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Babcock and Wilcox Co. v. Marshall

UNITED STATES COURT OF APPEALS, THIRD CIRCUIT


decided: November 16, 1979.

THE BABCOCK AND WILCOX COMPANY, APPELLANT
v.
RAY MARSHALL, SECRETARY OF LABOR, AND CHARLES A. STRAW, OSHA AREA DIRECTOR, UNITED STEELWORKERS OF AMERICA, AFL-CIO AND LOCAL 1082, UNITED STEELWORKERS OF AMERICA, INTERVENOR DEFENDANTS AND OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION, INTERVENOR DEFENDANT

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (C.A. No. 79-0604)

Before Adams, Hunter and Higginbotham, Circuit Judges.

Author: Adams

Opinion OF THE COURT

In Marshall v. Barlow's, Inc., 436 U.S. 307, 98 S. Ct. 1816, 56 L. Ed. 2d 305 (1978), the Supreme Court declared that the Fourth Amendment stands between an employer and the use of compliance inspections by the agency charged with enforcing the Occupational Safety and Health Act (the Act).*fn1 From the time of that decision, numerous controversies have arisen over the standards for administrative probable cause*fn2 and over the procedures for issuing inspection warrants that must be satisfied before officers of the Occupational Safety and Health Administration (OSHA) may enter the workplace.*fn3

The primary focus of the present case, and of In re Establishment Inspection of Whittaker Corp., decided today by a different panel of this Court,*fn4 is a dispute regarding jurisdiction and institutional competence to decide challenges to inspection warrants once they have been executed. This additional complication in the overall conflict surrounding OSHA inspections exists because the Act not only established new standards for conditions at the worksite and a new agency to administer the Act, but also established an administrative tribunal to adjudicate challenges to OSHA enforcement.

Specifically, the appeal sub judice presents the question, given divergent answers by three courts of appeals,*fn5 whether a company must exhaust its remedies in the administrative tribunal before it may seek relief in the federal courts by raising constitutional challenges to OSHA inspections. In a memorandum order dismissing a claim by a plant owner for declaratory and injunctive relief, as well as its motion to quash an inspection warrant, the district court in this proceeding held that the administrative route must be taken in the first instance. We affirm for the reasons set out below.

I.

The Babcock & Wilcox Company (Babcock) operates several large manufacturing plants in Ambridge and Beaver Falls, Pennsylvania. Representatives of OSHA's Pittsburgh office made three separate inspections of these plants in August and September, 1978. Each inspection was triggered by a complaint of unsafe conditions by an employee of Babcock, and each was effected by obtaining an Ex parte warrant from a United States Magistrate.

OSHA received the first complaint which was in writing and signed on August 4, 1978. The complaint stated that cranes in several areas of the Ambridge plant had unguarded couplings, exposed electrical equipment, and worn brakes; that tubes were piled unsafely; that oxygen and acetylene tanks were stored together; and that employees were climbing twenty-foot-high racks without safety equipment. Several specific areas throughout the plant where hazards existed were mentioned, and the employee charged that these hazards immediately threatened death or serious physical harm. Officials in the Pittsburgh office decided that the matter merited an inspection and assigned a compliance office for the task;*fn6 Babcock denied him entry. On OSHA's request, a magistrate issued a warrant authorizing inspection of the entire Ambridge plant.

A second complaint was received on August 28 by way of a telephone call from a Babcock employee charging unsafe conditions in the Hot Mill and Oil Well Tubing areas of the Ambridge plant. The third complaint, written and signed, alleged unsafe conditions in the East Works Department of the Beaver Falls plant. In response to the second complaint, OSHA sent a compliance officer to inspect the Ambridge plant and Babcock again denied entry. The inspection warrant subsequently obtained by OSHA was limited, by the magistrate's handwriting, to the Hot Mill and Oil Well Tubing Department at Ambridge. Because of the unsuccessful attempts to gain entry without warrants following the first two complaints, the OSHA officials secured a warrant after the third complaint without first attempting a consensual search. This last search warrant was limited by a notation on the face of the warrant made by the magistrate, to the East Works Department of the Beaver Falls plant.

Inspections pursuant to the warrants were made in late August and September. There is some disagreement whether all three inspections were "wall to wall" (covering the entire plant). Babcock contends that the scope of the last two warrants was not disclosed, nor were the limitations of the warrants observed, OSHA insists that its inspection officers complied with the limitations in the warrants.

Each search led to the issuance of citations for violations of the Act, and Babcock exercised in a timely fashion its right to contest the citations so as to initiate an administrative review process.*fn7 The objections to the citations were assigned to administrative law judges of the Occupational Safety and Health Review Commission (Review Commission), an independent tribunal and an intervenor in this appeal. Babcock's first challenge was referred to an administrative law judge on December 11, 1978, and on December 18, the parties were directed to commence a settlement conference. A hearing, originally set for March 12, 1979, was rescheduled for May 9 in order that the parties could continue discovery.

On April 30, Babcock filed suit in the district court to quash the three inspection warrants, and on May 3, filed a complaint for declaratory and injunctive relief. The complaint alleged that the warrants violated the Fourth Amendment because they were obtained Ex parte and without probable cause. The district court was asked to declare § 8(a) of the Act*fn8 unconstitutional to the extent that it allowed warrants to be granted Ex parte and to the extent that it allowed warrants to issue without probable cause and without proper limitations as to scope. Babcock also requested that the evidence obtained from the inspections be suppressed and that OSHA be enjoined from further litigation based on the challenged inspections.

The district court denied as moot Babcock's motion to quash the warrants, and dismissed its complaint for failure to exhaust administrative remedies. Babcock appealed and, on its motion, we stayed the administrative review process until disposition of this proceeding.

II.

An issue not raised by the parties, but which we are obliged to consider on our own initiative because it is jurisdictional, is the appealability of the district court's denial of Babcock's motion to quash the warrant. Because the motion was made after the warrant was fully executed, the order rejecting it is in an odd procedural posture. A denial of a motion to quash an inspection warrant should no more be appealable than is a denial of a motion to quash a grand jury subpoena, which has long been held to be not final and therefore not appealable.*fn9 "Such an order generally lacks finality because it leaves to the subpoenaed party the decision whether or not to comply with the subpoena; and if that party does not comply it leaves to the other party the decision whether or not it is worthwhile to seek a citation for contempt in order to compel disclosure." In re Grand Jury Subpoena for New York State Income Tax Records, 607 F.2d 566, 569 (2d Cir. 1979). In this case, of course, Babcock could not be held in contempt after a denial of its motion to quash, because there was nothing more that Babcock could be ordered to do, for the warrant had already been executed.*fn10

Continuing the analogy of inspection warrants to subpoenas, we believe that this appeal would come within the exception to nonappealability noted by Justice Frankfurter in Cobbledick v. United States, 309 U.S. 323, 60 S. Ct. 540, 84 L. Ed. 783 (1940). Cobbledick distinguished a denial of a motion to quash a grand jury subpoena, generally held to be not appealable, from a proceeding in federal court to enforce or quash an administrative subpoena, which

may be deemed self-contained, so far as the judiciary is concerned as much so as an independent suit in equity in which appeal will lie from an injunction without the necessity of waiting for disobedience. After the court has ordered a recusant witness to testify before the Commission, there remains nothing for it to do. Not only is this true with respect to the particular witness whose testimony is sought; there is not, as in the case of a grand jury or trial, any further judicial inquiry which would be halted were the offending witness permitted to appeal. The proceeding before the district court is not ancillary to any judicial proceeding. So far as the court is concerned, it is complete in itself.

Id. at 330, 60 S. Ct. at 543. See In re Restland Memorial Park, 540 F.2d 626, 627 n.3 (3d Cir.1976); Cf. O'Connor v. O'Connell, 253 F.2d 365, 365-66 (1st Cir. 1958) (order directing compliance with administrative subpoena held final and therefore appealable). In this case, as well, "there remains nothing for (the district court) to do." We therefore conclude that the order in this case is appealable.

III.

As we have stated, Babcock's motion to quash the inspection warrant was a somewhat novel approach, inasmuch as the warrant had long since been executed. Because the inspection had been completed and the constitutional injury to Babcock if an injury indeed occurred had been fully accomplished,*fn11 the warrant could not be recalled or quashed.*fn12 The motion was thus moot when considered by the district court.

This conclusion as to a motion to quash a warrant already executed at the time of the motion may be compared with the result when such a motion is made before execution. As we have held in In re Establishment Inspection of Whittaker Corp., 610 F.2d 1141 (3d Cir. 1979), in which an inspection occurred after the district court's ruling on a motion to quash, but before the appeal was heard, the following factors will be weighed in considering whether a complaint with elements of mootness should nevertheless be adjudicated: "(1) whether the appellant has expeditiously taken all steps to perfect the appeal before the dispute becomes moot, (2) whether the trial court's order will have collateral consequences, and (3) whether the dispute is of such a nature that it is capable of repetition yet evading review." Id. at 1144.

These factors are also relevant in considering mootness in a district court proceeding, and none of them is evident in this case. Far from acting expeditiously to prevent the issue it now presses from becoming a Fait accompli, Babcock waited over seven months after the last disputed inspection occurred before filing its motion in the district court. Moreover, unlike the Whittaker appeal in which the district court denied a motion to quash, held the company in contempt, and ordered it to purge the contempt by allowing an inspection, the court order here has no legal consequences. The citations in this case are a consequence of the inspection, which had already occurred, as compared with the situation in Whittaker where the court order itself caused the inspection to occur.*fn13 Finally, as we held in Whittaker, there is nothing in the nature of the present altercation that will make future ones of its type evade review. The dispute here, as in Whittaker, evades review in this Court at this time because of the appellant's lack of prompt action.

Rather than indulge in the somewhat futile gesture of considering whether an already executed warrant should be quashed, we shall, as did the district court in In re Worksite Inspection of Quality Products,*fn14 treat the motion to quash as simply a request to suppress evidence arising from the inspections. Indeed, such a request was specifically included in Babcock's prayer for relief. It will then be necessary to consider whether the appropriate forum for such a decision, in the first instance, is the district court or the Review Commission, for adjudication of this matter is constrained by the doctrine of exhaustion of administrative remedies to the same extent as is Babcock's request for declaratory and injunctive relief.

IV.

It is well established that the principle proclaiming that "no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted"*fn15 applies to the legislation in question here.*fn16 Babcock does not question the soundness of the general doctrine of exhaustion of administrative remedies, but contends that it is inapplicable here for two reasons. First, Babcock asserts that the present proceeding does not involve judicial interruption of the administrative process, but just the reverse. The warrant, Babcock continues, was issued by a magistrate acting as an adjunct to the federal judiciary.*fn17 Magistrates operate under the general supervision of district judges,*fn18 and it is therefore desirable, Babcock asserts, that district judges review the decisions of magistrates in the first instance.*fn19 For an administrative tribunal to pass on the propriety of the magistrate's action, the argument proceeds, is to usurp the judicial role. Alternatively, Babcock urges that this case falls squarely within well-recognized exceptions to the exhaustion doctrine.

Babcock's argument incorrectly characterizes which branch of government is engaged in a continuing process and which is only involved in a discrete, collateral adjudication. As part of its enforcement effort, OSHA seeks warrants to inspect worksites when consensual inspection cannot be obtained. The judgment at this point of a "neutral and detached magistrate" is required to protect the privacy of citizens from over-zealous enforcement.*fn20 Direct review of the issuance of a civil warrant may be obtainable before the inspection by resisting entry, moving to quash the warrant, risking contempt, and if necessary acting expeditiously to appeal. Babcock did not take such steps. It did not move swiftly to preserve its rights and prevent what it considered to be an illegal search. Babcock's conceptualization of the Review Commission proceedings interrupting judicial review particularly lacks credibility because Babcock did not even move promptly to obtain judicial protection from the use of the evidence secured in the allegedly illegal search. The worksite inspections were completed in September 1978, and Babcock did not attempt to quash the inspection warrants until approximately seven months later.

Contrary to Babcock's contention, illegal OSHA searches will not inevitably evade review; they may be preserved for determination by the district courts if the plant operator is willing to risk civil contempt and moves expeditiously to obtain full judicial review before the warrant is executed. This may seem to be a cruel choice to thrust on the company, but the alternative would be to indulge both in a presumption that magistrates do not perform their duties correctly and that there will not be probable cause for issuing inspection warrants in a fair number of these cases.*fn21

The Article III objections stressed by Babcock similarly mischaracterize the process. The Review Commission will not sit in direct review of the decision of the magistrate. As already indicated, the decision to issue the inspection warrant is complete and cannot be negated.*fn22 If the challenge is raised by Babcock, the problem for the Review Commission will be whether to use the evidence obtained from the inspection. In deciding whether to use this evidence the Review Commission must of course, makes its own judgment as to the propriety of the warrant, but such a determination does not reverse the magistrate's action, nor does it contravene a judicial order. The OSHA official would not be in contempt if he were to decide not to execute a warrant signed by the magistrate,*fn23 and an administrative tribunal does not flout the authority of the judiciary by refusing to consider evidence that has been obtained pursuant to a warrant issued by a judge or magistrate.

Babcock contends that it is entitled to adjudication by an Article III court of its constitutional rights, but the question in this case is not Whether the issues may be heard by an Article III court, but When.*fn24 Babcock may appeal to this Court as of right from any adverse determination by the Review Commission.*fn25 The crux of the matter, then, is a claim by Babcock that the factual record for constitutional claims must be developed by an Article III district court rather than by the Article I Review Commission. But that proposition has been decisively rejected by the courts, because it would seriously impede the use and effectiveness of administrative tribunals in the many statutory schemes in which they operate. In Bethlehem Steel Corp. v. Occupational Safety and Health Review Commission, 607 F.2d 871 at 876 (3d Cir. 1979), this Court held:

Conceding, arguendo, that an administrative agency is not ordinarily considered the appropriate forum for the resolution of constitutional claims, we think there are compelling reasons for insisting that fourth amendment claims for the suppression of evidence in OSHA enforcement cases be tendered first to the Commission. Those claims in most cases, if not all, require the development of a factual record concerning such issues as consent, waiver, and emergency. Under the enforcement and review scheme of the Occupational Safety and Health Act . . . the Commission is the only tribunal available for the development of a factual record. If we were to hold that these constitutional arguments need not be presented to the Commission, the alternative would be either separate litigation in a district court, which has facilities for making a record, or fact-finding in this court, which lacks such facilities. Assuming we could find a statutory justification for either course, neither is attractive. Thus we hold that fourth amendment claims must be presented, in the first instance, to the Commission.*fn26

In sum, the ongoing procedure here is that initiated by OSHA in the Review Commission, not that of the district court in supervising one of its magistrates. Any constitutional conflict between two branches of government over the propriety of the warrant is mostly imaginary, while the conflict with the statutory scheme and administrative exigencies if exhaustion is not required will be quite real. The principle of exhaustion therefore applies, and we now pass to the question whether Babcock comes within any of its exceptions. To decide this question it is necessary to examine the constitutional and policy rationales for the doctrine.

V.

Constitutionally, exhaustion is grounded in a concept of judicial self-restraint, admonishing courts that constitutional issues should not be decided, and legislation should not be invalidated, if a controversy may be resolved on some other ground.*fn27 When, as here, action is deferred for consideration to an independent administrative tribunal, rather than to the agency itself, the doctrine also exemplifies deference within the constitutional framework to Congress's decision as to the proper forum for the initial resolution of disputes under its statute.*fn28

Requiring the exhaustion of administrative remedies also ensures the most efficient use of judicial resources because the Review Commission will develop a factual record so that, if the court must decide on constitutional grounds, it will be able to do so with the benefit of a full factual context. If the tribunal decides favorably to the aggrieved party on nonconstitutional grounds, the court will find it unnecessary to proceed with constitutional adjudication.

As a judicially created doctrine, exhaustion of administrative remedies is subject to judicially created exceptions.*fn29 Thus, this Court has declined to require exhaustion when resort to administrative remedies would be futile,*fn30 when agency involvement "clearly and unambiguously violates statutory or constitutional rights,"*fn31 or "if the prescribed administrative procedure is clearly shown to be inadequate to prevent irreparable injury."*fn32 In this respect, exhaustion of administrative remedies has not been required when the administrative procedure itself is alleged to violate a constitutional right E.g., when an administrative procedure violates due process by not affording a claimant prior notice and a hearing*fn33 or by subjecting a party to "vexatious and harassing" prosecutions by refusing to apply collateral estoppel.*fn34 Similarly, in McKart v. United States, 395 U.S. 185, 197, 89 S. Ct. 1657, 23 L. Ed. 2d 194 (1969), the Supreme Court did not require exhaustion of administrative remedies when inflexible application of the rule would bar a defendant from raising his only defense to a criminal prosecution.

In Weyerhauser Co. v. Marshall,*fn35 the Court of Appeals for the Seventh Circuit held that none of the factors favoring the exhaustion requirement was applicable to a challenge to the validity of an inspection warrant that had already been executed. It stated that no factual record was required, since "the court need only look to the face of the warrant application to decide whether it met the requirements of administrative probable cause."*fn36 The Seventh Circuit discounted the possibility of the Review Commission's ruling on the probable cause issue because the Commission had never done so before.

Whatever the policy of the Review Commission may have been at the time Weyerhauser was handed down, it is now established that the Review Commission will consider challenges to inspection warrants.*fn37 Before the Supreme Court's opinion in Barlow's, the Review Commission had declined to rule on challenges to warrants, because it believed that to do so would require it to pass, at least implicitly, on the constitutionality of its underlying statute,*fn38 which had authorized warrantless searches.

Now that Barlow's has determined that inspections pursuant to 28 U.S.C. § 657(a) must satisfy the Fourth Amendment both as to the necessity of a warrant for nonconsensual inspections and as to the demonstration of probable cause the Review Commission may consider motions to suppress evidence without acting beyond its jurisdiction. It may do this, consonant with its limited role under the Constitution, not by reviewing the constitutionality of its statute but by interpreting the statute*fn39 and by applying constitutional principles to specific facts.*fn40

We do not, of course, express any opinion at this time on the sharply contested question whether the exclusionary rule applies to OSHA enforcement.*fn41 We simply point out that resolution of that issue has no bearing on our decision that exhaustion of administrative remedies is required in this case. Regardless of how the exclusionary rule controversy is ultimately resolved, Babcock will be no worse off by filing its motion to suppress in the Review Commission rather than in the district court. The decision of either forum is reviewable in this Court. Babcock may even be in a better posture before the Review Commission, for that tribunal may decide, independently of any decision by the federal courts as to the applicability of the exclusionary rule to administrative proceedings, to apply the rule as a matter of its own policy pursuant to its supervisory power over the Act's enforcement.

The Weyerhauser court was influenced in deciding that exhaustion was not required by its perception that the development of a factual record in ruling on probable cause was not necessary, since such a determination could be made by looking at the warrant application alone. 592 F.2d at 376. If a factual record were superfluous in this case, we might also consider it a factor to be weighed against requiring exhaustion though it would hardly be determinative because of the many important considerations, already set out, that favor the requirement. It is apparent here, as we believe would be true in most cases, that there are many disputed issues of fact relevant to the constitutional claims. For example, the parties contest whether each inspection was wall-to-wall; whether the magistrate authorized general inspections in the second and third warrants; whether, if general inspections were authorized, OSHA's use of specific complaints to trigger general inspections constitutes a valid administrative enforcement scheme;*fn42 and whether the magistrate was properly apprised of the agency's inspection scheme. A factual record and resolution of all of these issues would be quite useful, if not absolutely necessary, were this Court eventually called upon to decide the various constitutional issues urged by Babcock.

Babcock contends that exhaustion of administrative remedies should not be required because the constitutional claims in this litigation, even if they may be considered by the Review Commission, bear no relation to the administrative expertise of the tribunal in resolving issues pertaining to safety violations. The Review Commission, Babcock argues, has no expertise with regard to the interpretation of the constitutional and statutory concept of "reasonableness" in OSHA inspections.*fn43

Specialized tribunals obviously do not come into being with their full potential developed. And since it is only recently that the Review Commission has determined that issues similar to those posed by Babcock may be considered without passing on the constitutionality of its enabling legislation, it should not be surprising that the development of expertise on these issues is in the formative stage. If exhaustion of administrative remedies were inapplicable when an agency's expertise has not been established, as Babcock contends, the doctrine might well be frustrated whenever a new agency or independent tribunal were created. Although the Review Commission may not, in its early stages, have developed expertise in deciding, for example, what constitutes administrative probable cause and a reasonable inspection under the Act, the thought that expertise on those issues will be developed by the Review Commission reinforces our conclusion that exhaustion of administrative remedies is required in this case.

We are not persuaded by any of the reasons advanced by Babcock to excuse it from the general rule of exhaustion of administrative remedies. Indeed, an examination of the congressional purpose in establishing OSHA convinces us that application of the rule is essential if the Act is to accomplish its goal.

Congress found that "personal injuries and illnesses arising out of work situations imposed a substantial burden upon, and were a hindrance to, interstate commerce . . . ."*fn44 It therefore declared its purpose and policy to "assure so far as possible every working man and woman in the Nation safe and healthful working conditions."*fn45 To balance the need for "swift issuance of abatement orders to protect employees endangered by the conditions of their work"*fn46 with the requirements of due process to employer and employee alike, the Review Commission was established to carry out the Act's adjudicatory functions.

Were an employer given the power to invoke the district court's jurisdiction on the eve of a scheduled hearing before the Review Commission whenever an inspection warrant is challenged on constitutional grounds, we might well sunder the statutory balance between swift abatement of dangerous conditions and due process protections. As the Court of Appeals for the First Circuit stated: "The practice of considering motions to suppress in proceedings separate from the proceedings at which the evidence would be used would afford much opportunity for abuse for dilatory purposes, to the detriment and possible disruption of effective law enforcement."*fn47

The district court's order denying Babcock's motion to quash the warrants and dismissing the company's complaint for declaratory and injunctive relief will be affirmed.


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