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From Products Liability Law Daily, December 30, 2013

Tort reform association’s petition for review of OSHA’s modification of HazCom standard introductory paragraph is “much ado about nothing”

By Brandi O. Brown, J.D.

Finding the American Tort Reform Association’s (ATRA) petition for review of the Occupational Safety & Health Administration’s (OSHA) modification of an introductory paragraph when the agency amended the substantive hazard communication (HazCom) standard as “much ado about nothing,” the U.S. Court of Appeals for the District of Columbia Circuit determined that the challenge was not ripe for review. Both sides acknowledged that OSHA lacked legal authority to determine the preemptive effect of the Occupational Safety and Health Act (OSH Act), and OSHA conceded that it never meant to suggest otherwise when it amended paragraph (a)(2) of HazCom. At most, the paragraph was an interpretative statement advising the public of the agency’s interpretation; accordingly, it was not subject to notice and comment rulemaking under the administrative procedures act and not subject to judicial review, the court ruled (American Tort Reform Association v OSHA, December 27, 2013, Edwards, H).

In March 2012, OSHA issued a final rule amending the substantive requirements of the HazCom standard, which establishes labeling requirements for chemicals used in the workplace. OSHA also modified paragraph (a)(2), an introductory paragraph that describes the preemptive scope of HazCom. Although several commentators had urged OSHA to modify paragraph (a)(2) to state that the standard preempted state tort actions based on inadequate labeling, OSHA declined those invitations, explaining that HazCom did not preempt state tort failure-to-warn lawsuits. OSHA made it clear that the Occupational Safety and Health Act preserved, rather than preempted, state tort law. So, along with the final rule amending the standard, OSHA modified paragraph (a)(2) to reflect the agency’s view that the standard preempts state legislative and regulatory requirements, but not state tort claims.

ATRA filed a petition for review, advancing two claims: (1) that the disputed modifications to the paragraph exceeded OSHA’s delegated authority under the OSH Act and (2) that no modifications could be made to the paragraph without notice and comment rulemaking under the Administrative Procedures Act (APA).

OSHA’s authority. At the outset, the appeals court noted the parties’ agreement that OSHA has no legal authority to determine the preemptive effect of the OSH Act. Following the U.S. Supreme Court’s 2003 decision in Nat’l Park Hospitality Ass’n v Dep’t of Interior, the appeals court noted that when an agency issues an interpretative rule or statement with respect to a matter that it is not empowered to decide, that statement merely informs the public of the agency’s views, and controversies over such statements typically cannot result in a justiciable dispute.

Such was the case here. First, OSHA did not have legal authority to decide this matter under the OSH Act. Paragraph (a)(2) was not substantive because it pertained to a matter that OSHA had no legal authority to decide under the Act; the paragraph was nothing more than a guideline. The fact that it was published in the Federal Register and Code of Federal Regulations was not dispositive under National Park Service Ass’n. Nor was ATRA’s claim bolstered by the fact that a state court relied on the paragraph language to hold that HazCom did not preempt a state failure-to-warn tort. The state court was not obligated to follow it or to find that the agency’s view was legally binding. Moreover, the paragraph reflected OSHA’s understanding of the Act based on judicial interpretations of the Act; consequently, it was not a legislative rule promulgated by the agency.

Judicial review; notice and comment. Interpretative rules are not subject to judicial review. Authority from the D.C. Circuit that labeling a rule as a statement or guideline would not necessarily prevent review—where it was really a rule—was not applicable in this case. OSHA had clearly offered the paragraph as a guideline, not as a legislative rule. Nor had OSHA offered the paragraph in support of its position in any pending actions. The modification to paragraph (a)(2) also was not subject to notice and comment rulemaking under the APA. OSHA did not have authority to promulgate a rule with the force of law on the preemptive effect of the OSH Act, and it never meant for this paragraph to have that effect. Therefore, the agency was not required to apply notice and comment rulemaking before making the modification.

Ripeness. Finally, ATRA’s claim that the substance of the paragraph exceeded the preemptive scope of the OSH Act did not present a case or controversy ripe for judicial review, the appeals court noted. The paragraph does not carry the force of law because OSHA lacks legal authority to render dispositive decisions on preemption. The paragraph also was not subject to the requirements of notice and comment rulemaking nor judicial review. Nor had OSHA purported to rely on it in support of an agency action in a concrete case. Therefore, the challenge was not ripe for review. ATRA also would not suffer legally cognizable hardship from this result—an agency’s interpretative guideline does not have adverse legal effects. The court found it too speculative whether the problem presented would ever need solving and ATRA’s hardship too insubstantial.

The case number is 12-1229.

Attorneys: Mark Alan Behrens (Shook, Hardy & Bacon) for American Tort Reform Association. Edmund Charles Baird, U.S. Department of Labor, for OSHA.

Companies: American Tort Reform Association

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