in-re-the-matter-of-a-search-warrant-regarding-the-following-real-estate ( 2012 )

FOR PUBLICATION
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEE:
PAUL L. JEFFERSON GREGORY F. ZOELLER
MARK STUAAN Attorney General of Indiana
Barnes & Thornburg, LLP
Indianapolis, Indiana KATHY BRADLEY
Deputy Attorney General
Indianapolis, Indiana
FILED
Jun 26 2012, 9:17 am
IN THE
CLERK
COURT OF APPEALS OF INDIANA of the supreme court,
court of appeals and
tax court
IN RE THE MATTER OF A SEARCH )
WARRANT REGARDING THE )
FOLLOWING REAL ESTATE, )
)
SENSIENT FLAVORS LLC, )
)
Appellant-Defendant, )
)
vs. ) No. 49A02-1109-MC-844
)
INDIANA OCCUPATIONAL SAFETY AND )
HEALTH ADMINISTRATION, )
)
Appellee-Plaintiff. )
)
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Grant W. Hawkins, Judge
Cause No. 49G05-1109-MC-2441
June 26, 2012
OPINION - FOR PUBLICATION
VAIDIK, Judge
Case Summary
The Indiana Commissioner of Labor filed a petition for an anticipatory search
warrant in order to conduct an administrative inspection of Sensient Flavors LLC’s
Indianapolis facility. Sensient opposed the search warrant and was successful in getting
it quashed. The trial court later issued an amended search warrant that was more
restrictive than the original. Although the search of Sensient’s facility has been
completed, Sensient appeals the issuance of the amended search warrant, arguing that it
was not supported by probable cause and unreasonable because it did not contain any
limitations regarding the scope or manner of the search. Concluding that Sensient has
failed to exhaust its administrative remedies, we dismiss this appeal.
Facts and Procedural History
Sensient is a Delaware limited liability company with its principal place of
business at 5600-5700 West Raymond Street in Indianapolis. Sensient manufactures and
distributes proprietary flavors that are used in food and beverages. As part of its
business, Sensient uses certain substances that are listed as “high priority” by the U.S.
Department of Health and Human Services. One such substance is diacetyl. Appellant’s
App. p. 142. Diacetyl is used to add flavor and aroma to food and is typically used in
microwave popcorn. The government has been investigating the use of diacetyl in
facilities that manufacture food flavorings because of the dangers diacetyl poses to
workers, and Sensient became a target.
The Occupational Safety and Health Act of 1970 created both The National
Institute for Occupational Safety and Health (NIOSH) and the Occupational Safety and
2
Health Administration (OSHA). About NIOSH, The Nat’l Inst. for Occupational Safety
& Health, http://www.cdc.gov/niosh/about.html (last visited June 8, 2012). OSHA is in
the U.S. Department of Labor and is responsible for developing and enforcing workplace
safety and health regulations. Id. NIOSH is part of the Centers for Disease Control and
Prevention (CDC) in the U.S. Department of Health and Human Services. Id. NIOSH is
an agency established to help ensure safe and healthful working conditions for working
men and women by providing research, information, education, and training in the field
of occupational safety and health. Id.
On the state level, the Indiana Occupational Safety and Health Administration
(IOSHA), which is part of the Indiana Department of Labor, is dedicated to ensuring
Hoosier workplace safety and health by reducing hazards and exposures in the workplace
environment that result in occupational injuries, illnesses, and fatalities. IOSHA, Ind.
Dep’t of Labor, http://www.in.gov/dol/iosha.htm (last visited June 8, 2012).
At some point, the International Brotherhood of Teamsters Local 137 became
concerned about possible respiratory problems and the use of flavoring chemicals,
including diacetyl, at Sensient’s facility. Accordingly, the union requested a Health
Hazard Evaluation from NIOSH. NIOSH investigators visited Sensient’s facility in May
2008 and performed air sampling and received records of spriometry, a type of lung-
function test, in June 2008. After a delay incurred by litigation, Sensient provided
additional spirometry records through September 2009 and air-sampling results through
August 2009. In June 2011, NIOSH issued a forty-eight-page final Health Hazard
Evaluation Report, which concluded that Sensient employees had experienced adverse
3
respiratory conditions due to exposure to food-flavoring chemicals, including diacetyl.
Appellant’s App. p. 39-91.
On September 9, 2011, the Indiana Commissioner of Labor (“Commissioner”)
filed a Petition for Anticipatory Search Warrant in Marion Superior Court to conduct an
administrative inspection of Sensient’s facility. Notably, probable cause in the criminal
sense is not required for administrative search warrants. Marshall v. Barlow’s, Inc., 436
U.S. 307, 320 (1978); State v. Kokomo Tube Co., 426 N.E.2d 1338, 1343 (Ind. Ct. App.
1981). That is, probable cause to conduct a nonconsensual inspection of business
premises can be established by presenting specific evidence of an existing violation or by
showing compliance with reasonable legislative or administrative standards for
inspecting the premises in question. Barlow’s, 436 U.S. at 320; Kokomo Tube, 426
N.E.2d at 1342. Here, the Commissioner wanted to determine whether Sensient was
furnishing its employees “a place of employment which is free from recognized hazards
that are causing or are likely to cause death or serious physical harm to employees” and
whether Sensient was “complying with the occupational safety and health standards
promulgated under the Indiana Occupational Safety and Health Act, Ind. Code § 22-8-
1.1-1 . . . .” Appellant’s App. p. 8.
The Commissioner sought an anticipatory search warrant because in the past
Sensient had failed to cooperate with IOSHA’s Compliance Safety and Health Officers
(CSHOs). Id. The Petition for Anticipatory Search Warrant was supported by the
affidavits of the Director of Industrial Safety and Hygiene and a CSHO. The affidavits
specifically averred that IOSHA had received a referral from OSHA regarding Sensient
4
and IOSHA wished to carry out an “unprogrammed inspection” of Sensient because of
that referral.1 Id. at 12. The referral was based on NIOSH’s June 2011 report that
revealed Sensient employees had experienced adverse respiratory conditions due to
exposure to food-flavoring chemicals. The trial court granted the search warrant that day.
But on September 12, Sensient filed an emergency motion to stay the search
warrant. The trial court scheduled a hearing for the next day. At the September 13
hearing, Sensient argued that the search warrant was not supported by probable cause.
The Commissioner was given additional time to supplement the documentation in
support of the search warrant. On September 14, the Commissioner filed supplemental
documentation in support of the search warrant, including an amended affidavit of the
CSHO. The amended affidavit provides, in pertinent part:
4. That in approximately mid to late July 2011, Richard Fairfax, Deputy
Assistant Secretary at federal OSHA referred the NIOSH report to my
superior Jeffry Carter, Deputy Commissioner, Indiana Occupational Health
and Safety Administration for an inspection regarding the findings of the
2011 NIOSH report at Sensient.
5. That NIOSH sent copies of their June 2011 final report, which is
attached as Exhibit 3 and incorporated herein, to representatives at
Sensient, the International Brotherhood of Teamsters Local 137, Indiana
State Department of Health, and OSHA Region V office in Chicago in the
summer of 2011. See page 40 of Exhibit 3 (the NIOSH report).
6. That NIOSH received a request from the local union for the Health
Hazard Evaluation because it was concerned about possible respiratory
problems and the use of flavoring chemicals. See page iii, Exhibit 3.
7. That the team from NIOSH that conducted the inspection at Sensient
resulting in the 2011 report consisted of two industrial hygienists and two
medical doctors. See Exhibit 2 page 3.
1
“Unprogrammed inspections” are those “where alleged hazardous working conditions have been
identified at a specific establishment and include fatality/catastrophe investigations, complaint or referral
inspections[,] and follow-up inspections.” Appellant’s App. p. 12.
5
*****
9. [T]here is a national emphasis program designated by federal OSHA
covering the manufacture of food flavorings containing diacetyl. Please see
attached Exhibit 4 incorporated herein. A national emphasis program is
used to identify and reduce or eliminate hazards associated with employee
exposure to flavoring chemicals in facilities that manufacture food
flavorings containing diacetyl. See, abstract page 3 of Exhibit 4.
*****
11. That documentation and information received from Mr. Fairfax
included the June 2011 NIOSH report that revealed that employees have
experienced adverse respiratory conditions due to exposure to food
flavoring chemicals. See Exhibit 3.
12. That IOSHA has a policy of conducting inspections of referrals that
allege serious health hazards as stated in the Indiana Field Inspection
Reference Manual, Chapter 1, page I-11 of Exhibit 5 attached and
incorporated herein.
Id. at 24-25. The June 2011 NIOSH report, which was attached to the CSHO’s amended
affidavit, makes the following conclusions:
The findings from our spirometry record review indicate that the flavorings
manufacturing facility employees who underwent spirometry testing at the
contracted clinic had 3.8 times greater prevalence of spirometric restriction
than the U.S. population after adjusting for age, gender, race, smoking, and
body mass index. About one-third of employees had spirometric
abnormalities, most of them restrictive in nature. . . . Statistical modeling
indicated that abnormal decline in FEV1 [forced expiratory volume in one
second] and that annualized average decreases in FEV1 and FVC [forced
vital capacity] were associated with working in areas with higher potential
for exposure to flavoring chemicals. Employees who had ever done liquid
processing had greater average annualized falls in spirometric
measurements than employees who had never worked in an area with
higher potential for flavoring exposure. These results suggest that the
flavorings company employees are experiencing respiratory health effects
related to ongoing exposures in the workplace.
6
Id. at 81 (emphasis added). The report also offered recommendations to Sensient on how
to reduce exposure to harmful chemicals. Id. at 81-84.
At a September 14 hearing, the Commissioner agreed that the scope of the
September 9 warrant was too broad and should be limited to documents, records, and
areas associated with the use of flavoring substances listed in Appendix D of OSHA’s
National Enforcement Program to identify and reduce or eliminate hazards associated
with exposures to flavoring chemicals. Tr. p. 58; Appellant’s App. p. 92, 140-150.
Accordingly, the trial court quashed the September 9 search warrant but noted that it
would issue an amended search warrant that limited the scope of the search to documents,
records, and areas associated with the use of the substances listed in Appendix D.
Sensient objected to any amended search warrant and asked that it be quashed. The trial
court, however, denied this request as well as Sensient’s request to stay execution of the
amended search warrant pending appeal.
On the next day, September 15, the trial court issued the amended search warrant.
The only substantive difference between the original and amended search warrants is the
inclusion of this paragraph at the end of the amended search warrant:
However, this warrant shall be limited in scope to those documents,
records, and areas associated with the use of flavoring substances listed as
high priority in Appendix D of the National [E]nforcement Program, CPL
03-00-011, pages D-3 through D-13.
Appellant’s App. p. 7. Sensient immediately appealed and asked this Court to stay
execution of the amended search warrant. We denied their request on September 16, and
the briefing process continued.
7
In the meantime, Sensient continued to litigate this matter in the trial court. In
October 2011, Sensient filed an Emergency Motion to Quash Search Warrant, Exclude
Evidence and for Sanctions. Id. at 2. A flurry of motions followed, and the search
warrant was stayed pending resolution of these and other issues. Finally, in January
2012, the trial court denied Sensient’s Emergency Motion to Quash Search Warrant,
Exclude Evidence and for Sanctions. The trial court also denied Sensient’s further
motion to stay execution of the amended search warrant.
On February 22, 2012, IOSHA filed a notice in the trial court that the amended
search warrant for Sensient’s facility had been fully executed and IOSHA would not
undertake any further searches pursuant to that warrant. Appellee’s App. p. 9.
At this point, activity resumed in this Court. In March 2012, IOSHA filed a
motion to dismiss the appeal, arguing that because the search of Sensient’s facility had
already been completed, the matter was moot. This Court denied IOSHA’s motion in a
2-to-1 vote. Sensient Flavors, LLC v. Ind. Occupational Safety & Health Admin., No.
49A02-1109-MC-844 (Ind. Ct. App. Apr. 2, 2012).
Discussion and Decision
Sensient challenges the amended search warrant on two grounds: (1) it is not
supported by probable cause and (2) it is unreasonable because it does not contain any
limitations regarding the scope or manner of the search. Accordingly, Sensient asks us to
“void” the warrant. IOSHA makes two arguments in response. First, IOSHA argues that
the issue of whether the amended search warrant should be voided is moot because the
search has already been completed. Second, IOSHA argues that because the search is
8
complete, the only possible issue is suppression of the evidence obtained as a result of the
search if such evidence is going to be used in finding safety violations and imposing
penalties; however, Sensient must first present this issue to the agency and exhaust its
administrative remedies.2 We find IOSHA’s second argument to carry the day in light of
Seventh Circuit case law on this very issue.
In In re Establishment Inspection of Kohler Company, 935 F.2d 810 (7th Cir.
1991), Kohler Company, a Wisconsin company, sought to quash an administrative search
warrant issued to OSHA on grounds that OSHA lacked probable cause to inspect its
plant. Like this case, OSHA argued that because the inspection had already been
completed, the issue was moot. The Seventh Circuit, however, did not address OSHA’s
mootness argument because it found that Kohler had failed to exhaust its administrative
remedies. Id. at 812. Specifically, the court found that according to the Occupational
Safety and Health Act of 1970 (OSH Act), it was “without jurisdiction to consider
Kohler’s challenge to the warrant that authorized OSHA’s inspection.” Id. The court
noted that Section 10(a) of the OSH Act “requires parties to contest OSHA citations
before the Review Commission before obtaining judicial review” and Section 11(a)
provides that “no objection that has not been argued before the Commission shall be
considered by the court . . . .” Id. (citing 29 U.S.C. §§ 659, 660). Accordingly, the court
concluded, “We cannot, therefore, review a motion to suppress evidence . . . that has not
2
We note that Sensient argues in its reply brief that it is not seeking to suppress any evidence;
however, given that the search has already been completed, it is unclear what the remedy would be if we
were to find that the amended warrant was not properly issued. See Appellant’s Reply Br. p. 11 (“IOSHA
hypothesizes that the goal of this appeal is the suppression of evidence (which it is not) and thus whether
the warrant was deficient as a matter of law is subject to exhaustion issues.”).
9
been presented to the Review Commission. . . . To address Kohler’s motion to quash
now would enable Kohler to circumvent the statutory exhaustion requirement.” Id.The court then highlighted the importance of exhausting administrative remedies,
that is, it “protects the autonomy of administrative agencies, respects administrative
expertise, facilitates judicial review by ensuring a well-developed factual record, and
promotes judicial economy by avoiding piece-meal review of cases and by giving the
agency the opportunity to resolve the case to the parties’ mutual satisfaction without
judicial interference.” Id. Particularly relevant to this case, the court explained:
The rationale for applying the doctrine may be even stronger in the context
of a case, like this one, that raises a constitutional question, because the
exhaustion requirement enables courts to avoid deciding cases on
constitutional grounds unnecessarily; during administrative proceedings the
constitutional issue, or the entire case, for that matter, may be resolved
favorably for the aggrieved party, obviating the need for the courts to
address the constitutional claim.
Id. at 812-813. The court noted that these considerations have led many of the circuits to
require companies seeking to suppress evidence obtained during OSHA inspections to
contest OSHA citations before the Review Commission before turning to the federal
courts for relief. Id. at 813. The Seventh Circuit therefore “join[ed] the other circuits
that require parties challenging completed OSHA inspections on fourth amendment
grounds to address their arguments to the Review Commission before turning to the
federal courts.”3 Id. at 814; see also Trinity Marine Products, Inc. v. Chao, 512 F.3d 198,
3
The court noted that according to Weyerhaeuser Co. v. Marshall, 592 F.2d 373 (7th Cir. 1979),
an exception to the exhaustion requirement is when doing so would be pointless. Kohler, 935 F.2d at
814. That exception did not apply in Kohler.
The court also headed off any argument that requiring the Review Commission to rule on motions
to suppress evidence presented a separation-of-powers problem. Id.10
203 (5th Cir. 2007) (“Administrative warrants also differ from traditional criminal
warrants in that the exhaustion-of-administrative-remedies doctrine applies, meaning that
an employer who wishes to challenge a warrant cannot immediately file a motion in
district court to suppress the evidence after the warrant has been executed.”).
Treatises provide likewise. According to LaFave, “An executed search warrant
may not be immediately challenged in court, as the business must first exhaust its
administrative remedies. The same is true as to state counterparts of OSHA.” 5 Wayne
R. LaFave, Search and Seizure: A Treatise on the Fourth Amendment § 10.2 n.37 (4th ed.
2004) (emphasis added) (citations omitted).
Although we are not bound by federal court of appeals’ precedent, because the
federal OHSA statutes closely resemble ours, federal case law is persuasive. See Comm’r
of Labor v. Gary Steel Products Corp., 643 N.E.2d 407, 412 (Ind. Ct. App. 1994);
Comm’r of Labor v. Talbert Mfg. Co., 593 N.E.2d 1229, 1232 (Ind. Ct. App. 1992).
Similar to the OSH Act, the Indiana Occupational Safety and Health Act (IOSH Act)
requires employers to contest citations before petitioning for judicial review. See Ind.
Code § 22-8-1.1-28.1(b) (“If the employer wishes to petition for review of a penalty
assessment, he must file a written petition for review under IC 4-21.5-3-7 with the
commissioner within fifteen (15) working days of the receipt of the notice of penalty.”
(emphasis added)). Further, judicial review of citations is governed by Indiana’s
Finally, the court premised its holding on the ability of employers to challenge OSHA inspection
warrants in district court. Id. at 815. In this case, Sensient did just that and was successful in getting the
original search warrant quashed. Sensient continued to challenge the amended search warrant in the trial
court even after filing a notice of appeal and obtained a stay until January 2012, when its motion to quash
the amended warrant was finally denied. Appellant’s App. p. 2-6.
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Administrative Orders and Procedures Act (AOPA), which requires issues to be
presented to the Indiana Board of Safety Review4 before seeking judicial review.5 LTV
Steel Co. v. Griffin, 730 N.E.2d 1251, 1255 (Ind. 2000); see also Ind. Code §§ 4-21.5-5-
10, -4(a) (“A person may file a petition for judicial review under this chapter only after
exhausting all administrative remedies available within the agency whose action is being
challenged and within any other agency authorized to exercise administrative review.”).
The Indiana Supreme Court has also emphasized the value of completing
administrative proceedings before resorting to judicial review. Johnson v. Celebration
Fireworks, Inc., 829 N.E.2d 979, 982 (Ind. 2005). Similar to the Seventh Circuit in
Kohler, our Supreme Court has found that the exhaustion doctrine is supported by “strong
policy reasons and considerations of judicial economy,” particularly:
The exhaustion doctrine is intended to defer judicial review until
controversies have been channeled through the complete administrative
process. The exhaustion requirement serves to avoid collateral, dilatory
action . . . and to ensure the efficient, uninterrupted progression of
administrative proceedings and the effective application of judicial review.
It provides an agency with an opportunity to correct its own errors, to
afford the parties and the courts the benefit of [the agency’s] experience
and expertise, and to compile a [factual] record which is adequate for
judicial review.
Id. (quotation omitted). Also similar to the Seventh Circuit in Kohler, our Supreme Court
concluded that even where “the ground of the complaint is the unconstitutionality of the
statute, which may be beyond the agency’s power to resolve, exhaustion of administrative
4
The Board of Safety Review conducts hearing on contests involving safety orders, penalties, and
notices of failure to correct a violation issued under Indiana Code chapter 22-8-1.1 and may affirm,
modify, or dismiss the action of the Commissioner in respect to the violation, penalty, and abatement
period. Ind. Code § 22-8-1.1-30.1(b).
5
AOPA sets forth two exceptions, neither of which apply here.
12
remedies may still be required because administrative action may resolve the case on
other grounds without confronting broader legal issues.” Id. at 982-83 (emphasis added)
(quotation omitted).6
Here, Sensient has administrative remedies still available to it. The IOSH Act
provides that if following an administrative search, the Commissioner or his designated
representative determines that there are occupational safety and health violations, the
Commissioner “shall issue a safety order”7 and may impose civil penalties on the
employer. Ind. Code §§ 22-8-1.1-25.1, -27.1. An employer receiving a safety order may
file a petition for review with the Commissioner, who has five working days in which to
affirm, amend, or dismiss the safety order and penalty, if any. Ind. Code §§ 22-8-1.1-
28.1(a), -28.3(a); see also I.C. § 22-8-1.1-28.1(b) (noting that when there is a penalty
assessment, the employer “must” file a written petition for review). If a petition for
review is granted, the Commissioner shall immediately certify the dispute to the Board of
Safety Review, which must hold a hearing. Ind. Code §§ 22-8-1.1-28.5, -35.3. The
Board of Safety Review may affirm, modify, or dismiss the action of the Commissioner
concerning an alleged violation, including any penalty or abatement period. Ind. Code §
22-8-1.1-30.1; see also Griffin, 730 N.E.2d at 1255. Finally, orders by the Board of
Safety Review are subject to judicial review in accordance with Indiana Code chapter 4-
21.5-5. Ind. Code § 22-8-1.1-35.5. Because Sensient’s remaining relief is suppression of
the evidence obtained during the search, it must exhaust these administrative remedies
6
We acknowledge Sensient’s concern that it is effectively denied review of its constitutional
issue right now; however, this review is merely delayed until it becomes necessary to address this issue.
7
A “safety order” “refers to a notice issued to employers by the commissioner of labor for
alleged violations of this chapter, including any health and safety standards.” Ind. Code § 22-8-1.1-1.
13
first.8 As noted by both the Kohler and Johnson Courts, it does not matter that this case
raises a constitutional question. Because Sensient has failed to exhaust its administrative
remedies, we dismiss this appeal.
Dismissed.
CRONE, J., and BRADFORD, J., concur.
8
The Kohler Court noted that “a determination that the OSHA inspectors lacked probable cause
could conceivably support a section 1983 action, giving Kohler another possible remedy for the
unconstitutional search and rescuing the case from mootness.” 935 F.2d at 812. Sensient has filed such a
case in federal court in Sensient Flavors LLC v. Ind. Occupational Safety & Health Admin,, et. al, 1:11-
CV-1622-JMS-DML. See Appellant’s Br. p. 6 n.4.
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