Court Opinion

ID: 2730076
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:53:38.620566+00
Date Added: 2024-06-11T09:40:32.452804
License: Public Domain

FOR PUBLICATION

ATTORNEYS FOR APPELLANT:                     ATTORNEYS FOR APPELLEE:

PAUL L. JEFFERSON                            GREGORY F. ZOELLER
MARK STUAAN                                  Attorney General of Indiana
Barnes & Thornburg, LLP
Indianapolis, Indiana                        KATHY BRADLEY
                                             Deputy Attorney General
                                             Indianapolis, Indiana
                                                                           FILED
                                                                       Jun 26 2012, 9:17 am
                             IN THE
                                                                              CLERK
                   COURT OF APPEALS OF INDIANA                              of the supreme court,
                                                                            court of appeals and
                                                                                   tax court

IN RE THE MATTER OF A SEARCH                 )
WARRANT REGARDING THE                        )
FOLLOWING REAL ESTATE,                       )
                                             )
SENSIENT FLAVORS LLC,                        )
                                             )
      Appellant-Defendant,                   )
                                             )
             vs.                             )      No. 49A02-1109-MC-844
                                             )
INDIANA OCCUPATIONAL SAFETY AND              )
HEALTH ADMINISTRATION,                       )
                                             )
      Appellee-Plaintiff.                    )
                                             )

                   APPEAL FROM THE MARION SUPERIOR COURT
                       The Honorable Grant W. Hawkins, Judge
                          Cause No. 49G05-1109-MC-2441

                                    June 26, 2012

                             OPINION - FOR PUBLICATION

VAIDIK, Judge
                                     Case Summary

       The Indiana Commissioner of Labor filed a petition for an anticipatory search

warrant in order to conduct an administrative inspection of Sensient Flavors LLC’s

Indianapolis facility. Sensient opposed the search warrant and was successful in getting

it quashed.   The trial court later issued an amended search warrant that was more

restrictive than the original.   Although the search of Sensient’s facility has been

completed, Sensient appeals the issuance of the amended search warrant, arguing that it

was not supported by probable cause and unreasonable because it did not contain any

limitations regarding the scope or manner of the search. Concluding that Sensient has

failed to exhaust its administrative remedies, we dismiss this appeal.

                             Facts and Procedural History

       Sensient is a Delaware limited liability company with its principal place of

business at 5600-5700 West Raymond Street in Indianapolis. Sensient manufactures and

distributes proprietary flavors that are used in food and beverages.      As part of its

business, Sensient uses certain substances that are listed as “high priority” by the U.S.

Department of Health and Human Services. One such substance is diacetyl. Appellant’s

App. p. 142. Diacetyl is used to add flavor and aroma to food and is typically used in

microwave popcorn.      The government has been investigating the use of diacetyl in

facilities that manufacture food flavorings because of the dangers diacetyl poses to

workers, and Sensient became a target.

       The Occupational Safety and Health Act of 1970 created both The National

Institute for Occupational Safety and Health (NIOSH) and the Occupational Safety and

                                             2
Health Administration (OSHA). About NIOSH, The Nat’l Inst. for Occupational Safety

& Health, http://www.cdc.gov/niosh/about.html (last visited June 8, 2012). OSHA is in

the U.S. Department of Labor and is responsible for developing and enforcing workplace

safety and health regulations. Id. NIOSH is part of the Centers for Disease Control and

Prevention (CDC) in the U.S. Department of Health and Human Services. Id. NIOSH is

an agency established to help ensure safe and healthful working conditions for working

men and women by providing research, information, education, and training in the field

of occupational safety and health. Id.

      On the state level, the Indiana Occupational Safety and Health Administration

(IOSHA), which is part of the Indiana Department of Labor, is dedicated to ensuring

Hoosier workplace safety and health by reducing hazards and exposures in the workplace

environment that result in occupational injuries, illnesses, and fatalities. IOSHA, Ind.

Dep’t of Labor, http://www.in.gov/dol/iosha.htm (last visited June 8, 2012).

      At some point, the International Brotherhood of Teamsters Local 137 became

concerned about possible respiratory problems and the use of flavoring chemicals,

including diacetyl, at Sensient’s facility. Accordingly, the union requested a Health

Hazard Evaluation from NIOSH. NIOSH investigators visited Sensient’s facility in May

2008 and performed air sampling and received records of spriometry, a type of lung-

function test, in June 2008. After a delay incurred by litigation, Sensient provided

additional spirometry records through September 2009 and air-sampling results through

August 2009.    In June 2011, NIOSH issued a forty-eight-page final Health Hazard

Evaluation Report, which concluded that Sensient employees had experienced adverse

                                            3
respiratory conditions due to exposure to food-flavoring chemicals, including diacetyl.

Appellant’s App. p. 39-91.

         On September 9, 2011, the Indiana Commissioner of Labor (“Commissioner”)

filed a Petition for Anticipatory Search Warrant in Marion Superior Court to conduct an

administrative inspection of Sensient’s facility. Notably, probable cause in the criminal

sense is not required for administrative search warrants. Marshall v. Barlow’s, Inc., 436

U.S. 307, 320 (1978); State v. Kokomo Tube Co., 426 N.E.2d 1338, 1343 (Ind. Ct. App.

1981).    That is, probable cause to conduct a nonconsensual inspection of business

premises can be established by presenting specific evidence of an existing violation or by

showing compliance with reasonable legislative or administrative standards for

inspecting the premises in question. Barlow’s, 436 U.S. at 320; Kokomo Tube, 426

N.E.2d at 1342. Here, the Commissioner wanted to determine whether Sensient was

furnishing its employees “a place of employment which is free from recognized hazards

that are causing or are likely to cause death or serious physical harm to employees” and

whether Sensient was “complying with the occupational safety and health standards

promulgated under the Indiana Occupational Safety and Health Act, Ind. Code § 22-8-

1.1-1 . . . .” Appellant’s App. p. 8.

         The Commissioner sought an anticipatory search warrant because in the past

Sensient had failed to cooperate with IOSHA’s Compliance Safety and Health Officers

(CSHOs). Id. The Petition for Anticipatory Search Warrant was supported by the

affidavits of the Director of Industrial Safety and Hygiene and a CSHO. The affidavits

specifically averred that IOSHA had received a referral from OSHA regarding Sensient

                                            4
and IOSHA wished to carry out an “unprogrammed inspection” of Sensient because of

that referral.1 Id. at 12. The referral was based on NIOSH’s June 2011 report that

revealed Sensient employees had experienced adverse respiratory conditions due to

exposure to food-flavoring chemicals. The trial court granted the search warrant that day.

        But on September 12, Sensient filed an emergency motion to stay the search

warrant. The trial court scheduled a hearing for the next day. At the September 13

hearing, Sensient argued that the search warrant was not supported by probable cause.

The Commissioner was given additional time to supplement the documentation in

support of the search warrant. On September 14, the Commissioner filed supplemental

documentation in support of the search warrant, including an amended affidavit of the

CSHO. The amended affidavit provides, in pertinent part:

        4. That in approximately mid to late July 2011, Richard Fairfax, Deputy
        Assistant Secretary at federal OSHA referred the NIOSH report to my
        superior Jeffry Carter, Deputy Commissioner, Indiana Occupational Health
        and Safety Administration for an inspection regarding the findings of the
        2011 NIOSH report at Sensient.

        5. That NIOSH sent copies of their June 2011 final report, which is
        attached as Exhibit 3 and incorporated herein, to representatives at
        Sensient, the International Brotherhood of Teamsters Local 137, Indiana
        State Department of Health, and OSHA Region V office in Chicago in the
        summer of 2011. See page 40 of Exhibit 3 (the NIOSH report).

        6. That NIOSH received a request from the local union for the Health
        Hazard Evaluation because it was concerned about possible respiratory
        problems and the use of flavoring chemicals. See page iii, Exhibit 3.

        7. That the team from NIOSH that conducted the inspection at Sensient
        resulting in the 2011 report consisted of two industrial hygienists and two
        medical doctors. See Exhibit 2 page 3.

        1
          “Unprogrammed inspections” are those “where alleged hazardous working conditions have been
identified at a specific establishment and include fatality/catastrophe investigations, complaint or referral
inspections[,] and follow-up inspections.” Appellant’s App. p. 12.
                                                     5
                                        *****

      9. [T]here is a national emphasis program designated by federal OSHA
      covering the manufacture of food flavorings containing diacetyl. Please see
      attached Exhibit 4 incorporated herein. A national emphasis program is
      used to identify and reduce or eliminate hazards associated with employee
      exposure to flavoring chemicals in facilities that manufacture food
      flavorings containing diacetyl. See, abstract page 3 of Exhibit 4.

                                        *****

      11. That documentation and information received from Mr. Fairfax
      included the June 2011 NIOSH report that revealed that employees have
      experienced adverse respiratory conditions due to exposure to food
      flavoring chemicals. See Exhibit 3.

      12. That IOSHA has a policy of conducting inspections of referrals that
      allege serious health hazards as stated in the Indiana Field Inspection
      Reference Manual, Chapter 1, page I-11 of Exhibit 5 attached and
      incorporated herein.

Id. at 24-25. The June 2011 NIOSH report, which was attached to the CSHO’s amended

affidavit, makes the following conclusions:

      The findings from our spirometry record review indicate that the flavorings
      manufacturing facility employees who underwent spirometry testing at the
      contracted clinic had 3.8 times greater prevalence of spirometric restriction
      than the U.S. population after adjusting for age, gender, race, smoking, and
      body mass index.        About one-third of employees had spirometric
      abnormalities, most of them restrictive in nature. . . . Statistical modeling
      indicated that abnormal decline in FEV1 [forced expiratory volume in one
      second] and that annualized average decreases in FEV1 and FVC [forced
      vital capacity] were associated with working in areas with higher potential
      for exposure to flavoring chemicals. Employees who had ever done liquid
      processing had greater average annualized falls in spirometric
      measurements than employees who had never worked in an area with
      higher potential for flavoring exposure. These results suggest that the
      flavorings company employees are experiencing respiratory health effects
      related to ongoing exposures in the workplace.

                                              6
Id. at 81 (emphasis added). The report also offered recommendations to Sensient on how

to reduce exposure to harmful chemicals. Id. at 81-84.

      At a September 14 hearing, the Commissioner agreed that the scope of the

September 9 warrant was too broad and should be limited to documents, records, and

areas associated with the use of flavoring substances listed in Appendix D of OSHA’s

National Enforcement Program to identify and reduce or eliminate hazards associated

with exposures to flavoring chemicals. Tr. p. 58; Appellant’s App. p. 92, 140-150.

Accordingly, the trial court quashed the September 9 search warrant but noted that it

would issue an amended search warrant that limited the scope of the search to documents,

records, and areas associated with the use of the substances listed in Appendix D.

Sensient objected to any amended search warrant and asked that it be quashed. The trial

court, however, denied this request as well as Sensient’s request to stay execution of the

amended search warrant pending appeal.

      On the next day, September 15, the trial court issued the amended search warrant.

The only substantive difference between the original and amended search warrants is the

inclusion of this paragraph at the end of the amended search warrant:

             However, this warrant shall be limited in scope to those documents,
      records, and areas associated with the use of flavoring substances listed as
      high priority in Appendix D of the National [E]nforcement Program, CPL
      03-00-011, pages D-3 through D-13.

Appellant’s App. p. 7. Sensient immediately appealed and asked this Court to stay

execution of the amended search warrant. We denied their request on September 16, and

the briefing process continued.

                                            7
      In the meantime, Sensient continued to litigate this matter in the trial court. In

October 2011, Sensient filed an Emergency Motion to Quash Search Warrant, Exclude

Evidence and for Sanctions. Id. at 2. A flurry of motions followed, and the search

warrant was stayed pending resolution of these and other issues. Finally, in January

2012, the trial court denied Sensient’s Emergency Motion to Quash Search Warrant,

Exclude Evidence and for Sanctions.      The trial court also denied Sensient’s further

motion to stay execution of the amended search warrant.

      On February 22, 2012, IOSHA filed a notice in the trial court that the amended

search warrant for Sensient’s facility had been fully executed and IOSHA would not

undertake any further searches pursuant to that warrant. Appellee’s App. p. 9.

      At this point, activity resumed in this Court. In March 2012, IOSHA filed a

motion to dismiss the appeal, arguing that because the search of Sensient’s facility had

already been completed, the matter was moot. This Court denied IOSHA’s motion in a

2-to-1 vote. Sensient Flavors, LLC v. Ind. Occupational Safety & Health Admin., No.

49A02-1109-MC-844 (Ind. Ct. App. Apr. 2, 2012).

                                Discussion and Decision

      Sensient challenges the amended search warrant on two grounds: (1) it is not

supported by probable cause and (2) it is unreasonable because it does not contain any

limitations regarding the scope or manner of the search. Accordingly, Sensient asks us to

“void” the warrant. IOSHA makes two arguments in response. First, IOSHA argues that

the issue of whether the amended search warrant should be voided is moot because the

search has already been completed. Second, IOSHA argues that because the search is

                                            8
complete, the only possible issue is suppression of the evidence obtained as a result of the

search if such evidence is going to be used in finding safety violations and imposing

penalties; however, Sensient must first present this issue to the agency and exhaust its

administrative remedies.2 We find IOSHA’s second argument to carry the day in light of

Seventh Circuit case law on this very issue.

         In In re Establishment Inspection of Kohler Company, 935 F.2d 810 (7th Cir.

1991), Kohler Company, a Wisconsin company, sought to quash an administrative search

warrant issued to OSHA on grounds that OSHA lacked probable cause to inspect its

plant.       Like this case, OSHA argued that because the inspection had already been

completed, the issue was moot. The Seventh Circuit, however, did not address OSHA’s

mootness argument because it found that Kohler had failed to exhaust its administrative

remedies. Id. at 812. Specifically, the court found that according to the Occupational

Safety and Health Act of 1970 (OSH Act), it was “without jurisdiction to consider

Kohler’s challenge to the warrant that authorized OSHA’s inspection.” Id. The court

noted that Section 10(a) of the OSH Act “requires parties to contest OSHA citations

before the Review Commission before obtaining judicial review” and Section 11(a)

provides that “no objection that has not been argued before the Commission shall be

considered by the court . . . .” Id. (citing 29 U.S.C. §§ 659, 660). Accordingly, the court

concluded, “We cannot, therefore, review a motion to suppress evidence . . . that has not

         2
          We note that Sensient argues in its reply brief that it is not seeking to suppress any evidence;
however, given that the search has already been completed, it is unclear what the remedy would be if we
were to find that the amended warrant was not properly issued. See Appellant’s Reply Br. p. 11 (“IOSHA
hypothesizes that the goal of this appeal is the suppression of evidence (which it is not) and thus whether
the warrant was deficient as a matter of law is subject to exhaustion issues.”).
                                                    9
been presented to the Review Commission. . . . To address Kohler’s motion to quash

now would enable Kohler to circumvent the statutory exhaustion requirement.” Id.

       The court then highlighted the importance of exhausting administrative remedies,

that is, it “protects the autonomy of administrative agencies, respects administrative

expertise, facilitates judicial review by ensuring a well-developed factual record, and

promotes judicial economy by avoiding piece-meal review of cases and by giving the

agency the opportunity to resolve the case to the parties’ mutual satisfaction without

judicial interference.” Id. Particularly relevant to this case, the court explained:

       The rationale for applying the doctrine may be even stronger in the context
       of a case, like this one, that raises a constitutional question, because the
       exhaustion requirement enables courts to avoid deciding cases on
       constitutional grounds unnecessarily; during administrative proceedings the
       constitutional issue, or the entire case, for that matter, may be resolved
       favorably for the aggrieved party, obviating the need for the courts to
       address the constitutional claim.

Id. at 812-813. The court noted that these considerations have led many of the circuits to

require companies seeking to suppress evidence obtained during OSHA inspections to

contest OSHA citations before the Review Commission before turning to the federal

courts for relief. Id. at 813. The Seventh Circuit therefore “join[ed] the other circuits

that require parties challenging completed OSHA inspections on fourth amendment

grounds to address their arguments to the Review Commission before turning to the

federal courts.”3 Id. at 814; see also Trinity Marine Products, Inc. v. Chao, 512 F.3d 198,

       3
         The court noted that according to Weyerhaeuser Co. v. Marshall, 592 F.2d 373 (7th Cir. 1979),
an exception to the exhaustion requirement is when doing so would be pointless. Kohler, 935 F.2d at
814. That exception did not apply in Kohler.
        The court also headed off any argument that requiring the Review Commission to rule on motions
to suppress evidence presented a separation-of-powers problem. Id.
                                                 10
203 (5th Cir. 2007) (“Administrative warrants also differ from traditional criminal

warrants in that the exhaustion-of-administrative-remedies doctrine applies, meaning that

an employer who wishes to challenge a warrant cannot immediately file a motion in

district court to suppress the evidence after the warrant has been executed.”).

        Treatises provide likewise. According to LaFave, “An executed search warrant

may not be immediately challenged in court, as the business must first exhaust its

administrative remedies. The same is true as to state counterparts of OSHA.” 5 Wayne

R. LaFave, Search and Seizure: A Treatise on the Fourth Amendment § 10.2 n.37 (4th ed.

2004) (emphasis added) (citations omitted).

        Although we are not bound by federal court of appeals’ precedent, because the

federal OHSA statutes closely resemble ours, federal case law is persuasive. See Comm’r

of Labor v. Gary Steel Products Corp., 643 N.E.2d 407, 412 (Ind. Ct. App. 1994);

Comm’r of Labor v. Talbert Mfg. Co., 593 N.E.2d 1229, 1232 (Ind. Ct. App. 1992).

Similar to the OSH Act, the Indiana Occupational Safety and Health Act (IOSH Act)

requires employers to contest citations before petitioning for judicial review. See Ind.

Code § 22-8-1.1-28.1(b) (“If the employer wishes to petition for review of a penalty

assessment, he must file a written petition for review under IC 4-21.5-3-7 with the

commissioner within fifteen (15) working days of the receipt of the notice of penalty.”

(emphasis added)).         Further, judicial review of citations is governed by Indiana’s

         Finally, the court premised its holding on the ability of employers to challenge OSHA inspection
warrants in district court. Id. at 815. In this case, Sensient did just that and was successful in getting the
original search warrant quashed. Sensient continued to challenge the amended search warrant in the trial
court even after filing a notice of appeal and obtained a stay until January 2012, when its motion to quash
the amended warrant was finally denied. Appellant’s App. p. 2-6.

                                                     11
Administrative Orders and Procedures Act (AOPA), which requires issues to be

presented to the Indiana Board of Safety Review4 before seeking judicial review.5 LTV

Steel Co. v. Griffin, 730 N.E.2d 1251, 1255 (Ind. 2000); see also Ind. Code §§ 4-21.5-5-

10, -4(a) (“A person may file a petition for judicial review under this chapter only after

exhausting all administrative remedies available within the agency whose action is being

challenged and within any other agency authorized to exercise administrative review.”).

       The Indiana Supreme Court has also emphasized the value of completing

administrative proceedings before resorting to judicial review. Johnson v. Celebration

Fireworks, Inc., 829 N.E.2d 979, 982 (Ind. 2005). Similar to the Seventh Circuit in

Kohler, our Supreme Court has found that the exhaustion doctrine is supported by “strong

policy reasons and considerations of judicial economy,” particularly:

       The exhaustion doctrine is intended to defer judicial review until
       controversies have been channeled through the complete administrative
       process. The exhaustion requirement serves to avoid collateral, dilatory
       action . . . and to ensure the efficient, uninterrupted progression of
       administrative proceedings and the effective application of judicial review.
       It provides an agency with an opportunity to correct its own errors, to
       afford the parties and the courts the benefit of [the agency’s] experience
       and expertise, and to compile a [factual] record which is adequate for
       judicial review.

Id. (quotation omitted). Also similar to the Seventh Circuit in Kohler, our Supreme Court

concluded that even where “the ground of the complaint is the unconstitutionality of the

statute, which may be beyond the agency’s power to resolve, exhaustion of administrative

       4
         The Board of Safety Review conducts hearing on contests involving safety orders, penalties, and
notices of failure to correct a violation issued under Indiana Code chapter 22-8-1.1 and may affirm,
modify, or dismiss the action of the Commissioner in respect to the violation, penalty, and abatement
period. Ind. Code § 22-8-1.1-30.1(b).
       5
           AOPA sets forth two exceptions, neither of which apply here.
                                                   12
remedies may still be required because administrative action may resolve the case on

other grounds without confronting broader legal issues.” Id. at 982-83 (emphasis added)

(quotation omitted).6

        Here, Sensient has administrative remedies still available to it. The IOSH Act

provides that if following an administrative search, the Commissioner or his designated

representative determines that there are occupational safety and health violations, the

Commissioner “shall issue a safety order”7 and may impose civil penalties on the

employer. Ind. Code §§ 22-8-1.1-25.1, -27.1. An employer receiving a safety order may

file a petition for review with the Commissioner, who has five working days in which to

affirm, amend, or dismiss the safety order and penalty, if any. Ind. Code §§ 22-8-1.1-

28.1(a), -28.3(a); see also I.C. § 22-8-1.1-28.1(b) (noting that when there is a penalty

assessment, the employer “must” file a written petition for review). If a petition for

review is granted, the Commissioner shall immediately certify the dispute to the Board of

Safety Review, which must hold a hearing. Ind. Code §§ 22-8-1.1-28.5, -35.3. The

Board of Safety Review may affirm, modify, or dismiss the action of the Commissioner

concerning an alleged violation, including any penalty or abatement period. Ind. Code §

22-8-1.1-30.1; see also Griffin, 730 N.E.2d at 1255. Finally, orders by the Board of

Safety Review are subject to judicial review in accordance with Indiana Code chapter 4-

21.5-5. Ind. Code § 22-8-1.1-35.5. Because Sensient’s remaining relief is suppression of

the evidence obtained during the search, it must exhaust these administrative remedies

        6
           We acknowledge Sensient’s concern that it is effectively denied review of its constitutional
issue right now; however, this review is merely delayed until it becomes necessary to address this issue.
        7
          A “safety order” “refers to a notice issued to employers by the commissioner of labor for
alleged violations of this chapter, including any health and safety standards.” Ind. Code § 22-8-1.1-1.
                                                   13
first.8 As noted by both the Kohler and Johnson Courts, it does not matter that this case

raises a constitutional question. Because Sensient has failed to exhaust its administrative

remedies, we dismiss this appeal.

       Dismissed.

CRONE, J., and BRADFORD, J., concur.

       8
          The Kohler Court noted that “a determination that the OSHA inspectors lacked probable cause
could conceivably support a section 1983 action, giving Kohler another possible remedy for the
unconstitutional search and rescuing the case from mootness.” 935 F.2d at 812. Sensient has filed such a
case in federal court in Sensient Flavors LLC v. Ind. Occupational Safety & Health Admin,, et. al, 1:11-
CV-1622-JMS-DML. See Appellant’s Br. p. 6 n.4.
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