Court denies OSHA petitions to revisit ruling on PSM retail exemption

Washington – The U.S. Court of Appeals for the District of Columbia Circuit has denied OSHA’s petitions for a rehearing and rehearing en banc of the court’s ruling that the agency failed to follow federal rulemaking requirements when it used a memorandum to announce a revised definition of retail facilities exempt from the Process Safety Management Standard.

The court issued the denial for a rehearing and rehearing en banc on Dec. 20, after ruling in September that OSHA’s new definition is a standard and must be “subject to the notice-and-comment procedures for standards set forth in the OSH Act.”

The Agricultural Retailers Association, one of two organizations to file a lawsuit, claims the court’s ruling will save U.S. retailers more than $100 million in compliance.

“This administration has broadly and unjustly avoided proper procedure to construct and reinterpret myriad federal regulations without public input,” Daren Coppock, president and CEO of Washington-based ARA, said in a press release. “The court’s decision in this case affirms the importance of regulatory agencies following proper notice and comment rulemaking procedure.”

OSHA’s revised standard interpretation, released in a July 2015 memorandum, stated that only retail trade facilities with North American Industry Classification System codes of 44 and 45 – such as hardware stores and office supply stores – would be exempt from the PSM standard. The move was in response to a deadly explosion that occurred in April 2013 at a fertilizer storage and distribution facility in West, TX. The facility, which had more than 50,000 pounds of ammonium nitrate that exploded and killed 15 people, had been exempt from the standard because more than half of its earnings derived from direct sales to end users. Before the revision, farm supply facilities that sell bulk chemical fertilizers to farmers, as well as retail establishments such as gas stations that sell hazardous chemicals in small quantities, had been exempt from the standard.

ARA and The Fertilizer Institute filed suit, claiming the OSH Act mandates that OSHA undergo the formal rulemaking process, including notice and comment periods, before issuing a revised interpretation.