Defining What to Regulate: Silica & the Problem of Regulatory Categorization Andrew P. Morriss & Susan E. Dudley Defining What to Regulate: Silica & the Problem of Regulatory Categorization

This article examines the history of human exposure to silica, the second most common element on earth, to explore the problem of categorizing substances for regulatory purposes and the role interest groups play in developing policy. The regulatory history of silica teaches three important lessons: First, the most compelling account of the cycle of action and inaction on the part of regulators is the one based on interest groups. Second, knowledge about hazards is endogenous – it arises in response to outside events, to regulations, and to interest groups. Accepting particular states of knowledge as definitive is thus a mistake, as is failing to consider the incentives for knowledge production created by regulatory measures. Third, the rise of the trial bar as an interest group means that the problems of silica exposure and similar occupational hazards cannot simply be left to the legal system to resolve through individual tort actions. We suggest that by understanding market forces, regulators can harness the energy of interest groups to create better solutions to addressing the problems of silica exposure, as well as other workplace health and safety issues. Defining What to Regulate: Silica & the Problem of Regulatory Categorization Andrew P. Morriss & Susan E. Dudley Defining What to Regulate: Silica & the Problem of Regulatory Categorization Andrew P. Morriss & Susan E. Dudley I. The Problem of Categorization................................................................................... 3 A. Characterization ...................................................................................................... 5 B. Silica Categorization and Health Effects ................................................................ 7 C. Incentives for Developing Knowledge ................................................................. 10 1. Market incentives & Market Failures ............................................................... 10 2. Incentives for Categorization & Knowledge .................................................... 11 3. Government Failures & the Role of Interest Groups ........................................ 13 II. An Interest Group-Based Account of Silica Regulation........................................... 15 A. The Early Awareness of the Health Risks of Silica.............................................. 15 B. From the Industrial Revolution to the New Deal.................................................. 17 1. Industrialization’s impacts ................................................................................ 17 2. The reaction of interest groups ......................................................................... 21 3. Workers’ compensation .................................................................................... 24 4. The Silicosis Crisis of the 1930s....................................................................... 26 5. The New Deal ................................................................................................... 29 6. Explaining the ‘moderate’ outcome.................................................................. 33 C. World War II to OSHA......................................................................................... 36 D. Regulation Under OSHA ...................................................................................... 43 1. OSHA and Incentives ....................................................................................... 43 2. OSHA and Interest Groups ............................................................................... 45 3. The Silica Standards ......................................................................................... 48 4. Institutional biases in regulation ....................................................................... 50 E. Explaining Regulations......................................................................................... 52 III. Regulation by Litigation ....................................................................................... 59 IV. What To Do?......................................................................................................... 68 Firms and doctors involved in silicosis suits are facing grand jury investigations in New York and a federal judge in Texas has suggested fraud may be involved in some of the tens of thousands of silicosis claims pending in her court, charging that one firm had attempted “to inflate the number of Plaintiffs and claims in order to overwhelm the * Galen J. Roush Professor of Business Law & Regulation, Case School of Law, Cleveland, Ohio & Senior Fellow, Property & Environment Research Center, Bozeman, Montana. A.B. 1981, Princeton University; J.D., M.Pub.Aff. 1984, The University of Texas at Austin; Ph.D. (Economics) 1994, Massachusetts Institute of Technology. The authors thank Chaya Compton and Olivia Odell for research assistance; the attendees at the Sorptive Minerals Institute Spring Forum 2005 for comments on an early version of this paper; and Case School of Law Dean Gerald Korngold for research funding. ** Director, Regulatory Studies Program, Mercatus Center at George Mason University and Adjunct Professor, George Mason University School of Law. B.S. 1977, University of Massachusetts; S.M.M. 1981, Sloan School of Management, Massachusetts Institute of Technology. Morriss & Dudley Page 2 Defendants and the judicial system.” At the same time, silica dust regulation is on the agenda of regulatory agencies around the world. The Occupational Safety and Health Administration (“OSHA”) in the United States, as well as regulators in other countries, are considering issuing new standards for silica dust, spurred on by the International Labor Organization and World Health Organization’s Global Campaign for the Elimination of Silicosis and the International Agency for Research on Cancer’s (IARC) 1997 classification of silica as a human carcinogen. (In addition to cancer, the regulators continue to have their traditional concerns with respiratory problems from dust inhalation, silicosis in the case of silica dusts.) Some action by OSHA on silica in the near future is virtually certain because the current standard, derived from a 1962 consensus standard originally created by the American Conference of Governmental Industrial Hygienists (ACGIH), “is based on particle counting technology, which is considered obsolete” and because the IARC conclusion has made clear that the existing standard, which did not consider the cancer risk, is no longer adequate. As a result, silica regulation is a “high priority” initiative at OSHA, one of only four such listed in OSHA’s December 2004 unified agenda. Occupational health and environmental regulators face challenges in developing regulations that adequately address the complexity of biological, mineralogical, chemical, physical, and other characteristics of substances like silica. Too much detail induces paralysis; too little produces regulations that fail to focus on the actual harmful substances and so imposes costs without corresponding benefits. As the In Re Silica Products Liability Litigation opinion demonstrates, crucial questions also arise as to the role of the tort system in regulating hazardous products. 1 The Silicosis Sheriff, W.S.J. (July 14, 2005) at A10; In re Silica Products Liability Litigation, 2005 WL 1593936 (S.D. Tex. June 30, 2005) at *95. 2 See Tee Lamont Guidotti, A Small Committee with a Big Agenda: The ILO/WHO Global Campaign for the Elimination of Silicosis and the ICOH Scientific Committee on Respiratory Disorders, ICOH QUARTERLY NEWSLETTER (August 1999) http://envepi.med.uoehu.ac.jp/icoh/ICOH%20QuarterlyNesletter.htm (last visited July 15, 2005) (describing campaign). 3 INTERNATIONAL AGENCY FOR RESEARCH ON CANCER, SILICA (IARC monograph, vol. 68) at 41 (1997) http://monographs.iarc.fr/htdocs/monographs/vol68/silica.htmIARC Vol. 68 (1997) (last visited August 7, 2005) (hereafter “IARC, SILICA”). 4 William G.B. Graham, Quartz and Silicosis, in OCCUPATIONAL LUNG DISEASE: AN INTERNATIONAL PERSPECTIVE 191, 191 (Daniel E. Banks & John E. Parker, eds., 1998) (“Silicosis is the term used to designate the occupational lung disease caused by inhaling crystalline silica (alpha-quartz or SiO2) or its polymorphs, tridymite or cristobalite.”). See also William Jones, Jane Y.C. Ma, Vincent Castranova, & Joseph K.H. Ma, Dust Particles: Occupational Considerations, HANDBOOK OF HAZARDOUS MATERIALS 213, 213 (Morton Cone, ed.) (1993) (“Pneumoconiosis is the reaction of the lungs to inspired dust.”). “Silicosis is a fibrotic disease produced by inhalation of silica-containing dusts. High exposures to crystalline silica can result in acute silicosis. Acute silicosis develops rapidly (1-3 yr) and is characterized by labored breathing (dyspnea), fatigue, cough, and weight loss.” Id. at 215. See also Paul Stark, Francine Jacobson, and Kitt Shaffer, Standard Imaging in Silicosis and Coal Worker’s Pneumoconiosis, 30 THE RADIOLOGICAL CLINICS OF NORTH AMERICA: OCCUPATIONAL LUNG DISEASE 1147, 1147-48 (1992) (describing acute, chronic, and accelerated forms of silica dust exposure). 5 Department of Labor, UNIFIED AGENDA OF FEDERAL REGULATORY AND DEREGULATORY ACTIONS, OSHA (Spring 2005) available at http://ciir.cs.umass.edu/ua/Spring2005/agenda/DEPARTMENT_OF_LABOR_(DOL).html. 6 Department of Labor, REGULATORY PLAN, OSHA, 69 FR 72781 (December 13, 2004). Defining What To Regulate Page 3 In this article we examine the current and future regulation of silica and the issues involved in developing new standards. In section I, we describe the problem of categorizing the subject of regulation. In section II, we use the experience with silica and public choice theory to focus on the pressures agencies face and the roles interest groups play in shaping occupational safety and health regulations. This regulatory history makes silica regulation an ideal case study for examining the general problem of categorizing regulated substances. In section III, the history of asbestos litigation illustrates the undesirable consequences of relying on the tort system to drive regulation. In section IV, we recap the problems facing regulation of silica and other compounds where characterization is difficult, and discuss possible options for developing sound policy. I. The Problem of Categorization Silica is the common name for minerals containing a combination of silicon and oxygen such as silicon dioxide (SiO2). As silica is one of the most common substances in the earth, it might appear that defining silica for regulatory purposes would be trivial. And, of course, regulators could define silica for regulatory purposes as the mineral SiO2. Yet such a definition would be grossly over-inclusive, potentially subjecting virtually every human activity to regulation. Some more sophisticated definition of silica is thus necessary for effective regulatory action. Silica comes in multiple forms that have varying mineralogical characteristics. First, silica may be “free” (only SiO2 is present), or it may be combined chemically with another atom or molecule. This is important, because only free silica is currently considered to have human health effects. Further, free silica can be distinguished into amorphous and crystalline silica. The former is “essentially benign,” while at least some 7 “All soils contain at least trace amounts of crystalline silica in the form of quartz.” U.S. DEPARTMENT OF THE INTERIOR, BRANCH OF INDUSTRIAL MINERALS, CRYSTALLINE SILICA PRIMER (1992) at 12. The average quartz content of igneous rocks is 12%. Id. at 13. “Because of its abundance in the Earth, silica, in both its crystalline and noncrystalline states, is present in nearly all mining operations.” Id. at 15. In addition, “quartz is ... the major component of sand and of dust in the air.” Id. at 13. 8 Graham, supra note 4, at 191 (noting that dusty non-occupational exposures, “as in villages in the high Himalayas or in desert communities” also show abnormal chest radiographs and other indications of silica exposure and that even workers in very low exposure jobs also show abnormalities in cells and proteins; “Whether these findings represent the presence of a disease process (alveolitis) is almost a subject for philosophical discussion, akin to asking whether tanning of the skin is a pathologic process or a normal response to an imposed stimulus. This analogy is not too far-fetched, since exposure to both quartz and sunlight have been constant companions in the evolution of biologic systems.”). See also Mei-lin Wang & Daniel E. Banks, Airways Obstruction and Occupational Inorganic Dust Exposure, in OCCUPATIONAL LUNG DISEASE: AN INTERNATIONAL PERSPECTIVE 69, 69 (Daniel E. Banks & John E. Parker, eds., 1998) (“Chronic obstructive pulmonary disease” (“COPD”) is a “physiologic parameter rather than an etiologically defined disease” and so “the cause explaining these abnormal pulmonary parameters in any single individual cannot be made without a clinical evaluation.”). 9 INDUSTRIAL ACCIDENT PREVENTION ASSOCIATION, SILICA IN THE WORKPLACE (2003) at 2 (hereafter “IAPA, WORKPLACE”) (available at http://www.iapa.ca/pdf/Silica-in-the-workplace-FEB03.pdf). 10 ID. at 2. 11 There are two states of silica: amorphous and crystalline, which are “quite different physically.” PRIMER, supra note 7, at 5. “Only the crystalline structures are highly toxic and fibrogenic.” Marlene Absher, Silica and Lung Inflammation, in HANDBOOK OF HAZARDOUS MATERIALS 661, 662 (Morton Cone, ed.) (1993). Morriss & Dudley Page 4 forms of the latter are potentially toxic when inhaled or otherwise ingested. As we will discuss in greater detail below, however, this simple binary characterization is still too crude to capture the distinctions necessary to differentiate the risks presented by different forms of silica. The difficulties in adequately characterizing even what appears to be a comparatively straightforward, common substance like silica, which has a long history of medical study, are magnified when the issue is a substance about which little research has been done. Unless regulators are willing to adopt a version of the precautionary principle that allows them to prevent all innovation until a substance is proven safe, and so cut off huge areas of economic activity, regulators will have to operate with a great deal of uncertainty. Regulators thus need a principled approach to determining how much of a distinction to draw in characterizing the subject of a regulation. Although there are seven forms (polymorphs) of crystalline silica, 4 are “extremely rare.” The three major forms are quartz, cristobalite, and tridymite. PRIMER, supra note 7, at 11. 12 Graham, supra note 4, at 191 (“Amorphous silica, which lacks a crystalline structure, is essentially benign. Crystalline silica in any form is potentially toxic when absorbed or inhaled in sufficient quantities.”). 13 PRIMER, supra note 7, at 32 (“The crystallinity of silica from different deposits, even from slightly different locations within the same deposits is not necessarily the same. This raises two problems. First, a single standard (that is, the reference material to which the silica in the sample is compared) may not be appropriate. Using a standard that matches the particle size and crystallinity of the silica in the sample is essential for an accurate analysis. Second, obtaining a representative sample, when the sample size is so small and the deposit so large, is nearly impossible.”). See also John E. Craighead, Inorganic Mineral Particulates in the Lung, HANDBOOK OF HAZARDOUS MATERIALS 399, 405 (Morton Cone, ed.) (1993) (“the SiO2 cristobalite is far more toxic and pathogenic than the mineralogically similar alpha quartz. . . . Since different dusts cause disease by differing pathogenetic mechanisms, the issues are exceptionally complex.”) and Absher, supra note 11, at 663 (“Factors which determine whether an exposed individual develops pulmonary pathology include the dose and duration of exposure, the nature of the dust (quartz, cristobalite, or a variety of silicates and silica-bearing minerals) and the content of crystalline silica in the exposure material.”). 14 See Elena Fagotto & Archon Fung, Improving Workplace Hazard Communication, 19 ISSUES IN SCIENCE AND TECHNOLOGY 63, 64 (Winter 2002) (available at http://www.issues.org/issues/19.2/fagotto.htm (last visited May 29, 2005) (noting OSHA estimate that employees are exposed to 650,000 hazardous products in the workplace and problems with getting sufficient information to evaluate those); GENERAL ACCOUNTING OFFICE, DELAYS IN SETTING WORKPLACE STANDARDS FOR CANCER-CAUSING AND OTHER DANGEROUS SUBSTANCES (May 10, 1977) [HRD-77-71] at 9 (“Several sources say that about 2 million chemical compounds exist today; information on toxicity may be available for 100,000; about 13,000 known toxic chemicals are commonly used; and about 500 new substances are introduced each year.”). 15 The literature on the precautionary principle is vast but generally does not assess its potential perils. For notable exceptions to this see INDUR M. GOKLANY, THE PRECAUTIONARY PRINCIPLE: A CRITICAL APPRAISAL OF ENVIRONMENT RISK ASSESSMENT (2001) (critical assessment of precautionary principle as having too great a reach); Jonathan H. Adler, Biosafe or Biosorry? 12 GEO. INT’L ENVT’L L. REV. 761 (2000) (arguing that technological advance is important to biodiversity protection); Frank B. Cross, Paradoxical Perils of the Precautionary Principle, 53 WASH. & LEE L. REV. 851 (1996) (arguing that countervailing risks from well-intended regulatory programs produce harms as great or greater than those the regulations are intended to prevent in many instances). 16 Uncertainty is discussed most extensively in connection with environmental, rather than workplace health and safety, issues, but the concerns are similar. For concise summaries of issues caused by scientific uncertainty, see Daniel A. Farber, Probabilities Behaving Badly: Complexity Theory and Environmental Uncertainty, 37 U.C. DAVIS L. REV. 145 (2003); J.B. Ruhl, Thinking of Environmental Law as a Complex Defining What To Regulate Page 5