SECRETARY OF LABOR,
Complainant,
v.
ACROM CONSTRUCTION SERVICES, INC.,
Respondent.
OSHRC Docket No. 88-2291
DECISION
Before: FOULKE Chairman; WISEMAN, Commissioner.
BY THE COMMISSION:
Before us for review is a decision of Administrative Law Judge David G. Oringer granting a
motion by the Secretary of Labor ("Secretary") to dismiss a written notice of
contest filed by Acrom Construction Services, Inc. ("Acrom") about three months
after two citations issued to Acrom had become final orders. The case further involves the
question of whether a telephone call to the Occupational Safety and Health
Administration's ("OSHA") Manhattan area office by an Acrom project manager
within the 15-day contest period constituted a valid notice of contest. We hold that the
telephone call did not constitute a valid notice of contest and that the written notice of
contest filed by Acrcm was not timely. We affirm the judge's disposition of the case.
Factual Background and Chronology
In March of 1988, the Secretary conducted an inspection of a construction site in New York
City where Acrom was engaged as a drywall subcontractor. The general contractor at the
site was Turner Construction Co. On May 10, 1988, the Secretary issued to Acrom a
three-item serious citation with penalties of $640 proposed for each item and a one-item
nonserious citation with no penalty proposed. The citations alleged that Respondent failed
to provide hardhats and guardrails.
A certified return receipt shows that the citations were delivered to Acrom on May 12,
1988. The citations on their face warned that unless a written notice of contest was filed
with the OSHA Area Director in Manhattan within 15 working days of their receipt by Acrom,
the citations and their proposed penalties would become final, nonreviewable orders.
On May 19, 1988, Acrom project manager Arthur Scotto telephoned OSHA's Manhattan office
and spoke to a safety supervisor of the agency, Angelo Signorile. According to the
affidavit filed by Scotto in opposition to the Secretary's motion to dismiss in this case:
I honestly believed that the citations were a mistake because I believed that the proper
party to the citations was Turner Construction Company, the general contractor. I assumed
that this apparent mistake could be resolved by telephoning OSHA and advising them of the
facts .... Therefore, upon service of the citations, I telephoned the OSHA Manhattan
office and advised them that the citations were incorrectly served on Acrom in that Acrom
was merely a drywall subcontractor and therefore not responsible for the alleged
violations.
Scotto further alleged, in his affidavit, that he was "unaware that Acrom was
required to answer in writing to avoid imposition of a penalty and that he believed his
telephone call "was sufficient to protect the interests of Acrom in this
matter."
OSHA's Signorile states in his affidavit, however, that he told Scotto that if Scotto
disagreed with the citations he could request an informal contest or send a letter to the
Manhatten OSHA office expressing his wish to contest. At no time during the telephone
conversation, Signorile states in his affidavit, did Scotto "indicate...that he
wished to contest the citations issued."
The 15 working-day period for contesting the citations under section 10(a) of the Act, 29
U.S.C. § 659(a), expired on June 3, 1988, and on August 3, 1988, OSHA sent Acrom a letter
demanding payment of the penalties proposed with the citations.
On September 2, 1988, Acrom attorney Carl M. Kuntz called Signorile and requested a
conference to resolve the matter, but was told that Acrom was in "default" in
the case. On September 6, 1988, the attorney wrote OSHA asking that the "default be
vacated, so that our client can be given a fair hearing and a conference to ...resolve the
matter." OSHA responded that the request for a conference was untimely because the
15-day contest period had expired on June 3, 1988 and the citations and proposed penalties
had become a final order.
On September 27, 1988, after receiving OSHA's demand for payment of the penalties
assessed, Acrom wrote the Review Commission's Executive Secretary requesting "review
of OSHA's refusal to provide a hearing." The letter alleged that Acrom did not
,willfully default" but failed to contest within the 15-day period because "a
principal of Acrom was not available to timely respond." The letter was treated as a
notice of contest by the Commission and the case was subsequently assigned to Judge
Oringer.
On November 22, 1988, the Secretary filed her motion for an order dismissing the
late-filed notice of contest. Thereafter, on December 15, 1988, Acrom filed two affidavits
in opposition to the motion to dismiss. The first affidavit was from project manager
Scotto and the second was from Sidney Kalman, the company's president. Kalman stated that
Acrom's failure to timely file a notice of contest was excusable because project manager
Scotto believed that service of the citations on Acrom was a mistake and therefore assumed
it was not necessary to make a written request for a hearing. Kalman further noted that:
Scotto is approximately thirty years old and inexperienced in matters involving OSHA
citations. Mr. Scotto, therefore, reasonably believed it was sufficient to contact OSHA by
telephone. He did not advise any of the principals of Acrom of the citations and
therefore, a principal of Acrom was not available to respond in writing.
Kalman concluded his affidavit by contending that Acrom's default was "excusable and
caused by mistake within the meaning of FRCP 60(b)."
Judge Oringer's Decision
The judge dismissed Acrom's notice of contest, affirmed the citations and assessed the
proposed penalties of $1,920. He found that even if Scotto's telephone call to OSHA had
been timely made, it would not have met the requirements of 29 C.F.R. § 1903.17(a),[[1/]]
which requires a written notice of contest. The judge therefore concluded that the
argument of Acrom's president that the default was excusable and caused by a mistake,
within the meaning of Rule 60(b) of the Federal Rules of Civil Procedure, failed as a
matter of law, citing Secretary of Labor v. Barretto Granite Corp., 830 F.2d 396 (1st Cir.
1987) (per curiam) ("Barretto Granite") (Secretary's written notice of contest
requirement in section 1903.17(a) upheld).
The judge held that section 1903.17 requires a timely, written notice of contest to
prevent a citation from becoming a final order, unless an employer can show that the
Secretary's deception or failure to follow proper procedures or other misleading conduct
was responsible for the late filing, citing Atlantic Marine, Inc. v. OSHRC, 524 F.2d 476
(5th Cir. 1975) (per curiam) ("Atlantic Marine"). He found that the September 6,
1988 letter of Acrom's counsel and the affidavits of Acrom's president and project manager
"Portrayed no evidence whatsoever of any evidence of misconduct by the
Secretary."
The Commission's Direction for Review
Acrom petitioned for review and review was granted on the following issues: (1) whether
the judge erred in dismissing Acrom's notice of contest on the ground that it was not made
in writing, (2) whether the statutory time limitation on the filing of notices of contest
should be equitably tolled under the principles stated in Atlantic Marine, and (3) whether
Acrom should be granted relief from a final order under Fed.R.Civ.P. 60(b).
Issue 1: Did the ALJ Err in Dismissing Acrom's Alleged Oral Notice of Contest Because
It Was Not in Writing?
Acrom contends that Commission precedent permits oral notices of contest where employer
misunderstanding adequately explains the failure to file a timely notice of contest,
citing Pav-Saver Manufacturing Co., 12 BNA OSHC 2001, 1986-87 CCH OSHD (p) 27,676 (No.
84-733, 1986), rev'd, No. 87-1418 (7th Cir. May. 24, 1991), pet. for rev'd filed, June 10,
1991. It claims that this case falls within the rule of Pav-Saver because project manager
Scotto orally contacted OSHA within the contest period in the belief that such contact was
sufficient to perfect a valid contest. Acrom argues that the Commission should not follow
the First Circuit's Barretto Granite decision, supra, because the decision is in conflict
with the Commission's decision in Pav-Saver, and because this case is reviewable in the
Second Circuit.
The Secretary argues that Acrom failed to comply with the requirement of section
1903.17(a) for a written notice of contest. She calls our attention to the Seventh
Circuit's reversal of the Commission's decision in Pav-Saver and asks that we reexamine
that precedent. She points out that the First Circuit in Barretto Granite found that the
interpretation set forth in section 1903.17(a) requiring a writing was reasonable and
rejected a Pav-Saver-type test whereby an oral notices of contest would be accepted when
an employer's confusion, uncertainty or misunderstanding prompts it to believe that an
oral notice of contest is sufficient. The Secretary concedes that although the
Occupational Safety and Health Act itself does not specify whether notices of contest
should be written or oral, her interpretation of the statute's requirement at 29 U.S.C. §
659(a), that an employer "notify" OSHA of its intent to contest a citation, is
reflected in her regulation and is entitled to deference, unless it is not a reasonable
interpretation of the Act, citing Martin v. OSHRC, U.S., 111 S.Ct. 1171 (1991) (reviewing
court should defer to Secretary when Secretary and Commission furnish reasonable but
conflicting interpretations of ambiguous regulation promulgated by Secretary) and
Whirlpool Corp. v. Marshall, 445 U.S. 1, 11 (1980) (reference given to Secretary's
construction of section 11(c) of the Act).
Discussion and Disposition
Current Commission precedent provides that the merits of a case should still be heard by
the Commission when "due to confusion, uncertainty, or misunderstanding the employer
fails to file its written notice of contest within the statutory period, but orally
disputes the validity of citations or penalties in a timely manner and in good faith
believes by so doing it has perfected a valid contest." Pav-Saver, 12 BNA OSHC at
2006-2007, 1986-87 CCH OSHD at p. 36,104-36,105. Pav-Saver, however, was reversed by the
Seventh Circuit, which held that the Secretary has reasonably required that a notice of
contest be in writing. No. 87-1418, slip op. at 7 (7th Cir. May 24, 1991). In finding that
it was reasonable to require that a notice of contest be in writing, the Seventh Circuit
came to the same result as did the First Circuit in its decision upholding the Secretary's
written notice-of-contest requirement in Barretto Granite. 830 F.2d at 398.
We have reconsidered our decisions in Pav-Saver and Barretto Granite upholding oral
notices of contest, and now believe that they reach an incorrect result. The receipt by
the Secretary of a written notice of contest from an employer is far more reliable than an
oral notice for determining when a notice of contest is actually filed. See Keppel's,
Inc., 7 BNA OSHC 1442, 1979 CCH OSHD (p) 23,622, p. 28,637 (No. 77-3020, 1979). We
therefore hold that an oral notice of contest is not a sufficient means of contesting a
citation. To the extent that Pav-Saver and other Commission decisions hold otherwise, they
are overruled.[[2/]]
Issue 2: Should the Statutory Time Limitation on the Filing of Acrom's Written Notice
of Contest be Tolled under the Equitable Principles of Atlantic Marine v. OSHRC?
In Atlantic Marine, the Fifth Circuit stated that
... a powerful. argument can be generated that a petitioner should not be denied review
altogether of a Citation of Violation for not having filed a Notice of Contest within the
15-day limit prescribed in the Act if the Secretary's deception or failure to follow
proper procedures is responsible for the late filing.
524 F.2d at 478. The Commission has adopted this test and applied it in a number of cases,
e.g., Seminole Distributors, Inc. 6 BNA OSHC 1194, 1195, 1977-78 CCH OSHD (p) 22,412, p.
27,021 (No. 15761, 1977); Keppel's Inc. 7 BNA OSHC 1442,- 1443, 1979 CCH OSHD (p) 23,622,
p. 28,636 (No. 77-3020, 19791; B.J. Hughes, Inc., 7 BNA OSHC 1471, 1476, 1979 CCH OSHD (p)
23,675, p. 28,710 (No. 76- 2165, 1979).
Although Acrom argues that "Scotto was misled into believing that the citations were
actually intended for the general contractor ... and that the designation of Acrom in the
citations was erroneous," no blame for Scotto's misconception is attributable to the
Secretary. The citations were properly addressed and served. The citations on their face
warned that unless a written notice of contest was filed, the citations and their proposed
penalties would become final, nonreviewable orders. See Roy Kav. Inc. , 13 BNA OSHC 2021,
1987-90 CCH OSHD (p) 28,406 (No. 68-1748, 1989) (citation plainly stated contest
requirement and therefore employer was "explicitly told" of its obligations).
Acrom must bear the burden of its own lack of diligence in failing to carefully read and
act upon the information contained in the citations.
Further, Acrom has not alleged any misconduct by OSHA. Acrom's confusion resulted from a
lack of knowledge of OSHA and Commission procedures on the part of project manager Scotto.
Furthermore, as the Secretary argues, it is established OSHA policy to cite subcontractors
on multi-employer construction sites who have employees exposed to violative conditions,
even though the subcontractors did not create or control the violations. Lee Roy Westbrook
Construction Co., 13 BNA OSHC 2104, 2106-2107, 1987-90 CCH OSHD (p) 28,465, p. 37,696 (No.
85-601, 1989). See Grossman Steel & Aluminum Corp., 4 BNA OSHC 1185, 1189, 1975-76 CCH
OSHD (p) 20,691, pp. 24,791-92 (No. 12775f 1976). Thus, there is no evidence of deception
here or of the Secretary failing to follow proper procedures. Acrom is therefore not
entitled to equitable relief under Atlantic Marine.[[3/]]
Issue 3: Should Acrom be Granted Relief from a Final order under Fed.R.Civ.P. 60(b) ?
Rule 60(b) of the Federal Rules of Civil Procedure provides, in pertinent part:
Rule 60. Relief From Judgment or order
* * *
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On
motion and upon such terms as are just, the court may relieve a party or a party's legal
representative from a final Judgment, order, or proceeding for the following reasons: (1)
mistake, inadvertence, surprise, or excusable neglect ....(3) fraud ... misrepresentation,
or other misconduct of an adverse party .... or (6) any other reason justifying relief
from the operation of the judgment.
Acrom's president states in his affidavit that the failure to timely serve a notice of
contest was excusable under Rule 60(b), because its project manager, who was inexperienced
in OSHA matters, believed that service of the citations on Acrom was a mistake and
therefore assumed that it was not necessary to make a written request for a hearing.
The facts in this case are virtually indistinguishable from those in Roy-Kay, Inc., supra,
in which the Commission refused to grant relief to an employer who filed its notice of
contest more than three weeks late because of its lack of prior experience with OSHA. The
Commission pointed out that the citation issued to Roy Kay "plainly stated the
requirement to file a notice of contest within the prescribed tire period" and that
the company had also been sent a letter by the OSHA area director reiterating the 15-day
limitation on the contest period. The Commission further stated that "ignorance of
procedural rules does not constitute excusable neglect within Federal Rule of Civil
Procedure 60 (b)." 13 BNA OSHC at 2022, 1987-90 CCH OSHC at p. 37,534. See also Keefe
Earth Boring Co., 14 BNA OSHC 2187, 2192, 1991 CCH OSHD § 29,277, p. 39,270 (No. 88-2521,
1991). Although Roy Kay focuses on "excusable neglect," while Acrom argues
primarily in terms of "mistake", the facts in the two cases are sufficiently
similar for Roy Kay to control this case.
Acrom did not file its notice of contest until September 6, 1988, about three months after
the 15-day contest period had expired and the citations had become a final order. Acrom
asks to be excused from the consequences of that late filing by arguing that its project
manager was inexperienced in OSHA matters and assumed it was not necessary to make a
written request for a hearing. Under the dictates of Rpy Kay, however, this is not a
sufficient basis for relief under Rule 60(b).
However inexperienced he was, and whatever wrong impressions the project manager may have
harbored, the record reveals that Scotto had been informed by OSHA's Signorile that he
could timely contest the citations in writing if he disagreed with them, and the citations
themselves provided Scotto with notice that a timely writing was required if they were to
be contested. The project manager, however, failed to timely contest the citations in
writing. Scotto's mistake in failing to do so does not entitle ,Acrom to relief under Rule
60(b)(1).
In addition, since Acrom does not allege, and the record does not reveal, any "fraud
... misrepresentation, or other misconduct" by the Secretary that would justify
granting Acrom relief under Rule 60(b)(3), we do not grant such relief. Finally, on the
evidence before us, we find no "other reason justifying relief" from the final
orders under Rule 60(b) (6).
ORDER
The judge's order dismissing Acron's late-filed written notice of contest, affirming the
secretary's citations and assessing penalties totaling $1,920 is affirmed.
Edwin G. Foulke, Jr.
Chairman
Donald G. Wiseman
Commissioner
Dated: June 28, 1991
SECRETARY OF LABOR ,
Complainant
v.
ACROM CONSTRUCTION SERVICES INC
Respondent
OSHRC Docket No. 88-2291
DECISION AND ORDER
The Secretary moved for an order dismissing the Respondent's notice of contest as untimely
filed and further requested the affirmance of the Secretary's citations and notification
of proposed penalties as issued.
The Respondent filed two affidavits in opposition to the Secretary's motion.
The two citations and notifications of proposed penalties were issued on May 10, 1988, and
transmitted by certified mail, and the return receipt indicates delivery on May 12, 1988.
The statutory 15 working day period within which a timely contest could be validly filed,
expired on June 3, 1988.
Counsel for the Respondent wrote OSHA on September 6, 1988, and related that an individual
employed by OSHA's office was notified of what the Respondent alleged to be the merits of
the matter and a denial of responsibility for the violations on September 2nd, 1988, three
months subsequent to the last day that the notice of contest should have been filed by
statutory mandate, the first contact orally or writing apprising OSHA of the Respondent's
contest. September 6th was the first written notice of dissatisfaction or contest with
respect to the citations and notifications of proposed penalty issued to Respondent. In an
affidavit by Mr. Arthur Scotto, he testified that he was unaware that the Respondent was
required to answer in writing. Further, he stated in paragraph 3 of his affidavit that he
telephoned the OSHA Manhattan office and advised them that the citations were incorrectly
served on Respondent. He does not state in the affidavit when the telephone call was made.
The record indicates that no call was made prior to September 2nd. In assuming however,
that the telephone call was made prior thereto, in and of itself that would not relieve
Respondent of the responsibility to contest the citations and proposed penalties in
writing. While Mr. Kalman, the president of the corporation, states in his affidavit that
the first telephone call was timely made, again there is no date of the telephone
conversation in his affidavit and with danger of being redundant, a timely telephone call
would not meet the requirements of statute or the Secretary's regulation. The president
argues in his affidavit that the default was excusable and caused by a mistake within the
meaning of FRCP 60(b). While this tribunal is sympathetic to Respondent, his argument
fails as a matter of law.
The Secretary promulgated a regulation set forth at 29 CFR 1903.17, which requires timely
written notice of contest in order to prevent a citation from becoming a final order
unless an employer can show that the Secretary's deception or failure to follow proper
procedures or other misleading conduct was responsible for the late filing. [[1]]
In this case, the letter Counsel and the affidavits of Arthur Scotto and Sidney Kalman for
the Respondent portrayed no evidence whatsoever of any evidence of misconduct by the
Secretary.
Accordingly, even if the telephone calls of Respondent notifying OSHA that they were
orally contesting the citations and notifications of proposed penalty were timely, this
tribunal would be constrained by law to dismiss the notice of contest. See Secretary of
Labor v. Barretto, Granite Corporation, et al, 830 F.2nd, 396 (First Circuit) (per
Curiam).
In accordance therewith, the purported notice of contest is DISMISSED. The citations are
AFFIRMED and the Penalties proposed in an aggregate sum of $1920 are ASSESSED by operation
of law.
IT IS SO ORDERED.
DAVID G. ORINGER
Judge, OSHRC
Dated: February 2, 1989
Boston, Massachusetts
FOOTNOTES:
[[1/]]Section 1903.17(a) provides:
§ 1903.17 Employer and employee contests before the Review Commission
(a) Any employer to whom a citation or notice of proposed penalty has been issued may,
under section 10(a) of the Act, notify the Area Director in writing that he intends to
contest (emphasis supplied) such citation or proposed penalty before the Review
Commission. Such notice of intention to contest shall be postmarked within 15 working days
of the receipt by the employer of the notice of proposed penalty. Every notice of
intention to contest shall specify whether it is directed to the citation or to the
proposed penalty, or both. The Area Director shall immediately transmit such notice to the
Review Commission in accordance with the rules of procedure prescribed by the Commission.
[[2/]]Even if we were not reversing Pav-Saver today and we were accepting Acrom's
argument that oral notices of contest are permissible, we would still rule against Acrom
in this case. Pav-Saver required that when an employer orally disputes the validity of a
citation it must have a good faith belief that it has perfected a valid contest. The
record before us fails to establish that Acrom project manager Scotto had a good faith
belief that he was perfecting a valid contest--and thereby initiating a process of legal
review -- when he telephoned OSHA's Signorile. Scotto does not state in his affidavit that
he intended to contest the citations by his telephone call and Signorile's affidavit
states that Scotto never expressed a desire to contest the citations. It appears that
Scotto was merely telephoning OSHA to inform it of his unfounded belief that the citations
had been mistakenly sent to subcontractor Acrom instead of general contractor Turner
Construction. This would not have been sufficient to constitute a notice of contest under
Pay-Saver.
[[3/]] We also note that Item 1 of the serious citation alleges that Acrom employees
who were exposed to falling tools and materials were not wearing protective helmets as
required by section 1926.100(a). This is not an allegation that Acrom may credibly claim
was mistakenly directed at it rather than the general contractor.
[[1]]See Atlantic Marine, Inc. v. OSHRC & Dunlop, 524 F.2nd 476 (5th Circuit, 1975)
(per Curiam)