While the repercussions remain to be determined, it appears that a unanimous panel of the D.C. Circuit finally lost its patience with the cavalier approach of the federal OSHA bureaucracy in revising established interpretations of OSHA standards without notice and comment rulemaking -- a practice which has been encouraged by a line of decisions on judicial deference issued by the U.S. Supreme Court. The panel made the courageous decision to uphold the underlying constitutional principles of due process against this persistent pattern of regulatory abuse and the long shadow of Perez v. Mortgage Bankers.
An industry challenged an OSHA “guidance” memo that narrowed the “retail facility” exemption to the OSHA Process Safety Management (PSM) Standard and would, for the first time, have subjected up to 4,800 facilities to the requirements of the OSHA PSM Standard. The court could have invalidated the OSHA memo on the narrow ground that OSHA’s revised definition of “retail facility” was inconsistent with and, in effect, amended the regulatory text of the rule. Instead, the court appears to have broadly held than any OSHA guidance that announces a substantive change in the established interpretation of an OSHA standard is an amendment of that standard, which requires notice and comment rulemaking. Under that analysis, OSHA would not be permitted to make a substantive change to an established interpretation of an OSHA standard without notice and comment rulemaking. If that is the intent of the decision, a Petition for Certiorari to the U.S. Supreme Court appears inevitable.