LTV Steel Co. v. Griffin

Attorneys for Appellant

S.R. Born
Ellen D. Gregory
George Norwood
Ice Miller Donadio & Ryan
Indianapolis, IN

Attorneys for Amicus Curiae Indiana Legal Foundation

Lewis D. Beckwith
Danelle Miller Marks
Baker & Daniels
Indianapolis, IN

Attorneys for Appellee

Jeffery A. Modisett
Attorney General of Indiana

Jon Laramore
Rafal Ofierski
Deputy Attorney General
Indianapolis, IN

IN THE
INDIANA SUPREME COURT

LTV STEEL COMPANY
Appellant (Plaintiff below),

v.

JOHN P. GRIFFIN (formally Kenneth Zeller), In His Capacity As The
COMMISSIONER OF THE INDIANA DEPARTMENT OF LABOR,
Appellee (Defendant below).

)
) Supreme Court No.
) 49S04-9811-CV-692
)
)
) Court of Appeals No.
) 49A04-9612-CV-512
)
)
)
)

APPEAL FROM THE MARION COUNTY SUPERIOR COURT
The Honorable Richard H. Huston, Judge
Cause No. 49D10-9503-MI-0399

ON PETITION TO TRANSFER

June 30, 2000

SULLIVAN, Justice.

An employer was charged with serious and knowing workplace safety
violations after a state inspection. The state safety review board (the
adjudicator of workplace safety violations) dismissed the charges because
it found that the safety inspector had a conflict of financial interest.
We reverse, holding that an employer is not entitled to dismissal of such
charges on this basis.

Background

The Indiana Occupational Safety and Health Act (“IOSHA”) requires
Hoosier employers to “establish and maintain conditions of work which are
reasonably safe and healthful for employees, and free from recognized
hazards that are causing or are likely to cause death or serious physical
harm to employees.” Ind. Code § 22-8-1.1-2.[1] Under IOSHA, an
Occupational Safety Standards Commission is authorized to promulgate safety
and health standards. Id. § 22-8-1.1-7. In addition, IOSHA adopts certain
federal occupational safety and health standards as standards of the
Indiana Occupational Safety Standards Commission. Id. § 22-8-1.1-13.1.[2]
Every Indiana employer is required to “comply with the occupational health
and safety standards promulgated under” IOSHA. Id. § 22-8-1.1-3.1.

The Commissioner of the Indiana Department of Labor and the
Commissioner's designated representatives are charged with administering
and enforcing IOSHA and the safety standards adopted by the Standards
Commission.[3] Id. § 22-8-1.1-22.1. The Commissioner and designated
representatives are authorized by IOSHA to “enter without delay and inspect
at all reasonable times places of employment in order to enforce any
provisions of [IOSHA], including occupational safety and health standards.”
Id. § 22-8-1.1-23.1.[4]

This case arises out of such an inspection. Between April 11 and
August 15, 1991, an IOSHA compliance safety and health officer conducted an
inspection of LTV Steel Company’s Harbor Works Facility (“LTV Steel”) in
East Chicago, Indiana. The investigation identified a series of alleged
violations. Pursuant to the Commissioner’s authority under section 25.1 of
IOSHA, the Commissioner issued two notices of alleged violations, referred
to in IOSHA as “safety orders,” to LTV Steel.

The first safety order listed fourteen alleged “serious”[5] violations
of IOSHA safety standards including:

1. Storage of steel coils between five and six feet in height
in a way that obscured the vision of employees operating a remote
control crane in a high volume traffic area.

2. Transporting scrap hoppers down aisleways overloaded and
with sharp pieces of steel hanging over the sides causing a hazard to
persons walking or moving into the aisles.

3. Potholes and a large oil spill in the floor area around a
tin mill coil storage stand conveyor.

4. Huge potholes and uneven floor area where the slab carriers
transport slabs of steel.

5. Failure to instruct employees working in and around the
chromic acid tanks as to the hazards of their job.

6. Failure to instruct supervisors and workers in slab carrier
operations in the proper selection, use and maintenance of
respirators.

7. Water supply turned off and eye wash and drenching station
not readily available where industrial batteries were being replaced
and recharged.

8. A tin mill crane malfunctioned and the crane went out of
control.

The Commissioner assessed penalties totaling $12,200 for these
violations.[6]

The second safety order alleged “knowing” violations[7] of IOSHA
safety standards arising from a June 17, 1991, incident in which an
unsecured grate on a chromic acid tank slid out of place, causing an
employee to fall into the tank. The order further alleged that during a
recent maintenance, the bolts that secured the grate had been removed and
were not replaced, and that there had been no immediate supply of clean
cold water for washing off chemicals or other liquids. The Commissioner
assessed penalties totaling $20,000 for these violations.

The IOSHA compliance safety and health officer who conducted the
inspection was Harvey French. French had been a union employee of A.M.
General Corporation in Mishawaka prior to being laid off in December 1989.
Upon taking the position as compliance safety and health officer with the
Labor Department in May 1990, French notified A.M. General of his new
position. While employed with the Labor Department, French remained on
layoff status with A.M. General and enjoyed “recall rights” of re-
employment. French also had a vested pension with A.M. General.

Unbeknownst to French at the time he began a previous inspection of
the LTV Steel facility in late 1990, LTV Steel and A.M. General were sister
subsidiaries of the same parent corporation, LTV Corporation. At some
point during the prior inspection, French became aware of the connection
between the two corporations and advised LTV Steel officials of his layoff
status with A.M. General. French was told by LTV Steel officials[8] that
LTV Steel had no objection to his conducting the inspection and encouraged
him to proceed.[9] Likewise, during the 1991 inspection at issue, no LTV
Steel official or employee objected to French’s participation in the
inspection at the LTV Steel facility.

As noted above, French’s inspection resulted in two safety orders
dated September 23, 1991, being issued to LTV Steel. As authorized by
section 28.1 of IOSHA, LTV Steel filed a petition for review dated October
10, 1991, denying each of the allegations in the safety orders.[10] At
this point, the matter became subject to the procedural requirements of
both IOSHA and the Indiana Administrative Orders and Procedures Act, Ind.
Code § 4-21.5-1-1 et seq. (“AOPA”). Under IOSHA, the Commissioner
certified the dispute to the Indiana Board of Safety Review (“Safety
Board”). The Safety Board is given the power under IOSHA to affirm,
modify, or dismiss any action of the Commissioner concerning an alleged
violation (including any penalty and abatement period).[11] See Ind. Code
§ 22-8-1.1-30.1. By operation of AOPA, the Safety Board assigned the
matter to an administrative law judge for a hearing.

On March 24, 1993, LTV Steel filed a motion for summary judgment
contending that the entire inspection conducted by French and the resulting
safety orders were invalid because French had a statutorily prohibited
conflict of financial interest when he conducted the inspection. The
specifics of LTV Steel’s summary judgment argument were (1) that section
9(a) of the statute governing Indiana state employee ethics (“Ethics
Code”)[12] provides, “A state officer or employee may not participate in
any decision . . . in which the state officer or the employee . . . has a
financial interest, Ind. Code § 4-2-6-9(a);” (2) that French participated
in the decision to issue the safety orders to LTV Steel; (3) that French
had a “financial interest” within the meaning of section 1 of the Ethics
Code, in LTV Steel arising out of his employment relationship with A.M.
General/LTV, id. § 4-2-6-1(9); and (4) as a result, French’s inspection had
been conducted in violation of Indiana law and the safety orders should be
vacated. LTV Steel also provided an additional argument in support of
partial summary judgment.

For purposes of our decision today, it is sufficient to say that on
May 13, 1993, the administrative law judge denied the motion for summary
judgment without explanation.[13] On February 24, 1995, the Safety Board
reversed the administrative law judge’s decision and granted summary
judgment to LTV Steel. The Safety Board held that the inspection conducted
by French was invalid because French had a conflict of financial interest
that violated section 9 of the Ethics Code. Having rendered the inspection
invalid, the Safety Board dismissed all IOHSA violations that were subject
to the ALJ’s recommendation.

Exercising the right of judicial review of agency action under chapter
5 of AOPA, the Commissioner appealed the decision of the Safety Board. In
this petition for review, the Commissioner argued that LTV Steel failed to
demonstrate that French “was biased by [the] alleged financial interest,”
(R. at 1830), or that he “was influenced in any manner by the tenuous
relationship between [LTV Steel] and A.M. General when he conducted the
inspections.” (R. at 1831.) Therefore, the Commissioner contended that
the “Board’s decision [was] arbitrary and capricious, . . . in excess of
statutory jurisdiction, . . . and otherwise not in accordance with the
law, . . . because there is no factual or legal basis upon which the Board
could properly conclude that Harvey French’s inspection of LTV was clouded
by any conflict of interest .” (R. at 1768-69.)

On September 16, 1996, the Marion Superior Court vacated the Safety
Board’s decision reversing the ALJ’s denial of LTV Steel’s motion for
summary judgment and remanded the matter to the Safety Board for further
review. In reaching its conclusion, the trial court agreed with the
Commissioner’s contention that there was no evidence that French was
influenced by his attenuated relationship with A.M. General when he
conducted the inspections at the LTV Steel plant. The trial court further
determined that dismissing the IOSHA violations based on a “purported
conflict” of a regulatory inspector would contravene public policy because
such action would “unjustifiably reward LTV [Steel] for ignoring health and
safety regulations.” (R. at 1894.) But on January 12, 1998, the Court of
Appeals reversed the trial court and reinstated the determination of the
Safety Board. LTV Steel Co. v. Zeller, 686 N.E.2d 904 (Ind. Ct. App.
1997).[14]

Discussion

While the legislature has granted courts the power to review the
action of state government agencies taken pursuant to the Administrative
Orders and Procedures Act, this power of judicial review is limited. See
State Bd. of Registration for Prof’l Eng’rs v. Eberenz, 723 N.E.2d 422, 430
(Ind. 2000); Indiana Dep’t of Envtl. Management v. Conard, 614 N.E.2d 916,
919 (Ind. 1993); Indiana Dep’t of Natural Resources v. United Refuse Co.,
615 N.E.2d 100, 103 (Ind. 1993). A court may only set aside agency action
that is:

(1) arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law;

(2) contrary to constitutional right, power, privilege, or
immunity;

(3) in excess of statutory jurisdiction, authority, or
limitations, or short of statutory right;

(4) without observance of procedure required by law; or

(5) unsupported by substantial evidence.

See Ind. Code § 4-21.5-5-14(d).

While an appellate court grants deference to the administrative
agency’s findings of fact, no such deference is accorded to the agency’s
conclusions of law. See Indiana Dep’t of Pub. Welfare v. Payne, 622 N.E.2d
461, 465 (Ind. 1993), reh’g denied; Board of Trustees of the Pub.
Employees’ Retirement Fund of Ind. v. Miller, 519 N.E.2d 732, 733 (Ind.
1988). An interpretation of a statute by an administrative agency charged
with the duty of enforcing the statute is entitled to great weight, unless
this interpretation would be inconsistent with the statute itself. See
Indiana Dep’t of State Revenue v. Bulkmatic Transport, Co., 648 N.E.2d
1156, 1158 (Ind. 1995); cf. Lyng v. Payne, 476 U.S. 926, 939 (1986). But
an administrative agency does not have the power to make decisions properly
committed to another agency. See Spoon v. Town of Pittsboro, 706 N.E.2d
254, 257 (Ind. Ct. App. 1999); Bell v. State Bd. of Tax Comm’rs, 651 N.E.2d
816, 819 (Ind. Tax 1995); see also Charles H. Koch, Jr., Administrative Law
and Practice § 11.26, at 140 (2d ed. 1997) (“Courts will give no special
deference to interpretation by one agency of another agency’s rules.”).
An administrative agency has only those powers conferred on it by the
legislature, and unless we find the grant of powers and authority in the
statute, we conclude that no power exists. See Citizens Action Coalition
of Ind., Inc. v. NIPSCO Northern Ind. Pub. Serv. Co., 485 N.E.2d 610, 612
(Ind. 1985), cert. denied, 476 U.S. 1137 (1988).

For the reasons discussed below, we find the action of the Safety
Board in dismissing the safety orders was not in accordance with law, Ind.
Code § 4-21.5-5-14(d)(1), and was in excess of the Safety Board’s statutory
jurisdiction, id. § 4-21.5-5-14(d)(3).

I

The legislature has entrusted to the State Ethics Commission the
authority to establish, interpret, and enforce a code of ethics for the
conduct of state business. See Ind. Code § 4-2-6-1 et. seq. The Ethics
Code (the ethics statute and the regulations promulgated pursuant thereto)
constitutes a comprehensive remedial scheme. Of particular relevance to
this case, Ind. Code § 4-2-6-4(a)(2) authorizes the Ethics Commission to
receive and hear all complaints alleging a violation of the Ethics Code.
It may reject or dismiss any such complaint without further investigation,
id. § 4-2-6-4(b)(2)(A); must investigate any alleged violation not rejected
or dismissed, id. § 4-2-6-4(b)(2)(C); may determine whether a violation
occurred using a probable cause standard, id.; must conduct a public
hearing where probable cause has been found to exist, id.; must provide the
alleged violator “appropriate due process protection” during the hearing,
id. § 4-2-6-4(b)(2)(D); and must issue findings of fact after a hearing,
id. § 4-2-6-4(b)(2)(E). When the Ethics Commission finds that a violation
has occurred, it is authorized to recommend a sanction to be imposed by the
head of the state agency (called the “appointing authority”) or the elected
official for whom the violator is employed. Id. The Ethics Commission is
also authorized to forward a copy of any complaint to the prosecuting
attorney of the county in which the alleged violation occurred, id. § 4-2-6-
4 (b)(2)(A)(iii) & (H)(i), and to impose civil penalties, id. §§ 4-2-6-4
(b)(2)(F) and 4-2-6-12.

It is clear from this regulatory scheme that the legislature intended
the Ethics Commission to have exclusive jurisdiction to establish a code of
ethics for the conduct of state business, id. § 4-2-6-3, and to adjudicate
alleged violations thereof, id. § 4-2-6-4. The Ethics Commission shares
with the appointing authority or state elected official for which or whom a
violator is employed the authority to impose sanctions. Id. §§ 4-2-6-
4(b)(2)(E)-(F) and 4-2-6-12. That is, when a state employee is alleged to
have violated an ethics requirement, the allegation is not adjudicated by
the appointing authority or state elected official for which or whom the
alleged violator is employed but by the Ethics Commission. See, e.g.,
Indiana State Ethics Comm’n v. Nelson, 656 N.E.2d 1172 (Ind. Ct. App. 1995)
(state ethics requirement violations by State Department of Natural
Resources employees adjudicated by Ethics Commission), transfer denied.

The Safety Board resolved this case by adjudicating French to have had
a “financial interest” as defined by the Ethics Code[15] and thereby
violated Ind. Code § 4-2-6-9[16] which prohibits a state employee from
“participat[ing] in any decision or vote of any kind in which the state . .
. employee . . . has a financial interest.”[17] Id. § 4-2-6-9(a) (1990);
see also Ind. Admin. Code tit. 40, r. 2-1-9(f) (Supp. 1991). In making
these determinations, the Safety Board exceeded its jurisdiction. We shall
examine IOSHA, the statute under which the Safety Board operates in some
detail infra, but point out here that there is nothing in it that
authorizes the Safety Board to adjudicate violations of the Ethics Code.
And, as we just explained, we find such to be within the exclusive
jurisdiction of the Ethics Commission.

At least two policy reasons for entrusting such determinations
exclusively to the Ethics Commission seem clear to us. If each state
agency were to issue its own interpretations of what, say, constituted an
impermissible financial interest, the standards would inevitably vary from
agency to agency. This would make compliance unnecessarily difficult,
especially for employees who are reassigned among agencies or who may
perform responsibilities for more than one. We get a sense of such
inconsistency in this case where the Safety Board, the trial court, and the
Court of Appeals each tried their respective hands at interpreting the
meaning of “financial interest” in the Ethics Code with varying results.
Second, though not directly implicated here, entrusting such determinations
to a single agency assures consistency in the application of due process
rights of alleged violators.[18]

II

While it appears to us undeniable that all of the Safety Board, trial
court, and Court of Appeals engaged in an adjudication that was within the
exclusive jurisdiction of the Ethics Commission, we do not rest our
analysis exclusively on that conclusion. We also conclude that even if
French had been properly found by the Ethics Commission to have had an
impermissible financial interest in LTV Steel,[19] such a finding would not
have provided LTV Steel with a statutory basis for dismissal of the safety
orders. None of the Ethics Code, IOSHA, or AOPA suggests any authority for
a state ethics violation by an inspector serving as a defense to
allegations of serious workplace safety violations.

A

We return to the Ethics Code, this time to examine whether it
expressly or impliedly authorizes a violation thereof to be employed as a
defense in an IOSHA safety enforcement proceeding.

Section 9 provides: “A state officer or employee may not participate
in any decision or vote of any kind in which the state officer or the
employee or that individual’s spouse or unemancipated children has a
financial interest.” Ind. Code § 4-2-6-9 (1990). If the Ethics Commission
finds a violation of this requirement, the Ethics Code contains two
provisions governing sanctions. First, the Ethics Commission “may make a
recommendation for the sanctions to be imposed by the appointing authority
or state officer [for whom the violator works] for the violation,
including: (i) reprimand; (ii) suspension with or without pay; or (iii)
dismissal of an employee.” Id. § 4-2-6-4(b)(2)(E). Second, the Ethics
Commission “may also take any of the actions provided in section 12 of” the
Ethics Code. Id. Section 12 authorizes the following actions:

(1) Impose a civil penalty upon a respondent not to exceed the
greater of: (A) three (3) times the value of any benefit received from
the violation; or (B) ten thousand dollars ($10,000).

(2) Cancel a contract.

(3) Bar a person from entering into a contract with any agency
for a period specified by the commission. The period specified by the
commission may not exceed two (2) years from the date the action of
the commission is effective.

Id. § 4-2-6-12. It is clear that the express language of the Ethics Code
does not authorize the dismissal of an IOSHA safety order as a sanction for
a violation of the Ethics Code.

Nor do we find such authority implied by the statute. First, the
structure of the Ethics Code is clearly pointed at sanctioning state
employees who violate the Ethics Code and not conferring benefits on third
parties arguably injured by a state employee’s violation. All of the
sanctions impinge upon the individual state employee personally. It is
true that the Ethics Code remedy providing for the cancellation of a
contract entered into in violation of the Ethics Code could confer a
benefit on a party which had unsuccessfully sought the contract in the
sense that that party might again be able to seek the contract. But where
the legislature specifically provided the remedy of contract cancellation
without providing a counterpart remedy of regulatory action dismissal, we
are unable to infer any legislative intent that the Ethics Code be
available as a defense against an IOSHA safety order.

This conclusion comports with the law generally applicable to the
ability of private parties to enforce rights under particular statutes. As
a general rule, a private party may not enforce rights under a statute
designed to protect the public in general and containing a comprehensive
enforcement mechanism. See, e.g., Ritz v. Indiana & Ohio R.R., 632 N.E.2d
769, 775 (Ind. Ct. App. 1994), transfer denied; Coons by Coons v. Kaiser,
567 N.E.2d 851, 855 (Ind. Ct. App. 1991), reh’g denied; Borne by Borne v.
Northwest Allen County Sch. Corp., 532 N.E.2d 1196, 1203 (Ind. Ct. App.
1989); Hirschauer v. C & E Shoe Jobbers, Inc., 436 N.E.2d 107, 111 n.4
(Ind. Ct. App. 1982). We hold that because the Ethics Code is designed to
protect the public in general and contains a comprehensive enforcement
mechanism, it implies no entitlement for use as a defense against an IOSHA
safety order.

B

We also find that IOSHA itself neither expressly nor impliedly
authorizes a violation of the Ethics Code to be employed as a defense in an
IOSHA safety enforcement proceeding.

At the time the safety orders were issued to LTV Steel, the text of
IOSHA contained no express affirmative defenses to alleged workplace safety
violations. In 1995, the legislature added a new section to IOSHA
recognizing “an affirmative defense for a violation of any standard, rule,
or order that is the result of employee misconduct.” Ind. Code § 22-8-1.1-
27.2 (as added by P.L. 224-1995 § 1). The fact that the legislature has
provided an affirmative defense only for employee misconduct leads us to
conclude that the legislature did not intend that IOSHA itself provide any
other affirmative defenses to alleged IOSHA violations.

We believe this conclusion is harmonious with the central purpose and
basic policy of IOSHA.[20] As set forth supra, IOSHA requires that every
Hoosier employer must “establish and maintain conditions of work which are
reasonably safe and healthful for employees, and free from recognized
hazards that are causing or are likely to cause death or serious physical
harm to employees.” Ind. Code § 22-8-1.1-2. Further, every Indiana
employer must “comply with the occupational health and safety standards”
established under IOSHA. Id. § 22-8-1.1-3.1. To permit an employer to
have allegations of IOSHA violations against it dismissed on the basis that
the IOSHA inspector had a conflict of financial interest not permitted by
the Ethics Code would frustrate the Commissioner’s obligation under IOSHA
to enforce safety orders to “establish and maintain conditions of work
which are reasonably safe and healthful for employees.” Id. § 22-8-1.1-2;
see also id. § 22-8-1.1-22.1 (setting forth the Commissioner’s enforcement
power under IOSHA). An inspector’s Ethics Code impermissible financial
interest in no way excuses or mitigates workplace safety violations.[21]
Given the pervasive emphasis in IOSHA on an employer’s duty to maintain a
safe workplace, we are unable to find an implied affirmative defense for
violations of the Ethics Code.

C

Lastly, we turn to AOPA and find that it, like the Ethics Code and
like IOSHA, neither expressly nor impliedly authorizes a violation of the
Ethics Code to be employed as a defense in an IOSHA safety enforcement
proceeding.

In reaching this conclusion, we note three parts of chapter 3 of AOPA:
(1) Section 14, which discusses certain requirements for proceedings before
an administrative law judge, recognizes that a party may assert “an
affirmative defense specified by law,” Ind. Code § 4-21.5-3-14(a)(c); AOPA
itself does not provide or otherwise enumerate any affirmative defenses,
(2) Section 13 contains a specific provision prohibiting an investigator in
a regulatory proceeding from serving as an administrative law judge or
assisting or advising the administrative law judge in any way, id. § 4-21-5-
3-13; and (3) sections 9, 10, and 12 collectively contain an extensive set
of provisions governing the disqualification of administrative law judges
on grounds of bias. Our examination of these three parts of AOPA lead us
to conclude that, while the legislature specifically considered the role of
affirmative defenses, regulatory investigators, and bias in writing the
AOPA, it did not provide or suggest that an investigator’s impermissible
financial interest under the Ethics Code could serve as any type of defense
in AOPA proceeding.

III

Animating much of LTV Steel’s argument is its contention that unless
it can deploy the provisions of state employee ethics rules in its defense,
employers have “no remedy in situations, like this one, where the
inspection is tainted by serious impropriety or illegal conduct by the
inspector.” LTV’s Br. in Opp’n to Comm’r’s Pet. to Transfer at 7.[22]
With remarkable candor, LTV Steel employs the following analogy: “LTV has
merely raised the statute as a basis for invalidating the inspection, just
as a defendant in a criminal case, defending himself against charges
brought against him, might claim the investigators conducted an
unreasonable search and seizure.” Id. at 6.

Employers’ protection against wrongful allegations of safety
violations is the elaborate administrative and judicial review provisions
of the AOPA. This protection, constitutional in dimension,[23] gives an
employer a broad opportunity to exonerate itself from allegations of
workplace safety violations. But this protection, at least under current
law, does not extend to an automatic dismissal of charges on grounds that
the safety inspector violated the Ethics Code.

Conclusion

The Safety Board’s dismissal of the two safety orders issued to LTV
steel is reversed. This matter is remanded to the Safety Board for further
proceedings consistent with this opinion.

SHEPARD, C.J., and DICKSON, BOEHM, and RUCKER, JJ., concur.
-----------------------
[1] All IOSHA references to the Indiana Code and Indiana Administrative
Code, tit. 610, art. 4, r. 3, in this opinion are to the year 1988, which
were the Codes in effect at the time of the inspection.

[2] Repealed in 1994; now see Ind. Code § 22-8-1.1-16.2 (1998).
[3] Unless the context otherwise requires, the term “IOSHA” as used in this
opinion encompasses the Indiana Occupational Safety and Heath Act and the
safety standards thereunder.

[4] Effective in 1995, the legislature exempted certain employers from this
right of entry in certain circumstances. Ind. Code § 22-8-1.1-23.1 (Supp.
1995) (as amended by P.L. 221-1995, § 1, P.L. 220-1995, § 1).

[5] Ind. Code § 22-8-1.1-27.1(b) (1988) defines a “serious” violation as
one where “there is a substantial probability that death or serious
physical harm could result from a condition which exists from one or more
practices, means, methods, operations, or processes, which have been
adopted or are in use, in the place of employment, unless the employer did
not know and could not, with the exercise of reasonable diligence, have
known of the presence of the violation.” At the time of LTV Steel’s
inspection, employers who committed a violation of any safety standard or
rule “serious” in nature were subject to civil penalties up to $1,000 per
violation. See id. § 22-8-1.1-27.1(a)(2). In 1991, however, the Indiana
legislature increased this figure to $7,000 per “serious” violation, see
id. § 22-8-1.1-27.1(a)(2) (Supp. 1991); P.L. 170-1991 § 25 (effective
October 1991), and it remains so today. The definition of a “serious”
violation remained the same.

[6] See infra note 13.

[7] To prove a “knowing” violation under IOSHA, the Commissioner is
required to show that the employer acted voluntarily either in intentional
disregard of, or in plain indifference to its employees. See Union Tank
Car, Fleet Operations v. Commissioner of Labor, 671 N.E.2d 885, 890 (Ind.
Ct. App. 1996), transfer denied. At the time of LTV Steel’s inspection,
employers who “knowingly” violated any safety standard, rule, or order were
subject to civil penalties up to $10,000 per violation. Ind. Code § 22-8-
1.1-27.1(a)(4) (1988). In 1991, the Indiana legislature amended this
figure and currently sets the penalty at a minimum of $5,000 and a maximum
of $70,000 for each knowing violation. See id. § 22-8-1.1-27.1(a)(6)
(Supp. 1991); P.L. 170-1991 § 25 (effective October 1991).

[8] French informed John Carroll, the Manager of Safety Services for LTV
Steel, about his employment status with A.M. General. He also informed
Dennis Adams, the Chairman of the Safety and Health Committee of United
Steelworkers of America.

[9] On August 8, 1991, while French was conducting the LTV Steel
inspection, A.M. General granted French a “recall slip.” At the time he
received the recall, French had been working for the Labor Department for
just over one year. French chose to waive his recall rights for 60 days
and finished the inspection. On October 28, 1991, French formally tendered
his resignation from A.M. General.

[10] In addition to denying each of the allegations in the safety orders,
LTV Steel’s petition for review contended that one allegation contradicted
federal law and a prior IOSHA order, that three of the allegations were pre-
empted by federal regulation, and that it possessed insufficient knowledge
of one of the cited conditions to constitute a violation. As to the
chromic acid incident, LTV Steel denied the allegations and further
contended that the safety standard cited by the Commissioner was not
applicable to the facts.
[11] The Safety Board consists of five members appointed by the Governor,
two of whom are drawn from backgrounds with labor organizations, two from
backgrounds with employers, and one (the chairman) “from the highest
membership classification of the American Society of Safety Engineers.”
Ind. Code § 22-8-1.1-31.

[12] The statute governing Indiana state employee ethics is codified at
Ind. Code § 4-2-6-1 et seq. Section 2 of that statute creates a State
Ethics Commission and section 3 directs the Ethics Commission to adopt
rules establishing “a code of ethics for the conduct of state business.”
Unless the context otherwise requires, the use of the term “Ethics Code” in
this opinion refers to the statute and rules promulgated thereunder. And
all Ethics Code references to the Indiana Code in this opinion can be found
in the 1988 main volume or the 1990 supplements thereto, and Ethics Code
references to the Indiana Administrative Code can be found in the 1991
version, which were the versions in effect at the time of the inspection.
[13] The ALJ’s May 13, 1993 order denying LTV Steel’s motion for summary
judgment and partial summary judgment was not accompanied by findings of
facts or conclusions of law. From June 28 - 30, 1993, the ALJ held a
hearing to determine the merits of the contested safety orders. On April
4, 1994, the ALJ’s first recommendation upheld most of the violations but
recommended that the Board downgrade the second safety order regarding an
employee falling into the chromic acid tank from “knowing” to “serious.”
Both LTV Steel and the Department of Labor appealed to the Safety Board
where LTV Steel renewed its summary judgment motion. On August 16, 1994,
the Safety Board remanded the case to the ALJ, instructing the ALJ to
provide a factual basis for his earlier decision. The ALJ issued a second
recommended decision on December 29, 1994. In it, the ALJ upheld two
violations of the first safety order, which amounted to an $800.00 fine,
and all other violations were dismissed or reclassified to “de minimus,”
resulting in no fines. With respect to the second safety order, the ALJ
maintained the “serious” reclassification and penalized LTV for $1,000.00.
However, in neither recommendation did the ALJ address the issue of whether
French had a conflict of financial interest, the basis of LTV Steel’s
summary judgment motion and this appeal. Both parties again appealed to
the Safety Board and LTV Steel continued to argue its position that the
“underlying inspection was invalid as being performed in violation of” the
Ethics Code.

[14] When this case was on review with the Court of Appeals, Kenneth
Zeller held the position of Commissioner of the Indiana Department of Labor
(“IDOL”); however, John P. Griffin presides as the current Commissioner of
IDOL. Indiana Trial Rule 25(F)(1) provides in pertinent part:
When a public officer is a party to an action or other proceeding in
an official capacity and during its pendency . . . ceases to hold
office, the action does not abate and the officer’s successor is
automatically substituted as a party. Proceedings following
substitution shall be in the name of the substituted party . . . .
Accordingly, John P. Griffin “is automatically substituted as a party” for
Kenneth Zeller.
[15] Ind. Code § 4-2-6-1(9) (1990) states that a “financial interest means
an interest:
A) distinct from that:
i) of the general public; or
ii) as a state employee;
B) in a purchase, sale, lease, contract, option, or other transaction
between an agency and any person;
C) involving property or services; and
D) in which a state officer or an employee or that individual’s spouse
or unemancipated children may gain a benefit of two hundred fifty
dollars ($250) or more.
This term includes an interest arising from employment or prospective
employment for which negotiations have begun. . . .”

Ind. Admin. Code tit. 40, r. 2-1-4 (Supp. 1991) characterizes
“financial interest” as “economic interest,” meaning a “substantial
financial interest in investments, employment, awarding of contracts,
grants, loans, purchases, leases, sales or similar matters under
consideration or consummated between a state agency over which the person
has jurisdiction or in which the person is employed.”

[16] Although not relevant to the decision we make today, we recognize that
the Indiana legislature has since twice amended Indiana Code § 4-2-6-9
which now reads, “A state officer or employee may not participate in any
decision or vote of any kind in which the state officer or the employee, or
that individual’s spouse or unemancipated children has a financial
interest.” (As amended by P.L. 15-1992 § 5 and P.L. 22-1995 § 2).

[17] We need not and do not resolve whether French’s disclosed relationship
to a corporate sibling of LTV rose to the level of a “financial interest”
in French’s decisions as an inspector of LTV, or even if it did, whether
LTV was in a position to complain after inviting French to continue when
the affiliation between LTV and A.M. General was discovered.

[18] Here, French has been found by the Safety Board and the Indiana Court
of Appeals to have violated the State Ethics Code, violations of which
carry severe sanctions, without ever having had any due process at all.

[19] There is nothing in the record to suggest that LTV Steel filed a
complaint with the Ethics Commission alleging a violation by French.
[20] Congress has explained that the purpose of the federal Occupational
Safety and Health Act, which IOSHA implements in Indiana, is “to assure so
far as possible every working man and woman in the Nation safe and
healthful working conditions.” 29 U.S.C. § 651(b) (1994).

[21] This appears to be the context of the trial court’s conclusion that
“[s]etting aside the Safety Orders for a purported conflict would
unjustifiably reward LTV [Steel] for ignoring health and safety regulations
endangering its plant’s employees.” (R. at 1893-94.)
[22] LTV Steel begins its brief to the Court of Appeals as follows:

Increasingly of late, local and national newspapers and media
interests have carried substantial news stories regarding claims of
corruption by government officials. Whether those stories concern
Arkansas, Washington, D.C., or Indianapolis, Indiana, one abiding
element exists in each: the citizenry opposes actions by government
officials which aggrandize the power, position, or fortune of the
government official because he or she has the authority to make a
decision affecting others. That is the central core of the definition
of conflict of interest.

Appellant’s Br. at 1. While we appreciate the point LTV Steel makes, we
question its relevance to this case which we do not perceive to involve
any question of government corruption. At no point does LTV Steel accuse
French of corruption.

[23] The Due Process Clause ensures that “no person will be deprived of his
interests in the absence of a proceeding in which he may present his case
with assurance that the arbiter is not predisposed to find against him.”
Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980). Thus, self-dealing
or bias on the part of a hearing officer would contravene not only the AOPA
but the Constitution itself. Marshall also indicates that the Due Process
Clause imposes some limits, which we do not find implicated here, on
“administrative prosecutors,” a category of persons which we believe could
include government investigators. Id. at 249-50. LTV Steel alleges no
violation of the Due Process Clause.