Thursday, July 2, 2020

Trump’s OSHA Too Tough for Smithfield? & Why the Defense Production Act Probably Does not Immunize Anyone From Tort Claims

Trump’s OSHA has committed the unpardonable sin of subpoenaing Download DOH subpoena from the South Dakota Department of Health certain information that Smithfield Foods provided it during the early days of the Covid outbreak: employee reports of illness; COVID-19 test results; correspondence between the South Dakota Department of Health and Smithfield representatives; interviews conducted with employees or management officials related to the outbreak of COVID-19; statistical data reflecting any potential clusters of COVID-19 within the plant, including production lines, work stations, or common areas; photographs and/or video taken of the plant, including work stations, processes, or equipment; and any recommendations issued to Smithfield by the State of South Dakota, Department of Health, to combat the spread of the virus.  

Ladies and gentlemen, as a former prosecuting attorney for the National Labor Relations Board I will represent to you that in the context of a workplace COVID outbreak that is about as tame a subpoena as one could draft. Every item is clearly relevant, even critical. If a national workplace safety agency does not have prompt access to such information it is not a “real” safety agency. But there is more afoot here. Smithfield filed a Motion to Quash Download Smithfield MTQ on a few very interesting theories.

  • The Motion argues that “enforcement of the Subpoena will inevitably chill ongoing cooperation between employers and public health agencies during COVID-19—cooperation that is critical given how much remains unknown about the novel virus and the fact that essential employers are currently uniquely situated for scientific study.”
    • Translation: if the feds can get investigative materials from state authorities we may stop cooperating with state health authorities.
  • The Motion complains that “OSHA initiated its investigation at the Plant well after DOH initiatedits investigation.”
    • Translation: we are not as cautious with state authorities as with federal authorities and we did not have the opportunity to impose message discipline in the early days of the crisis.
  • The Motion objects, “the Subpoena seeks information that is not relevant or proportionate to OSHA's investigation of Smithfield's Sioux Falls plant.”
    • Translation: Only we get to say how company-wide safety protocols may be relevant to safety at an individual facility.
    • Here it may be useful to return to the items mentioned in the first paragraph
  • Incredibly, Smithfield demanded the right to inspect in advance documents provided by South Dakota authorities to OSHA on privacy grounds. I seem to remember something about disclosure of documents to third parties destroying claims of privilege.

What might a suspicious mind think? Could there be documents in the state trove that do not quite jibe with what federal officials have been provided? Might document preservation be more assured in federal hands? Might that be of no small moment given the looming complexity and persistence of tort litigation?

Some may be surprised that I even mention tort litigation given the pervasive urban myth that the Defense Production Act has absolutely immunized meatpacking facilities from tort liability. I have a curt response for those embracing the view: please produce one reported case in which the Defense Production Act has ever immunized a Defense Production Act contractor from tort liability. I just looked again a couple of hours ago and I could not find a single case. The DPA immunity cases actually have quite a different ring. In response to a defendant’s claim of DPA immunity for tort liability, in  Hercules, Inc. v. U.S. (one of the “Agent Orange” cases), the Circuit Court of Appeals for the Federal Circuit stated at page 203 (in an opinion upheld by the U.S. Supreme Court on other grounds):

Thompson contends that because section 101 of the DPA authorizes the President . . . to compel contract performance as well as contract acceptance, the “risk imposed” is not limited to breach of contract actions arising out of preference given to DPA contracts, but rather extends to possible tort suits by third parties arising from subsequent use of the product produced under the DPA contract . . . We disagree. As did the district court in the Agent Orange litigation and the Claims Court in this suit, we read section 707 of the DPA as providing a defense for a DPA contractor against a suit by a non-government customer in the event that the DPA contractor is forced to breach another contract to fulfill the government's requirements. Section 707 does not provide the kind of protection asserted by Thompson.

That sounds pretty clear to me. The liability pertains to breach of contract actions not tort actions. A similar result was reached in U.S. v. Vertac, 46 F.3d 803 (1995) (No immunization for CERCLA liability because immunity would exceed the risk imposed by 101(a) of the DPA). But if anyone has a DPA case upholding tort immunity for DPA contractors I would be very interested to read it.

Michael C. Duff

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