Court Opinion

ID: 201539
Source: CourtListenerOpinion
Date Created: 2011-02-07 05:29:04+00
Date Added: 2024-06-11T17:27:19.007159
License: Public Domain

Not For Publication in West's Federal Reporter
                 Citation Limited Pursuant to 1st Cir. Loc. R. 32.3

          United States Court of Appeals
                          For the First Circuit

No. 04-1836

                             STURM RUGER & CO.,

                                  Petitioner,

                                        v.

                   ELAINE CHAO, SECRETARY OF LABOR,

                                  Respondent.

              ON PETITION FOR REVIEW OF A FINAL ORDER OF

      THE OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

                                     Before

                           Howard, Circuit Judge,

                Cyr and Stahl, Senior Circuit Judges.

     Richard D. Wayne with whom Brian E. Lewis and Hinkley, Allen
& Snyder LLP were on brief, for petitioner.
     Ronald J. Gottlieb, Attorney, U.S. Department of Labor with
whom Howard M. Radzely, Solicitor of Labor, Joseph M. Woodward,
Associate Solicitor of Occupational Safety and Health and Ann
Rosenthal, Counsel for Appellate Litigation, were on brief, for
Respondent.

                                April 18, 2005
           Per Curiam. Sturm Ruger & Co. petitions for review of an

order of the Occupational Safety and Health Review Commission (the
Commission) denying its motion to suppress evidence obtained during

an Occupational Safety and Health Administration (OSHA) inspection

of one of its establishments.       Sturm Ruger also challenges certain
of the Commission's discovery rulings.          We deny the petition for

review.
                                     I.

             In 1996, OSHA launched an annual survey called the Data

Collection Initiative (DCI).         See 29 C.F.R. § 1904.17 (1998).

Under the DCI, OSHA required certain employers to report the number

of work related injuries and illnesses, as well as the number of

employees and the number of hours worked during the survey period.

The   survey   required    that   each    employer   report   the   requested

information on a "per establishment" basis.           OSHA used the survey

data to calculate the rate of injury or illness per establishment.

OSHA then used the resulting rates to target certain establishments

for inspection as part of its Interim Plan for Inspection Targeting
(ITP).

           Sturm Ruger has manufacturing facilities in Newport, New

Hampshire.     Sturm Ruger's Pine Tree Castings Division is housed

within one of the buildings at Sturm Ruger's Newport facility.
Pine Tree produces steel investment castings for use by Sturm Ruger
and third parties.        In April 1997, OSHA sent Sturm Ruger a DCI

survey for its Pine Tree establishment.         Sturm Ruger complied with

                                     -2-
the survey by providing OSHA all of the requested information for

Pine Tree.

          Based on the data provided, OSHA determined that Pine
Tree had a higher than average injury/illness rate and targeted it

for inspection under the ITP.      In June 1998, two OSHA inspectors

attempted to inspect Pine Tree.      Sturm Ruger management withheld

consent for the inspection.        Consequently, OSHA requested and

obtained an administrative search warrant from a judge of the

United States District Court for the District of New Hampshire.

When the inspectors returned to Pine Tree to execute the warrant,

Sturm Ruger again refused them entry and subsequently moved to

quash the warrant in the district court.
             Sturm Ruger's main argument to quash the warrant was that
the regulation authorizing the DCI only permitted OSHA to collect

data on an "employer" basis, and therefore OSHA did not have the
power to request data solely for an employer's "establishments."
The company also argued that the warrant did not comport with the

Fourth Amendment requirements for an administrative search.        In
detailed opinions, a magistrate judge and a second district court
judge rejected Sturm Ruger's arguments.     See Sturm Ruger v. United

States, No. 98-418JD, 1999 U.S. Dist. LEXIS 22533 (D.N.H. Jan. 22,

1999) (district court opinion); Sturm Ruger v. United States, No.

98-418JD (Dec. 8, 1999) (report and recommendation of magistrate

judge).   Sturm Ruger appealed to this court and sought a stay of

the inspection.     We denied the stay and eventually dismissed the

appeal.   See Sturm Ruger v. United States, No. 99-1160 (Mar. 4,

                                  -3-
1999) (order denying stay); Sturm Ruger v. United States, 186 F.3d

63 (1st Cir. 1999) (opinion dismissing appeal).             OSHA subsequently

inspected Pine Tree.         As a result of the inspection, OSHA issued
Sturm Ruger citations for safety violations.

            In accordance with the Occupational Safety and Health

Act's (the Act) review procedures, Sturm Ruger contested the

citations before an administrative law judge appointed by the

Commission.      In this proceeding, Sturm Ruger reiterated its prior

arguments and also claimed that the DCI was unlawful because the

Act only permitted OSHA to collect information from an employer

which was "made and kept" pursuant to regulations issued by the

Secretary   of    Labor   --    a   putative    prerequisite      that   was   not
satisfied   here.      The     administrative     law    judge    rejected     this
argument (as well as Sturm Ruger's other challenges to the DCI) on

the ground that Sturm Ruger had provided the survey information
willingly and therefore had waived any objection it might have to
the DCI.

            Sturm Ruger sought and obtained from the Commission
discretionary review of the administrative law judge's decision.
The company repeated its arguments concerning the legality of the

DCI and the unconstitutional nature of the warrant. It also argued

that it was unfairly denied discovery before the administrative law

judge concerning the legality of the DCI and whether OSHA had

vindictively     targeted      it   for   inspection    under    the   ITP.     The

Commission rejected Sturm Ruger's arguments against the validity of

the warrant and concluded that, even if the warrant was ultra

                                          -4-
vires, OSHA obtained the warrant in good faith and therefore was

entitled to introduce any evidence obtained as a result of its

execution.      The Commission also rejected Sturm Ruger's discovery
complaints because its challenges to the DCI were purely legal and

because Sturm Ruger had not made a threshold showing that OSHA

vindictively targeted it for inspection under the ITP.
                                       II.

             In its petition for review, Sturm Ruger has challenged

the legality of the DCI, the constitutionality of the warrant, and

the fairness of the discovery rulings.                It has not, however,

challenged     the    Commission's    decision   that,      regardless   of   the

legality of the warrant, suppression of the evidence obtained from
the inspection was not required because OSHA obtained the warrant
in   good    faith.      Indeed,     Sturm   Ruger   only    acknowledged     the

Commission's good faith ruling in its reply brief, after OSHA
focused on it as the primary ground for affirming the Commission's
order.

             A party may not raise an argument for the first time in
a reply brief.        See United States v. Torres, 162 F.3d 6, 11 (1st

Cir. 1998); United States v. Nueva, 979 F.2d 880, 885 n.8 (1st Cir.

1992).      Applying this rule is particularly appropriate where, as

here, the petitioner ignored one of the lower court's (or in this

case the agency's) clearly stated grounds for decision.                       Cf.

Anheuser-Busch, Inc. v. Caught-on-Bleu, Inc., 105 Fed. Appx. 285,

287 (1st Cir. 2004) (per curiam) (explaining that appellant has an

obligation to address with specificity the grounds for the lower

                                       -5-
court's decision), cert. denied, --U.S.--, 2005 WL 637213 (Mar. 21,

2005).   Sturm      Ruger's    challenge     to   the   good   faith   ruling   is

therefore most likely waived, see Torres, 162 F.3d at 11, and, at
best, is forfeited and only can be considered for plain error, see

United States v. Rodriguez-Leon, 311 F.3d 435, 437 (1st Cir. 2002).

We will assume arguendo that plain error review is available.

              For Sturm Ruger to demonstrate plain error, it must show

that there was a clear error that affected its substantial rights

and undermines the fairness, integrity, or public reputation of the

judicial process. See Diaz-Seijo v. Fajardo-Velez, 397 F.3d 53, 55
(1st Cir. 2005).        Sturm Ruger stumbles at the threshold as it

cannot demonstrate that the Commission's good faith ruling was
obviously wrong.
              The parties agree that the exclusionary rule would apply

to evidence obtained from an unlawful OSHA inspection.                 They also
agree that the good faith exception to the exclusionary rule would
apply    to    at   least     some   searches     conducted    pursuant   to    an

administrative warrant.          See United States v. Leon, 468 U.S. 897,

918-21 (1984) (explaining the rationale for not applying the
exclusionary rule to evidence garnered from an unlawful warrant

that was obtained in objective good faith). Sturm Ruger's position

is that the good faith exception does not apply here because OSHA's

request for a warrant was based on an erroneous interpretation of

its legal authority to conduct the inspection.                 The caselaw does

not support this proposed limitation to the good faith rule.

                                       -6-
           In Trinity Industries v. Occupational Safety & Health

Review Commission, 16 F.3d 1455 (6th Cir. 1994), the Sixth Circuit

considered an employer's challenge to an OSHA warrant on the ground
that the OSHA regulation authorizing the inspection was illegal.

The court agreed with the employer that the regulation was unlawful

and that the warrant should not have been issued.    Id. at 1459-60.

The court nevertheless declined to invoke the exclusionary rule

because OSHA had obtained the warrant in objective good faith. Id.

at 1462.   In so ruling, the court pointed out that the warrant

application was detailed and specific, and that the warrant's

validity had been upheld by a magistrate judge and district court

judge before it was executed.         Id; see also Donovan v. Fed.
Clearing Die Casting Co., 695 F.2d 1020, 1022-24 (7th Cir. 1982)
(admitting evidence seized pursuant to an improper OSHA warrant

because the district court had upheld the validity of the warrant
in pre-execution litigation).
           This case closely resembles Trinity and Donovan. The

warrant application that OSHA submitted was detailed and accurate.
More importantly, before executing the warrant, OSHA successfully
litigated the validity of the warrant before a magistrate and

district court judge and defeated Sturm Ruger's motion to stay the

warrant's execution in this court.

           There is, however, one significant difference between

this case and Trinity and Donvoan.      In the latter two cases, the

employer raised all of its arguments against the validity of the

warrant in the motion to quash so all issues had been litigated

                                -7-
before OSHA executed the warrant.        Here, Sturm Ruger raised only

the employer/establishment argument and the Fourth Amendment claim

in the motion to quash proceeding and reserved the "number of
employees/hours worked" argument until the Commission proceeding.

We can base our good faith conclusion on the fact that the warrant

was upheld in pre-execution judicial proceedings only for the

arguments     resolved    in    those      proceedings     (viz.,    the

employer/establishment argument and the Fourth Amendment argument).

We   must    consider    independently     whether   the   "number    of

employees/hours worked" argument is so obviously meritorious that

OSHA clearly was not acting in good faith by seeking a warrant

based on data obtained from the DCI.        See Leon, 468 U.S. at 922
(stating that good faith exception does not apply if the inspecting
authority "ha[d] no reasonable grounds for believing that the

warrant was properly issued").
            The regulation authorizing the DCI required employers to
report to OSHA "the number of workers . . . employed and [the]

number of hours worked . . . for periods designated in the Survey
Form."   29 C.F.R. § 1904.17 (1998).      Sturm Ruger argues that this
requirement was unlawful because the Act only permits OSHA to

require employers to file reports "on the basis of records made and

kept pursuant" to regulations promulgated by the Secretary of

Labor,   29 U.S.C. § 673(e) (emphasis supplied), and there is no

regulation requiring employers to keep records of the number of

employees and the number of hours worked per establishment.

                                 -8-
                  Sturm Ruger's contention rests on the statutory language

"on the basis of records made and kept."              It reads this language to

mean       that    reports   required    by   OSHA   must   be   based   solely on

information contained in records that the Secretary of Labor

requires employers to keep.             OSHA reads this language as giving it

flexibility to require the reporting of some information not

required to be kept so long as the foundation for the report is

information that an employer must maintain.

                  OSHA's reading of the statute is not plainly wrong.

Courts have found that similar "based on" language is synonymous

with "arising from" and ordinarily refers to a "starting point" or

a "foundation",           see McDaniel v. Chevron Corp., 203 F.3d 1099,

1111-12 (9th Cir. 2000) (collecting cases), and have resisted
reading this phrase to mean "based solely on,"                   see United States

ex rel. Kreindler & Kreindler v. United Tech Corp., 985 F.2d 1148,
1158 (2d Cir. 1993).          The language in the Act is therefore at least
reasonably read as granting OSHA a modicum of discretion to require

the reporting of additional information -- at least where, as here,
the foundation for the report is information maintained in records
which employers, by regulation, must keep.1                  See Sierra Club v.

       1
      There is no dispute that the Secretary of Labor required
employers to keep logs on the incidences of work place injuries and
illnesses. This was the foundational information for the DCI. The
number of employees and the hours worked were background
information that allowed OSHA to generate a rate of injury or
illness for each establishment. As OSHA explained in its brief,
"the raw numbers of injuries and illnesses occurring at a workplace
would be meaningless without information on how that number
compared to the amount of work performed there."
     Since the inspection of Pine Tree, the Secretary has
promulgated a regulation requiring employers to keep records of the
                                          -9-
EPA, 356 F.3d 296, 305-06 n.7 (D.C. Cir. 2004) (stating that the

statutory term "based on" unambiguously granted agency discretion

to apply some additional criteria to those stated in the statute).
That   being   the   case,   the    Commission     did   not   plainly   err   in

declining to suppress the evidence under Leon.

           The only remaining issue is Sturm Ruger's challenge to

the denial of discovery on its claims that the DCI was illegal and

that   OSHA    vindictively        targeted   it    for    inspection.         An

administrative agency's discovery rulings are reviewed for an abuse

of discretion and will be overturned only if the complaining party

demonstrates prejudice. See Markland v. Office of Pers. Mgmt., 140
F.3d 1031, 1036 (Fed. Cir. 1998).             "The extent of discovery to
which a party to an administrative proceeding is entitled is
primarily determined by the particular agency . . ."                Pac. Gas &

Elec. Co. v. FERC, 746 F.2d 1383, 1387 (9th Cir. 1984).
           The Commission's ruling that Sturm Ruger was not entitled
to discovery on the legality of the DCI was within its discretion.

Sturm Ruger has provided only a conclusory statement that it needed
discovery to prove that the DCI was unlawful.              But we fail to see
how discovery on this question would have yielded information

number of employees and the number of hours worked. See 29 C.F.R.
§ 1904.32 (2004). We do not believe that the promulgation of this
regulation demonstrates that OSHA did not act in good faith in
asking for information before the regulation was adopted on the
number of employees and the number of hours worked. OSHA may well
have believed that it had the authority to request this information
without the regulation and that the promulgation of the new
regulation merely clarified its preexisting authority.

                                      -10-
relevant to whether the regulation creating the DCI violated the

Act.   As the Commission explained, this is a question of law.

           Sturm Ruger also has failed to meet its burden for
overturning the discovery ruling concerning its claim of vindictive

targeting under the ITP.    The Commission rejected Sturm Ruger's

discovery request because Sturm Ruger "had not shown a colorable

basis for [its] claim."      We discern nothing improper in the

Commission requiring Sturm Ruger to make a threshold showing that

the agency acted vindictively in targeting it for inspection.

Similar requirements exist in analogous areas.   Cf. United States

v. Armstrong, 517 U.S. 456, 468-69 (1996) (holding that the accused

must make a threshold showing to obtain discovery on a selective
prosecution claim); Franks v. Delaware, 438 U.S. 154, 171-72 (1978)

(holding that a party must provide an offer of proof of a falsely

procured search warrant to obtain an evidentiary hearing).   Sturm
Ruger alleged that it was vindictively targeted because it had
vigorously opposed a prior OSHA initiative, but it provided no

facts to support this assertion.   The Commission did not abuse its
discretion in concluding that this allegation was insufficient to
warrant discovery.
                               III.

          For the reasons stated, we deny the petition for review

and enforce the Commission's order.

                               -11-