Fifth Circuit Decision Represents Seismic Shift in Scope of OSHA Effect on BOEMRE, BSSE and Coast Guard Regulations? Increased Liability of Principals to Third Party Employees?
Acosta v. Hensel Phelps Constr. Co., 2018 U.S. App. LEXIS 33155 *; 2018 WL 6168044 (5th Cir., No. 26, 2018; No. 17-60543)
By: Arthur Crais
The Fifth Circuit panel consisting of Circuit Judges Graves and Costa and District Judge Bennett (of the Southern District of Texas and sitting by designation) issued an opinion last week reversing precedent (the panel was keen not to use the word reverse; rather, it used the word "obsolete") set in 1981 in Melerine v. Avondale Shipyards, Inc., 659 F.2d 706 (5th Cir. Unit A Oct. 1981) in which the court with Judge Rubin as the author of that opinion) held that the Occupational and Safety Health Act does not establish a standard of care to third parties in a negligence action (659 F.2d at 707).
In the noted case, OSHA issued a citation to the general contractor which had control of a “hazardous condition” at the worksite which affected employees of another company. The ALJ dismissed the citation citing the precedent of Melerine. The Secretary sought discretionary review of the decision which the Commission did not grant. (2018 U.S.App. LEXIS 33155 at *7). A timely petition for review was filed with the Fifth Circuit.
Following the two step analysis established in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) as well as the precedent of National Cable & Telecommunications Ass'n v. Brand X Internet Services, 545 U.S. 967 (2005)[1], the panel concluded that the precedent of Melerine is obsolete. (2018 U.S.App. LEXIS 33155 at *40).
The Fifth Circuit panel thus granted the petition for review, reversed the Final Order of the OSHA Commission and remanded the matter to the Commission for further proceedings.
What effect will this have on third party actions? In Melerine, the court clearly held that OSHA does not create “an implied cause of action [or] establish negligence per se.” (659 F.2d at 707). (Acosta does not apparently change this rule.) OSHA establishes a standard of care due to direct employees but not employees of third parties. Id. In declaring this latter rule “obsolete,” and while Acosta is not a third party negligence action (OSHA sought to issue a citation to Phelps for conditions which affect third party employees), does this sea change in the Melerine precedent now stand for the proposition that OSHA regulations establish a standard of care to third party employees for which the principal contractor may be held liable? What effect would this have on regulations of the Department of the Interior and BOEMRE and BSEE or regulations of the U.S. Coast Guard on platforms, MODUs and other vessels? Will control continue to be an important issue in a third party negligence action?
[1] "A court's prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion." Id. at 982.
