it federal or state, and that the only way a State may regulate a [federally]-regulated occupational safety and health issue is pursuant to an approved state plan that displaces the federal standards.” (Gade, supra, 505 U.S. at pp. 98-99.)
The plurality opinion relied on
Subdivisions (f) and (h) of
From these provisions, the plurality “conclude[d] that the OSH Act precludes any state regulation of an occupational safety or health issue with respect to which a federal standard has been established, unless a state plan has been submitted and approved pursuant to [
Addressing the separate question whether preemption — still in the absence of an approved state plan — reached state laws that directly regulated occupational safety and health but also were intended to protect public safety, the plurality concluded that the preemptive effect of the federal law extended to
“In sum, a state law requirement that directly, substantially, and specifically regulates occupational safety and health is an occupational safety and health standard within the meaning of the [federal OSH] Act. . . . If the State wishes to enact a dual impact law that regulates an occupational safety or health issue for which a federal standard is in effect, . . . the Act requires that the State submit a plan for the approval of the Secretary.” (Gade, supra, 505 U.S. at pp. 107-108, italics added.)
The concurring opinion by Justice Kennedy concluded that the federal law expressly preempts state occupational safety and health standards when a federal standard is in effect and the state has not submitted a plan for approval, but vigorously opposed the plurality‘s finding of implied preemption. (Gade, supra, 505 U.S. at pp. 109-114 (conc. opn. of Kennedy, J.).) In his view, the plurality‘s analysis failed to surmount the “high threshold” required for a finding that a law is preempted because it conflicts with the purpose of a federal law. (Id. at p. 110.) He added that such preemption “should be limited to state laws which impose prohibitions or obligations which are in direct contradiction to Congress’ primary objectives, as conveyed with clarity in the federal legislation.” (Ibid.) The concurrence observed no such direct contradiction between federal standards and a “concurrent, supplementary state scheme.” (Ibid.) Rather, all the inferences from
According to the concurrence, the plurality opinion failed to comply with a presumption that ” ‘historic police powers of the States’ ” are not preempted ” ‘unless that was the clear and manifest purpose of Congress.’ ” (Gade, supra, 505 U.S. at p 111.) In addition, Justice Kennedy criticized the plurality‘s method of inferring the congressional purpose, saying that a “freewheeling judicial inquiry into whether a state statute is in tension with federal objectives would undercut the principle that it is Congress rather than the courts that pre-empts state law.” (Ibid.)
Although Justice Kennedy disagreed with the plurality‘s conclusion that preemption was implied, he concluded that the plurality‘s analysis “amply demonstrates” express preemption. (Gade, supra, 505 U.S. at p. 112.) In his view, although
Justice Kennedy found it unnecessary to “reiterate the plurality‘s persuasive discussion on this point.” (Gade, supra, 505 U.S. at p. 11329 United States Code section 667. (Id. at p. 104, fn. 2.)
II. Discussion
The Court of Appeal held that the UCL and FAL claims are preempted by the federal OSH Act both expressly and through application of the principles of implied preemption. It concluded that Congress has essentially occupied the entire field of workplace safety regulation and enforcement other than workers’ compensation and the precise provisions of an approved state plan. It reasoned that “[b]ecause the [federal] OSH Act allows a state to avoid
As the Court of Appeal observed, the federal OSH Act expressly states what is not preempted — state laws governing workers’ compensation, a broad category of statutory and common law actions touching on worker safety, and any occupational safety or health issue as to which there is no federal standard. (
A. No implied preemption of UCL and FAL claims
1. Field preemption
a. The field preempted is narrow
In enacting the federal OSH Act, Congress entered “a field that traditionally had been occupied by the States. Federal regulation of the workplace was not intended to be all encompassing, however.” (Gade, supra, 505 U.S. at p. 96 (plur. opn. of O‘Connor, J.); see United Air Lines, supra, 32 Cal.3d at p. 772 [“Despite a broad authorization to [the federal OSH Act] . . . , the act did not foreclose other federal agencies or states from exercising . . . jurisdiction” over occupational safety and health].) Unlike some federal statutes,
Moreover, various elements of the federal OSH Act convince us that the preempted field is narrow. First, we have seen that when there is no federal standard, there is no preemption. (
Second, even when there are federal standards, states may “assume responsibility for development and enforcement” of state occupational safety and health standards, provided the state submits and gains approval for a state plan. (
We acknowledge that the Secretary of Labor has authority to approve modifications to a state‘s plan (
Third, the federal OSH Act‘s savings clause (
Finally, the provisions we have discussed indicate that the federal OSH Act contemplates a cooperative system of workplace safety regulation,
b. The UCL and FAL claims do not fall within this narrow field of preemption
Laws of general application are not ordinarily preempted by the federal act. (Gade, supra, 505 U.S. at p. 107 (plur. opn. of O‘Connor, J.); id. at p. 114 (conc. opn. of Kennedy, J.).) As explained below, under state law, actions under the UCL or FAL are not considered to be a means of enforcing the law claimed to have been violated; rather, they provide a remedy for economic damage suffered as a result of violations of a wide array of other laws. Furthermore, to the extent these claims may be considered an enforcement mechanism with respect to the state plan‘s substantive standards, these claims merely supplement enforcement of state standards. Federal OSHA‘s provisions related to the enforcement of state plans are concerned with ensuring enforcement that is at least as effective as the federal standards; nothing in the federal act suggests a concern with enforcement that exceeds federal requirements.
The UCL concerns unfair competition, a term that “mean[s] and include[s] any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law].” (
As noted above, under state law, these actions are not considered on their face to be a means of enforcing the underlying law. ” ‘By proscribing “any unlawful” business practice, “[the UCL] ‘borrows’ violations of other laws and treats them as unlawful practices” that the [UCL] makes independently actionable. [Citations.] ’ ” (Rose v. Bank of America, N.A. (2013) 57 Cal.4th 390, 396.) We have explained that “by borrowing requirements from other statutes, the UCL does not serve as a mere enforcement mechanism. It provides its own distinct and limited equitable remedies for unlawful business practices, using other laws only to define what is ‘unlawful.’ [Citation.] The UCL reflects the Legislature‘s intent to discourage business practices that confer unfair advantages in the marketplace to the detriment of both consumers and law-abiding competitors.” (Id. at p. 397; see People ex rel. Harris v. Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 783 [Federal Aviation Administration Act does not on its face preempt UCL claims against motor carriers for misclassification of drivers]; In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1272 [a federal law governing cigarette sales to minors on its face did not expressly preempt the UCL, which “is a law of general application, and it is not based on concerns about smoking and health“]; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150; Cel-TechCommunications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180; Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 560, 566, 576.) Thus, the UCL and FAL are laws of general application.
We acknowledge that in some instances, a UCL claim may fall within a field of preemption. For example, in In re Tobacco Cases II, supra, 41 Cal.4th 1257, a UCL claim based on advertising activities alleged to violate
We also recognize that the federal OSH Act is concerned not only with a state‘s substantive standards, but also with its enforcement. (
Notably, however, the federal OSH Act‘s concern regarding enforcement is only that states provide enforcement “at least as effective” as required under the federal OSH Act. (
Our conclusion is consistent with the decision of the federal Department of Labor approving California‘s Hazard Communication Standard (Standard), which incorporated provisions from Proposition 65, the Safe Drinking Water and Toxic Enforcement Act. (
The federal Department‘s consideration of Proposition 65 occurred in the context of an approval of a plan amendment, but Congress has not specified (as it has elsewhere) that any amendments to the state plan — even as to substantive standards — must be submitted to the Secretary of Labor for approval before they are implemented. (See, e.g.,
Federal regulations and commentary are in accord that changes to state plans may be implemented immediately, prior to any action by the Secretary of Labor or that officer‘s designee, federal OSHA: “Federal OSHA approval of a State plan . . . in effect removes the barrier of Federal preemption, and permits the State to adopt and enforce State standards and other requirements regarding occupational safety or health issues regulated by OSHA. A State with an approved plan may modify or supplement the requirements contained in its plan, and may implement such requirements under State law, without prior approval of the plan change by Federal OSHA. Changes to approved State plans are subject to subsequent OSHA review. If OSHA finds reason to reject a State plan change, and this determination is upheld after an adjudicatory proceeding, the plan change would then be excluded from the State‘s Federally-approved plan.” (
Finally, we reiterate the strong presumption against preemption, arising both from the fact that the federal legislation addresses an area that has been the long-standing subject of state regulation and from the fact that California has assumed responsibility under the federal OSH Act to regulate worker safety and health, thereby preempting federal law. In light of the cooperative character of the federal OSH Act, the authority the federal OSH Act grants states that haveassumed responsibility for worker safety and health, the nature of UCL and FAL claims, and the strong presumption against preemption, we find no implied preemption of the claims in this case.
To recall, “Obstacle preemption permits courts to strike state law that stands as ‘an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’ [Citations.] It requires proof Congress had particular purposes and objectives in mind, a demonstration that leaving state law in place would compromise those objectives, and reason to discount the possibility the Congress that enacted the legislation was aware of the background tapestry of state law and content to let that law remain as it was.” (Quesada, supra, 62 Cal.4th at p. 312.) We “conduct our analysis from the starting point of a presumption that displacement of state regulation in areas of traditional state concern was not intended absent clear and manifest evidence of a contrary congressional intent.” (Id. at p. 315; see also Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 388 [a high threshold must be surmounted before obstacle preemption will be found].)
The principal goal of the federal OSH Act‘s enactment was to “address the problem of uneven and inadequate state protection of employee health and safety” by supplying a minimum level of protection throughout the country — a federal “nationwide floor” of minimally necessary safeguards. (United Air Lines, supra, 32 Cal.3d at p. 772.) Federal approval of the California plan indicates that this goal has been met in this state. Even if we view UCL and FAL actions based on Cal/OSHA violations as having a substantial impact on occupational safety and health issues, that impact is not an obstacle to achieving the congressionalpurpose, nor are additional enforcement mechanisms an obstacle to establishing at least a minimum level of worker protection.7
Similarly, UCL and FAL claims that are premised on Cal/OSHA violations do not conflict with the federal OSH Act‘s provision that when state standards are applicable to products in interstate commerce, the Secretary of Labor must determine that the standards “are required by compelling local conditions and do not unduly burden interstate commerce.” (
Neither do the UCL or FAL claims obstruct another of the federal OSH Act‘s purposes, namely to encourage the States “to assume the fullest responsibility for the administration and enforcement of their occupational safety and health laws.” (
Finally, there is no reason to “discount” Congress‘s awareness and acceptance of the “background tapestry” of state law in this area. (Quesada, supra, 62 Cal.4th at p. 312) In the federal OSH Act‘s savings clause, Congress explicitly recognized the continuing applicability of state law in the field. (See
Under the circumstances, there is no “clear and manifest evidence” (Quesada, supra, 62 Cal.4th at p. 315) of a congressional intent to displace state authority over unfair competition and consumer claims that are premised on Cal/OSHA standards.
As noted above, the federal OSH Act does not state that claims such as UCL and FAL claims or that enforcement actions beyond those specified in a stateplan are preempted until they are included in a plan and approved by the Secretary of Labor. However, despite the absence of such a statement, express preemption may be found where an act‘s structure and language reflect a clear purpose of Congress to preempt state law. (See Gade, supra, 505 U.S. at pp. 112-113 (conc. opn. of Kennedy, J.) [express preemption of state law established by federal OSH Act provisions that allow state regulation where there is no relevant federal standard, require a state to submit a plan in order to assume responsibility for worker safety and health, set forth conditions for approval of a plan, and require continuing evaluation of a plan by the Secretary of Labor].)
As our discussion above of implied preemption reflects, when a state has obtained approval of a state plan for the regulation of worker safety and health, state law preempts federal law. Moreover, with respect to the enforcement of safety and health standards, the federal OSH Act requires enforcement at least as effective as under the federal act; there is no indication in the language or structure of the federal OSH Act that states with approved plans cannot supplement enforcement of federally-approved standards by means of unfair business practice claims. (See Farm Raised Salmon Cases, supra, 42 Cal.4th at p. 1090 [permitting UCL claim to proceed and finding it significant that nothing in the federal Food, Drug and Cosmetic Act said anything restricting the range of remedies states could provide].) Finally, the federal OSH Act allows a state with an approved plan to implement modifications or additions without prior approval of the plan change by Federal OSHA.
In the absence of a clear and manifest congressional purpose to preempt claims such as the UCL and FAL claims asserted in this action, such claims are encompassed in the presumption against preemption that arises upon a state‘s assumption of responsibility under the federal OSH Act to regulate worker safety and health. (See Quesada, supra, 62 Cal.4th at p. 315.)
III. Disposition
The judgment of the Court of Appeal is reversed, and the matter is remanded to the Court of Appeal with directions to vacate its order granting the petition for writ of mandate and instead to deny the petition for writ of
CANTIL-SAKAUYE, C. J.
WE CONCUR:
CHIN, J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
MIHARA, J.*
* Associate Justice of the Court of Appeal, Sixth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Notes
Solus has identified several standards that it contends apply to the facts of this case. (
Solus also cites federal OSHA‘s general duty clause, which states that an employer “(1) shall furnish . . . 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.” (
Although we are skeptical that the cited standards apply here, we note that the case has been litigated based on the view that a federal standard applies to the allegations, and we will assume without deciding that there is a federal standard relevant to the claims.
The federal regulation provides: “(a) The California State plan received initial approval on May 1, 1973. [¶] (b) [federal] OSHA entered into an operational status agreement with California. [¶] (c) The plan covers all private-sector employers and employees, with several notable exceptions, as well as State and Local government employers and employees, within the State. For current information on these exceptions and for additional details about the plan, please visit [a federal Department of Labor website].” (
The referenced website contains a very brief summary of the plan, noting that the Division “implements the California State Plan‘s enforcement . . . .” (U.S. Dept. of Labor, OSHA Plans <http://www.osha.gov/dcsp/osp/stateprogs/california.html> [as of February 8, 2018].)
The referenced “operational status agreement” notes that the Division “is designated as the state agency responsible for administering the State Plan,” that, with certain limited exceptions, “concurrent federal enforcement authority was suspended with regard to federal occupational safety and health standards in issues covered by the State Plan,” and that “concurrent federal enforcement authority would not be initiated with regard to any federal occupational safety and health standards in issues covered by the State Plan.” (82 Fed.Reg. 25631 (June 2, 2017).)