United
States of America
OCCUPATIONAL SAFETY AND HEALTH
REVIEW COMMISSION
1120
20th Street, N.W., Ninth Floor
Washington,
DC 20036-3457
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SECRETARY
OF LABOR,
Complainant,
v.
TEXAS MANAGEMENT DIVISION, INC.,
Respondent.
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OSHRC Docket No.: 17-1861
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APPEARANCES:
Nicholas C. Geale,
Acting Solicitor of Labor; James E. Culp, Regional Solicitor; Madeleine T. Le,
Counsel for Safety and Health; Kristina T. Harrell, Senior Trial Attorney; U.S.
Department of Labor, Dallas and Washington, D.C.
For the
Complainant
Steven R. McCown, Esq.; Travis. J.
Odom, Esq.; Littler Mendelson P.C., Austin, Dallas, and Houston, Texas
For the
Respondent
REMAND
ORDER
Before:
MacDOUGALL,
Chairman; ATTWOOD and SULLIVAN, Commissioners.
BY THE COMMISSION:
At issue before the Commission is a
decision of Administrative Law Judge Peggy S. Ball denying Respondent’s motion
for relief from a final order under Federal Rule of Civil Procedure 60(b)(1)
after Respondent filed an untimely notice of contest. Upon review, for the reasons
that follow, we set aside the judge’s decision and remand this case to
the judge for further proceedings.
On
June 1, 2017, the Occupational Safety and Health Administration issued
Respondent a citation that was sent via certified mail and signed for on June
5, 2017, by an employee at Respondent’s Carrollton, Texas branch office. Respondent’s notice of contest was due on
June 26, 2017, but it was not filed until September 18, 2017. Because Respondent’s notice of contest was
untimely pursuant to section 10(a) of the Occupational Safety and Health Act,
the citation became a final order of the Commission. See 29 U.S.C. §
659(a) (failure to contest citation within fifteen working days
results in citation becoming final order of Commission). On October 24, 2017, Respondent filed a Rule
60(b)(1) motion seeking relief from the final order, which was denied by the
judge.
In its Rule
60(b)(1) motion, Respondent argued that it was entitled to relief from a final
order based on “mistake, inadvertence[,] o[r]
excusable neglect.” See Fed. R. Civ. P. 60(b) (“On motion and
just terms, the court may relieve a party . . . from
a final judgment, order, or proceeding for the following reasons: (1) mistake,
inadvertence, surprise, or excusable neglect . . . .”). According
to Respondent, management at its headquarters in Houston, Texas did not become
aware of the citation until August 8, 2017; the
company asserts that it subsequently filed its notice of contest after
conducting an internal investigation, communicating with the OSHA area office,
and retaining counsel. Respondent also submitted
a declaration from its corporate controller in support of its motion and
requested an evidentiary hearing with an opportunity for limited discovery. The Secretary filed an opposition to
Respondent’s motion, asserting that “Respondent has not established any basis
for relief” under Rule 60(b)(1). In
support of his opposition, the Secretary submitted: (1) a declaration from the OSHA
Assistant Area Director; (2) a handwritten statement that OSHA obtained during
the inspection from Respondent’s former branch manager; and (3) copies of
correspondence sent from OSHA to Respondent during the period between the
inspection and the issuance of the citation.
On
January 17, 2018, the judge issued the parties an order to appear for a “Telephonic
Motions Hearing” on February 21, 2018, stating that “[t]he parties should be
prepared to address the current status of the case,
and any pending issues before this Court.”
That same day, the judge issued a “Notice of Trial,” scheduling trial
dates of July 18 and 19, 2018. After
apparently communicating with Respondent’s counsel, the Secretary’s counsel
sent an email on February 12, 2018, to the judge’s legal assistant, in which
she copied Respondent’s counsel and sought clarification about the judge’s
telephonic hearing order: “The parties do not interpret the Order as requiring
the parties to put on a telephonic evidentiary hearing involving witnesses,
exhibits and a court reporter. Please
let the parties know if our understanding is incorrect.” There is nothing in the record to indicate
that a response to this email was ever sent, nor is there any documentation of what
transpired during the telephonic hearing.
In denying Respondent’s Rule 60(b)(1) motion,
the judge found that even if its initial handling of the citation constituted
excusable neglect because the former branch manager did not follow the
company’s established procedure of transmitting the citation to corporate
headquarters, Respondent’s “continued failure to respond in a timely manner”
after receiving a second copy of the citation at its headquarters was
unjustified. See A.
W. Ross Inc., 19 BNA OSHC 1147, 1148 (No. 99-0945, 2000) (“A key factor in
evaluating whether a party’s delay in filing was due to excusable neglect is
‘the reason for the delay’ including whether it was within the reasonable
control of the movant.”) (citations omitted). In her
decision, the judge relied primarily on the parties’ declarations to make her
factual findings. There is no mention—nor
any record—of the judge having ruled on Respondent’s requests for limited
discovery and an evidentiary hearing.
On review, Respondent
raises several arguments that center largely on the judge’s failure to explicitly
rule on these specific requests.
Respondent contends that it was not made aware of the “purpose” of the
telephonic hearing and therefore, had “no opportunity to put on evidence and testimony”
regarding its Rule 60(b)(1) motion. In
addition, Respondent challenges the judge’s reliance on what it asserts are
hearsay statements in the declaration submitted by the Secretary. We agree that the absence of express rulings
from the judge on Respondent’s requests is problematic, particularly where an
opportunity for limited discovery may have addressed the hearsay concerns
evident in the declarations submitted by both parties. It also appears that the parties may have
been confused by the judge’s simultaneous issuance of orders scheduling a
telephonic “hearing” and a subsequent “trial” in the case. Indeed, based on the record before us, the
parties were never informed that the telephonic hearing would constitute the
dispositive hearing on the Rule 60(b)(1) issue.
Under these circumstances,
we remand this case to the judge to: (1) address Respondent’s request for
limited discovery and provide a written explanation of the basis for her ruling;
and (2) conduct an evidentiary hearing to afford the parties an opportunity to
develop the record. See Elan
Lawn and Landscape Serv., 22 BNA OSHC 1337, 1339-40 (No. 08-0700, 2008)
(remanding case for evidentiary hearing where Respondent was confused about
opportunity to establish potential basis for Rule 60(b)(1) relief); see, e.g., Rheem
Mfg. Co., Inc., 25 BNA OSHC 1838, 1839 (No. 15-1248, 2016) (remanding case
for evidentiary hearing where judge’s order denying Rule 60(b)(1) relief based
on excusable neglect was “premature based on the limited record”).
Accordingly, we set aside
the judge’s decision and remand this case to the judge for further proceedings.
SO ORDERED.
/s/
Heather
L. MacDougall
Chairman
/s/
James J. Sullivan,
Jr.
Dated: July 31,
3018 Commissioner
ATTWOOD,
Commissioner, dissenting:
Because I find no error
in the judge’s decision to deny Respondent’s Rule 60(b)(1) motion without first
conducting an evidentiary hearing, I dissent.
In my view, Respondent has not only failed to assert facts sufficient to
support a finding that the untimely filing of its notice of contest was due to
excusable neglect; it has also failed to even hint at how an evidentiary
hearing on the issue would remedy that failure of proof.
After
filing its notice of contest almost three months past the statutory deadline,
Respondent filed a Rule 60(b)(1) motion for relief with the judge, as well as a
reply to the Secretary’s opposition to its motion. See
29 U.S.C. §
659(a) (failure to contest citation within fifteen working days
results in citation becoming final order of Commission). Both
parties submitted sworn declarations and exhibits with their filings. In her decision, the judge considered the
parties’ arguments and the record before her, then sufficiently explained the
basis for her findings. She noted the
applicability of Pioneer Investment Services Co. v. Brunswick Associates
Limited Partnership, 507 U.S. 380, 395 (1993), and following the
Commission’s decision in A. W. Ross Inc.,
19 BNA OSHC 1147, 1148 (No. 99-0945, 2000), focused on the reasons for
Respondent’s delay. Specifically, she
concluded that even if Respondent’s claim that its corporate management did not
learn of the citation until August 8, 2017 was sufficient to excuse its failure
to contest the citation prior to August 8, 2017, Respondent failed to provide a
sufficient explanation for why it “still did not file its notice of contest
until September 18, 2017.” The judge
found that this continued delay cuts “against a finding that Respondent was
maintaining orderly procedures for the handling of important documents such as
the [c]itation[,] and making a good faith effort to comply with the Act”
and therefore denied the motion.
I
agree with the judge’s ruling that Respondent failed to establish that its
almost six-week delay in filing its notice of contest after OSHA provided it
with a second copy of the citation was due to excusable neglect. Under Pioneer, the factors to consider
in determining whether a party has established excusable neglect such that it
is entitled to relief under Rule 60(b)(1) “include . . . the danger of
prejudice to the [opposing party], the length of the delay and its potential
impact on judicial proceedings, the reason for the delay, including whether it
was within the reasonable control of the movant, and whether the movant acted
in good faith.” 507
U.S. at 395. Although Respondent provided the judge with an
explanation for its failure to file its notice of contest prior to August 8, it
made no attempt whatsoever to justify its delay after that date. Indeed, in its filings here and below,
Respondent simply stated that “[a]fter conducting an
internal investigation (which is ongoing to date) and communicating with the
OSHA Area Office, TMD retained the undersigned counsel to represent it in this
matter.” Respondent made no claim
either before the judge or in its petition to us that these activities
prevented it from promptly filing a notice of contest. Compounding this failure, Respondent has not
asserted any other reason for its lengthy delay, which was fully within
Respondent’s control. Cf. Nw.
Conduit Corp., 18 BNA OSHC 1948, 1950-51 (No. 97-851, 1999)
(granting Rule 60(b)(1) relief where employer’s president and attorney showed
“diligence in pursuing their remedies” and attorney personally delivered notice
of contest to OSHA the same day he discovered it had not been timely filed).
Absent any attempt at an explanation, I agree with the judge that this further delay in filing demonstrates
Respondent’s failure to maintain orderly procedures for handling important
documents and to proceed in good faith and does not constitute excusable
neglect. La.-Pac. Corp., 13 BNA OSHC 2020, 2021 (No. 86-1266, 1989) (“Even
during a management transition, a business must maintain orderly procedures for
handling important documents.”) (citation omitted).
Nothing
in the Occupational Safety and Health Act, the Commission’s Rules of Procedure,
the Federal Rules of Civil Procedure, or the Administrative Procedure Act grants Respondent the unfettered right to have discovery and
an evidentiary hearing on its motion.
And Respondent has made no showing that it is legally entitled to
either, nor has it shown how it was harmed by this alleged error. As any attorney who routinely engages in a motions practice
is well aware, in the absence of some showing by
Respondent that discovery and an evidentiary hearing were required here, the
judge was under no compulsion to grant that request prior to ruling on
Respondent’s motion. Moreover, Respondent has not put forth a
single fact that it claims it could have proven in support of its motion for
relief but for the judge’s denial of discovery and an evidentiary hearing. See
Williams Enters. Inc., 13 BNA OSHC 1249, 1250-51 (No. 85-355, 1987) (party that “seeks
to have a judgment set aside because of an erroneous ruling carries the burden
of showing that prejudice resulted”) (citation omitted). Since all of the facts that would be
relevant to any justification for Respondent’s delay in filing its notice of
contest from August 8 until September 18 are exclusively within Respondent’s
control, discovery and an evidentiary hearing could add nothing beyond what it
already knows in this regard.
Respondent, with benefit of counsel, chose at its peril not to assert
before the judge any facts related to its almost six-week delay in filing after
receipt of the second copy of the citation beyond its unsupported claim that it
was conducting an internal investigation. Its failure to do so should not now provide a
justification for a needless remand. Thus, I find not even a shred of
support for my colleagues’ conclusion that Respondent was deprived of a
sufficient opportunity to show that the untimely filing of its notice of
contest was due to excusable neglect.
Accordingly,
I would affirm the judge’s decision.
/s/
Cynthia
L. Attwood
Dated: July 31, 2018 Commissioner
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United States of America
OCCUPATIONAL
SAFETY AND HEALTH REVIEW COMMISSION
U.S. Custom House
721 19th Street, Room 407
Denver, Colorado 80202-2517
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SECRETARY
OF LABOR,
Complainant,
v.
TEXAS MANAGEMENT DIVISION, INC.,
Respondent.
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OSHRC Docket No.: 17-1861
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DECISION
AND ORDER
This
matter is before the Occupational Safety and Health Review Commission (The
Commission) pursuant to Section 10 of the Occupational Safety and Health Act of
1970, 29 U.S.C. §651, et sec. (the
Act). The Occupational Safety and Health Administration (OSHA) issued a Citation
and Notification of Penalty (Citation) to Respondent on June 1, 2017, resulting
from Inspection Number 1213423, conducted at 204 East Bethany Drive, Allen,
Texas (worksite). Such Citation was not timely contested and thus became a
Final Order of the Commission pursuant to Section 10(a) of the Act.
Respondent, Texas Management
Division, Inc., filed a Motion for Relief
From A Final Order Pursuant to Rule 60(b)(1), Federal
Rules of Civil Procedure (FRCP) (motion). A hearing on the motion was held
February 21, 2018. The Court has reviewed briefs from both parties regarding
this request for Rule 60(b)(1) relief.
For reasons set forth below, the motion is denied
and the Citation and Penalty are affirmed as the Final Order of the Commission.
Background
Respondent is a staffing agency
which provided temporary workers at the worksite. An onsite manager of the Respondent,
Ms. Elena Tavira, was present at the time of the
inspection on February 23, 2017. Respondent’s branch manager, Chris Garza, was present
when air sampling for methylene chloride was conducted at the worksite on March
23, 2017. The parties disagree regarding the extent of the Respondent’s active participation
in the opening and closing conferences. Results of air sampling were provided
to the Respondent, and OSHA sent requests for additional documentation to the
Respondent.
A Citation and Notification of
Penalty was served to the Respondent on June 5, 2017, by certified mail to
Respondent’s Carrollton, Texas Branch Office. An employee of the Respondent, Mr.
Ramirez, signed for receipt of the Citation, which informed the Respondent it
had 15 working days from the date of receipt to contest the Citation pursuant
to Section 10(a) of the Act. Since Respondent did not contest the Citation or
submit the required verification of abatement within the time periods allotted,
on July 27, 2017, OSHA sent notice to the Respondent regarding nonpayment and delinquency
(notice of delinquency).
On August 9, 2017, Respondent’s Controller,
Melisa Del Rio, contacted the OSHA Richardson Area Office, reporting the
Respondent had received the notice of delinquency, but was not able to locate the
Citation. Respondent asserts its corporate office did not have knowledge of the
Citation until August 8, 2017. A copy of the Citation and air sampling results
were e-mailed to the Respondent’s corporate headquarters on August 9, 2017, the
same day the request for a second copy was received. A “late letter of
contest”, dated September 18, 2017, was submitted by facsimile mail (notice of
contest).
Respondent asserts its late filing
of the notice of contest resulted from excusable neglect and requests relief
from the Final Order. No essential dispute of facts material to this Decision
and Order has been established.
Discussion,
Findings, and Conclusions
Discretionary
relief from a Final Order of the Commission may be granted, pursuant to Fed.R.Civ.P. 60(b)(1), if the Court finds the employer has
established that “mistake, inadvertence, surprise, or excusable neglect” was
the cause of the employer’s failure to contest a citation within the time mandated
by Section 10(a) of the Act, or finds any other cause has
been established that justifies relief. Branciforte Builders, 9 BNA OSHC 2113, 2116-2117
(No. 80-1920, 1981). The presence of a potentially meritorious defense must
also be established so that vacating the Final Order will not be an empty
exercise. The Respondent, as the moving party, has the burden of proof that it
is entitled to such equitable relief.
In
determining whether the late filing of a notice of contest may be found to
result from “excusable neglect” under Rule 60(b)(1), the equitable analysis
enunciated by the Supreme Court in Pioneer
Inv. Serv. Co. v. Brunswick Assoc. Ltd. P’ship,
507 U.S. 380, 393 (1993) is
applicable. In Pioneer, the Court held that “excusable neglect” is determined
based upon equitable considerations that take into account all relevant
circumstances, and include consideration of the following factors: (1) the
danger of prejudice to the opposing party; (2) the length of the delay and its
potential impact on the proceedings; (3) the reason for the delay, including
whether it was within the reasonable control of the party seeking relief, and
(4) whether the party seeking relief acted in good faith. Id. At 395. “(N)either a lack of prejudice to the Secretary nor
good faith on the part of Respondent in attempting to comply with the statutory
filing requirement alone will excuse a late filing.” Prime Roofing Corp., 23 BNA OSHC 1329 (No. 07-1409, 2010). The
Commission has held that whether the reason for the delay was within the control
of the Respondent is a key factor in assessing the presence of excusable
neglect. A.S. Ross, Inc., 19 BNA OSHC
1147 (No. 99-0945, 2000).
It is undisputed the notice of contest
was due to have been filed not later than June 26, 2017, pursuant to Section 10(a)
of the Act, but was not in fact filed until September 18, 2017.
Respondent asserts its delay in
filing the notice of contest constituted excusable neglect because the employee
who signed for the Citation delivered it to the branch manager, Mr. Garza, who then
left Respondent’s employment without following established company policy to
transmit the Citation from the branch location to company headquarters. As a
result, Respondent alleges its corporate headquarters did not have knowledge of
the Citation until August 8, 2017. No explanation has been
offered for why Respondent’s headquarters had direct knowledge of the Citation
on August 8, 2017, yet still did not file its notice of contest until September
18, 2017.
The Secretary does not dispute the
facts alleged by the Respondent as noted above, but petitions
the Court as a matter of law to affirm the finality of the Citation.
Considering facts very similar to
those in this case, the Commission held in Stroudsburg
Dyeing & Finishing Company, 13 BNA OSHC 2058, 1987-90, CCH OSHD (No.
88-1830, 1989), that when the employee who received a mailed citation failed to
bring it to the attention of the proper officer of the company, that failure
did not constitute excusable neglect or any other reason justifying relief
pursuant to Rule 60(b). See also J.F. Shea Co., 15 BNA OSHC 1092, 1094 (No. 89-976, 1991). Transmittal
of the Citation between its branch location and its headquarters clearly was
within the exclusive control of the Respondent.
The Commission has consistently
ruled that employers must maintain orderly procedures for handling important
documents, and that when the lack of such procedures results in the untimely
filing of a notice of contest, relief under Rule 60(b) is not warranted. A.W. Ross, Inc., supra; Montgomery
Security Doors and Ornamental Iron, Inc., 18 BNA OSHC 2145, 2148 (No. 97-1906,
2000). Prompt employer response to citations issued pursuant to the OSH Act
not only facilitates efficient case management, but also furthers the ultimate
purpose of the Act to assure safe and healthful working conditions for employees
in their place of work. The failure of Respondent’s branch manager to communicate
adequately to headquarters upon receipt of the Citation did not constitute
excusable neglect. The Declaration of
Ms. Del Rio alleges the branch manager resigned June 20, 2017, but it was not
until August 8, 2017, that his successor found the notice of default dated July
27, 2017 buried on his former desk - none of which convinces the Court
Respondent had a sufficiently orderly process for managing important
documents.
No justification for Respondent’s continued
failure to file a notice of contest in a timely manner after requesting and
receiving a second copy of the Citation has been tendered. Respondent’s request
for an additional copy of the Citation did not alter the deadline for filing a notice
of contest, or start the response time mandated by
Section 10(a) of the Act over again. Section 10(a) does not include a tolling
provision when a second copy of a citation is requested. Even if the Court were
to find the Respondent’s handling of its first copy of the Citation constituted
excusable neglect because its branch manager did not follow established company
policy for transmittal of the Citation to corporate headquarters, that finding
would not justify Respondent’s continued failure to respond in a timely manner
after receiving a second copy directly in its headquarters. Respondent’s continued
failure to file a timely notice of contest after requesting and receiving a
second copy of the Citation exacerbated the potential impact of the delay on
the proceedings and also the potential prejudice to
the opposing party. Such continued delay also mitigates against a finding that
Respondent was maintaining orderly procedures for the handling of important
documents such as the Citation and making a good faith effort to comply with
the Act.
In the event excusable neglect is
not found, Respondent alleges in the alternative that although it was aware of
the inspection, since it is a staffing agency, it did not believe its safety
procedures were a subject of the ongoing inspection or that that it could be
the recipient of a citation. Therefore, it alleges it was unfairly surprised by
issuance of the Citation. However, the evidence shows the inspecting Compliance
Safety and Health Officer, Ryan McAliney, had
extensive communication with the Respondent during the period of the inspection,
including an opening conference, requests from OSHA to the Respondent for
documents, and the presence of a Respondent representative during air sampling
and at the closing conference. (Declaration of Greg Wynn, Complainant’s Exhibit
A). Mr. Wynn also avers he discussed requirements for filing a notice of contest
with the Respondent’s Controller, Ms. Del Rio, when she called to request the
second copy of the Citation. The Respondent’s assertion that it did not expect
to be issued a citation at the conclusion of the
inspection does not justify its failure to file a timely notice of contest when
it received one, or still less its continued delay when it had requested and received
a second copy.
Since Respondent has not established
an entitlement to relief from the Final Order as a result of
mistake, inadvertence, surprise, excusable neglect, or any other just cause
encompassed by Rule 60(b), the presence or absence of a potentially meritorious
defense is not germane. The presence of a latent
defense would not by itself justify failure to file a notice of contest as
required by Section 10(a) of the Act. A ruling that an employer can simply
assert at any time that it didn’t submit a timely notice of contest to a citation
because it thought it had a good defense would defeat the purpose of Section
10(a) and ignore its plain meaning.
The Respondent has not established
sufficient justification for relief from the Final Order.
FINDINGS OF FACT AND CONCLUSIONS OF
LAW
The foregoing Decision and Order constitutes
the Court’s findings of fact and conclusions of law in accordance with Rule
52(a) of the Federal Rules of Civil Procedure.
ORDER
The Respondent’s motion for relief is
denied. The Citation and Penalties are affirmed as the Final Order of the
Commission.
SO ORDERED.
/s/
Judge Peggy S. Ball
Occupational Safety and Health Review
Commission
Dated:
May 30, 2018
