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Brock v. Morysville Body Works Inc.

argued: May 4, 1987.

WILLIAM E. BROCK, SECRETARY OF LABOR, PETITIONER,
v.
MORYSVILLE BODY WORKS, INC., RESPONDENT



On Petition for Enforcement of a Final Order of the Occupational Safety and Health Review Commission.

Weis, Sloviter and Becker, Circuit Judges.

Author: Becker

Opinion OF THE COURT

BECKER, Circuit Judge.

This petition by the Secretary of Labor, seeking summary enforcement of an uncontested Occupational Safety and Health Administration citation against Morysville Body Works, Inc. (Morysville), a Chapter 11 debtor, presents three issues. We must first decide if we have jurisdiction over this petition, as against the contention that only the Bankruptcy Court (as surrogate for the District Court) has jurisdiction. We conclude both that we have concurrent jurisdiction with the Bankruptcy Court and that we should exercise that jurisdiction over the instant petition. Second, we must decide whether we have jurisdiction to determine issues concerning the applicability of the automatic bankruptcy stay. We also find that we share concurrent jurisdiction with the bankruptcy court over this issue and that we should decide it. Finally, we must determine the effect, if any, that the automatic bankruptcy stay has on the Secretary's petition. We conclude that, although the stay prevents us from enforcing the petition with regard to the fine required by the citation, it does not extend to that portion of the citation that orders abatement of health and safety violations, and for that portion of the citation, we grant the Secretary's petition for enforcement.

I. FACTS AND PROCEDURAL HISTORY

On August 3, 1984 Morysville filed for reorganization under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1101, in the United States District Court for the Eastern District of Pennsylvania. During the reorganization, Morysville continued operating its truck body manufacturing plant in Boyertown, Pennsylvania. On September 17, 1985 a representative of the Secretary of Labor conducted a health and safety inspection of the Morysville work site. The inspection revealed that Morysville had failed to provide its employees with an eye wash, had not affixed point-of-operation guards on certain machinery, had failed to provide goggles or shields for employees, and had neglected to repair certain electrical equipment. The Secretary subsequently issued a citation charging Morysville with five violations of safety and health standards promulgated under the Occupational Safety and Health Act (OSHA), 29 U.S.C. § 654(a)(2). The citation required Morysville to abate the violations; it also assessed a penalty of $21,000 against the company.

Morysville did not contest the citation within fifteen working days after it was issued. Therefore, on March 4, 1986, the citation became a final order of the Occupational Safety and Health Review Commission that is not reviewable by any court or agency. 29 U.S.C. § 659(a). The Secretary petitioned this Court for summary enforcement of this final order pursuant to 29 U.S.C. § 660. We in essence denied summary enforcement by setting the matter down for oral argument, and we now consider the Secretary's Petition for Enforcement in light of that argument and the written submissions of the parties.

II. JURISDICTION

Our jurisdiction over this case must be assessed in light of both OSHA and the Chapter 11 petition filed by Morysville. Putting aside for the moment the bankruptcy of Morysville, we look to an OSHA provision, 29 U.S.C. § 660, as the source of our jurisdiction. By its terms, section 660(b) grants us original and exclusive jurisdiction. It provides that the Secretary may obtain "enforcement of any final order of the Commission by filing a petition for such relief in the United States court of appeals for the circuit in which the alleged violations occurred or in which the employer has its principal office . . . ." 29 U.S.C. § 660(b). Section 660(b) also specifically incorporates § 660(a), which provides that "upon the filing of the record with it, the jurisdiction of the court [of appeals] shall be exclusive . . . ."*fn1

We must also account for Morysville's bankruptcy, however, to which the jurisdictional grant of 28 U.S.C. § 1334(b) applies. Section 1334(b) provides:

Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.

This court has defined "related to" as follows:

The usual articulation of the test for determining whether a civil proceeding is related to bankruptcy is whether the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy . . . . An action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate.

Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir. 1984); In re Bobroff, 766 F.2d 797, 802 (3d Cir. 1985).

In the current case, enforcement of the Commission's citations against Morysville will undoubtedly alter its liabilities and have an impact on the administration of the debtor's estate. Enforcement will affect the arrangement, standing, and priorities of Morysville's creditors. Since the estate of the debtor has an interest in the enforcement of the Secretary's petition, it is "related to" a case under title 11.

Although section 1334(b) alters the effect of the jurisdictional grant of section 660(b) by expressly rendering it non-exclusive, it does not divest us of our jurisdiction. Rather, the effect of 28 U.S.C. § 1334(b) is to grant the district court overseeing the bankruptcy concurrent original jurisdiction.*fn2 We thus share concurrent original jurisdiction with the district court overseeing the petitioner's bankruptcy, and because the instant enforcement petition was first filed with us, we must decide if we should defer to the district court in this matter.*fn3

The purpose of both sections 660(b) and 1334(b) is the expeditious resolution of the controversy at hand. The legislative history of OSHA details this purpose. If an employer wishes to contest a citation, he has numerous procedures which may be followed; when a citation is not contested and has become final, however, the order is uncontestable and is to be entered as "an automatic court enforcement order" of the Court of Appeals. See S. Rep. No. 1282, 91st Cong., 2d Sess., reprinted in 1970 U.S. Code Cong. & Admin. News 5177, 5191; see also id. at 5211; H.R. Conf. Rep. No. 1765, 91st Cong., 2d Sess., reprinted in 1970 U.S. Code Cong. & Admin. News 5228, 5235. ...


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