STATE OF CALIFORNIA
OCCUPATIONAL SAFETY AND HEALTH
In the Matter of the Appeal of:
SOUTHWEST MARINE, INC.
P. O. Box 13308
P. O. Box 13308
The Occupational Safety and Health Appeals Board (Board), acting pursuant to authority vested in it by the California Labor Code and having granted the petition for reconsideration filed in the above entitled matter by Southwest Marine, Inc., (Employer), makes the following decision after reconsideration.
Employer repairs and services large and small commercial marine vessels. As a result of a fatal accident on June 11, 1996, the Division of Occupational Safety and Health (the Division) through Fabian Trucios, Associate Engineer-Compliance conducted an inspection on that day at a place of employment maintained by Employer at 985 S. Seaside Avenue, Terminal Island, California (the site).
The Division cited Employer for an alleged serious violation of section 3306 [destruction of cylinders] of the occupational safety and health standards and orders found in Title 8, California Code of Regulations.1
Employer filed a timely appeal contesting the existence and classification of the alleged violation, and the amount of the proposed civil penalty. Employer affirmatively alleged that the fatal accident was the result of an independent employee act.
This matter came on regularly for hearing before Barbara E. Miller, Administrative Law Judge (ALJ) for the Board, in Torrance, California. Edward P. Swan, Jr., attorney, represented Employer. Katherine R. Wolff, staff counsel, represented the Division.
On January 19, 2000, a decision was issued denying Employers appeal. On February 23, 2000, Employer filed a petition for reconsideration. The Division filed an Answer on March 16, 2000. The Board granted the petition on March 28, 2000. On November 19, 2001 the Board held Oral Argument in the case.
Fabian Trucios is an engineer employed by the Division since June 1977. He has the equivalent of a doctorate in engineering from the University of Buenos Aires, Argentina. As part of the curriculum in machine science he studied pressurized machinery and cylinders for more than one year.
Trucios interviewed John Pepperling, Employers Safety Manager, who told Trucios he could get additional information regarding the accident from Felipe Valencias leadman/supervisor, Richard Lewis. According to Lewis, on June 11, 1996, he instructed Valencia to cut and dispose of gas cylinders. Although Valencia was experienced and trained as a cutter and welder on ships and was accustomed to working with gas cylinders, there is no evidence that he had any experience cutting into such cylinders since it was only the second day of a new operation for Employer. Lewis told Trucios that Valencia had no training regarding the salvage of cylinders.
All the cylinders to be cut were side-by-side on a rail car outside the shop
where the cutting was to be performed. Some cylinders were marked in chalk with
an X inside a circle. Those were cylinders that Lewis had prepared by removing
the caps and then opening the valves. After pressure was released, Lewis opened
the valves completely and let the cylinders drain over night. There were other
cylinders, one oxygen and one acetylene, marked with only an X. Those were cylinders
that Valencia was apparently told not to salvage.
Lewis explained to Trucios that the caps on the cylinders marked with only an X were rusted on2. Accordingly, the valves could not be opened and the gases could not be drained. Pictures of some of the cylinders were admitted into evidence. The chalk markings were only visible on the oxygen cylinder that led to the tragedy. Trucios testified that the markings were difficult to discern and distinguish. Based upon the pictures admitted into evidence, the cylinders did not contain indicator tags setting forth their content and the sealed oxygen cylinder was stored on the same rack as the sealed acetylene cylinder.
Valencia was alone in the shop when the cutting was performed as Lewis, after giving his instructions, left to perform other duties. Based upon interviews taken June 11, Trucios concluded that Valencia perforated and then cut one of the acetylene cylinders marked with an X inside a circle. He next selected an oxygen cylinder marked with an X only. Printed on the cylinder was the word oxidizer. Valencia proceeded to drill a hole in the cylinder with an electric drill. There was a large explosion, Valencia was thrown across the shop, and died of his injuries not long thereafter. Pictures of the cylinder show a hole much larger than the size of the drill bit. The area around the hole is charred from the heat and explosion.
On June 11, 1996, Trucios took pictures of the equipment involved in the accident3.
The citation was issued as a serious, accident-related violation. Trucios testimony regarding the serious classification was unrebutted. He testified that there was a substantial probability that death or serious injury would result if an accident were to happen. Because the oxygen cylinder had not been drained, the Division alleged the serious injury was related to the violation. Based upon Trucios determination that the Likelihood rating was high, the Division proposed a civil penalty of $7,000.
MOTION TO SUPPRESS EVIDENCE
Employer moved to have all the evidence excluded on the ground that the search of Employers work site on June 12, 1996 was based on a fraudulently procured warrant and that during this search authorities illegally seized attorney-client work product. Employer contends that the entire investigation was contaminated because the Division had access to and participated in the seizure of privileged materials. Employer contends that the Division repeatedly failed and refused to return the privileged documents, which were written employee statements expressly prepared at the direction of Employers counsel in anticipation of litigation.
Certain facts do not appear to be in dispute. The Division was given access to the work site and to employees on the day of the accident, June 11, 1996. The Division never asked to take possession of any physical evidence although it did issue orders prohibiting use. There was and is no allegation that the materials would be destroyed. Believing the fatality might give rise to a criminal prosecution, the Los Angeles District Attorney, with Trucios as a court appointed agent, executed a search warrant of Employers premises on June 12, 1996. At that time, a number of items were seized, including the physical evidence, training records, and the file prepared after the accident at the direction of Senior Vice President and General Counsel, Lloyd Schwartz. With regard to the latter, Employer objected to the seizure at the time of the search.
Within two days of the search, on June 14, 1996, Mr. Schwartz wrote to the Bureau of Investigation setting forth his position that the documents seized were privileged. Schwartz asked the Bureau of Investigation to contact him immediately to discuss the matter. That correspondence was faxed to Trucios at the Torrance District office of the Division on June 17, 1996. Notwithstanding Employers entreaties, the documents were not returned. Indeed, when Trucios later returned to the job site to conduct employee interviews, he admitted to Mr. Swan, Employers current counsel, that he had reviewed the documents.4 Swan wrote to Trucios on August 21, 1996, requesting that the privileged documents be returned. As of the date of the hearing before the ALJ, the documents were still in the possession of the Division. As perhaps an ultimate irony, when Employer sought discovery in preparation for the hearing before the ALJ, the Division copied the privileged material and sent it to Employer.
At the hearing before the ALJ, Trucios and counsel for the Division claimed that Employer did not identify the documents it sought returned.
1. Does the evidence justify a violation of section 3306?
2. Was Employer denied due process because the language of the citation misstated the alleged violation?
3. Should all the evidence be suppressed because the search warrant was fraudulently obtained?
4. Were attorney-client and attorney work product documents illegally seized contaminating the entire investigation?
FINDINGS AND REASONS
DECISION AFTER RECONSIDERATION
In the petition, Employer argues:
1. That the evidence does not justify a violation of section 3306.
2. That the language of the citation for a violation of section 3306 misstated the alleged violation and misled the Employer.
3. That the search warrant was obtained fraudulently and all evidence obtained should be suppressed.
4. That attorney-client and attorney work product documents were illegally seized which contaminated the entire investigation.
1. The Evidence Justifies a Violation of Section 3306.
In this case the evidence obtained by Trucios on June 11, 1996, the day before the warrant was obtained is sufficient to establish a violation of section 3306.
Section 3306 states:
Pressure vessels or other containers shall not be crushed, sheared, baled or otherwise processed for salvage until the employer has made certain that such vessels or containers do not contain hazardous substances or pressures in quantities which would render them unsafe for such salvaging operations. No attempt shall be made to open closed pressure vessels or containers of unknown contents until adequate precautionary measures have been taken to eliminate risk of injury to employees. Such precautionary measures may include rupture or perforation of the vessels while they are protected by barricades, enclosures or isolation.
NOTE: Certain cylinders and vessels, after passing their useful life, are destroyed by the owner of the vessel in such a manner that it can be resold for salvage purposes and can be crushed, sheared, melted or otherwise processed safely. (Some closed pressure vessels and containers may be safely disposed of by burying in the earth rather than by attempting to salvage them.)
It is undisputed an employee cut into a sealed oxygen cylinder, when it was not safe to do so. In that sense, the safety order was clearly violated. It is also found that Employer did not take adequate precautionary measures to eliminate risk. Pursuant to the uncontroverted testimony of Trucios, the cylinders were marked with an X inside a circle and an X without a circle, which were each difficult to discern.
Trucios observed on June 11, 1996, that the cylinders to be cut and the other cylinders were stored side by side. The oxygen and acetylene cylinders with sealed caps still contained gas under pressure. None of the cylinders had indicator tags. All these circumstances combine and point toward upholding the ALJs finding. Employer did not take adequate precautions to protect its employees with regard to the salvage operation.
After review of the record we adopt the ALJs conclusion and analysis that Employer effectively required that Valencia perform the procedure, which resulted in his death.
The Independent Employee Action Defense does not apply.
The evidence also supports a violation of section 3306 because the cylinders without rusted caps were salvaged before completion of adequate measures to ensure they were empty. Trucios testified that Employer should have cleaned, rinsed, and ventilated the cylinders prior to salvage. Employer did not offer credible testimony that it had adequately purged the cylinders of the hazardous contents. Accordingly, it is found that the method of opening the valves of the cylinders over night was not an adequate precautionary measure to ensure that the cylinders did not contain hazardous substances under pressure in quantities, which rendered them unsafe for the salvage operation.
Employer further contends that even if it is found in violation of the cited safety order, the violation was the result of misconduct on the part of the injured employee and that it is excused from liability under the independent employee action defense5 as articulated by the Appeals Board in Mercury Service, Inc., Cal/OSHA App. 77-1133, Decision After Reconsideration (Oct. 16, 1980). Because it is an affirmative defense, the burden of proving it, to a preponderance of the evidence (Central Coast Pipeline Construction Co., Inc., Cal/OSHA App. 76-1342, Decision After Reconsideration (July 16, 1980)) rests upon the employer. Ernest W. Hahn, Inc., Cal/OSHA App. 77-576, Decision After Reconsideration (Jan. 25, 1984). Satisfactory proof establishing each of the five elements of the independent employee action defense may insulate an employer from the unsafe acts of employees in violation of a safety order. The rationale of the defense is that an employer cannot anticipate its employees failure to follow instructions and its safety rules. Ernest W. Hahn, Inc., supra.
We find that Employers argument is without merit. Employer did not establish the first element of the independent employee action defense because although Valencia was an experienced welder, there is no evidence that he was experienced at cutting into cylinders in this type of salvage operation since it was only the second day of the new operation.
Lewis told Trucios that Valencia had no training regarding the salvaging of cylinders.
Employer did not establish the fifth element of the independent employee action defense because insufficient evidence was presented that Valencia caused a safety infraction that he knew was contrary to Employers safety requirements. There was no systematic training regarding the new activity and Employer merely assumed that Valencia would know that a sealed cap was a red flag of danger. Also, the testimony and evidence is uncontroverted that the cylinders were faintly marked with an X inside a circle or an X without a circle, which were difficult to discern. Finally, its difficult to accept, absent some other evidence, that Valencia intentionally cut into a cylinder which he had reason to know would explode and kill him.
2. Employer was not Denied Due Process Because the Language of the Citation
Misstated the Alleged Violation.
Employer alleges that because the language of the citation did not mirror the violative section that it was misled and denied due process protection.
On the citation form, the Division did not quote the operative language from the safety order but rather stated the following:
(1) The employer did not ensure that the oxygen and acetylene cylinders did not contain residual gases before an employee was required to cut them with a drill and band saws. On June 11, 1996, an employee was killed when the oxygen cylinder that was being cut exploded in the structural shop.
(2) No precautionary measure was taken before opening the valves of old cylinders containing residual gases. Three valves of three cylinders were open in the structural shop on June 11, 1996. [Emphasis added.]
Employer contends it did not violate the charging language in the citation in that Valencia was not required to cut into cylinders. With regard to the sealed cylinders, Employer does not adequately address whether the safety order itself was violated. The language of the regulation and the charging language regarding the other cylinders is essentially the same. The addition of the phrase was required to cut does not mislead Employer as to the substance of the violation.
The Divisions lack of precision in the pleading does not rise to the level of denying due process in this case because Employer had sufficient notice of the charge to prepare a defense. It is obvious from the well thought out and vigorous defense presented by Employer that it was prepared to defend against the charges brought against it.
Due process requires that an employer have sufficient notice of the charge to enable it to prepare a defense to the charge. (R. W. Taylor Co., Cal/OSHA App. 77-359, Decision After Reconsideration (Jan. 9, 1980); Gaehwiler Construction, Co. Cal/OSHA App. 78-651 Decision After Reconsideration (Jan 7, 1985).) In this case Employer was informed that the cylinder exploded, that it caused death, that the Division was alleging that it did not ensure that the cylinders did not contain residual gases and that no precautionary measure was taken before opening the valves that contained the residual gases within the meaning of section 3306.
3. There was Insufficient Evidence Presented that the Warrant was Obtained Fraudulently and that all Evidence Should be Suppressed.
Employer contends that the warrant was fraudulently obtained and all evidence should be suppressed. We note first of all that the only evidence used by the ALJ to render the decision was evidence obtained on June 11, 1996, which was prior to obtaining the warrant and nobody has a credible claim that Trucios was not lawfully present on that date.
We have independently reviewed the record and do not find that Employer established that the warrant was fraudulently obtained. Employers assertion that the warrant was illegally obtained is based upon Trucioss testimony that he did not supply the information that was used in his affidavit to Los Angeles County District Attorney Investigator Patrick Byrne. For reasons clear only to Employer, Employer chose not to call Investigator Byrne. No explanation is given as to how Byrne could have obtained the information contained in his affidavit if not through Trucios, and we feel it incumbent upon the party who is attacking the warrant to give the trier of fact an opportunity to hear the affiants testimony.
In any event, other than the statement attributed to Trucios that a representative of Employer refused to allow the cylinders to be removed from the premises, the information in the warrant appears to have been established as true during the hearing, giving additional credibility to the information stated by Byrne as a basis for obtaining the warrant.
It appears to us that the evidence excluded (except for privileged attorney-client documents discussed infra.) should have been admitted even though it would not have altered the outcome of the case. The ALJ apparently acted with an abundance of caution in not considering the other evidence. We find that Employer did not establish that the warrant was obtained fraudulently.
1. Attorney-Client and Attorney Work Product Documents did not Contaminate the Entire Investigation.
Despite Employers failure to demonstrate the invalidity of the warrant
and that the particular items of evidence were excludable, it argues that the
exclusionary rule itself applies to preclude all evidence presented by Trucios.
There is some question as to whether the exclusionary rule applies to proceedings of this Board. See e.g. Gikas v. Zolin (1993) 6 Cal.4th 841. The Board elects to maintain the safeguards contained within the exclusionary rule but elects to only exclude evidence when it can be established that a warrant was not obtained in good faith. In this regard, we elect to follow the good faith exception to the exclusionary rule enunciated in United States v. Leon (1984) 468 U.S. 897, 104 5.Ct. 3405 and People v. Camarella (1991) 54 Cal.3d 592. The Board is persuaded by and adopts the holdings of Secretary of Labor v. Smith Steel Casting Company, 800 F.2d 1329 (1986). In that case, the Fifth Circuit relying on the writings of Justice OConnor in INS v. Lopez-Mendoza, (1984) 468 U.S. 1032 which held that the exclusionary rule should not apply to preclude an agency from pursuing corrective actions but may apply for assessment of penalties after the fact.6
In this case we do not feel that Employer made a showing that the evidence was not obtained in good faith. If we needed to look at evidence obtained after June 11, 1966, we would have admitted that evidence (except for privileged attorney-client documents discussed infra.). The burden to show that the warrant was not obtained in good faith was on Employer and Employer at the very least, should have called Bryne as a witness so that the ALJ could have assessed his credibility in this case.
However, we agree with Employer that records containing Employers Report of Investigation are privileged and are excluded. We are cognizant of the Divisions argument that an inadequate foundation was laid to show that these documents are privileged attorney-client documents or subject to the work-product exclusion. We find that the totality of the evidence on the subject is sufficient to establish a nexus of communication between Employer and their attorney.
It appears from the record that the ALJ did not consider these documents and it would have been inappropriate for those statements to be considered.
Even though we find that the documents are privileged, there has not been a sufficient showing that evidence obtained on June 11, 1996, before the warrant was issued, was a fruit of the attorney client statements as argued by Employer. We also find that there has not been a sufficient showing that the other evidence obtained June 12, 1996 pursuant to the warrant was a fruit of these statements.
We are troubled by the Divisions conduct in not immediately returning the privileged items upon request by Attorney Schwartz. If the Division contended that the documents were not privileged it was incumbent upon the Division to immediately notify Employers attorney of that fact so that Employer could have made an application to an appropriate forum for an independent determination as to whether or not the documents were privileged.
Since the privileged documents were not relied upon in reaching the decision, the Board will not order any further sanctions in this case. However, we want to make it clear that we disapprove of the Divisions conduct in maintaining the documents after being requested to return them. We would be receptive to providing further relief to other employers if similar facts are presented in the future, based upon a finding of misconduct by Division personnel.
DECISION AFTER RECONSIDERATION
The Board affirms the ALJs decision finding a serious violation of section 3306 and the assessment of a $7,000 civil penalty.
MARCY V. SAUNDERS, Member
GERALD P. OHARA, Member
OCCUPATIONAL SAFETY AND HEALTH APPEALS BOARD
FILED ON: January 10, 2002
1 Unless otherwise specified all references are to sections of Title 8, California Code of Regulations.
2According to Trucios testimony, more information was provided on July 2, 1996, during a second interview with Lewis, after Trucios reviewed the privileged documents. Based upon Employers demand for exclusion and the determination to base the decision only on undisputed materials, all information gathered after the review of the privileged documents was excluded by the ALJ. The ALJ found, however and we concur, that such evidence would not influence the outcome of the case.
3Photographs submitted as Exhibits 5 and 7 appear to have been taken by Trucios on June 11, 1996, the date of the initial inspection.
4 Initially Trucios acknowledged making that statement. Later in his testimony, during a lengthy and sometimes combative cross-examination, Trucios stated that he only meant he had reviewed documents generally, not the privileged documents. Given that Trucios had marked each page of those documents, that he was preparing to interview employees and that his testimony changed, the ALJ found that his denial regarding review of the documents was not credible.
5 Those elements are: 1. The employee was experienced in the job being performed; 2. The employer has a well-devised safety program which includes training employees in matters of safety respective to their particular job assignments; 3. The employer effectively enforces the safety program; 4. The employer has a policy of sanctions against employees who violate the safety program; and 5. The employee caused a safety infraction, which he or she knew was contra to the employers safety requirement.
6 In INS v. Lopes-Mendoza, supra, Justice OConner reasoned: Presumably no one would argue that the exclusionary rule should be invoked to prevent an agency from ordering corrective action at a leaking hazardous waste dump if the evidence underlying the order had been improperly obtained, or to compel police to return contraband explosives or drugs to their owner if the contraband had been unlawfully seized. On the rare occasions that it has considered costs of this type the Court has firmly indicated that the exclusionary rule does not extend this far. See United States v. Jeffers 342 U.S. 48, 54 [72 S.Ct. 93, 96, 96 L.Ed.59] (1951); Trupiano v. United States 334 U.S. 699, 710 [68 S.Ct. 1229, 1234, 92 L.Ed. 1663] (1948) . The constables blunder may allow the criminal to go free, but we have never suggested that it allows the criminal to continue in the commission of an ongoing crime.
The Smith Steel Casting Court held: Based on Justice OConners reasoning, we do not believe that the exclusionary rule should be invoked to prevent the Secretary of Labor from ordering correction of OSHA violations involving unsafe or unhealthy working conditions, even though the evidence supporting the order was improperly obtained. However, illegally obtained evidence must be excluded for purposes of punishing the crime, i.e. the exclusionary rule should be applied for purposes of assessing penalties against an employer after the fact for OSHA violations, unless it can be shown that the good faith exception applies to the Secretarys actions. Therefore, we hold pursuant to Lopez-Mendoza that the exclusionary rule does not extend to OSHA enforcement actions for purposes of correcting violations of occupational safety and health standards. Further, again under Justice OConners reasoning in Lopez-Mendoza we hold that the exclusionary rule applies where the object is to assess penalties against the employer for past violations of OSHA regulations unless, under the reasoning announced in Leon, the good faith exception can be applied to the Secretarys actions in obtaining the tainted evidence.