OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
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SECRETARY OF LABOR, |
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Complainant, |
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v. |
OSHRC Docket No. 12-0140
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G.A. DENISON & SONS, INC., |
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Respondent. |
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APPEARANCES:
Kevin E. Sullivan, Attorney;
Michael D. Felson, Regional Solicitor; M. Patricia Smith, Solicitor of Labor; U.S.
Department of Labor, Boston, MA
For the Complainant
George Denison; G.A. Denison & Sons, Inc., New
London, CT
For the Respondent
DIRECTION FOR REVIEW AND
REMAND ORDER
Before: ROGERS, Chairman and ATTWOOD, Commissioner.
BY THE
COMMISSION:
On
July 30, 2012, Administrative Law Judge Dennis L. Phillips issued a Decision
and Order dismissing the notice of contest filed by G.A. Denison & Sons,
Inc. (“Denison”) and affirming the two citations issued to Denison with
proposed penalties totaling $110,000.
The case had been assigned to the judge for mandatory settlement
proceedings pursuant to Commission Rule 120(b), 29 C.F.R. § 2200.120(b), and
those proceedings were underway at the time of the judge’s dismissal. Denison, appearing pro se, has filed a petition for review of the judge’s
decision. For the following reasons, we
direct the case for review, set aside the judge’s order, and remand for further
proceedings consistent with this opinion.
On July 11, 2012, the judge issued a show
cause order, in which he gave Denison until July 23 to show why it should not
be held in default for failing to file (1) a notice of appearance as ordered by
the judge on March 26, 2012; (2) a corporate disclosure declaration as required
by Commission Rule 35(a), 29 C.F.R. § 2200.35(a); and (3) “a properly
captioned, titled and signed answer.”
The show cause order was sent to Denison via certified mail, return
receipt requested, as required by Commission Rule 101(d), 29 C.F.R. §
2200.101(d).
On July 30, the judge
dismissed the notice of contest based on Denison’s failure to comply with his
orders throughout the settlement proceedings, including Denison’s failure to
respond to the July 11 show cause order.
The judge relied on Commission Rule 101(a), which states that a party
“may be declared to be in default . . . after having been
afforded an opportunity to show cause why he should not be declared to be in
default . . . .” 29
C.F.R. § 2200.101(a). However, the
return receipt for the July 11 show cause order shows that Denison did not
receive the order until July 30, seven days after the company was required to
respond to the order and the same day that the judge issued his dismissal
order. Because Denison was not afforded
an opportunity to respond to the show cause order before being declared in
default, as required by Rule 101(a), dismissal of its notice of contest was not
appropriate. See WR Exterior Design
Constr. Inc., 22 BNA OSHC 1391, 1392, 2004-2009 CCH OSHD ¶ 33,006,
p. 54,232 (No. 08-0474, 2008) (dismissal set aside where pro se respondent did not receive show cause order).
Accordingly, on remand, the judge is directed to
provide Denison with an opportunity to respond to the show cause order and take
any further action as appropriate.[1]
SO ORDERED.
___/s/_____________________________
Thomasina
V. Rogers
Chairman
___/s/_____________________________
Cynthia
L. Attwood
Dated: September 13, 2012 Commissioner
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
______________________________________
Secretary of Labor, )
)
Complainant, )
)
v.
) OSHRC
Docket No. 12-0140
)
G.A. Denison & Sons, Inc., )
)
)
Respondent. )
______________________________________ )
DECISION AND ORDER
Background
This proceeding is before the
Occupational Safety and Health Review Commission (“the Commission”) pursuant to
§ 10(c) of the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et
seq. (“the Act”). On June 8, 2011,
the Occupational Safety and Health Administration (“OSHA”) inspected the work
site of Respondent, G. A. Denison & Sons, Inc. (“Respondent” or “Denison”)
at 69 Lyme Street, Old Lyme, Connecticut 06371.
As a result of the inspection, on December 5, 2011, OSHA issued a seven
item serious citation and a five item willful citation. The total proposed penalty for the citations
items is $110,000.00.
By
letter to OSHA dated December 23, 2011, Respondent contested the proposed
penalties
and violations.
On
January 9, 2012, the Secretary filed her complaint. Respondent failed to file a timely answer.
On January
26, 2012, the case was designated for Mandatory Settlement Proceedings pursuant
to Commission Rule 29 C.F.R. § 2200.120.
On February 9, 2012, Respondent was
ordered to show cause by February 27, 2012 why it should not be held in default
for failing to file an answer and comply with Commission Rule 35.[2] Respondent was duly warned that its failure
to timely respond to the order to show cause may result in Respondent being
held in default, the dismissal of Respondent’s notice of contest of the
citation(s) at issue, and/or the assessment of costs, including attorney’s
fees, incurred by the Commission and the other parties relating to this case.
During
the pre-settlement conference telephone scheduling conference conducted on
March 16, 2012, Respondent’s George Denison identified Keith Stedman as
Respondent’s corporate representative.[3] During the conference, the Court orally
instructed Respondent to file its answer and Rule 35 declaration, and to have
its representative promptly file his appearance in accordance with 29 C.F.R. §§
2200.22 and 2200.23.
The
Court’s Notice of Mandatory Settlement Conference and Order, dated March 26,
2012 (Scheduling Order), ordered Respondent to file its answer and Commission
Rule 35(a) declaration by March 27, 2012.
The
Scheduling Order also ordered and stated that “each party shall prepare and
submit to me ex parte a confidential summary, which must be received in
my office no later than July 18, 2012.” The parties were told that the summary shall
include a statement of:
1. the key issue(s) remaining in controversy;
2. its
assessment of its own position, including the factual predicate for its
position on each issue, and any other information the party believes would be
helpful to understanding its position;
3. its assessment of the opposing party’s
position;
4. steps or
concessions it will take, and would like to see the opposing party take toward
resolution; and
5. the
preceding settlement negotiations between the parties, including an
identification of the latest settlement proposals made by each party.
By
Discovery Scheduling Order dated March 26, 2012, since Respondent had made
“ability to pay” the proposed penalties an issue at the Mandatory Settlement
Conference (“MSC”), Respondent was directed to provide the Secretary of Labor’s
counsel no later than April 20, 2012:
(1) United States Tax Returns, e.g.; Form 1040 (Individual U.S.
Tax Return), Form 1120-W (Estimated Tax Corporations), and/or Form 1065 (U.S.
Return of Partnership Income), as appropriate, for a period of two years
preceding the MSC; (2) state income tax returns for a period of two years
preceding the MSC, and (3) Respondent’s financial statements and audits for
2010 and 2011 (and thereafter if they exist).[4]
Respondent filed an undated,
untitled, and unsigned document that purported to agree to all allegations in
the complaint, while asserting that Respondent could “not afford to pay the
pine (sic) amount.”[5] Respondent also indicated that it had asked
for assistance from Keith Stedman.
On July 11, 2012, Respondent was
ordered to show cause on or before July 23, 2012 why it should not be held in
default for failing to: 1) file a
declaration that complies with Commission Rule 35, 2) file a properly
captioned, titled and signed answer,[6]
and 3) comply with the Court’s order dated March 26, 2012 by not filing a
representative’s notice of appearance.
Respondent was duly warned that its
failure to timely respond to the order to show cause may result in Respondent
being held in default, the dismissal of Respondent’s notice of contest of the
citation(s) at issue, and/or the assessment of costs, including attorney’s
fees, incurred by the Commission and the other parties relating to this case.
Respondent has not filed: 1) a properly captioned, titled and signed
answer, 2) its declaration, 3) its notice of appearance by a representative, or
4) any confidential summary with the Court.
Respondent also did
not provide to the Secretary the financial documents identified in the Court’s
Discovery Scheduling Order.
Respondent
has also not filed a response to the Court’s July 11, 2012 show cause order.
On July 26, 2012, the Court cancelled
the MSC noting that Respondent had failed to:
1) submit designated financial information to the Complainant by April
20, 2012 in advance of the MSC, 2) submit its confidential statement to the
Court by July 18, 2012, and 3) respond to the Court’s Order to Show Cause by
July 23, 2012; as well as file a: a)
declaration that complies with Commission Rule 35, b) properly captioned,
titled and signed answer, and c) representative’s notice of appearance. The Court stated that it would issue a
dispositive decision and order shortly.
Jurisdiction
The Court finds that the Commission has
jurisdiction of the parties and the subject matter in this case.
Order to Show Cause
Commission judges have the discretion to impose
sanctions on parties who violate their orders.[7] See NL Industries, Inc., 11 BNA OSHC
2156, 2168 (No. 78-5204, 1984). Rule
16(f), Federal Rules of Civil Procedure (“Fed. R. Civ. P.”),[8]
also permits the Court on its own initiative to order just sanctions if a party
or party’s attorney fails to obey a scheduling or pretrial order.[9] Rule 16(f) was added in 1983 to “reflect that existing practice [to enforce
failures by appropriate sanctions] and to obviate dependence upon Rule 41(b) or
the court’s inherent power to regulate litigation.” Notes of Advisory Committee on Rules, 1983
Amendment, Subdivision (f); Sanctions.
Considerable discretion is vested in judges to decide whether to impose
sanctions and what form they should take.
The Commission and federal courts
generally consider eight criteria when determining whether a Judge’s decision
to sanction a party through dismissal is appropriate. Duquesne Light Company, 8 BNA OSHC
1218, 1221 (No. 78-5303, 1980).
Prejudice to the opposing party,[10]
whether there is a showing of willful default by a party, and contumacious
conduct by the noncomplying party are three of the more significant criteria to
take into account. Only one of these
three criteria is needed to affirm the Judge’s decision to render a judgment by
default against a party. Ford
Development Corp., 15 BNA OSHC 2003, 2005 (No. 90-1505, 1992), Circle T
Drilling Company, Inc., 8 BNA OSHC 1681, 1682 (No. 79-2667, 1980).
In this instance, there is a clear
showing of willful default by Respondent.
Respondent did not: 1) submit designated financial information to
the Complainant by April 20, 2012 in advance of the MSC, 2) submit its
confidential statement to the Court by July 18, 2012, 3) adequately respond to
the Court’s February 9, 2012 show cause order, and 4) respond to the Court’s
Order to Show Cause by July 23, 2012; as well as file a: a) declaration that complies with Commission
Rule 35, b) properly captioned, titled and signed answer, and c)
representative’s notice of appearance.
Respondent has failed to comply with the Judge’s Orders throughout the
proceeding including the Show Cause Order dated February 9, 2012, verbal March
16, 2012 order, Scheduling Order dated March 26, 2012, Discovery Scheduling
Order dated March 26, 2012, and Show Cause Order dated July 11, 2012.
The document filed by
Respondent purportedly as its answer does not contest the merits of the
citations or their penalties. It is of
questionable significance since it is unsigned and does not comport with the
Commission rule 29 C.F.R. § 2200.32.[11]
No explanation for these failings has
been tendered to the Court.
Collectively, the Court finds these failures to be contumacious conduct
by the Respondent. The Court may dismiss
a matter when “the record shows contumacious conduct by the noncomplying party
or prejudice to the opposing party.” St.
Lawrence Food Corp. D/b/a/ (sic) Primo Foods, 21 BNA OSHC 1467, 1472 (Nos.
04-1734 and 04-1735, 2006). Having
submitted its notice to contest the citations at issue in December, 2011,
Respondent has shown little interest since then in moving this case
forward. Under these circumstances, the
Court sees no worthwhile purpose in allowing this case to proceed any further.
The Court is mindful of policy
considerations in the law that weigh in favor of deciding cases on their
merits. See Pearson v.
Dennison, 353 F.2d 24 (9th Cir. 1965). Pro se employers are held to a
standard of reasonable diligence. See
Manti d/b/a Mant Homes, 16 BNA OSHC 1458, 1460 (No. 92-2222, 1993). There are limits to how liberally Commission
judges can interpret the rules to assist the pro se employer. Id. at 1461. The Court finds that the Commission has
conveyed due notice to Respondent of its procedural rights and provided ample
warning that its failure to comply with Court orders may result in the
dismissal of its notice of contest.
The Court finds Respondent to be in
default. “A defaulting party ‘is taken
to have conceded the truth of the factual allegations in the complaint as
establishing the grounds for liability as to which damages will be
calculated.’” Ortiz-Gonzalez v. Fonovia, 277 F.3d 59, 62-63 (1st
Cir. 2002)(quoting Franco v. Selective Ins. Co., 184 F.3d 4, 9 n.3 (1st
Cir. 1999)), Tower Painting Co., 22 BNA OSHC 1368, 1375 (No. 07-0585,
2008).[12]
The Court finds that the underlying
complaint and citations sufficiently state the description of the alleged
violations and a reference to the standards allegedly violated. The Court also finds that by Respondent’s
default the Secretary has adequately shown the applicability of the cited
standards for each of the alleged violations and has sufficiently established
that the terms of the cited standards were not met by Respondent in each of the
alleged violations. By Respondent’s
default, the Court also finds that Respondent’s employees had access to the
cited conditions and that the Secretary has adequately proved that Respondent
either knew or should have known of the cited conditions. Accordingly, the Court finds that the
Citation Items at issue are all affirmed, in their entirety, as alleged by the
Secretary.
Penalties
The Secretary has proposed a total
penalty of $110,000 for the Citation Items at issue. In assessing penalties, the Commission must
give due consideration to the gravity of the violation and to the employer’s
size, prior history of violations and good faith. 29 U.S.C. § 666(j); J.A. Jones Constr. Co.,
15 BNA OSHC 2201, 2213-14 (No. 87-2059, 1993).
These factors are not necessarily accorded equal weight, and gravity is
generally the principal factor in penalty assessment. Trinity Indus., Inc., 15 BNA OSHC 1481,
1483 (No. 88-2691, 1992). The gravity of
a violation depends upon such matters as the number of employees exposed,
duration of exposure, precautions taken against injury, and the likelihood that
an injury would result. J.A. Jones, 15 BNA OSHC at 2213-14. Based on the record of this case and
Respondent’s default, the Court finds that the Secretary properly considered
the statutory factors in her penalty proposals.
The court finds the total proposed penalty of $110,000, along with the classification of the violations as alleged
by the Secretary, for the Citation Items at issue to be appropriate, and the
proposed penalties are assessed.
Findings of Fact and Conclusions of
Law
All finding of fact and conclusions
of law relevant and necessary to a determination of the contested issues have
been found and appear in the decision above.
See Fed. R. Civ. P. 52(a).
Order
After considering the entire record of
this case, including the July 11, 2012 Order to Show Cause and Respondent’s
lack of response thereto, the Court finds that a default judgment against
Respondent is warranted and that Respondent be declared in DEFAULT;
IT IS FURTHER ORDERED THAT
Respondent’s Notice of Contest is DISMISSED with prejudice; and
based upon the foregoing findings of fact
and conclusions of law, IT IS FURTHER
ORDERED that the seven item serious citation, five item
willful citation, and proposed penalties for all of the items of the citations
totaling $110,000.00 are AFFIRMED in all respects.
_/s/__________________________
The
Honorable Dennis L. Phillips
U.S. OSHRC Judge
Date: _August
13, 2012___
Washington, D.C.
[1] Our decision rests solely on Denison’s lack of opportunity to respond to the judge’s show cause order. We note that although Denison apparently seeks only a penalty reduction, the judge found that Denison has not been diligent in participating in the mandatory settlement proceedings. In the event that those proceedings are resumed, we remind the parties that a failure to “comply with the orders of the Settlement Judge or the refusal to cooperate fully within the spirit of this [settlement] rule may result in the imposition of sanctions.” Commission Rule 120(d)(2), 29 C.F.R. § 2200.120(d)(2).
[2] Commission Rule 35(a) requires an answer be accompanied by a separate declaration listing all Respondent’s parents, subsidiaries, and affiliates, or stating that it has none (declaration). 29 C.F.R. § 2200.35(a). A party that fails to file an adequate declaration may be held in default after being given an opportunity to show cause why it should not be held in default. 29 C.F.R. § 2200.35(b).
[3] Mr. Stedman joined in the conference call.
[4] Respondent consented and agreed to disclose this financial material during the conference.
[5] No separate declaration listing Respondent’s parents, subsidiaries, and affiliates, or stating that it has none accompanied Respondent’s document.
[6] See 29 C.F.R. § 2200.32 Signing of pleadings and motions.
[7] See 29 C.F.R. § 2200.101 Failure to obey rules, which states (a) Sanctions. When any party has failed to plead or otherwise proceed as provided by these rules or as required by the Commission or Judge, he may be declared to be in default either on the initiative of the Commission or Judge, after having been afforded an opportunity to show cause why he should not be declared to be in default, …. Thereafter, the Commission or Judge, in their discretion, may enter a decision against the defaulting party ….
[8]
Rule 16(f), Fed. R. Civ. P. states:
(f) Sanctions.
(1) In General. On motion or on its own, the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney fails to obey a scheduling or other pretrial order
[9] Procedure before the Commission is in accordance with the Fed. R. Civ. P. in the absence of a specific provision in the Commission’s own Rules of Procedure. Rule 2(b) of the CRP, 29 C.F.R. § 2200.2(b), see also Williams Enterprises, 4 BNA OSHC 1663, 1665 n.2 (No. 4533, 1976).
[10] A party is prejudiced if the failure to make required court ordered disclosures impairs the party’s ability to adequately prepare, including receiving timely notice of the opponent’s defense(s) or lack thereof. See Avionic Co. v. General Dynamics Corp., 957 F.2d 555 (8th Cir. 1992). In this instance, the Secretary has been prejudiced by Respondent’s failure to comply with the Court’s Scheduling Order by failing to file a properly captioned, titled and signed answer and its required declaration.
[11] 29 C.F.R. § 2200.32 states:
Pleadings … shall be signed by the filing party or by the party’s representative. The signature of a representative constitutes a representation by him that he is authorized to represent the party … on whose behalf the pleading is filed. The signature of a representative or party also constitutes a certificate by him that he has read the pleading, … that to the best of his knowledge information, and belief, formed after reasonable inquiry, it is by exiting law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase the cost of litigation. If a pleading … is signed in violation of this rule, such signing party or its representative shall be subject to the sanctions set forth in § 2200.101 or § 2200.104. A signature by a party representative constitutes a representation by him that he understands that the rules and orders of the Commission and its judges apply equally to attorney and non-attorney representatives.
[12] As a result of a default, the factual allegations of the underlying citation relating to liability are taken as true. Dundee Cement Co. v. Howard Pipe & Concrete Products, 722 F.2d 1319, 1323 (7th Cir. 1983). When entering a default judgment, factual allegations set forth in the complaint and underlying citations are sufficient to establish a defendant’s liability. Trustees of the Iron Workers District Council of Tennessee Valley and Vicinity Pension Fund et al. v. Charles Howell, No. 1:07-cv-5, 2008 WL 2645504, * 6 (E.D. Tenn. July 2, 2008); National Satellite Sports, Inc. v. Mosely Entertainment, Inc., No. 01-CV-74510-DT, 2002 WL 1303039, * 3 (E.D. Mich. May 21, 2002).