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Pennsylvania Steel Foundry and Machine Co. v. Secretary of Labor

argued: April 10, 1987.


On Petition for Review of an Order of the Occupational Safety and Health Review Commission, OSHRC No. 78-638.

Sloviter, Becker and Garth, Circuit Judges.

Author: Sloviter


SLOVITER, Circuit Judge

The principal issue before us is whether the Occupational Safety and Health Review Commission (OSHRC or the Commission) erred in failing to suppress evidence from an inspection authorized by an ex parte warrant. The contested evidence was the basis of the agency's decision that Pennsylvania Steel Foundry (Penn Steel) committed numerous violations of the Occupational Safety and Health Act (the Act), 29 U.S.C. § 651 et seq. (1982). An additional issue is whether the Commission improperly enforced a settlement agreement from which Penn Steel contends it withdrew before the agreement was final.



On June 13, 1977, OSHA compliance inspectors sought to conduct a comprehensive inspection of Penn Steel's Hamburg, Pennsylvania foundry. Penn Steel refused to permit the inspection without a warrant. On August 15, 1977, OSHA made an ex parte application to a federal magistrate for an inspection warrant. The application set forth that the foundry had been cited in 1973 for three violations,*fn1 that Penn Steel contested the citation but subsequently withdrew its contest on the ground that the violations had been abated; that after a follow-up inspection in 1974 two more citations were issued, one for a "repeated" violation of the silica dust standards; that ultimately the foundry withdrew its contest to these violations, representing that the violations had been or would be abated; and that an attorney for Penn Steel advised OSHA by letter dated March 5, 1976 that some abatement controls previously agreed to as to dust levels and noise controls were either economically or technically infeasible. The warrant application also described the National Emphasis Program (NEP) which had been established in 1976 "to reduce hazards in industries reporting a higher than average rate of injuries and illnesses." App. at 72. The application further states that iron and steel foundries were among the first target industries selected for inspections, citing foundry illness and injury rates of 26.6 per 100 workers was compared to the national average of 8.8.

On August 25, 1977, the magistrate issued an inspection warrant for Penn Steel's foundry to be conducted "in accordance with the guidelines set forth in the OSHA National Emphasis Program for Foundries." App. at 66. The warrant stated that it was ordered pursuant to section 8(a) of the Act, 29 U.S.C. § 657(a), which provides for inspection of the entire workplace "within reasonable limits." Pursuant to the warrant, OSHA compliance officers conducted a full-scope health and safety inspection of the entire worksite where the foundry is located. OSHA issued citations for 298 violations of OSHA standards.

A hearing on the citations before an administrative law judge began on January 15, 1979. After three days, the hearing was recessed to allow the parties to attempt to negotiate a settlement. In August 1979, Penn Steel moved in the Commission for summary judgment on the grounds, inter alia, that there was no probable cause for the warrant as required by the Supreme Court's decision in Marshall v. Barlow's, Inc., 436 U.S. 307, 56 L. Ed. 2d 305, 98 S. Ct. 1816 (1978), and that ex parte warrants in OSHA cases were invalid under Cerro Metal Products v. Marshall, 467 F. Supp. 869 (E.D. Pa. 1979).

Without reaching the merits of either of these objections, the ALJ expressed the opinion "that the Supreme Court would not apply the exclusionary rule retroactively under circumstances similar to those of this case," App. at 442, and, after noting that ex parte warrants had been "standard practice" in OSHA cases prior to Barlow's, appeared to apply a good faith exception. App. at 443.

The parties settled 240 citations and notified the ALJ, who recommenced the administrative hearing on December 5, 1979, to hear evidence on the remaining fifty-eight items. On June 27, 1980, the ALJ issued a preliminary decision and order affirming some items, vacating others and reducing the characterization of still others.

The parties executed a Stipulation of Settlement in June 1981 regarding the 240 settled citations which provided that the "disposition set forth [in the ALJ's preliminary decision] shall take effect . . . on the date this stipulation becomes a final order of the Commission." App. at 80. Both parties reserved their rights under the Act, 29 U.S.C. § 660, to petition for review of the ALJ's decision. On July 13, 1981, the ALJ issued a Final Decision and Order "fully implement[ing]" the preliminary decision on the fifty-eight litigated items, approving the settlement, assessing a $5,000 find provided in the settlement, and requiring abatement as provided for by settlement. App. at 77-79.

In its petitio for review to the Commission Penn Steel sought suppression of all evidence and dismissal on the probable cause and ex parte warrant grounds raised before the ALJ. Both Penn Steel and the Secretary contested the ALJ's rulings on some of the fifty-eight litigated items. The Commission initially directed review on certain of the litigated items. There was no action in the case between January 1983 and February 1986.*fn2

In January 1986, the Commission requested supplemental briefs on several issues, including the applicability of a good faith exception to the exclusionary rule and the effect of this court's decision in Cerro Metal Products v. Marshall, 620 F.2d 964 (3d Cir. 1980), affirming the district court's order holding ex parte warrants to be invalid. In its brief to the Commission dated October 25, 1982, Penn Steel stated, for the first time, that, "in its exercise of its right to do so, Respondent withdraws from the pending settlement agreement." App. at 166.

The Commission, by a two-to-one vote, refused to suppress the evidence obtained from the inspection. The Commission treated Penn Steel's statement of withdrawal from the settlement as a motion to withdraw, which it denied, and held that judgment on the 240 unlitigated items should be entered in accordance with the settlement agreement, which included an assessment of a $5,000 penalty.*fn3 Penn Steel petitions for review of the Commission's order.


Existence of a Quorum

As a preliminary matter, Penn Steel argues that no part of the Commission's decision can be affirmed because there were not two affirmative votes on the existence or absence of probable cause.

The Act provides that "two members of the Commission shall constitute a quorum and official action can be taken only on the affirmative vote of at least two members." 29 U.S.C. § 661(f). All three members of the Commission participated in the decision. However, Chairman Buckley declined to take part in the probable cause determination because he believed that the Commission, as an administrative agency within the executive branch, cannot perform functions committed to the judicial branch and hence cannot review a magistrate's determination of probable cause. The other two Commissioners reached the merits but were divided on probable cause. Penn Steel argues that ...

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