In the wake of a horrific accident where two teenage boys were killed in a grain elevator last summer, the Occupational Safety and Health Administration has won a key battle against an insurance company in investigating what happened.
The two teens, who were 14 and 19, were working inside a grain elevator in Mount Carroll, Ill. owned by Haasbach LLC. At the time of the accident, they were “walking down the corn” to make it flow while machinery used for evacuating the grain was running.
The boys became trapped, and were buried under 30 feet of corn. Another worker, who was 20, was injured but survived.
OSHA began investigating the incident immediately. Haasbach was issued 25 citations and fined $555,000, which it now contests. As part of the investigation, OSHA subpoenaed the company’s workers compensation insurer, Grinnell Mutual Reinsurance Co., seeking documents and testimony regarding working conditions at Haasbach.
Grinnell refused to produce any documents or information, and OSHA sued the insurer in the Northern District of Illinois in January to force it to comply.
Grinnell, represented by Raymond Melton of Smith Amundsen in Rockford, Ill, offered a series of reasons why it should not turn over the information.
Grinnell argued that enforcing the subpoena would cause a “chilling effect” by discouraging businesses from allowing insurers to conduct safety inspections if the material could later be used against them in litigation or OSHA enforcement proceedings.
The court didn’t buy it. “Assuming for the sake of argument that this is true, correcting that problem is a policy decision to be made somewhere other than in the federal courts,” wrote Judge Philip Reinhard.
Of perhaps more immediate concern, Haasbach faces a suit in Illinois state court brought by the family of the 14 year-old victim.
Grinnell said all its communications with Haasbach are privileged in the state case, and claimed it would suffer “irreparable harm” if it gave the information to OSHA and it then somehow became public or was transmitted to the plaintiffs.
The court was not convinced. “Why this would happen or why nothing can be done to prevent it short of refusing to give OSHA the information in the first place is not explained.”
Grinnell also argued that Haasbach is not within OSHA’s jurisdiction. Haasbach counsel John Doak of Katz, Huntoon & Fieweger in Moline, Ill. describes the company in court papers as a farming operation with 10 or fewer employees.
Further, Grinnell said the subpeona was moot because OSHA already issued a citation. Grinnell said it should be allowed to postpone turning over any information until Haasbach has exhausted all of its administrative remedies related to the citation and penalty.
“The subject workplace double fatality certainly ‘superficially appears’ to be within OSHA’s jurisdiction,” wrote the judge. “OSHA, therefore, may investigate to determine whether it has jurisdiction over Haasbach. With the ability to investigate, comes the authority to require the production of evidence and to obtain court enforcement of subpoenas seeking such evidence.”
He ordered the company to produce the evidence by May 27.
OSHA was represented by senior trial attorney Denise Hockley-Cann, counsel for safety and health Allen Bean, regional solicitor Joan Gestrin, and M. Patricia Smith, solicitor of labor.
“The court affirmed OSHA’s authority to obtain relevant information from an employer’s workers’ compensation insurance company,” said OSHA assistant secretary David Michaels in a news release. “This is not surprising legally, but it does illustrate that workers’ compensation and OSHA are not separate worlds divorced from each other.”