Chief Admin. Officer of Occupational Safety & Health Admin. v. Savage Servs. Corp.

CHIEF ADMINISTRATIVE OFFICER OF THE OCCUPATIONAL SAFETYAND HEALTH ADMINISTRATION,DIVISION OF INDUSTRIAL RELATIONS OF THE DEPARTMENT OFBUSINESS AND INDUSTRY, STATE OF NEVADA, Petitioner, v. SAVAGE SERVICES CORPORATION, Respondent.

Case No. 3:19-cv-00147-LRH-WGC

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

December 2, 2019

ORDER

Petitioner ("NOSHA") has appealed the ruling of the Nevada Occupational Safety and Health Review Board ("Review Board"), which dismissed its administrative safety citation of respondent Savage Services Corporation ("Savage") for want of jurisdiction. In addition to its appeal, NOSHA has also filed a motion to remand the action back to Nevada state court (ECF No. 18). For the reasons stated below, the Court denies NOSHA's motion to remand and affirms the decision of the Review Board.

I. Factual Background and Procedural History

This administrative appeal concerns whether employers must provide fall protection equipment to their employees when they work atop railcars and other similar containers in railyards. As part of its business offerings, Savage (a Utah corporation) provides services to railcar owners in a railyard in Elko, Nevada. (ECF No. 19 at 7; No. 25 at 11). Savage does not own the railcars or the railyard. (Id.) In providing these services at the Elko railyard, Savage's employees sometimes need to be on top of railcars that are not adjacent to any buildings or structures. (Id.) Savage claims that despite providing services in fifty locations nationwide, none of its employees has ever fallen from atop a railcar. (Id. at 12). Savage also asserts that even though the Federal Railroad Administration ("FRA") conducts annual inspections of its worksites, it has never been cited for inadequate fall protection. (Id.)

On November 27, 2017, NOSHA conducted an inspection of Savage's worksite at the Elko railyard, which it asserts was the product of an "anonymous referral" alleging that Savage's employees were working on top of railcars without fall protection. (ECF No. 19 at 7). NOSHA subsequently issued a safety citation to Savage for that reason on January 18, 2018, pursuant to the "General Duty Clause" codified in NRS 618.375. (Id. at 8). Nevada's General Duty Clause, which is similar to its federal counterpart (29 U.S.C. §654), requires employers to, inter alia, provide employees with a safe working environment free from hazards that are likely to cause death or serious physical harm. It also requires employers to use safety devices and other safeguards to meet that goal. The citation required Savage to pay a fine and incorporate fall protection equipment into its business services in Elko within a month. (ECF No. 25 at 12).

Savage contested the citation, resulting in a hearing before the Review Board on December 13, 2018. (ECF No. 19 at 8). During the hearing, Savage argued that NOSHA lacked jurisdiction to issue it a citation for improper fall protection because the FRA preempts both federal and state OSHA agencies from promulgating rules affecting railroad workers when they operate on top of railcars. (ECF No. 1-2 at 3). The Review Board ultimately agreed, ruling on January 29, 2019, that FRA preemption prevented it from exercising jurisdiction over NOSHA's citation of Savage. (Id. at 5-6). NOSHA filed a motion for reconsideration on February 11, 2019, arguing that newly discovered evidence demonstrated that NOSHA and the FRA have concurrent jurisdiction over the issue of fall protection equipment for railroad workers. (ECF No. 25 at 15). NOSHA pointed to search results from an online database that allegedly showed federal OSHA citations concerning fall protection equipment on railcars and an email from Scott Woolstenhume, an FRA employee in California, which allegedly stated that it was the FRA's position that it had concurrentjurisdiction with NOSHA. (Id. at 15-16). Before the Review Board could conduct a hearing, NOSHA filed a petition for judicial review of the Board's original January 29, 2019 decision in Nevada state court. Because NOSHA's petition for judicial review stripped the Review Board of jurisdiction to rule on the motion for reconsideration, the most it could do was certify to the state court how it would have ruled on the motion. (ECF No. 1-4 at 5).

Savage removed the case from state court to this Court on March 14, 2019. (ECF No. 1). On March 27, 2019, the Review Board certified to the reviewing court that it would have denied NOSHA's motion to reconsider. (ECF No. 19 at 9). It found that NOSHA failed to demonstrate how its failure to present the "newly discovered" evidence was excused by an exercise of reasonable diligence. (ECF No. 1-4 at 7-8). In particular, the Review Board found that even if NOSHA had been able to demonstrate reasonable diligence, the new evidence it sought to introduce was merely "unsworn observations of counsel." (Id. at 7). Before the Court now is NOSHA's motion to remand (ECF No. 18) and judicial review of the Review Board's decision.

II. Legal Standard

A. Motion to Remand

Under 28 U.S.C. §1441, "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. §1441(a). Removal of a case to district court may be challenged by motion, and a federal court must remand a matter if there is a lack of jurisdiction. 28 U.S.C. §1441. Removal statutes are construed restrictively and in favor of remanding a case to state court, and it is the burden of the defendant to show that removal is proper. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-109 (1941); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

B. Administrative Review

Nevada judicial review of state agency decisions is similar to review of federal agency decision. Pursuant to NRS 233B.135, a court may review a Nevada agency's final decision, but the court's review must be confined to the administrative record. Pentecostal Church of God v.Douglas County, 2018 WL 1611184, at *5 (D. Nev. Apr. 2, 2018). The reviewing court cannot reweigh the evidence, but it may set aside an agency decision if the decision: (1) violates constitutional provisions; (2) is clearly erroneous in view of reliable, probative, and substantial evidence; (3) is affected by an error of law, or (4) is arbitrary, capricious, or an abuse of discretion. Nev. Rev. Stat. § 233B.135(2)-(3). "Substantial evidence" means "evidence which a reasonable mind might accept as adequate to support a conclusion." Id. at (4). Substantial evidence may be shown inferentially if certain evidence is absent. Wright v. State, Dep't of Motor Vehicles, 110 P.3d 1066, 1068 (Nev. 2005). A state agency's ruling on a question of law is persuasive but not entitled to deference. Sierra Pacific Industries v. Wilson, 440 P.3d 37, 40 (Nev. 2019).

III. Discussion

A. NOSHA's Motion to Remand (ECF No. 18)

Before addressing the merits of NOSHA's petition for judicial review, the Court must first determine if NOSHA is correct in arguing that removal to federal court was improper. Savage argues that pursuant to the Supreme Court's decision in City of Chicago v. International College of Surgeons, 522 U.S. 15 (1997), federal courts have jurisdiction to review state administrative decisions when the decision presents a substantial question of federal law. (ECF No. 21 at 5). And because the Review Board dismissed NOSHA's citation with prejudice on the basis that the FRA preempts state OSHAs from regulating some issues related to railroad worker safety, the Review Board's decision presents an important question of federal law. (Id.) NOSHA responds by arguing that because neither the FRA nor Congress has prohibited the promulgation of regulations addressing fall equipment for railroad workers on top of train cars, state OSHAs have concurrent jurisdiction with the FRA to regulate that area. (ECF No. 22 at 9). NOSHA also asserts that concurrent jurisdiction is demonstrated through the evidence that it presented but that the Review Board failed to consider, such as the Woolstenhume email.

In City of Chicago, the respondents challenged a decision by a historical landmarks commission to designate two buildings they hoped to renovate as historical landmarks, thereby preventing any possible construction. 522 U.S. 156, 159-60 (1997). The commission denied the respondents' request for a renovation exception, and they eventually filed a petition for judicialreview in Illinois state court. Id. at 160. Among other claims, the respondents pleaded violations of the Due Process and Equal Protection clauses of the U.S. Constitution and requested judicial review of the commission's decision. Id. The City of Chicago eventually removed the case to federal court. Id. at 161. The Supreme Court held that the removal was proper because even if state law creates a party's cause of action, the case may still arise under federal law if the "right to relief under state law requires resolution of a substantial question of federal law." Id. at 164. The Supreme Court further expounded on this doctrine in Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., explaining that federal jurisdiction exists where: (1) the state claim necessarily states a federal issue; (2) the issue is actually disputed and substantial, and (3) the federal court can decide the issue without encroaching on the purview of the state court. 545 U.S. 308, 313-14 (2005).

This is precisely the case here. The Review Board based its order of dismissal with prejudice on its belief that the FRA had exclusive jurisdiction over promulgating safety regulations for workers operating on top of railcars. (ECF No. 1-2 at 5-6). Whether the FRA or any federal agency has exclusive jurisdiction over a matter is a clear question of federal law. Gallo Cattle Co. v. U.S. Dep't. of...