Eastern Bridge v. Secretary of Labor

United States Court of Appeals
For the First Circuit

No. 02-1908

EASTERN BRIDGE, LLC; ISAACSON STRUCTURAL STEEL, INC.;
VANGUARD MANUFACTURING, INC.; MONADNOCK FOREST PRODUCTS, INC.,
Plaintiffs, Appellants,

v.

ELAINE L. CHAO, Secretary of Labor, United States
Department of Labor; and JOHN L. HENSHAW,
Assistant Secretary of Labor for Occupational
Safety and Health Administration,
Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]

Before

Boudin, Chief Judge,
Farris,* Senior Circuit Judge,
and Torruella, Circuit Judge.

Richard D. Wayne, with whom Debra Dyleski-Najjar, Brian E.
Lewis and Hinckley, Allen & Snyder LLP, were on brief, for
appellants.
Gretchen Leah Witt, Assistant United States Attorney, Chief,
Civil Division, with whom Thomas P. Colantuono, United States
Attorney, were on brief, for appellees.

February 14, 2003

*
Of the Ninth Circuit, sitting by designation.
 TORRUELLA, Circuit Judge. Four New Hampshire companies

("plaintiffs") -- Eastern Bridge, LLC, Isaacson Structural Steel,

Inc., Vanguard Manufacturing, Inc., and Monadnock Forest Products,

Inc. ("Monadnock") -- claim that the Occupational Safety and Health

Administration ("OSHA") acted ultra vires when it mandated that

plaintiffs complete a Data Collection Initiative Survey ("DCI

Survey" or "Survey"). They argue that OSHA did not have a final

regulation requiring employers to maintain the information sought

in the DCI Surveys. The United States District Court for the

District of New Hampshire granted defendants'1 motion to dismiss,

holding that it lacked subject matter jurisdiction over plaintiffs'

claims. We affirm.

I. Background

A. The History of the DCI Survey

In 1970, Congress enacted the Occupational Safety and

Health Act ("OSH Act"), 29 U.S.C. § 651 et seq. (2000), giving the

Secretary of Labor ("Secretary") the responsibility to protect the

health and safety of American workers. The OSH Act gives the

Secretary authority to promulgate implementing regulations and

requires that employers comply with OSHA's standards and

regulations. See, e.g., id. § 673(e) ("On the basis of the records

1
Defendants include Elaine L. Chao, Secretary of Labor, United
States Department of Labor; and John L. Henshaw, Assistant
Secretary of Labor for Occupational Safety and Health
Administration.

-2-
made and kept pursuant to section 657(c) of this title, employers

shall file such reports with the Secretary as [s]he shall prescribe

by regulation, as necessary to carry out h[er] functions under this

chapter.").

To enforce the OSH Act, Congress provides the following

administrative mechanism. If the Secretary believes, after a

workplace inspection, that an employer has violated a standard or

regulation, the Secretary can issue the employer a citation,

classify the citation, and set a penalty. 29 U.S.C. §§ 658(a),

666. If the employer contests the citation or the proposed

assignment of penalty, the Occupational Safety and Health Review

Commission ("Commission") will provide the employer with a hearing

before an administrative law judge ("ALJ"). Id. § 659. Following

the hearing, the ALJ makes a report of the hearing, which becomes

a final order of the Commission unless the Commission decides to

conduct further review. Id. § 661(j). The employer can appeal the

Commission's final order to a United States court of appeals. Id.

§ 660(a).

The Secretary first sent the challenged DCI Surveys to

various employers in February 1996. American Trucking Ass'ns v.

Reich, 955 F. Supp. 4, 5 (D. D.C. 1997). In March of that year, a

consortium of employers filed suit against the Secretary of Labor

under the Administrative Procedures Act ("APA"), claiming that the

Secretary did not have the regulatory authority to distribute the

-3-
DCI Surveys. Id. A district court in the District of Columbia

Circuit held that OSHA's DCI Survey, as it then existed, violated

the APA because OSHA attempted to accomplish its data collection

without a final regulation in place requiring employers to complete

and return the Survey. Id. at 6-7.

Following American Trucking, the Secretary promulgated a

final regulation explicitly requiring employers to complete the DCI

Survey:

Each employer shall, upon receipt of OSHA's
Annual Survey Form, report to OSHA or OSHA's
designee the number of workers it employed and
number of hours worked by its employees for
periods designated in the Survey form, and
such information as OSHA may request from
records required to be created and maintained
pursuant to 29 C.F.R. part 1904.

29 C.F.R. 1904.17(a) (1997).

OSHA uses the DCI Survey to gather injury and illness

data about specific establishments. The Survey asks for

information about the number of employees at the company, the

number of hours the employees worked over a specified period, and

the number of injuries and illnesses the employees suffered during

that period. Based on this information, OSHA calculates the

workplace's injury/illness incidence rate and decides whether to

target the establishment for inspection.

-4-
 B. Plaintiffs were Sent DCI Surveys

In 2000, OSHA sent a DCI Survey to three of the four

plaintiffs seeking information based upon 1999 data.2 Plaintiffs

completed the 2000 DCI Survey, leading to the placement of

Monadnock and Eastern Bridge on OSHA's primary inspection list.3

Although OSHA never initiated an inspection of Monadnock, it

attempted to inspect Eastern Bridge. When Eastern Bridge withdrew

its consent to inspection, OSHA obtained an administrative search

warrant from the district court. Eastern Bridge moved to quash the

warrant, but the motion was denied. Subsequently, OSHA carried out

the inspection and issued Eastern Bridge a citation. Eastern

Bridge has not appealed the issuance of the warrant.

In 2001, OSHA sent all four plaintiffs a DCI Survey

requesting data from 2000. All of the plaintiffs completed the

Survey. OSHA placed Eastern Bridge on the primary inspection list

and placed the other three plaintiffs on the supplemental

inspection list. Because OSHA had already inspected Eastern Bridge

that year, it deleted Eastern Bridge from its inspection list. On

the record before us, OSHA has not subjected any of the plaintiffs

2
OSHA did not send Vanguard Manufacturing, Inc. a survey in 2000.
3
OSHA has a primary and a supplemental inspection list.
Worksites on the supplemental list are only inspected after all of
the worksites on the primary list are inspected. Based on the 2000
DCI Survey, Isaacson Structural Steel, Inc. was placed on the
supplemental list but was not inspected.

-5-
on the supplemental list to an inspection, and there is no

indication that any inspection is pending.

C. District Court Proceeding

In April of 2002, before they received their 2002 DCI

Surveys requesting data from 2001,4 plaintiffs brought suit seeking

to have the district court declare the DCI Survey ultra vires and

the use of information gathered in the DCI Survey illegal.

Plaintiffs sought declaratory and injunctive relief, arguing that

the DCI Survey violated the OSH Act and the APA because it required

plaintiffs to report information that they were not required by

regulation to maintain, and that the Survey violated their Fourth

Amendment privacy right. Plaintiffs argue that 29 C.F.R. § 1904.17

(b) simply required employers to "report" the information, but did

not require them to record and maintain the requested information.

In response, OSHA argues that the plaintiffs are required to

channel and exhaust their claims administratively pursuant to the

OSH Act's statutorily provided review scheme.5 The district court

dismissed plaintiffs' action due to lack of subject matter

jurisdiction.

4
After the litigation began, plaintiffs received their 2002 DCI
Surveys, requesting 2001 information, and they refused to complete
the Surveys.
5
On the merits, defendants also contend that 29 C.F.R. section
1904.17 (1997) required employers to maintain the employment
information necessary to respond to the DCI Survey.

-6-
 Effective January 1, 2002, OSHA issued a final rule

revising its employer injury and illness record keeping and

reporting requirements. See 66 Fed. Reg. at 5916 (Jan. 19, 2001)

(codified at 29 C.F.R. pt. 1904 (2002)). This rule explicitly

requires employers to record, maintain, and report the information

requested in the DCI Survey. See 29 C.F.R. §§ 1904.29, 1904.30,

1904.32 (2002). The January 1, 2002 effective date means that

employers must maintain the requested information starting with

that date. Plaintiffs concede that the 2003 DCI Survey (requesting

2002 information) will be valid even under the theory on which they

challenge the prior Surveys, and they do not seek to enjoin it.

D. Standard of Review

We review de novo the district court's dismissal for lack

of subject matter jurisdiction because the question of subject

matter jurisdiction in this case focuses on "pure (or nearly pure)

questions of law." Gonzáles v. United States, 284 F.3d 281, 287

(1st Cir. 2002).

II. Analysis

A. Presumption of Administrative Review

To determine whether Congress intended to preclude

district court review of plaintiffs' claims, we first examine the

OSH Act for explicit language of preclusion. Because no such

language exists, we look next for other indicia of congressional

intent. Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 207 (1994).

-7-
Due to the similarity between the review provisions in the Mine Act

and the OSH Act, we have already found Thunder Basin's holding --

that, in general, Congress intended Mine Act challenges to be

initially reviewed administratively -- to apply to the OSH Act.6

Northeast Erectors Ass'n of the BTEA v. Sec'y of Labor, 62 F.3d 37,

40 (1st Cir. 1995) (finding that the comprehensive administrative

review procedure under the Mine Act is "nearly identical" to the

administrative review process for review of OSHA enforcement

actions); see also Sturm, Ruger & Co., Inc. v. Chao, 300 F.3d 867,

873 (D.C. Cir. 2002) (stating that "in every relevant respect the

statutory review provisions of the OSH Act parallel those of the

Mine Act, and we therefore join the First and Sixth circuits in

concluding that Thunder Basin's analysis of review under the Mine

Act is fully applicable to the OSH Act").

Committing initial review to the agency is often sensible

policy. Because the administrative agency may possess greater

expertise with respect to the organic statute, agency review can be

more informed and thus more expeditious, and scarce judicial

resources can be conserved for other areas of pressing concern.

Moreover, streamlined agency adjudication and deferential appellate

review can induce greater compliance by ensuring that penalties are

6
Plaintiffs argue that Thunder Basin does not apply to the
present dispute because it is not a pre-enforcement challenge.
This argument is faulty because whether this case is an
impermissible pre-enforcement challenge is exactly what a Thunder
Basin analysis determines.

-8-
paid reasonably close in time to violations and by deterring

frivolous and dilatory challenges. Cf. Thunder Basin, 510 U.S. at

210-11 (discussing the motivation for the similarly worded review

scheme in the Mine Act).

B. Exceptions to Preclusion

To unsettle this presumption of initial administrative

review -- made apparent by the structure of the organic statute --

requires a strong countervailing rationale. See Thunder Basin, 510

U.S. at 212-17. The Supreme Court has made exceptions in the past,

inter alia, for situations where plaintiffs will effectively

receive no review at all,7 where the administrative process is

fundamentally flawed because of a pattern and practice of

administrative agency abuse,8 where the agency's behavior is

7
See, e.g., Bowen v. Mich. Acad. of Family Physicians, 476 U.S.
667, 678-80 (1986) (holding that Congress did not intend to
foreclose judicial review where such a finding would result in
respondents being left without any forum to adjudicate statutory
and constitutional challenges to agency regulations).
8
See, e.g., McNary v. Haitian Refugee Center, 498 U.S. 479, 496-
98 (1991) (holding that the federal district court had jurisdiction
over an action in which respondents alleged that the INS had
engaged in a pattern and practice of due process violations, and
where, if respondents were denied district court review, they
"would not as a practical matter be able to obtain meaningful
judicial review" of their claims).

-9-
utterly lawless,9 and where further administrative exhaustion is

deemed futile.10

1. Preclusion of All Effective Review

The plaintiffs cannot escape the administrative process

on the basis of preclusion of all review because they can seek

judicial review of the agency proceedings. Plaintiffs can assert

all of their challenges as defenses in an agency enforcement

proceeding. If plaintiffs are dissatisfied with the outcome of the

agency proceeding, they can seek review in the appropriate federal

court of appeals. 29 U.S.C. § 660(a). This is simply not a case

where plaintiffs' claims are wholly committed to an administrative

process. See Bowen v. Mich. Acad. of Family Physicians, 476 U.S.

667, 674-78 (1986) (finding jurisdiction where there is no further

review of benefit determinations of a private insurance carrier).

The limitation imposed here is channeling of initial review through

the administrative process, not exclusion of judicial supervision.

9
See, e.g., Oestereich v. Selective Servs. Sys. Local Bd. No. 11,
393 U.S. 233, 237-39 (1968) (finding that the district court had
jurisdiction where the Selective Service Board had acted in a
"blatantly lawless manner" and where petitioner's only alternative
was to raise his claim through habeas corpus or in a criminal
prosecution).
10
See, e.g., Heckler v. Ringer, 466 U.S. 602, 619 (1984)
(requiring respondents to pursue "the often lengthy administrative
review process" because exhaustion would not be futile). The Court
stated that further exhaustion may be futile where the harm caused
by denial of respondents' claim early in the administrative process
could not later be remedied and where respondents' claim is "wholly
collateral" to a claim for benefits under the organic statute. Id.
at 618-19.

-10-
 However, we recognize that even with ultimate judicial

review, deferred review may not in reality be effective. Thunder

Basin, 510 U.S. at 212-18. In particular, effective review could

be cut off in two situations: (1) where the penalty for a violation

is set so high that no rational person would dare test the legality

of administrative action by refusing to comply, and (2) where the

compliance costs are so onerous that complying with the regulation

will cause irreparable harm. See id. Whether one or both of the

scenarios might justify pre-enforcement review would depend on the

magnitude of the burden, the different review options available to

the challenger, and other circumstances. But in this case, the

plaintiffs have failed to demonstrate that either scenario applies.

Plaintiffs have not alleged any facts demonstrating that

the potential penalty for refusing to complete the DCI Survey is

such that no rational actor would test the law. Similarly,

plaintiffs have not made any factual showing that the cost of

completing the DCI Survey is so high that it would cause

irreparable harm. The DCI Survey asks for information about the

number of employees at the company, the number of hours worked by

the employees, and the number of injuries and illnesses the

employees suffered during that period. But employers were already

required by regulation to "maintain . . . a log and summary of all

recordable occupational injuries and illnesses." 29 C.F.R. § 1904

.2(a) (1997). The marginal cost of maintaining the incremental

-11-
data (number of employees the company employs and the number of

hours worked) does not appear to create a burden that causes

irreparable harm. Cf. Mathews v. Eldridge, 424 U.S. 319, 324-25,

331 (1976) (finding federal court jurisdiction because the

statute's provision for a hearing only after plaintiff was deprived

of disability benefits could damage plaintiff in a way not

recompensable through retroactive payments); R.I. Dep't of Envtl.

Mgmt. v. United States, 304 F.3d 31, 43 (1st Cir. 2002) (finding

subject matter jurisdiction to hear state's sovereign immunity

claim because undergoing an unconsented-to administrative

adjudication would itself deprive the state of its "immunity from

being haled before a tribunal by private parties"). Instead,

plaintiffs have successfully completed the 2000 and 2001 DCI

Surveys. If the cost of compliance created an imperiling burden,

we would expect the plaintiffs to have alleged such facts in this

challenge. Plaintiffs have made no such argument.

2. Other Arguments for Exception to Preclusion

Plaintiffs also assert that their challenge is collateral

to the statutory review scheme. But calling an issue "collateral"

does not make it so. Plaintiffs claim that OSHA has engaged in a

pattern and practice of ultra vires conduct that has successfully

evaded review for six years. However, successful pattern and

practice challenges involve attacks on fundamentally flawed

administrative procedures that prevent challengers from obtaining

-12-
meaningful review. See, e.g., McNary v. Haitian Refugee Center,

498 U.S. 479, 496-97 (1991) (finding INS's review procedure flawed

because it did not create an adequate administrative record for

federal appellate review). Here, plaintiffs are only challenging

the underlying substantive conduct of the agency and not its review

procedures. They argue that the agency's DCI Survey is in part

unlawful (because not accompanied by a data-maintenance

regulation), but they have not challenged the integrity or fairness

of the administrative review process provided by the OSH Act.

Therefore, there is no reason why plaintiffs should not avail

themselves of the administrative forum first. All challenges to

agency action allege that the underlying substantive conduct is

unlawful. If we were to allow plaintiffs' claim to fit into the

pattern and practice exception, then the exception would swallow

the rule.

Plaintiffs also rely heavily on Leedom v. Kyne, 358 U.S.

184 (1958), in support of their argument that they should be

excepted from the exhaustion requirement. However, Leedom involved

an undisputed agency violation where the agency "attempted exercise

of power that had been specifically withheld" by statute, depriving

plaintiffs "of a right assured to them by Congress." Id. at 189

(emphasis added). Likewise, in Oestereich v. Selective Service

Systems Local Bd. No. 11, 393 U.S. 233 (1968), a case which

clarified Leedom, the Court held that the district court had

-13-
jurisdiction because the Selective Service Board had acted in a

"blatantly lawless manner." Id. at 237-39. In both Leedom and

Oestereich, the lawlessness of agency conduct was obvious on its

face and conceded. Id. at 187-89; Oestereich, 393 U.S. at 237-38.

The case before us is quite different. Here, it is not at all

clear to us that OSHA's conduct was lawless on the merits, and OSHA

vigorously contests the allegation that the DCI Survey was unlawful

under then-existing regulations.

Plaintiffs also assert that because they are alleging a

Fourth Amendment violation, they need not exhaust administrative

remedies. But this invocation of constitutional authority, without

more, cannot breathe life into a theory already pronounced dead by

the Supreme Court in binding precedent. At the termination of

administrative review, plaintiffs' constitutional claims "can be

meaningfully addressed in the Court of Appeals." Thunder Basin,

510 U.S. at 215 (stating that "the general rule disfavoring

constitutional adjudication by agencies is not mandatory").

Additionally, the present constitutional claim is really just a

recharacterization of their administrative claim, and we will not

allow plaintiffs to circumvent the statutory review process with an

agile game of word play. See Heckler v. Ringer, 466 U.S. 602, 622-

24 (1984) (rejecting respondents attempt to obtain jurisdiction by

characterizing his claim as arising under the Constitution rather

than under the Social Security Act).

-14-
 C. Injunction Against the Use of Information

As an additional remedy, plaintiffs seek an injunction

against OSHA's use of any information obtained in the DCI Surveys;

we do not believe this alternative prayer for relief affords us

jurisdiction where their primary theory has failed. In accordance

with the principles we discussed above, the plaintiffs can and

should test the legality of the 2002 Survey in the statutorily

provided process, if and when they are cited for noncompliance. As

to past Surveys already completed, they can seek to exclude the use

of data in citation proceedings based on such information.

We think it clear -- and OSHA concedes -- that the

district court would have jurisdiction if OSHA sought an

administrative warrant for an inspection, and plaintiffs moved to

quash the warrant on the theory that the warrant was based on

illegally collected Survey data. But in this case, the only

plaintiff (Eastern Bridge) to have challenged an administrative

warrant below has chosen not to appeal that issue to this court.

As matters now stand, Eastern Bridge has already been cited for

violations following a completed inspection, and ordinary

principles of exhaustion require us to defer to an administrative

process that is already in motion. See Sturm, Ruger & Co. v. OSHA,

186 F.3d 63, 64-65 (1st Cir. 1999).

-15-
 III. Conclusion

For the reasons stated above, we affirm the district

court's dismissal for lack of subject matter jurisdiction.

Affirmed.

-16-