Millard Refrigerated Services, Inc. v. Secretary of Labor , 718 F.3d 892 ( 2013 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 8, 2013 Decided June 7, 2013
No. 12-1244
MILLARD REFRIGERATED SERVICES, INC.,
PETITIONER
v.
SECRETARY OF LABOR,
RESPONDENT
On Petition for Review of an Order of the Occupational
Safety & Health Review Commission
Kathryn M. Willis argued the cause for petitioner. With her
on the brief was Marcel L. Debruge.
Ronald J. Gottlieb, Attorney, U.S. Department of Labor,
argued the cause for respondent. With him on the brief were
Joseph M. Woodward, Associate Solicitor and Heather R.
Phillips, Counsel for Appellate Litigation. Charles F. James,
Attorney, entered an appearance.
Before: GARLAND, Chief Judge, GRIFFITH, Circuit Judge,
and SILBERMAN, Senior Circuit Judge.
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Opinion for the Court filed by Chief Judge GARLAND.
GARLAND, Chief Judge: In August 2010, more than 30,000
pounds of anhydrous ammonia escaped from one of the
petitioner’s refrigerated storage facilities. After an
investigation, the Occupational Safety and Health
Administration cited the petitioner for committing violations of
emergency response, training, record-keeping, and other
requirements. The Occupational Safety and Health Review
Commission affirmed the citations, and the petitioner now seeks
review in this court. Concluding that the petitioner’s challenges
are without merit, we deny the petition for review.
I
Anhydrous ammonia (NH3) is a corrosive chemical that can
burn the eyes and skin and, when inhaled, can damage the nose,
throat, and lungs. At sufficient levels of exposure, anhydrous
ammonia can kill a person almost immediately. For these
reasons, the Occupational Safety and Health Administration
(OSHA) classifies anhydrous ammonia as a “toxic and reactive
highly hazardous chemical[].” 29 C.F.R. § 1910.119 app. A.
Employers that operate a process involving at least 10,000
pounds of anhydrous ammonia must conform to training,
monitoring, and record-keeping requirements devised by OSHA
-- known as “process safety management” practices. See id.§ 1910.119(a)(1)(i). Of particular relevance to this case, such
employers must create and regularly update a report -- called a
“process hazard analysis” -- that addresses risks involved in the
process that uses anhydrous ammonia and identifies any
“previous incident which had a likely potential for catastrophic
consequences in the workplace.” Id. at (e)(1), (3). Employers
must also provide training to employees “involved in operating
a process” that uses anhydrous ammonia and must keep a record
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showing that those employees “ha[ve] received and understood”
that training. Id. at (g)(1), (3).
Millard Refrigerated Services operates a refrigerated
storage facility in Theodore, Alabama. The refrigeration system
at the Theodore plant uses anhydrous ammonia in quantities that
trigger the process safety management regulations found at 29
C.F.R. § 1910.119. Although Millard’s refrigeration equipment
is designed to prevent releases from occurring, cracks or other
defects in the equipment can allow vaporized anhydrous
ammonia to escape from the refrigeration system into the
ambient air.
On the evening of August 22, 2010, Allen White, the
Theodore facility’s plant engineer, was notified at home that the
plant had lost power. White went to the facility and, after the
plant regained power, surveyed the refrigeration system. He
was unable, however, to get one of its pumps running before he
returned home.
The next morning, an employee working on a shipping dock
approximately 200 feet from the plant smelled ammonia coming
from the facility. Further investigation revealed a strong smell
of ammonia in one of the plant’s freezers and a visible ammonia
cloud rising from cracked piping on the plant’s roof. Two
employees under White’s supervision went to the roof to close
the valves that were allowing anhydrous ammonia to enter the
leaking segments of piping. Neither employee wore a self-
contained breathing apparatus, despite the fact that they came
within 15 feet of the ammonia cloud. Nor had either employee
been trained in the use of a respirator or in emergency response
procedures.
The efforts of White and the other employees succeeded in
containing the August 2010 leak, but only after more than
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30,000 pounds of anhydrous ammonia escaped into the air. That
release, the largest in company history, destroyed $4 million
worth of products stored at the plant, required the plant’s
evacuation, and sent approximately 150 people to the hospital --
including White himself. A month later, an internal
investigation report prepared by Millard identified White’s
failure to “achiev[e] a safe operation on all systems” following
the power outage as a contributing cause of the ammonia leak.
Braga Memorandum at 2 (Sept. 21, 2010) (J.A. 425).
On August 24, 2010, after local fire authorities allowed the
Theodore plant to re-open, OSHA commenced an inspection.
Over the course of multiple visits, OSHA broadened its focus
from the August 2010 release to a more comprehensive
inspection of the entire plant. At the end of the inspection,
OSHA issued two citations for 18 separate regulatory violations.
After a hearing, an administrative law judge (ALJ) affirmed as
to 13 of those violations, including two regarding process safety
management regulations: failure to keep an adequate record of
past releases of anhydrous ammonia, in violation of 29 C.F.R.
§ 1910.119(e)(3)(ii); and failure to ensure that plant engineer
White received adequate training, in violation of 29 C.F.R.
§ 1910.119(g)(3). Among the other violations found by the ALJ
was one for failing to install swinging gates on an open
ladderway on the roof, in violation of 29 C.F.R.
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§ 1910.23(a)(2).1 The ALJ assessed a total penalty of $15,250
against Millard.
Millard filed an administrative petition for discretionary
review. The Occupational Safety and Health Review
Commission denied the petition, noting that the decision of the
ALJ thereby became the final order of the Commission. Notice
of Final Order at 1 (J.A. 1792). In this court, Millard seeks
review of all 13 findings of violations as well as review of the
total penalty.
II
We consider Millard’s challenges under “[f]amiliar
principles of administrative law.” A.J. McNulty & Co. v. Sec’y
of Labor, 283 F.3d 328, 331 (D.C. Cir. 2002). “A reviewing
court must uphold the factual findings of the Commission if they
are ‘supported by substantial evidence on the record considered
as a whole,’ 29 U.S.C. § 660(a), and must uphold its other
conclusions as long as they are not arbitrary, capricious, an
abuse of discretion, or otherwise contrary to law, 5 U.S.C.
§ 706(2)(A).” A.E. Staley Mfg. Co. v. Sec’y of Labor, 295 F.3d
1341, 1345 (D.C. Cir. 2002). “Moreover, ‘[w]e defer to
1
The remaining regulatory violations upheld by the ALJ
included: failure of employees to wear self-contained breathing
apparatuses while working on the roof to contain the anhydrous
ammonia leak, in violation of 29 C.F.R. § 1910.120(q)(3)(iv); failure
to have provided those employees training in the use of respirators, in
violation of 29 C.F.R. § 1910.134(k)(3), and training in emergency
response operations, in violation of 29 C.F.R. § 1910.120(q)(6)(iii);
and numerous record-keeping violations, including two violations of
29 C.F.R. § 1904.7(b)(1), two violations of 29 C.F.R. § 1904.29(b)(1),
and one violation each of 29 C.F.R. § 1904.29(b)(3), § 1904.32(b)(3),
and § 1910.147(c)(6)(i).
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[OSHA’s] interpretation of the [Occupational Safety and Health]
Act and regulations, upholding such interpretations so long as
they are consistent with the statutory language and otherwise
reasonable.’” Id. (quoting Anthony Crane Rental, Inc. v. Reich,
70 F.3d 1298, 1302 (D.C. Cir. 1995)).2
In the following sections, we address Millard’s challenges
to the two process safety management violations, which
Millard’s counsel describes as the company’s most important
concerns. Oral Arg. Recording at 18:00 - 18:06. We also
address Millard’s contention that OSHA was estopped from
asserting that the company violated agency regulations by
failing to install swinging gates on an open ladderway. We find
no merit in any of these challenges. Although we have carefully
considered each of the remaining ten challenges, as well as
Millard’s challenge to the $15,250 penalty, we have concluded
that they merit neither reversal nor further discussion.
A
According to its counsel, Millard’s “number one issue” on
appeal is its challenge to the finding that it violated 29 C.F.R.
§ 1910.119(e)(3)(ii) by failing to disclose a previous, smaller
release of anhydrous ammonia in a mandatory report completed
just months before the August 2010 release. Oral Arg.
Recording at 18:07 - 18:39.
In the course of the 2010 inspection, OSHA examined
Millard’s inventory of actual and potential hazards associated
with processes that use anhydrous ammonia -- the “process
2
These principles of review apply equally in cases where the
Commission makes independent findings and where it declines review
and thereby adopts the ALJ’s findings as its own. See Fabi Constr.
Co. v. Sec’y of Labor, 508 F.3d 1077, 1080-81 (D.C. Cir. 2007).
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hazard analysis” report required by 29 C.F.R. § 1910.119(e). In
May 2010, a little more than three months before the August
2010 release, Millard had completed a mandatory five-year
review of its process hazard analysis reporting. By regulation,
Millard’s May 2010 report was required to include “[t]he
identification of any previous incident” within the past five
years that “had a likely potential for catastrophic consequences
in the workplace.” 29 C.F.R. § 1910.119(e)(3)(ii); see id. at
(e)(6). OSHA investigators cited Millard for failing to mention
in that report that 110 pounds of anhydrous ammonia gas had
been released from the Theodore plant’s refrigeration system in
2007. According to Millard’s internal summary of the 2007
incident, the earlier release, like the August 2010 release, was
caused in part by hydraulic shock within the system. Incident
Investigation (Apr. 25, 2007) (J.A. 426); see ALJ Decision at 4
(J.A. 1743).
Before the ALJ, Millard contended that its May 2010 report
was adequate because a sentence in the report mentioned a
“PHA Addendum.” See PHA Review Certification Letter (May
5, 2010) (J.A. 492). According to Millard, that mention served
to incorporate by reference a document labeled “PHA
Addendum” that Millard had completed three years earlier, in
May 2007, following the 2007 release. PHA Study Team
Session Documentation (May 4, 2007) (J.A. 434). The May
2010 report did not indicate that the “Addendum” it referred to
was a 2007 document. And the 2007 document contained no
description or discussion of the April 2007 release of anhydrous
ammonia. Instead, it contained -- without explanation or
description -- a six-digit number, see id., that was also listed at
the top of a different internal document describing the April
2007 release, see Incident Investigation (Apr. 25, 2007) (J.A.
426).
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The ALJ found that there was “no dispute that the 2007
incident needed to be identified” in the 2010 report because the
2007 incident “had a ‘likely potential for catastrophic
consequences’ based on the release of 110 pounds of ammonia
caused by hydraulic shock under circumstances similar to [the]
August 2010 ammonia release.” ALJ Decision at 9 (J.A. 1748).
According to the ALJ, the May 2010 report failed to meet the
identification requirement because it “contain[ed] no
information about the 2007 incident,” and its alleged reference
to the May 2007 document was unclear. Id. at 9-10.
Millard concedes that it has waived any argument that the
2007 release was not a potentially catastrophic incident
triggering 29 C.F.R. § 1910.119(e)(3)(ii), by failing to raise such
an argument before the Commission. Oral Arg. Recording at
31:10 - 31:49; see 29 U.S.C. § 660(a) (“No objection that has
not been urged before the Commission shall be considered by
the court, unless the failure or neglect to urge such objection
shall be excused because of extraordinary circumstances.”).
Accordingly, the only issue before us is whether the May 2010
report “identified” the 2007 release as required by that
regulation.
There is no dispute that the May 2010 report did not itself
mention the 2007 release. Nonetheless, Millard contends that
the May 2010 report satisfied § 1910.119(e)(3)(ii) because it
incorporated by reference the May 2007 addendum, which in
turn identified the April 2007 release. This contention has
problems at two levels. First, the claim that the 2010 report
incorporated the May 2007 addendum rests on a single sentence
in the former stating that “all changes” to an earlier process
hazard analysis report “have been addressed in the PHA
Addendum.” PHA Review Certification Letter (May 5, 2010)
(J.A. 492). It would be charitable to call that statement opaque.
As the ALJ noted, there is no way to know that the sentence
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referred to the May 2007 document; it mentioned nothing more
than an undated “Addendum.” ALJ Decision at 10 (J.A. 1749).
Moreover, even if it were crystal clear that the statement
referred to the May 2007 document, that document’s reference
to the April 2007 ammonia release was itself opaque. The May
2007 document contained no mention of the April 2007
ammonia release; all it contained was an unexplained, six-digit
number that was the same as the number on Millard’s internal
report of the April 2007 release. PHA Study Team Session
Documentation (May 4, 2007) (J.A. 434); see Incident
Investigation (Apr. 25, 2007) (J.A. 426). Given these missing
links, the ALJ was hardly unreasonable in concluding that
Millard’s May 2010 process hazard analysis report failed to
satisfy the identification requirement of 29 C.F.R.
§ 1910.119(e)(3)(ii).
B
Millard’s “number two” issue on appeal is its challenge to
the finding that it violated 29 C.F.R. § 1910.119(g)(3) by failing
to ensure that Allen White, Millard’s plant engineer, was
adequately trained in the safe operation of an anhydrous
ammonia refrigeration system. Oral Arg. Recording at 18:40 -
18:54.
Following the August 2010 ammonia leak, OSHA
inspectors interviewed White. According to one inspector, they
“question[ed] [White] about basic concepts of process safety
management.” Hr’g Tr. at 128 (Aug. 29, 2011) (J.A. 105).
Finding that White could not articulate basic concepts and
procedures relevant to safely operating an anhydrous ammonia
refrigeration system, they issued Millard a citation for violating
§ 1910.119(g)(3).
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Before the ALJ, Millard argued that White’s inability to
recite technical terms on command -- without an opportunity to
refer to manuals or consult other employees -- did not prove he
was unfamiliar with safe system operation. Millard also
maintained that, at the time of the August 2010 release, the
recently-promoted White was still in training, and was under the
supervision of a regional engineer who oversaw operations at
nine other plants across the southern states.
Drawing on “the OSHA interviews . . . and [White’s]
testimony at hearing,” the ALJ found that White was not merely
unable to recall technical details, but was “unable to express or
show any understanding of [process safety management]’s basic
principles.” ALJ Decision at 15 (J.A. 1753). Moreover, he
“was unable to describe his training or demonstrate an
understanding of the topics on which he allegedly was trained.”
Id. The ALJ further found that the regional manager’s oversight
of White did not excuse the violation because the training
requirements are “not restricted to personnel who have ‘overall
control’ such as the regional engineer,” and because “[t]he
regional engineer was not expected to supervise the plant’s daily
activities.” Id. at 14. The ALJ acknowledged that White had
recently been promoted, but held that “[t]he issue is the lack of
understanding of the training already received.” Id. at 15.
“Even a plant engineer in training who has responsibility for
[Millard’s] processes should know basic [process safety
management] principles.” Id. at 14. Finally, the ALJ noted that
the paperwork regarding White’s training provided no
“documentation explaining how the employer determined the
trainee understood the training,” as required by the regulations.
Id. at 15. For these reasons, the ALJ found that OSHA had
established a violation of 29 C.F.R. § 1910.119(g)(3).
On review, Millard urges many of the same arguments it
raised before the agency. Although we, like the ALJ, take
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Millard’s point that White was still in training in August 2010,
we note that he had been an operator since 2008 and, by 2010,
had been in training for several years. ALJ Decision at 14-15
(J.A. 1753-54). We conclude that there was substantial evidence
to support the ALJ’s findings -- in particular, that White did not
understand the training he had already received.
Finally, we reject Millard’s claim that it should be held
faultless because it did not know that White did not understand
his training. The regulation places the burden to “ascertain that
each employee involved in operating a process has received and
understood the training required” on the employer. 29 C.F.R.
§ 1910.119(g)(3). Substantial evidence supports the ALJ’s
conclusion that Millard did not meet that burden.
C
We briefly address one final challenge. During a December
2010 inspection of the Theodore facility, OSHA inspectors
noticed 15-foot ladders leading from the roof of the plant to
several raised platforms. While the raised platforms were
mostly surrounded by guardrails, the openings in the platforms
through which the ladders rose were completely open, exposing
employees to a 15-foot fall if they stepped through. In February
2011, at the conclusion of their inspection, the inspectors cited
Millard for violating 29 C.F.R. § 1910.23(a)(2), which requires
that “[e]very ladderway floor opening or platform shall be
guarded by a standard railing . . . with the passage through the
railing either provided with a swinging gate or so offset that a
person cannot walk directly into the opening.” The ALJ and
Commission upheld the citation.
Millard raises a host of challenges to the citation, none of
which are availing and only one of which warrants further
discussion: Millard’s contention that OSHA was estopped from
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issuing the citation. We first note the Supreme Court’s repeated
admonition, “from [its] earliest cases,” that “equitable estoppel
will not lie against the Government as it lies against private
litigants.” OPM v. Richmond, 496 U.S. 414, 419 (1990) (citing
cases). And although the Court has declined to hold that there
are no circumstances in which estoppel may run against the
government, id. at 423, it has made clear that the bar for
succeeding on such a claim is high, see id. at 421-22 (noting that
the Court’s opinions have “mention[ed] the possibility, in the
course of rejecting estoppel arguments, that some type of
‘affirmative misconduct’ might give rise to estoppel against the
Government.”). See Morris Commc’ns, Inc. v. FCC, 566 F.3d
184, 191-92 (D.C. Cir. 2009). Millard’s argument does not
come close to reaching that bar.
Millard argues that OSHA was estopped from finding
violations in December 2010 because its inspectors had failed to
cite Millard for the absence of gates during previous inspections
in 2007 and August 2010. But the mere failure to cite Millard
previously can hardly be enough to estop later government
enforcement. “[U]nless Congress has indicated otherwise,”
agencies charged with enforcing the law retain discretion not to
prosecute every violation that comes to their attention. Heckler
v. Chaney, 470 U.S. 821, 838 (1985). This broad discretion
would be considerably constrained if declining to prosecute an
offender in one instance by itself prevented an agency from ever
demanding that the offender come into compliance. Indeed, if
that were the law, an agency like OSHA could preserve its
future enforcement authority only by requiring its inspectors to
cite every regulated party for every violation discovered during
every inspection.
In any event, as the ALJ found, “there is no evidence that
the caged ladders or platforms were the subject of prior OSHA
inspections or even observed by the OSHA inspectors prior to
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December 2010.” ALJ Decision at 7 (J.A. 1746). There is
certainly “no showing of detrimental reliance by [Millard] or
that OSHA misled it regarding the swing gates.” Id. And
detrimental reliance is an essential element of any conceivable
estoppel defense. See Keating v. FERC, 569 F.3d 427, 434
(D.C. Cir. 2009).
Millard maintains that there is more here than merely a
failure to previously cite it for a violation. The company
contends that, during the December 2010 inspection, an
inspector noted that the ladder openings lacked swinging gates
but stated that OSHA would not cite Millard for their absence.
Millard Br. 26. Even if the inspector had made such a remark
(which is contested), it would not suffice to establish an estoppel
defense. In the first place, by drawing Millard’s attention to the
fact that the company was in violation of the regulation, the
remark could hardly have lulled Millard into believing that it
was in compliance with the law. More important, the citation at
issue expressly charged Millard with having failed to provide
protection “prior” to the date the inspector allegedly made the
remark, including during the period before the December
inspection even began. Citation and Notification of Penalty at
6 (J.A. 11). Hence, because Millard could not have relied on the
inspector’s remark in deciding not to provide fall protection, it
cannot make out even a traditional defense of estoppel.
III
For the foregoing reasons, the petition for review is
Denied.