Pulaski v. Occupational Safety & Health Stds. Bd. (1999)

ART PULASKI et al., Plaintiffs and Respondents, v. CALIFORNIA OCCUPATIONAL SAFETY AND HEALTH STANDARDS BOARD, Defendant and Appellant; AMERICAN TRUCKING ASSOCIATIONS, INC., et al., Interveners and Appellants; AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, Intervener and Respondent.

(Superior Court of Sacramento County, No. 95CS00362, James Timothy Ford, Judge.)

(Opinion by Callahan, J., with Scotland, P. J., and Davis, J., concurring.)

COUNSEL

Daniel E. Lungren and Bill Lockyer, Attorneys General, and Timothy G. Laddish, Assistant Attorney General, for Defendant and Appellant.

Gibson, Dunn & Crutcher, Pamela L. Hemminger, Eugene Scalia; ATA Litigation Center, Daniel R. Barney and Lynda S. Mounts for Interveners and Appellants.

Carroll & Scully, Donald C. Carroll and Charles P. Scully II for Plaintiffs and Respondents.

Kazan, McClain, Edises, Simon & Abrams, Frances C. Schreiberg; Altshuler, Berzon, Nussbaum, Berzon & Rubin, Stephen P. Berzon, Scott A. Kronland, Jonathan P. Hiatt and Lynn Rhinehart for Intervener and Respondent.

OPINION

CALLAHAN, J.-

In 1993, the Legislature enacted Labor Code section 6357, directing the California Occupational Safety and Health (Cal OSHA) Standards Board to "adopt standards for ergonomics in the workplace designed to minimize the instances of injury from repetitive motion." [75 Cal. App. 4th 1323]

In response to this legislative mandate, and following a protracted saga of rulemaking, comments and public hearings, Cal OSHA's standards board (the Board) promulgated title 8, section 5110 of the California Code of Regulations (Regulation 5110).

No sooner was the ink dry on the final regulation than it came under attack from opposite directions: Labor interests claimed the regulation was too soft, that it contained "loopholes" which were inconsistent with the mandate of Labor Code section 6357 and guaranteed that employers would be able to virtually ignore the problem of repetitive stress injury. Certain employer groups, spearheaded by the American Trucking Associations, Inc., and California Trucking Association, thought the regulation scientifically unsound and issued without substantial compliance with the California Administrative Procedure Act (APA) (Gov. Code, § 11340 et seq.). fn. 1

Acting on petitions for writ of mandate (Code Civ. Proc., § 1084 et seq.), the trial court granted most of the relief sought by the Labor petitioners. The court struck four portions of Regulation 5110, found the remainder of the regulation valid, and ordered it to go into effect as modified by the court.

On this appeal by the Board and the Associations, we will conclude that, except for one conspicuous exemption, the regulation is valid, that the trial court improperly invaded the rulemaking authority of the Board by striking the remaining provisions, and that the APA-based challenges to the regulation are meritless. We will reverse with directions.

Background

Section 6357 and the Board's Attempt to Comply

The Board was created by the Legislature as part of the California Occupational Safety and Health Act of 1973. (Lab. Code, § 6300 et seq. [all further unspecified statutory references are to this code]; see Carmona v. Division of Industrial Safety (1975) 13 Cal. 3d 303, 306, fn. 1 [118 Cal. Rptr. 473, 530 P.2d 161].) The Board is the only administrative agency empowered to adopt statewide occupational health and safety standards. (§ 142.3, subd. (a)(1); National Elevator Services, Inc. v. Department of Industrial Relations (1982) 136 Cal. App. 3d 131, 142-143 [186 Cal. Rptr. 165].)

Section 6357 was enacted as part of Assembly Bill No. 110 (19931994 Reg. Sess.), an omnibus package of workers' compensation reform [75 Cal. App. 4th 1324] legislation. In his message to the Assembly following its signing on July 16, 1993, Governor Wilson hailed the bill as a significant step in handling the " 'exploding costs' " of workers' compensation claims, accomplishing a 14 percent estimated reduction in costs. (Historical Note, 42 West's Ann. Ins. Code (1999 pocket supp.) foll. § 675, p. 37.)

The language of section 6357 is straightforward and simple. "On or before January 1, 1995, the [Cal OSHA] Standards Board shall adopt standards for ergonomics in the workplace designed to minimize the instances of injury from repetitive motion." (Stats. 1993, ch. 121, § 71, p. 1340, eff. July 16, 1993.) fn. 2

Implementation was far from simple. The Board attempted to comply with the deadline of January 1, 1995, but was inundated with an unprecedented amount of testimony during public hearings and comment periods. It also discovered there was no agreement among the affected groups or knowledgeable experts on the means effectively to regulate or prevent repetitive motion injuries (RMI's). fn. 3 Moreover, federal OSHA had suspended its efforts to publish a proposed rule governing ergonomics in 1994. Consequently, after many modifications, the Board decided to develop a "performance standard" proposal, which left to the employer the details of implementing a corrective ergonomics program. fn. 4

The rulemaking process was long and tedious. Frustrated by the delay, a group of California labor federations and workers claiming injury from repetitive motion filed a petition for writ of mandate to compel the Board to [75 Cal. App. 4th 1325] adopt repetitive motion injury standards in accordance with the mandate of section 6357. As a result of the petition, the trial court issued a peremptory writ of mandate, ordering the Board to propose and adopt standards not later than December 1, 1996.

On November 15, 1996, after holding hearings and receiving public comments, the Board adopted a standard and submitted it to the Office of Administrative Law (OAL) for review. The OAL rejected the regulation and sent it back to the Board for failure to satisfy the clarity standard of Government Code section 11349.1. fn. 5 Soon thereafter, the Labor petitioners filed a motion to cite the Board for contempt for enacting a regulation which allegedly did not meet the mandate of section 6357, but the court found the request premature.

On June 3, 1997, the OAL approved the standard, with clarifying modifications. Regulation 5110 became effective on July 3, 1997.

Summary of Regulation 5110

Regulation 5110 requires an employer to institute a program designed to minimize RMI's in the workplace whenever two or more of its employees performing repetitive tasks have reported RMI's within a twelve-month time span. (Id., subds. (a), (b).) These so-called "triggering" RMI's must be predominantly work-related and objectively diagnosed by a licensed physician. (Id., subd. (a)(1), (3).)

Once the two-injury threshold is met, the employer is required to establish and implement a program designed to minimize RMI's. The program shall [75 Cal. App. 4th 1326] have three components: (1) worksite evaluation, (2) corrective control of exposure to RMI's, and (3) employee training. (Reg. 5110, subd. (b)(1-3).)

There are two very important qualifications: (1) Employers with nine or fewer employees are completely exempted from the regulation (the "small employer exemption"), and (2) ergonomics measures carried out by an employer pursuant to the regulation shall be deemed to satisfy the employer's obligations "unless it is shown that a measure known to but not taken by the employer is substantially certain to cause a greater reduction in such [RMI's] and that this alternative measure would not impose additional unreasonable costs" (the "safe harbor" provision). (Reg. 5110, subds. (a), (c).)

Challenges to the Regulation

By stipulation of the parties, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), and the Associations were permitted to file petitions in intervention on opposite sides of the issue.

The Associations argued the entire regulation should be invalidated because the Board's findings that it would have no significant economic impact and that it was reasonably necessary to effectuate the purpose of the statute were not supported by substantial evidence in the record. The Associations also claimed the Board did not substantially comply with the procedural requirements of the APA.

Labor sought invalidation of various loopholes that it claimed violated the mandate of section 6357: (1) the small employer exemption, (2) the definition of "injury" as predominantly work-related coupled with the requirement the injury be objectively diagnosed by a physician; (3) the two-injury in twelve-months requirement; and (4) the safe harbor provision.

The Board defended the regulation from the attacks launched against it from the two opposing sides.

After exhaustive briefing and a hearing, the trial court denied all of the relief sought by the Associations and granted most of the relief sought by Labor. Specifically, the court:

Upheld the two-injury threshold requirement to trigger the employer's obligation to institute ergonomics measures designed to minimize RMI's.

Eliminated the exemption for small businesses. [75 Cal. App. 4th 1327]

Excised the requirement that the RMI's be predominantly caused by a work-related repetitive motion task.

Struck the word "objectively" from the sentence "[T]he RMIs were musculo-skeletal injuries and that a licensed physician objectively identified and diagnosed such."

Eliminated subdivision (c), the safe harbor provision, protecting an employer that undertakes good faith measures designed to minimize RMI's.

The court granted a peremptory writ of mandate requiring the Board to refrain from giving "legal force and effect" to those portions of Regulation 5110 it found invalid. fn. 6

The Associations and the Board have each appealed from the judgment. Labor initially filed a cross-appeal, but has since withdrawn it. While not entirely happy with the court's ruling, Labor has chosen to take the role of the respondents on this appeal in defense of the judgment.

Appeal

I. APA Challenges

The Associations contend the Board severely failed to comply with the letter and spirit of the APA in enacting Regulation 5110. The objections may be broken down into three categories: (1) failure to determine the regulation's cost and economic impact; (2) lack of substantial evidence in the record to support findings of "reasonable necessity" and lack of significant harm to California businesses, and (3) failure to cite the scientific studies on which the Board relied.

Overview of the APA

[1] "The APA is intended to advance 'meaningful public participation in the adoption of administrative regulations by state agencies' and create 'an administrative record assuring effective judicial review.' [Citation.] In order to carry out these dual objectives, the APA (1) establishes 'basic minimum procedural requirements for the adoption, amendment or repeal of administrative regulations' (Gov. Code, § 11346) which give 'interested parties an [75 Cal. App. 4th 1328] opportunity to present statements and arguments at the time and place specified in the notice and calls upon the agency to consider all relevant matter presented to it,' and (2) 'provides that any interested person may obtain a judicial declaration as to the validity of any regulation by bringing an action for declaratory relief in the superior court.' [Citation.] The APA was born out of the Legislature's perception there existed too many regulations imposing greater than necessary burdens on the state and particularly upon small businesses." (Voss v. Superior Court (1996) 46 Cal. App. 4th 900, 908-909 [54 Cal. Rptr. 2d 225].)

[2] Under Government Code section 11350, any interested person may obtain a judicial declaration as to the validity of a regulation adopted under the APA. Failure to comply with every procedural facet of the APA, however, does not automatically invalidate a regulation. A court may declare the regulation invalid only for lack of "substantial failure" to comply with the act. (Gov. Code, § 11350, subd. (a).) " ' "Substantial compliance, as the phrase is used in the decisions, means actual compliance in respect to the substance essential to every reasonable objective of the statute." ... Where there is compliance as to all matters of substance technical deviations are not to be given the stature of noncompliance.... Substance prevails over form.' " (United Systems of Arkansas, Inc. v. Stamison (1998) 63 Cal. App. 4th 1001, 1011 [74 Cal. Rptr. 2d 407], citations omitted, quoting Southern Pac. Transportation Co. v. State Bd. of Equalization (1985) 175 Cal. App. 3d 438, 442 [221 Cal. Rptr. 12], italics in original.) We review the Associations' claims in light of the above precepts.

1. Failure to assess economic impact

Section 11346.5, subdivision (a)(9) of the Government Code requires the notice of proposed regulation to contain a "statement of the potential cost impact of the proposed action on private persons or businesses directly affected, ..." Government Code section 11346.3, subdivision (a) also provides that "State agencies proposing to adopt ... any administrative regulation shall assess the potential for adverse economic impact on California business enterprises and individuals, ... [¶] ... [¶] (2) ... including the ability of California businesses to compete with businesses in other states...."

[3] The Associations argue that the Board simply shrugged its shoulders at these provisions by confessing that it was impossible to determine the economic impact of Regulation 5110. They cite as examples the Board's statements that "The Board has not determined the immediate costs" and "[T]he Board is aware of the lack of cost data ...." [75 Cal. App. 4th 1329]

The argument is not well taken. In both the notice of proposed action and in its initial statement of reasons (ISOR), the Board states: "This proposal should not result in a significant adverse economic impact on businesses, including the ability of California businesses to compete with businesses in other states [and] [¶] ... should not require private persons or entities who are employers to incur additional costs in complying with the proposal." The Board also concluded that although precise cost figures could not be known, the costs of implementation would likely be offset by a "significant amount of savings to be realized from the reduction in worker's compensation and productivity costs associated with fewer repetitive motion injuries as a result of this proposal."

The Associations' suggestion that these findings are not supported by substantial evidence is unwarranted. The federal government's National Institute for Occupational Safety and Health (NIOSH) conservatively estimated the cost of occupational musculoskeletal injuries at $13 billion. After exhaustively reviewing the literature in the area, NIOSH concluded "Musculoskeletal disorders are a major work-related problem, and ergonomics programs can dramatically reduce lost work time due to injuries and illnesses." (Linda Rosenstock, Director of National Institute for Occupational Safety and Health, statement before House Com. on Education and the Workforce, Subcom. on Workforce Protections (May 21, 1997) p. 5