United States of America v. Myr Group , Inc .

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-3250
U NITED S TATES OF A MERICA ,
Plaintiff-Appellant,
v.
MYR G ROUP , I NC .,
Defendant-Appellee.
____________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 02 CR 1205—Elaine E. Bucklo, Judge.
____________
A RGUED F EBRUARY 19, 2004—DECIDED M ARCH 16, 2004
____________
Before CUDAHY , P OSNER , and R OVNER , Circuit Judges.
P OSNER , Circuit Judge. The district judge dismissed an
indictment that charged MYR Group, Inc., with violating
section 17(e) of the Occupational Safety and Health Act, 29
U.S.C. § 666(e), and the government appeals. The factual
record is limited to the facts alleged in the indictment,
according to which: MYR has a wholly owned subsidiary
named L.E. Myers Company (the parties call it “LEM”),
which repairs high-voltage lines. MYR oversees the safety
programs of its subsidiaries, provides safety manuals and
other safety instructions to the employees of the subsidiaries

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2 No. 03-3250
and jointly with the subsidiaries is responsible for training
those employees with regard to safety matters, including
how to repair high-voltage lines without being electrocuted.
Nevertheless, on two separate occasions, employees of LEM
were electrocuted while repairing such lines. The indictment
charges both MYR and LEM with two counts of causing the
death of an employee by willfully violating rules promul-
gated under OSHA. 29 U.S.C. § 666(e). MYR is charged with
violating regulations requiring, in essence, that employees
be properly trained in safe working procedures. 29 C.F.R. §§
1910.269(a)(2)(i), (ii). LEM is charged with violations of
other rules as well, and is awaiting trial in the district court.
The government’s argument is a simple one. MYR is an
employer, albeit not of the two workers who were elec-
trocuted; the two workers were employees; the regulations
in question state simply that “employees shall be trained in”
safe working procedures. Therefore, the argument con-
cludes, the duties created by the regulations run to anyone’s
employees, not merely employees of the employer accused
of having violated the regulations.
In its opening brief the government tried to make some-
thing of the fact that MYR and LEM are corporate affiliates,
citing Esmark, Inc. v. NLRB, 887 F.2d 739 (7th Cir. 1989).
That, however, was a veil-piercing case, where we said that
“it is solely where a parent disregards the separate legal
personality of its subsidiary (and the subsidiary’s own de-
cisionmaking ‘paraphernalia’), and exercises direct control
over a specific transaction, that derivative liability for the
subsidiary’s unfair labor practices will be imposed under
the theory adopted by the Board in the present case.” Id. at
757. At argument the government made clear that it is not
attempting to pierce the corporate veil and by doing so
attribute the subsidiary’s acts to the parent, consistent with
the principles of corporate law.

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No. 03-3250 3
Breathtaking vistas of both criminal and civil liability (the
latter not dependent on proof that the violation was willful,
29 U.S.C. §§ 666(b), (c); S.A. Healy Co. v. OSHRC, 138 F.3d
686, 688 (7th Cir. 1998)) open before our eyes. Were LEM to
hire the Illinois Institute of Technology to train LEM’s
employees in the hazards of uninsulated high-voltage elec-
trical cables, and IIT fell down on the job and an employee
of LEM was electrocuted as a result, IIT would, if the gov-
ernment is right, be either criminally or civilly liable for
having violated OSHA. It would be so merely by virtue of
having employees, even though those were not the workers
endangered by its violation. It is true that LEM and IIT are
not affiliates, but the government’s lawyer acknowledged
that this would make no difference, for remember that it
is not arguing that MYR did anything that would justify
treating LEM as if it were really just a division of MYR
rather than a separate corporation.
The government’s argument is not limited to service pro-
viders. A firm (provided only that it had employees) that
sold a defective espresso machine to a coffee shop would be
subject to OSHA liability if the machine exploded and
scalded a waiter. OSHA would become a products-liability
statute—with criminal sanctions for its willful violation.
The government points to our decision in United States v.
Pitt-Des Moines, Inc., 168 F.3d 976, 984-85 (7th Cir. 1999),
which holds that a contractor at a construction site can be
prosecuted under section 666(e) if by violating an OSHA
regulation he causes the death of an employee of another
contractor at the same site. However, the point of this
“multi-employer” gloss (cf. Universal Construction Co. v.
OSHRC, 182 F.3d 726, 728-30 (10th Cir. 1999); R.P. Carbone
Construction Co. v. OSHRC, 166 F.3d 815, 818 (6th Cir. 1998);
Beatty Equipment Leasing, Inc. v. Secretary of Labor, 577 F.2d
534, 536-37 (9th Cir. 1978); Marshall v. Knutson Construction

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4 No. 03-3250
Co., 566 F.2d 596, 599-600 (8th Cir. 1977) (per curiam);
Brennan v. OSHRC, 513 F.2d 1032, 1037-39 (2d Cir. 1975); but
see Melerine v. Avondale Shipyards, Inc., 659 F.2d 706, 710-
11 (5th Cir. 1981)) is that since the contractor is subject to
OSHA’s regulations of safety in construction by virtue of
being engaged in the construction business, and has to
comply with those regulations in order to protect his own
workers at the site, it is sensible to think of him as assuming
the same duty to the other workers at the site who might be
injured or killed if he violated the regulations. From a safety
standpoint, it is a joint-employment case. A crane operator
might be killed because the contractor responsible for
leveling the ground at the worksite violated a regulation
requiring that the surface beneath the crane be planed
smooth, and a bulldozer driver might be killed when a
crane fell on him because the crane contractor had failed to
comply with regulations governing the safe operation of
cranes. Each employer at the worksite controls a part of the
dangerous activities occurring at the site and is the logical
person to be made responsible for protecting everyone at
the site from the dangers that are within his power to
control. See Universal Construction Co. v. OSHRC, supra, 182
F.3d at 730; Brennan v. OSHRC, supra, 513 F.2d at 1038. This
case is not like that. No employee of MYR was engaged in
repairing high-voltage lines, any more than a professor of
electrical engineering at IIT who trained employees in the
hazards of electricity would be present at the worksite.
The government’s attempt to stretch the statute by filing
a criminal indictment is especially questionable. Surely the
proper way to proceed, if the government really thinks the
statute can be stretched this far, would be to amend the
regulations to bring the third-party case under them.
And who by the way is “the government” in this case? No
representative of the Occupational Safety and Health
Administration, or for that matter anyone outside the office

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No. 03-3250 5
of the U.S. Attorney for this district, signed the govern-
ment’s brief. The Solicitor General of the United States had
to approve the appeal, 28 C.F.R. § 0.20(b); but we have
not even been told whether OSHA approves, or for that
matter knows of, the extension of liability urged by the U.S.
Attorney!
The dismissal of the indictment against the MYR Group is
A FFIRMED .
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-16-04

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