Secretary of Labor v. Copomon Enterprises, LLC , 601 F. App'x 823 ( 2015 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-12061
Non-Argument Calendar
________________________
Agency No. 13-0709
SECRETARY OF LABOR,
Petitioner,
versus
COPOMON ENTERPRISES, LLC,
Respondent.
________________________
Petition for Review of a Decision of the
Occupational Safety and Health Review Commission
________________________
(February 9, 2015)
Before HULL, ROSENBAUM, and EDMONDSON, Circuit Judges.
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PER CURIAM:
The Secretary of Labor petitions for review of the Occupational
Safety and Health Review Commission’s (“Commission’s”) order
granting summary judgment in favor of Copomon Enterprises, LLC. 1
The Commission concluded that the Secretary’s citation against
Copomon was barred by the doctrine of res judicata. 2 No reversible
error has been shown; we deny the petition and affirm the Commission’s
decision.
We review the Commission’s factual findings to ensure they are
supported by substantial evidence in the record. Daniel Int’l Corp. v.
Occupational Safety & Health Review Comm’n, 683 F.2d 361, 363-64
(11th Cir. 1982). Substantial evidence is more than a mere scintilla but
less than a preponderance. Hale v. Bowen, 831 F.2d 1007, 1011 (11th
1
Because the Commission did not direct review of the Administrative Law Judge’s (“ALJ’s”)
decision granting Copomon’s motion for summary judgment, the ALJ’s decision became the
final order of the Commission. See 29 C.F.R. § 2200.90(d).
2
The Commission also concluded, in the alternative, that the Secretary’s citation was barred by
collateral estoppel. Because we conclude that the Secretary’s citation is precluded by res
judicata, we do not reach the collateral estoppel issue.
2
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Cir. 1987). We review legal determinations by the Commission to
determine if they are arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with the law. 5 U.S.C. § 706; Fund for
Animals, Inc. v. Rice, 85 F.3d 535, 541 (11th Cir. 1996). “Barring a
claim on the basis of res judicata is a determination of law” that we
review de novo. Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1238
(11th Cir. 1999).
Copomon distributes and markets hair straightening and smoothing
products used by professional hair stylists. Following an Occupational
Safety and Health Act (“OSHA”) inspection of one of Copomon’s
facilities in 2011, the Secretary issued Copomon a citation (“Citation
1”). Among other things, Citation 1 alleged a serious violation of 29
C.F.R. § 1910.1048(m)(3)(i) for failing to ensure that containers of
formaldehyde-containing products -- including, but not limited to
Natural Keratin Smoothing Treatment, Natural Keratin Smoothing
Treatment Blonde, and Express Blow Out -- contained labels warning of
the hazards associated with formaldehyde exposure.
3
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Copomon contested the citation. 3 The parties ultimately reached a
settlement agreement, which was approved by the ALJ and became part
of the Commission’s final order. Under the terms of the Settlement
Agreement, Copomon agreed to “revise the labeling on all hair
smoothing/hair straightening products at issue in this case to include the
language agreed upon by the parties at the April 25, 2012 voluntary
mediation in compliance with 29 C.F.R. § 1910(m)(3)(i).” The language
to which the parties agreed was this language:
Hazard Warning
OSHA Compliant. Product is safe if used as directed. If not
used as directed may cause irritation and sensitization of the
skin and respiratory system, eye and throat irritation, acute
toxicity, and carcinoma per IARC. Physical and health
hazard information is readily available at [Company address
and phone number] and MSDS.
Following the ALJ’s order, Copomon revised its product labels in
compliance with the approved terms of the Settlement Agreement.
3
Although Copomon contends that its products do not contain formaldehyde in and of
themselves, Copomon concedes that the products named in Citation 1 are “capable of releasing
formaldehyde into the air, under reasonably foreseeable conditions of use, at concentrations
reaching or exceeding 0.1 ppm” and, thus, are subject to regulation under 29 C.F.R.
1910.1048(m) (2011).
4
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A few months later, following another inspection of Copomon’s
facilities, the Secretary issued Copomon a second citation (“Citation 2”).
Citation 2 alleged a “repeat” violation 4 of 29 C.F.R.
§ 1910.1048(m)(3)(ii) for failing to “ensure that the labels of
formaldehyde-containing products such as but not limited to Express
Blow Out, Natural Keratin Smoothing Treatment Blonde and Natural
Keratin Smoothing treatment were updated to indicate that the products
contained formaldehyde.” Citation 2 noted that Copomon had already
been “cited for a violation of this [OSHA] standard or its equivalent
standard” in Citation 1.
Copomon contested Citation 2. Among other things, Copomon
asserted -- based on the final order approving the Settlement Agreement
reached about Citation 1 -- that Citation 2 was barred by res judicata.
4
The Secretary later moved successfully to amend the classification of the violation in Citation 2
from “repeat” to “other-than-serious,” but did not otherwise alter the alleged violation
description.
5
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The ALJ granted summary judgment in favor of Copomon, concluding
that Citation 2 was precluded. 5
“Res judicata bars the filing of claims which were raised or could
have been raised in an earlier proceeding.” Ragsdale, 193 F.3d at 1238.
A claim is barred by earlier litigation if these four elements are met:
“(1) there is a final judgment on the merits; (2) the decision was
rendered by a court of competent jurisdiction; (3) the parties, or those in
privity with them, are identical in both suits; and (4) the same cause of
action is involved in both cases.” Id. “[I]f a case arises out of the same
nucleus of operative fact, or is based upon the same factual predicate, as
a former action, . . . the two cases are really the same ‘claim’ or ‘cause
of action’ for purposes of res judicata.” Id. at 1239.
The Commission determined that each of these four elements was
met and, as a result, that Citation 2 was barred by res judicata. We
agree. The parties do not dispute that elements (2) and (3) are met.
About element (1), the Commission’s order approving the parties’
5
The ALJ also denied the Secretary’s motion for summary judgment. The Secretary does not
challenge this denial on appeal.
6
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settlement agreement constituted a final judgment on the merits. See
Juris v. Inamed Corp., 685 F.3d 1294, 1340 (11th Cir. 2012) (“For
purposes of determining res judicata, an order approving a settlement
agreement provides a final determination on the merits.”).
Element (4) is also satisfied. In both cases, the Secretary alleged
that Copomon failed to ensure that containers of formaldehyde-
containing products (specifically Natural Keratin Smoothing Treatment,
Natural Keratin Smoothing Treatment Blonde, and Express Blow Out)
reflected adequately (1) that the products contained formaldehyde and
(2) the hazards of formaldehyde exposure. Thus, both cases arise out of
the same nucleus of operative fact and are based upon the same factual
predicate. That the Secretary initially categorized Citation 2 as a
“repeat” violation based on Copomon’s earlier citation (in Citation 1) of
an “equivalent standard” further evidences that both cases involve the
same cause of action.
On appeal, the Secretary does not challenge the Commission’s
determination on the four elements and does not otherwise contend that
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these four elements have not been shown. Instead, the Secretary argues
that the Commission should have applied a modified res judicata
analysis, based on our decision in Norfolk Southern Corp. v. Chevron,
371 F.3d 1285 (11th Cir. 2004).
In Norfolk Southern, we said that where parties consent to a
voluntary dismissal with prejudice under Fed.R.Civ.P. 41, “a somewhat
modified form of res judicata applies to the written settlement agreement
upon which such dismissal is predicated, if one exists.” 371 F.3d at
1291. Under this modified res judicata analysis, we determine whether a
claim is precluded from future litigation by looking at the terms of the
settlement agreement itself (as interpreted based on traditional principles
of contract law), instead of by looking at the claims in the original
complaint. Id. at 1289. “In determining the res judicata effect of an
order of dismissal based upon a settlement agreement, we should also
attempt to effectuate the parties’ intent. The best evidence of that intent
is, of course, the settlement agreement itself.” Id.
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Even if we assume -- without deciding -- that a modified res
judicata analysis similar to that discussed in Norfolk Southern is
appropriate in this case, Citation 2 would still be precluded. Based on
the express terms of the settlement agreement, the parties intended -- and
agreed -- that the mutually agreed-upon language for Copomon’s revised
product labels did, in fact, comply with 29 C.F.R. 1910.1048(m)(3)(i).
And, among other things, compliance with 29 C.F.R.
1910.1048(m)(3)(i) required that the product label identify the hazardous
chemical that is the subject of the warning (in this case, formaldehyde).
See 29 C.F.R. 1910.1048(m)(3)(i) (2011) (requiring hazard warning
labels to comply with 29 C.F.R. § 1910.1200(f)).
The crux of Citation 2, meanwhile, is that Copomon’s revised label
(which contained the mutually agreed-upon language) failed to identify
properly that Copomon’s products (the same three products identified in
Citation 1) contained formaldehyde. Because the settlement agreement
already established that the agreed-upon label language satisfied the
requirement that the hazardous chemical be identified properly, and
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because the settlement agreement evidences the parties’ intent that the
agreement may be used for other OSHA actions, we conclude that
Citation 2 is precluded under the modified version of the res judicata
doctrine.6
PETITION DENIED; AFFIRMED.
6
Given the facts of this case -- where Copomon revised its product labels in compliance with 29
C.F.R. 1910.1048(m)(3)(i) and with the terms of the approved Settlement Agreement -- nothing
evidences that the application of res judicata to bar Citation 2 restricts improperly the Secretary’s
enforcement discretion.
10