RALSTON PURINA COMPANY
OSHRC Docket No. 78-145
Occupational Safety and Health Review Commission
September 26, 1979
[*1]
Before CLEARY, Chairman; BARNAKO and COTTINE, Commissioners.
COUNSEL:
Baruch A. Fellner, Office of the Solicitor, USDOL
Daniel W. Teehan, Regional Solicitor, USDOL
Charles J. Crider, Ralston Purina Company, for the employer
OPINIONBY: CLEARY
OPINION:
DECISION
CLEARY, Chairman:
The Secretary of Labor has petitioned for review of two Orders issued by Administrative Law Judge James A. Cronin. First, the Secretary excepts to an August 25, 1978, Order that denied the Secretary's motion for an order compelling entry to conduct discovery inspection and for a postponement of the hearing. Secondly, the Secretary takes exception to an August 29, 1978, Order that dismissed Citation No. 1 for the Secretary's failure to prosecute the case. Commissioner Cottine has directed the case for review on the above two issues. n1
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n1 29 U.S.C. § 661(i).
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The Secretary cited respondent, Ralston Purina Company, on December 20, 1977, for allegedly violating section 5(a)(2) of the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et seq. [hereinafter [*2] "the Act"] by its failure to comply with the noise standard, 29 CFR § 1910.95(b)(1). Respondent contested in timely fashion. Following the filing of the complaint and answer in January, the Secretary conducted a discovery inspection of respondent's plant on March 21, 1978. The discovery inspection was made by three compliance officers and an attorney from the Regional Solicitor's Office. On March 24, 1978, by joint stipulation, the parties moved for continuance of the hearing from the then scheduled May 9, 1978, hearing date to an unspecified date in July of 1978. The grounds stated in support of the motion for continuance were that the parties needed more time to complete studies to determine the feasibility of noise engineering controls. The parties also asserted that settlement was being pursued in conjunction with the results of these engineering feasibility studies. Judge Cronin granted the motion for continuance and rescheduled the hearing for July 12, 1978.
Subsequently, on June 28, 1978, the Secretary moved for a second continuance on the grounds that the engineering controls feasibility study prepared by one of the compliance officers who had conducted the discovery [*3] inspection of respondent's plant in March had just been mailed to respondent, and that additional time was therefore necessary to permit the parties to "engage in meaningful discussions and to pursue the possibilities of reaching a settlement." By telegram, respondent's counsel concurred in the Secretary's motion for continuance. By Order dated July 7, 1978, Judge Cronin rescheduled the hearing to August 28, 1978.
After learning that respondent would not accept the recommendations made in the engineering feasibility report, the Secretary, on August 11, 1978, served on respondent a request for permission to enter, pursuant to Fed. R. Civ. P. 34 n2 and also moved for a third continuance of the hearing from August 28 to September 25, 1978. n3 On August 15, 1978, prior to any opposition to the Secretary's motion by the respondent, Judge Cronin issued an Order denying the motion for a continuance on the ground that "ample time has been provided the parties to prepare for hearing in this case, and a further continuance is unjustified."
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n2 The Federal Rules of Civil Procedure are applicable to Commission proceedings in the absence of a specific Commission rule. 29 CFR § 2200.2(b).
n3 The Secretary initially filed the Rule 34 request for permission to enter with the judge on August 1, 1978. Judge Cronin ruled on August 4 that the Rule 34 motion was "unnecessary and inappropriate" and therefore denied the Secretary's motion. In explanation, the judge stated that requests to permit entry may be served on a party without leave of the Commission. The judge reasoned that the Commission becomes involved only after respondent refuses to permit the requested inspection.
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On August 21, 1978, respondent filed its opposition to the Secretary's Request for Permission to Enter on the grounds that trade secrets would be disclosed and such "midnight hour" discovery inspection would irreparably prejudice the respondent's defense. Respondent also requested that this proceeding be stayed pending disposition of another Ralston-Purina case (Docket No. 77-1550) involving their Oklahoma City plant, a case which was then before the Commission on interlocutory appeal.
Subsequently, on August 22, 1978, the Secretary filed a motion pursuant to Fed. R. Civ. P. 37(a) to compel discovery inspection as requested, and renewed his request for a continuance. Respondent opposed this motion on the same grounds that it had asserted in opposition to the Rule 34 request. Judge Cronin denied the Secretary's motion in his August 25, 1978, Order, not because of the possibility of trade secrets disclosure, but because the requested discovery would delay the hearing on the merits. Judge Cronin emphasized that ample time for discovery had already been provided. The motion to postpone the hearing [*5] date was also denied.
Having been denied the right to conduct further discovery inspection, the Secretary filed a Statement of Position on August 28, 1978, in which the Secretary stated that he would be "unable to proceed to trial. . . ." The "Statement" made it clear that although the Secretary did not intend to present any evidence at the scheduled hearing on August 28, 1978, this action was not to be considered a withdrawal of the citation. By Order dated August 29, 1978, Judge Cronin dismissed the citation issued December 20, 1977, for failure of the Secretary to prosecute the case.
The initial question is whether the judge properly denied the Secretary's motions for a discovery inspection and a postponement of the hearing. Although respondent opposed the Secretary's motion for entry largely on the basis of trade secret protection, citing for support Reynolds Metals Co., 76 OSAHRC 31/C14, 3 BNA OSHC 2051, 1975-76 CCH OSHD P20,447 (No. 1551, 1976) [hereinafter Reynolds I], the judge denied both motions on the basis of unjustified delay: "[a]mple time has been provided complainant to pursue discovery and prepare for hearing in this case."
The decision whether to allow [*6] discovery is within the judge's sound discretion. KLI, Inc., 77 OSAHRC 202/A2, 6 BNA OSHC 1097, 1977-78 CCH OSHD P22,350 (No. 13490, 1978). This sound discretion should be guided by the objective of providing a fair and prompt hearing to the parties. Moreover, the judge should consider the need of the moving party for the information sought, any undue burden to the party from whom discovery is sought, and, on balance, any undue delay in the proceedings that may occur. Id. at 1098. Given the judge's broad discretion, a judge's disposition of discovery matters is reversible only if the judge's actions constitute an abuse of discretion resulting in substantial prejudice. Perini Corp., 77 OSAHRC 136/A2, 5 BNA OSHC 1596, 1977-78 CCH OSHD P21,967 (No. 11007, 1977); see ISI Corp. v. United States, 503 F.2d 558 (9th Cir. 1974).
Discovery inspections, however, are ordinarily permissible where a violation of the noise standard is alleged. Pabst Brewing Co., 77 OSAHRC 12/A2, 4 BNA OSHC 2003, 1976-77 CCH OSHD P21,472 (No. 13068, 1977). The practical effect of denying discovery inspection here is to undercut the Secretary's case. Without expert testimony, it is [*7] doubtful that the Secretary can show the feasibility of engineering controls. Thus, denying the Secretary's motion for discovery inspection has already resulted in substantial prejudice to the Secretary's case. Furthermore, delay of one month will not impair the merits of respondent's defense. Thus, applying the factors set forth in KLI, Inc., supra, the facts of this case do not warrant denial of discovery inspection on the ground of unjustified delay.
In support of its trade secrets argument, respondent refers to the judge's decision in Ralston Purina Co., (Docket No. 77-1550), which barred entry by non-federally employed experts to conduct discovery inspection at respondent's Oklahoma City plant. Respondent impliedly contends that since the trade secret considerations involved in the presently cited Sparks, Nevada, facility are the same as those at the Oklahoma City plant, entry should be similarly barred in the present case. n4 The denial of entry to the outside non-federal expert in the Oklahoma City case was based on Reynolds I. Clearly that result is no longer warranted under our recent decision in Owens-Illinois, Inc., 78 OSAHRC 105/C8, 6 BNA OSHC [*8] 2162, 1978 CCH OSHD P23,218 (No. 77-648, 1978), in which we held that the likelihood of disclosure of trade secrets to a non-federal employee does not preclude granting a motion for entry to inspect as long as an adequate protective order is entered. Thus, in the Oklahoma City case, Ralston Purina Co., OSAHRC , 7 BNA OSHC 1201, 1979 CCH OSHD (No. 77-1550, 1979), we reversed the judge's decision and remanded the case for further proceedings consistent with Owens-Illinois, Inc., supra. Therefore, respondent's trade secrets argument for barring entry is unsupported by current Commission precedent.
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n4 Respondent further submits that until the Oklahoma City City case (Docket No. 77-1550) is resolved by the Commission on interlocutory appeal, there is no useful purpose in pursuing the present case. Since the Commission has already disposed of the Oklahoma City case in Ralston Purina Co., OSAHRC , 7 BNA OSHC 1201, 1979 CCH OSHD No. (77-1550, 1979), respondent's argument is now moot.
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The second [*9] issue is whether the judge erred by dismissing the citation for failure to prosecute. Although involuntary dismissal for want of prosecution under Fed. R. Civ. P. 41(b) is within the discretion of the judge and is to be reversed only for an abuse of that discretion, appellate courts have allowed dismissal n5 with prejudice "only in the face of a clear record of delay or contumacious conduct by the plaintiff." Durham v. Florida East Coast Railway Co., 385 F.2d 366, 368 (5th Cir. 1967). The Durham court ruled that want of prosecution caused by negligence short of being bad faith will not justify dismissal with prejudice. In Link v. Wabash Railroad Co., 370 U.S. 626, 82 S.Ct. 1386 (1962), the Supreme Court found that the plaintiff had been deliberately proceeding in a dilatory fashion, and therefore affirmed the trial judge's decision to dismiss for want of prosecution. The reluctance to dismiss with prejudice except where the delay has been intentional is a recognition of the policy of the law that dispositions of cases should be based on their merits. See Wright & Miller, Federal Practice and Procedure, § § 2368, 2370. Against this policy in favor of deciding [*10] cases on the merits, courts have balanced the prejudice to the defendant's case caused by delay. Pearson v. Dennison, 353 F.2d 24 (9th Cir. 1965); States Steamship Co. v. Philippine Airlines, 426 F.2d 803 (9th Cir. 1970).
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n5 Dismissal under Fed. R. Civ. P. 41(b) "operates as an adjudication upon the mertis" and therefore is a dismissal with prejudice.
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The reason for the delay in conducting a discovery inspection by an expert was the anticipated settlement of the case. The parties agreed that the purpose of both continuances following the March 21, 1978, inspection by the three compliance officers was to pursue settlement through the preparation of an engineering feasibility study based on the inspection and to allow respondent to evaluate this report as the basis for settlement. Thus the success of settlement depended upon whether respondent accepted the suggestions made in the engineering feasibility report. The report was finally completed and sent to respondent's counsel on June 28, 1978. In an affidavit [*11] accompanying the Secretary's Motion for Entry upon Land for inspection, the Secretary's counsel states that he had telephone conversations with respondent's attorney during July concerning whether respondent would accept the engineering feasibility report. Respondent's counsel informed the attorney for the Secretary that respondent was not convinced of the feasibility of the noise control measures recommended in the report and that specific reasons for respondent's rejection would be sent to the Secretary by the end of July. Thus as of August 1, when the Secretary sought expert discovery inspection for the first time, it had been at most a matter of a few weeks since settlement was rejected. The further delay until August 11, when the Secretary first served respondent with the Rule 34 discovery request, resulted from the judge's ruling that the August 1, Rule 34 request had been improperly filed before the judge and should have been served directly upon respondent. The delay caused by the pursuit of settlement should therefore not be characterized as undue delay supporting the judge's decision to deny the discovery request.
Respondent contends that settlement negotiations should [*12] not serve as an excuse for the Secretary's lack of preparedness for the hearing, nor ultimately for the Secretary's failure to prosecute. In support of this argument respondent cites 5 Moore's Federal Practice, P41.11[2], which states that the fact that a plaintiff has attempted to negotiate a settlement should not deprive a defendant of the right to move to dismiss for want of prosecution. The essence of respondent's argument is that the pursuit of settlement does not constitute excusable delay in seeking expert discovery inspection. We do not agree. Assuming that the parties were negotiating for a settlement in good faith, and there have been no allegations to the contrary, it can not reasonably be expected that the Secretary would undertake the expense of an expert noise consultant until the very real possibility of settlement no longer existed. We find the Secretary's decision not to retain an expert noise consultant until settlement negotiations collapsed to be a reasonable decision resulting in excusable delay.
Moreover, involuntary dismissal for want of prosecution only arises if the request for entry to conduct expert discovery inspection is denied and the Secretary [*13] cannot proceed at the hearing. Had the judge permitted discovery inspection in accordance with Owens-Illinois as we find here that he should have, then the issue of involunatary dismissal for want of prosecution would not have been presented. Thus, by holding that the judge abused his discretion in denying the Secretary's discovery inspection request, the Commission is finding that the delay and the Secretary's inability to proceed at the hearing were excusable.
Accordingly, the judge's Orders dated August 25, 1978, and August 29, 1978, are reversed, and the case is remanded for further proceedings consistent with our decision in Owens-Illinois and this decision.
CONCURBY: BARNAKO (In Part)
CONCUR:
BARNAKO, Commissioner, concurring in part:
I agree with my colleagues that the judge erred in denying the Secretary's motions for postponement of hearing and for discovery inspection of Ralston Purina's Sparks, Nevada facility on the ground that granting the motions would cause unwarranted delay. I also agree that the judge erred in dismissing the citation for failure to prosecute. Thus, I concur in remanding this case to the judge.
I do not agree, however, with the view expressed by my colleagues [*14] concerning the trade secrets issue. Following their ruling in Owens-Illinois, Inc., n1 they conclude that Ralston's argument that trade secrets are likely to be revealed to non-federal experts in a discovery inspection is not a ground for barring non-federal experts' participation in the discovery inspection as long as an adequate protective order is issued. I dissented in Owens-Illinois, Inc. Following my rationale in Reynolds Metals Co., n2 I concluded that when trade secrets are demonstrated to exist any discovery entry should be limited to federal employees, unless the Secretary establishes good cause for using a non-federal expert. On the other hand, if trade secrets are not established there is no basis for barring the use of an outside expert. Thus, in adhering to this view here, I would hold that if on remand Ralston shows the presence of trade secrets in its Sparks, Nevada plant, the entry upon land should be conducted solely by federal employees, unless the Secretary demonstrates good cause for the use of an outside expert.
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n1 78 OSAHRC 105/C8, 6 BNA OSHC 2162, 1978 CCH OSHD P23,218 (No. 77-648, 1978).
n2 78 OSAHRC 51/F1, 3 BNA OSHC 1749, 1975-76 CCH OSHD P20,214 (No. 4385, 1975), and 78 OSAHRC 51/D4, 6 BNA OSHC 1667, 1978 CCH OSHD P22,806 (No. 4385, 1978).
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In arguing the trade secrets issue before the judge, Ralston noted that in another Commission case an administrative law judge found that Ralston's Oklahoma City plant possessed trade secrets. n3 Ralston contended that the plant in issue here is identical to its Oklahoma City facility, and that pursuant to the principle of collateral estoppel, the finding of trade secrets by the judge in that case should apply here. The judge never addressed this issue. I would therefore afford Ralston the opportunity to renew this argument before the judge on remand. The judge should then consider whether the doctrine of collateral estoppel applies to the trade secrets issue here.
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n3 Ralston Purina Co. (No. 77-1550, 1978) (judge's decision), vacated on other grounds, 79 OSAHRC 15/A13, 7 BNA OSHC 1201, 1979 CCH OSHD P23,383 (No. 77-1550, 1979). When this case came before the Commission on interlocutory appeal, the Secretary did not take exception to the judge's ruling on the trade secrets question and the Commission did not address that issue; instead it remanded the case for proceedings consistent with its decision in Owens-Illinois, Inc., supra. In a separate opinion, I noted my agreement with the judge's findings that Ralston possessed trade secrets. I also concluded that the Secretary had not demonstrated good cause to use an outside expert.
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