SECRETARY OF LABOR,

Complainant,

v.

SEALTITE CORPORATION,

Respondent.

OSHRC Docket No. 88-1431

DECISION

Before: FOULKE, Chairman, and WISEMAN, Commissioner.

BY THE COMMISSION:

Sealtite Corporation entered into a contract with the Veterans Administration ("VA") to remove asbestos insulation from a VA facility in Bonham, Texas. While Sealtite was performing this work, a compliance officer of the Occupational Safety and Health Administration ("OSHA") inspected the worksite. As a result of that inspection, the Secretary of Labor issued three citations, alleging willful, serious, and other-than-serious violations of OSHA's asbestos exposure standard, 29 C.F.R. 1926.58(a). The Secretary proposed penalties totaling $47,500 for these violations.

Sealtite timely notified the Secretary of its intent to contest the citations, and the Secretary forwarded that notice of contest to this Commission. The case was docketed and assigned to one of the Review Commission's administrative law judges ("ALJ") for an adjudicative hearing. After Sealtite had failed to cooperate in discovery proceedings or to file documents either required by our Rules of Procedure or ordered by the Review Commission's ALJ, the judge found that Sealtite's pattern of failure to comply amounted to contumacious conduct, held Sealtite in default, and entered an order vacating the notice of contests. That order was directed for review pursuant to section 12 (j) of the Occupational Safety & Health Act of 1970 ("the Act"), 29 U.S.C. 661 (j). After extensive review of the record, we hold that the judge did not err in finding that Sealtite's conduct was contumacious and that the judge did not abuse his discretion in imposing the sanction of dismissal.

I.

When Sealtite's notice of contest was docketed by the Commission, Sealtite was sent a copy of the Commission's Rules of Procedure. In addition, Sealtite was sent a guide to the Review Commission's procedures, a booklet which informed the company of its duties in proceedings before the Commission.

The Secretary filed a complaint within thirty days of forwarding Sealtite's notice of contest to this Commission as required by Rule 34 (a) of our Rules of Procedure, 29 C. F. R. 2200.34 (a). Ten days later, the Secretary filed an amended complaint, as was permitted by Rule 34 (f), since no answer had yet. been filed. 29 C.F.R. 2200.34 (f) . Under the Review Commission's Rules, Sealtite was required to file its answer within thirty days of the date the amended complaint was filed. 29 C.F.R. 2200.34 (d)(1) .

When SeaItite failed to respond within the allotted time, Secretary filed a motion to have Sealtite held in default. In response to that motion, Sealtite wrote the Commission complaining that OSHA had not responded to its request for information made under the Freedom of Information Act ("FOIA"), 5 U.S.C. 552, and stating, "[u]ntil we receive this detailed information of any alleged violation of regulations, it is impossible for us to answer your complaint." Sealtite alleged that the inspection was instigated by a former employee who was a convicted criminal, who stole tools from the company.

When Sealtite still had not filed an answer within another thirty days, the judge entered an order directing Sealtite to file an answer forthwith or to show cause within fourteen days why it should not be found in default. Five days later, Sealtite filed a "Demur to Complaint," in which it alleged that: (1) the the work had been performed in strict accordance with the Veterans Administration contract; (2) OSHA had not responded to its FOIA request; (3) the company could not answer the allegations in the complaint because they were not specific as to how the asbestos air sampling tests were conducted; and (4) the company could not answer the complaint without knowing the dates and times of the testing and the names of the individuals present.

Upon receiving Sealtite's "Demur," the judge entered an order in which he explained to Sealtite that demurrers are not pleadings recognized by the Federal Rules of Civil Procedure, which apply to proceedings before the Review Commission unless the Commission has adopted a different rule. Section 12(g) of the Act, 29 U.S.C. 661(g). Because Sealtite had requested that the complaint be clarified, the judge treated Sealtite's document as a motion for a more definite statement under Rule 21(e) of the Federal Rules. In his order ruling on that motion, the judge further discussed for Sealtite's benefit the fact that the Review Commission has no jurisdiction over Sealtite's FOIA request to OSHA. The judge also observed that the 16-page amended complaint was very detailed and that Sealtite had been provided a copy of the compliance officer's inspection worksheet. In addition, the judge noted that the only information requested by Sealtite concerned how the air sampling was performed, who was present, and what kind of laboratory testing was done. After observing that Sealtite did not need the information to admit or deny the allegations contained in the complaint, the judge informed Sealtite that the information sought could be obtained through discovery if Sealtite needed it to prepare for the hearing. The judge therefore denied Sealtite's request for a more definite statement and ordered Sealtite to file an answer within ten days.

A week later, Sealtite filed its answer to the Secretary's complaint. Although the answer addressed the allegations in the Secretary's complaint, it also contained assertions about wage payment issues that are not involved in this proceeding, and it further requested the release of payments withheld under its contract with the VA, which is outside the jurisdiction of this Commission.

Once the issues were framed by the complaint and the answer, the administrative law judge [[1/]] set the case for hearing and entered a prehearing order. That order directed each party to file, three weeks before the date set for the hearing, a statement of all legal and factual issues in dispute, all stipulations, a list of witnesses and documentary exhibits, and information about any expert witnesses to be called.

The Secretary then began to conduct prehearing discovery, serving on Sealtite a request for admissions that requested Sealtite to admit or deny the authenticity of numerous documents pertaining to Sealtite's performance of the work at the VA facility, including the contract between Sealtite and the Veterans Administration, copies of payroll forms Sealtite submitted to the VA, and copies of three stop-work orders issued to Sealtite by the VA's contracting officer because of Sealtite's failure to comply with safety and health requirements.[[2/]]

At the same time the request for admissions was served, the Secretary also served on Sealtite a request for the production of documents requiring Sealtite to provide the Secretary with a copy of a specific document within thirty-five days. When Sealtite failed to provide the Secretary with the requested document within the time specified or to make a timely objection to its production, the Secretary filed a motion to compel the production document. The judge then entered an order requiring Sealtite to produce the requested document by a specified date or to show cause why the judge should not impose one or more of the sanctions specified in Rule 52(e) [[3/]] of the Commission's Rules of Procedure, 29 C.F.R. 2200.52(e). For Sealtite's benefit, the judge included another copy of the Commission's Rules of Procedure with his order.

The Secretary filed with the judge the prehearing statement required by the judge's order and served a copy on Sealtite. When Sealtite failed to respond by the date set by the judge, the Secretary filed a motion to have Sealtite found in default. Before the judge acted on this motion, the Secretary notified the judge that Sealtite had also failed to comply with the judge's order because it had not produced the document that the Secretary had requested.

At this point, the judge entered his order finding Sealtite in default under Commission Rules 41 and 52, 29 C.F.R. 2200.41 & 2200.52. [[4/]] In his order, the judge recited Sealtite's failures to comply with the Commission's Rules and with his orders. The judge found that Sealtite's pattern of failure to comply constituted contumacious conduct. He therefore imposed the ultimate sanction, dismissal. The ALJ's order of dismissal is presently before us.

In the two weeks after the judge entered his order of dismissal, Sealtite filed a number of documents with the judge, including a "Stipulation of Fact" that stated that the judge's decision was a miscarriage of justice, that it was based on hearsay, and that it was a violation of due process. In addition, Sealtite sent the judge a letter in which it stated that, if certain former employees "attempt to create further problems, we will prosecute them under the felony laws for their outrageous acts." The judge treated those filings as a notion to set aside the default. He reviewed the record in the case and concluded that Sealtite had submitted nothing that would excuse its failure to comply with his orders.

ll.

This case again presents the difficult question of what standards will be required of employers who undertake to participate in our proceedings pro se, or not represented by an attorney.

Congress appears to have intended that Commission proceedings be conducted in a manner similar to those in a federal court, with the appropriate rules, since it specifically provided that, unless the Commission has adopted a different rule, the Federal Rules of Civil Procedure shall apply to Commission proceedings. Section 12(g) of the Act, 29 U.S.C. 661(g). Congress also mandated that proceedings before the Commission shall be heard by in administrative law judge. Sections 12(j) and 12(e) of the Act, 29 U.S.C. 661(j) & (e).

However, many businesses, like Sealtite, elect to appear before the Commission represented by a company official who is not trained in the law or familiar with legal procedure and evidence. The Commission has recognized the difficulties faced by the non-lawyer participating in our proceedings.[[5/]] E.g., Choice Electric Corp., 14 BNA OSHC 1899, 1901, 1987-90 CCH OSHD 29,141 (No. 88-1393, 1990); Monroe & Sons, Inc., 4 BNA OSHC 2016, 2017, 1976-77 CCH OSHD 21,470 (No. 6031, 1977). Moreover, the Commission has attempted to make allowances for pro se employers who have failed, through ignorance of our rules and of legal procedures, to comply with its procedural requirements. See, e.g., Action Group Inc., 14 BNA OSHC 1934, 1987-90 CCH OSHD 29,166 (No. 88-2058, 1990); Wes Jones & Son, Inc. 13 BNA OSHC 1277, 1986-87 CCH OSHD 27,924 (No. 86-1095, 1987); Browar Wood Prod. Co., 7 BNA OSHC 1165, 1979 CCH OSHD 23,326 (No 78-2230, 1979).

The Commission has held that the ultimate sanction of dismissal should be imposed on a party only when that party has been guilty of contumacious conduct or the other party has been prejudiced in preparing or presenting its case by the conduct of the noncomplying party. Noranda Aluminum, Inc., 9 BNA OSHC 1187, 1189, 1981 CCH OSHD 25,086, p.30,988 (No. 79-1059, 1980).

In this case, the judge found that Sealtite's conduct was contumacious, that the company was deliberately trying to put off or avoid the consequences of its failure to protect its employees from exposure to asbestos. The issue before us is whether his finding is correct.

In his decision, the judge held that Sealtite consistently failed to file documents required by the Commission's rules and to comply with his orders until show-cause orders were issued. The judge concluded that, given the pattern of failure to comply until threatened with default, Sealtite had deliberately ignored its obligations as a litigant in this proceeding.

In reviewing an ALJ's decision, we determine whether a preponderance of the evidence in the record supports the judge's finding. E.g., Ultimate Distribution Systems, Inc., 10 BNA OSHC a568, 1570, 1982 CCH OSHD 26,011, p. 32,653 (No. 79-1269, 1982),citing Universal Camera v. NLRB, 34 U.S. 474 (1951). Having examined the record, we find that a preponderance of the evidence does support the judge's decision. It is apparent that Sealtite's representative either failed to read the rules and the judge's orders or that he ignored then, perhaps in the hope of delaying the proceedings indefinitely.

The documents filed by Sealtite were drafted as though Sealtite did not understand the difference between OSHA and the Review Commission. In view of the similarity in the names of the two agencies, we could have understood Sealtite's confusion if it were not for the fact that the judge and the Commission's Executive Secretary had informed Sealtite that the two were completely separate and distinct agencies and that the Commission has no jurisdiction over Sealtite's Freedom of Information Act request to OSHA. It is readily apparent that Sealtite either failed to read those communications or was deliberately attempting to confuse the issue. Whichever the case, Sealtite's conduct passed the point at which we could excuse its actions.

If we believed that Sealtite's failures in this case were result of simple misunderstanding or confusion, we would make every effort to give the company its day in court. In addition, we would be more tolerant of Sealtite's omissions if we believed that the company had made a genuine effort to comply with our procedures. Review Commission hearings are adversary proceedings, like trials, and the judge and opposing counsel cannot be expected to give the opposing party assistance. However, our experience is that our judges are generally willing to provide procedural information to a Pro se employer in order to allow the merits of the case to be heard. Indeed, the orders in this case indicate that our administrative law judges made every effort to explain the Commission's jurisdiction and procedures to Sealtite. Despite their efforts, the record shows that Sealtite either failed to read those orders or chose to ignore them. We can only conclude that Sealtite deliberately disregarded the attempts of the judges to inform Sealtite of its obligations under the Commission's Rules and procedures governing the adjudication of this case. Furthermore, Sealtite made no attempt to address the safety and health issues that are the subject of this case. Instead, it alleged wrongdoing by the Veterans Administration, Sealtite's own employees, the Secretary, and the administrative law judge.

We do not necessarily expect a non-lawyer like Sealtite's president to understand fully what issues and arguments are relevant in Commission proceedings or to be familiar with legal precedent, such as the Supreme Court's decisions holding that the Freedom of Information Act was not intended by Congress to be either a substitute or a supplement for discovery in legal proceedings. E.g., N.L.R.B. v. Robbins Tire & Rubber Co., 437 U.S. 214, 242, 98 S. Ct. 2311, 2327 (1978); U.S. v. Weber Aircraft Corp., 465 U.S. 792, 801, 104 S.Ct. 1488, 1494 (1984). However, we do expect that, after both an administrative law judge and the Executive Secretary of the Commission have informed a party that this agency has no jurisdiction over a FOIA request made to the Department of Labor, that information will be accepted and that, once a party has been informed of the limitations on the issues and on the Commission's jurisdiction, it will cease making demands that the Commission answer its FOIA request.

The judge's orders fully informed Sealtite that it was required to participate in the prehearing exchanges of information and that it must produce the document requested by the Secretary or show cause why the judge should not impose sanctions for its failure to do so. Sealtite ignored both orders. Sealtite never filed the required documents, and it failed to ask the judge what it had to do to comply. There is a consistent pattern of failure to respond, of ignoring the issues of this case, and of arguing issues that are not before the Review Commission or within its jurisdiction.[[6/]] We find that the record amply supports the judge's conclusion that Sealtite engaged in contumacious conduct.

III.

Having determined that the judge did not err in finding that Sealtite's behavior was contumacious, we next consider whether the sanction imposed by the judge was excessive. The test we apply in making this determination is whether the judge abused his discretion.[[7/]] National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 642, 96 S.Ct. 2778, 2780 (1976). The judge has very broad discretion in imposing sanctions for noncompliance with his, orders; he will not be reversed if he stays within that discretion. Heat & Control, Inc. v. Hester Indus., 785 F.2d 1017, 1022 (Fed. Cir. 1986).

A review of the documents submitted by Sealtite on review, as well as those before the judge at the time he entered his order, persuades us that a lesser sanction likely would not have had the effect of focusing Sealtite's attention on the issues of this case. For example, Sealtite has persisted on review in attempting to litigate its disputes over the rate of wages paid to its employees, despite having been informed that this agency has no jurisdiction to hear them. Nothing in Sealtite's submissions to the judge or to the Commission suggests that, if the judge had imposed a lesser sanction, Sealtite would have altered its pattern of conduct and confined itself to the issues raised by the Secretary's amended complaint. Under these circumstances, we will not find that the judge abused his discretion by dismissing Sealtite's notice of contest.

In opposing the ALJ's dismissal of its notice of contest, Sealtite argues that the asbestos removal work was completed to the satisfaction of the Veterans Administration and has been accepted by that agency. However, the fact that the VA accepted the work is irrelevant to the issues raised by the OSHA citation alleging that Sealtite's employees were exposed to asbestos in violation of several provisions of 29 C.F.R. 1926.58 or the issues presented to the Commission in its review of the judge's rulings.

We recognize that, because Sealtite is liable for penalties of $47,500 without further opportunity to contest the existence or degree of the alleged violations or the appropriateness of the penalties assessed, our decision may be perceived as producing a harsh result. We therefore emphasize that Sealtite has been afforded ample opportunity to pursue these issues, which it forfeited by its failure to obey the rules of the Commission and the orders of the judge. We are not denying Sealtite due process of law; we are simply denying Sealtite one more opportunity because it failed to take proper advantage of the other opportunities afforded it. Sealtite designated its president to act as its representative in these proceedings, and the company must be bound by his actions and omissions.

IV.

For the reasons stated, we find that the judge did not err in finding Sealtite's conduct contumacious and that he did not abuse his discretion in imposing the sanction of dismissal. Accordingly, we affirm the decision of the administrative law judge. The Secretary's citations and the proposed penalties are affirmed.

Dated: June 28. 1991

Edwin G. Foulke, Jr.
Chairman

Donald G. Wiseman
Commissioner


SECRETARY OF LABOR,

Complainant,

v.

SEALTITE CORPORATION,

Respondent.

OSHRC DOCKET NO. 88-1431

ORDER

On August 26, 1988, this case was assigned to Judge Dee C. Blythe. Prior to that time, the Secretary had filed both a complaint and a first amended complaint. On September 16, 1988, the Secretary filed a motion to declare the Respondent in default, pursuant to Commission Rule 41(a)(2), due to its failure to file an answer. On October 27, 1988, Judge Blythe ordered the Respondent to file an answer forthwith or to show cause within 14 days why its notice of contest should not be vacated and judgment entered against it. Thereafter, on November 1, 1988, the Respondent filed a "Demur (sic) to Complaint." In an order issued on November 30, 1988, Judge Blythe observed that the Respondent had not filed an answer or otherwise responded to the order to show cause. However, the demurrer was treated as a motion for a more definite statement. As such, it was denied and the Respondent was given one more opportunity to file an answer. Respondent then filed an answer within the allotted time.

Thereafter, on January 6, 1989, the parties were notified at this case had been reassigned to the undersigned administrative law judge.[[1]] On February 15, 1989, the parties were given notice that a hearing would commence at 9:00 a.m. on May 1, 1989, in Dallas, Texas. On the same date in February, a prehearing order was issued which required, among other things, that both parties file a response thereto no later than April 10, 1989.

On February 27, 1989, the Secretary served the Respondent with a request for production of documents (certain payroll records) for inspection and copying.[[2]] Those records were to be produced to the Secretary in Dallas, Texas, on April 3, 1989. On April 6, 1989, the Secretary filed a motion to compel the Respondent to produce the requested documents, stating that the Respondent had failed to produce those documents or to file a written response stating the reason for objection to the production thereof. Thereafter, on April 10, 1989, the Respondent was ordered to produce the subject documents to the Secretary's representative in Dallas, Texas, at 9:00 a.m. on April 19, 1989, or show cause why one or more of the sanctions set forth and/or referred to In Commission Rule 52(e) should not be entered against the Respondent.[[3]] On April 19, 1989, the Secretary filed a letter stating that the respondent has failed to produce the subject documents.

The Secretary filed her response to the prehearing order on April 10, 1989 (the required date). The Respondent did not file the required response. Thereafter, on April 14, 1989, the Secretary filed a motion to declare the Respondent in default, pursuant to Commission Rule 41(a).

The Respondent's failure to act has placed it in default under Commission Rules 41 and 52. In the order issued April 10, 1989, the Respondent's attention was specifically called to those rules and the sanctions that may be imposed for a party's failure to comply with the terms thereof. A review of the history of this case leads to only one conclusion. Respondent's course of conduct is clearly of a contumacious nature.[[4]] Accordingly, the ultimate sanction will be imposed. Respondent's notice of contest, dated May 18, 1988, is VACATED.[[5]] All items of the three citations (other, serious and willful) issued on May 10, 1988, alleging violations of specified standards, are AFFIRMED. The civil penalties, as proposed, are ASSESSED.

This proceeding is TERMINATED.

Date: May 12, 1989

E. CARTER BOTKIN
Administrative Law Judge


FOOTNOTES:

[[1/]] Because the administrative law judge to whom this case was originally assigned became seriously ill, the case was reassigned to another judge. We refer to "the judge" in the singular, even though two different judges were involved in handling this case.

[[2/]] Because Sealtite failed to deny the authenticity of these documents, they are taken as genuine.

[[3/]] Rule 52(e) of the Commission's Rules of Procedure provides:

2200.52 General provisions governing discovery.

                            *             *                 *
(e) Failure to cooperate; Sanctions. A party may apply for an order compelling discovery when another party refuses or obstructs discovery. For purposes of this paragraph, an evasive or incomplete answer is to be treated as a failure to answer. If a Judge enters an order compelling discovery and there is a failure to comply with that order, the Judge may make such orders with regard to the failure as are just. The orders may issue upon the initiative of a Judge, after affording an opportunity to show cause why the order should not be entered, or upon the motion of a party. The orders may include any sanction stated in Fed.R.Civ.P 37, including the following:
(1) An order that designated facts shall he taken to be established for purposes of the case in accordance with the claim of the party obtaining that order;
(2) An order refusing to permit the disobedient party to support or to oppose designated claims or defenses, or prohibiting it from introducing designated matters in evidence;
(3) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed; and
(4) An order dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party.

[[4/]] Rule 41(a) of the Commission's Rules of Procedure provides: 2200.41 Failure to obey rules.
(a) Sanctions. When any party has failed to plead or otherwise proceed as provided by these rules or as required by the Commission or Judge, he may be declared to be in default either: (1) on the initiative of the Commission or Judge, after having been afforded an opportunity to show cause why he should not be declared to be in default; or (2) on the motion of a party. Thereafter, the Commission or Judge, in their discretion, may enter a decision against the defaulting party or strike any pleading or document not filed in accordance with these rules.

[[5/]] For example, in its Rules of Procedure the Commission has provided that the parties may agree to proceed under simplified proceedings, in which pleadings generally are not permitted, discovery and motions are discouraged, and the Federal Rules of Evidence do not apply, as they do to regular Commission hearings. See Rules 200 - 211, 29 C.F.R. 2200.200 - 2200.211.

[[6/]] For example, Sealtite has repeatedly insisted that it needs to know the identity of the person who made the complaint that led to the inspection, who Sealtite asserts was a disgruntled former employee who had been convicted of theft and drug use. Such information may not be relevant to the issues to be tried at the hearing, however. The identity of the person who made a complaint to OSHA generally is irrelevant once an inspection has been conducted and an OSHA compliance officer has observed a violation, except in certain circumstances not present here, such as an allegation that the compliance officer acted in bad faith. See Quality Stamping Prod. Co., 7 BNA OSHC 1285, 1979 CCH OSHD 23,520 (No. 78-235, 1979); Brock v. Brooks Woolen Co., 782 F.2d 1066 (1st Cir. 1986). Even then, the identity of the party who filed the complaint might be protected from disclosure by the informer's privilege. Massman-Johnson (Luling), 8 BNA OSHC 1369, 1371-73, 1980 CCH OSHD 24,436, p. 29,804-06 (No. 76-1484, 1980); Quality Stamping Prod. Co., 7 BNA OSHC at 1287-88, 1979 CCH OSHD at p. 28,504-505).

[[7/]] Abuse of discretion does not imply improper conduct by the judge. It merely indicates that the judge erred as a matter of law in exercising his discretion. Duquesne Light Co., 8 BNA OSHC 1218, 1221 n.17, 1980 CCH OSHD 24,384, p. 29,718 n. 17 (No. 78-5034, 1980). Abuse of discretion is a term used by the courts to describe more than a mere error or difference of judicial opinion. It occurs when a judge's decision is clearly unreasonable, arbitrary, or fanciful, when the decision is based on erroneous conclusions of law, when the judge's findings of fact are clearly erroneous, or when the record contains no evidence on which the judge rationally could have based his decision. Heat & Control, Inc. v. Hester Indus., 785 F.2d 1017, 1022 (Fed. Cir. 1986). Abuse of discretion occurs when a relevant factor that should have been given weight is not considered, when an irrelevant or improper factor is considered and given significant weight, or when all proper factors are considered, no improper factors are considered, but the judge commits a clear error of judgment in weighing these factors. U.S. v. Kramer, 827 F.2d 1174, 1179 (8th Cir. 1987).

[[1]] It was reassigned due to the unavailability of Judge Blythe.

[[2]] On the same date, the Secretary filed a request for admissions.

[[3]] A copy of the Review Commission's Rules of Procedure were enclosed to the Respondent.

[[4]] It is further noted that the Respondent failed to file any response to the Secretary's request for admissions. Therefore, each matter was deemed admitted. Request for admission number 33, with attached exhibit number 31, discloses that the corporate Respondent is no stranger to legal matters or the possibility of default therein.

[[5]] The hearing, as scheduled, is cancelled.