SECRETARY OF LABOR,
HOCKING VALLEY STEEL
OSHRC DOCKET No. 80-1463
Before: Rowland, Chairman; CLEARY and COTTINE, Commissioners.
BY THE COMMISSION:
Administrative Law Judge James D. Burroughs denied an application for
attorney fees filed by Hocking Valley Steel Erectors, Inc., under the Equal Access to
Justice Act, Pub. L. No. 96-481, 94 Stat. 2325 (1980). Hocking Valley sought review
of the judge's decision denying the application and Chairman Rowland directed review under
29 U.S.C. § 661(i) and 5 U.S.C. § 504. See 29 C.F.R. § 2204.309. We affirm
the judge's decision.
Hocking Valley Steel Erector, Inc. ("Hocking Valley"), a steel erection subcontractor, was engaged in construction of an "open-bay" type manufacturing building at the Schuler-Leuhart Manufacturing Company in Columbus, Ohio, when the worksite was inspected by a compliance officer and a compliance officer trainee from the Occupational Safety and Health Administration ("OSHA"). Following the inspection, Hocking Valley received a citation alleging a serious violation of the construction safety standard at 29 C.F.R. § 1926.28(a).[] A penalty of $490 was proposed for the violation. Hocking Valley contested the citation, but, after a hearing, the citation was affirmed and a penalty of $100 imposed by Administrative Law Judge Joe D. Sparks. Hocking Valley petitioned the Commission for review, and review was granted by Commissioner Cottine on one issue raised by Hocking Valley. After Hocking Valley filed its brief on review to the Commission, the Secretary moved to vacate the judge's decision and dismiss the citation on the stated ground that the case was an "inappropriate vehicle for further litigation." The Commission granted the Secretary's motion.
Hocking Valley then filed an application under the Equal Access to Justice Act ("EAJA") for attorney fees and expenses incurred in litigating the case. The amount sought by Hocking Valley in its initial and two subsequent applications totaled $14,187.[] Under EAJA, a private party that prevails against the federal government in an administrative adjudication, has a net worth of no more than 5 million dollars and employs no more than 500 employees [] is entitled to an award of attorney fees and other expenses unless the position of the government agency as a party to the proceeding was substantially justified or special circumstances make an award unjust. 5 U.S.C. §§ 504(a)(1) & 504(b) (1)(B). That Hocking Valley was the prevailing party and met the limits for net worth and number of employees was not disputed. However, Judge James D. Burroughs, who was assigned to rule on the application after Judge Sparks granted a recusal motion filed by Hocking Valley, denied Hocking Valley's application on the basis that the Secretary's position in the case was substantially justified. Hocking Valley's petition for review followed.
As amended at the outset of the hearing, the citation against Hocking Valley stated:
29 C.F.R. 1926.28(a). Employee(s) were not protected against falls of more than 25 feet by the use of safety lines, safety belts, or other appropriate personal protective equipment:
(a) The Schuler Leuhart steel structured building extension. Employees walking at elevated levels above 25' were not protected from hazard of falling to ground level.
The compliance officer testified that he observed two Hocking Valley employees walk across the structural steel of the 30-foot-high roof of the building under construction. The employees were wearing safety belts and lanyards that were not tied off. In the compliance officer's view the employees were subjected to a fall hazard. Two photos of the employees were taken by the trainee. The compliance officer was unable to identify by name the men walking on the steel. He testified that he determined they were employees of Hocking Valley through discussion with Riddle, Dell, and Mayo, who were Hocking Valley employees. He also testified that he believed Dell and Mayo mentioned that they were working on the roof of the building. He added that Hocking Valley's foreman told him that Hocking Valley was the only contractor who was working on the roof. The compliance officer named the other contractors at the site and described the work they were doing. He said that they were mainly working on the ground level and none was working on the roof level. This also led him to conclude that the employees walking on the steel were employed by Hocking Valley.
The compliance officer testified that the fall hazard could be abated by attaching the employees' safety belt lanyards to lifelines strung between metal stanchions. The stanchions would have to be welded or clamped to the structural steel. The Secretary put in evidence a booklet showing fall protection devices, and the compliance officer marked the two pages that depicted a lifeline system similar to the one he proposed. The compliance officer said he discussed abatement with two Hocking Valley officers, Paul Fox and Robert Eaton, and they agreed to erect cables for lifelines from horizontal supports in the existing structure. The cables would be at the level of the steel rather than above it.
Eaton, Hocking Valley's vice president for operations, acknowledged that he agreed to establish a cable system but was under the impression that the system need not be installed until the building was "detailed," i.e., welding completed and bolts tightened, to the extent that it could withstand a 5,400 pound dead load test. The compliance officer believed that the building had been "detailed" at the time of the inspection. He stated that foreman Swisher had told him that the structural steel work had been completed on the Monday before the inspection. Swisher testified that on the day of the inspection the steel erection was 90 percent complete. The compliance officer presumed that the building members were of sufficient integrity to permit stanchions and cables to be connected, since he believed the building had been detailed.
Eaton, an expert witness, had a B.S. degree in civil engineering, was a journeyman ironworker, and had been in the steel erection business for fourteen years. He testified that, when inspected, the building was still in the erecting and detailing stage. The trusses and columns were up, some of the joists had been welded but others merely landed between trusses, and the bolts may not have been tightened; there was more welding and checking of bolts to do. Thus, the building was not yet structurally sound. He testified that he has never seen a cable or static line used on a building such as this one "during the process of erection in commencement of the detailing."
Eaton further testified that it would not be possible to string lifelines from stanchions attached to the structural steel at this stage of construction because the structure was not stable enough. The stanchions would put additional stress on the structure, and resonance and harmonics "might tend" to build up as a person attached to the lifeline walked around. When resonance and harmonics built up, it would make walking along the structure impossible, and, "[Y]ou would probably end up falling in the hole." A person who fell would almost be assured of knocking off some of the joists that had not been welded, and he would be cut in half if the joists landed on him. The falling joists would also be hazardous for anyone working below. Eaton also stated that the lifeline system could not comply with the requirements of 29 C.F.R. § 1926.104 (b) & (d) in several respects: It could not be secured above the point of operation because there was no higher part of the structure to which to fasten it; the lanyards would have to be more than six feet long or additional cables would have to be put up, which the building could not support; and, the cable system could not hold 5,400 pounds. [] He added that erection of a cable system on the beam line would create a tripping hazard. He also stated that, other than safety belts and lanyards, there were no alternative means of fall protection for ironworkers on this type of building. Safety nets would not work because "some of the pieces had to come up through the interior of the building."
In its post-hearing brief, Hocking Valley advanced the following arguments: (1) the compliance officer's testimony was not credible; (2) the Secretary failed to prove that the men walking on the steel were employees of Hocking Valley; (3) the Secretary failed to prove that the alleged employees were working or were performing an operation, as required for 29 C.F.R. § 1926.28(a) to be applicable; (4) the Secretary failed to prove a feasible means of abatement; (5) Hocking Valley established the defenses of impossibility and greater hazard; (6) the Secretary failed to prove that a reasonable person familiar with respondent's industry would have protected against the hazard by the means specified; (7) section 1926.28(a) was invalidly promulgated and is unenforceably vague. The Secretary declined to file a brief.
Judge Sparks affirmed the citation. He found that the two men walking on the steel were employees of Hocking Valley. He based this finding on evidence that the other contractors on the site were working in areas other than the roof, that Dell, Swisher, and Mayo mentioned that some of Hocking Valley's employees were working on the roof, and that Eaton stated that more work on the steel needed to be done at the time of the inspection. The judge also found that the two men were walking from point to point in the course of their duties for Hocking Valley and thus were performing "operations" within the meaning of section 1926.28(a). The judge concluded that the Secretary had established a prima facie violation of section 1926.28(a) under the tests set out in S & H Riggers & Erectors, Inc., 79 OSAHRC 23/A2, 7 BNA OSHC 1260, 1979 CCH OSHD ¶ 23,480 (No. 15855, 1979). He held that the employees were exposed to an obvious 30-foot fall hazard requiring the use of personal protective equipment and that the Secretary proposed the use of lifelines anchored on the steel by stanchions, to which safety belts and lanyards could be attached, as the appropriate means of protection. The judge noted that S & H Rigger's use of a reasonable person test gives employers reasonable notice of what safety precautions are required and satisfies due process requirements. The judge concluded that Hocking Valley showed that the use of lifelines on the same level as the beams on which the employees worked presented a greater hazard than use of no fall protection at all. However, he concluded that the greater hazard defense was not established because Hocking Valley did not present any evidence that alternative means of protection were unavailable or that a variance application was inappropriate. The judge also rejected Hocking Valley's impossibility defense, concluding (1) the fact that a lifeline cannot support 5,400 pounds is not a defense to a section 1926.28(a) violation, and (2) Hocking Valley did not prove that alternative means of protection were unavailable.
Hocking Valley petitioned for review of the judge's decision, raising essentially the same arguments as it made before the judge. Commissioner Cottine granted the petition in part, limiting review to the issue of whether the judge erred in affirming the citation in light of Hocking Valley's defense that personal protective equipment was inappropriate under the cited conditions. After Hocking Valley filed its brief on review, the Secretary moved to vacate the judge's decision and dismiss the citation because "the Secretary upon additional consideration has determined that this case is an inappropriate vehicle for further litigation." The Commission granted his motion.
Hocking Valley's subsequent fee application was assigned to Judge Burroughs after Judge Sparks granted a recusal motion filed by Hocking Valley. After the parties declined to request further proceedings, Judge Burroughs decided the case on the basis of the written record. He concluded that the Secretary's motion to dismiss the citation could not be deemed an admission that his position was not substantially justified. The judge noted that a ruling on the merits in favor of Hocking Valley would not result in an automatic award of fees because EAJA does not mandate a fee award whenever the government loses a case. He also noted that the determination of whether the Secretary's position was substantially justified must be based on whether the facts, as developed in the record, support his position as being reasonable in law and fact. The judge then reviewed the evidence and concluded that the Secretary's determination that the persons on the steel framework were Hocking Valley employees and were engaged in performing their job was reasonable, fair, did not involve any overreaching, and was supported by substantial evidence. He added that, in finding a violation of section 1926.28(a), Judge Sparks applied Commission precedent, and his findings and inferences were sufficient to justify a reasonable person in concluding that there was a section 1926.28(a) violation. He also agreed with Judge Sparks that the evidence was not sufficient to establish the greater hazard or impossibility defenses.
On review of the denial of the fee application, Hocking Valley argues that this is a "classic" example of a case in which the government should be required to pay attorney fees because it involved unreasonable government prosecution calculated to force a small business to "knuckle under" to unreasonable demands. Hocking Valley contends that the Secretary failed to prove that the persons observed by the compliance officer walking on the steel were employees of Hocking Valley, and, knowing that the compliance officer could not identify these persons, the Secretary should not have pursued the case. Hocking Valley also maintains that (1) the Secretary's complaint failed to allege all the elements of a section 1926.28(a) violation, (2) the evidence failed to establish that the persons observed walking on the steel were engaged in an "operation" within the meaning of section 1926.28(a), (3) the Secretary failed to introduce any evidence of a feasible means of abatement relevant to this construction project, and (4) Hocking Valley established the greater hazard and impossibility defenses. Hocking Valley asserts that once the Secretary learned of the evidence supporting its defenses, he should have withdrawn the citation. Finally, Hocking Valley contends that Judge Burroughs improperly placed on the employer the burden of proof concerning "substantial justification" in that the judge did not rule that, by failing to explain why he sought to dismiss the citation, the Secretary failed to prove that his position was substantially justified.
The Secretary argues that in affirming the citation Judge Sparks followed Commission precedent, and that the rulings of both Judge Sparks and Judge Burroughs convincingly demonstrate that the Secretary's position was substantially justified. Additionally, the Commissioner's direction for review was limited to the issue of the appropriateness of personal protective equipment, lending support to the Secretary's claim that his position was substantially justified. The Secretary maintains that his motion to dismiss the citation on review does not show that his position was not substantially justified. He contends that a decision to seek dismissal may be based on any of several factors, and he is not required to reveal his litigation strategy. He adds that a determination of whether his position was substantially justified must be based on the facts developed in the record, and Judge Burroughs did not place an improper burden on Hocking Valley. Finally, the Secretary rejects as erroneous Hocking Valley's argument that the Secretary was required to show that the employees were working in order to establish a violation of section 1926.28(a).
The statutory criterion when reviewing EAJA applications is whether the position of the government as a party to the proceeding was substantially justified. Before making this determination in this case, it is appropriate to consider what Congress intended in establishing the "substantial justification" standard. Identical explanations appear in the House and Senate Judiciary Committee reports on EAJA, as follows:
The test of whether or not a Government action is substantially justified is essentially one of reasonableness. Where the Government can show that its case had a reasonable basis both in law and fact, no award will be made.
Certain types of case dispositions may indicate that the Government action was not substantially justified. A court should look closely at cases, for example, where there has been a judgment on the pleadings or where there is a directed verdict or where a prior suit on the same claim had been dismissed. Such cases clearly raise the possibility that the Government was unreasonable in pursuing the litigation.
The standard, however, should not be read to raise a presumption that the Government position was not substantially justified, simply because it lost the case. Nor, in fact, does the standard require the Government to establish that its decision to litigate was based on a substantial probability of prevailing.
S. Rep. No. 96-253, 96th Cong., 1st Sess. 6-7 (1979), reprinted in Award of Attorney's Fees Against the Federal Government: Hearings Before the Subcom. on Courts, Civil Liberties & the Administration of Justice, 96th Cong., 2d Sess. 242-43 [hereinafter cited as Hearings]; H.R. Rep. No. 96-1418, 96th Cong. 2d Sess. 10-11 (1980), reprinted in Hearings 341-42 and in  U.S. Code Cong. & Ad. News 4989-90. The House Judiciary Committee report also includes the following elaboration:
The standard and burden of proof adopted in [EAJA] represents an acceptable middle ground between an automatic award of fees and the restrictive standard proposed by the Department of Justice [that would permit fees to be awarded only where the government action was arbitrary, frivolous, unreasonable, or groundless]. It presses the agency to address the problem of abusive and harassing regulatory practices. It is intended to caution agencies to carefully evaluate their case and not to pursue those which are weak or tenuous. At the same time, the language of the section protects the government when its case, though not prevailing, has a reasonable basis in law and fact. H.R. Rep. No. 96-1418, 96th Cong., 2d Sess. at 13-14, reprinted in Hearings 344-45, and in  U.S. Code Cong. & Ad. News 4992-93. Thus, the "substantial justification" standard is intended to be a middle ground between automatically awarding attorney fees against the government whenever it loses a case and awarding attorney fees against the government only when its action was arbitrary or frivolous. Tyler Business Services, Inc. v. NLRB, 695 F.2d 73 (4th Cir. 1982).
Based on this understanding of the statutory standard of review, we conclude that the position of the Secretary as a party to the proceeding before us was substantially justified. This case is in an unusual posture for analysis of this question. In the only decision on the merits in this case, Judge Sparks ruled in favor of the government's position. Hocking Valley is the prevailing party only because on review the Secretary chose to terminate the case. However, even if the Secretary had not prevailed before the judge, Hocking Valley would not have been entitled to an automatic fee award. The substantial justification standard, "should not be read to raise a presumption that the Government position was not substantially justified, simply because it lost the case." S. Rep. No. 96-253, 96th Cong, 1st Sess. 7 (1979), reprinted in Hearing at 243; accord, Broad Avenue Laundry & Tailoring v. United States, 693 F.2d 1387, 1391 (Fed. Cir. 1982) ("The mere fact that the United States lost the case does not show that its position in defending the case was not substantially justified."); Wyandotte Savings Bank v. NLRB, 682 F.2d 119, 120 (6th Cir. 1982) ("The mere fact that the NLRB was the losing party....does not mean that the Board was not substantially justified in seeking enforcement of its order.") Thus, in order to conclude that the Secretary's position in this case was not substantially justified, we would have to find that the judge erred in affirming the citation on the merits and further conclude that the Secretary's case did not even have a reasonable basis in law and fact. See 29 C.F.R. § 2204.106(a); Tyler Business Services, Inc. v. NLRB, supra.
We are unable to reach such a conclusion. Rather, we conclude that the Secretary's case was reasonable under Commission precedent and the positions adopted by the Secretary on the various issues in the case were at least arguably correct.
Even as to the aspects of the case that Hocking Valley attacks most sharply, the Secretary's position was substantially justified. On the issue of whether the men walking on the steel roof beams were employees of Hocking Valley, the compliance officer's conclusion that the men were Hocking Valley employees is reasonable in view of the fact that Hocking Valley was the only contractor working on the roof level. In cases before the Commission, facts need to be proved by only a preponderance of the evidence, not by clear and convincing evidence or beyond a reasonable doubt. Heath & Stich, Inc., 80 OSAHRC 65/E12, 8 BNA OSHC 1640, 1980 CCH OSHD ¶ 24,580 (No. 14188, 1980), appeal dismissed, 641 F.2d 338 (5th Cir. 1981); Armor Elevator Co., 73 OSAHRC 54/A2, 1 BNA OSHC 1409, 1973-74 CCH OSHD ¶ 16,958 (No. 425, 1973). It would have been preferable for the compliance officer to have been able to identify these men by name or specify who told him that the men were Hocking Valley employees. Nevertheless, under these facts the Secretary was substantially justified in taking the position that he had sufficient evidence to show by a preponderance that the men walking on the beams were employees of Hocking Valley.
Hocking Valley also presented considerable evidence of the difficulties involved in using a lifeline system to which employees on the roof level could fasten their safety belt lanyards. However, Judge Sparks held that under Commission precedent Hocking Valley failed to prove the impossibility and greater hazard defenses. We conclude that these issues at least presented close questions and the Secretary's position had substantial justification. Hocking Valley's vice president Eaton told the compliance officer during the inspection that Hocking Valley would erect cables from horizontal members of the existing structure to serve as lifelines to which safety belt lanyards could be attached. Thus, prior to the hearing, the Secretary was justified in believing that implementation of a lifeline system was an appropriate abatement method. Eaton then testified at the hearing that stanchions attached to the structure for the purpose of securing lifelines would put stress on the structure and resonance and harmonics "might tend" to build up, causing vibrations as a person wearing a tied-off safety belt walked on the structure. Hocking Valley maintains that once this evidence was presented, the Secretary should have withdrawn the citation.
Hocking Valley is correct that facts that become known during the course of litigation could make a position of the government unreasonable that was reasonable at the outset of the litigation. Under EAJA, when this occurs the government must act fairly expeditiously to alter its position appropriately in light of the new facts. Alspach v. District Director of Internal Revenue, 527 F.Supp. 225 (D. Md. 1981). However, Hocking Valley is incorrect that Eaton's testimony on the difficulties involved in using a lifeline system on the roof level made it unreasonable for the Secretary to continue to seek affirmance of the citation. While Eaton in his testimony pointed out a possible vibration problem caused by a system of lifelines supported by stanchions, he was far from certain that this type of system actually would cause vibrations. He stated only that it "might tend" to do so. Indeed, since the steel erection work was 90 percent complete, it seems implausible that significant vibrations would have been caused by this lifeline system. Moreover, it appears that this asserted problem could have been avoided by attaching the lifelines not to stanchions but to horizontal members of the existing structure, as Eaton told the compliance officer would be done. Thus, it was reasonable for the Secretary to continue to seek affirmance of the citation after hearing Eaton's testimony.
Hocking Valley's additional argument that it could not erect a lifeline system that would comply with the requirements of 29 C.F.R. § 1926.104 does not constitute a defense to an alleged section 1926.28(a) violation. Martin-Tomlinson Roofing Co., 80 OSAHRC 4/B12, 7 BNA OSHC 2122, 1980 CCH OSHD ¶ 24,167 (No. 76-2339, 1980); J.W. Conway, Inc., 79 OSAHRC 75/F3, 7 BNA OSHC 1718, 1979 CCH OSHD ¶ 23,869 (No. 15942, 1979). We have considered Hocking Valley's remaining contentions and find them unpersuasive. As Judge Sparks' and Judge Burroughs' discussions of these contentions shows, the Secretary's position as to these contentions was at least arguably correct and, thus, was substantially justified.
Our conclusion that the Secretary's position as a party to the proceeding was substantially justified is not aided by the Secretary's failure to explain why he chose on review not to litigate the case but to move that the citation be vacated. His oblique statement that "the Secretary upon additional consideration has determined that this case is an inappropriate vehicle for further litigation" provides no insight into the termination of this case. In fact, one could infer from his unexplained abandonment of his case that the Secretary believed that the Commission would vacate the citation if it ruled on the case. While this is not tantamount to an admission that his position was not substantially justified, it is not supportive of the substantial justification otherwise found on this record. Moreover, the Secretary's unexplained termination of the case at this point may well leave Hocking Valley with the impression that it was put through the expense and inconvenience of contesting and trying a citation that was issued for no valid purpose. The Secretary's cause would have been better served had he candidly explained why he had decided to terminate the case, even if to do so would have required him to admit that he believed the case was weak or that the violation was so momentary that it did not warrant litigation.
However, EAJA does not permit an award of fees if the Secretary's position as a party to the proceeding was substantially justified. As explained above, we have concluded that the Secretary's position in seeking affirmance of the citation was substantially justified under Commission precedent. Though the Secretary's withdrawal is not clearly explained, the substantial justification of his position on the merits is not altered by the termination on review when the entire case is considered. Indeed, by terminating the case the Secretary did precisely what Hocking Valley urges the Secretary should have done, albeit not as quickly as Hocking Valley desired. Therefore, Judge Burroughs' decision denying Hocking Valley's fee application is affirmed. The document designated by Hocking Valley as its third application for fees and costs also is denied. SO ORDERED.
FOR THE COMMISSION
RAY H. DARLING, JR.
DATED: APR 27 1983
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[] 29 C.F.R. § 1926.28(a) states:
The employer is responsible for requiring the wearing of appropriate personal protective equipment in all operations where there is an exposure to hazardous conditions or where this part indicates the need for using such equipment to reduce the hazards to the employees.
[] Hocking Valley's initial application for fees and costs, filed on January 5, 1982, sought an award of $8,752.76. Hocking Valley filed a second application on March 29, 1982, seeking an additional award of $2,134.23 for fees and costs incurred up to February 15, 1982. Judge Burroughs' decision denying both applications was sent to the parties on April 6, 1982. On August 25, 1982, while this case was pending on review, Hocking Valley filed a third application seeking an additional award of $3,300.18 for fees and costs incurred up to August 10, 1982. Hocking Valley's second and third applications are merely supplements to its initial application, submitted simply to cover fees and expenses incurred in this case after Hocking Valley's initial application was filed. It was therefore erroneous to label them as separate fee applications, and it would be inappropriate to consider and dispose of them independently of each other or of the initial fee request. Rather, such additional submissions should be labeled as supplements to the original fee application and normally should be considered together. We dispose of both the initial fee application and the two supplemental requests in this decision. Since the third request merely supplements the first two to cover a later time period, it need not be initially considered by an administrative law judge.
[] The net worth limitation does not apply to charitable or other
tax-exempt organizations described in § 501(c)(3) of the Internal Revenue Code, 26 U.S.C.
§ 501(c)(3), nor does it apply to cooperative associations as defined in § 15(a) of the
Agricultural Marketing Act, 12 U.S.C. § 1141j(a). Additionally, for individuals the
net worth limitation is $1 million and there is no limitation on the number of employees.
5 U.S.C. § 504 (b)(1)(B); 29 C.F.R. § 2204.105(b).
[] 29 C.F.R. § 1926.104(b) states:
Lifelines shall be secured above the point of operation to an anchorage or structural member capable of supporting a minimum dead weight of 5,400 pounds.
29 C.F.R. § 1926.104(d) states:
Safety belt lanyard shall be a minimum of 1/2-inch nylon, or equivalent with
a maximum length to provide for a fall of no greater than 6 feet. The rope shall
have a nominal breaking strength of 5,400 pounds.