SCOTUS decision may have ramifications for OSHA and MSHA

Washington — A recent Supreme Court decision could affect how legal disputes with OSHA or the Mine Safety and Health Administration are settled.

In a 6-3 decision on Securities and Exchange Commission v. Jarkesy, the court on June 27 ruled that SEC may not use administrative law judges while seeking civil penalties for alleged securities fraud. Instead, the agency must take its cases to federal court, where parties alleged of fraud would have a jury trial – a right provided by the Seventh Amendment to the Constitution. 

The decision could prove important for OSHA and MSHA because both agencies also use administrative law judges, along with review commissions, to settle disputes stemming from citations.

However, Chief Justice John Roberts’ majority opinion references a 1977 case – Atlas Roofing v. OSHRC – involving the Occupational Safety and Health Review Commission. In that case, the Supreme Court ruled that Atlas Roofing didn’t have the right to a trial by jury because of the “public rights” exception to Article 3 of the Constitution.

That exception allows “legislative courts” to rule on cases. Those cases are conflicts that arise between a “private actor” (an employer, for example) and the government. They also involve civil law and not common law.

“Atlas Roofing, therefore, does not apply here (to the SEC case),” Roberts writes. He adds that SEC’s antifraud provisions “replicate common law fraud.”

Former OSHA Deputy Assistant Secretary Richard Fairfax, a principal consultant at the National Safety Council, said that although the case focused on SEC, “I do not believe it directly impacts the other regulatory agencies. It does, however, open the door for future challenges.”

Because of this decision, it’s unclear if the “public rights” exception would apply in every case that comes before safety agencies’ administrative law judges, OSHRC, or the Federal Mine Safety and Health Review Commission. It’s also uncertain how a cited employer would get a change in venue to a federal jury trial from an administrative law judge.

A type of OSHA case that could see a change in venue in the future may be certain General Duty Clause citations, said Alka Ramchandani-Raj, co-chair of the Littler law firm’s occupational safety and health practice group. 

One example is a workplace violence injury caused by a third party who is unaffiliated with the employer.

“I think it depends on how the agency is pursuing its claims, to the degree that they’re pursuing statutory claims or they’re trying to pursue claims that are in the nature of a common lawsuit,” Ramchandani-Raj said. “There are grounds, under the Seventh Amendment, to potentially have [the claim] be adjudicated by a court rather than adjudicated by the agency.”