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Authority of workplace safety agency challenged at appeals court

An Ohio-based contractor argues OSHA has too much power over virtually every industry in the U.S.

CINCINNATI (CN) — A contractor that provides furnace services in the glass and petrochemical industries argued Thursday that Congress granted unconstitutional authority to the federal workplace safety agency when lawmakers passed the Occupational Safety and Health Act in 1970.

Allstates Refractory Contractors, based in Toledo, Ohio, sued the Occupational Safety and Health Administration and the U.S. Department of Labor in federal court in 2021, claiming the permanent rulemaking authority granted to OSHA is unconstitutionally overbroad.

The contractor argued Congress violated the nondelegation provision of the U.S. Constitution when it delegated rulemaking authority to the agency in 1970, but a federal judge disagreed.

U.S. District Judge Jack Zouhary, an appointee of George W. Bush, granted the federal government's motion for summary judgment in September 2022 and ruled the inclusion of the phrase "reasonably necessary or appropriate" in the statute placed constitutional restraints on OSHA.

Zouhary cited the 2001 U.S. Supreme Court case Whitman v. American Trucking Associations Inc. in his opinion.

"After OSHA makes the threshold finding of significant risk," he said, "the agency has discretion to determine what safety standards are 'reasonably necessary or appropriate' to mitigate that risk.

"As the [Supreme] Court noted, 'even in sweeping regulatory schemes we have never demanded ... that statutes provide a 'determinative criterion' for saying 'how much of the regulated harm is too much.' The Court has never 'required the statute to decree how 'imminent' was too imminent, or how 'necessary' was necessary enough."

In its appellate brief to the Sixth Circuit, Allstates bluntly called the language cited by Zouhary "no limit at all."

"The Act therefore gives OSHA the power to make whatever safety rules it thinks appropriate, based on nothing more than its subjective judgment," it said. "Armed with this limitless authority, the agency has enacted a variety of safety standards governing the nation's workplaces in striking detail ... with penalties reaching as high as $145,000-plus per infraction."

The contractor argues its own safety protocols are more stringent and effective than those required by OSHA, whose standards have become "unnecessarily burdensome or dangerous" and are effectively limitless.

"Both the executive and judicial branches have struggled for decades to settle on a meaning for this vacuous generality," the brief states. "If this blank-check delegation of rulemaking authority contains an intelligible principle, then anything does."

The federal government flatly rejected Allstates' claims and argued in its own brief there are "significant limitations" on OSHA's rulemaking authority.

It cited Supreme Court precedent that requires the secretary of labor to find "significant" workplace safety risks prior to the institution of any new safety standard and dismissed two 1935 cases cited by the contractor – known as Panama Refining and Schechter Poultry – as irrelevant outliers.

"Congress's delegation to the secretary cannot plausibly be compared to the boundless delegations at issue in those cases, where Congress 'placed almost no limits on how the president -- and in Schechter's case, private groups -- could wield their delegated authority,'" the government said.

Attorney Brett Shumate of the Washington, D.C., firm Jones Day argued Thursday on behalf of Allstates and told the Sixth Circuit panel the delegation of authority to OSHA "is unconstitutional because it allows OSHA to do whatever it deems appropriate."

"OSHA has unlimited discretion to decide which risks are significant [and then] OSHA can do whatever it deems appropriate to resolve that significant risk," he continued.

Shumate decried the lack of "mandatory language" in the statute and reminded the panel "OSHA is regulating virtually every industry in America."

U.S. Circuit Judge John Nalbandian, an appointee of Donald Trump, asked for clarification on that point.

"So if it's just railroads, [the agency] can do whatever [it] wants? Why does the playing field matter?" he asked.

Allstates' attorney responded that as an agency's area of control expands, "more significant restraints" are required to control its rulemaking authority.

"Why doesn't [the phrase] 'significant risk' work as a way to get at that problem?" Nalbandian asked.

"Once OSHA makes a threshold finding [of risk]," Shumate answered, "it can do whatever it wants."

U.S. Circuit Judge Richard Griffin asked Shumate why his client chose to mount a challenge against OSHA now, more than 50 years after the legislation that created the agency was passed, especially considering the court is bound to follow U.S. Supreme Court precedent.

The attorney said several Supreme Court justices have expressed a desire to revisit the nondelegation provision and pointed out "there is no precedent" to uphold the limitless authority granted to OSHA.

Attorney Courtney Dixon from the U.S. Department of Justice argued on behalf of the federal government and noted both the D.C. and Seventh Circuits have already rejected facial challenges to OSHA's authority.

Dixon argued "technological and economic feasibility" requirements provide restraints on the types of rules OSHA is able to enforce and emphasized the Supreme Court has always viewed nondelegation challenges in the context of the statute as a whole, not by parsing individual words.

"I understand 'public interest' can be broad," Nalbandian told the government's attorney, "but here, OSHA covers every employer. It's just a vast scope. ... And what does 'appropriate' mean?"

"We don't look at those words in a vacuum," Dixon answered.

During Shumate's rebuttal, Senior U.S. Circuit Judge Deborah Cook, another George W. Bush appointee, said case law has narrowed the scope of OSHA's authority and cast a pall over the contractor's chances of success.

"You're just saying you hate the words," she said. "It's a tough road to hoe."

No timetable has been set for the court's decision.

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Categories / Appeals, Business, Employment, Government, National

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