Cases by Issue - Occupational Safety and Health Act

Chao v. Mallard Bay Drilling, Inc. - Oral Argument

Fri, 09 Jan 2009 14:50:21 +0000

Case:

Chao v. Mallard Bay Drilling, Inc.

Media File:

00-927_20011031-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Matthew D. Roberts

Mr. Roberts: Mr. Chief Justice, and may it please the Court: This case arises out of an explosion that killed four employees on a drilling barge on the inland waters of Louisiana.

The barge is not inspected for certification by the Coast Guard, which therefore has almost no regulations that address occupational safety and health on the barge.

The question presented is whether the Coast Guard has, nonetheless, exercised authority over the working conditions on the barge so as to displace application of the Occupational Safety and Health Act.

Justice O'Connor: Well, Mr. Roberts, the Coast Guard does have regulations, though, that require an emergency plan and fire control devices.

Mr. Roberts: Not... not that apply to this vessel, Your Honor.

The... the only occupational... the only regulations addressed to occupational safety and health issues on this barge that have been identified by respondent and its amici are regulations that address risk from the marine sanitation devices, or the toilets, on the vessel.

The only other regulation of which I'm aware that deals with occupational safety and health is a regulation that... that addresses operating the vessel while intoxicated.

Those regulations... there are regulations that address emergency procedures on inspected vessels, but not on this type of uninspected vessel.

Justice Kennedy: Fire safety regulations are... are different from... from--

Mr. Roberts: No, no.

There are no fire and safety regulations on... on this vessel, Your Honor.

There are some specific fire and safety regulations required by some statutes on particular types of vessels, particularly vessels propelled by machinery.

Those are the ones covered by... by 46 U.S.C. 4102.

Justice O'Connor: --Well, if... if the Coast Guard has regulations that try to contain a hazardous event, after it occurs, as opposed to regulations trying to prevent it in the first place, do you say that the containment approach just doesn't qualify under this statute as a Coast Guard regulation?

Mr. Roberts: No, Your Honor, but... but with respect to... to this vessel, as I... as I was saying, they don't have such regulations.

The... the containment approach would... would qualify, although if... if a regulation was addressed to preventing a fire for occurring, that would address a... a different... a different hazard than a regulation that was addressed to responding to that after the fire had occurred and... and could be put out.

But... but here, the Coast Guard has not exercised statutory authority over the working conditions involved in this case, and under section 4(b)(1) of the act, the--

Justice Ginsburg: Mr. Roberts, do you think you could explain to us... just go back to the basics.

What is the difference between an inspected vessel and an uninspected--

And also, you introduced just now not this type of an inspection.

So, there are subcategories within an inspection.

If you could just tell us what fills those categories--

Mr. Roberts: --Yes.

Yes, Your Honor.

First, to... to start at the... the beginning of your question, there are certain categories of vessels that are listed under the statute as inspected vessels and with respect... under Coast Guard statutes as inspected vessels.

On those vessels, the Coast Guard inspects them at the beginning and then periodically for certification that they're in satisfactory condition, fit for the service for which they're intended and seaworthy.

The Coast Guard also has comprehensive regulatory authority over those vessels, and it's exercised that authority comprehensively over those vessels.

So, for those vessels, the Secretary and the Coast Guard agree the... the Occupational Safety and Health Act doesn't apply.

Then there's another set of vessels--

Justice Kennedy: --May I... may I interrupt you right there?

And I don't want to interrupt this whole answer.

Does... OSHA doesn't apply just as to those measures... just as to those working conditions on those vessels that have been covered?

Suppose OSHA has a regulation about kitchens.

You have to have guards on the carving knives or something.

And the Coast Guard, on an inspected vessel, does not have that provision.

Under the scheme, as it works, can OSHA regulate the... the kitchen knife problem, or... or is it completely displaced?

Because--

Mr. Roberts: --It's completely displaced on the inspected vessels because the Coast Guard has comprehensive authority over those and has exercised its comprehensive authority on the inspected vessels by promulgating comprehensive regulations, and those regulations include specific ones addressing specific hazards, as well as general provisions such as the one that I was referring to that requires that the vessels be fit for the service that they're intended and safe and seaworthy.

And therefore, with respect to those, all the working conditions are covered either by the specifics or by the general, and the OSH Act does not apply.

But what we're concerned with in this case is a... is a vessel on which... over which the Coast Guard has much more limited authority and with respect to which it... it has authority to and has regulated only very specific conditions.

Justice Kennedy: --Getting back to the inspected vessels, because this might have a bearing on... on how we write the opinion in this case, even though it's uninspected.

Are there instances in which there are... there is concurrent jurisdiction between the Coast Guard and OSHA on inspected vessels?

Mr. Roberts: Not with respect to regulation in terms of setting occupational safety and health standards and enforcing occupational safety and health standards.

There is, with respect to reporting or investigation on inspected vessels... I mean, not... no.

I guess the answer is no.

Justice Kennedy: I hope I didn't take you too far off the track.

You were talking about inspected and uninspected vessels.

Mr. Roberts: To get back to the uninspected vessels that... that Justice Ginsburg had asked about and which is what we... we have in this case, on those vessels, there's very limited authority.

It flows from specific statutory grants that deal with specific items of safety.

And therefore, the Coast Guard regulation of working conditions on those vessels is spotty, depending on the statutory grants of authority.

And as I said before, on... this particular type of inspected vessel is a... is an inland drilling barge, and on this barge there... the statutory authority doesn't give the Coast Guard authority to require fire extinguishers or... or those kind of things, and it gives the Coast Guard no authority over the hazards from oil and gas drilling, which are the hazards involved in this... in this case.

Justice Ginsburg: But some... some uninspected are more closely watched?

Mr. Roberts: Some uninspected are more closely watched, and we... we would submit that no uninspected vessel is comprehensively watched as to occupational safety and health.

But that... the Court doesn't need to... to get into that to... to resolve this case.

All... all we're asking here is that the Court reject the holding of the Fifth Circuit, which is that there's an industry-wide exemption for all seamen on all vessels from the Occupational Safety and Health Act, even in situations where the Coast Guard has not regulated the particular working conditions on that vessel and the particular working conditions that result in the occupational and safety and health citation in the... in that case.

Justice Ginsburg: How could one know that this is a little-inspected vessel, as... as distinguished from uninspected but more inspected?

Mr. Roberts: Well, there are different types of... of uninspected vessels, and the... depending on the type, different sets of regulations apply to them.

And the vessel operators are well aware of what regulations apply to them.

But... but on all uninspected vessels, it doesn't really matter whether it's little or more, because the way the statutory scheme works is that the Coast Guard regulations that govern them apply to them.

And the OSHA standards apply to the extent that the working conditions are not covered by Coast Guard regulations.

And that comes from the... the language of section 4(b)(1) of the OSH Act, which makes clear that displacement of the act is limited to those working conditions with respect to which other agencies exercise authority to prescribe or enforce occupational safety and health standards.

That--

Justice O'Connor: Now, Mr. Roberts, it seemed to me here the administrative law judge seemed to say that the OSHA regulations were not preempted because the Coast Guard didn't require precisely the same thing that OSHA did.

And I would have thought it was a much more general proposition, that if the Coast Guard adopted some general regulations in this area, that's enough, and that you wouldn't look to see how closely OSHA's regs matched in every detail the Coast Guard regs.

What is the Government's view?

Mr. Roberts: --The Government's view is that you don't look to see if there's precisely the same regulation in precisely the same manner of the same... the same degree of stringency.

You look to see whether the... whether there is a regulation on the part of the Coast Guard that addresses the same working conditions, the same hazards that are involved.

And if there are, then no matter whether that's more stringent, less stringent, or goes about it in a different way, it's displaced.

But here there's no regulation that addresses this hazard--

Justice O'Connor: Apparently both the Coast Guard and OSHA agree here.

Mr. Roberts: --Yes, they agree.

And the agencies, not only the Coast Guard and OSHA, but other agencies where this comes up, are... have been in agreement.

These kinds of disputes about coverage haven't arisen because the agencies have been disputing about what... when it applies and when it doesn't and what working conditions are covered by their different regulations.

They've arisen when employers have asserted that the OSH Act doesn't apply so that nobody... there would be no regulations covering--

Chief Justice Rehnquist: How much of a dispute would survive the Solicitor General's review of the two agencies' decision?

Mr. Roberts: --Well, we didn't... we didn't need to resolve any dispute because there's been a longstanding understanding between the two agencies, based on the language of the OSH Act, as to how the... how the two... the authority of each agency interacts with the other.

Justice Kennedy: If I can go back to inspected vessels just for 1 minute.

I thought the answer you would give me to the question about, you know, the kitchen knives would be just what you told Justice O'Connor now with reference to the uninspected vessels, that we look to see if the working condition is regulated.

Or maybe I just misunderstood your answer.

Was your answer to the effect that on inspected vessels, generally, all working conditions are regulated, or at least they've been looked at and there's been a decision not to regulate and that's sufficient to displace OSHA?

Mr. Roberts: Yes.

Yes, Your Honor.

It's the same--

Justice Kennedy: That's the best understanding--

Mr. Roberts: --My answer was intended to say the same thing, that at bottom, the same test applies whether the particular working conditions have been addressed, but with respect to inspected vessels, the working conditions have been addressed comprehensively by the Coast Guard through specific regulations and through general regulations.

And so, there aren't... there aren't any gaps where workers would be unprotected that the OSH Act would need to... to step in.

But on uninspected vessels, the... the situation is quite... quite the reverse and almost the polar opposite where there aren't just little gaps, but there are potentially whole vessels that are almost completely unregulated with respect to occupational safety and health.

So, the industry-wide exemption that the Fifth Circuit has crafted here would, as a result, leave many workers unprotected from many hazardous conditions and... and really frustrate the express purpose of the act which is to assure, insofar as possible that every working man and woman in the Nation has safe and healthful working conditions.

And moreover, to... even if there was any ambiguity about how the statutory scheme should work, from looking at its text and from looking at the... and from the fundamental purpose of the act, the Secretary has interpreted the act this way for 30 years.

It's been the Secretary's longstanding and consisted view.

It's reflected in citations over those 30 years and regulations that the Secretary promulgated in 1972 in a statutorily mandated report to Congress on coordination between the OSH Act and other laws that the Secretary submitted in 1980.

And the Secretary's view would be... would be entitled to deference.

Justice Souter: --That... that view is also expressed in the... in the joint agreement.

What... could you tell me... I should know this, but I just don't... how was the joint agreement promulgated, if it was?

Or is it simply just a private memorandum of understanding exchanged between the two agencies?

Mr. Roberts: It was published in the... in the Federal Register at... at the time that it was... it was entered into, Your Honor.

To... to... without... without belaboring the point, turning to the facts that are here briefly, the respondent does not dispute that the Coast Guard hasn't addressed the particular hazards involved here.

And as I said before, the only regulations that respondent and amici have... have pointed to that address the working conditions here are... are very limited, those addressing the marine sanitation devices, and there is in fact almost no regulation here, so that under any understanding of the term working conditions, any reasonable understanding of what working conditions is under the statute, the Coast Guard hasn't exercised authority over the working conditions here.

Justice Souter: I take it the reason you say we don't have to get into the distinction between the... the hazard view and the area view is that the area view has been interpreted, I think as you put it, narrowly to take into consideration the particular area in which the particular hazard occurs.

Is that about--

Mr. Roberts: That's... that's one... one reason.

If... if the area view was interpreted broadly, it would, in effect, completely eviscerate--

Justice Souter: --Yes.

Mr. Roberts: --the act because it would mean that the regulations of the toilets preempt the... any regulation of the vessel and expose all those... all the hazards that might exist on the vessel would not be subject to... to regulation.

So, it has been interpreted narrowly.

Justice Souter: I... I guess my only question is, given that narrow interpretation, I wonder if there is all that much difference between the hazard view and the... and the area view as it has been... been stated.

Mr. Roberts: Well, I... I think that... that there is the potential for... for different results to arise between the two views, even with the... the narrow interpretation of... of the area view because the area is identified, say, as the... the atmosphere on the boat.

The atmosphere might be regulated by the Coast Guard with respect to particular injuries that... that might be caused by problems in the atmosphere like explosion, which it isn't here, but assume that it were.

Yet, it wouldn't be regulated for... for other problems that might result from that like respiratory problems, particles that would be in the atmosphere that would get into the... the workers' lungs.

Chief Justice Rehnquist: Are you saying that the regulations just have to be an exact... if the regulation is not an exact duplicate of what OSHA would do, it isn't covered?

Mr. Roberts: No, Your Honor.

Not that it... that it has to be an exact duplicate, but that it has to address the same injury, the same kind of injury from the same source in essence.

Chief Justice Rehnquist: So, if you regulate smoke... if the Coast Guard regulates smoke because of some reasons but doesn't address the particulates in the smoke, OSHA could come in and have a regulation for smoke coming out of the vessel?

Mr. Roberts: Yes, if... if the Coast Guard's regulation didn't address the injury... the particular injury that would result from the smoke, that the... that the OSHA regulation was trying to--

Chief Justice Rehnquist: Well, what if the--

Mr. Roberts: --to get at.

Chief Justice Rehnquist: --Coast Guard regulations said that we're going to regulate this aspect of smoke.

Insofar as particulates are concerned, we think seamen are... can take particulates.

Mr. Roberts: If the Coast Guard had made that determination and expressly concluded that a regulation of that was not warranted, then that would be an exercise of its authority over... over that working condition and the OSH Act would be displaced.

But there's no... no contention that... that that is what happened here, and there couldn't be because the Coast Guard doesn't even have authority to regulate the hazards that are involved... involved here, Your Honor.

If there are no further questions, I'll reserve the remainder of my time for rebuttal.

Argument of Patrick J. Veters

Chief Justice Rehnquist: Very well, Mr. Roberts.

Mr. Veters, we'll hear from you.

Mr. Veters: Thank you, Mr. Chief Justice, and may it please the Court: The Coast Guard has absolute authority to regulate uninspected vessels, as well inspected vessels, and there's not one iota of difference between the two.

Justice O'Connor, if I could go to your question earlier, you're absolutely correct.

The ALJ in this case said that we did not... the Coast Guard did not have a statute that mirrored the language of... of the OSH Act.

As a result thereof, she concluded that the act was displaced.

Justice O'Connor: Yes.

It sounds like the ALJ's description was probably... didn't get it quite right, and I take it that your opposing counsel here concedes as much.

Mr. Veters: I would hope so, Your Honor.

And, Your Honor, to get right to the point, with all due respect to counsel, the Coast Guard has absolutely regulated emergency response.

46 C.F.R. 26.

Operators of inspected vessels must prepare and post an emergency checkoff list.

Justice O'Connor: Now, where are you... you're reading from a Coast Guard regulation?

Mr. Veters: Yes, sir, Your Honor.

Chief Justice Rehnquist: Where... where will we find it in the papers?

Mr. Veters: We'll find that on page 13 of the amicus brief on behalf of the AWO, Your Honor.

They had... they require an... quote, an emergency checkoff list.

Justice Souter: Now, is this for uninspected vessels?

Mr. Veters: For uninspected vessels, Your Honor, operators of uninspected vessels covering emergencies, including rough weather, crossing hazardous bars, man overboard, as well as fire at sea.

We have a parallel regulation.

It doesn't read verbatim as the OSH Act, but clearly it has been addressed.

But to go back to Justice O'Connor's question, that is not even required by the Coast Guard for preemption purposes.

The Coast Guard has a statute... the OSH Act, 4(b)(1) reads that it will not apply to working conditions that are... so long as the other Federal agency exercises statutory authority.

The Coast Guard has exercised statutory authority.

It's not a question of degrees in the statute.

It's not light exercise, moderate exercise, or heavy exercise.

It's once there has been exercise by a Federal agency such as the Coast Guard, the OSH Act is displaced.

Justice Ginsburg: Well, there's a difference between having statutory authority and discretion to exercise it.

And the Coast Guard may have statutory authority which it chooses not to exercise.

But on... to the extent that I understand, your argument is if the Coast Guard has authority and exercises it to any extent, then that's preempted.

Is that... do I understand that?

Mr. Veters: That's... that's fairly correct, Your Honor.

And... and the only question... the Government is mischaracterizing the extent of regulation in this case.

You cannot tell... in this case, the Coast Guard... there is no gap in coverage for... for worker safety.

The Coast Guard stepped in and investigated a serious marine accident pursuant to 46 U.S.C. 63.

We had multiple deaths.

We had multiple injuries.

We had property damage in excess of $100,000.

Three Coast Guard investigators came out over a 6-month period.

They got control of this well, of this blowout situation, and they exercised their authority.

Chief Justice Rehnquist: But let's take a... perhaps a practical example in response to Justice Ginsburg's question.

Supposing all the Coast Guard had regulated here was marine toilets: don't dump your toilets into the navigable water.

Would you say that OSHA could not do anything then?

Mr. Veters: I would say that's an extreme example, Your Honor.

But, yes--

Chief Justice Rehnquist: Those are the... the kinds of examples that perhaps focus your attention.

Mr. Veters: --Your Honor, yes.

I would say that there has been an exercise of authority, and if... if OSHA has a complaint, it is not properly directed to the Court.

It's properly directed to Congress to have the Coast Guard promulgate regulations that address the needs of the seamen.

That's the proper complaint.

It's not for this Court to step in and give OSHA... carve out exception after exception where there are no express regulations.

If I may refer to Justice Kennedy's question, he's... you're absolutely correct.

OSHA gets... OSHA gets their jurisdiction in this case from a memorandum of understanding, a peace treaty, an informal memorandum that is not a delegation of law.

That memorandum says, Your Honor... it says... the memorandum of understanding says nothing in this MOU pertains to uninspected vessels.

That's what it says.

That does not disclaim Coast Guard regulation of inspected vessels, nor does it cede to the Government jurisdiction over uninspected vessels.

Your example about the kitchen knife is absolutely correct.

The Government has come in and said if the Coast Guard does not have an express provision... in this case, we did not have an express provision regarding the working conditions of the presence of natural gas in the atmosphere of an inland drilling barge... there's no such creature.

If... if the Coast Guard does not have that or if the Coast Guard does not articulate a policy that they will not regulate the presence of natural gas in the atmosphere of an inland drilling barge, then OSHA can step in and regulate that.

OSHA can step--

Justice Kennedy: Well, but it seems to me to that that argument... that position of the Government is just consistent with the statute because the... the statute applies to working conditions.

Mr. Veters: --Correct.

Justice Kennedy: And I... I would be surprised if the Coast Guard had regulations on... on drilling barges that related to... to blowout preventers, mud cavity depressors, chemical mixturing material for mud, drilling bits.

That's... that's OSHA stuff not Coast Guard stuff.

Mr. Veters: Well, Your Honor, they... what the Coast Guard has is broad, general authority according to 14 U.S.C. 2, and they can board an uninspected vessel.

They can inspect... they can investigate any uninspected vessel on the navigable waters of the United States.

They can seize it partially or seize it fully.

They can take an uninspected barge out of service if it poses a danger or threat to property or persons.

It can even sink an uninspected barge if it's a threat to property or... or life.

With that being said, the Coast Guard does not have to... to have every minute regulation that tailors that of the OSH Act to... to assert their authority in this case.

Justice Breyer: Well, but they said... the Government said, for example, in respect to the... the regulations that you cited having to do with safety on page 13--

Mr. Veters: Yes, sir.

Justice Breyer: --where they said that part 27, which is what you were quoting from, applies only to towing vessels, that it didn't apply to barges.

So, that's what they said in their reply brief.

And you're dealing with a barge.

So, when we look through this, it seemed to me that their claim... and I'd ask you if that isn't right... that... that the only... the only Coast Guard things that seem to apply at all to the barges, an uninspected barge, had to do with fire extinguishers, life preservers, ventilation for tanks and engines, and also a general requirement that when there's an accident, they look into it to see if a law has been violated.

Mr. Veters: I would disagree.

Justice Breyer: Is that right?

Which are the ones, in addition to those that do apply?

Mr. Veters: Those do apply under the subchapter C uninspected vessels.

But we submit, Your Honor, 46 C.F.R. 24, 25, and 26 apply to all uninspected vessels.

And not only that, Your Honor, the important thing is there are many regulations that apply to both uninspected vessels--

Justice Breyer: Well, I'm just saying which ones apply--

Mr. Veters: --Which ones.

Justice Breyer: --other than the ones I listed.

Mr. Veters: Your Honor--

Justice Breyer: I mean, you know, they go through this in a big appendix, and... and are they wrong in their appendix?

Mr. Veters: --Yes, I think they're reading--

Justice Breyer: Which... which part of the appendix is wrong?

Mr. Veters: --I think they're reading the... the statutes too narrowly, Your Honor.

I would submit 33 C.F.R., part 160.

It's... that governs ports and waterways safety.

It applies to all vessels.

That... under that statute, inspected as well as uninspected, the Coast Guard can deny entry to a port.

It can seize a vessel that it feels is operating unsafely.

It can tell the operator of that vessel how to operate that vessel.

It can take that vessel out of service.

It doesn't... it doesn't come under the subchapter of uninspected vessels, yet the authority is very broad.

It's just like the... the drug testing of people that have accidents, Your Honor.

Any--

Justice Breyer: Okay, 160.

Is there any other one that you think that they're wrong about?

Mr. Veters: --Yes.

I think the COLLREGS, Your Honor.

The... the--

Justice Breyer: Well, you better tell me the... I mean, you know, I'm just checking them and I'll look up later.

Mr. Veters: --Okay.

Your Honor, I don't have the... the COLLREGS, what we call the rules of the road, but it's the navigational rules that apply to vessels as well as uninspected vessels.

Clearly, there are rules that apply to both species.

These... these regulations are designed to prevent collisions and to prevent accidents and injuries to seamen.

They... that's another example of rules articulated that are... that govern the working conditions--

Justice Breyer: What I'm getting at is that they... let's say a few minimal applications... applied to the Belden, all right, which is, I take it, your... your barge, to Mr. Belden.

Mr. Veters: --Yes, Your Honor.

Justice Breyer: And they have a big appendix designed to show that.

And if their appendix is right, they're right.

So, I want to check the ones that you disagree with about that appendix, so I can go back and look them up.

What I've looked up so far, I've checked section 160.

I'll go look that up.

Is there any other thing I should check?

Mr. Veters: Your Honor, I don't have their appendix in front of me, but yes, I would go... we have... we have a list of regulations that we've... we've applied to--

Justice Breyer: I know and they went through those, and they went and said that every one of those that you say, by and large, don't apply with certain exceptions.

So, I'm just going to make my work a little easier--

Mr. Veters: --Oh, I understand, Your Honor.

Justice Breyer: --to find out what I do have to look up and what I don't.

Mr. Veters: Your Honor, we would... we would submit that, yes, the ones we talk about 33 C.F.R., part 160 clearly applies.

We believe 46 C.F.R. 24, part 24, part 25, part 26 apply.

We believe the rules of the road, the COLLREG, related to navigation apply.

We believe the... the regulations concerning drug and alcohol testing, 46 C.F.R., part... part 16... they apply.

We believe 33 C.F.R., part 155; 33 C.F.R., part 81, navigation lights.

When this vessel is towed... it's a non-self-propelled barge... when it's towed out to location, Your Honor, it has to have certain navigation lights.

These are all application of specific regulations.

Justice Kennedy: But I don't know what that has to do with the complexity of a... of a well drilling operation.

It's just night and day.

There are separate working conditions that prevail to oil field operations that--

Mr. Veters: Your Honor, I think it does go back that... that this is actual exercise of authority by the Coast Guard.

Justice Kennedy: --But... but this applies to working conditions that... that I've just mentioned.

The statute says, with respect to working conditions.

Mr. Veters: Your Honor, we think the working conditions... I believe Justice Souter mentioned it... is clearly the working conditions on the barge itself.

I don't think you have to regulate... the thousands of potential working conditions that could be regulated cannot be addressed in minute detail.

This Court recognized 60 years ago in Southern Steamship--

Justice Kennedy: Well, that... that's OSHA's problem.

Mr. Veters: --Your Honor, I guess we haven't discussed is the relationship of master to seaman is entirely different from that of employer to employee.

Justice Souter: But before you get into that, I... I just want to touch base on one thing.

Your... your argument... your response to Justice Kennedy, as I understand it, depends on the point that you made in response to the Chief Justice's question.

If they are regulating marine toilets, then they are regulating for purposes of... of excluding OSHA jurisdiction.

If they're regulating in... in a later example that you used, running lights when the barge is being towed, then they're regulating to the exclusion of OSHA.

Period.

I mean, that's... that's the essence of your argument, and as I understand it, in response to Justice Kennedy, just as... as in response to the Chief.

Am I right?

Mr. Veters: Yes, Your Honor.

Justice Souter: Yes.

Mr. Veters: They have... they possess statutory authority to regulate and they have exercised that authority.

And they've emphasized it in a general way, maybe not in the same exact way OSHA does, maybe not as aggressively, but the preemption cases from this Court say that once there's been an exercise of statutory authority, we don't look at the quality of the regulations, we don't look at the consistency or the extent.

Justice Stevens: No, counsel, but isn't it true that what it really boils down to is whether rules of the road or navigation lights are regulations of working conditions?

Mr. Veters: I believe so, Your Honor.

If you work on a semi-submersible drilling rig and you're being towed at night and having the presence of navigation lights is to protect you from injury from a colliding vessel, I believe that does... that goes to health and safety of those seamen on that vessel.

I think it clearly does.

I don't think you can take very specific, you know, regulations... the working environment out... out at sea is very much different than it is at the, you know, manufacturing facility in New Jersey.

It's two different kind of... two different types of animals.

And that's why this Court has always considered seamen to be wards of the Court.

That's why they enacted the Jones Act for their protection, the... the warranty of unseaworthiness.

Seamen have been treated differently for as long as--

Chief Justice Rehnquist: But your client isn't a seaman.

It's an employer.

Mr. Veters: --It's an employer of seamen, Your Honor.

And one... one thing we haven't addressed also, Your Honor, I think the Fifth Circuit, which I would submit is the preeminent admiralty circuit court at least in this... in this country, has... has hit the nail on the head.

Adopting the definition of working conditions espoused by the Government would create an absolute disastrous and unworkable concept.

I do not think Congress in its wisdom could have ever intended that a barge within 3 miles is subject to... to OSHA jurisdiction.

As it leaves the 3-mile area, now it's not subject to OSHA jurisdiction, and in... within 3 miles and outside 3 miles, it is still subject to the jurisdiction of the United States Coast Guard.

Justice Ginsburg: Mr. Veters, that might have been a more persuasive argument if we didn't have 30 years of experience with this understanding between the... the two agencies.

So, what you describe as unworkable has apparently worked for some 30 years and it's open and notorious.

Congress hasn't stepped in to say, agencies, you've got it wrong.

Mr. Veters: No, Your Honor.

I believe that the MOU is important.

In this case, the... the OSHA inspector... it's in the trial transcript... who testified, where did you get your jurisdiction in this case?

He said, I looked at the memorandum of understanding and I came to the conclusion I had jurisdiction.

The Fifth Circuit is correct.

14 U.S.C. 2, the enabling statute of the Coast Guard, says it covers all matters not delegated by law specifically to some of the Federal agencies.

Two Federal agencies cannot contravene--

Justice Ginsburg: You're now addressing a different question, whether there's any statutory authority for this arrangement.

You're not addressing the question I asked you.

Mr. Veters: --I'm sorry, Your Honor.

Justice Ginsburg: Where is this massive confusion if for 30 years this has been in place and at least the agencies are telling us that... that it's working okay?

Mr. Veters: Your Honor, there's no confusion in the Fifth Circuit because the Fifth Circuit in the Clary cases and the Donovan cases says with respect to the working conditions of seamen, the OSH Act doesn't apply.

Period.

The confusion is in the Ninth Circuit.

The confusion is in the Eleventh Circuit when you have OSHA standards being applied to seamen.

And, Your Honor--

Justice Ginsburg: I thought you said... I thought you said that it confused it.

You could not have these two agencies... that there would be pandemonium out there by the people who are regulated.

Mr. Veters: --That's correct.

Justice Ginsburg: And the Government is telling us that's not so.

It's been that way for 30 years, and even the Clary case is what?

1980?

Mr. Veters: Yes, 1980.

Justice Ginsburg: The Government said, well, as they read it, that just goes to... it wasn't clear that it wasn't an inspected vessel.

Mr. Veters: No.

The Fifth Circuit had handled that, Your Honor, and said it was a special purpose drilling barge similar to the Mr. Belden.

And... and the Fifth Circuit was right.

It didn't matter if it was inspected or it wasn't inspected.

But, Your Honor, I would submit the Fifth Circuit is correct.

If you let two agencies regulate the working conditions of seamen and have OSHA come in with a nook and cranny theory and fill in gaps every place there's not a Coast Guard regulation, outside of the Fifth Circuit of the United States, you will have absolute confusion.

You will have redundancy.

Justice Ginsburg: --you've had it for 30 years outside the Fifth Circuit, and there hasn't apparently been this massive confusion.

Is the Government dissembling when it tells us that there hasn't been such confusion?

Mr. Veters: Your Honor, I think that we have three amicus briefs that were filed.

We have the American Waterways Operators and two other entities I think strongly urging this Court to adopt the position we're espousing for the very reason that they anticipate that, yes, that there will be confusion if there's two sets of regulations.

Marine operators have to know who to look to--

Justice Ginsburg: Well, why should it be anticipate since this has been going on so long?

Mr. Veters: --Your Honor, I would submit that there is... there has been confusion on this issue.

I... I would submit to you that where the OSH Act has... has supplanted or overreached into the area of the Coast Guard, there has been confusion.

But there has not been confusion in the Fifth Circuit, where we have the Mississippi River and the Gulf of Mexico, because marine operators know what the law is and they've been able to apply that.

Justice Souter: What about a... a kind of contrary parade of horribles to yours if... if we were to accept the Fifth Circuit view, and that is assuming that the Coast Guard regulates running lights and marine sanitation devices, as they were called, and things like that and does nothing more, and it does nothing more than it purports to do right now?

There's an enormous gap in... in safety coverage for a whole class of workers.

It seems to me very odd that Congress, in writing the... the statute that we're dealing with, would have intended such a kind of a huge gap in safety coverage.

What's your response to that?

Mr. Veters: Your Honor, I do not believe there is a huge gap.

They... as I had mentioned earlier--

Justice Souter: Well, if they... on your theory, if they... if the Coast Guard regulates running lights, OSHA can do absolutely nothing about blowouts like this, and that seems to me a pretty big gap.

Mr. Veters: --Your Honor, the... the Coast Guard has the absolute authority, statutory authority, to board, inspect, investigate any vessel they choose randomly at will, whatever they want to do, and to seize that vessel, to control it--

Justice Souter: If that were... if that were... I mean, if that were the answer to my problem, I would have expected Congress to tell the Coast Guard not only that it may regulate, but that it must.

I would have expected some statute that would in... in effect, have... have required or have extended as a matter of law Coast Guard regulation regardless of the Coast Guard's discretion.

But we have nothing like that.

What we have, on your theory, is regulation of running lights by the Coast Guard means safety in blowout situations is not covered by anything.

And... and that's what I find it difficult to believe that Congress could have intended.

Mr. Veters: --Your Honor, what... I go back to what I said earlier.

Under 14 U.S.C. 2, the Coast Guard has been charged with the responsibility of safety and life at sea.

If they are not doing their job, if they need to have more regulations, then yes, that is a question properly addressed to the Congress, not to this Court.

I respectfully submit that.

Then they have to go to Congress and say, we need more regulations in this area.

You need to do that.

Under the marine--

Justice Souter: Congress apparently has... has not been... been particularly concerned about the... the Secretary's interpretation of this statute and the... to the effect of the... OSHA jurisdiction.

And I gather that has been a... a subject of... of published standards for what?

15 years, 25 years now?

Mr. Veters: --Yes, Your Honor.

Justice Souter: So, if... if you say, well, if Congress doesn't like it, Congress can do something about it, Congress could do something about the... the administrative position and it hasn't done anything about it, which suggests that that's a... a good reason behind the rule of deference.

Mr. Veters: Your Honor, the rule of deference only applies if the... it is consistent with the intent of Congress and the statute is unambiguous in its intention.

I believe 14--

Justice Souter: And you say this is an unambiguous statute despite the... the presence of the word exercise there?

Mr. Veters: --I do, Your Honor.

I think the enabling act says, covering all matters not specifically delegated by law to some other Federal agencies.

It was enacted in 1915.

There's been no specific delegation by law to OSHA, and OSHA has assumed jurisdiction, so to speak, of uninspected barges through a private treaty, informal agreement between them and the Coast Guard.

That is improper.

The Fifth Circuit has said Federal modalities may not shift and exchange responsibilities between themselves.

If they want to go to Congress and they want to carve out an exemption for uninspected vessels in State territorial waters, they can do that.

The Congress can enact that, and I have no complaints.

But that cannot be something done between agencies among themselves, Your Honor.

And this--

Justice Breyer: The antitrust division and the FTC do it all the time.

Mr. Veters: --Your Honor, I can't speak--

Justice Breyer: Is that illegal too?

Mr. Veters: --I'm not an antitrust lawyer, Your Honor, about which I could... I could speak to that.

Justice Breyer: I mean, I just wondered how general statement was.

You mean in this instance they can't do it.

Mr. Veters: No.

Your Honor, if I could go back to what Justice Kennedy had said earlier, though, about the kitchen knives, I think he's absolutely correct.

The theory espoused by the Government, if there is not an express regulation for inspected vessels, inspected vessels being 900-foot passenger vessels, Your Honor, if there is... if there is not a Coast Guard regulation that... that specifically addresses kitchen knives, then under the theory espoused by the Government, OSHA can absolutely step in and regulate--

Justice Breyer: Well, that's why I wondered maybe it has to do how comprehensive the regulation was, and that's what I was interested in.

Mr. Veters: --Your Honor, they've just chosen... OSHA has chosen not to regulate inspected vessels pursuant to a memorandum of understanding, but it does not... it doesn't change the statutory scheme one bit.

Justice Breyer: Well, the word is exercise.

The word is exercise in the statute.

Mr. Veters: Yes, Your Honor.

Justice Breyer: So, if they decide not to exercise their authority, then I guess they're not exercising it.

Mr. Veters: You're right, Your Honor.

Justice Breyer: They can choose not to exercise it, I suppose.

If they're not exercising it, they're not.

Then the Coast Guard can come in.

I mean, that's what the statute says.

Mr. Veters: But, Your Honor, the statute doesn't say comprehensive, pervasive exercise; it says exercise.

And I think we give its plain meaning.

And... and if there's been an exercise of authority by one Federal agency, I think it will create confusion, I think it will create redundancy, and it will create a proliferation of regulations that are not needed.

Justice Ginsburg: So, if the Coast Guard didn't regulate the toilets, then OSHA could regulate it.

Mr. Veters: According to OSHA, Your Honor, that's correct.

But we say--

Justice Ginsburg: What about you?

I mean, you... you have said if they exercise any authority, that's it.

It's totally preemptive of what the regulate and what they don't regulate.

Suppose they don't exercise any authority at all.

Would this be just a no regulation plan?

Mr. Veters: --If there were no express--

Justice Ginsburg: If the Coast Guard didn't regulate anything on this particular class of uninspected vessels, then would there be authority in the Occupational Safety and Health--

Mr. Veters: --If there was just the mere possession of authority without the exercise, I would argue, Your Honor, that they still... the Coast Guard still has been charged with their responsibility and they still would have that responsibility.

They just were not doing their job.

But in this case, they have--

Justice Ginsburg: --But you don't... you don't put anything... I misunderstood your argument before.

I thought you said if they exercise any authority, then everything is preempted.

Mr. Veters: --Yes, Your Honor--

Justice Ginsburg: So, if they didn't choose to exercise any authority, that OSHA could... could regulate.

But now you're saying there is no authority at all with respect to these uninspected vessels in any agency other than the Coast Guard.

Is that what you're saying?

Mr. Veters: --That's correct, Your Honor.

I'm saying that the Coast Guard has absolute, exclusive jurisdiction over uninspected vessels.

They have the statutory authority and they have exercised the statutory authority through regulations.

Justice Souter: No, but... as I understand your theory now, it wouldn't matter even if they had not exercised it.

Mr. Veters: Your Honor, I'd say... I would agree with that.

I'd say that even if they had the possession of authority given to them by Congress and they choose, for whatever reason, not to exercise that, then the complaint is still not properly before this Court.

It's properly with Congress as to why they're not doing their job and to ensure that they do it or to take the jurisdiction away.

But that's not our case.

If you just look at the facts of this case, Your Honor, there was... there... there was no regulations regarding atmospheric presence of natural gas.

Yet, what did the Coast Guard do?

They immediately dispatched people to the scene.

They took control of the well.

They prevented pollution.

They saved lives.

They did a 6-month investigation.

OSHA did nothing.

OSHA came out to the site, turned around, never... never interviewed a... a crew member, never stepped foot aboard the Mr. Belden, and received in the mail a certified letter with respect to citations.

The Coast Guard did their job in this case, even though there's not express regulations and provisions in minute detail, and they continue to do that for any... any marine accident or any serious marine accident that fits the criteria of deaths, personal injuries, or property damage.

They do the job.

There... there is not this gap in coverage, Your Honor.

If there's a death on a vessel in navigable waters or an injury, whether it be an uninspected vessel of whatever length or... or something larger, the Coast Guard is charged with the responsibility to investigate.

And the Marine Safety Manual says, when they investigate, one of the other things they must do is to... to look at existing regulations to determine if there is a need for a change in the regulations, to supplement the regulations, or to leave them as they are because they have the expertise.

They've been doing this since 1915, since the Department of Transportation enabled them and empowered them to do their job.

They have the special expertise in this area.

If there are no further questions, Your Honor, I--

Chief Justice Rehnquist: Thank you, Mr. Veters.

Mr. Veters: --Thank you very much.

Rebuttal of Matthew D. Roberts

Chief Justice Rehnquist: Mr. Roberts, you have 11 minutes remaining.

Mr. Roberts: With the exception of part 160, which doesn't regulate occupational safety and health, none of the regulations identified by respondent applied to the Mr. Belden as is explained in the... in the appendix in our reply brief.

Just to... just to briefly mention part 26, which he started about the emergency checkoff list, that specifically applies to small passenger vessels based on specific authority given to the Coast Guard to regulate small passenger vessels in more detail.

Many of the others deal with navigational issues like running lights, have nothing to do with regulation of occupational safety and health.

None regulates the hazards from oil and gas drilling.

Section 14 U.S.C. 2 on which respondent relies, first of all, as Justice Ginsburg points out, that only goes to the existence of authority, not to the exercise of it, and the statute is very clear that... that the other agency must exercise authority to displace the OSH Act.

Justice Stevens: What do you say about his argument that, yes, oh, that may be true in writing, but in fact the people who did investigate this accident was the Coast Guard?

Mr. Roberts: The Coast Guard has... has responsibility for investigating marine accidents.

Investigative authority doesn't necessarily imply that you have regulatory authority as the National Transportation Safety Board is an illustration of.

Congress wanted the Coast Guard to... to investigate.

It does.

If it finds violations, finds situations that indicate violations of other agency laws, it coordinates with those agencies, as it did here, and those agencies take appropriate enforcement action.

The authority to investigate accidents after they happen, even if they might have been caused by unsafe working conditions, is not regulation of those working conditions, and it doesn't preempt the... preempt the OSH Act.

Justice Stevens: Mr. Roberts, how far can a memorandum of understanding go?

Supposing two agencies, just the two Secretaries or whoever is representing, sit down and say, let's... let's just divide up this area... there can be some conflict... and just sign a very simple understanding that, you know, you regulate A and I'll regulate B. How much authority should a court give to that?

Mr. Roberts: The... the question of who has authority here is governed by section 4(b)(1) of the OSH Act, not by some agreement between the... Coast Guard and OSHA.

That agreement reflects the Coast Guard's regulations and the interpretation of the OSH Act that the Secretary--

Chief Justice Rehnquist: So, you don't... you don't rely on the memorandum as any independent basis for a ruling--

Mr. Roberts: --None whatsoever, Your Honor.

We rely... we rely on the text of... of section 4(b)(1) which is... is quite clear that it displaces the OSH Act with respect to particular working conditions.

That's in stark contrast to the Fifth Circuit's holding here that there's an industry-wide exemption for all seamen on all vessels from the OSH Act.

That's the approach that respondent endorses, admitting that regulation of the toilets would preempt regulation of the act altogether, and that you don't even need to regulate that, that... that the OSH Act simply doesn't apply because respondent mistakenly believes that the Coast Guard has authority, plenary authority, under section 2, when the Coast Guard has never interpreted section 2 to give it plenary authority.

And it's repeatedly gone back to Congress to get specific authority to address specific issues on particular uninspected vessels, and Congress has given the Coast Guard that authority, which indicates that neither Congress nor the Coast Guard thought section 2 gave it that authority.

The... the Secretary's view that the Coast Guard has to regulate the particular working conditions at issue in order to displace the OSH Act is supported by the text.

It's supported by the purpose of the act.

It's been the Secretary's longstanding view.

It's been followed by all the other circuits except for the Fifth Circuit.

The Second Circuit, the Ninth Circuit, the Eleventh Circuit, with due respect to the maritime expertise in the Fifth Circuit, those circuits also have a great deal of maritime... of maritime expertise.

And the working conditions here, as Justice Kennedy pointed out, are not maritime-specific.

They're matters over which OSHA has expertise, and 4(b)(1) allows the Coast Guard to step in and displace the OSH Act when it has authority and when it believes that its expertise warrants it to address the particular working conditions that are at issue.

The Coast Guard doesn't have authority here.

It hasn't exercised authority here, and the OSH Act applies here.

Justice Kennedy: --Are there some drilling platforms on the Outer Continental Shelf which are registered vessels and so are completely under the Coast Guard's jurisdiction as to drilling--

Mr. Roberts: Yes.

A drilling vessel that went to the Outer Continental Shelf, in most cases, would be an inspected mobile oil drilling unit, which the Coast Guard has comprehensive regulations covering.

The Coast Guard also has regulations specifically addressed to all facilities at the Outer Continental Shelf which include a general duty clause, similar to the OSHA general duty clause, that requires that work places there be free of... of recognized hazards.

In addition, the Interior Department has some regulatory authority out there specifically related to mineral drilling.

Justice Kennedy: --On those vessels, if the Coast Guard chose, could it allow OSHA a specific regulation of a concurrent... sort of a concurrent jurisdiction?

Mr. Roberts: The... it... it could have if it... if it hadn't exercised its comprehensive authority over those vessels, but it has exercised its comprehensive authority over those vessels, in contrast to the situation here.

If there are no further questions.

Chief Justice Rehnquist: Thank you, Mr. Roberts.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Martin v. Oshrc - Oral Argument

Fri, 09 Jan 2009 14:49:38 +0000

Case:

Martin v. Oshrc

Media File:

89-1541_19901127-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Clifford M. Sloan

Chief Justice Rehnquist: We'll hear argument next in No. 89-1541, Roderick A. DeArment, Acting Secretary of Labor v. Occupational Safety and Health Review Commission.

You may proceed, Mr. Sloan.

Mr. Sloan: Mr. Chief Justice, and may it please the Court:

This case concerns the Occupational Safety and Health Act of 1970.

In that act Congress established a comprehensive regime for occupational safety and health.

Congress gave the Secretary of Labor the authority to set occupational safety and health standards through issuing regulations, and he gave the Secretary the authority to administer the program through a variety of means, including inspecting businesses and issuing citations for violations of the statute or regulations.

At the same time Congress created the Occupational Safety and Health Review Commission.

Its sole function is to hear challenges to the citations.

The Commission's decisions, in turn, are reviewable in the courts of appeals.

The question in this case is whether, when the Secretary and the Commission disagree about the meaning of the Secretary's regulations, deference should be given to the Secretary or to the Commission.

We believe that deference should be given to the Secretary because Congress gave the Secretary the authority to make policy through issuing regulations and administering the program, and the ability to provide reasonable interpretations of those regulations is an aspect of that policy-making authority.

Unknown Speaker: Mr. Sloan, does that same principle apply to the Commission itself when it decides issues?

Does it have to defer to the Secretary's interpretation?

Mr. Sloan: Yes, it does, Justice O'Connor.

Unknown Speaker: So the error that was made here, in your view, was made at the Commission level by its failure to defer to the Secretary's position?

Mr. Sloan: That's correct.

We believe that the Commission failed to give proper deference to the Secretary's position.

For the reviewing court, we believe that the question should be the same as for the Commission, which is whether the Secretary's interpretation was reasonable.

And so therefore the reviewing court should just address that question directly, considering carefully the Commission's opinion and the light that it can shed on that issue, but basically facing the same question that the Commission was facing.

Unknown Speaker: I'm curious here.

There is a regulation that appears to be more clearly in point for this particular violation, and that was (g)(4)(i), and the Secretary, or the department never amended its complaint to refer to that regulation.

It chose to rely instead on the training regulation for the violation.

Why was that?

Mr. Sloan: The reason for that was that the regulation that was relied on was perfectly appropriate.

The particular provision is a training provision, but it has a fitting component.

It specifically refers to respirators being fitted properly, and it's important--

Unknown Speaker: Well, when you rely on the training regulation, it's perhaps ambiguous, or you have to stretch to see how it applies.

But if reliance had been placed on the other regulation it would seem rather clear, wouldn't it?

Mr. Sloan: --Well, in terms of some of the objections that have been raised to it, those objections would not be present.

But let me address the separate fit provision in its context.

Unknown Speaker: Yeah, I just... it seems the present interpretation would appear to make it duplicative.

You don't even need (g)(4)(i), I guess, in light of the Secretary's reading of the training regulation.

Mr. Sloan: Well, part of the reason--

Unknown Speaker: I might say that I share Justice O'Connor's concern as to why an amendment wasn't made, or why you didn't rely on the other provision.

Mr. Sloan: --Two... there are two reasons.

One has to do with (g)(4)(i), and one has to do with (g)(3), which is what incorporates the general respirator provision of section 134.

Taking (g)(4)(i) first, what remains of that provision is a vestige of the original provision.

It was initially, as promulgated by the Secretary, an entirely different provision.

The sentence that is there now, which has the language 134, "fitted properly", that initially was followed by a specific quantitative fit requirement which is very different from the qualitative fit test which is at issue in this case, the banana oil test where an employee puts on a respirator and is asked if he can detect the smell of the banana oil.

That's a qualitative fit test.

A quantitative fit test actually measures on a quantitative basis the exposure that the respirator is allowing.

Initially (g)(4)(i) included a quantitative fit provision.

The "fitted properly" sentence was the first sentence, and it then went on to the quantitative fit provision.

The quantitative fit requirement was invalidated in the course of litigation within the year and a half previously to this inspection here, which was in August 1979.

That had been invalidated in 1978.

Now, the first sentence of (g)(4)(i) ultimately, when the Secretary corrected the regulation, kept the first sentence, but it was a very different provision from the one that had initially been there.

And so that's, in terms of the context on (g)(4)(i)--

Unknown Speaker: That may be interesting background, but it doesn't answer the question, because the shorter version was in effect, was it not?

Mr. Sloan: --At the time--

Unknown Speaker: Here, yes.

Mr. Sloan: --That's correct.

At the time--

Unknown Speaker: So why wasn't it used or cited?

Mr. Sloan: --Okay, and that gets to the second... that gets to the second question, the second part of the question.

The second part of the question has to do with (g)(3) in Section 134 and its scope.

There are many circumstances in which section (g)(3), applies, and there is no separate fit provision as in (g)(4)(i).

It applies of its own force in many circumstances, and it applies, sometimes when it's incorporated in another regulation, without a sentence as is now in (g)(4)(i).

In those circumstances the Secretary has consistently interpreted section 134 to impose a fit requirement, and if the conclusion that section 134 does not impose a fit requirement because of the existence of this separate fit provision in (g)(4)(i), would strip the regulation of an essential part of its meaning, in the Secretary's view, in those other contexts, even though the predicate for doing so, the separate fit provision, is not... is not there.

And the reason that I'm going into this background is to say that section 134, which is incorporated, has a broad applicability, and this is the standard way that it has been interpreted.

It has been interpreted to include that fitting component.

The reason I went into the background on (g)(4)(i) is that although the shorter version remained in effect, it had been primarily viewed as the quantitative fit requirement, and it had been viewed that (g)(3), which incorporated section 134, imposed, among other things, a requirement that, as the regulations state, the employee had an opportunity to have the respirator fitted properly, and have an opportunity to have the respirator in a test atmosphere.

And so it was a perfectly valid interpretation.

There was no reason to think that it was only covered by (g)(4)(i), and in fact that would be inconsistent with the way section 134 had been interpreted in a wide variety of other contexts.

Unknown Speaker: Mr. Sloan, where in your brief or in the petition are these various sections set out?

Mr. Sloan: The regulations, Justice... Chief Justice Rehnquist?

Unknown Speaker: What you have just been talking to in response to Justice O'Connor and Justice Blackmun's questions.

Mr. Sloan: Okay.

Section 134 is at page 115... I'm sorry, section 134(e)(5) is at page 115a of the petition... of the appendix to the petition.

1029(g), both (3) and (4) is on page 122a.

In (g)(4)(i), what is left is one sentence.

There was initially another sentence which imposed the quantitative fit requirement which has been deleted from the current regulation and is not reproduced here.

So what is here is the vestige that remained after the invalidation of the earlier provision, after the invalidation of the quantitative fit requirement--

Unknown Speaker: Is... one of the regulations that the Secretary relied on is not reproduced?

Mr. Sloan: --No, Chief Justice Rehnquist, that's not what I'm saying.

What I am saying is that one of the regulations that has been discussed in the opinions initially had a different form than it is here.

In terms of its applicability and in terms of its current state, it is in the form that it was reproduced on page 122a.

So this is the current regulation, and this is the regulation that was effective at the time of the inspection.

Unknown Speaker: Thank you.

Mr. Sloan: As a clerical matter, the second sentence wasn't deleted until somewhat later, but this is what was in effect at the time.

I should point out that these questions about the reasonableness of the Secretary's interpretation are precisely what the court of appeals did not find it necessary to address, because in the court of appeals' view it was sufficient to defer to the Commission's interpretation.

In the court of appeals' view in cases of conflict between the Secretary and the Commission, if it determines that the regulation is ambiguous, it defers to the Commission if it finds that the Commission's view is reasonable.

So the court found that the regulation was ambiguous, found that the Commission's interpretation was reasonable, and never explicitly addressed the reasonableness or not of the Secretary's interpretation.

That is exactly the question that we think should have been addressed by the court and was not.

Unknown Speaker: Are you, therefore, Mr. Sloan, asking us to send the case back so the court can address that question, or are you asking us to decide it?

Mr. Sloan: We think that it would be appropriate to send the case back to address the reasonableness after clarifying the threshold question which has divided the courts of appeals, which is whether deference should be given to the Secretary or to the Commission.

And we think because the court of appeals did not address the question it would be appropriate to send it back to consider it in the first instance.

Unknown Speaker: Would you agree that if one just reads (e)(5), that the Secretary's position is unreasonable?

Mr. Sloan: No, I would not agree with that, because (e)(5) includes the language that the employee must have an opportunity to have the respirator fitted properly.

And if... and it also includes the language about a test atmosphere.

And what the Secretary said is that this imposes two requirements.

It imposes a requirement that the employee be exposed in a test atmosphere, and secondly, that if the test results show that the respirator does not fit, the employer must do something about it, must give the employee a respirator that does fit.

That's the meaning of fitted properly.

What the Commission said, and its view was that the regulation required only the first of those.

It does require the employer to put the employee in a test atmosphere, but it then leaves the employer entirely free to ignore the test results and to send the worker back into the work environment with the respirator after getting results indicating that the respirator does not fit.

And in this particular case there not only is the language of the regulation, but there is the fact that respondent had actual notice that this was the Secretary's interpretation, as is stated in the Commission's decision and in the administrative law judge's decision.

The Secretary's compliance officer explained to the respondent that the respirators had to be fitted with banana oil or another kind of test atmosphere, and respondent revealed this understanding in its own training films by saying to its workers that if a test indicated that its respirators did not fit properly, it would be provided... the employees would be provided with a respirator that did fit.

Yet despite this actual notice, respondent was not doing this, the Secretary's compliance officer discovered, on this inspection.

Unknown Speaker: Mr. Sloan, you spoke of the question of relative deferences between the Secretary and OSHA as being a threshold question.

Why isn't the threshold question the one which Justice Stevens began to pose, and that is whether the Secretary's interpretation can be accepted by us as reasonable in the first place?

Because if it isn't, I don't see how we get to the question of relative deference.

Mr. Sloan: Well, we agree that that should be the primary... that that should be the first question that the Court looks at, and that was a serious error in the court of appeals' decision.

It would be our view that if a court determines that the Secretary's interpretation is reasonable, then it should be upheld.

And I suppose there could be a view that if the Secretary's interpretation was reasonable, that then raised other questions of deference.

But that is exactly the question that we think the Court should address, and that it--

Unknown Speaker: But that isn't the question you presented in your petition for certiorari.

In your petition for certiorari you present the question of should the Secretary's view receive deference rather than that of the OSHA.

Mr. Sloan: --That's correct, Chief Justice Rehnquist.

What I was trying to say in my response to Justice Souter is that we believe that a proper analysis of the issue would be to recognize first that the Secretary is entitled to deference, which means that the Secretary's reasonable interpretation should be upheld.

And so therefore the first question that the court of appeals should address is is the Secretary's interpretation reasonable.

Unknown Speaker: You're talking about what the court of appeals should address rather than what we should address.

Mr. Sloan: That's right.

Unknown Speaker: I didn't understand that.

Mr. Sloan: That's right, Chief Justice.

Unknown Speaker: Well, I suppose part of your... part of the question you presented is whether the Secretary's position is reasonable?

Because you don't defer to something that's unreasonable.

Mr. Sloan: You don't defer to something that's unreasonable, I agree with that.

And respondent has urged this Court to hold that the Secretary's interpretation is unreasonable.

And if the Court--

Unknown Speaker: You may... I suppose you would think we would be unreasonable if we said that the Secretary's position is unreasonable.

But, nevertheless, what if we thought that?

I don't know why we should get mixed up with questions of deference then.

Mr. Sloan: --Well, in terms of the question, it is related to the question of deference, Your Honor, because if in fact the Commission should receive deference in its reasonable interpretations, then, as the court of appeals did, there is no reason to consider the reasonableness of the Secretary's interpretation.

There's an important legal question at stake here which has splintered the courts of appeals, which is what are they supposed to do, how are they supposed to approach the issue when the Secretary and the Commission disagree.

And it, it's our view that the Secretary's reasonable interpretation should receive deference.

And once that principle of law is clarified--

Unknown Speaker: Well, if the... you think the issue here is just whether there should be deference or not, and the court of appeals didn't think that it was entitled to any deference, so it didn't reach the reasonableness.

Mr. Sloan: --Of the Secretary's interpretation.

Unknown Speaker: Yes, exactly.

Mr. Sloan: That's right.

Unknown Speaker: Exactly.

So we don't need to... we don't need... technically we don't need to get mixed up into the reasonableness issue.

Mr. Sloan: Well... I think that's correct, the Court does not have to get mixed up in the reasonableness issue if it clarifies the general legal principle that has divided the courts of appeals.

Unknown Speaker: Mr. Sloan, I don't know why you, I thought you conceded earlier that the preliminary issue was whether this was a reasonable interpretation of the Secretary or not.

It seems to me neither of those two questions is logically prior.

We don't have to consider whether deference is due if it's unreasonable, but just as equal... equally we don't have to consider whether it's unreasonable if no deference is due.

I don't know how one can identify either of those two questions as the prior one.

You don't have to reach the other if you answer the other one a certain way.

Mr. Sloan: The reason why I think that the threshold question should be which entity receives deference, and I didn't mean to say anything contrary to that--

Unknown Speaker: I thought you did.

All right.

Mr. Sloan: --The reason why I think that the identity of the entity that should receive deference is the threshold question is because that is the legal rule that then structures the court's analysis in its case-by-case consideration of these cases, and that's exactly the issue that has generated the--

Unknown Speaker: It's the more important question, no doubt.

Mr. Sloan: --That's right.

Unknown Speaker: In whatever might be logically prior in some sort of theoretical analysis, one question is presented by this petition for certiorari, and that is who gets deference.

Mr. Sloan: That's correct, Chief Justice Rehnquist.

Unknown Speaker: Yes, but it's presented on the assumption that there is some ambiguity that needs... justifying deferring to somebody.

If the language were absolutely clear one way or the other, we certainly wouldn't be arguing about deference, would we?

Mr. Sloan: Well, it is... the question presented arises from the judgment of the court of appeals.

Unknown Speaker: They assume that there was ambiguity, and therefore they decided which one to have to defer to.

And you have presented the case on the assumption there is ambiguity.

So in other words you have assumed, you have gone past the hurdle that Justice Souter raised.

But if you're starting from scratch, you're the first reviewing court, and it looks absolutely clear to you, you're not going to worry about deference, are you?

Mr. Sloan: If there, if there is no ambiguity there is no question of deference presented.

And I think that's a very important point in focusing on what the issue in this case is and what exactly is at stake, because we completely agree with respondent that the Secretary's interpretation should be set aside if it is inconsistent with the plain meaning of the regulation or with the plain language of the regulation.

And we also completely agree with respondent that the Secretary's interpretation should be set aside if it is unreasonable.

The only category of cases that is affected by the issue in this case is the category of cases in which the Secretary's interpretation is reasonable and would be found to be so by the reviewing court.

And in those circumstances we believe that the Secretary's reasonable interpretation should be upheld.

Unknown Speaker: Mr. Sloan, may I ask you one other question?

Do you take the position that the same degree of deference is owed to the Secretary if her position is taken only in a compliance order or in the litigation itself, rather than in some other forum, to whit, a consistent interpretation or one adopted by rule, or that sort of thing?

Mr. Sloan: That issue would bear on the reasonableness of the interpretation.

In answer to your question whether if it is only in a compliance order it should receive deference, we would say that it should receive deference, but that there should be a full consideration of the reasonableness of the interpretation.

And to the extent that there would be a prior history of such interpretations, then it would strengthen the case for the reasonableness.

It seems that--

Unknown Speaker: Well, suppose it just comes to the Commission to decide, and all they have is that particular compliance order.

Do they have to bow down and defer every single time because the Secretary has issued a compliance order?

Mr. Sloan: --Well, they--

Unknown Speaker: So the Commission has to defer, and the court subsequently has to defer?

How do they apply their analysis when that's all you have?

Mr. Sloan: --When that's all you have, which is the hardest question... I should point out that this issue encompasses a great many other kinds of interpretations by the Secretary which aren't as hard as that hardest case.

But in that hardest case, what the Commission and the court should do is to see whether the interpretation that is reflected in that interpretation... I'm sorry, whether the interpretation that is reflected in that citation is reasonable.

Now you have certain questions in those circumstances that you don't have if the Secretary has previously given some clarifying interpretation, even though not in a regulation.

For one thing, the question--

Unknown Speaker: Why is that?

Why isn't the issuance of a citation... is it the official act of the Secretary or not?

Is it?

Mr. Sloan: --It is the official act.

Unknown Speaker: Is it a governmental act?

Mr. Sloan: Yes, it is.

Unknown Speaker: And official.

Then why... then why does it get stronger, why would an unreasonable interpretation, you say, only become more reasonable if there have been a large number of citation orders?

I mean, it's either reasonable or it's unreasonable.

10,000 repetitions makes it truth?

Mr. Sloan: Well--

Unknown Speaker: I don't understand that.

Mr. Sloan: --I agree that it should be upheld if it's reasonable, and that's why my answer to Justice O'Connor on this question was that yes, it should, it should get deference.

In terms of comparing that action to other interpretations, the reason why I'm saying that it might bear unreasonableness is for two reasons.

One reason is that it relates to the question of notice.

If the interpretation is only in the enforcement action, you would want to be very careful that... about notice.

Now, normally reasonableness would encompass notice.

To the extent that it's a reasonable interpretation, you would think that an employer would fairly have notice of it.

But because, if that is the only place that it is appearing--

Unknown Speaker: I think you can play that in reverse.

I think a reasonable interpretation gives notice, but I don't think that when you give somebody notice you have thereby achieved a reasonable interpretation.

I mean, if I give you notice of an unreasonable interpretation, it doesn't become more reasonable by the fact that I gave you notice of it.

Mr. Sloan: --I--

Unknown Speaker: I hereby advise you I'm going to interpret black to mean white.

That doesn't make that interpretation reasonable.

Mr. Sloan: --I agree with that.

And if that interpretation was issued 3 weeks before a citation, then, and then you had a citation reflecting that interpretation, then the only question would be the reasonableness of the black means white.

But you wouldn't have a question about notice.

In the case where it's only in a citation, you have exactly the same reasonableness inquiry, but you have an additional question, which you don't have in the other case, which is a question of notice, which you would want to be careful about.

And in terms of notice it's important, and the role of the Commission in terms of what it's supposed to do in that circumstance, it's important to point out that in addition to the adjudication of the challenge itself, a very important role that the Commission plays and that it gets deference on is the establishment of the penalty and of the category of violation.

In terms of the penalty, the... there are four factors that the Commission can consider in determining the appropriate penalty, and in some cases in eliminating a penalty altogether, and those are the size of the business, the gravity of the violation, the good faith of the employer, and the previous history of violations of the employer.

And in those kinds of factual discretionary determinations the Commission gets substantial deference, and it is the Commission rather than the Secretary that is entitled to deference on those questions.

And so even if you have a situation where an employer has received notice through a reasonable interpretation, but somehow still was in good faith, then in those circumstances the Commission can still exercise its important role of adjudication by taking that subjective good faith into account in the assessment of penalties.

Unknown Speaker: Are those statutory factors?

Mr. Sloan: Yes, they are.

I'd like to reserve the remainder of my time for rebuttal.

Unknown Speaker: Very well, Mr. Sloan.

Mr. Faught.

Argument of John D. Faught

Mr. Faught: Mr. Chief Justice, and may it please the Court:

What this case is about is a direct attack by the Secretary of Labor on the Occupational Safety and Health Act and the Administrative Procedure Act.

The Secretary seeks to overturn a compromise reached by Congress when it considered this legislation more than 20 years ago, and she seeks to upset a system of checks and balances that has been in place since that time.

In considering the alternative bills before it in 1970, members of Congress expressed strong concern that placing all the administrative power in one agency head, the Secretary of the Labor, would not gain the acceptance of the regulated community that was necessary to achieve the objectives of the act.

To resolve these concerns Congress reached a compromise, and that compromise was to remove the adjudicatory authority from the Secretary and place it in an independent agency, the Occupational Safety and Health Review Commission.

The Review Commission was given the express authority to carry out the adjudicatory functions of the... under the act.

The Secretary's position today is that the Commission has no policy-making authority in its role as the adjudicator.

The Secretary in a sense... her position would rip the heart out of the adjudicatory authority that has been given to the Commission, and would render the Commission nothing more than a rubber stamp.

Unknown Speaker: Mr. Faught, I suppose Congress could have just not have provided for administrative adjudication at all.

That could have been just a direct enforcement statute where if the Secretary wanted to enforce the statute, the Secretary would have to go to an Article III court.

Mr. Faught: That is not--

Unknown Speaker: There are a lot of statutes where you don't have an administrative agency adjudicating.

The enforcer just has to go to court.

And if that had been the case, I suppose an Article III court would have been faced with the same question, do we have to defer to the Secretary or not, or should we just make our own completely independent judgment about what the statute means or what the regulation means.

Mr. Faught: --That is not correct, Justice White.

Unknown Speaker: What?

Mr. Faught: What Congress created was an independent administrative agency.

Unknown Speaker: I know that, but let's assume for the moment that they had put it in a court, an Article III court.

What would be the rule an Article III court would have to follow with respect to the meaning of a... the Secretary's regulation?

Mr. Faught: The Article III court would look at the... what Chevron, and apply the analysis under Chevron as to whether it gives way to the court or way to the Secretary.

Unknown Speaker: Do you think the... do you think the... you think OSHA, the Commission doesn't have to follow Chevron, is that it?

Mr. Faught: Your Honor, Chevron is a judicial--

Unknown Speaker: A court would have to, but the Commission doesn't?

Mr. Faught: --The Commission would not follow Chevron per se, if I may explain.

Chevron is a judicial rule, so it does not directly apply to the Commission.

The Commission would, if the Secretary promulgated an unambiguous standard under its rule-making authority, then, as the Commission agreed in its amicus brief, the Commission would be bound by that rule.

However, if the rule is ambiguous, as it is in this case, that is exactly the function that Congress wanted this Commission to carry out.

And it's particularly important in the Occupational Safety and Health area.

Unknown Speaker: Mr. Faught, maybe that's true, but it's certainly not true because Congress wanted to create an independent, as you have described it, an independent adjudicative agency.

I mean, the supreme example of an independent adjudicative agency is an Article III court.

And all the Government is arguing for here is to apply the same rule to this adjudicative agency as Article III courts apply.

So it has to be something more than just adjudicative power that you're arguing for here.

Mr. Faught: As this Court has held in a long series of cases, beginning with SEC v. Chenery, Justice Scalia, is that an administrative agency in adjudicatory power also has the power to make policy.

That is the exact kind of thing that Congress wanted to create in the Commission here.

Because in the Occupational Safety and Health area it applies to many industries.

It has a very broad spectrum, and it applies to many aspects of those injuries... those industries.

And therefore the adjudicatory function is important, that based on facts of helping to develop this policy, of, in effect, developing a common law.

And that's where the Commission's role is very important in the Occupational Safety and Health area.

Unknown Speaker: Do you think that OSHA can develop regulations through its adjudication the way the labor board can, for example?

You know, labor... it doesn't issue regulations normally.

They just make up new rules in adjudication.

Can OSHA do that?

Mr. Faught: They cannot make up rules in terms of rule-making power, which is given to the Secretary.

But they can make up principles of law, and in fact they have.

Unknown Speaker: That impose new substantive obligations that are not imposed by the Secretary's regulations?

Mr. Faught: They can... the Commission can act in a number of ways.

It can, one, it can--

Unknown Speaker: Can you answer that?

Just answer that one yes or no, and then go on and give me the other ways.

Can it enact, impose substantive requirements upon individuals that are not imposed by the Secretary's regulations?

Mr. Faught: --Yes, it can.

Unknown Speaker: It can?

Mr. Faught: Yes, it can.

And it has.

Unknown Speaker: Such as?

Mr. Faught: Such as the Commission has interpreted what is a repeated violation under the act.

The act provides that an employer may be fined up to $10,000 for a repeated violation.

The act, however, does not define what is a repeated violation.

The Commission has developed the principles of law in defining what constitutes--

Unknown Speaker: That's not a new substantive rule.

That's just interpreting what the statute says.

It can interpret what the statute says, it can interpret what the regs say.

But can it... can it make policy in the sense of imposing new obligations upon people, the way an agency can do by adjudication?

Mr. Faught: --It cannot make policy in the sense of establishing substantive standards, which is the power of the Secretary under its rule-making authority.

But under the adjudicatory authority it does include some inherent policy making.

And inherent in that policy making is precisely the question the Court has before it today, is you have an ambiguous standard.

And in that inherent adjudicatory power that includes some policy, the Commission can decide that question.

It can interpret what that standard means.

And that is precisely what it has done in this case.

Unknown Speaker: Well, now, if there were no Commission and the question went to an Article III court, the same question we have here, would the Article III court defer to the Secretary's interpretation of an ambiguous regulation?

Mr. Faught: On the facts of this case the answer is no, Justice O'Connor, because the matter that is presented here by the Secretary, her interpretation of the standard is not based on her rule-making authority.

If it was based on the rule-making authority, then the court would apply Chevron and could give controlling weight.

But what she presents here is not based on rule-making authority.

It's her interpretation presented through litigation positions.

And those positions, we would maintain, would not be entitled to deference.

Unknown Speaker: Oh, so your answer is that you only defer to certain kinds of interpretations, but not to an interpretation developed and presented during the course of litigation.

Is that your position?

Mr. Faught: That is correct.

That is correct, Your Honor.

Unknown Speaker: And do you have authority from this Court for that proposition?

Mr. Faught: Yes.

Unknown Speaker: Is that clear?

Mr. Faught: Bowen v. Georgetown University makes it very clear that litigation positions are not entitled to Chevron deference.

As Justice Kennedy wrote, Chevron simply does not apply to litigation positions.

Unknown Speaker: But in this case it was a citation.

The Secretary took official action citing the company for a violation of the act.

This wasn't just an interpretation that was developed in the course of an adjudicated proceeding to defend a statute... to defend a regulation.

Mr. Faught: What you have here, Justice Kennedy, is an ambiguous standard.

And the Secretary, in effect, admits that it's ambiguous.

And the only way that she is clarifying it is through the litigation positions that she is presenting in court.

She clarifies it by the issuance of the citation by the compliance officer and by the arguments of counsel.

That is the only way she is clarifying, and we believe under Bowen that those litigation positions are not entitled to deference.

Had she said, had the standard been unambiguous, then the question of deference would be here for the Secretary.

But it simply does not apply.

The Secretary, in saying--

Unknown Speaker: What was the litigation position involved in Bowen?

Mr. Faught: --The litigation position involved the retroactive application of a wage index by the Secretary of Health and Human Services.

Unknown Speaker: Right, defending against a suit against the Secretary, right?

Mr. Faught: That's correct.

And the question was, argument of counsel in the litigation was the reason for the retroactive application of the wage index was because it was a cost adjustment.

And the court said that is the first time we have heard that.

That's the first expression of the Secretary's interpretation.

Very much the same we have here.

The first time that the Secretary explains what this standard (g)(3) means is by the citation and the arguments of counsel.

Unknown Speaker: But there, there the mere action that the Secretary had taken in Bowen didn't bespeak that interpretation.

When it came to defending itself, the department came up with this interpretation.

I thought that's what we meant by a litigating position.

But here when the Secretary brings a citation, you don't have to guess what the basis is.

It was cited for violation of this section in particular.

That is not a litigating position, except to the extent that any implementation of the law by the agency is a litigating position.

That... your position then is that the agency can only clarify a regulation by another regulation.

Is there anything else, any other way it can clarify the meaning of a regulation?

Mr. Faught: And to be entitled to Chevron deference?

Unknown Speaker: Yeah.

Mr. Faught: No.

The agency must act--

Unknown Speaker: So it can't clarify a regulation.

It can only amend it.

Mr. Faught: --To be entitled to controlling weight, it would have to act through what the authority that Congress has delegated it, which would be rule-making authority.

That does not mean that it cannot present its arguments and that the court or the Commission should not give weight to those arguments.

The question is controlling weight.

Controlling weight is only when it has acted in its rule-making capacity.

Unknown Speaker: Is this so for all agencies, or is this just OSHA?

Mr. Faught: It would be for all agencies.

We believe that is the appropriate application of Chevron, and there has been a recent recommendation of the Administrative Conference of the United States that agrees with our position.

Unknown Speaker: But we have a lot of cases deferring to the agency's interpretation of its own regulation.

Indeed some of our cases say that we're even more inclined to defer to an agency's interpretation of its own regulations than we are to an agency interpretation of its statute.

And we're not referring to its interpretation through an additional regulation.

How do you explain all those cases?

Mr. Faught: In those cases, Your Honor, there is... there is confusing language about the controlling weight under Chevron or whether you give considerable deference.

And in our... we maintain that to be entitled to controlling weight, the ultimate deference, the agency should be acting in the capacity that Congress has delegated.

And if the agency is doing something less, such as merely offering an interpretation, the regulation didn't mean what she said it does.

She says let me now explain to you what the regulation means.

When they offer that kind of an interpretation it may be entitled to some weight, but the court needs to balance the factors in which that interpretation is made and decide how much weight is given.

That interpretation may be... may have some many of the wrappings around it that it looks almost like the... a form of rule making.

In that case, the weight that the court would give it would be very high.

It may approach controlling weight.

But our position is controlling weight is for those delegated authorities--

Unknown Speaker: So when the FCC prosecutes somebody for a violation of one of its regulations in a district court, let's say, and the case comes to a district court, and the FCC's position is reasonable as to the meaning of that regulation, we would not defer to the FCC, you would say?

Mr. Faught: --If the action of the FCC is based on the authority that Congress has delegated to it, it would be a Chevron question--

Unknown Speaker: No, this is a regulation.

It's an FCC regulation that they are proceeding under.

The issue is the interpretation of that regulation.

And what you say is we would give no deference to the FCC.

The only way we would give deference to the FCC is if it amended the regulation.

But its interpretation of the regulation is entitled to no deference under Chevron.

Mr. Faught: --You would give deference to the regulation as an interpretation of its authority under the statute--

Unknown Speaker: But not to the FCC's interpretation of the regulation?

Mr. Faught: --If they argued in court and gave you their interpretation that added to it, that is not entitled to--

Unknown Speaker: Not just arguing in court.

The citation was based on their interpretation of the regulation.

Mr. Faught: --Your Honor--

Unknown Speaker: And you say it would not get Chevron--

Mr. Faught: --If the citation... if the citation conforms with the standard and there is no ambiguity in the standard, then the agency is going to get controlling weight.

But if it's something less, then they are not.

If you look at the Occupational Safety and Health Act, Congress makes it very clear the type of authority it placed in the Occupational Safety and Health Review Commission.

The citations issued by the Secretary are only enforceable as final orders of the Commission.

The Commission has exclusive authority to impose civil penalties.

The Secretary only has the authority to recommend.

Under section 659 of the act, if a citation is not contested it becomes a final order of the Commission that is not subject to review by any court or any agency.

If it is contested, then the Commission conducts a hearing.

That hearing is conducted under the Administrative Procedure Act, and the Commission is given the authority to affirm, modify, or vacate the citation of the Commission.

Therefore Congress has provided the Commission with a full complement of adjudicatory authority.

This is also made clear by the reference to the Administrative Procedure Act.

Congress said that the Commission has the authority to adjudicate under the act.

That brings into play the cases decided by this Court, as to the authority an adjudicatory agency has.

That includes policy-making power.

The Secretary here argues that the Commission has no policy-making power.

It does not even have the power to interpret an ambiguous standard.

That is directly contrary to what Congress said in the Occupational Safety and Health Act, and it's directly contrary to the precedents of this Court establishing what the powers are of adjudicatory agencies under the Administrative Procedure Act.

We believe it is clear, from the statute and the APA, the kind of authority the Commission is to have in this case.

If the Court believes it is necessary to look at the legislative history, the legislative history also supports our position.

As I said previously, as this matter was being considered by Congress, there were strong concerns presented that placing all of the authority in the Secretary would not gain the confidence of the regulated community necessary to achieve voluntary compliance, necessary to achieve the objectives of the act.

So Congress reached a compromise, and that compromise was to place adjudicatory power in the Commission.

The legislative history is outlined in significant detail in the brief of the U.S. Chamber of Commerce, beginning at page 13.

But there are two important aspects to highlight.

One is the competing interests that were involved and the compromise as reached by Congress.

The other is the role models, the agencies that Congress was looking to in deciding what power should be given to this new independent agency, the Commission.

And in looking at the competing interests, what Congress said, and the compromise that was reached, is that in the Occupational Safety and Health area, where it covers such a broad number of industries, there should be significant power, adjudicatory power, in the Commission to deal with factual settings and factual circumstances.

And Congress looked to the FTC and the National Labor Relations Board as the examples under which they decided the authority the Commission should have.

Senator Javitz, who proposed the amendment creating the Commission, referred specifically to the authority of the FTC when referring to the powers of the Commission.

Unknown Speaker: --Mr. Faught, is it your position that the, that OSHA does not defer to the Secretary with respect to the Secretary's interpretation of the statute as well as the regulations?

Suppose a case comes up in which there is no regulation at issue, but just the terms of the statute, and the Secretary has taken a particular interpretation.

Does OSHA defer to the interpretation of the statute?

Mr. Faught: If the Secretary interpreted a statute through a rule making, as delegated by Congress, it would be binding on the Commission.

Unknown Speaker: No, no.

Not through rule making.

He brings a citation just under the terms of the statute.

There is no rule specifically addressed to it, but he says the statute authorizes this.

Mr. Faught: And the only forum of the Secretary's interpretation was the citation itself, no, it is not entitled to any controlling weight by the Commission.

It would be given weight by the Commission, but not necessarily controlling weight.

Unknown Speaker: Not controlling weight.

But if the Secretary interpreted the same statute in an action that would come to district court or to the court of appeals, the third branch of Government would defer to the Secretary's interpretation?

Mr. Faught: It's our position, Justice Scalia, that again it would depend on the forum, that if... that the Secretary has acted in a fashion authorized by Congress, then the court should apply Chevron and determine whether it is entitled to controlling deference.

If it is in a form that is less than that format delegated by Congress, it is entitled to weight, and that weight will depend on a number of factors, for example those spelled out in Skidmore, but it is not entitled to controlling weight.

And how much weight is going to depend on those factors.

How much consideration was given, the reasoning behind the interpretation.

As I said, looking at the legislative history, it supports our position that Congress intended the Commission to have the power to interpret the standards.

Therefore in this case the Commission has acted based on its delegated authority from Congress.

And when you apply the Chevron analysis, that action, the final order, which is the subject matter before the Court today, is entitled to controlling weight.

The Commission's interpretation of the standard is not arbitrary and capricious, and is in accord with the statute.

In fact the Secretary here does not contest that the Commission's interpretation is reasonable.

It is therefore entitled to controlling weight.

I would like to turn to the Secretary's position.

The Secretary's position here, the interpretation, is nothing more than a litigation position.

It was presented by the citation issued by the compliance officer and as argued by the Secretary's counsel in Court.

And as I indicated previously, under Bowen we believe that stands for the proposition that litigation positions are not entitled to controlling weight under Chevron.

Unknown Speaker: Well, I just read Bowen, the part that you're interested in, and it seemed to me the Court's opinion there was talking about kind of justifications offered for a regulation in the course of litigation sustaining it.

The quotation being that, about the counsel for an agency offering a post-hope justification for it.

That really isn't the case here, is it?

Mr. Faught: Yes it is, Justice Scalia... Justice Rehnquist... Chief Justice Rehnquist.

On the face of it, this standard does not require what the Secretary says.

The gravamen of the offense here that the Secretary alleges is that CF&I did not provide new respirators.

There is nothing in (g)(3) that says that new respirators must be provided.

That only comes about, that requirement is created by the compliance officer when he issues the citation.

Unknown Speaker: But that is done in the context of the exercise of the Secretary's administrative authority.

A citation has been issued through the administrative process based on the Secretary's interpretation of the regulation.

And we have always said that an administrative construction of the regulation by the Secretary is entitled to great deference.

And that is exactly what this is.

Mr. Faught: I will distinguish again, Justice Kennedy, between considerable deference and controlling deference.

Our position is that controlling deference, as outlined in Chevron, only applies when the agency is acting under its delegated authority by Congress, in a format delegated by Congress.

If it's something less than that, yes, it's entitled to weight, but less weight.

And I... there is a lot of confusion around the word deference.

We're not saying that interpretation is not entitled to some weight.

In fact, it should be given weight by the Commission, and it was.

But we are arguing that it is not entitled to controlling weight.

Unknown Speaker: Mr. Faught, in Bowen... I'll try to put it again; I'm not sure you're responding to what seems to be the problem.

In Bowen, the official action was simply the denial of benefits.

That's the authorized governmental action taken by the agency.

And that action didn't necessarily rest on a particular interpretation of the statute.

It didn't bespeak anything.

It was just a denial of the benefits.

Then the litigation comes up, he comes up with this theory.

That's a litigating position.

Here the official action was the issuance of the citation.

That was not neutral.

On the face of it it referred to this section.

On the face of it it necessarily was an official administrative interpretation of the regulation.

Don't you see a difference between those two situations as to what's a litigating position and what isn't?

Mr. Faught: In this situation, Justice Scalia, the only explanation, the only thing that the Secretary has done that places the requirement she is seeking to impose here in this regulation, is the arguments of her counsel and the compliance officer writing.

It is not in the standard itself.

It is like... it's imposing a new requirement that is not there.

And I view that virtually the same as what was happening in Bowen, is that the Secretary came into litigation and explained... tried to explain... a basis for retroactively applying the regulation.

And this Court rejected it.

It said no, we won't accept your explanation when it is not the basis for the regulation.

In addition to Bowen, this Court has made it very clear that to be entitled to controlling weight an agency must act in the forum that is delegated by Congress.

In Batterton the Court distinguished between deference and the kinds of weights that I have been talking about here.

In Batterton the Court said if it's a delegated authority, it's entitled to controlling weight.

If it's something less than delegated authority, it may be entitled to weight, but it's a different weight.

I referred previously to the recommendation of the Administrative Conference of the United States.

The Administrative Conference considered precisely this issue inn 1989, and in July of 1989 issued a recommendation that says in order for an agency to be entitled to controlling weight under Chevron it should act in a rule-making power, a formal adjudication, or in some other forum delegated by Congress.

If the agency has not acted in that forum, it is not entitled to controlling weight.

And that precisely is what the case is here.

Unknown Speaker: What do you, what would you say if... would you say we would be dead wrong if we gave some deference to the... to the National Labor Relations Board view of the National Labor Relations Act?

Mr. Faught: It would depend on the forum, Justice White.

Unknown Speaker: Well, here's the... they issue a complaint and they adjudicate, and they present a view... their interpretation of this statute when it's challenged.

I thought we frequently gave deference to the NLRB?

Mr. Faught: The National Labor Relations Board was carrying out its delegated authority from Congress to adjudicate cases.

In that adjudication it said what the act meant?

Yes, it's entitled to Chevron deference.

Unknown Speaker: Well, I know, but they've never issued a rule in the history.

Mr. Faught: Issued a--

Unknown Speaker: Maybe one or two procedural rules, but they don't have to get up and have a big rule-making authority, proceeding, to announce a construction of the statute that is entitled to deference.

Mr. Faught: --They have been given adjudicatory authority by Congress, just the same as the Commission here.

Unknown Speaker: Well, that's just... that's just exactly... that's just... that's exactly what the Secretary did in this case.

Just took out after somebody to enforce the statute, and... and was expressing a... her view of the statute.

Just like the NLRB does when it--

Mr. Faught: The difference here, Justice White, is that Congress has separated the functions.

Congress took the adjudicatory power from the Secretary, and all that that entails, took that from the Secretary and placed it in the Commission.

So in this case you have a split, split agency.

You have split powers, that the Secretary can operate through the rule-making power, and the Commission can operate through the adjudicatory power.

They both have a policy-making function.

The Secretary's policy-making function is exercised through making rules.

The Commission's policy-making function is exercised through adjudications.

And as Justice Scalia noted in his concurring opinion in Bowen, is that a rule... or excuse me, an order based on adjudication is to determine what the law was.

That is precisely what the Commission did here.

It determined what the law was.

It interpreted what the standard meant.

That's its... that's its function under the act, and that is why it should receive controlling weight.

What the Secretary is trying to do here is raise the same questions that were raised before Congress in 1970 and were rejected.

The Secretary is saying I want that power.

I want all the policy power.

The Commission does not have any policy power in its adjudication.

That is not what Congress intended, and that is not what Congress said.

What Congress said, we are concerned, we will not, and we refuse to place all the power in the Secretary.

We are going to give the adjudicatory power to the Commission.

And that's... that's what the Secretary is trying to take back today.

And she's trying to take it back, not in a formal rule-making proceeding, she's trying to take it back through the issuance of a compliance order, or an order by a compliance officer.

He is one of a thousand compliance officers.

He issues it and says this is my interpretation, this is what the standard means.

And now the Secretary is bolstering it in Court by her arguments of counsel.

That is not the way she is to operate; that is not the delegated authority by Congress.

She is to exercise her policy power through making rules.

She did make a standard in this case, but it's ambiguous.

It didn't say what was intended.

Therefore she tries to explain it by other means.

This Court should reject that explanation.

It is not entitled to controlling weight under Chevron.

The Secretary should not be allowed to circumvent the procedural requirements that Congress set out for her to exercise her rule-making authority.

And therefore we think the judgment, or the judgment of the Tenth Circuit should be affirmed.

It was correct when it said it would look to the reasonableness of the final order of the Commission.

That final order was reasonable, and therefore was entitled to controlling weight and entitled to deference over the litigation positions of the Secretary.

If there are no further questions, Chief Justice.

Unknown Speaker: --Thank you, Mr. Faught.

Mr. Sloan, do you have rebuttal?

Rebuttal of Clifford M. Sloan

Mr. Sloan: Just a few brief points, Your Honor.

First, respondent places great weight repeatedly on the phrase "controlling weight" as a decisive factor here.

Respondent fails to point out that in this Court's consistent decisions on an entity's interpretations of its own regulations, which almost by definition are not embodied in the regulation, the Court has repeatedly said that those interpretations are entitled to controlling weight unless plainly erroneous or inconsistent with the regulation.

That has been the settled standard that the Court has applied in this category of cases.

Secondly, respondent contends that the Commission was given a policy-making function, and there is no evidence of that in the statute or in the legislative history.

The contrast between the Commission's role and the role of the NLRB or the Federal Trade Commission could not be more stark, for those entities are specifically given policy-making authority.

And, as this Court has held in cases like Chenery and Bell Aerospace, the reason that those entities can announce policies in the course of adjudication is precisely because they have the choice of making that policy in other means.

They have been given the policy-making authority, and it is that that the Commission lacks here.

Third, in terms of just the context of this case, the second very case-specific issue that respondent repeatedly talks about, it is not true that the only evidence of the Secretary's interpretation is embodied in the citation in this case.

Even if it were, it would be entitled to deference.

As we have pointed out in the reply brief, in January of 1979 the Secretary, in the Industrial Hygiene Field Operations Manual, had said in interpreting this provision that respirators must fit properly, and in subsequent interpretation in April of 1979, which is Exhibit C(11) before the administrative law judge, at page 2, the Secretary again said... referred to this specific provision as a training and fitting standard.

In 1980 the Secretary issued another instruction, and that has consistently been the Secretary's interpretation with respect to whether a fit requirement is imposed.

If there are no further questions.

Chief Justice Rehnquist: Thank you, Mr. Sloan.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

American Textile Mfrs. Inst. v. Donovan - Oral Argument

Wed, 18 Feb 2009 06:13:12 +0000

Case:

American Textile Mfrs. Inst. v. Donovan

Media File:

79-1429_19810121-argument.mp3

Related Transcript:

79-1429_19810121-argument_transcript.xml

Transcript:

ORAL ARGUMENT OF ROBERT H. BORK, ESQ., ON BEHALF OF THE PETITIONERS

Chief Justice Burger: We will hear arguments first this morning in American Textile Manufacturers Institute v. The Secretary of Labor, and National Cotton Council v. The Secretary of Labor; consolidated cases.

Mr. Bork, you may proceed whenever you are ready.

Mr. Bork: Mr. Chief Justice and may it please the Court:

These cases are here on writ of certiorari from the Court of Appeals for the District of Columbia.

That Court upheld a health standard promulgated by the Occupational Safety and Health Administration, and the standard specifies the maximum amount of respirable cotton dust that may be in the air of any textile plant.

It is intended to reduce the incidence of byssinosis, which is a respiratory condition associated with cotton dust.

Petitioner in one case are... American Textile Manufacturers Association or ATMI, a trade association, and 12 manufacturer members.

Petitioners in the other case are the National Cotton Council, which represents all seven segments of the cotton industry from farmers to textile manufacturing.

The standard is extraordinarily severe and costly; it requires textile manufacturers to reduce cotton dust within four years to.2 milligrams per cubic meter of air in all yarn manufacturing processes and to.75 milligrams per cubic meter in all weaving processes.

Now this standard was arrived at by OSHA by applying their carcinogen policy, which this Court remembers from Benzene.

The Benzene case requires that the exposure limit be set at the lowest feasible level.

It is ironic that just two days ago OSHA rescinded its carcinogen policy.

Mr. Bork: Mr. Bork, how do you define the word feasible in that statute?

Mr. Bork: Well in a variety of ways, Justice Rehnquist.

In the first place, my first point will be that, to find a standard economically feasible, OSHA must have an estimate of costs which is based upon substantial evidence.

It must then find what those costs mean to the industry, what impact it will have upon the industry; how many jobs, how much investment will be lost because of that cost.

And finally, it has to have a legal criteria by which it is able to state that the impact it finds is economically feasible.

Mr. Bork: And did you draw that definition from the Congressional language or legislative history?

Mr. Bork: From the Congressional language and also it seems to me, Justice Rehnquist, that it is impossible to say that something is feasible without knowing what it will do to the industry.

And OSHA has made no finding here of what it will do to the industry other than to say that some undefined number of plants may close.

Mr. Bork: Well, and that the industry as such would not go... not cease to exist?

Mr. Bork: The industry as such, Justice Stewart, will not cease to exist is all they have said.

That finding is thoroughly consistent with 90 percent of the industry being left, or 50 percent of the industry being left, or 10 percent of the industry being left.

In fact, the literal language that OSHA uses would be satisfied if there were a single mil left.

That standard of the industry will continue to exist is not a standard at all.

Mr. Bork: But it is the one that OSHA applied?

Mr. Bork: That's the only one, that's right, Justice Stewart.

And one of our contentions is that that standard, if that is considered to be a standard, means that nobody knows what OSHA is doing; judicial review is impossible, and you have the completely uncanalized power over industry that this Court found improper on the benefit side of the act.

Here, they are claiming the same power through their power to impose costs without limit, or without any real limit.

Mr. Bork: Well Mr. Bork, if while the Benzene case was pending here, the Board had revoked its carcinogen policy, as you say it now has, would we have remanded that Benzene case for reconsideration?

Mr. Bork: I trust so.

Because--

Mr. Bork: And are you suggesting that that should be done here?

Mr. Bork: --I'm suggesting that, but I have additional suggestions, Justice White--

Mr. Bork: Yes, I know you do.

But this is a very recent development, I take it?

Mr. Bork: --Monday.

Mr. Bork: Is there anything official--

Mr. Bork: I believe it's in the Federal Register as of Monday, is it not?

Mr. Bork: --Have the parties given us anything, Mr. Bork?

Mr. Bork: No, I just learned about it last night.

Mr. Bork: I haven't heard it until you just mentioned it.

Well could, I know you have other points but it's possible that would be dispositive--

Mr. Bork: I think it is, Justice White.

Mr. Bork: --Mr. Bork, can you hypothesize the circumstances in which a major industry, producing things we regard as necessary, that is, the entire automobile industry and the entire lumber industry, the entire cotton industry... can you hypothesize any situation in which it could be simply closed down and stopped, by operation of law?

Mr. Bork: You mean that it would be proper to do it that way?

Mr. Bork: Could it be done that way?

Could the Congress of the United States, through its mechanisms such as we have here, in effect say, no more automobiles shall be produced because automobiles kill 63,000 people a year and injure two million people a year, and therefore.

Mr. Bork: I think, Mr. Chief Justice, that I would agree that the Congress does have the power to do that.

There may be problems about compensation, but I think it has the power to do that.

However, one thing is clear; that Congress in the OSHA act did not intend just to shut down industries, because they required that the standard be economically feasible.

Mr. Bork: Mr. Bork, the Chief Justice asked you if the Congress could through its technicians, accomplish this result?

My understanding of the act was that Congress had delegated to the executive branch the accomplishment of these particular results.

I don't know if your answer would be any different if the question were phrased in those terms or not.

Mr. Bork: Well, I think an additional problem arises, Justice Rehnquist, and that is the problem that Congress did not delegate the power to destroy an industry because it specifically required that economic feasibility be present.

So while Congress may have the raw constitutional power to do that, it is perfectly clear that in this statute it has not done that.

Mr. Bork: Well, one of your points is that there was an overdelegation, in the sense that it's... a delegation without any standards, isn't it?

Mr. Bork: That is quite correct, Justice White.

But it is more than that, because it is a constitutional point in that sense.

Mr. Bork: Right.

Mr. Bork: But it is also a statutory point, so that--

Mr. Bork: Right.

Mr. Bork: --I think those persons who do not think that the delegation doctrine remains a part of constitutional law would nevertheless wish to reverse here, for a wholly inadequate set of findings about economic feasibility.

One simply cannot judge economic feasibility in any way from the record OSHA has made.

Mr. Bork: The statutory word is feasible, isn't it?

Mr. Bork: Pardon me?

Mr. Bork: The statutory word is feasible, I mean, not economically feasible?

Mr. Bork: That is correct.

That is correct.

Everybody who has looked at it, every Court who has looked at it has accepted the contention that feasibility requires both technological feasibility and economic feasibility.

Mr. Bork: And maybe some other kind of feasibility.

Mr. Bork: Perhaps so.

Mr. Bork: And along with the executives, along with OSHA, they think it includes economic--

Mr. Bork: Yes they do... no, OSHA does not contend that economic feasibility is not a requirement.

Mr. Bork: --Right.

But the statutory standard is feasible.

Mr. Bork: That is correct, Justice Stewart.

Mr. Bork: Mr. Bork, could I be sure I understand your suggestion about the revocation of... OSHA's carcinogen policy?

I didn't understand... this is not a carcinogen that we're dealing with here, is it?

Mr. Bork: That's why I find it ironic that OSHA continues to insist upon a standard arrived upon the carcinogen policy for cotton dust which is not a carcinogen.

Mr. Bork: Well, but did they expressly rely on their carcinogen policy here, or do you think their reasoning was--

Mr. Bork: As I understand it--

Mr. Bork: --comparable to that used in the other cases?

Mr. Bork: --It was certainly identical, not just comparable, Justice Stevens.

And I think they expressly relied upon it.

Mr. Bork: Was the lead case in this same Court of Appeals?

Mr. Bork: Yes.

Mr. Bork: Is that a carcinogen or is it more akin to this?

Mr. Bork: The lead case is... the carcinogen policy was amended because of the Benzene case, and they said that the... that lowest, that carcinogen policy requiring the lowest feasible level was inconsistent with the act.

I would suppose this is too.

Mr. Bork: My question was the lead case, in this same Court of Appeals?

Mr. Bork: Yes.

Mr. Bork: Was that like this, a non-cancer-producing agent?

Or was it a cancer-producing agent?

Mr. Bork: No, it is not a carcinogen.

Mr. Bork: Wasn't the reason for revoking the carcinogen policy, at least as applied in cases like Benzene, was the failure to make a finding that was made in this case, namely that there was a significant risk.

So does revocation really affect this case?

Mr. Bork: Well, I don't think the... I'll come to that, I don't think the significant risk--

Mr. Bork: You don't contest the fact there was such a... the finding required by Benzene was made here, I don't think you dispute that?

Mr. Bork: --That first finding was, yes.

Mr. Bork: Yes, and you don't challenge it as being adequately supported by the record?

Mr. Bork: Well there is a significant risk in cotton dust, it's a question of at what level and with what controls that risk disappears, is very much before us.

But my first point I have,... really want to argue two propositions.

The first one is economic feasibility.

And as to that, my point is that three things are required.

As I said, an estimate of costs based upon substantial evidence.

Our point here is that the estimate of costs is based upon no evidence, it is pure conjecture.

But the second two elements of economic feasibility aren't even present here, and that is, what do those costs mean for the industry, how much of this industry is going to be destroyed.

That isn't even addressed here, except to say the whole industry won't be destroyed.

And thirdly, there is no criteria of any sort; no policy judgment, no articulated policy judgment, nothing as to why whatever percentage of the industry is going to be destroyed should nevertheless be considered a feasible policy.

So that, two of the three elements which are inherent and inevitable in any finding of economic feasibility simply aren't present here, and that fact alone, I think, requires reversal.

Additionally, there is no substantial evidence to support the cost for the bases, so that we have economic feasibility requiring three elements, not one of which is present in this case.

And the government's brief I think, quite understandably, attempts to obscure this point which is present in our main brief, by speaking as if we are only arguing about the substantial evidence supporting the cost estimate.

We are not only arguing that.

We are also arguing that the other two elements which are required for any sensible judgment of economic feasibility aren't even addressed at this point.

Mr. Bork: Well, Mr. Bork, none of this, I gather, as you've now stated, involves an argument that a cost benefit analysis was obtained?

Mr. Bork: That is my second proposition, Justice Brennan.

Mr. Bork: That's your second point.

Mr. Bork: And these--

Mr. Bork: Is that under the feasibility or under the reasonably necessary?

Mr. Bork: --I think it's under both, Justice Brennan.

Mr. Bork: Under both.

Mr. Bork: Under both sections of the statute.

But I want to stress that these two propositions are logically independent.

The argument about economic feasibility would in and of itself justify reversal, quite aside from whether there was any requirement, which we contend there is, that there be a reasonable relationship between costs and benefits.

Mr. Bork: And were these points presented this way to the Court of Appeals?

Mr. Bork: The Court of Appeals, the cost-benefit point was presented and the finding of economic feasibility was attacked, yes.

Mr. Bork: But in these terms, in the terms that you are now putting... with the three elements?

Mr. Bork: I don't think it was that drawn out, in quite that sharp a form.

Mr. Bork: You're inferring that the Court of Appeals dealt with these particular points?

Mr. Bork: No.

The Court of Appeals simply accepted the idea that if... which was challenged... that if the whole industry was not destroyed, that was sufficient.

The Court of Appeals articulated that standing.

But I think therefore, under the economic feasibility point, that the agency is claiming an unfettered power--

Mr. Bork: Mr. Bork, can I ask you what you... for a little clarification of the second point in your three points that are required?

How much of the industry must be destroyed before it's no longer feasible?

Supposing that... say the figure is 25 percent and supposing 25 percent of the firms would go out of business but the remaining 75 percent would be able to expand their production and continue to produce the same aggregate amount of goods.

Would that be feasible or not feasible under your standard?

Mr. Bork: --Well, in the first place, Justice Stevens, I am not advancing any standard because I am not in a position to do so.

These things have never been addressed--

Mr. Bork: No, but you are advancing a proposition that there must be measurement of the percentage of the industry destroyed.

What do you mean by destroying industry, is that to mean destroying existing firms or a portion of the total output?

Mr. Bork: --Oh, I think it means both.

For example, if... it may be that if there is a section of the country where all of the firms would be destroyed with drastic effects upon employment and so forth and so on, that might be considered not feasible, even though the production would shift to a different section of the country.

But I don't really wish to settle that.

We haven't... this is a process of developing this law which has not even been gone through by OSHA.

Mr. Bork: It's just not there.

Mr. Bork: Pardon me?

Mr. Bork: It's just not there.

And I am really not prepared to spell out all of the conditions under which--

Mr. Bork: Would you say OSHA is free to pick whatever approach to the word feasible makes sense, as long as it follows these three criteria?

Mr. Bork: --That's true.

Mr. Bork: Because certainly there's no Congressional guidance on this precise point.

Mr. Bork: No, that's true.

I think the... while we're talking about practical concerns and so forth... I think it would be a common law development when OSHA began to give the reasons why it found a certain level of destruction feasible.

The Courts could then look at it and we would begin to get some rationality into OSHA's processes and we would know what they were doing.

And not least, that would make OSHA politically accountable to Congress, because Congress would know then what price we are paying for this kind of thing.

So I think it is a large function of this Court to introduce political accountability into processes, governmental processes, which lack them.

And this one certainly lacks them.

Mr. Bork: Let me pursue the hypothetical question I put to you earlier, Mr. Bork.

In your view, would Congress have the constitutional authority to bar cigarettes, for example, unless they can demonstrate that all negative health factors were eliminated?

Could Congress do that itself via statute?

Mr. Bork: In my opinion, you have chosen the example, Mr. Chief Justice, that pains me a great deal, but I think they could.

Mr. Bork: Second question: could they delegate that, by a structure somewhat like the usual pattern of creating a commission like OSHA, could they delegate that to a commission on tobacco hazards?

Mr. Bork: I think, again, Mr. Chief Justice, the answer is yes they could, if they told the agency what it was to consider in arriving at the conclusion whether or not cigarettes were to be banned.

Mr. Bork: That is, do you mean by that if the commission, after hearings, made findings that it had this definite health hazard factor, carcinogen-producing elements, then the commission could--

Mr. Bork: I think so, if it's a canalized, structured delegation, so the commission isn't just roaming free.

Mr. Bork: --And it would have nothing to do with... or Congress would not be limited by the fact that this would put a great many people out of business?

Mr. Bork: No, Congress would not be, nor would OSHA, if they had been delegated the task.

But they were delegated the task to do it to the extent that it is feasible, which we all, I think agree that it means economically feasible, and given that, I think they have to make the findings that go to feasibility.

And they have not.

Now the other point--

Mr. Bork: Mr. Bork, before you proceed, does OSHA agree with your assertion that it has authority, under the act, to put 50 percent of a major industry out of business?

Mr. Bork: --Justice Powell, the difficulty is that OSHA has never addressed what it's authority is.

I think... well, I don't know--

Mr. Bork: Are OSHA's findings in the papers that we have before us?

I couldn't locate them.

Mr. Bork: --OSHA's findings are simply that the entire industry will not be destroyed or industry as a whole will not be destroyed, that's all they said.

Mr. Bork: And I'm sure the Solicitor General will respond to my question, but one of the examples you gave was that... I understood it, that under the standard before us in this case 90 percent of the industry could be put out of business and OSHA would still claim the standard was appropriate.

Mr. Bork: OSHA could still claim, under that form of words.

I don't know what OSHA would do in that case.

And a large part of OSHA's argument in its brief is that they don't really need to state a standard because they are very reasonable and prudent people.

And in effect, the brief argues, you can certainly trust us because we're reasonable and we're careful.

But that's the--

Mr. Bork: Did OSHA make the sort of findings of fact that we expect from a trial court, and if so, where are they?

Mr. Bork: --I can't find them, Justice Powell.

I think it's an extraordinarily vague performance.

We don't know what they mean about feasibility, which is my entire point.

The... they did say, that some marginal plants will close rather than comply.

One, if marginal means plants that are close to the edge financially, that could be a very large part of the industry.

We don't know.

Some plants will close rather than comply, other plants may go out of business after they try to comply.

We don't know.

OSHA simply has not addressed that issue.

In a way, I think they have to, to have a rational process that can be reviewed by anybody.

The only thing they have tried to do, is state that they have found particular costs.

I think I will have to provide that subject in view of the time, because if a careful look is taken at their cost estimates it will be found that they rest upon nothing.

For example, in the spinning process, which is one of the most expensive to deal with in terms of getting dust levels down, it turns out that their own contractor, RTI, found 553 million dollars to get down to the.2 level OSHA insists upon, and said that local exhaust would be necessary; local exhaust ventilation.

Now it turns out, you can't put local exhaust ventilation on spinning frames, and the experts Hocutt and Thomas, who were our dust control experts, said it couldn't get down to.2 under any circumstances.

OSHA did two things: it made up its own technology, both experts agreed, you had to do it by local exhaust ventilation.

OSHA just decided no, you can do it some other way; we don't know how they think we can do it, except they speak vaguely about room ventilation, which the people agree won't work.

They also made up their own cost figures.

They rejected their own contractors' cost figures by about 500 million dollars, so that we... the one thing we do know about the cost that OSHA projects is that they have no relationship to the real costs.

Mr. Bork: Are respirator masks a guarantee of protection, Mr. Bork?

Mr. Bork: They are not, Your Honor.

They may be used by some people, but not by others, and in cases where they may not be used, cannot be used, then transferred to a--

Mr. Bork: But where they are used, are they a guarantee?

Mr. Bork: --As I understand it, yes, Mr. Chief Justice.

Now--

Mr. Bork: What is the factor that renders them unfeasible?

Mr. Bork: --Well for some people, the standard sizes don't fit.

Some people have a little trouble breathing through them, other people can use them.

So you have to try it on the individual and see whether he is one who can use it.

One more point about costs which is simply that, I think it is quite clear that less cotton is going to be manufactured as a result of this standard.

In fact, the cotton production has been dropping every year since the standard was announced.

And OSHA decided it did not have to look at the costs imposed, for example, upon cotton farmers; there are 160,000 cotton farmers many of whom are no longer going to growing cotton and OSHA just simply ignored all of those costs in its standard and didn't even address them.

Which, I think, is also improper.

But I'd like to turn to the second proposition now, which is the question of whether there has to be a reasonable relationship between costs and benefit.

Mr. Bork: Before you go on to that, Mr. Bork, is there anything in this record that would indicate that with dropping domestic production of cotton and cotton products--

Mr. Bork: The National Cotton... I'm sorry.

Mr. Bork: --that there are imports that are taking up the slack?

Mr. Bork: That is correct, Mr. Chief Justice.

The National Cotton Council put in the evidence on what would happen to cotton farmers, it put in the evidence upon the decline of domestic cotton production which I think is about 2.5 percent a year for the last four years, and of course, the import of domestic, foreign textiles, cotton-made textiles, has been increasing and may increase at 6 to 7 percent a year, even under the restrictive trade agreements.

Mr. Bork: Anything to prevent Congress from, or OSHA, from providing that no imports would be permitted in this country unless the sources complied with OSHA's standards?

Mr. Bork: Nothing that I can think of, Mr. Chief Justice.

Mr. Bork: But, how would we, as a practical matter, how would we--

Mr. Bork: How would we effect it?

Mr. Bork: --Yes, would we send inspectors over to--

Mr. Bork: Well, I addressed your question on the assumption that Congress has the raw power to try it.

I don't think it's a very practical effort.

Mr. Bork: --That would take treaties.

Mr. Bork: It would, it would.

But on the relationship between cost and benefit, I think this is an ideal case to consider it, because--

Mr. Bork: Excuse me for interrupting you again, Mr. Bork, we're not giving you much chance, I'm afraid.

But, in connection with your argument, I gather what you're now addressing is a little different than the costs discussion you've been giving us as to unfeasibility--

Mr. Bork: --It's entirely different.

Mr. Bork: --it is independent, isn't it?

Mr. Bork: That's right.

Mr. Bork: The cost benefit?

Now isn't cost benefit analysis a... that's an expression of art, isn't it, some kind of--

Mr. Bork: No, Justice Brennan, I think it is what we all do every day, and in about every decision we make.

And OSHA has been doing cost benefit analysis when they chose to go after cotton dust before noise, when they chose a.2 level and chose a.75 level for other processes, they did it because they--

Mr. Bork: --Well, yet, what we're concerned with here, I gather, is what the relationship is of cost to benefit, and how do you define benefit here?

Mr. Bork: --We define benefit in what additional worker health protection will be provided by the--

Mr. Bork: Production of the PEL, is that it?

Mr. Bork: --Well, that's not a benefit, unless it provides additional protection to workers.

Mr. Bork: From this... cost question?

Mr. Bork: That's right, and here I think the real case to be decided... the reason I think this is a case that's almost ideal for this kind of discussion, is that byssinosis is not a carcinogen, it develops slowly, it can be caught by a variety of tests long before it gets to the irreversible stage, so that I think there is no benefit, but I don't have to say that... I think there's no benefit, to reducing the PEL from.5 to.2 when you have a medical surveillance plan which catches these things and the workers can be transferred or put in respirators.

But at least OSHA should have addressed the question, whether moving from... down from.5 to.2....5 is a reduction in dust levels, I mean, that's our proposal, whether coming down from.5 to.2 with a medical surveillance plan which OSHA itself has said these tests would insure that any significant change from the baseline determination will become apparent before material impairment occurs.

Mr. Bork: Well even if you are right, where in the statute is the requirement that OSHA do what you're now suggesting OSHA should have done?

Mr. Bork: I think this comes under the reasonably necessary language, and under the requirement of feasibility, and indeed, it comes I think from the language that OSHA's counsel seem to think goes the other way, which is no material impairment of health to the extent feasible.

That isn't a standard about, that isn't a criteria about a single health hazard, that is the worker and the total amount of risks he faces in the marketplace, and you can't come close or as close as is possible--

Mr. Bork: Well, I guess we'd all be better off if Congress had said in express terms that OSHA should have done a cost benefit-analysis.

What kind do you suggest?

Mr. Bork: --Justice Brennan, I would stress that I'm not suggesting a computer or a slide rule and a straight weighing.

I think OSHA should be allowed... required, is required to state what range it is dealing with in cost-benefits--

Mr. Bork: Well are we going to... if they must do a cost-benefit analysis, are we not going to have to define what we mean by cost-benefit analysis?

Mr. Bork: --In the sense that you want OSHA to articulate the... because they have never done it, the additional benefits from.5 with medical surveillance to.2 with medical surveillance, and I think there are no additional benefits.

But they've never articulated it if there are any.

And I don't think this is reading something into the statute in any heroic fashion, Justice Brennan, because this is a less heroic reading of the statute than, for example, reading the rule of reason was into the Sherman Act, whose text simply doesn't allow the rule of reason.

But in order to make that a rational and useful statute, rather than a wholly destructive statute, this Court read the rule of reason in it.

So, here, I think the text of this statute easily allows and indeed, compels the finding that... and I want to stress this, OSHA says in its brief, that it is comparing all these factors.

So it's not resisting thinking about cost-benefit.

On page 57, they give you a list of all the cost-benefit analyses they do, what they are resisting is disclosing their thought processes.

Mr. Bork: Spelling it out.

Mr. Bork: That's right.

So that anybody, Justice Marshall, can review it, or find out what they're talking about, or so that Congress can find out what they're talking about and what kind of--

Mr. Bork: Mr. Bork, do you think they can do it in a meaningful way without putting a value on human life?

Mr. Bork: --Certainly, Justice Stevens.

In the first place, I would stress that human life is not at stake in this case, because at the levels we're talking about and the medical surveillance we're talking about, this stuff can be caught before it becomes irreversible and human life is not at stake in this case, nor is material impairment of health at stake in this case.

Mr. Bork: Well, would it not have to put a dollar value on the irreversible stage of the disease at least?

Mr. Bork: Not in this case, Justice Stevens, and not in most cases, I think.

Not a dollar value.

But... and nobody expects that.

We expect them to state... we expect the following benefits, they're going to cost so much, and that seems to us reasonable--

Mr. Bork: But one side of the equation is all measured in dollars.

Mr. Bork: --But we're not asking, Justice Stevens, that they come up and say, look, the benefits in dollars outweigh the costs in dollars.

What we want is an articulation of what they expect to get for how much money, and over time, they will develop a common law and Courts will begin to understand what--

Mr. Bork: So, to that extent, I gather, what you're suggesting is judgmental?

Mr. Bork: --It is judgmental.

Mr. Bork: The ultimate conclusion has to be judgmental.

Mr. Bork: It is.

Mr. Bork: But not in dollar terms, based on the benefits?

Mr. Bork: No.

That is correct, absolutely correct.

We don't expect that kind of analysis at all.

But if their process is to be rational, and if we are to know that it's rational... if industry is to know, if the Courts are to know, if the Congress is to know, I think they ought to spell out what it is they expect to get for how much money.

Here,--

Mr. Bork: You think the statute requires that they do so?

Mr. Bork: --That is correct, Justice Stewart.

Mr. Bork: And is it your further contention that if the statute doesn't require they should do so, that the statute, there may be constitutional doubts about the statute itself?

Mr. Bork: I would think so, because at that point we don't know what OSHA is doing.

Mr. Bork: A successive delegation standard for this delegation--

Mr. Bork: At that point it is, at that point.

Mr. Bork: --Unless the statute requires them to do what you indicated?

Mr. Bork: I think so.

Of course, the alternative strategy, Justice Stewart, is to help them develop the criteria to save the statute, rather than striking it down; or to interpret the statute so that it is done to avoid that constitutional problem.

But I don't think we're asking anything peculiar, or anything they don't say they're doing; we are asking that they tell us what they are doing, that's all.

Mr. Bork: One final question, if I may, Mr. Bork.

Do you contend that this is a toxic substance case under Section 6, or whatever the number is, do you contend there is any difference in the cost-benefit analysis in a toxic substance case than in any other standards?

Mr. Bork: No, I don't think so, in that sense.

Because this is not, there are toxic substances that produce harm that can't be reversed.

I think that's a very different case, than this case where, despite some confusions upon the topic--

Mr. Bork: Well, we've got to decide which section of the statute we're working with, and Section 6, where the word feasibility is found, is in the toxic substance section.

Do you... first of all, do you agree that that's the appropriate section for purposes of statutory analysis?

Mr. Bork: --I think--

Mr. Bork: Assuming it's a toxic substance.

Mr. Bork: --I think Section 6 is the appropriate section, but I think all standards are also governed by Section 3.8.

Mr. Bork: So that if, if they are governed by 3.8, and that's the source of the cost-benefit requirement, then I don't think you can rely on the word feasibility.

Mr. Bork: No, I rely, Justice Stevens, on both of those sections.

It seems to me that both 3.8 and--

Mr. Bork: But you can't rely on both if it's not a toxic substance case, and that's why it seems to me we've got to think through the question whether the rule is different for a toxic substance than it is for a non-toxic substance.

Mr. Bork: --Well, we agree it is a toxic substance.

And it seems to me that if one wants to discuss 6(b)(5) alone, that the requirement of a cost-benefit comparison, and articulation of reasons, is to be found in 6(b)(5).

Mr. Bork: Well no, my point is somewhat different.

My point is, when one is confronted with a non-toxic substance and therefore doesn't have the benefit of the language in 6(b)(5), is there also a cost-benefit requirement.

And if so, that requirement is found independently of the feasibility language.

Mr. Bork: That's right, I think it would be found, Justice Stevens, in the reasonably necessary language of the section.

Mr. Bork: If that's enough, then you can't really rely on the feasibility language.

Seems to me you're in somewhat of a dilemma and I don't know what the right answer is, but I--

Mr. Bork: I confess, Justice Stevens, at the moment I don't quite perceive the dilemma I'm in.

Mr. Bork: --Well if the reasonably necessary language requires cost-benefit analysis for all standards, then we don't even have to look at the feasibility language.

Mr. Bork: That's right.

Mr. Bork: On the other hand, if you must look at the feasibility language in order to justify or to support your argument that cost-benefit is appropriate, then you do not require cost-benefit in non-toxic substance cases, which would be somewhat ironic, because that would mean that you have a more strict standard, the agency has a stricter burden, in the toxic substance case than in the non-toxic substance case.

Mr. Bork: Well Justice Stevens, if I may ask, it would seem to me, and perhaps I'm wrong, that if it was a toxic substance case you can derive it and should derive it from 6(b)(5) to the extent feasible.

If it is a non-toxic substance case, it seems to me it can be derived and should be derived from the language that a standard must be one which is reasonably necessary or appropriate.

Is that... am I still in a dilemma?

Mr. Bork: Well I think you are, but I won't take up any more of your time, because--

Mr. Bork: My time is gone, Justice Stevens.

Mr. Bork: --It seems to me that the... that one has to decide whether Congress intended a different standard for toxic substances than it did for non-toxic substances.

Having made that decision, then one must decide which portions of the statute will support your argument.

Mr. Bork: I do not think that Congress provided cost-benefit for toxic substances alone.

It seems to me it's a general requirement of the act.

Chief Justice Burger: Very well.

Mr. Geller.

ORAL ARGUMENT OF KENNETH S. GELLER, ESQ., ON BEHALF OF RESPONDENT MARSHALL

Mr. Geller: Thank you, Mr. Chief Justice, and may it please the Court:

The textile industry has presented two main challenges to the cotton dust standard in this case.

The first is the cost-benefit issue, second is the factual claim that the administrative record does not support the Secretary's findings of economic feasibility.

Mr. Bork: Excuse me, Mr. Geller, are you going to address this development of a couple of days ago?

Mr. Geller: I'd be happy to.

I was just about to do it.

I wanted to say about the second part of Petitioner's argument, the substantial evidence, that we think the Court of Appeals correctly analyzed that factual question.

But I do want to point out that Professor Bork is incorrect in saying that the cotton dust standard was issued pursuant to any sort of carcinogen policy.

It doesn't... it was not at all.

It was issued pursuant to substantial evidence of a significant health risk at the current exposure level.

The pre-standard current exposure level.

There were 105,000 pages of record in this case, and they pointed conclusively to a substantial risk of material health impairment at the 1,000 microgram level.

Dr. Merchant produced a dose-response curve, it was not subject to serious challenge at the administrative hearing, showed that at that level 26 percent of the workers would be exposed to some risk of byssinosis.

Also showed that at the level that the Secretary proposed that risk would be cut in half, to 13 percent.

There's no question in this case we think, both that the Secretary satisfied the Benzene standard, and that he issued the standard pursuant to substantial evidence of the significant health risk that the standard would reduce, not pursuant to any so-called policy.

This is just another industry red herring.

Now Professor Bork made another... a number of other misstatements about the record that are purely factual.

I want to just mention them very briefly.

The answers are all in our brief.

I don't think it's very useful here to replay the evidentiary disputes that the Secretary resolved and that the Court of Appeals found were supported by substantial evidence.

The respirators are not feasible, the record quite clearly shows that.

Secondly, the industry's approach in this case, and certainly the basis for the so-called ATMI alternative was this notion that the low-grade of byssinosis were no more damaging than the common cold.

That's absolutely incorrect.

There was substantial evidence in the record of material health risk even at low levels of byssinosis, and more important, the Secretary found that it's a continuum of disease.

Dr. Harley, the industry's main witness, testified that byssinosis is a continuum of disease, but it doesn't progress in a rational fashion.

Mr. Bork: Is it possible to tell from OSHA's announcements in this case what it understands feasible to be, to mean?

Mr. Geller: Yes, well, the Secretary has always taken the position--

Mr. Bork: Is it something more than affordable?

Mr. Geller: --It means economically affordable by the industry as a whole, not by every individual employer in the industry.

Mr. Bork: So what... just as long as it's affordable by the industry as a whole?

Mr. Geller: That's right.

That it won't materially impair the industry's financial condition, industry will be able to maintain long-term competitiveness and profit levels.

And here, the Secretary found, the industry as a whole will not be threatened by the capital requirements of the regulation, that's page 27378.

Mr. Bork: Well, do you mean by that, that if the record showed that compliance would increase the cost of cotton to the ultimate consumer by 500 percent, that then we could go ahead?

Mr. Geller: No, because in that situation--

Mr. Bork: You didn't put any limit on the economic feasibility in your earlier statement.

Mr. Geller: --Well, it would not be feasible if people would no longer buy cotton, the industry would go out of business.

But in this case--

Mr. Bork: Well, that would depend upon the elasticity of the--

Mr. Geller: --Well that's right, and the Secretary went into all of that.

Mr. Bork: --finding that it was an absolutely inelastic demand, and it could be increased 1000 percent--

Mr. Geller: Well perhaps then if the costs--

Mr. Bork: --amount of purchasing.

Mr. Geller: --And if the costs could all be passed along to the consumers, the consumers would still be able to buy, would still buy the product, then the health costs are the cost of doing business.

Mr. Bork: Are you suggesting that Congress contemplated that the whole country wait until we find out whether it's going to make the cost go up 1000 or 500 percent?

Mr. Geller: Well the Secretary has the burden of proving economic feasibility, he does... he does analyses, in this case, for example, the evidence showed that there would be a decrease in demand for cotton of only about 1 or 2 percent under the Secretary's proposed standard, and that costs could rise to keep the same profit levels, only--

Mr. Bork: Mr. Geller, you refer to the word... the phrase that the Secretary has the burden of proving economic feasibility, as I recall, the statute simply says if feasible, doesn't it?

Mr. Geller: --That's correct.

Feasibility though, is a requirement before Section 6(b)(5)--

Mr. Bork: Well why do you read the word economic into it?

Mr. Geller: --Well, I think that I agree with Professor Bork and certainly with the lower court, that Section 6(b)(5) has construed the word feasible to mean both technologically and economically feasible.

That's what we think Congress meant.

That's... in other statutes, such as the Clean Air Act which was passed the same week as the Occupational Safety and Health Act, Congress specifically said economically and technologically feasible, and in this statute, that's--

Mr. Bork: But wouldn't that be almost an argument against your position, if Congress the same week, when using the word feasible, had modified it with the words economic and technologically, and in this statute it simply said if feasible--

Mr. Geller: --Well I don't think, Congress doesn't act in computer-like fashion, but I think that when in the same week they used the word feasible and define it to mean both economic and technological feasibility, that that's what they mean when they... the same week, used the word feasible without the modifiers.

There's no suggestion in very lengthy legislative history, Mr. Justice Rehnquist, that they meant anything other than economic or technological feasibility.

Mr. Bork: --Incidentally, Mr. Geller, you just mentioned pass the cost on to the consumer, was there any finding to that effect?

Mr. Geller: Yes, there were substantial--

Mr. Bork: Well, I know there was an extreme assumption, I think that's the language, but what was the supporting evidence that it could be passed on or would be?

Mr. Geller: --There was testimony by experts in the field that--

Mr. Bork: No well, I'm asking, what finding other than the expression extreme assumption?

Mr. Geller: --No, no, no.

There were express findings in this case, Mr. Justice Brennan, in cent per profit cent, how much each garment would go up, these are all of course speculations, but informed ones, OSHA did not talk in vague generalities.

The preamble to this standard takes up some 40 or 50 pages of three column, small type in the Federal Register, justifying every single finding that the Secretary made, and the Court of Appeals took 100 pages analyzing the record very carefully to conclude that the Secretary's findings as regard to these Petitioners were supported by substantial evidence.

The... anyway, I just want to mention another one of the misstatements I think that was made, because I think it's important, the Secretary does not engage in the cost-benefit analysis under Section 6(g), he sets priorities, by statute he sets priorities.

And it didn't take very much sophistication for the Secretary to realize that the number one priority facing the textile industry in terms of health was cotton dust.

He didn't engage in any cost-benefit analysis to make that decision; it was obvious it--

Mr. Bork: Well, you instinctively do, as Professor Bork suggested.

Every decision that every person or institution makes is instinctively or implicitly inherently... a cost-benefit decision.

Mr. Geller: --Not with the same set of--

Mr. Bork: Even in the setting of priorities.

Mr. Geller: --Yes, but not, I don't think, Mr. Justice Stewart, with the same sort of mathematical precision that these Petitioners are going to require--

Mr. Bork: Whether or not you're going to play an extra rubber of bridge, you weigh the pleasure of playing an extra rubber of bridge with the loss of sleep that's going to be incurred.

Every decision that's made is a cost-benefit decision, is it not?

Every rational decision?

Mr. Geller: --Every rational decision takes into account costs and benefits, perhaps, but it doesn't weigh them the way the Petitioners suggest the Secretary has to weigh them in some sort of fine balance in this case.

Mr. Bork: In the setting of priorities, it's a cost-benefit decision.

Mr. Geller: And the Secretary does that under Section 6(g), and therefore there's no reason to think that when the standard is issued, that under Section 6(g) and under Section 6(b)(5), and under Section 3(8), that it's going to be irrational.

Let me also mention--

Mr. Bork: Mr. Geller, Mr. Bork mentioned the fact that there were no findings and I can't find any findings.

Now will you tell me where they are?

Mr. Geller: --The findings are in the preamble to the standard which is published in Volume 43 of the Federal Register.

We have supplied--

Mr. Bork: I'm talking about the findings in this case.

Mr. Geller: --Yes, that's what I'm talking about.

The Federal Register contains--

Mr. Bork: Well, do you want us to go read that, to take judicial notice of that?

Mr. Geller: --It's in the Federal Register and we have supplied a copy to every Justice of this Court, that these are the Secretary's findings to justify the standard.

And the Court of Appeals found that each of those findings, with regard to these Petitioners, was supported by substantial evidence.

I don't understand--

Mr. Bork: Well what finding did they make on economic feasibility?

What was the quote and end-quote finding?

Mr. Geller: --Well, the discussion of economic feasibility is at page 27378, Federal Register, and the key finding that was backed up by a great deal of evidence and cost figures, is that industry as a whole will not be threatened by the capital requirements of the regulation.

That these cost--

Mr. Bork: Do you know of any other case that we've decided that we didn't have papers we were deciding it on?

Mr. Geller: --I'm not quite sure what you're referring to, Mr. Justice Marshall.

Mr. Bork: We're referring to what's in the Federal Register and is not in this Court.

Mr. Geller: Well--

Mr. Bork: Period.

Mr. Geller: --Let me also address the statement that Mr. Justice Stevens was making to Professor Bork at the very end, about Section 3(8)--

Mr. Bork: Before you do that, I think just as a matter of mechanics, I don't recall ever seeing the copy of the decision that is... the findings that you say are in the Federal Register and were supplied to each of us individually; I don't think they were.

Mr. Geller: --Well,--

Mr. Bork: I frankly assumed they were in the Joint Appendix--

Mr. Geller: --No, they were not... reprinted in the Joint Appendix, but they are in the Federal Register which is of course a public document, and we did supply, or we sent it up to the Clerk... I'm surprised it hasn't been distributed with the cover letter.

Mr. Bork: --Well I don't think it was.

Mr. Geller: It's all, it's easily accessible to the Court.

Mr. Bork: I don't have it before me... saving money by not putting it in the Appendix?

Mr. Geller: It's... the Federal Register, June 23rd, 1978, Federal Register, beginning at page 27350 and I'm sure the Clerk will be happy to--

Mr. Bork: Does it look like what you have in your hands?

Mr. Geller: --Yes it does, it's--

Mr. Bork: I've never seen it.

Mr. Geller: --I'm sorry, Your Honor.

We sent that up about 10 days ago.

Mr. Bork: Does that comply with our rules with respect to type size and page... pagination?

Mr. Geller: Well I'm not sure that we had an obligation under the rules to reprint all of this, it would have been very burdensome.

We thought it would be useful for the Court, rather than simply to have the Court go to the library to get a public document, that we give Xerox copies.

We understand... the Petitioner's of course, had the burden of producing the Appendix, and not the Respondents.

Mr. Bork: Which if any of the questions presented by the Certiorari petition do you think raise a question that requires us to decide whether there's substantial evidence to support a finding?

Mr. Geller: I think the way that this case was argued in the Court of Appeals was that there was no substantial evidence to support the economic feasibility argument.

Mr. Bork: I didn't ask you about how the case was argued in the Court of Appeals--

Mr. Geller: And I think that is one of the questions presented in the petition that the Court granted certiorari on.

The Court did not grant certiorari on one of the four questions, which just went to whether the Court of Appeals in fact applied a substantial evidence test.

I'd like to spend my limited time discussing what I think is the key issue in the case, which is the cost-benefit issue.

It's become something of a rallying cry for industry forces in this area.

Simply stated, Petitioners claim that the Secretary may not issue an Occupational Health Standard for toxic substances till he first determines, on the basis of substantial evidence, that the benefits of the standard bear a "reasonable relationship" to the attendant costs.

I think it's important to begin this discussion by repeating what the Court said just a month ago in the Crushed Stone case.

That is that the question here is not what the Court thinks is generally appropriate to the regulatory process.

Congress is, the question is what Congress intended.

We've heard a great deal from the textile industry, both in its briefs and from Professor Bork today, about wise policy choices.

The issue here--

Mr. Bork: --Congress didn't say anything about cost-benefit analysis, did it?

Mr. Geller: --It did not, and that is our point, that there is, that the construction statute adopted by the Court of Appeals we think, reflects wise policy, but that's not the point.

The point is that there's nothing in the statute, either expressly or by reasonable implication that requires the Secretary to engage in so-called cost-benefit analysis before issuing a health--

Mr. Bork: Well was there anything in the statute then, that sets any standards at all?

Mr. Geller: --Yes, there is.

Mr. Bork: And if the answer to that is no there isn't, then, is my brother Rehnquist's opinion in the Benzene case, is a telling one.

Mr. Geller: If, I think that if Justice Rehnquist were right about the statute, he would be right about his conclusions.

But the statute sets criteria that the Secretary has to follow.

There is first of all, Section 6(b)(5), which says that the Secretary can't issue any standard unless he first finds that there's a significant risk of material health impairment in the work place, that it's an unsafe work place.

Mr. Bork: Well, but the... there, as we held in Benzene, misconstrued that requirement.

Mr. Geller: And that the standard would substantially reduce that risk.

Mr. Bork: Well those were... that's what was involved in the Benzene case.

Mr. Geller: That's right, that's right.

That's a substantial--

Mr. Bork: In which we had to correct the misapprehensions of OSHA.

Mr. Geller: --That is a substantial check on the Secretary now, he can't issue--

Mr. Bork: Well it wasn't understood by OSHA to be any check at all, until the Benzene case, isn't that correct?

Mr. Geller: --I don't want to re-argue the Benzene case--

Mr. Bork: Well of course you don't.

Mr. Geller: --but, be happy to if I thought the result might change.

But, the point is that in light of Section 3(8) as construed by this Court in Benzene, the Secretary now in issuing health standards, has to find that there's a significant risk of material health impairment and his standard will reduce that risk.

He also has to find that it's technologically and economically feasible.

Mr. Bork: Mr. Geller, I'd like to come back with a question that I put to Professor Bork, is it the government's position that this standard would be perfectly valid under the act if it destroyed 50 percent of the cotton industry in the United States, whether you measure it by number of companies or by total output, was that the government's position?

Mr. Geller: It's not the government's position, but--

Mr. Bork: Suppose 10 percent, would that--

Mr. Geller: --Well, the one thing that I agree with Professor Bork about, is that these are not issues that can be decided in the abstract.

The economic feasibility determination is that basic factual determination by the Secretary--

Mr. Bork: --Yes, but--

Mr. Geller: --with judicial review--

Mr. Bork: --Yes, but what troubles me and perhaps others, is that we're not getting any guidance, at least I've found none so far in this case, as to what the impact of... economically speaking, you admit that that's important... in view of the competition that our industry, our major industries are now suffering from industries in foreign countries, I would have thought OSHA would have taken a better, closer look, to ascertain whether 50, 20, 25, 45 percent of the cotton industry was going to be put out of business.

Mr. Geller: --Well, but the Secretary did make findings in this case, Justice Powell.

Mr. Bork: Where are they, specifically?

Mr. Geller: Well, I think, once again, page 27378 is the prime discussion of this issue.

The Secretary found that only certain marginal employers, very close to the margin... first of all, the Secretary found that there was a concentration process going on in this industry, wholly regardless of health standards, that firms at the margin, because of economies of scale or other reasons, were simply not making it and going out of business.

It's not a very heavily concentrated industry by the way, by and large.

There are--

Mr. Bork: Mr. Geller, did the Secretary consider in these findings that we haven't seen, whether these standards would materially affect the capability of the industry to modernize and expand and improve its production facilities?

Mr. Geller: --Yes.

Yes, he did.

He found that there was great excess capacity in the industry as it was, there was not going to be a great deal of expansion going on--

Mr. Bork: But we have excess capacity in the steel industry, but it's suffering from competition for more modern facilities in Japan and Germany.

I just don't know whether OSHA considered or considers that the act requires it to weigh factors of this kind.

Mr. Geller: --Yes, it does.

Mr. Bork: It does?

Mr. Geller: It does, and OSHA must consider, in making the economic feasibility determination, the industry's capital needs, the industry's costs of doing business.

And it has to determine if, by adding to those costs, the costs of the proposed standard, the industry as a whole will be able to function much the same way it was functioning prior to the issuance of the standard.

It's no suggestion that the Secretary thinks that the way to solve health problems is to take away the productive activity that causes the health problems.

The purpose is to try to reach some reasonable accommodation.

The word feasibility does that, and I think the other standards of the statute do that.

Let me, I do want to address this one question that Justice Stevens asked Professor Bork about Section 3(8) because I think it's an important question in the Court's determination of the answer to this case.

That is, that Section 3(8) could not have been thought to have any cost-benefit analysis in it, because if you recall, Section 3(8) was a definitional section, it was in the statute in precisely the same form it exists today from the very beginning, and yet, Senators Dominick and Senator Javits and others were quite concerned during the latter stages of the legislative history, that the statute might require absolute hell for spending a lot of money for things that weren't worth it, and they restructured Section 6(b)(5) to take account of that, by adding the feasibility language and material health language and all the rest, there would have been no reason for them to have engaged in that discussion if anybody thought that a cost-benefit analysis was already in the reasonably necessary or appropriate phrase in Section 3(8).

But nobody suggested that, during a length of an exceedingly lengthy legislative history, not one person suggested that 3(8) meant that.

Section 3(8)--

Mr. Bork: Well there wasn't really any discussion of cost-benefit as such, was there?

Mr. Geller: --That's... no one suggested that the statute was going to require that, that's exactly right.

And that's why we think it's totally--

Mr. Bork: The discussion was whether this was some sort of an absolute requirement?

Mr. Geller: --And there would have been no need for that discussion if someone thought that Section 3(8) already imposed a cost-benefit analysis in setting standards.

Section 3(8) tells the Secretary when he may issue a standard, it doesn't tell him where along the various alternatives he should issue--

Mr. Bork: Do you think this raises no delegation questions under Schechter and other cases?

Mr. Geller: --No, I don't, Mr. Chief Justice.

Mr. Bork: And your time doesn't permit you to go beyond that,--

Mr. Geller: I'd be happy to answer, but--

Mr. Bork: --you're in your colleague's time now.

Mr. Geller: --Thank you.

Chief Justice Burger: Mr. Cohen.

ORAL ARGUMENT OF GEORGE H. COHEN, ESQ., ON BEHALF OF UNION RESPONDENTS

Mr. Cohen: Mr. Chief Justice, and may it please the Court:

My name is George Cohen, I'm appearing on behalf of the Union Respondents.

Although I'm not sure this is the point to put the proper focus on it, I would like to point out to Mr. Justice Powell that, in response to your questions, Your Honor, that the Research Triangle Institute studies which were the contractor working for the Department of Labor at Joint Appendix pages 118, 120 and 123, discuss precisely the question that Your Honor raised, and basically concluded that insofar as achieving the costs necessary to achieve the standard that the Secretary set, the demand, the total demand for cotton products in this country would go down approximately one percent, and the impact on employment would be approximately.6 percent.

Mr. Bork: Mr. Cohen, excuse me.

No, go ahead.

What is your definition of the word if feasible, in the statute?

Mr. Cohen: Mr. Justice Rehnquist, the words of the statute are to the extent feasible, there's a bit of deja vu in this, because we do this together in the Benzene case, our... my answer then and my answer today, as further enlightened by this Court's decision in Benzene, is that the Congress of the United States was not seeking to impose impossible, impossible health... a solution that would be impossible as far as industry would be concerned, and that impossibility has been translated into two dimensions.

Number one, that it must be achievable in the sense that there is the technology and work place practices available, so-called technologically feasible.

The economic feasibility aspect which has also been imported into the statute, is in essence what this case... or what--

Mr. Bork: Well, imported into the statute by this Court, or by--

Mr. Cohen: --No, I don't think it's been imported into the statute by this Court, I think Senator Dominick--

Mr. Bork: --You mean yet.

Mr. Cohen: --Well, I thought the question, Mr. Justice Marshall, was does the origin of the importing come out of this Court?

I think the answer to that is no, I think this Court properly concluded that the legislative history as reflected most precisely by Senator Dominick, the leading spokesman for the Nixon Administration as this bill was passing through the halls of Congress, who made it very clear that what he was most concerned about... and this then became the consensus of the Senatorial concern, was that in the name of providing safety and health what would happen would be that you would drive industries as a whole out of business and ban occupations as a whole in the course of that process.

And it was that concern, whether one wants to then put in terms the word economic, feasibility which I am perfectly comfortable with and all the reviewing Courts have used, and this Court--

Mr. Bork: And OSHA, and OSHA.

Mr. Cohen: --And OSHA, yes.

Mr. Bork: And that feasible includes economically feasible, everybody agrees?

Mr. Cohen: Yes, everybody agrees there.

The question, among the questions presented here is in order for something to be feasible, must this magical cost-benefit analysis be done, we of course reject that argument.

We reject it because we say, number one, it's not there on the face of the statute, and number two, it is not there in the legislative history.

Mr. Bork: What do you mean by cost-benefit analysis?

What do you think the other side means by it?

Mr. Cohen: Mr. Justice White, I must confess that the more one studies this issue the less, I think, one comprehends it.

Mr. Bork: Well then you are very... so far, what you have said is meaningless.

And so--

Mr. Cohen: Well I--

Mr. Bork: --apparently then, what your opposition is saying, you think, is meaningless?

Mr. Cohen: --I do that, yes.

And I'll be glad to, I'll be glad to explain why.

We've been told that, let's take the industry position.

They have rejected the notion that "formal" cost-benefit analysis should be done.

They've rejected the notion that anything more than saying there's a reasonable balance between costs and benefits is necessary.

They've rejected the notion that you're going to place a value on human life.

Now let's take this case as a frame of reference.

We know, as government counsel--

Mr. Bork: Well let me ask you, you say the statute does not require a cost-benefit analysis.

Now, you tell me what you think you're saying the statute doesn't require?

Mr. Cohen: --Yes.

Mr. Bork: What do you think that it doesn't require?

Mr. Cohen: It doesn't require, after the Secretary has laid the... has done the following: has met the threshold determination, made a threshold determination that we have a significant risk of health involved, and that that risk can, through a variety of procedures, be dramatically reduced.

Mr. Bork: Right.

Mr. Cohen: That the Secretary must select the most protective way to achieve that result, consistent to the constraint or consistent with a constraint and the constraint is that it must be feasible, it must be technologically achievable and it must be feasible in the economic sense, namely, that as a result of complying with this standard industry as a whole's financial viability will not be challenged.

And that, at that point, Mr. Justice White, our position is the Secretary's obligations are over and the standard is entitled to--

Mr. Bork: Well, I think Mr. Justice Stewart may have suggested before that... well, isn't that a cost-benefit judgment in itself?

Mr. Cohen: --All right.

Now--

Mr. Bork: That the benefits that you're going to get, are worth whatever--

Mr. Cohen: --I think you are precisely correct.

Mr. Bork: --are worth whatever impact there is on the industry?

Mr. Cohen: Yes, we believe you are precisely correct in this sense.

We believe that what Congress did was, in effect, do its own "cost-benefit analysis".

Congress made the determination--

Mr. Bork: Well I know, but the Secretary has too.

You've... I suppose, he sets these levels after having concluded that the impact on the industry isn't so great that he should set a higher standard.

Mr. Cohen: --Well if you... on your terms--

Mr. Bork: Is that right or not?

Mr. Cohen: --That's what the Secretary has said, that's what we believe satisfies the statute--

Mr. Bork: Well, then the answer to my question is yes, isn't it?

Mr. Cohen: --Well I have a sense of responsibility.

I don't want to mislead you into thinking the other side agrees that that's a cost-benefit analysis.

We think that is a cost-benefit analysis, in the sense that that's all the Congress was concerned--

Mr. Bork: At least you think that's all the cost-benefit analysis the statute requires?

Mr. Cohen: --Exactly.

And that is the policy judgment--

Mr. Bork: And in any event it does not require any quantifying in dollar terms, of the benefits?

Mr. Cohen: --Absolutely.

Mr. Bork: It may, on the cost side, but not on the benefit side.

Mr. Cohen: Absolutely.

And I want to just carry that point one step forward, Mr. Justice Brennan.

If you... reading the industry position knowing as they come before the Court and tell you, that it doesn't require valuing human life, there's only one way to get away from that proposition and they try to get away with it by saying what the Secretary should be doing in setting a standard for one toxic substance, is to compare what the risk is going to be for other potential hazards, what the technological feasibility will be for all of those other hazards, what the cost of compliance will be for all of those hazards, and in that nice, simple, little package, says the ATMI, we have offered a "feasible solution" to ways this statute should be interpreted.

Now that in our judgment, in effect, would be asking the Secretary of Labor, in the name of doing something, to do everything, he would have to inventory the entire list of every single potential toxic substance.

Mr. Bork: Mr. Cohen, I take it it's undisputed that Congress, under its Commerce power, could flatly ban child labor?

Supposing Congress passed a statute saying we ban child labor to the extent it is feasible, and delegate to OSHA the promulgation of regulations for banning it.

What do you think OSHA would have to do?

Mr. Cohen: I think... I don't think, I want to emphasize this, I don't think we're anywhere near that in this case.

We have much clearer guidance from Congress than the discussion and rhetoric that's gone back and forth here in Court today, and our brief spells out what that discussion was and what those concerns were.

Now I know we've got a hypothetical, but let me stay with the concerns.

The concern was that small employers particularly, were not devoting the necessary capital investments in order to provide safe and healthy work places.

Congress understood this was a problem.

This is not a problem that's just emerged in the context of the cotton dust case.

And Congress said, we are going to insist on a uniform, nationwide approach; we're going to compel each and every employer to meet these standards because if we don't go that way we're never going to get it, the ultimate protection that this statute is all about.

Congress went further.

They also understood, and there's been discussions here of who would go out of business?

Well we're way removed from that problem in this case.

As a matter of fact, in the Court of Appeals, the Court of Appeals opinion says that the American Textile Manufacturing Industry concedes that at 550 million dollars there's no economic feasibility problem insofar as the entire industry as a whole is concerned.

But getting back to my point, Mr. Justice Rehnquist--

Mr. Bork: Well I thought it was my question that you were trying to get back to.

Mr. Cohen: --Yes.

I am trying to.

What I guess I'm saying is that I'm not sure that I know what precise tools would be brought to bear to deal with the child labor.

I am saying that the tools are there to deal with it, based on the legislative history of this statute.

And I hadn't finished that precise point.

And it was.

Not only was the judgment uniform, nationwide, small employers, but there is a recognition that this would well or might well have a severe impact on small employers.

That was not something that comes out of the blue; that was a major subject of concern.

Senator Dominick repeated that concern, but what was the solution?

Was it to carve out or exempt the small marginal employer?

No.

Was it to dilute the protection of the statute as to workers in those plants?

No.

What Congress said, in Section 28, will address this in terms of a small business loan proposition.

If an employer who would otherwise be driven out of business needs the economic wherewithal to be able to comply, we will afford that program.

Very similar, incidentally, to the program that this Court addressed--

Mr. Bork: Mr. Cohen, you keep saying that the problem is and the complaint of Petitioner is that OSHA didn't go through this.

I thought the complaint was OSHA hasn't yet told anybody what they did?

Now isn't that the complaint the Petitioners made, is that you can do anything... that you can find out whether they did right or wrong.

Mr. Cohen: --Mr. Justice Marshall--

Mr. Bork: Is that their position?

Mr. Cohen: --That's their position.

We and the Solicitor General have each responded to that proposition.

What we have said, basically, is insofar as economic feasibility is concerned, that the aggregate amount of money, the 550 million dollars which the Secretary found wasn't a dream, it was a finding.

Mr. Bork: How many businesses would be put out of business?

Mr. Cohen: The Secretary--

Mr. Bork: How many business would be put--

Mr. Cohen: --of Labor found one thing, one precise thing on this point.

He said industry--

Mr. Bork: --Did they find any figures as to how many would go out of business?

Mr. Cohen: --He said although some marginal employers, although some marginal employers might choose to go out of business rather than comply,... I'm reading to you now from the Federal Register 27378, column 2.

Mr. Bork: Where does it say how many?

Mr. Cohen: Didn't say how many, didn't say how many.

You should know, you should know, in the record, Mr. Justice Marshall,--

Mr. Bork: Well you have to put it in there if I should know it.

Mr. Cohen: --I say--

Mr. Bork: And now, you didn't put that in the record.

Mr. Cohen: --We could only take the Secretary's finding.

I wanted to be true to the finding--

Mr. Bork: But he did make, he made conclusions of law, he didn't make findings.

Mr. Cohen: --He said some marginal employers, some marginal employers--

Mr. Bork: Isn't that a conclusion?

Mr. Cohen: --Well, it was based on his analysis of this overall record--

Mr. Bork: How do we know that?

We take his word.

Mr. Cohen: --He states that, he states that--

Mr. Bork: Of course, and we take his word and your word.

That's the answer.

Mr. Cohen: --My red light is up.

I would just like to say as I leave the podium, that we have addressed in detail, the comments of Textile Manufacturing Institute as to the respirator, as to their so-called alternative, and we have explained why it does not provide the health protection obligations that should be imposed here.

Thank you.

Chief Justice Burger: Very well.

Thank you, gentlemen.

The case is submitted.

Attribution:

The OYEZ Project

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