Friday, February 9, 2018
Action Against Factory Under UCL May Proceed;
No Preemption by Federal Law—S.C.
By a MetNews Staff Writer
An action against a company based on workplace safety and health violations, brought by the Orange County district attorney under the Unfair Competition Law and the False Advertising Law, was not preempted by the federal Occupational Safety and Health Act of 1970, the California Supreme Court held yesterday.
Chief Justice Tani-Cantil-Sakauye wrote for a unanimous court in reversing a decision of the Fourth District Court of Appeal.
In an unpublished Feb. 24, 2014 opinion, Acting Presiding Justice William Rylaarsdam of Div. Three wrote that demurrers should have been sustained to two causes of action that were brought by District Attorney Tony Rackauckas against Solus Industrial Innovations, LLC for unsafe working conditions that led to the deaths of two employees at its factory. The causes of action were pursuant to the Unfair Competition Law (“UCL”).
Rylaarsdam said that California’s workplace safety plan, as approved by the U.S. secretary of labor, “does not include any provision for civil enforcement of workplace safety standards by a prosecutor through a cause of action for penalties under the UCL.”
He declared that “[u]nder controlling law, any part of a state plan not expressly approved is preempted.”
Enormity of Penalty
The jurist commented:
“Under each of these two UCL causes of action, the district attorney seeks to recover penalties of up to $2,500 per day, per employee, for the period from November 29, 2007 to March 19, 2009. That represents a potential penalty in excess of $1 million per employee, for each cause of action. And of course, the penalties available under the UCL are cumulative, and thus would be assessed in addition to whatever penalties were directly provided for under the Labor Code (and thus directly approved by the Secretary as part of California’s state plan.) By contrast, as the district attorney acknowledges, the total penalty actually imposed by Cal/OSHA in the stayed administrative action arising out of these same violations was under $100,000.
“It is not our place to assess whether such an extraordinary jump in the potential civil penalty an employer such as Solus might incur for workplace safety violations through application of the UCL is a good idea. For our purposes, it is enough to note that it is an extraordinary jump. And because it is, we conclude it will have to be the Secretary, and not this court, who assesses its merits.”
High Court Reversal
Cantil-Sakauye’s opinion rejects Rylaarsdam’s premise that a state may not invoke remedies that are not contained in its workplace safety plan. She wrote:
“We acknowledge that the Secretary of Labor has authority to approve modifications to a state’s plan….Notwithstanding these provisions, the federal OSH Act as a whole does not suggest that the preempted field encompasses all means of enforcement not specifically included in the state’s approved plan.”
When the secretary approved California’s plan in 1973, she said, Cal/OSHA regulation had already been in place and was incorporated in the plan. The UCL and the False Advertising Law (“FAL”), Cantil-Sakauye continued, simply provide remedies for violations of other laws—in this instance, Cal/OSHA regulations.
The chief justice pointed to “the strong presumption against preemption” in light of health and safety regulation long having been exclusively within state purview “and from the fact that California has assumed responsibility under the federal OSH Act to regulate worker safety and health, thereby preempting federal law.”
“In light of the cooperative character of the federal OSH Act, the authority the federal OSH Act grants states that have assumed responsibility for worker safety and health, the nature of UCL and FAL claims, and the strong presumption against preemption, we find no implied preemption of the claims in this case.”
The case is Solus Industrial Innovations, LLC v. Superior Court, 2018 S.O.S. 691.
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