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Perez v. Loren Cook Co.

United States Court of Appeals, Eighth Circuit

October 13, 2015

Thomas E. Perez, Secretary, United States Department of Labor, Petitioner
Loren Cook Company, Respondent

Submitted April 15, 2015.

Page 936

Petition for Review of an Order of the Occupational Safety & Health Review Commission.

For Thomas E. Perez, Secretary, United States Department of Labor, Petitioner: Ray H. Darling Jr., Occupational Safety & Health Review Commission, Office of the Executive Secretary, Washington, DC; Charles F. James, U.S. Department of Labor, Washington, DC; Kimberly Anne Robinson, U.S. Department of Labor, Office of the Solicitor, Washington, DC.

For Loren Cook Company, Respondent: Douglas B.M. Ehlke, Ehlke Law Offices, Federal Way, WA.

Before RILEY, Chief Judge, WOLLMAN, LOKEN, MURPHY, BYE, MELLOY, SMITH, COLLOTON, GRUENDER, BENTON, SHEPHERD, and KELLY, Circuit Judges, En Banc. MELLOY, Circuit Judge, with whom MURPHY, BYE, and KELLY, Circuit Judges, join, dissenting.


Page 937

SHEPHERD, Circuit Judge.

Following an industrial accident, the Secretary of Labor (Secretary)[1] determined that the Loren Cook Company (Loren Cook) violated 29 C.F.R. § 1910.212(a)(1), which requires barrier guards on certain industrial equipment. The Secretary imposed a $490,000 fine against Loren Cook. An Administrative Law Judge (ALJ) rejected the Secretary's interpretation of section 1910.212(a)(1) and vacated the fine. The Occupational Safety and Health Review Commission (Commission) adopted the ALJ's decision as its own. The Secretary petitioned this court for review of the Commission's order. A divided panel of this court granted the petition for review and reversed the Commission's order. In granting Loren Cook's petition for rehearing en banc, we vacated the panel decision. We now deny the Secretary's petition for review and affirm the Commission's order.


Loren Cook is an industrial manufacturer of air circulating equipment. Loren Cook uses lathes, which are industrial turning machines used to form and mold metal discs, in its manufacturing process. Lathes operate by holding heavily lubricated pieces of metal that rotate rapidly, allowing the lathe operator to apply tools to shape the metal into individual workpieces. Lathes vary in size depending on the size of the workpiece being produced. In May 2009, a Loren Cook lathe operator was killed when a 12-pound rotating metal workpiece broke free from the lathe, flew out of his machine, and struck him in the head. The lathe ejected the workpiece at a speed of 50 to 70 miles per hour and, after the workpiece struck the operator in the head, it traveled along the floor at least another 20 feet before crashing into metal shelving.

In November 2009, the Secretary conducted an investigation of the industrial accident and issued two citations against Loren Cook. Relevant to this appeal, one citation found seven violations of 29 C.F.R. § 1910.212(a)(1) for failure to employ barrier guards to protect workers from ejected workpieces. Section 1910.212(a)(1) provides:

Types of guarding. One or more methods of machine guarding shall be provided to protect the operator and other employees in the machine area from hazards such as those created by point of operation, ingoing nip points, rotating parts, flying chips and sparks. Examples of guarding methods are--barrier guards, two-hand tripping devices, electronic safety devices, etc.

The Secretary determined that Loren Cook's failure to employ barrier guards to prevent the ejection of a workpiece from this kind of catastrophic breakdown of a lathe violated section 1910.212(a)(1). The Secretary assessed Loren Cook a fine of $70,000 for each violation of this section, resulting in a total fine of $490,000.

Page 938

Loren Cook sought review from an ALJ, who, after conducting a 20-day hearing and compiling an extensive record, concluded that section 1910.212(a)(1) did not apply to the conduct for which the Secretary cited Loren Cook. The ALJ reasoned that section 1910.212(a)(1) focuses on point-of-contact risks and risks associated with the routine operation of lathes, such as flakes and sparks, but does not contemplate the catastrophic failure of a lathe that would result in a workpiece being thrown out of the lathe. The ALJ thus vacated the citation the Secretary issued against Loren Cook. The Commission adopted the unmodified recommendation of the ALJ. The Secretary subsequently petitioned our court for review of the Commission's final order pursuant to 29 U.S.C. § 660(b).


We review a petition seeking review of a Commission order under a deferential standard pursuant to the Administrative Procedures Act, upholding the Commission's factual findings if they are " supported by substantial evidence on the record considered as a whole," and upholding the Commission's legal conclusions " unless they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Solis v. Summit Contractors, Inc., 558 F.3d 815, 823 (8th Cir. 2009) (internal quotation marks omitted). The Commission adopted the ALJ's order finding section 1910.212(a)(1) does not address catastrophic failures of lathes resulting in the ejection of workpieces and instead only considers routine risks of operation. The Secretary argues this was in error because the Secretary's interpretation of its own regulation is entitled to considerable deference and the ALJ failed to afford the Secretary's interpretation such deference.

Applying Seminole Rock[2] deference, we generally afford substantial deference to the Secretary's interpretation of his own regulations. See Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994); Martin v. Occupational Safety & Health Review Comm'n, 499 U.S. 144, 150-51, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). But deference to the Secretary's interpretation is only appropriate when both the interpretation itself and the manner in which the Secretary announces the interpretation are reasonable. See Martin, 499 U.S. at 157-58.

Page 939

The Supreme Court has identified several circumstances under which a court should not afford deference to an agency's interpretation of its own regulation. First, deference to an agency's interpretation is inappropriate when the interpretation is " 'plainly erroneous or inconsistent with the regulation.'" Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997) (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 359, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989)). Second, deference is also inappropriate " when there is reason to suspect that the agency's interpretation 'does not reflect the agency's fair and considered judgment on the matter in question.'" Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2166, 183 L.Ed.2d 153 (2012) (quoting Auer, 519 U.S. at 462). This may be evidenced by an agency's current position conflicting with prior interpretations, by an agency's use of the position as nothing more than a litigating position, or by the use of the interpretation as a post hoc rationalization for a prior action. Id. at 2166.

Finally, deference is inappropriate when an agency's new interpretation of its own regulation results in unfair surprise. Id. at 2167. In declining to afford deference to the Department of Labor's interpretation of one of its regulations, the Christopher Court noted that giving the interpretation deference would " impose potentially massive liability on [the regulated entity] for conduct that occurred well before that interpretation was announced." Id. When the relevant agency fails to provide the regulated entity with a fair warning of what conduct a regulation prohibits, allowing the agency's interpretation to prevail would result in unfair surprise. Id. The risk of unfair surprise is particularly relevant when the " agency's announcement of its interpretation is preceded by a very lengthy period of conspicuous inaction." Id. at 2168. As the Court noted:

It is one thing to expect regulated parties to conform their conduct to an agency's interpretations once the agency announces them; it is quite another to require regulated parties to divine the agency's interpretations in advance or else be held liable when the agency announces its interpretations for the first time in an enforcement proceeding and demands deference.

Id. Such a " decision to use a citation as the initial means for announcing a particular interpretation may bear on the adequacy of notice to regulated parties, on the quality of the Secretary's elaboration of pertinent policy considerations, and on other factors relevant to the reasonableness of the Secretary's exercise of delegated lawmaking powers." Martin, 499 U.S. at 158 (citations omitted).

Our court has also acknowledged the parameters under which we should afford an agency's interpretation deference: " [D]eference is due when an agency has developed its interpretation contemporaneously with the regulation, when the agency has consistently applied the regulation over time, and when the agency's interpretation is the result of thorough and reasoned consideration." Solis, 558 F.3d at 823 (quoting Advanta USA, Inc. v. Chao, 350 F.3d 726, 728 (8th Cir. 2003)); see also Advanta, 350 F.3d at 728 (" The DOL's interpretation is not conclusive, and we are not necessarily bound by the DOL's interpretation of the [regulation]." ); Sioux Valley Hosp. v. Bowen, 792 F.2d 715, 720 (8th Cir. 1986) (" The erratic history of the labor/delivery room policy is not the kind of interpretation justifying deference to the Secretary's expertise." ).

This precedent provides the framework under which we must assess the Secretary's interpretation of section 1910.212(a)(1), evaluating the current interpretation: (1) for fidelity to the text of

Page 940

the regulation itself; (2) for its consistency with prior interpretations; and (3) for the possibility of unfair surprise. Under this framework, we conclude that the Secretary's interpretation of section 1910.212(a)(1) is unreasonable and thus is not entitled to deference.


First, the Secretary's interpretation of section 1910.212(a)(1) strains a common-sense reading of the section. The basic operative language of the section identifies five examples of hazards the barrier guards are meant to protect a lathe operator from: " hazards such as those created by point of operation, ingoing nip points, rotating parts, flying chips and sparks." 29 C.F.R. § 1910.212(a)(1). We note that the inclusion of the words " such as" in the language of the regulation indicates this list is illustrative rather than exhaustive. See Donovan v. Anheuser-Busch, Inc., 666 F.2d 315, 327 (8th Cir. 1981). These five hazards create two distinct categories: sources or causes of the hazard (point of operation, ingoing nip points, and rotating parts) and by-products from routine operation of the machinery (flying chips and sparks).

It follows that section 1910.212(a)(1) only covers the catastrophic failure of a lathe and the ejection of a workpiece if such an event is like one of these two categories. This event is not like the first category because a plain reading of the regulation limits this category to sources of the hazard relating to the worker's point of contact with the machinery and does not encompass the ejection of a spinning workpiece. Section 1910.212(a)(3)(i) defines " point of operation" as " the area on a machine where work is actually performed upon the material being processed." And this section provides that the requisite barrier guard " shall be so designed and constructed as to prevent the operator from having any part of his body in the danger zone during the operating cycle." 29 C.F.R. § 1910.212(a)(3)(ii). This definition of " point of operation" is further supported by section 1910.212(a)(3)(iv), which lists several machines--including shears, power presses, milling machines, and forming rolls--which all require the operators to make contact with the machine's operating cycle. In the context of the lathes employed by Loren Cook, the point of operation is where the lathe operator touches the tool to the spinning workpiece to shape the workpiece.

Further, the use of " rotating parts" in the language of section 1910.212(a)(1) does not encompass the event at issue here because the section contemplates hazards from rotating parts related to the operator's contact with the machine rather than the anomalous ejection of objects from the machine. In reaching this conclusion, we evaluate the meaning of the term " rotating parts" by considering the other enumerated examples around it. See United States v. Williams, 553 U.S. 285, 294, 128 S.Ct. 1830, 170 L.Ed.2d 650 (2008) (" In context, however, those meanings are narrowed by the commonsense canon of noscitur a sociis --which counsels that a word is given more precise content by the neighboring words with which it is associated." ). The hazards that a lathe's rotating parts create--much like the hazards from point of operation and nip points--result from contact with the lathe, including the danger of an operator's clothing, limbs, or hair becoming caught in or struck by the rotating parts. This limited interpretation of rotating parts is consistent with OSHA's machine guarding interpretative guidance. See Occupational Safety and Health Administration, Machine Guarding eTools, (last visited Sept. 30, 2015) (" Rotating motion can be dangerous; even smooth, slowly rotating

Page 941

shafts can grip hair and clothing, and through minor contact force the hand and arm into a ...

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