Amicus Curiae Brief — National Grain & Feed Ass'n v. Occupational Safety & Health Administration

Nos. 88-1070, 88-1075, 88-1385 and 88-1434

\

Gupreme Lous UA

yinbeD

noR 3 m8

ePaAniol. JR

IN THE

RK

Supreme Court of the United States

OCTOBER TERM, 1988

THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA,

AND THE ASSOCIATED GENERAL CONTRACTORS

OF VIRGINIA,

" Petitioners,

OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION,

UNITED STATES DEPARTMENT OF LABOR, et al.,

Respondents.

{Captions Continued on Inside Cover]

On Petitions for Writs of Certiorari to the

United States Court of Appeals for the Third Circuit

BRIEF OF THE NATIONAL ASSOCIATION OF

MANUFACTURERS AS AMICUS CURIAE IN SUPPORT

OF PETITIONS FOR WRITS OF CERTIORARI

Of Counsel:

JAN S. AMUNDSON

General Counsel

QUENTIN RIEGEL

Deputy General Counsel

NATIONAL ASSOCIATION OF

MANUFACTURERS

1331 Pennsylvania Ave., N.W.

Suite 1500 - North Lobby

Washington, D.C. 20004-1703

Telephone: (202) 627-3058

Date: April 3, 1989

RICHARD M. HALL *

CHRISTOPHER H. MARRARO

LypDIA B. DUFF

SIVE, PAGET, & RIESEL, P.C.

1055 Thomas Jefferson Street, N.W.

Suite 501

Washington, D.C. 20007

Telephone: (202) 965-1500

Attorneys for Amicus Curiae

National Association of

Manufacturers

~* Counsel of Record

WILSON -

Eres PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

ASSOCIATED BUILDERS AND CONTRACTORS, INC., and the

CONSTRUCTION INDUSTRY TRADE ASSOCIATIONS,

- Petitioners,

THE OCCUPATIONAL SAFETY AND HEALTH

ADMINISTRATION, UNITED STATES

DEPARTMENT OF LABOR, et a.,

Respondents.

THE NATIONAL GRAIN & FEED ASSOCIATION, INC.,

and UNITED TECHNOLOGIES CORP.,

Petitioners,

V.

OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION,

UNITED STATES DEPARTMENT OF LABOR,

Respondent.

ELIZABETH DOLE, SECRETARY OF LABOR, et al.,

=; Petitioners,

UNITED STEELWORKERS OF AMERICA, et al.,

Respondents.

TABLE OF CONTENTS

pe A GE ys 0 Nyy

INTEREST OF THE AMICUS CURIAE ........0.00000......

PRELIMINARY STATEMENT .......000.000.00. eee

REASONS FOR GRANTING THE PETITION ..........

I. THE THIRD CIRCUIT HAS REDUCED THE

i.

MINIMUM PROCEDURAL STANDARDS OF

THE ADMINISTRATIVE PROCEDURE ACT

BELOW THE PARAMETERS ESTABLISHED

BY CONGRESS AND THE SUPREME

COURT. THIS REDUCTION WORKS A SUB-

STANTIAL HARDSHIP ON INDIVIDUALS

AND ORGANIZATIONS THAT PARTICI-

PATE IN REGULATORY MATTERS AND

DIMINISHES THE QUALITY OF RULE-

EEG SRR

A. This Court Should Resolve The Question of

What Degree of Change Between Proposed

and Final Rulemakings Triggers a Require-

ment For a New Proposal ..............................

B. The Practical Inability of the Public to Fol-

low the Enormous Range of Rulemaking

Activities Which May Potentially, But Not

Expressly, Affect Them Makes a Clear Stand-

ard For Notice and Comment Imperative......

C. The Third Circuit Could Have Instead Im-

posed Detailed Time Deadlines on OSHA......

COURTS SHOULD NOT INTERFERE WITH

AGENCY ACTIONS THAT ARE LAWFUL

AND REASONABLE. REVIEW IS NEEDED

IN ORDER TO MAKE CLEAR THE VITAL-

ITY OF THE DOCTRINES EXPRESSED BY

THE SUPREME COURT IN VERMONT

YANKEE AND CHEVRON ..................2.::.22:0-0++-

ii

TABLE OF CONTENTS—Continued

Page

III. THE THIRD CIRCUIT’S DECISION CON-

FLICTS WITH A DECISION OF THE D.C.

CIRCUIT AND LIMITS IMPROPERLY THE

AUTHORITY OF OMB UNDER THE PAPER-

WORK REDUCTION ACT TO MINIMIZE

PAPERWORK BURDENS IMPOSED ON THE

RIE wictencnckicacoubin icaicdacsieephensqumnsdatnidaspdageeiaieinertiniken 11

A. The Importance of the Paperwork Reduction

Act to the Hazard Communication Standard.. 11

B. The Petition Should be Granted To Resolve

the Conflict Between the Third and D.C.

Circuits and to Reestablish the Director’s

Intended Role in Regulating the Paper-

work Burden Imposed by Administrative

PI oo iiccadtncianayseiernsimasaboddccidtasnleadanaclhmiaee 14

SRN easiness sctersesaninnsrienioncehseinnnunseanibidnamenstaigees 19

iii

TABLE OF AUTHORITIES

Cases Page

Action Alliance of Senior Citizens v. Bowen, 846

ie BP i oes | ee 15, 17, 18

AFL-CIO v. Donovan, 757 F.2d 330 (D.C. Cir.

ERR RES LSA SEA eC Te eT Nie Oe Teen MIP 4

American Iron & Steel Inst. v. EPA, 568 F.2d 284

ENEE MRIS, IIE © dies ss cindicoschninhucsunnndpibianeipanseiedumbacaiadaias 5

American Textile Mfrs. Inst. v. Donovan, 452

ac IE PIED siischt ain cteendcceceucekesne seaoleeeleaa Cees 4

Chamber of Commerce v. OSHA, 636 F.2d 464

AT eS Ry | eee eRe cles 2eeN MN ee 4

Chevron U.S.A., Inc. v. Natural Resources De-

fense Council, Inc., 467 U.S. 837 (1984) -2000....... 10, 17

Environmental Defense Fund v. EPA, 852 F.2d

1316 (D.C. Cir. 1988), cert. denied, 57 U.S.L.W.

SU Re a a 9

Eli Lilly & Co. v. Costle, 444 U.S. 1096 (1980)... 5

Ethyl Corp. v. EPA, 541 F.2d 1 (D.C. Cir. 1976),

cert. denied, 426 U.S. 941 (1976) ......................... 4

Federal Power Comm’n v. Transcontinental Gas

Pipe Line Corp., 423 U.S. 326 (1976) ................. 10

Industrial Union Dep’t v. Am. Petroleum Inst.,

Ie PN I 4

International Harvester Co. v. Ruckelshaus, 478

ee ee Ces es RIED mcntncicccoscucncrensescncoennetnce 5

National Tour Brokers Assoc. v. United States,

i fs oe Se | |} eee 7,9

Natural Resources Defense Council, Inc. v. EPA,

824 F.2d 1258 (ist Cir. 1987) ............................... 5, 7

Portland Cement Assoc. v. Ruckelshaus, 486 F.2d

375 (D.C. Cir. 1973), cert. denied, 417 U.S. 921

CROAT D- casaianennaieestgssinsaiininidadendamntemediihaiieemiubessus cies 8

SEC v. Chenery Corp., 332 U.S. 194 (1947)........ 10

United Steelworkers of Am. v. Marshall, 647 F.2d

1189 (D.C. Cir. 1980), cert. denied, 453 U.S. 913

+ BR ae a a Berke ote un bse Oe 5

United Steelworkers of Am. v. Auchter, 763 F.2d

RE CN GE RIOD dasa danevctdcebcgaicieeacoaaciene toca )

iv

TABLE OF AUTHORITIES—Continued

Page

United Steelworkers of Am. v. Pendergrass, 819

Se I Ne BOE DP etcrscenscecetssensenennensntonsanns 9

United Steelworkers of Am. v. Pendergrass, 855

Es PED a dideccscceccccsnoncocnannsctansasioces 3, 17,19

Vermont Yankee Nuclear Power Corp. v. NRDC,

RE RL bn EG |

Statutes

Administrative Procedure Act, 5 U.S.C. §§ 551-

el alesddmabeguens Pre na ees 3, 4, 5, 10

Federal Reports Act of 1975, 42 U.S.C. 3501 et

I aloha reins sal acidpamdnmanatoametainnnicnnse 11, 15

Occupational Safety and Health Act, 29 U.S.C.

§§ 651-678 (1982 & Supp. V 1987) ................... 3, 4, 5, 10

Paperwork Reduction Act of 1980, 44 U.S.C.

FEI 0 UTNE D. esectsnccevossncsrccsnsecenstetnacssncssaa 11, 12,17

Pub. L. No. 94-78 § 4, 89 Stat. 411 (1975) ............ 18

Federal Rules and Other Notices

47 Fed. Bam, 12,092 (1063) ...............0-.c0cercsccscccccescecses 8

52 Fed. Reg. 31,871 (1987) ...2..................ccccoccescccsceees 6

52 Fed. Reg. 31,878 (1987) ....................cccsoccccccccecccceces 6

53 Fed. Reg. 29,821 (1988)........00..00000.ccccc cece ceeeeeeeee ee . 13

A Bex 6 BOO. CUGBB) nncccccccccccccccccccnncscnccccoscccvcscses 16

29 C.F.R. § 1910.1200 (1988) 200000 ssanimanaes 13, 14

Other Authorities

K. Davis, Administrative Law Treatise (2d ed.

SeenON SS TF 6 EE ec ee ar 11

126 Cong. Rec. 14,689 (daily ed., Nov. 19, 1980)... 13

Final Summary Report of The Commission on

Federal Paperwork 5 (1977) ..........ccccccccccccceeeeeeeee 12

Letter from Wendy Gramm, Administrator for

Information and Regulatory Affairs, Office of

Management and Budget, to the Honorable

Thomas C. Komarek, Assistant Secretary for

Administration and Management, Department

III Soros ss cacvnaisiida ipa enibinigsineiranebeheninleesinenannecaniens 13

Vv

TABLE OF AUTHORITIES—Continued

Letter from James C. Miller III, Director, Office

of Management and Budget, to President

Ronald Reagan transmitting the Administra-

tion’s Information Collection Budget for Fiscal

pS get ear he eee le Ne

Office of Management and Budget, Executive Of-

fice of the President, Regulatory Programs of

the United States Government, April 1, 1987-

SG ls SE sc a ee oe

Otfice of Management and Budget, Transcript of

hearings on the Paperwork Requirements of

the Occupational Safety and Health Adminis-

tration Hazard Communication Standard, April

2, 1987 and October 16, 1987) ...............................

S. Rep. No. 96-930, 96th Cong., 2d Sess., reprinted

in 1980 U.S. Code Cong. & Admin. News 6241...

S. Rep. No. 98-576, 98th Cong., 2d Sess. (1984) ....

Scalia, Vermont Yankee: The APA, The D.C. Cir-

cuit, and The Supreme Court, 1978 Sup. Ct.

is IN sichenstnencmncaniiei lt we

Comments of the Associated General Contractors

of America, Oct. 23, 1987, attached as Appendix

5 to the Petition for Review of a Final Rule of

the Occupational Safety and Health Administra-

tion, Associated Gen. Contractors v. OSHA,

(3d Cir.) (No. 88-1070) 2

Page

7,12

14, 18

11, 16

16

11

IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

No. 88-1070

THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA,

AND THE ASSOCIATED GENERAL CONTRACTORS

OF VIRGINIA,

ies Petitioners,

OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION,

UNITED STATES DEPARTMENT OF LABOR, et al.,

Respondents.

No. 88-1075

ASSOCIATED BUILDERS AND CONTRACTORS, INC., and the

CONSTRUCTION INDUSTRY TRADE ASSOCIATIONS,

my Petitioners,

THE OCCUPATIONAL SAFETY AND HEALTH

ADMINISTRATION, UNITED STATES

DEPARTMENT OF LABOR, et al.,

Respondents.

No. 88-1385

THE NATIONAL GRAIN & FEED ASSOCIATION, INC.,

and UNITED TECHNOLOGIES CoORP.,

- Petitioners,

OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION,

UNITED STATES DEPARTMENT OF LABOR,

Respondent,

2

No. 88-1434

ELIZABETH DOLE, SECRETARY OF LABOR, et al.,

. Petitioners,

UNITED STEELWORKERS OF AMERICA, et al.,

Respondents.

On Petitions for Writs of Certiorari to the

United States Court of Appeals for the Third Circuit

BRIEF OF THE NATIONAL ASSOCIATION OF

MANUFACTURERS AS AMICUS CURIAE IN SUPPORT

OF PETITIONS FOR WRITS OF CERTIORARI

INTEREST OF THE AMICUS CURIAE

The National Association of Manufacturers of the

United States of America (“NAM”) is an association of

approximately 13,500 companies and subsidiaries that to-

gether employ eighty-five percent of all manufacturing

workers in the United States and produce more than

eighty percent of this nation’s manufactured goods. NAM

is associated with 158,000 additional businesses through

its Associations Council and the National Industrial

Council.

Most of the NAM member companies are heavily reg-

ulated in many areas of their activities, at substantial

expense to the member companies and to the consumers

of their manufactured products. A significant portion

of the expense is associated with a broad array of fed-

eral requirements to create, disseminate and keep rec-

ords. Most of the regulation and recordkeeping require-

ments are not directly imposed on NAM members by

statute; they are imposed principally by agency rules.

3

The members of NAM have been covered by a Hazard

Communication Standard (“HCS”) since 1983, and are

not directly affected by the adoption of an HCS for non-

manufacturers. However, the members of NAM are vi-

tally affected by the Third Circuit’s decisions undermin-

ing the procedural safeguards contained in the require-

ments of the Administrative Procedure Act (“APA”)

and the Occupational Safety and Health Act (“OSH Act’’)

that agency rules only be adopted after notice and oppor-

tunity to comment. Likewise, NAM’s members are ad-

versely affected by the Third Circuit’s restrictive inter-

pretation of the Paperwork Reduction Act of 1980, a law

which has benefited the productivity of American manu-

facturers by ameliorating the burdens of federally spon-

sored paperwork.

NAM therefore submits this brief as amicus curiae,

with the consent of all parties, in support of the Peti-

tions for Writs of Certiorari in order to assist the Court

in evaluating the importance of the issues presented.

PRELIMINARY STATEMENT

These cases bring before the Court two major issues

affecting the functioning of all federal administrative

agencies. The first issue is whether the notice and oppor-

tunity to comment. on a proposed HCS for manufacturers

was sufficient under the APA and the OSH Act for the

adoption of a final HCS for non-manufacturers. The sec-

ond issue is the scope of the authority of the Office of

Management and Budget (“OMB”) under the Paperwork

Reduction Act of 1980 to reduce paperwork requirements

imposed by the Occupational Health and Safety Admin-

istration (“OSHA”). Petitioners seeks writs of certiorari

in connection with two cases decided by the Third Cir-

cuit. Associated Builders and Contractors, Inc. v. Brook,

No. 88-1075 (3d Cir., Nov. 25, 1988) (a consolidation of

four petitions for review of administrative action), and

United Steelworkers of Am. v. Pendergrass (USWA

III), 855 F.2d 108 (3d Cir. 1988).

4

REASONS FOR GRANTING THE PETITION

I. THE THIRD CIRCUIT HAS REDUCED THE MINI-

MUM PROCEDURAL STANDARDS OF THE AD-

MINISTRATIVE PROCEDURE ACT BELOW THE

PARAMETERS ESTABLISHED BY CONGRESS

AND THE SUPREME COURT. THIS REDUCTION

WORKS A SUBSTANTIAL HARDSHIP ON INDI-

VIDUALS AND ORGANIZATIONS THAT PARTICI-

PATE IN REGULATORY MATTERS AND DIMIN-

ISHES THE QUALITY OF RULEMAKING.

The United States Court of Appeals for the Third Cir-

cuit violated the APA and the OSH Act in adopting an

HCS for non-manufacturers without permitting OSHA

to provide non-manufacturers with notice and an cppor-

tunity for comment beyond that afforded by the original

notice applying an HCS to manufacturers in 1982. 42

Fed. Reg. 12,092 (1982). Insofar as that court’s action

is seen as allowing rulemaking without notice and com-

ment, the decision is a novel departure from settled law’,

is at odds with other Circuits *, works a substantial hard-

ship on individuals and organizations who participate in

regulatory matters, disserves the government agency

seeking the views of the affected public, and is deserving

of reversal by this Court.

1 See American Textile Mfrs. Inst. v. Donovan, 452 U.S. 490, 536-

40 (1981) (OSHA must show each specific provision of safety

standard contributed to increased safety); Industrial Union Dept.

v. American Petroleum Inst., 448 U.S. 607, 667 (1980) (plurality

invalidated OSHA’s benzene standard because of failure to explain

how rule would benefit workers).

2 See, e.g., AFL-CIO v. Donovan, 757 F.2d 330, 337-40 (D.C. Cir.

1985); Chamber of Commerce of United States v. OSHA, 636 F.2d

464 (D.C. Cir. 1980); Ethyl Corp. v. EPA, 541 F.2d 1, 48 (D.C.

Cir. 1976), cert. denied, 426 U.S. 941 (1976).

5

A. This Court Should Resolve The Question of What

Degree of Change Between Proposed and Final

Rulemakings Triggers a Requirement For a New

Proposal.

Both the APA and the OSH Act require OSHA to pro-

vide notice and opportunity for comment on proposed

regulations before they become final. 5 U.S.C. § 553(b)

(1982) and 29 U.S.C. § 655(b) (1982). Under order of

the Third Circuit, OSHA published no proposed regula-

tions on the application of an HCS to the non-manufac-

turer employers.

The Third Circuit justified its order prohibiting fur-

ther notice by relying on its earlier decision in American

Iron & Steel Inst. v. EPA, 568 F.2d 284, 293 (3d Cir.

1977) and similar decisions in the United States Court

of Appeals for the District of Columbia. See United

Steelworkers of Am. v. Marshall, 647 F.2d 1189, 1221

(D.C. Cir. 1980), cert. denied, 453 U.S. 913 (1981);

International Harvester Co. v. Ruckelshaus, 478 F.2d

615, 632 n.51 (D.C. Cir. 1973). Those lower court deci-

sions established that a final rule may differ from the

proposed rule where the change is a “logical outgrowth”

of the rulemaking proceeding. 647 F.2d at 1221; NRDC

v. EPA, 824 F.2d 1258, 1283 (1st Cir. 1987) (stating

that substantial changes can be made “as long as the

final changes are in ‘character with the original scheme’

and ‘a logical outgrowth’ of the notice and comment.’’)

The proper scope of this “logical outgrowth” concept is

an issue of great importance, which cannot help but

become greater as time goes on and more and more

administrative proceedings are conducted either di-

rectly under the Administrative Procedure Act, 5

U.S.C. § 553, or similar provisions in new Acts of

Congress for review of agency action.

Eli Lilly & Co. v. Costle, 444 U.S. 1096, 1096 (1980)

(Rehnquist, J. dissenting on denial of petition for writ

of certiorari). Chief Justice Rehnquist’s statement is

6

prophetic: the issue has continued to grow in impor-

tance, lacking needed guidance from the Supreme Court.

The Court should review this case to resolve the critical

question of how much change in a proposed rule is per-

missible without a reproposal begore final promulgation.

The application of a standard to an entirely new group

of industries cannot be deemed a “logical outgrowth” of a

proposed rule which did not previously affect those indus-

tries. The impacts of an HCS on the construction and ag-

ricultural communities differ significantly from the im-

pacts on the manufacturing community initially covered.*

In addition to qualitative differences between the affected

communities, the quantitative change effected by extend-

ing the HCS from manufacturers to non-manufacturers

eliminates any logic in the growth of the standard with-

out additional notice and opportunity to comment.‘

3 The 230% average turnover rate in the construction industry

and the outdoor nature of construction work contrast with the

“prototypical manufacturing workplace, which is generally a sta-

tionary worksite with a relatively stable workforce.” Comments of

the Associated General Contractors of America, Oct. 23, 1987,

attached as Appendix 5 to the Petition for Review of a Final Rule

of the Occupational Safety and Health Administration, Associated

Gen. Contractors v. OSHA (3d Cir.) (No. 88-1070), at 13a.

4The August 24, 1987 expanded rule applied an HCS, without

notice and opportunity to comment other than that afforded in 1982,

to 4,503,879 theretofore uncovered establishments with a total em-

ployment of 58,890,236, of which an estimated 18,391,096 employees

are exposed in the workplace to hazardous chemicals. 52 Fed. Reg.

31,852, 31,871. OSHA estimated the cost of the application to non-

manufacturing employers to be $687.2 million in the first year, with

substantial additional! costs each year thereafter. Jd. at 31,873. In-

deed, without the benefit of a notice of proposed rulemaking, OSHA

may have seriously underestimated both coverage and cost impact

of its new rule. For example, the Association of General Contractors

testified before OMB that compliance in the construction industry

would require 58 million man hours in the first year with costs for

retraining at 38 million man hours for subsequent years. In con-

trast, OSHA estimated the costs at 34 million and 8 million respec-

tively for all industries.

7

The final rulemaking extending the HCS to non-

manufacturers is not a logical outgrowth of the initial

standard and should have triggered a new proposal to

aliow comment since the non-manufacturers did not have

“a fair opportunity to present their views on the con-

tents of the final plan.” 824 F.2d at 1283. The error

of the Third Circuit in bypassing the APA and OSH

Act notice and comment requirements for the entire non-

manufacturing sector of the nation’s industry provides

an important opportunity for the Supreme Court to

clarify the standards for re-proposal of proposed regu-

lations.

B. The Practical Inability of the Public to Follow the

-Enormous Range of Rulemaking Activities Which

May Potentially, But Not Expressly, Affect Them

Makes a Clear Standard For Notice and Comment

Imperative.

In addition to the unfairness to the non-manufacturers

here, the practical consequences of the Third Circuit’s

decision for all future rulemakings are worrisome.

“Agencies could in the future publish vague, ambiguous

notices in the Federal Register, adverting obliquely to

certain issues or proceedings, and then, months or years

later, promulgate final rules and claim that constructive

notice had been given.” National Tour Brokers Assoc. v.

United States, 591 F.2d 896, 899 (D.C. Cir. 1978).

In each of the past five years, more than 3,000 pro-

posed rules and 4,500 final rules have appeared in the

Federal Register. Office of Management and Budget,

Executive Office of the President, Regulatory Programs

of the United States Government, April 1, 1987 to

March 31, 1988 636.

Given this large number of federal rulemakings, those

who are regulated and their associations, such as NAM,

must limit the proposed rules that receive close attention.

8

When an agency announces, as OSHA did here,° that it

will not adopt a standard for a class of the regulated

community, members of that class typically pass on to

other issues. Under the Third Circuit’s rule, those ex-

cluded from regulation will nevertheless have to partici-

pate in rulemakings in which there is any shadow of an

implication in the preamble that they might be included.

This will lead to added expense and complexity for pri-

vate and government parties.

The result for tne courts is also worrisome. When an

agency promulgates a final rule that excludes a sector of

the regulated community and a review petition is filed,

the seemingly excluded persons will have no choice but

to intervene in the litigation to protect their interests.

This will lead to unnecessary court interventions and will

make such cases even more complex and burdensome.

Furthermore, the appropriateness, clarity, and efficacy

of regulations which have not had the benefit of com-

ments from all those potentially affected will be signifi-

cantly diminished. “It is not consonant with the purpose

of a rulemaking proceeding to promulgate rules on the

basis of inadequate data.” Portland Cement Assoc. v.

Ruckelshaus, 486 F.2d 375, 393 (D.C. Cir. 1973), cert.

denied, 417 U.S. 921 (1974). OSHA itself recognized the

need for notice and comment so that the final regulation

could accurately reflect the differences amnong the groups

covered. OSHA stated that the HCS as developed “fo-

cused on existing practices and desirable implementa-

tion methods in manufacturing industries,” and urged

the Third Circuit to permit reproposing the regulations

before applying them to non-manufacturers. Petition for

Rehearing and Suggestion for Rehearing En Banc of the

Secretary of Labor (No. 83-3554) at 9. The need for a

reproposal is evident from the record before OMB. Con-

fusion over issues of coverage, scope and practicality

raised by participants at the OMB hearings easily could

547 Fed. Reg. 12,092, 12,101-12,102 (1982).

9

have been addressed and clarified through a rulemaking

proposal. The Third Circuit decision deprived the

agency of the opportunity “to benefit from the expertise

and input of the parties who file comments with regard

to the proposed rule... .” National Tour Brokers Assoc.

v. United States, 591 F.2d 896, 902 (D.C. Cir. 1978).

C. The Third Circuit Could Have Instead Imposed De-

tailed Time Deadlines on OSHA.

Whatever the frustrations of the labor organization

petitioners with the pace of achieving their goal, the

Third Circuit should not have meddled in agency proce-

dure to speed up agency action.’ The court could have

imposed a reasonable time limit instead. The ability of

courts to fashion remedies that achieve results without

interfering with the agency’s attempt to assure adequate

notice and comment is amply demonstrated by the re-

mand issued in EDF v. EPA, 852 F.2d 1316, 1331 (D.C.

Cir. 1988) (ordering EPA to adhere to a schedule for

fulfilling its statutory obligations).

6 For example, The National Druggist Association raised legiti-

mate questions as to whether capsules which contain powders or

liquids were exempt from the rule noting that if they were not, an

additional $3,400,320 in compliance costs would be incurred by drug-

gists. October 16, 1987 hearing before OMB at 174. Similarly, the

Small Business Administration testified that OSHA had underesti-

mated the first vear cost impact by over one billion dollars. State-

ment of Charles A. Cadwell, U.S. Small Business Administration

before the Office of Management and Budget, Oct. 16, 1987.

™The Third Circuit’s repeated references to the time intervals

between agency actions and court proceedings indicates that the

Third Circuit may also have shared in this frustration. See United

Steelworkers of Am. v. Auchter, 763 F.2d 728, 732 (3d Cir. 1985),

and United Steelworkers of Am. v. Pendergrass, 819 F.2d 1263, 1265,

1266, 1269 (3d Cir. 1987).

~~

10

Il. COURTS SHOULD NOT INTERFERE WITH

AGENCY ACTIONS THAT ARE LAWFUL AND

REASONABLE. REVIEW IS NEEDED IN ORDER

TO MAKE CLEAR THE VITALITY OF THE DOC-

TRINES EXPRESSED BY THE SUPREME COURT

IN VERMONT YANKEE AND CHEVRON.

The Third Circuit ignored the principles of judicial re-

straint enunciated in Chevron U.S.A., Ine. v. NRDC, 467

U.S. 837 (1984) and Vermont Yankee Nuclear Power

Corp. v. NRDC, 435 U.S. 519 (1978). Vermont Yankee

limited the courts’ ability to interfere in the procedural

actions of agencies. 435 U.S. at 555. The Third Circuit

violated this precept in a novel context that needs review

by the Supreme Court. Vermont Yankee restrained the

judiciary from imposing procedural requirements on fed-

eral agencies in excess of those required by Congress. In

the present case, the Third Circuit interfered with the

agency’s chosen procedure by imposing procedural re-

quirements less than those required by Congress and se-

lected by the agency.

By compelling OSHA to skip over the procedures re-

quired by the APA and the OSH Act, the Third Circuit

violated the Vermont Yankee principle that courts should

not interfere with agency actions permissible under stat-

ute. Even assuming arguendo that the notice afforded

non-manufacturing employers in the 1982 rulemaking

was in theory legally sufficient to allow OSHA to go di-

rectly to a final rule, under Vermont Yankee the Third

Circuit should not have ordered the agency to abandon

its choice to collect more information and undertake a

notice and comment rulemaking. Indeed the force of the

Vermont Yankee rule is all the greater when, as here,

the agency seeks to give more procedural safeguards and

thereby avoid statutory and even constitutional questions

of fairness. See Federal Power Comm’n v. Transconti-

nental Gas Pipe Line Corp., 423 U.S. 326, 333 (1976) ;

SEC v. Chenery Corp., 332 U.S. 194, 196 (1947).

11

The Court should review this case to assert the vitality

of Vermont Yankee. Surely it cannot be true, as one

commentator has stated, that Vermont Yankee is “largely

one of those rare opinions in which a unanimous Supreme

Court speaks with little or no authority.” 1 K. Davis,

Administrative Law Treatise 616 (2d ed. 1978), quoted

and discussed in, Scalia Vermont Yankee: The APA,

The D.C. Circuit, and The Supreme Court, 1978 Sup. Ct.

Rev. 345, 371 (1978). It is time for the Court to explain

the authority and authoritativeness of Vermont Yankee.

The Court should review this case to emphasize “that the

formulation of procedures was basically to be left within

the discretion of the agencies to which Congress had

confided the responsibility for substantive judgments.”

Vermont Yankee, 435 U.S. at 524.

Ill. THE THIRD CIRCUIT’S DECISION CONFLICTS

WITH A DECISION OF THE D.C. CIRCUIT AND

LIMITS IMPROPERLY THE AUTHORITY OF OMB

UNDER THE PAPERWORK REDUCTION ACT TO

MINIMIZE PAPERWORK BURDENS IMPOSED ON

THE PUBLIC.

A. The Importance of the Paperwork Reduction Act

to the Hazard Communication Standard.

The Paperwork Reduction Act of 1980 (“PRA”) is the

culmination of longstanding efforts by Congress* to

“minimize the Federal paperwork burden for individuals,

small businesses, state and local governments and other

persons.” 44 U.S.C. § 3501(a) (1). The critical need for

this law was established by the Commission on Federal

Paperwork, which concluded in its final report that fed-

eral paperwork requirements imposed annual costs of 25

8 The Paperwork Reduction Act was a “rewrite” of the Federal

Reports Act of 1942, and was intended to “strengthen the clearance

process” established under the prior law. S. Rep. No. 96-930, 96th

Cong., 2d Sess. 13, reprinted in 1980 U..S Code Cong. & Admin.

News 6241, 6253.

12

to 35 billion dollars on private industry, and 8.7 billion

dollars on individuals.’ To minimize this formidable bur-

den, Congress directed OMB to review all information re-

quests proposed by agencies to determine whether such

collection of information “is necessary for the proper per-

formance of the functions of the agency,” as well as

whether the information “will have practical utility.” 44

U.S.C. § 3504(c) (3) (1982). The effectiveness of the PRA

in ameliorating the burden on the public has been great.

Between 1981 and 1986, agencies subject to PRA review

have reduced the paperwork burden imposed on the pub-

lic by over 560 million hours annually ® or 44 percent

of the burden that existed in 1980.1! The Administra-

tion estimated that the paperwork burden on the public

in fiscal year 1988 would decrease by 66.1 million hours,

representing the seventh year of reduction by the fed-

eral government since 1981."°

OMB adhered closely to its lawful authority in review-

ing OSHA’s final HCS and, based on an extensive record

and detailed consultation with the agency, disapproved

three limited provisions in the rule.'"* OMB’s disapproval

9 Final Summary Report of The Commission on Federal Paper-

work 5 (1977).

10 March 10, 1988 Letter from James C. Miller III, Director, Office

of Management and Budget, to President Ronald Reagan transmit-

ting the Administration’s Information Collection Budget for Fiscal

Year 1988, 1.

11 Executive Office of the President, Office of Management and

Budget, Regulatory Programs of the United States Government,

April 1, 1987-March 31, 1988, 1-1i.

12 See March 10, 1988 letter from James C. Miller III, 1. Accord-

ing to the letter a net increase of approximately 140 million hours

resulted from three federal statutes enacted in 1987.

13 The Third Circuit, in ordering the Secretary to proceed directly

to a final rule without-the benefit of a notice of proposed rulemaking

prevented OSHA from complying with 44 U.S.C. § 3504(h). That

13

of the requirement that material safety data sheets

(“MSDSs”) be exchanged by each employer at multi-

employer worksites was based solely on the determination

that such requirement “does not appear to be the least

burdensome necessary for the efficient transmittal of haz-

ard information in multi-employer workplaces.” '* OMB

also disapproved the overly narrow scope of the exemp-

tion for consumer products, stating, “the record indicates

that this exemption would continue to place under the

HCS large number of consumers for which MSDSs would

have little practical utility, and for which the burden of

compliance would be substantial.” '

section requires an agency to notify OMB not later than publication

of notice, of any proposal rule which includes a collection of infor-

mation requirement. This important procedural requirement, spon-

sored by Senator Kennedy as Amendment 1177 of the Senate Judi-

ciary Committee, is intended to coordinate Executive review of

collection of information requirements in agency rulemakings with

regulatory oversight by the Executive Office of the President by

providing the agency an opportunity to respond to OMB comments.

See Remarks of Senator Edward Kennedy, 126 Cong. Rec. 14,689

(daily ed. Nov. 19, 1980). Thus, the Court’s short-circuiting of the

APA also thwarted the critical interagency deliberative process re-

quired by the Kennedy Amendment.

** October 28, 1987 letter from Wendy L. Gramm, Administrator

for Information and Regulatory Affairs, Office of Management and

Budget, to the Honorable Thomas C. Komarek Assistant Secretary

for Administration and Management, Department of Labor, disap-

proving the collection of information requests in the final HCS. The

record is replete with examples where trade groups demonstrated in

testimony before OMB that this provision of the HCS had no prac-

tical utility. These same groups provided numerous alternatives

which would accomplish the same objective of workplace hazard

communication without the full paperwork burden imposed by the

rule. Jd. at 7-9. See also October 28, 1988, “Comments and Request

for Hearing by the Construction Industry Hazard Communication

Coalition Proposed Revisions to OSHA Hazard Communication

Standard” (53 Fed. Reg. 29,821), submitted to OSHA Docket Officer

at 17-19.

© Letter of Gramm to Komarek at 8. The OMB record illustrated

how OSHA’s limited consumer product exemption (29 C.F.R.

14

OMB disapproved a third provision of the final HCS

that would have exempted FDA regulated drugs to the

extent that they are in “solid, final form for direct ad-

ministration to patients.” 29 C.F.R. §§$ 1910.1200(b) (6)

(viii) (1988). The OSHA exemption did not exclude drug

capsules containing liquids or particles. The narrow

scope of the exemption resulted in drug wholesalers init-

ially having to distribute 4.8 million MSDSs despite the

fact that a professional package insert of comprehensive

hazard information is already included in “every single

package of a prescription drug in this country.” '

B. The Petition Should be Granted To Resolve the

Conflict Between the Third and D.C. Circuits and

to Reestablish the Director’s Intended Role in Reg-

. ulating the Paperwork Burden Imposed by Admin-

istrative Agencies.

The Third Circuit erred in ruling that the HCS re-

quirement to collect and distribute MSDSs does not come

within the reach of the PRA and that, because the rec-

ordkeeping requirement had a regulatory purpose under

the OSH Act, it was exempt from PRA review. These

two rulings misinterpret the law and undermine the im-

portant powers given to OMB. The Court should take

this case so that OMB can fulfill its congressional man-

§ 1910.1200(b) (6) (vii) ) lacks practical utility. Under the OSHA

exemption employers could not discern when the exemption would

apply. Witnesses before OMB testified that this flaw would lead to

exaggerated overcompliance causing a substantial paperwork bur-

den involving the maintenance of MSDSs. Moreover, hazard infor-

mation on consumer products was duplicative of that required by

the Consumer Product Safety Commission. Transcript of OMB

hearings on the Paperwork Requirements of the Occupational Safety

and Health Administration Hazard Communications Standard, Oct.

16, 1987, at 90, 148-52.

16 Testimony before OMB of the National Wholesale Druggists

Association. Paperwork Requirements of the Occupational Safety

and Health Administration Hazard Communication Standard, supra

note 15, at 168-79

15

date to limit paperwork requirements imposed on mem-

bers of NAM without significant public benefit.

The D.C. Circuit has interpreted the PRA’s predeces-

sor, the Federal Reports Act of 1942 (codified at 44

U.S.C. § 3501-3520 (1976) ), to apply to the collection of

all information required by a federal agency for any reg-

ulatory purpose, whether or not the information is fur-

nished directly to the agency. Action Alliance of Senior

Citizens v. Bowen, 846 F.2d 1449 (D.C. Cir. 1988). The

D.C. Cireuit Court rejected arguments that the Federal

Reports Act applied only to documents furnished to an

agency. Interpreting the PRA, the court wrote that “un-

der the Paperwork Act ... OMB holds the same substan-

tive power as it did under the |Federal] Reports Act.

Where it determines that collection of information is un-

necessary, the Agency may not proceed with the collec-

tion.” Jd. at 1453. The Court continued “[a]pellants

cannot seriously believe . . . Congress was concerned

solely or primarily with private parties’ costs of mailing

data to Washington; it is the record-keeping and data-

gathering that constitute the burden.” Jd.

The attempt by the Third Circuit to distinguish Ac-

tion Alliance and thus avoid the conflict is unsuccessful.

The D.C. Cireuit quoted the paperwork requirement that

OMB lawfully disapproved: a “ ‘written self-evaluation

of {the federal fund recipients’} compliance under the

[Age Discrimination] Act’... [and a] self evaluation

available on request to the agency and to the public.” Id.

at 1452 (emphasis added, citations omitted). This re-

quirement is little different from the HCS requirement

that the MSDSs be made available to employees and

“upon request, to... the Assistant Secretary [of La-

bor] ....” 29 C.F.R. § 1910.1200(g) (11) (1988).

The Third Circuit’s decision is also inconsistent with

the PRA’s legislative history '’ and, without so much as

17The Senate Report includes within the coverage of the PRA

information collected for purposes of disclosure to the public. The

16

a mention, rejects the OMB interpretation of the PRA.

OMB’s regulations, which were promulgated on March

31, 1983, define the “eollection of information” as:

the obtaining or soliciting of information by an

agency from ten or more persons by means of iden-

tical questions, whether such collection of informa-

tion is mandatory, voluntary, or required to obtain

a benefit. For purposes of this definition, the ‘“ob-

taining or soliciting of information” includes any

requirement or request for persons to obtain, main-

tain, retain, report, or publicly disclose information.

5 CER. § 1320.7(c) (1988) (emphasis added). Subsec-

tion (2) of Section 1320.7(c) further provides, in part,

that:

Requirements by an agency, a person to obtain or to

compile information for purpose of disclosure to

members of the public at large, through posting,

notification, labeling, or similar disclosure require-

ments, constitute the “collection of information”

whenever the same requirement to obtain or compile

‘nformation would be a “collection of information” if

the information were directly provided to the agency.

(Emphasis added). Thus, the Third Circuit, without ex-

planation, rejected a “permissible construction” of the

Senate Report addreses public disclosures required by the Securi-

ties and Exchange Commission stating, “In this connection, fed-

erally mandated disclosures to the public by issuers and certain

owners of securities are central to carrying out the purpose of the

Federal Securities Laws.” S. Rep. No. 96-930, 96th Cong., 2d Sess.

39, reprinted in 1980 U.S. Code Cong. & Admin. News 6241, 6279.

This view was reiterated by Sen. Chiles, the Sponsor when Congress

considered amendments to the PRA in 1984. He explained:

[t]he notion that the law was dedicated primarily to forms,

questionnaires and surveys ‘and not to other instruments such

as reporting, recordkeeping, and disclosure requirements which

are means to carry out federally sponsored collections of infor-

mation’ is a fundamental misreading of what the law states

fand] what Congress in 1980 intended... .

S, Rep. No. 576, 98th Cong., 2d Sess. at 43.

17

statute by the administering agency, contrary to Chevron

U.S.A., Inc. v. NRDC, 467 U.S. 837, 866 (1984).

The Third Circuit also mistakenly and substantially

narrowed the scope of the PRA by ruling that 44 U.S.C.

§ 3518(e) (1982) prevents OMB from performing its

statutory function with respect to paperwork require-

ments when the rulemaking “embodies substantive policy

decision-making entrusted to the other [non-OMB]

agency.” United Steelworkers of Am. v. Pendergrass,

855 F.2d 108, 112 (3d Cir. 1988). This determination

also conflicts with the D.C. Circuit. Activn Alliance, 846

F.2d at 1454-55. While there may on occasion be tension

between OMB duties with respect to paperwork require-

ments under the PRA and another agency’s duties under

another law, the Third Circuit’s meat ax approach—

OMB always looses—“carve[s] so large a slice from OMB

authority” that it calls for review and adjustment by the

Supreme Court. Action Alliance, 846 F.2d at 1455.

The plain language of the PRA shows that Congress

vested sole authority in OMB to determine whether a

proposed paperwork requirement imposed by a federal

agency is necessary or useful in achieving a substantive

policy. Under the goal of ensuring that rules of federal

agencies minimize the information burden on the public,

Congress ordered federal agencies “not to conduct or

sponsor the collection of information unless, ... (3) the

Director has approved the proposed information collec-

tion request... .” 44 U.S.C. § 3507(a) (1982). Con-

gress then directed that the function of the Director to

clear information collection requests shall include a deter-

mination of whether a collection of information request

“is necessary for the proper performance of the func-

tions of the agency,” as well as whether the information

“will have practical utility ....” 44 U.S.C. § 3504(c) (2)

(1982). There is nothing in the PRA that terminates

this authority merely because the agency or anyone else

claims that the information collection request also has a

18

direct regulatory function. Action Alliance, 846 F.2d at

1455.**

OMB acted on a well-developed record and after detailed

consultation with OSHA. OMB carefully focused its ac-

tivities only on requirements for the collection of infor-

mation and restricted its disapproval to such require-

ments, leaving intact the underlying regulatory approach

of OSHA. The disapproved provisions involve the collec-

tion and maintenance for purposes of public disclosure

and recordkeeping of hundreds, thousands, and in some

cases millions of pages of material safety data sheets,”

precisely the area of concern at which the PRA is aimed.

The Court should grant the petitions to assure OMB’s

ability to control such excessive and costly paperwork re-

quirements affecting NAM and all members of the public.

18 The Third Circuit paid little attention to relevant legislative

history when it construed § 3518(e) to deny the Director of OMB

the authority to review agency rules. Prior to and during considera-

tion of the PRA, Congress understood the Executive already to have

the authority to intervene on substantive points of other agency

rulemakings. See Pub. L. No. 94-78, § 4 (August 9, 1975) amend-

ing The Council on Wage and Price Stability Act, Pub. L. No. 93-387

(August 24, 1974).

19 See OMB Docket 1218-0072 including written submissions ac-

companying April 2, 1987 and October 16, 1987 transcript of public

hearings. For example the Small Business Administration esti-

mated that a typical plumber must maintain 500 MSDSs compared

with OSHA’s estimate of 12. Ex. 2-21 (October 16, 1987). One

contractor from Minnesota estimated that 55 file cabinets to main-

tain MSDSs may be required at a typical construction high rise site.

Oct. 16, 1987, Transcript at 109.

19

CONCLUSION

For these reasons, and upon the entire record, the peti-

tions for writs of certiorari should be granted in both

Associated Builders and Contractors, Inc. v. Brock and

United Steelworkers of Am. v. Pendergrass (USWA III).

Of Counsel:

JAN S. AMUNDSON

General Counsel

QUENTIN RIEGEL

Deputy General Counsel]

NATIONAL ASSOCIATION OF

MANUFACTURERS

1331 Pennsylvania Ave., N.W.

Suite 1500 - North Lobby

Washington, D.C. 20004-1703

Telephone: (202) 637-3058

Date: April 3, 1989

Respectfully submitted,

RICHARD M. HALL *

CHRISTOPHER H. MARRARO

LYDIA B. DuFF

SIVE, PAGET, & RIESEL, P.C.

1055 Thomas Jefferson Street, N.W.

Suite 501

Washington, D.C. 20007

Telephone: (202) 965-1500

Attorneys for Amicus Curiae

National Association of

Manufacturers

* Counsel of Record