A ruling issued today by the D.C. Circuit Court of Appeals saves U.S. retailers in excess of $100 million in compliance costs.
The Court of Appeals ruled the Occupational Safety and Health Administration violated the Occupational Safety and Health (OSH) Act when it issued an enforcement memorandum on July 22, 2015, redefining the retail facility exemption to the Process Safety Management Standard.
“This administration has broadly and unjustly avoided proper procedure to construct and reinterpret myriad federal regulations without public input,” said Daren Coppock, president and chief executive officer of the Agricultural Retailers Association (ARA). “The court’s decision in this case affirms the importance of regulatory agencies following proper notice and comment rulemaking procedure.”
ARA and The Fertilizer Institute (TFI) led the legal challenge. The organizations argued that the OSH Act requires the agency to adhere to notice-and-comment procedures in promulgating its new definition of retail facility. The court found that by narrowing the scope of the exemption for retail facilities, OSHA had in effect issued a formal standard, which must be subject to notice-and-comment procedures as spelled out in the APA.
“We are pleased with the court’s decision to vacate OSHA’s repeal of the retail PSM exemption,” said TFI President, Chris Jahn. “Through ResponsibleAg, the industry is taking concrete action to ensure that retailers can verify compliance with all applicable federal regulations. We take this work seriously, but need to be able to voice our concerns when new federal rules are proposed.”
Anhydrous Ammonia, the most commonly used nitrogen fertilizer in U.S. agriculture, is already regulated under 29 CFR 1910.111 and the General Duty Clause. PSM applies to any facility storing 10,000 lbs. or more of anhydrous ammonia. However, ag retail facilities selling more than 50% of the popular fertilizer to farmers have been exempt from PSM under what was deemed the “50 percent rule.” OSHA’s 2015 memo eliminated the exemption.
“Although ARA could only challenge on the procedural point and not the enforcement memo itself, we’re still very pleased to see the Court rule in our favor and to provide this relief to our members,” Coppock added.
ARA and TFI initiated legal action against OSHA in September 2015. Absent ARA and TFI intervention, 3,800 agricultural retailers would have been subject to regulations intended for chemical manufacturers, at a cost of more than $100 million.
“Given the significant economic costs and absence of any safety benefit, the court made the correct decision,” said ARA Chairman Harold Cooper. “The retail exemption has been in place for more than 20 years and OSHA should not have redefined it without an opportunity for stakeholders to comment.”
Cooper said the case could have easily gone the other way, if organizations like ARA and TFI were not prepared strategically or financially.
“As an industry, ag retailers tend to be complacent about regulations that come our way. We keep our heads down and do what's required," he said. "But this rule would have limited farmers and retailers options through an agency's improper regulatory overreach. Thankfully, ARA and TFI were prepared and positioned to defend our industry. They gave us a vehicle to fight and win this battle.”