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Federal safety rules don't pre-empt state law

Federal safety rules don't pre-empt state law

PHILADELPHIA—Manufacturers of equipment used in the workplace are not shielded from product liability claims in state court even if federal safety regulations do not set out how the equipment must safeguard users, a federal appeals court ruled.

In what attorneys say is a precedent-setting decision, a 3rd U.S. Circuit Court of Appeals panel in Philadelphia ruled that federal safety law in most cases does not pre-empt state tort law claims against equipment manufacturers.

The March 26 ruling overturned a federal district court decision in the case, which involved a product liability suit stemming from a tractor rollover that killed the equipment's operator.

In its ruling, the 3rd Circuit panel noted that the New Jersey Supreme Court had ruled in an unrelated case that the federal Occupational Safety and Health Act did pre-empt a product liability lawsuit that, like the current case, had been filed in New Jersey state court. But the 3rd Circuit panel determined that the earlier case involved an unusual type of situation that did not apply in the tractor rollover case.

"If the (appeals) court had ruled the other way, it would have been shocking to me," said employer attorney Julie Pacaro of Cozen O'Connor P.C. in Philadelphia.

Some federal statutes, such as the interstate commerce law, are intended to "occupy the field" they cover and, therefore, pre-empt related state laws, Ms. Pacaro said.

That was not Congress' intention when it enacted OSH Act, she said. Instead, the act is protective in nature, because it is designed to prevent injuries, she said. But after a workplace accident, it does not replace workers' rights that state laws guarantee, she said.

The 3rd Circuit case centers on the 2002 death of construction worker Charles Lindsey, who was crushed when a tractor he was operating rolled over at a job site in Franklin Township, N.J. The equipment, a sideboom pipe-laying tractor manufactured by Caterpillar Inc. of Peoria, Ill., did not have a rollover protection cage.

While OSH Act regulations mandate that manufacturers install rollover cages on some tractors, they do not require the cages on sideboom pipe-laying tractors.

Another tractor maker, though, had equipped its version of the tractors with the cages as a standard safety feature. In addition, an Occupational Safety and Health Administration representative wrote in his postaccident report to Mr. Lindsey's employer that the agency encouraged employers to use only tractors with cages.

Mr. Lindsey's widow, Rosario Lindsey, filed a product liability suit against Caterpillar in New Jersey state court, but the manufacturer argued that the OSH Act pre-empted such litigation.

In ruling for Caterpillar, a federal district court judge last year determined that Ms. Lindsey's state law claim conflicted with the federal safety standard on the tractor's rollover protection structure. As a result, the safety standard pre-empted the state product liability law claim, the court ruled.

To support its ruling, the district court cited a New Jersey Supreme Court decision reached earlier that year in another material-handling equipment case. In that case, the plaintiff sued a forklift manufacturer that produced equipment with warning devices that complied with OSHA regulations. The plaintiff, however, argued that an additional warning device would have prevented a workplace accident.

In ruling for the manufacturer, the New Jersey Supreme Court determined that the plaintiff's claim conflicted with federal safety regulations because the additional warning devices the plaintiff sought could make work sites more dangerous.

But the 3rd Circuit panel said the forklift case involved a limited number of warning devices allowed by OSH Act regulations. In contrast, the OSH Act tractor regulations are silent on rollover cages, the appellate panel noted. It also pointed out that the New Jersey Supreme Court described its forklift decision as having a "narrow" application.

The 3rd Circuit panel then turned to the "clearly articulated" state law savings clause in the OSH Act.

The OSH Act does not "enlarge or diminish or affect in any other manner the common law or statutory rights, duties, or liabilities of employers and employees under any law with respect to injuries, diseases, or death of employees arising out of, or in the course of, employment," the appellate court said. "State law claims that fall within the scope of this savings clause are not pre-empted."

In addition, "the regulatory language exempting sideboom pipe layers from the requirement for rollover protective structures cannot reach beyond the authority Congress granted. Therefore, the absence of a requirement for an employer does not implicate third-party duties for a manufacturer."

The decision is "an important opinion for manufacturers," said employer attorney Jonathan Wetchler, a partner with Wolf, Block, Schorr & Solis-Cohen in Philadelphia.

"It gives them an approach to analyze whether federal law provides them a safe harbor for how a product is manufactured," he said.

"It's a matter of whether OSH regulations support, contradict or don't speak at all to the issues in the state tort claim," Mr. Wetchler said.

Manufacturers also should determine whether OSHA has issued any guidance letters like the one it sent to the employer in the 3rd Circuit case, Ms. Pacaro said. Those letters could significantly help a plaintiff, she said.

Caterpillar's attorney did not return calls.

But Ms. Lindsey's attorney, Robert G. Bauer of Abraham, Bauer, & Spalding P.C. in Philadelphia, said the defense has indicated they may appeal.

Mr. Bauer called the 3rd Circuit's decision a "flabbergasting reversal of fortune." Given the number of differing rulings on the issue, Mr. Bauer said he is "not sitting here confident in the ultimate outcome" of the case.

Rosario Lindsey vs. Caterpillar Inc., 3rd U.S. Circuit Court of Appeals, March 26; No. 05-4406.