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Agricultural Retailers Association v. United States Department of Labor

United States Court of Appeals, District of Columbia Circuit

September 23, 2016

Agricultural Retailers Association and The Fertilizer Institute, Petitioners
v.
United States Department of Labor and Occupational Safety & Health Administration, Respondents

          Submitted May 16, 2016

         On Petitions for Review of a Memorandum of the Occupational Safety & Health Administration

          Gary H. Baise, Stewart D. Fried, Chris S. Leason, Mark C. Dangerfield, and Andrew E. Dudley were on the joint briefs for petitioners. Anson M. Keller Sr. entered an appearance.

          Ann S. Rosenthal, Associate Solicitor, Occupational Safety & Health Administration, Charles F. James, Counsel, U.S. Department of Labor, and Lauren S. Goodman, Senior Attorney, U.S. Department of Labor, were on the brief for respondents.

          Randy S. Rabinowitz was on the brief for movant-intervenor for respondents.

          Before: Rogers, Srinivasan and Millett, Circuit Judges.

          OPINION

          Srinivasan Circuit Judge

         The Occupational Safety and Health Administration, part of the Department of Labor, aims to secure "safe and healthful working conditions" for the Nation's workers. 29 U.S.C. § 651(b). To that end, OSHA in 1992 issued the so-called Process Safety Management Standard to protect the safety of those who work with or near highly hazardous chemicals. From its inception, the standard has exempted retail facilities from its requirements. The exemption rests on an assumption that the retail setting involves diminished risks of a substantial release of toxic chemicals. Recently, after a catastrophic chemical explosion at a Texas fertilizer company that qualified as an exempt retail facility, OSHA narrowed the scope of the retail-facility exemption so that the safety standard's requirements would now apply to formerly exempt facilities like the Texas plant.

         The question we confront is whether, when OSHA narrowed the scope of the exemption for retail facilities, the agency issued a safety "standard" within the meaning of the Occupational Safety and Health Act (OSH Act). If so, we have jurisdiction to review OSHA's action, and the OSH Act would have required the agency to adhere to procedural notice-and-comment requirements, which it concededly did not do. If, however, OSHA's action did not amount to issuance of a "standard, " we would lack jurisdiction to review it and the OSH Act would have imposed no obligation to follow notice-and-comment procedures.

         Under our decisions, when an action by OSHA corrects a particular hazard, as opposed to adjusting procedures for detection or enforcement, it amounts to a "standard." Applying that understanding, we conclude that the agency's narrowing of the substantive scope of the exemption for retail facilities qualified as issuance of a "standard." We therefore have jurisdiction, and OSHA was required to adhere to notice-and-comment procedures. Consequently, we grant the petitions for review and vacate OSHA's action.

         I.

         In 1992, OSHA promulgated the Process Safety Management (PSM) Standard in an effort to "provide safe and healthful employment and places of employment for employees in industries which have processes involving highly hazardous chemicals." Process Safety Management of Highly Hazardous Chemicals; Explosives and Blasting Agents, 57 Fed. Reg. 6356, 6359 (Feb. 24, 1992), codified at 29 C.F.R. § 1910.119 (2016). The PSM Standard "contains requirements for preventing or minimizing the consequences of catastrophic releases of toxic, reactive, flammable, or explosive chemicals." 29 C.F.R. § 1910.119.

         From the outset, OSHA exempted "[r]etail facilities" from the requirements of the PSM Standard. Id. § 1910.119(a)(2)(i). The exemption, OSHA explained in the preamble of the final standard, was rooted in an understanding that "chemicals in retail facilities are in small volume packages, containers and allotments, making a large release [of toxic chemicals] unlikely." 57 Fed. Reg. at 6369. OSHA identified "gasoline stations" as prototypical examples of retail facilities. Id. Shortly after promulgating the PSM Standard, OSHA issued a letter defining an exempt retail facility as "an establishment . . . at which more than half of the income is obtained from direct sales to end users." See Letter from Patricia K. Clark, Dir. of Enf't Programs, OSHA, to Gary Myers, President, The Fertilizer Inst. (June 19, 1992). The "50 percent test" remained the rule for more than two decades.

         In April 2013, a catastrophic chemical explosion at a fertilizer company in West, Texas, resulted in the deaths of 15 persons and injured many others. Although the company stored large quantities of a highly hazardous chemical (anhydrous ammonia) for bulk distribution as fertilizer to farmers, it had been exempt from the PSM Standard under the 50 percent test for retail facilities. That test had enabled establishments to claim the exemption even if they stored large amounts of hazardous chemicals for ...


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