Metropolitan News-Enterprise


Wednesday, February 26, 2014


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Court Says D.A. Cannot Sue for Penalties Resulting From Explosion




A district attorney cannot sue for civil penalties for violations of the California Occupational Safety and Health Act, either directly under the statute or for unlawful practices under the Unfair Competition Law, the Fourth District Court of Appeal has ruled.

In a pair of companion cases Monday, Div. Three ruled that Orange District Attorney Tony Rackauckas lacked statutory authority to seek civil penalties against two supervisors at Solus Industrial Innovations, a plastics manufacturer. The litigation, and a related criminal prosecution, grew out of an explosion at the company’s Rancho Santa Margarita plant that killed two employees in March 2009.

The state Division of Occupational Safety and Health investigated the explosion, then sent the report to the district attorney under Labor Code §6315(b). The statute requires the division to notify the district attorney when it determines that a worker suffered serious injury or death as a result of the employer’s violation of safety regulations.

Safety Violations

The division concluded that regulations governing the installation and maintenance of equipment were violated. It said the company, in order to save money, installed a $500 retail water heater intended for residential use only, rather than an industrial-grade product, and continued to use it despite leaks that should have put it on notice of the potential for injury.

Two supervisors were charged with criminal violations. They pled no contest earlier this month and were placed on probation, subject to conditions including payment of $450,000 in restitution, the Orange County Register reported.

The district attorney also filed an action seeking more than $1 million in civil penalties under Labor Code §§ 6428 and 6429 and the Unfair Competition Law. The company demurred to the Labor Code claims on the ground that the district attorney lacks statutory authority to seek penalties under that provision, and to the UCL claims as preempted by federal law.

Orange Superior Court Judge Kim G. Dunning sustained the demurrer as to the Labor Code claims, but overruled it as to the UCL. Each party petitioned for writ relief, and the Court of Appeal Monday ruled for Solus on all causes of action.

Amicus Brief

The court rejected the contention that by mandating referrals to the district attorney, §6315(b) implied that the district attorney could bring both criminal and civil proceedings in the referred matters. Although the division, which filed an amicus brief, agreed with the district attorney, the Court of Appeal said that interpretation was contrary to case authority and clear legislative intent.

“The statutory scheme for enforcement of workplace safety standards reflects that the Division is the governmental agency responsible for civil enforcement of the Labor Code provisions, and that mandatory referral of serious cases to prosecutors is primarily intended to facilitate criminal prosecution where appropriate,” Justice William Rylaarsdam wrote.

In a separate opinion, Rylaarsdam said the UCL is preempted by federal law when it comes to workplace safety issues.

Under the federal Occupational Safety and Health Act of 1970, all state laws governing workplace safety are preempted with respect to businesses affected by interstate commerce, subject to certain exceptions. Federal OSHA does not preempt state workers’ compensation laws, or state standards with regard to subjects as to which there is no federal standard.

In addition, a state may submit a workplace safety program to the U.S. Department of Labor.

Federal Preemption

If the program is deemed to be at least as effective as the federal standards, it will take precedence over all conflicting federal provisions. However, any provision of state law that is not part of the approved state plan will be preempted.

UCL claims are not provided for in California’s approved plan and are therefore barred, Rylaarsdam concluded.

He explained:

“First, while it may be true that the penalty statutes and regulations underlying these UCL claims are included in the approved state plan, the district attorney is not seeking to directly enforce those approved penalties and regulations. Instead, he is seeking to enforce separate penalties under the UCL which have not been approved for application in the otherwise preempted area of workplace safety regulation. Second, the standard for assessing whether reliance on the UCL as a tool of enforcing workplace safety laws is preempted is not whether we believe it appears ‘consistent with the goals’ of the OSH Act to do so. It is the Secretary [of Labor], not this court, which retains the discretion to determine whether changes in the state’s already approved enforcement plan are appropriate. Stated simply, avoidance of federal preemption is dependent upon the Secretary’s approval, not ours.”

The cases are People v. Superior Court (Solus Innovations, LLC), 14 S.O.S. 970, and Solus Innovations, LLC v. Superior Court (People), 14 S.O.S. 965.


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