OSHRC Docket No. 13084

Occupational Safety and Health Review Commission

January 24, 1977


Before BARNAKO, Chairman; MORAN and CLEARY, Commissioners.


Baruch A. Fellner, Office of the Solicitor, USDOL

Albert Ross Regional Solicitor

Richard J. Ferriter, Penn Central Transportation Company, for the employer




BARNAKO, Chairman:

A decision and order of Review Commission Judge Abraham Gold, dated December 4, 1975 is before this Commission for review pursuant to 29 U.S.C. 661(i). The Judge affirmed citations alleging that Respondent had committed three repeat and two nonserious violations of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et seq.) He assessed penalties totaling $300.

On review, Respondent argues 1) that the Administrative Law Judge erred by amending the citations, notification of proposed penalty and complaint pursuant to Rule 21 of the Federal Rules of Civil Procedure to add the Trustees of the Penn Central Transportation Company as an indispensable party; 2) that the Trustees were prejudiced in defending on the merits of the case due to a lack of proper notice and a lack of opportunity to abate the alleged violations; 3) that Respondent was not the party responsible for the repair and maintenance of any part of [*2] the location at which the alleged violations occurred; 4) that the violations were not repeat violations; and, 5) that the penalties assessed were inappropriate.

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n1 Rule 21 of the Federal Rules of Civil Procedure states:

Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately.

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Issues 1 and 2 are interrelated. The citations were issued to the Penn Central Transportation Company. At the time, Penn Central was involved in a Bankruptcy reorganization. Pursuant to the railroad reorganization provisions of the Bankruptcy Act (11 U.S.C. 205), the Judge found the Trustees in bankruptcy to be an indispensable party to this proceeding and on his own motion he added them as a party. In reaching this decision he relied particularly on the fact that the Trustees were fully knowledgeable [*3] of the proceeding from its inception and on the fact that they have been actively involved in all aspects of this litigation. Clearly, the prejudicial argument is not meritorious. We affirm.

As to issue 3, we affirm the Judge's decision for the reasons he has assigned. Respondent's employees were exposed to the violative conditions, and abatement of those conditions is clearly within Respondent's ability.

Concerning issues 4 and 5, we find that in assessing penalties, the Judge properly considered the factors set forth in 29 U.S.C. 666(i). Accordingly, we affirm his assessments. Under the circumstances of this case, the penalties assessed are appropriate regardless of whether the violations are characterized as "repeat" or "nonserious." The determination of the violations as "repeat" is therefore merely a technically in the case, and we therefore do not need to decide whether it is one or the other. See J.F. McCarthy, Inc., Docket No. 3985, BNA 4 OSHC 1358, CCH OSHD para. 20,813 (June 22, 1976).

Accordingly, the Judge's decision is affirmed.



MORAN, Commissioner, Dissenting:

All charges should be vacated because the railroad industry, of which respondent is a part, [*4] is not subject to the jurisdiction of the Occupational Safety and Health Act of 1970, 29 U.S.C. 651 et seq., 84 Stat. 1590, by virtue of 29 U.S.C. 653(b)(1). Secretary v. Belt Railway Company of Chicago, 20 OSAHRC 568 (1975) (concurring and dissenting opinion).

Additional grounds for vacation of these charges is the complainant's failure to cite and serve the proper employer. n2 In this connection, the Judge erred in adding the trustees as respondents on his own motion where the complainant persisted in proceeding against the railroad itself despite his knowledge of its reorganization status under 11 U.S.C. 205 at the time of inspection. This error was compounded by the fact that the amendment was made after the expiration of the 6-month statute of limitations set forth at 29 U.S.C. 658(c).

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n2 Under 11 U.S.C. 205 railroad reorganization, the bankruptcy court has exclusive control and possession of the debtor railroad's property. The trustees, however, hold legal title. 11 U.S.C. 586. During reorganization, the employer is the trustee of the railroad company, not the company itself. Jakubowski v. Central R. Co. of N.J., 88 F.Supp. 258 (S.D. N.Y. 1950). Furthermore, a railroad is not liable for the action of employees of its trustees in a reorganization. Wagner v. New York, Ontario and Western Railway, 146 F.Supp. 926 (M.D. Pa. 1956).


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This case presents facts similar to those previously considered by this Commission in Secretary v. Vincent Rizzo, d/b/a Vincent Rizzo Construction Co. or Masoncraft, Inc., OSAHRC Docket No. 4224, December 22, 1975. In dismissing the citation for lack of a proper party respondent in that case, we stated the following:

"The rules of procedure cited by the Secretary speak in terms of 'when justice so requires' and 'but for a mistake.' Does 'justice' require that we permit an amendment to rectify circumstances that were known to the Secretary long before the six-month statutory period in section 9(c) expired? Does 'justice' require that we permit the Secretary to correct his error, even though he persisted in his 'mistake' long after the true situation was known? We think not. There was no 'mistake' on complainant's part. It was an obstinate refusal to pursue the case against the proper party respondent." (Footnote omitted).

Rule 21 of the Federal Rules of Civil Procedure, relied upon by Judge Gold in the case before us, is similar to the rules relied upon by the complainant in Rizzo as it [*6] permits parties to be added "on such terms as are just."

Also, at the hearing in this case, which was held prior to the expiration of the Act's statute of limitations, complainant, as he did in Rizzo, insisted that the proper party had been cited. This was done with full knowledge of the existence of the trusteeship. Under these circumstances, Rizzo is controlling in this case, and the Commission should not put itself in the position of correcting complainant's error when he refused to take any action to correct it himself. The proper course of action for complainant would have been the issuance and service of a new citation to the trustees.

In Bloomfield Mechanical Contracting, Inc. v. OSAHRC, 519 F.2d 1257, 1262 (3d Cir. 1975), where the Secretary of Labor attempted to add a joint venture as a party by way of the complaint, the court stated that "[i]t is the citation which serves as the statutory vehicle for notice of the violation, 29 U.S.C. 658(a)." (Emphasis added.) Thus, even if the statute of limitations problem is disregarded, the amendment of the citation in the instant case to add a new party was clearly improper. Notice in a citation is a statutory [*7] requirement. The addition of a new party creates a new cause of action which must be commenced by the issuance and proper service of a citation and notice of proposed penalty upon the named party. Secretary v. P & Z Co., Inc. and J.F. Shea Co., Inc., OSAHRC Docket No. 14822, May 21, 1976 (concurring and dissenting opinion).

I also disagree with my colleagues' statement that classification of the violations involved as "repeat" is merely a technicality which need not be resolved. n3 As a practical matter, such a characterization could result in the assessment of higher penalties than would otherwise be assessed because the characterization could be improperly construed in ascertaining respondent's "history of previous violations." 29 U.S.C. 666(i). For that reason, it should be made clear that the respondent trustees cannot be found liable for "repeat" violations on the basis of a prior citation to which they were not parties. As was stated in In the Matter of Penn Central Transportation Company, 347 F.Supp. 1349, 1351 (E.D. Penn. 1972), the trustees cannot "be prejudicially bound by earlier administrative proceedings, to which they were not parties, in view of the requirement [*8] of due process."

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n3 They have, however, affirmed the charges as "repeat" violations despite respondent's protestations to the contrary.

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In view of my colleagues' adoption in part of Judge Gold's decision, it will be attached hereto as Appendix A so that the law in this case may be known.

Appendix A


Robert A. Yetman, for Complainant

Richard J. Ferriter, for Respondent

This case arose under Section 10(c) of the Occupational Safety and Health Act of 1970, 29 U.S.C. 659(c), and was heard on August 5, 1975, at Boston, Massachusetts.

On April 18, 1975, the Penn Central was cited for one posting violation (Citation No. 2) and seven repeat nonserious violations (Citations Nos. 3-9), for which a total penalty of $775 was proposed by the Secretary. Counsel for the trustees filed a notice of intent to contest all the citations and proposed penalties.

The complainant amended repeat nonserious Citation No. 3, reducing the charge to nonserious, and reducing the proposed penalty from $205 to $50. At [*9] trial the Secretary withdrew repeat nonserious Citation No. 6 and the $80 penalty proposed therefor (Tr. 37-38).

29 U.S.C. 654(a)(2) requires that each employer comply with occupational safety and health standards promulgated under the Act.

Under 29 U.S.C. 666(a), an employer who willfully or repeatedly violates the Act may be assessed a civil penalty of up to $10,000 for each such violation.

Section 666(c) provides that an employer may be assessed a civil penalty of up to $1,000 for each nonserious violation.

Section 666(h) states that a civil penalty of up to $1,000 shall be assessed for a violation of a posting requirement.

Civil penalties under the Act can be assessed only after considering the size of the business of the employer, the gravity of the violation, the good faith of the employer, and the history of previous violations, 29 U.S.C. 666(i).

Respondent has admitted (Ans. I) that the Penn Central is a Pennsylvania corporation, with its principal office at Philadelphia, and is engaged in a business of providing rail transportation throughout the northeastern portion of the United States; and that during the course of its operation it receives and handles goods [*10] that are moving or have moved across state lines in interstate commerce, and is engaged in a business affecting commerce, within the meaning of Section 3(5) of the Act.

An officer of the Department of Labor inspected the Penn Central engineering department located on the fourth floor of the South Station complex at Boston, Massachusetts, on March 19, 1975 (Tr. 19-20).

Prior to trial, Respondent moved for dismissal of the citations on the ground that the Secretary and the Commission have no jurisdiction over the subject matter of this case because of Section 4(b)(1) of the Act, 29 U.S.C. 653(b)(1), which provides, in pertinent part:

"Nothing in this Act shall apply to working conditions of employees with respect to which other Federal agencies * * * exercise statutory authority to prescribe or enforce standards or regulations affecting occupational safety and health."

The motion was denied prior to trial. In his brief Respondent's counsel renewed his argument that the motion should have been granted (brief, pp. 2-13).

It is contended that the Secretary of the Department of Transportation (DOT) has statutory authority to prescribe and enforce standards of occupational safety [*11] and health in Respondent's industry by virtue of the Federal Railway Safety Act of 1970, 45 U.S.C. 421 et seq.; that the Secretary of DOT has exercised that authority through the Federal Railroad Administration; and that 29 U.S.C. 653(b)(1) precludes the Secretary of Labor and the Commission from acting on safety or health matters relating to employees in the industry in which Penn Central engages.

The Commission has held that 29 U.S.C. 653(b)(1) does not provide an industry exemption from the reach of the Occupational Safety and Health Act, but rather exempts only those specific "working conditions" with respect to which the DOT has exercised its authority to prescribe or enforce standards or regulations affecting occupational safety or health. Secretary of Labor v. Southern Pacific Transportation Co., CCH, E.S.H.G., para. 19,054 (1974); petition for rev. filed, No. 1091, 5th Cir., January 10, 1975. The DOT has not exercised its authority to prescribe or enforce standards substantially deplicating those cited in the instant case. For that reason the motion was properly denied.

Prior to and at trial, Respondent's counsel moved for dismissal of the action for [*12] lack of jurisdiction based on another ground. He argued that since the Penn Central is in reorganization under the federal bankruptcy laws the trustees appointed by the court constitute an indispensable party and should have been named as Respondent. The motions were denied.

A bankruptcy proceeding places an embargo on the bankrupt's right to dispose of his property. In the instant case, only the trustees can pay the abatement costs and civil penalties. Trustees of a railroad in reorganization under the Bankruptcy Act (11 U.S.C. 205) are liable for acts committed before as well as after their appointment and become an indispensable party in a suit to enforce liability. United States v. Dorigan, 236 F. Supp. 106, 108 (D.C. N.Y. 1964).

I find that the trustees do indeed constitute an indispensable party.

The Secretary did not move to amend the citations, proposed penalty notice and complaint to substitute or join the trustees as a party. Under Fed. R. Civ. P. 21, a party may be dropped or added at any stage of the action on motion of any party or on the initiative of the court.

Clearly, the trustees have been fully aware of this action since its inception. The notice [*13] of contest was filed by Richard J. Ferriter on the stationery of the trustees. His title, appearing below his signature, reads, "General Attorney." The stationery bears this heading:

PENN CENTRAL TRANSPORTATION COMPANY Robert W. Blanchette, Richard C. Bond and John H. McArthur, Trustees.

Counsel used this stationery and title in a letter accompanying the answer to the complaint. He did likewise when filing other documents in the case, including motions and brief.

Mr. Ferriter, as their general attorney, was hired by, and acted for, the trustees. Only the trustees can pay for his legal services. His filing of the notice of contest and responsive pleadings, his presentation of evidence at the trial, and his filing of the brief were acts on behalf of the trustees, who were not prejudiced in maintaining a defense upon the merits. Their counsel defended fully and capably.

It is my view that equity and good conscience require that I invoke Fed. R. Civ. P. 21. Therefore, the citations, notification of proposed penalty, and complaint are amended to reflect the trustees of the Penn Central Transportation Company as the respondent rather than the Penn Central itself.

Respondent seeks [*14] dismissal of the action for yet another reason (brief, pp. 14-16), contending that the building in which the alleged violations occurred is owned by the Boston Redevelopment Authority (BRA) and managed by the Boston Terminal Corporation; and that the building occupancy agreement (Exh. R-1) requires the Terminal Corporation to make ordinary repairs and/or alterations, and if extraordinary repairs are needed, Terminal must notify the BRA and do nothing without express BRA authority. For this reason, argues counsel, the trustees of Penn Central have no obligation to repair or maintain any part of the South Station.

Respondent has an obligation to comply with the Occupational Safety and Health Act. Respondent is charged with failing to comply with standards requiring the posting of a notice of informing employees of the protections and obligations provided in the Act: providing that all exits discharge directly to the street or other space giving safe access to a public way; marking all exits by a readily visible sign; mounting of fire extinguishers; inspecting, testing and maintaining fire extinguishers; assuring that fire hoses are provided; and guarding electrical equipment against [*15] accidental contact. Compliance with the standards which Respondent is found to have violated would not require making repairs of the South Station. This contention is without merit.

Citation No. 2 alleges a nonserious violation of 29 C.F.R. 1903.2 for failure to post an approved notice which informs employees of the protections and obligations provided for in the Act. The regulation requires that the poster be placed in a conspicuous place where notices to employees are customarily posted. The inspecting officer testified that he looked for the poster throughout the engineering unit and could find none; that there was a bulletin board, but the poster was not on it (Tr. 30). The General Manager of the Boston Terminal Corporation asserted that he had posted this notice in five places in South Station (Tr. 97, 104), but designated four locations as of the inspection date. He testified that it was posted in two places on the second floor and two on the ground level. It is clear from the General Manager's testimony that some of Respondent's engineering employees, located on the fourth floor, might occasionally have reason to visit one of the locations where the posters were placed; [*16] most of Respondent's employees would be unlikely to have any reason to do so (Tr. 105-107). The manager agreed that no poster was placed in Respondent's engineering office on the fourth floor (Tr. 107).

The purpose of the poster is to inform all of the Penn Central employees of their rights and duties. Since no poster was placed at a location where all of the employees would be likely to see it, it cannot be said that the poster was placed in a conspicuous place, within the meaning and intent of the standard. It is found that the charge in Citation No. 2 is established by this record.

As to Citation No. 3, a nonserious violation of 29 C.F.R. 1910.37(h)(1) is alleged for failure to assure that all exits discharge directly to a street, or to a yard, court, or other open space that gives safe access to a public way. The inspector stated that in addition to an elevator and stairway there was a fire escape; that he went down the fire escape which ended on a boardwalk or roof on the South Station concourse (Exh. C-5); that the roof is about 15 feet above track or ground level; and that he saw no ladder for a person to use in order to reach ground level (Tr. 30-33). The General [*17] Manager of the Boston Terminal Corporation testified that there is a roof house 15 to 20 feet beyond the area shown in C-5, or about 120 feet from the fire escape shown in the photograph; that the roof house encloses the top of a five-foot-wide fire escape which is weighted into the ceiling, so that if a person steps on it the steps depress to ground level; and that it has been there since 1929 (Tr. 98, 107-114). The Secretary has failed to establish this charge, and it will be ordered vacated.

In his brief (p. 6) the Secretary declares that if it is found that this citation is not sustained then he moves to amend the citation to allege a violation of 29 C.F.R. 1910.37(q)(1). The motion is denied. To permit the Secretary to lodge such a substantially different charge after the hearing would be a denial of due process to the employer, as far as Citation No. 3 is concerned. Incidentally, in Citation No. 4 the Secretary claims a repeat nonserious violation of 1910.37(q)(1) for failure to mark all exits by a readily visible sign. Here, the inspector testified (Tr. 33-36) that in order to reach the fire escape on the fourth floor one had to pass through the chief dispatcher's [*18] office which bore a "No Admittance" sign on the door (Exh. C-4); that on the far side of that office was a door leading out to the fire escape (Exhs. C-4, C-5); and that the doors of the office of the chief dispatcher were not identified by exit signs (Tr. 35). On cross-examination the inspecting officer admitted that in the middle of the corridor leading to the chief dispatcher's office there was a large illuminated sign reading "Fire Exit," pointing in the direction of the office of the chief dispatcher (Tr. 64-65, 72). The inspector conceded that this is a readily visible sign (Tr. 72). Counsel for the Secretary argues (brief, p. 7) that the "No Admittance" sign would have a chilling effect upon employees who would have to pass through the dispatcher's office to reach the fire escape. I cannot find a violation on the basis of such conjecture. Citation No. 4 will be vacated for failure of proof.

Next, we turn to Citation No. 5, which alleges a repeat nonserious violation of 1910.157(a)(5). The inspector said that he observed an unmounted fire extinguisher in the engineering area (Tr. 36, 37). A photograph shows the extinguisher resting on the floor (Exh. C-2). This charge [*19] is established. This is a repeat violation since a citation issued on September 5, 1973, including the same charge (item 15), became a final order upon failure to file a notice of contest (Exhs. C-1, C-10 through C-14, Tr. 83-91).

The seventh citation is based on 1910.157(d)(1)(i). In his brief (p. 9) the Secretary moves to reduce the repeat nonserious charge to a nonserious violation. The motion is granted. The inspector noted that a fire extinguisher bore a tag which disclosed that it was last inspected on October 9, 1973 (Tr. 38) and that a second extinguisher bore a tag indicating that it had not been inspected within a year prior to his inspection (Tr. 41). Section 1910.157(d)(1)(i) directs that "(t)he employer shall be responsible for such inspection, maintenance, and testing" of portable fire extinguishers as specified in 157(d). The complaint alleges that Respondent "failed to assure that the fire extinguishers were inspected, maintained or tested." Section 1910.157(d)(3)(i) requires portable extinguishers to be thoroughly examined at regular intervals not more than one year apart. The cited charge is supported by the evidence and will be affirmed.

Citation No. [*20] 8 (repeat nonserious) is based on 1910.158(a)(1), which incorporates by reference the hose system requirements of the National Fire Protection Association's standard NFPA 14-1970. The inspector testified that there were no fire hoses installed at standpipe location cabinets located in the corridor of the fourth floor (Tr. 41). The pertinent standard requires that each hose outlet provided for the use of building occupants shall be equipped with not more than 75 feet and preferably not more than 50 feet of approved small fire hose attached and ready for use (NFPA 14-1970, Ch. 4, sec. 421). The building manager claimed that hoses have been vandalized (Tr. 101), but he admitted that the hose had not been replaced "for possibly a year" (Tr. 123). Violation of the standard is established. The same standard was listed as item 19 in the citation of September 5, 1973 (Exh. C-1), which became a final order. Hence, it is found that this was a repeat violation.

The last charge, Citation No. 9, alleges a violation of Article 110-17 of the National Electrical Code, as adopted by 29 C.F.R. 1910.308 and .309(a). There was no plate on a receptacle used to supply electricity to a window [*21] air-conditioning unit (Tr. 45-46). This energized wire carried over 200 volts (Tr. 124). A violation is shown. Since it was contained in the September 5, 1973, citation as item 27, it is a repeat violation.

We turn now to penalties. The posting violation (Citation No. 2) requires the assessment of a penalty. It is felt that $25 is reasonable. Citations 5, 7, 8 and 9, which are the other affirmed charges, are of a low level of gravity; but Nos. 5, 8 and 9 are repeat infractions, and even though the Penn Central is bankrupt, it is still a giant enterprise; it is still in operation; and its continued failure to adhere to safety standards should not go unnoticed. Taking into account the criteria listed in 29 U.S.C. 666(i), I find that a penalty of $75 for each of the three repeat violations is reasonable, plus a $50 penalty for Citation No. 7.

Conclusions of Law

1. The trustees of the Penn Central Transportation Company are and at all times pertinent herein were engaged in a business affecting commerce, and the Occupational Safety and Health Review Commission has jurisdiction over the parties and the subject matter within the contemplation of 29 U.S.C. 652 and 653(a). [*22]

2. On March 19, 1975, Respondent violated 29 U.S.C. 654(a)(2) for a failure to comply with the safety standards at 29 C.F.R. 1903.2, and at 157(a)(5), 157(d)(1)(i), 158(a), and 308 and 309(a) of Part 1910 of Title 29, Code of Federal Regulations.

3. The above violations, except for 1903.2 and 1910.157(d)(1)(i), were repeat violations, within the contemplation of 29 U.S.C. 666(a).

4. It is reasonable and appropriate pursuant to 29 U.S.C. 666(h) and (i) to assess a penalty of $25 for the posting violation charged in Citation No. 2, and pursuant to 29 U.S.C. 666(c) and (i) to assess a penalty of $50 for the violation charged in amended nonserious Citation No. 7.

5. It is reasonable and appropriate pursuant to 29 U.S.C. 666(a) and (i) to assess a penalty of $75 for each of the repeat nonserious violations charged in Citation Nos. 5, 8 and 9.

6. On March 19, 1975, Respondent did not violate 29 U.S.C. 654(a)(2) for failure to comply with 37(h)(1), 37(q)(1), and 157(c)(1)(ii) of Part 1910 of Title 29, Code of Federal Regulations.

It is ORDERED that Citation No. 2 be affirmed and a penalty of $25 be assessed therefor; that amended nonserious Citation [*23] No. 7 be affirmed and a $50 penalty be assessed; that repeat nonserious Citations 5, 8 and 9 be affirmed and $75 be assessed for each of these citations; and that amended Citation 3, and Citations 4 and 6 and the penalties proposed therefor be and the same are hereby vacated.


Dated: December 4, 1975, Boston, Massachusetts