Opinion
No. 5-844 / 04-1763
Filed January 19, 2006
Appeal from the Iowa District Court for Polk County, Glenn E. Pille, Judge.
Respondents appeal from the district court's ruling on judicial review reversing the Employment Appeal Board's decision upholding a citation against the petitioner for serious violations of the Iowa Occupational Safety and Health Act. AFFIRMED.
Rick Autry and Gail Sheridan-Lucht, Des Moines, for appellants.
Mark Godwin, Deputy City Attorney, Des Moines, for appellee.
Heard by Huitink, P.J., and Mahan and Hecht, JJ.
The Iowa Labor Commissioner and the Employment Appeal Board (Board or Respondents) appeal the district court's ruling on judicial review reversing the Board's decision upholding a citation against the City of Des Moines for serious violations of the Iowa Occupational Safety and Health Act (IOSHA).
I. Introduction
The issues in this case revolve around the Commissioner's decision to apply IOSHA general industry standards, rather than construction standards, when issuing citations to the City. Therefore, we include a brief overview of these standards to aid in our analysis.
The United States Congress gave the Federal Occupational Safety and Health Administration (OSHA) authority to promulgate occupational health and safety standards by regulation. See 29 U.S.C. § 655. Pursuant to this authority, the federal OSHA issued general industry standards. See 29 C.F.R. Pt. § 1910. These rules have been adopted by reference in Iowa. Iowa Admin. Code r. 875-10.20. The federal OSHA has also issued safety and health regulations for construction. See 29 C.F.R. Pt. 1926. The construction regulations apply to any place of employment where construction work is performed. See 29 C.F.R. 1910.12(a). The construction regulations have also been adopted by reference in Iowa. Iowa Admin. Code r. 875-26.1; see also id. 875-10.12(1) (providing that the standards prescribed in 875-Chapter 26 "are adopted as safety and health standards and shall apply . . . to every employment and place of employment and of every employee engaged in construction work"). The administrative rule defines "construction work," for the purpose of rule 875-10.12, as:
work for construction, alteration, or repair including painting and redecorating, and where applicable, the erection of new electrical transmission and distribution lines and equipment, and the alteration, conversion, and improvement of the existing transmission and distribution lines and equipment.
Iowa Admin. Code r. 875-10.12(2). II. Background Facts and Proceedings
The federal regulations include a similar definition of "construction work." See 29 C.F.R. § 1910.12(b) (defining "construction work" as "work for construction, alteration, and/or repair, including painting and decorating").
In December 2001 the Iowa Department of Natural Resources (DNR) issued a "Report of Investigation" which noted "chronic problems" with illegal discharge from the City's sewer system into Dean's Lake. The report required the City to make repairs and upgrades to its sewer system to stop the illegal discharge. Prior to receipt of the DNR report, the City had not planned or anticipated making the required repairs or upgrades. The work was contracted out to Insituform Technologies USA, Inc., through a competitive bidding process. Insituform would place "fillets" in the bottom of the sewer and then insert a felt liner containing a resin material that would be heat-activated (or "cured-in-place") to expand within the pipe. The repairs would change the rectangular-shaped sewer to a more rounded shape.
Insituform contractually agreed to comply with federal and state OSHA requirements. The City monitored the project's progress through a construction inspector, Chester Van Buskirk, who was supervised by the construction inspection supervisor, Marty McKinnie. No City employees worked in or near the sewer while it was being repaired. Insituform controlled construction and safety at the work site.
In July 2002, two Insituform employees drowned after they were overcome by fumes from an unidentified sewer gas. Five other workers were seriously injured. Following an investigation, IOSH Administrator Mary L. Bryant issued a citation in September 2002, alleging two serious violations of the IOSHA. Specifically, the citation alleged serious violations of IOSHA standards 1910.146(c)(8)(i) and (iii), and proposed a civil penalty of $4,500 for each violation.
The standards provide as follows:
When an employer (host employer) arranges to have employees of another employer (contractor) perform work that involved permit space entry, the host employer shall:
(i) Inform the contractor that the workplace contains permit spaces and that permit space entry is allowed only through compliance with a permit space program meeting the requirements of this section [1910.146(c)(8)]
. . . .
(iii) Apprise the contractor of any precautions or procedures that the host employer has implemented for the protection of employees in or near permit spaces where contractor personnel will be working.
29 CFR § 1910.146(c)(8); see also Iowa Admin. Code r. 875-10.20 (adopting by reference the Federal Occupational Safety and Health Standards of 29 CFR Part 1910).
The City contested the citations. A hearing was held on October 23-24, 2003, before an administrative law judge. At the hearing, the parties entered into evidence the following written stipulation:
The parties hereby agree and stipulate that the City of Des Moines did not perform the actions required by the regulations referenced in the citation issued against the City, as to Item 1 and as to Item 2. Namely, the City of Des Moines did not exchange its confined space entry procedure with Insituform and the City of Des Moines did not inform Insituform of the procedures the City undertook when entering that confined space. This stipulation should not be construed as acquiescence in the citations by the City, as the City had proffered a number of defenses to the citation items which will be the subject of this hearing on this matter.
Kenneth Clausen, a compliance safety and health officer for IOSHA who inspected the work site following the accident, testified he relied on two documents in determining that the City came under the general industry standards of 29 CFR Part 1910, rather than construction standards of section 29 CFR Part 1926. The first, Exhibit 7, was a compliance directive, CPL 2.100, issued by the federal OSHA on May 5, 1995. The CPL, entitled "Application of the Permit-Required Confined Spaces (PRCS) Standards, 29 CFR 1910.146," provided the following example of "maintenance" subject to the standard of 1910.146: "The relining of a sewer line using a sleeve which is pushed through a section of the existing system is maintenance." Exhibit 30, a "Federal Program Change Two-Way Memo," dated May 8, 1995, and signed by IOSH Administrator Mary Bryant, indicated "The State of Iowa will adopt OSHA Instruction CPL 2.100 . . . in its entirety."
According to Bryant, a CPL "establishes enforcement policy and provides explanation of the standard to insure uniform enforcement." When the federal OSHA issues a CPL, the State receives a memorandum from the federal OSHA asking if the State will adopt the CPL as written or write its own CPL, which would be as effective as the federal CPL. According to Bryant, a CPL would have greater authority than an interpretation "simply because we have to officially adopt them." CPLs are accessed primarily through the Internet using the federal OSHA website; IOSHA also receives hard copies from the federal OSHA. The federal OSHA website does not indicate whether a CPL has been adopted by Iowa.
The second document on which Clausen relied was Exhibit 8, a standard interpretation from the federal OSHA entitled "Confined spaces: use of rescue-type SCBAs [self-contained breathing apparatus]; maintenance vs. construction," dated April 12, 1996. The document listed several examples of maintenance operations, including "Relining of a sewer line using a sleeve which is pushed through a section of the existing system."
IOSH Administrator Mary Bryant testified she relied exclusively on Exhibits 7 and 8 in determining to apply general industry standards in this case.
At the hearing, the City introduced similar federal authority upon which IOSHA could have relied in making a construction versus maintenance determination: Exhibits D (Standard Interpretation "Construction vs. Maintenance," dated August 11, 1994); E (Standard Interpretation "Rehabilitation of a sewer tunnel constructed in the years between 1926 and 1932," dated January 29, 1991); and W (Standard Interpretation, "The difference between maintenance and construction; scaffold inspection requirements; and definition of periodic scaffold inspection," dated February 1, 1999). Statements in these Standard Interpretations contradict the conclusion that the sewer project was maintenance, rather than construction.
The ALJ entered a decision on January 6, 2004, amending the citation to show "other than serious" violations, affirming the amended citation and reducing the penalty to $2,500 total. The ALJ concluded the City was subject to the provisions of general industry standard 1910.146. The ALJ further concluded the commissioner could rely on CPL 2.100 "as a guide," even if not indexed as required by Iowa Code section 17A.3. The ALJ reduced the violations from "serious" to "other than serious" and combined the two violations for penalty purposes, ordering the City to pay a penalty of $2,500 to the commissioner.
The City appealed the decision to the Board. The Board modified the ALJ's decision, amending the "other than serious" violations to "serious" violations and reinstating the original $9,000 penalty. The Board concluded: (1) the commissioner's use of Exhibits 7 and 8 "as a guide" was proper, and the Board's use of the information in these exhibits did not constitute improper rulemaking; (2) the City was subject to general industry standards, not construction standards; and (3) the City was "host employer" for purposes of section 1910.146(c)(8); therefore, it had a responsibility to comply with the standards of sections 1910.146(c)(8)(i) and (iii).
The City petitioned for judicial review. The district court's ruling reversed the Board's decision and voided the citations. The district court concluded (1) the use of Exhibits 7 and 8 by the Board constituted an abuse of discretion and illegal rulemaking in violation of Iowa Code section 17A.3; (2) the work performed by Insituform was construction, not maintenance; and (3) the City was not liable as a "host employer" because, under the terms of the contract between the City and Insituform, Insituform had complete control over the work site, including work site safety and the actual construction process.
Respondents appeal, raising the following issues:
1. The Board did not violate Iowa Code section 17A.3 when it concluded Exhibits 7 and 8 could be used as a guide to interpreting the IOSHA.
2. The Board properly concluded the City was a "host employer" for purposes of 29 CFR section 1910.146.
3. Substantial evidence supports the Board's conclusion that the general industry confined space standard ( 29 CFR § 1910.146) applied to the City.III. Standard of Review
Our review is governed by the Iowa Administrative Procedure Act, Iowa Code chapter 17A. See Iowa Code § 88.9(1) (2003). The district court functions in an appellate capacity in exercising its judicial review power. Hill v. Fleetguard, Inc., ___ N.W.2d ___, ___ (Iowa 2005). When reviewing the district court's decision, we apply the standards of chapter 17A to determine whether the conclusions we reach are the same as those of the district court. Id. We affirm if the conclusions are the same; otherwise we reverse. Id. The agency's findings of fact are binding on us if they are supported by substantial evidence. Fears v. Iowa Dep't of Human Servs., 382 N.W.2d 473, 475 (Iowa Ct. App. 1985). "However, neither we nor the district court is bound by the agency's legal conclusions." Id. IV. Iowa Code section 17A.3
Iowa Code section 17A.3(2) (2003) requires that, in order to be effective against any person or party, or invoked by the agency, any agency rule, written statements of law or policy, interpretation, order, decision, or opinion must be made available for public inspection and indexed as required by sections 17A.3(1)(d) and (e). "The provision is intended to prohibit undisclosed but authoritative interpretations of law or policy that are equivalent to secret rulemaking." Doe v. Iowa State Bd. of Physical Therapy Occupational Therapy Exam'rs, 320 N.W.2d 557, 561 (Iowa 1982). Administrative rules specifically impose similar indexing and public inspection requirements on the Commissioner. See Iowa Admin. Code r. 875-1.46.
The Board concluded the Commissioner's use of Exhibits 7 and 8 "as a guide" was proper. In particular, the Board found IOSH Administrator Bryant
provided ample evidence to support the agency's basis for both citations pointing out that CPL 2.100 (Exhibit 7) which has been adopted by the State of Iowa (Exhibit 30), set forth the guidelines as to what standard is applicable to the type of work for which the [City] hired the contractor to perform.
On judicial review, the district court concluded the use of the federal OSHA directive (Exhibit 7) and standard interpretation (Exhibit 8) constituted an abuse of discretion and unlawful rulemaking in violation of section 17A.3. We agree.
Appellants contend the Board's reliance on federal interpretations of federal OSHA regulations was neither "undisclosed" nor "authoritative." We disagree. Certainly the information was undisclosed. The availability of such information on the federal OSHA website fails to satisfy the requirements of section 17A.3, as it does not inform the general public which interpretations the State has adopted.
The record does not support the Board's conclusion that Exhibit 7 "has been adopted by the State of Iowa." Exhibit 30, a "Federal Program Change Two-Way Memo," indicated the State of Iowa "will adopt" federal OSHA compliance directive CPL 2.100 (Exhibit 7), but nothing in the record indicates the directive was actually adopted. If the directive was indeed adopted, section 17A.3 requires that it be indexed and made available to the public.
Moreover, we conclude the Board's reliance on Exhibit 7 was "authoritative." The Board cited to and quoted only this exhibit in reaching its conclusion that the work performed in this case fell within the general industry standards, rather than the construction standards.
We affirm the district court on this issue.
V. General Industry or Construction Standard
By relying solely on unindexed federal directives, the Board failed to consider the agency's own definition for "construction work," which is defined as "work for construction, alteration, or repair." Iowa Admin. Code r. 875-10.12(2). The record in this case supports a conclusion that the work performed by Insituform in this case fell within the agency's definition of "construction work." The work was not scheduled or planned; rather, it was work to comply with the DNR report requiring the City to repair the sewer and prevent further illegal discharge into Dean's Lake. The work performed by Insituform altered the shape of the sewer. The parties treated the project as a construction project, as evidenced by the contractual relationship and the use of City construction inspectors to monitor the project's progress.
Because the work performed by Insituform falls within the definition of "construction work," the safety and health regulations for construction work should have been applied. See Iowa Admin. Code r. 875-10.12(1). The Board's decision approving of a citation under the general industry standard was improper and not supported by substantial evidence. We affirm the district court on this issue.
Our resolution of this issue renders it unnecessary for us to determine whether the City was a "host employer" for purposes of the general industry standard of 29 CFR section 1910.146(c)(8).
We affirm the district court's ruling reversing the Board's decision and voiding the citations against the City.