On July 9, 2020, the Fifth Circuit held that the mechanical integrity requirements of the Occupational Safety and Health Administration (OSHA) process safety management (PSM) standard for highly hazardous chemicals applies to emergency stops that would only be activated after a release. The case—Sanderson Farms v. Occupational Safety and Health Review Commission (OSHRC)—centered on the application of the PSM standard’s mechanical integrity element, 29 C.F.R. § 1910.119(j), specifically (1) whether that element applies to emergency shutdown equipment, and (2) the requirements to inspect and test such equipment. Petitioner, Sanderson Farms, Inc. (Sanderson), argued that the mechanical integrity requirements did not apply to emergency stops because they only activate after a release and are therefore responding to another component’s mechanical failure.

OSHA citation of Sanderson Farms, Inc.

Sanderson operates a chicken-processing plant in Waco, Texas and uses anhydrous ammonia as a refrigerant to freeze processed chickens.  The plant is equipped with “cutout” devices and emergency stops to shut down the ammonia compressors when certain conditions fall outside of allowable limits. In 2017, OSHA conducted inspections of the plant’s compliance with OSHA’s PSM standard.

As a result, OSHA issued Sanderson a citation charging several serious violations of the PSM standard, two of which are at issue in this case.  OSHA alleged that:

  1. Sanderson did not “establish and implement written procedures to maintain the on-going mechanical integrity of the process” with respect to safety cutouts, emergency stop testing procedures, and pressure vessel level control test procedures in violation of 29 C.F.R. § 1910.119(j)(2); and
  2. Sanderson “failed to perform inspections and tests on process equipment” including three compressor cutouts and two emergency stop buttons, in violation of 29 C.F.R. § 1910.119(j)(4)(i).

Sanderson contested the citation, and an Administrative Law Judge (ALJ) affirmed the above with respect to the compressor cutouts and emergency stop buttons. See Sanderson Farms, Inc., OSHRC Docket No. 17-1246 (May 30, 2019). When the Occupational Safety and Health Review Commission denied review of the ALJ’s decision, Sanderson petitioned the Fifth Circuit for review.

Fifth Circuit review of the ALJ’s decision

Sanderson argued that the emergency shutdown equipment does not fall within the scope of the mechanical integrity element and the requirements for testing and inspection under the PSM standard do not apply because the equipment only activates after a another component has failed and caused a release. The Fifth Circuit rejected Sanderson’s arguments.

  • The emergency shutdown equipment is process equipment because it works to minimize a hazard even if it acts after a release

Sanderson argued that although the mechanical integrity program applies to “emergency shutdown systems,” the equipment at issue was “not designed to protect the mechanical integrity of the equipment by preventing a release” because it only activates after some other mechanical failure that leads to a release.

The Fifth Circuit rejected Sanderson’s arguments and stated that Sanderson misconstrued the purpose of the regulation. The overall purpose of the PSM standard is “preventing or minimizing the consequences of catastrophic releases.” 29 C.F.R. § 1910.119 (emphasis added). As a result, the court concluded that the compressor cutouts and emergency stops are subject to the requirements of the mechanical integrity program.

  • All process equipment must be inspected and tested but employers may implement that testing guided by recognized and generally accepted good engineering practices (RAGAGEP)

OSHA alleged that Sanderson failed to test compressor cutouts and emergency stops as required by the mechanical integrity standard. Under these requirements,

  1. Inspections and tests shall be performed on process equipment.
  2. Inspection and testing procedures shall follow recognized and generally accepted good engineering practices (RAGAGEP).
  3. The frequency of inspections and tests of process equipment shall be consistent with applicable manufacturers’ recommendations and good engineering practices, and more frequently if determined to be necessary by prior operating experience.

29 C.F.R. § 1910.119(j)(4).

Sanderson argued that subsection (i) did not require it to perform tests on all equipment, but only on equipment covered by specific RAGAGEP.

The court disagreed, stating that the plain language of subsection (i) set a minimum standard that process equipment must be inspected and tested; however, the following subsections give employers flexibility to implement these inspections and testing guided by RAGAGEP. Therefore, the court concluded that Sanderson was required to inspect and test all process equipment, including the cutouts and emergency stops.

The Fifth Circuit’s decision may be used by OSHA in support of their interpretation that PSM requirements apply to equipment at PSM facilities connected to or tangentially related to a covered process, such as fire water or deluge systems, that do not prevent but may minimize or mitigate a release.  Additionally, the holding could be interpreted to broaden the scope of equipment subject to PSM mechanical integrity testing and inspection requirements, even when there is no industry standard that prescribes how such inspections, testing, or maintenance should be performed.