SECRETARY OF LABOR,
ACTION GROUP, INC.,
OSHRC Docket No. 88-2058
DECISION AND ORDER
BEFORE: FOULKE, Chairman; MONTOYA and WISEMAN, Commissioners.
BY THE COMMISSION:
An order of Administrative Law Judge Paul L. Brady dismissing a notice of contest filed by Respondent, Action Group, Inc. ("Action"), is before us for review pursuant to section 12(j) of the Occupational Safety and Health Act of 1970 ("the Act"), 29 U.S.C. § 661(j), and Commission Rule 92, 29 C.F.R. § 2200.92. For the reasons that follow, we set aside the judge's order and remand this matter for further proceedings.
Action was issued notifications alleging that it had failed to abate four violations of the Act within the period of time permitted for their correction. The Secretary proposed an aggregate penalty of $4,200 for the alleged failure to abate. Action's president, Frank Denutte, contested this penalty, asserting that it was burdensome and excessive in view of the expenditure Action was making to correct the violations. After Action failed to file an answer to the Secretary's complaint as required by commission Rule 34(d)(1), 29 C.F.R. § 2200.34(d)(1), [[1/]] the judge ordered that Action "show cause within seven days of receipt of this order why it should not be declared in default for failure to plead." The judge issued this order under Rule 41, 29 C.F.R. § 2200.41, which allows a judge to impose sanctions on a party for failure to comply with the Commission's rules.[[2/]]
Action responded to the show cause order through a letter dated February 26, 1989, signed by its plant manager, Ralph Fields. Fields advised that he had assumed the position of general plant manager on January 15, 1989, which was approximately two months after the complaint had been filed and one month after Action's answer was due. He also asserted that "[n]o files remain from the previous plant manager." However, Fields stated that ''[b]ased on information available to me, it is my understanding that the matter has been resolved between O.S.H.A. and Action Group, Inc. and a $500.00 [penalty] was agreed upon." Although this letter was dated within the seven-day period permitted by the judge for a response, [[3/]] the judge did not receive the letter until after he had issued his dismissal order. Accordingly, Action's letter was treated by the Commission as a petition for discretionary review of the judge's order.
The Commission has observed that, generally speaking, employers appearing pro se, like Action here, are often confused by legal terminology and may not be fully cognizant of the legal technicalities of the judicial process. Browar Wood Products Co., 7 BNA OSHC 1165, 1979 CCH OSHD ¶ 23, 326 (No. 78-2230, 1979); Monroe & Sons, 4 BNA OSHC 2016, 1976-77 CCH OSHD ¶ 21,470 (No. 6031, 1977), aff'd, 615 F.2d 1156 (6th Cir. 1980). A pro se employer could reasonably conclude that it need not file an answer to the complaint if the case is in the process of being settled. However, on the limited record before us here, we cannot determine whether Action's belief that it had satisfied the Commission's procedural requirements was reasonable.
While there is some indication that the parties engaged in settlement discussions, there is no indication that the parties ever reached a settlement, or even that they came close to doing so. [] Since the judge had not received Action's letter before he issued his dismissal order, he had no opportunity to consider whether Action has made a sufficient response to his show cause order. Accordingly, we remand for the judge to decide whether Action has, stated adequate grounds to justify its failure to file an answer in the circumstances presented here. The judge may, if necessary, conduct further evidentiary proceedings to determine whether there is good reason to allow this case to be reinstated, including making findings on whether Action reasonably believed that there was a settlement. See Choice Electric Corp., No. 88-1393 (Nov. 7, 1990) (case remanded to allow prose employer to demonstrate that it had reason for failing to file an answer that would justify setting aside a dismissal sanction); Bywater Sales & Service, 13 BNA OSHC 1268, 1986-87 CCH OSHD ¶ 27,896 (No. 86-1214, 1987).
Should the judge conclude that Action has stated grounds to excuse its failure to answer, the judge shall afford Action the opportunity to file an answer that complies with the requirements of the Commission's rules. Although the judge's show cause order satisfies Rule 41, the order does not make clear what an answer must include. For the benefit of Action and other Pro se employers, we emphasize that the substance of an answer is addressed in Rule 36, 29 C.F.R. § 2200.36, entitled "Content of the answer," which provides as follows:
The answer shall contain in short and plain terms a response to each allegation of the complaint. It shall specifically admit or deny each allegation or, if the employer is without knowledge of the facts, the answer shall so state. A statement of lack of knowledge has the effect of a denial. A failure to respond to an allegation shall be treated as an admission that the allegation is true.
In other words, the answer should respond to each specific paragraph of the complaint. It should state whether the allegations in each paragraph are correct or incorrect, or, if the employer does not have enough information to either admit or deny any portion of the complaint, the answer should so state. In short, the essential purpose of both the complaint and the answer is to put both the parties and the judge on notice of what issues are in controversy and what matters are not disputed.[[5/]] If the judge concludes that Action is entitled to another opportunity to file an answer in this case, the answer is to be filed with the judge, but Action must also send a copy of its answer to the attorney representing the Secretary. If under these circumstances Action fails to file an answer in a timely fashion, the judge shall affirm the failure to abate notifications and dismiss Action's notice of contest.
One final observation must be made. The Secretary originally
proposed a total penalty of $4,200. However, apparently through clerical error, the judge
assessed a penalty of only $1,400 in his dismissal order. Should the judge conclude that
Action has not stated grounds for its failure to answer, the judge may reinstate his
dismissal order, but the penalty assessment in that event shall be $4,200. Should the
judge conclude that Action has stated sufficient grounds to explain its failure to answer
and provide Action with the further opportunity to answer, and should Action thereafter
fail to file an answer in a timely manner, the penalty to be assessed upon dismissal of
Action's notice of contest shall likewise be $4,200.
Accordingly, this matter is remanded for further proceedings consistent with this opinion.
Edwin G. Foulke, Jr.
Donald G. Wiseman
Dated: December 4, 1990
SECRETARY OF LABOR,
ACTION GROUP, INC.,
OSHRC Docket No. 88-2058
ORDER DISMISSING NOTICE OF CONTEST
Respondent, having failed to respond to an order to show cause and pursuant to Rule 41(a) of the Commission's Rules of Procedure [29 C.F.R. § 2200.41(a)], is hereby declared in default for its failure to comply with Commission Rule 36, 2200.36, requiring the filing of an answer to the complaint in this cause.
Therefore, it is ORDERED:
1. The notice of contest is dismissed.
2. The citations are affirmed and a penalty in the amount of $1,400.00 is hereby assessed.
Dated this 7th day of March, 1989.
PAUL L. BRADY
[[1/]] This rule requires that "the employer shall file with the Commission an answer conforming to the requirements of § 2200.36 within 30 days after service of the complaint."
[[2/]] Rule 41(a) provides, in pertinent part, as follows:
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.
. . .
[[3/]] The complaint was served on Action by mail on November 16, 1988, under Rule 7, which permits pleadings to be served by first class mail. Allowing three days for mailing under Commission Rule 4(b), Action's answer was due by December 19, 1988. Judge Brady issued his show cause order on February 16, 1989. Assuming three days for mailing, Action received the order Tuesday, February 21 (Monday, February 20, 1989 was a Federal and postal holiday), and thus the seventh day from receipt would have been February 28. Under Commission Rule 8, responses to orders sent by mail are deemed filed at the time of mailing. Assuming, in the absence of evidence to the contrary, that Action's letter was mailed on or about February 26, 1989, the date appearing on the letter, its response was timely.
We note, however, that in order to eliminate uncertainty regarding when orders to show cause are received, the Commission now requires that such orders be sent by certified mail, return receipt requested. 55 Fed. Reg. 22780, 22782 (1990).
[[4/]] The file contains a handwritten narrative of an informal conference between Action's president and representatives of the Secretary. The narrative is written on an OSHA form used for keeping records of informal conferences. It appears to be OSHA's official record of the conference with Action. According to this document, the Secretary's representatives would not agree to a penalty less than $2,120, Action thought that amount was still excessive, and "no settlement agreement was signed."
[[5/]] A copy of the Commission's rules is sent to each
employer when a case is docketed. In addition, each employer also receives a copy of the
Commission's publication, "A Guide to Procedures of the United States Occupational
Safety and Health Review Commission," which also contains a brief description of the
contents of an answer.