VANCE, Circuit Judge:
The Occupational Safety and Health Administration (OSHA) promulgated regulatory standards for the cotton gin industry under the Occupational Safety and Health Act (the Act). 29 U.S.C. § 651 et seq. Five industry associations petitioned for pre-enforcement review in this court,
Background information about the ginning industry and occupational diseases is essential for analysis of the justification, reasonable necessity, and feasibility of OSHA's regulations.
A. The Ginning Industry
The ginning process consists of a series of mechanical operations that separate the lint from the seed so that the lint may be processed by textile mills and the seeds may be used by cottonseed oil mills. Additionally, ginning removes foreign matter that has become entangled in the raw cotton during harvesting. Most of the cotton crop is ginned in the fall and early winter, immediately after it is picked, on the farm or in the locality where it is grown.
The ginning system is automated to a large extent with the cotton moving through pneumatic pipes. Cotton is delivered to the gin in storage trailers and removed by a pneumatic device. The cotton passes through machinery that separates the lint from the seed. The seed are conveyed to a storage house and the cotton lint is pneumatically conveyed through lint cleaners into the baling press where it is hydraulically pressed into bales.
Although the size of the operation and the capabilities of the individuals influence the composition of the workforce, the job functions in a typical cotton gin crew include a gin stand operator, lint cleaner operator, press man, sucker pipe operator and yard man. The average gin worker spends half of his time outside the gin shed away from cotton dust concentrations, and the typical gin is at least partially open-sided with substantial outside air circulation.
Gin employment is characterized by its seasonal nature, migrant work force, and high employee turnover. Estimates of a typical ginning season vary from four-six weeks, four-eight weeks, and five-twelve weeks. The average employee works only about seven weeks per year, averaging sixty workhours per week.
B. Respiratory Disease
Byssinosis, commonly called brown lung disease, is a respiratory impairment linked
Numerous studies involving the textile industry have linked the occurrence of acute and chronic byssinosis to long term exposure to cotton dust, although they have not fully explained the etiology.
C. The Challenged Ginning Regulations
The Assistant Secretary of Labor for the Occupational Safety and Health Administration in 1978 promulgated regulations of cotton dust exposure by gin employees through informal rulemaking procedures. 29 C.F.R. § 1910.1046 (1979). These cotton gin regulations essentially involve five requirements. Beginning with the most controversial directive, (1) employers must provide medical surveillance of exposed employees.
OSHA did not impose on the ginning industry a requirement for a maximum limit on airborne concentration of cotton dust (a permissible exposure limit, or PEL) or for dust emission controls on gin machinery. The basic reasons for not requiring a PEL and emission devices were that gin employees are only exposed to cotton dust for a short season, that the proper maximum level is not known for such seasonal exposure, and that the emission controls are infeasible because they would increase the construction cost of the average gin by sixty-five percent and would increase the farmer's ginning costs by fifty percent.
D. The Petition for Review
Five ginning industry organizations filed petitions for pre-enforcement review in this circuit of the cotton gin regulations, note 1 supra, and four other ginning associations intervened, note 2 supra. See 29 U.S.C. § 655(f). In this consolidated petition, they contend that the OSHA ginning regulations are not required by a material impairment of workers' health, are not feasible in their medical examination requirements,
II. STANDARD OF REVIEW
A. The Substantial Evidence Standard
The Act unqualifiedly provides that "[t]he determinations of the Secretary shall be conclusive if supported by substantial evidence in the record considered as a whole." 29 U.S.C. § 655(f). This review standard applies to both factual determinations and policy determinations by OSHA, although its application to the latter is more difficult. AFL-CIO v. Marshall, 617 F.2d 636, 648 n.43 (D.C.Cir. 1979); Associated Industries of New York State, Inc. v. United States Department of Labor, 487 F.2d 342, 348 (2nd Cir. 1973); see American Petroleum Institute v. OSHA, 581 F.2d 493, 497 (5th Cir. 1978), aff'd on other grounds sub nom. Industrial Union Department, AFL-CIO v. American Petroleum Institute, 446 U.S. ___, 100 S.Ct. 2844, 65 L.Ed.2d 1010 (1980).
For policy determinations, the administrative decision "must be scrutinized" even though it is "not so susceptible to verification or refutation by the record" as are factual findings. Id. at 497. Accord, Industrial Union Department, AFL-CIO v. Hodgson, 499 F.2d 467, 475 (D.C.Cir. 1974) ("exacting scrutiny"). This scrutiny of informal rulemaking involves a two-fold examination:
The reasonableness requirement, as applied to OSHA policy determinations, stems from the mandate of the Administrative Procedure Act, 5 U.S.C. § 551 et seq., for a reviewing court to hold unlawful and to set aside agency action, findings, and conclusions, whether adopted through formal or informal rulemaking, that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. § 706(2)(A). This involves appellate scrutiny to determine (a) whether enough facts are available and have been investigated to render rational the making of a policy judgment;
B. The Statutory Mandate and Limitations
The consistency requirement, which is that OSHA's action must accord with the Act's language and purpose, refers inter alia to several explicit statutory limitations on OSHA rulemaking. The Act authorizes only those OSHA regulations that are elicited by a significant risk of unsafe or unhealthful employment or workplaces, and that are reasonably necessary or appropriate to reduce that risk. For toxic materials or harmful physical agents, 29 U.S.C. § 655(b)(5) authorizes only those regulations
The petitioning and intervening ginners in this case question whether the cotton gin regulations are necessitated by a significant risk of material health impairment, whether the ginning regulations are reasonably necessary or appropriate, and whether the medical surveillance requirement is feasible. The petitioning gin employee organizations assert that a permitted exposure limit (PEL) for cotton gin dust would most adequately protect workers and is reasonably necessary or appropriate.
The purpose of the Occupational Safety and Health Act to protect workers is most laudable. The only question that we decide is whether OSHA's regulations for cotton gins comply with the statutory requirements that Congress has prescribed. We conclude that they do not because OSHA has not found as a "threshold matter" that cotton dust poses a "significant health risk" in cotton gins, Part III infra, and that a standard is "reasonably necessary or appropriate to provide safe or healthful employment and places of employment." See Industrial Union Department, AFL-CIO v. American Petroleum Institute, ___ U.S. ___, 100 S.Ct. 2844, at 2850 (1980) (plurality opinion); Part IV infra.
III. SIGNIFICANT RISK OF MATERIAL HEALTH IMPAIRMENT
Section 3(8) of the Act requires that all OSHA standards must be "reasonably necessary or appropriate to provide safe or healthful employment and places of employment." 29 U.S.C. § 652(8). In Industrial Union Department, AFL-CIO v. American Petroleum Institute, ___ U.S. ___, 100 S.Ct. 2844 (1980) (plurality opinion), the Supreme Court construed this provision to require the Secretary of Labor to make a threshold finding "that the workplaces in question are not safe." ___ U.S. at ___, 100 S.Ct. at 2864. However, the Court explained:
Section 6(b)(5) of the Act also provides that "standards dealing with toxic materials or harmful physical agents" shall assure "that no employee will suffer material impairment of health or functional capacity even if such employee has regular exposure ...." 29 U.S.C. § 655(b)(5). This "empowers the Secretary to promulgate standards, not for chemicals and physical agents generally, but for `toxic chemicals' and `harmful physical agents.'" Industrial Union
OSHA's finding of a health hazard from cotton ginning is based on the correlation between the occurrence of byssinosis from exposure to cotton dust in other facets of the textile industry and by several studies involving the ginning industry.
A. The American Ginning Study
Palmer utilized X-ray readings, respiratory symptom questionnaire, and spirometric tests in examining the incidence of byssinosis and other chronic respiratory disease among gin workers and a control group in the Rio Grande Valley and New Mexico. Results from the interviewer administered questionnaire showed that chronic respiratory disease was more prevalent in the control group, thirty-nine percent, than in the gin workers, thirty percent. Furthermore, the amount of chronic respiratory disease diagnosed by spirometric test was identical for the gin workers and the control group. Spirometer results, however, showed that forty-four percent of gin workers, called reactors, suffer a decline in their forced expiratory volume in one second, FEV
The Palmer study found no evidence of byssinosis or other chronic respiratory disease among American gin workers. Much of the spirometer data as well as all of the questionnaire data supports the industry petitioners' stance in denying symptoms of byssinosis or other chronic respiratory disease. Some of the spirometer data supports OSHA's position in showing that gin workers suffer a temporary decline in FEV
B. The Foreign Ginning Studies
In concluding that exposure to cotton dust was a health hazard for gin workers, OSHA relied on several foreign studies of ginning employees in Egypt, Uganda, Greece and Sudan.
C. The Cotton Manufacturing Industry Studies
OSHA argues that numerous studies involving the cotton yarn manufacturing,
In the present case, OSHA has not produced substantial evidence that a ten week or less annual exposure for half the workday to cotton dust entails a significant risk, accepting that a year-round exposure does significantly threaten a material health impairment. Instead of findings based on substantial evidence, OSHA has made findings based on assumptions without an adequate evidentiary basis. OSHA has relied on the assumptions, from byssinosis resulting from the high exposure level in textile mills and other cotton manufacturing processes, that byssinosis must result from the substantially lower exposure level in cotton gins. As in Industrial Union Department, "[t]hese assumptions are not a proper substitute for the findings of a significant risk of harm required by the Act." Id. at ___, 100 S.Ct. at 2874. We reverse OSHA's determination and remand for consistent proceedings.
IV. REASONABLY NECESSARY OR APPROPRIATE STANDARD
A. The Statutory Requirement
Section 3(8) of the Act defines an occupational safety and health standard authorized by the Act as a standard whose requirements are "reasonably necessary or appropriate to provide safe or healthful employment and places of employment." 19 U.S.C. § 652(8). The reasonably necessary or appropriate clause does not merely require that OSHA standards must be rational, because Congress added the limitation that standards must be "necessary or appropriate" to the reasonableness limitation. Instead the reasonably necessary
581 F.2d at 502. The Supreme Court implicitly recognized this substantive restriction when it held that the reasonably necessary clause requires a significant risk of material harm before OSHA can promulgate regulations under Section 6(b)(5), 29 U.S.C. § 655(B)(5). Industrial Union Department, AFL-CIO v. American Petroleum Institute, ___ U.S. ___, 100 S.Ct. 2844 (1980) (plurality opinion). Because of this and other statutory limitations, the Act "does not give OSHA the unbridled discretion to adopt standards designed to create absolutely risk-free workplaces regardless of cost." American Petroleum Institute v. OSHA, 581 F.2d at 502. Accord, Industrial Union Department, AFL-CIO v. American Petroleum Institute, ___ U.S. at ___, 100 S.Ct. at 2864; Taylor Diving & Salvage Co. v. United States Department of Labor, 599 F.2d 622, 625 (5th Cir. 1979). The reasonably necessary or appropriate limitation requires that OSHA regulations must be reasonably essential or at least reasonably efficacious in reducing a significant risk of material harm.
This circuit in American Petroleum Institute held that the reasonably necessary limitation requires OSHA, before promulgating regulations, (1) to estimate the expected costs of its regulation, (2) to estimate the expected benefits of that regulation, and (3) to determine whether those benefits are reasonably related to those costs.
581 F.2d 493, 502-03. Accord, Florida Peach Growers Association, Inc. v. United States Department of Labor, 489 F.2d 120, 130 (5th Cir. 1974).
Industrial Union Department, AFL-CIO v. American Petroleum Institute, ___ U.S. at ___, 100 S.Ct. at 2877-78 (concurring opinion). Justice Powell explained that this comparison is required because the "cost of complying with a standard may be `bearable' and still not reasonably related to the benefits expected." Id. at ___, n.4, 100 S.Ct. at 2850 n.4. This mandate for estimation of costs and benefits and of a reasonable relationship between those costs and benefits is not a requirement for formal cost-benefit analysis. American Petroleum Institute v. OSHA, 581 F.2d at 503; see Aqua Slide `N' Dive Corp. v. CPSC, 569 F.2d 831, 840 (5th Cir. 1978).
The substantial evidence standard of review applies to OSHA's comparison of costs and benefits. As this court ruled in American Petroleum Institute,
581 F.2d at 504. OSHA's estimate of the anticipated cost and expected benefit of proposed regulations are factual findings that must be supported by substantial evidence in the record. Id. at 503; see, e. g., Aqua Slide `N' Dive Corp. v. CPSC, 569 F.2d at 844. The agency's determination that the cost bears a reasonable relationship to the benefit, although a policy determination to a large degree, also is subject to the substantial evidence standard. E. g., Florida Peach Growers Association, Inc. v. United States Department of Labor, 489 F.2d at 129; see Aqua Slide `N' Dive Corp. v. CPSC, 569 F.2d at 841; id. at 845 (Wisdom, J., concurring). For such a policy determination to be supported by substantial evidence, sufficient facts must be available to render a policy judgment rational; the factual premises underlying that judgment must be supported by substantial evidence; and the judgment must be rationally related to those factual premises so that the regulatory manner is reasonable. Part II(A) supra. As with other determinations, OSHA must make specific findings of these elements of reasonable necessity, see Industrial Union Department, AFL-CIO v. American Petroleum Institute, ___ U.S. at ___ n.45, 100 S.Ct. at 2863 n.45 and must include its evidence in the record.
B. OSHA's Noncompliance
OSHA conclusorily asserted that "significant worker protection will result" from the cotton ginning regulations and that "it is not possible to estimate anticipated declines in the incidence of byssinosis."
OSHA's response that it is impossible to estimate any benefits from its regulations is as inadequate here as it was in American Petroleum Institute:
581 F.2d at 504 (footnote omitted). OSHA was able to estimate the anticipated costs of the cotton ginning regulations, thus, it should be capable of estimating the expected benefits upon substantial evidence. Because of the reasonably necessary limitation, OSHA is not authorized to promulgate regulations until it has substantial evidence
Although OSHA has neither provided substantial evidence that there is a significant health risk to gin workers from cotton dust nor shown by substantial evidence that the standards promulgated for the cotton ginning industry are reasonably necessary, for the guidance of OSHA we note that there is also a feasibility requirement that must be proven if the other tests are met. Section 6(b)(5) of the Act provides that OSHA standards shall prevent "to the extent feasible," material health impairments from toxic materials or harmful physical agents. 29 U.S.C. § 655(b)(5). Whereas the reasonably necessary limitation ensures that an OSHA regulation will effectively ameliorate a significant health or safety risk without unreasonable cost, the feasibility limitation requires that the regulation must be attainable and that its achievement must be at a practical cost. The feasibility limitation includes both technological
OSHA has not adduced substantial evidence that its cotton ginning regulations are "reasonably necessary and appropriate to remedy a significant risk of material health impairment." Industrial Union Department, AFL-CIO v. American Petroleum Institute, ___ U.S. at ___, 100 S.Ct. at 2863 (1980) (plurality opinion).
VACATED and REMANDED.
OSHA acknowledges that, "[w]hile there is evidence of chronic respiratory effects in foreign gin worker populations, such evidence is yet to be gathered in this country." 43 Fed. Reg. at 27422.
The gin employee organizations assert that the former PEL applied to ginning, with the result that the challenged regulations improperly revoked the PEL. The 1971 standard applied to dust exposure in the workplace but not in agricultural employment. See Fed.Reg. 10466, 10468 (1971). Accordingly, we believe it is clear that the 1971 PEL never applied to the ginning industry, in light of the explicit subsequent exemption for agricultural pursuits and the total lack of enforcement efforts for ginning. See 29 C.F.R. § 1928(b) (1979) (present version).
We reject the suggestion that only OSHA factual determinations, not its policy decisions, in regulations are subject to the substantial evidence test. For such a rule, see American Iron & Steel Inst. v. OSHA, 577 F.2d 825, 831 (3rd Cir. 1978), cert. dismissed, ___ U.S. ___, 101 S.Ct. 38, 65 L.Ed.2d ___ (1980); but see Synthetic Organic Chemical Mfgrs. Ass'n v. Brennan, 503 F.2d 1155, 1159-60 (3rd Cir. 1974), cert. denied, 420 U.S. 973, 95 S.Ct. 1396, 43 L.Ed.2d 653 (1975). See also Society of the Plastics Indus., Inc. v. OSHA, 509 F.2d 1301, 1304 (2nd Cir.), cert. denied, 421 U.S. 992, 95 S.Ct. 1998, 44 L.Ed.2d 482 (1975). See generally 2 O.S.H.A. § 11.04[b] (MB) (1977).
Industrial Union Dep't, AFL-CIO v. Hodgson, 499 F.2d at 475-76. Accord, Synthetic Organic Chemical Mfgrs. Ass'n v. Brennan, 503 F.2d at 1157; Associated Indus. of N.Y. State, Inc. v. United States Dep't of Labor, 487 F.2d at 353. 29 U.S.C. § 655(e) requires the Secretary of Labor to state the reasons for promulgating any standard.
The cotton ginning process in Egypt is quite different from those found in the United States. In the ginnery, the cotton which has been picked in the fields, is opened and mixed by throwing it into the air. This process is called farfara, derived from an Arabic word meaning to flutter. Accordingly there are higher concentrations of cotton dust in the Egyptian gins.
Other circuits have construed the feasibility limitation of the Act to require a similar comparison of costs and benefits. RMI Co. v. Secretary of Labor, 594 F.2d 566, 571-73 (6th Cir. 1979); Turner v. Secretary of Labor, 561 F.2d 82, 85-86 (7th Cir. 1977). But see AFL-CIO v. Marshall, 617 F.2d 636, 662 (D.C. Cir. 1979).
Industrial Union Dep't, AFL-CIO v. American Petroleum Inst., ___ U.S. at ___, 100 S.Ct. at 2878 (concurring opinion) (footnote omitted). Similarly, as Judge Wisdom said in Aqua Slide,
569 F.2d at 845 (concurring opinion).
The industry petitioners have moved for remand for OSHA to consider a recent American study of California gin workers that apparently finds no excess prevalence of byssinosis or other chronic or acute pulmonary disease among cotton gin workers. OSHA has refused to consider that study and opposes the motion, for reasons that we do not comprehend. On further consideration OSHA's continued refusal to consider this latest available scientific test would violate its statutory obligation to consider the best available evidence.
The record before us does not contain sufficient evidence to demonstrate the feasibility of the medical surveillance provision proposed by OSHA.
Id. at 85. Accord, RMI Co. v. Secretary of Labor, 594 F.2d 566 (6th Cir. 1979).
OSHA has also recognized that the feasibility limitation requires a comparison of costs and benefits. E. g., Atlantic Steel Co., [1977-1978] Occup'l Saf. & Health Dec. (CCH) ¶ 22,843 (1978); Castle & Cooke Foods, [1977-1978] Occup'l Saf. & Health Dec. (CCH) ¶ 21,854 at 26,325 (1977); Great Falls Tribune Co., [1977-1978] Occup'l Saf. & Health Dec. (CCH) ¶ 21,844 at 26,303 (1977); Continental Can Co., [1976-1977] Occup'l Saf. & Health Dec. (CCH) ¶ 21,009 (1976).