DEEMER STEEL CASTING CO.
OSHRC Docket No. 13686
Occupational Safety and Health Review Commission
March 15, 1977
[*1]
Before: BARNAKO, Chairman; MORAN and CLEARY, Commissioners.
COUNSEL:
Baruch A. Fellner, Office of the Solicitor, USDOL
Marshall H. Harris, Regional Solicitor, U.S. Department of Labor
E. G. Moody, Jr., Administrator, Deemer Steel Casting Co., for the employer
OPINION:
DECISION
BY THE COMMISSION: An October 21, 1975, decision of Review Commission Judge Ben D. Worcester is before this Commission for review pursuant to 29 U.S.C. § 661(i). That decision, which is attached hereto as Appendix A, n1 is reversed insofar as it fails to approve the entire settlement agreement between the parties, vacates the notification of failure to correct a prior violation, and orders the refunding of $630 tendered by respondent in satisfaction of the penalty assessment agreed upon by the parties.
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n1 Chairman Barnako does not agree to this attachment.
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This case involves a rather convoluted history. Respondent was originally cited, on April 3, 1973, for a violation of 29 U.S.C. § 654(a)(2) for noncompliance with the occupational safety and health [*2] standard codified at 29 C.F.R. § 1910.94(b)(2)(i) in that it failed to equip its portable pneumatic hand grinding wheels with hoods or enclosures connected to an exhaust system to remove point of operation dust. Respondent timely contested the alleged violation, and the case was docketed under Number 2792. On October 30, 1973, Review Commission Judge Joseph L. Chalk affirmed the citation and penalty proposed therefor, but he extended the abatement period specified in the citation "to include a period of ninety days from the date of [his] order, to furnish respondent the opportunity to apply for a variance, if desired." Secretary v. Deemer Steel Casting Company, 15 OSAHRC 162, 171 (1975). Thereafter, that decision was directed for review, and the Commission, on January 23, 1975, stayed the abatement of the violation "pending final disposition of respondent's variance application." n2 15 OSAHRC at 163. At the time of that decision, the Commission did not know that the Secretary of Labor had denied respondent's November 26, 1973, application for a variance "without prejudice" on October 29, 1974. The Commission was subsequently made aware of that fact by a letter from the Secretary, [*3] dated February 21, 1975.
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n2 The Commission decision erroneously refers to the violated standard as 29 C.F.R. § 1910.94(b)(1) rather than 29 C.F.R. § 1910.94(b)(2)(i).
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The instant case arises from a reinspection of respondent's facility which was conducted during the period April 28 through May 15, 1975. As a result of that inspection, respondent was issued a notification of failure to correct the aforementioned violation which proposed an additional penalty of $1,260. Respondent timely contested the notification. Thereafter, however, the parties filed a settlement agreement with Judge Worcester. That agreement provided for a reduction of the proposed penalty to $630, withdrawal of respondent's notice of contest, and various abatement procedures including an abatement date of January 1, 1976. Judge Worcester approved only that portion of the settlement agreement which extended the abatement period to January 1, 1976. He vacated the notification for failure to correct and the penalty proposed therefor sua sponte [*4] on the grounds that the Commission's stay order was in effect at the time of the reinspection and that the Secretary's failure to advise respondent of its right to a hearing on its application for a variance was a denial of due process. We find that Judge Worcester erred in not approving the entire settlement agreement.
The Act provides that an employer shall be afforded an "opportunity" for a hearing on an application for a variance. 29 U.S.C. § 655(d). In implementation of this requirement, the Secretary has provided that an applicant for a variance may request a hearing in his application. 29 C.F.R. § § 1905.11(b)(6) and 1905.15. Not only did respondent's application fail to request a hearing but it ended with the statement that "[w]e await your decision." Thus, it is clear that respondent was satisfied to have the issue determined on the basis of the matters contained in its application.
Unfortunately, the Commission was not aware of the denial of respondent's application for a variance at the time that it issued its decision in Docket Number 2792. Had it been, the stay order would not have been issued. Although that order may have been more clearly stated, what was intended [*5] was to afford the respondent the opportunity for action by the Secretary on an application for a variance if respondent desired to submit an application as permitted by Judge Chalk's order. That opportunity was afforded respondent, and the stay order ceased to be effective when the Commission received the Secretary's letter on February 21, 1975, advising of the denial of respondent's application for a variance.
The Commission order in Docket No. 2792 provided that abatement was stayed "pending final disposition of respondent's variance application." The clear import of that language is that abatement was stayed until the Secretary took final action on the application permitted by Judge Chalk's order. The fact that the Secretary denied the application "without prejudice" is irrelevant. This merely recognizes that the Act does not limit the number of times that the respondent can apply for the same variance. Moreover, the Commission order does not refer to more than one "application." We therefore find that Judge Worcester's interpretation thereof unduly expands the order. If allowed to stand, his decision would produce an unreasonable result by permitting an employer to avoid [*6] abatement ad infinitum by simply submitting another application each time the preceding one is denied.
In the instant case, there is no indication that respondent has filed any subsequent application for a variance or that it was dissatisfied with the Secretary's action in its November 26, 1973, application. To the contrary, respondent's execution of the settlement agreement implies that it did not disagree with the action of the Secretary on the variance application. Considering the matters discussed above in conjunction with the well-established principle of law that public policy favors amicable settlement of litigation n3 and finding that the settlement agreement is not repugnant to the purposes and policies of the Act, n4 we conclude that the agreement should have been approved in its entirety. n5
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n3 Cities Services Oil Co. v. Coleman Oil Co., 470 F.2d 925 (1st Cir. 1972).
n4 See Secretary v. Thorleif Larsen and Son, Inc., 12 OSAHRC 313 (1974).
n5 Also see Dale M. Madden Construction, Inc. v. Hodgson, 502 F.2d 278 (9th Cir. 1974).
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For the foregoing reasons, the settlement agreement is approved in its entirety. Accordingly, the Judge's decision is vacated, and the notification of failure to correct and the agreed penalty of $630 are affirmed.
APPENDIX A
DECISION AND ORDER
Howard K. Agran, for the Secretary
E. G. Moody, Jr., pro se, forthe Respondent
Ben. D. Worcester, Judge, OSAHRC
THE FACTS
This proceeding arises pursuant to a notice of contest filed by the respondent, Deemer Steel Casting Company, under the provisions of section 10(c) of the Occupational Safety and Health Act of 1970 (84 Stat. 1590 et seq., 29 U.S.C. 651 et seq.) hereinafter called the Act.
On May 19, 1975, the Secretary notified Deemer that as the result of an inspection of its facility at New Castle, Delaware, from April 28, 1975, through May 15, 1975, a penalty of $1,260 was proposed for failure to abate an alleged violation of 29 CFR 1910.94(b)(2)(i) described in item 7(b) of a citation issued on April 3, 1973. The respondent filed a timely notice of contest of both the citation and the proposed penalty.
In the 1973 citation it was alleged in item 7 that Deemer [*8] had failed:
". . . to limit to the point of operation, dust produced in production hand grinding with abrasive wheels . . . ."
at portable pneumatic hand grinding wheels used for cleaning steel castings.
Item 7 of this citation included an admonition that Deemer was required to submit a detailed plan for complete abatement by means of feasible engineering or administrative controls within 30 days of the receipt of the notice. In its notice of contest Deemer asserted that qualified expert advice and their own efforts to devise feasible engineering methods of abatement had been unsuccessful, but averred that substantial compliance has been achieved through a strictly enforced requirement that affected employees wear respirators.
This proceeding has an unusual history. According to the complaint it began with an inspection on December 29, 1972. The previously mentioned citation was issued on April 3, 1973, and, after a notice of contest was filed, it came on to be heard before Judge Chalk. He stayed the abatement of the citation alleging noncompliance with 29 CFR 1910.94(b)(1) [sic] n1 so that Deemer would have an opportunity to make appropriate application for a variance since [*9] the Secretary had stipulated that ". . . no workable system to compensate for the varied work positions has been arranged to entrap the dust particles." n2 The Secretary petitioned for review on the ground that Judge Chalk had infringed upon the variance power granted the Secretary in section 6(d) of the Act. The Commission, after noting that the Secretary had precluded the Commission from setting an abatement requirement by stipulating as to the extreme difficulty of abatement, ordered the abatement "stayed pending final disposition of the variance application, so long as the employer continues to use respirators in the cleaning operation."
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n1 15 OSAHRC 162, 169 (1975)
n2 15 OSAHRC 162 (1975)
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Exhibit D to the complaint which is a copy of a letter from the complainant's Associate Assistant Secretary for Regional Programs indicates that Deemer did file a written request for a variance by letter dated June 18, 1974. Section 6(d) of the Act (29 U.S.C. 655(d)) gives any affected employer the right to apply for a rule [*10] or order for a variance from a standard. This paragraph requires the Secretary to issue a rule or order ". . . if he determines on the record, after opportunity for . . . a hearing . . . ." that the proponent of a variance has demonstrated by a preponderance of the evidence that the variance should be granted. The pro se respondent was neither advised of the right to a hearing nor given an opportunity to present evidence in support of the petition for a variance. Instead the Secretary unilaterally concluded on October 29, 1974, that Deemer's petition sought an exemption instead of a variance, so the petition was summarily denied without prejudice so that Deemer would have an opportunity to file an amended application.
The effect of this action was to indefinitely postpone final disposition of the variance application and thus, under the provisions of the Commission's order, continue the stay of the proceeding. On April 28, 1975, without prior notice the Secretary reinspected the worksite and on May 19, 1975, issued a citation charging Deemer with failure to abate the stayed abatement order and proposed a penalty of $1,260. It is this citation which is in issue.
The complainant [*11] Secretary has now prepared, submitted to the respondent for signing and transmitted for filing with this Commission a Stipulation of Settlement in which the Secretary has moved to reduce the proposed additional penalty from $1,260 to $630 on the ground that:
"Respondent is exhibiting sufficient good faith by the attempt herein set forth to abate a difficult hazard to justify a fifty percent reduction of the proposed penalty."
In the stipulation the Secretary conceded that it was possible that neither engineering nor long range administrative controls might be feasible so that continued reliance on the use of respirators might be necessary. The complainant further conceded in paragraph 1(e) that experience with attempts to abate the hazard may require reopening the action for failure to abate:
". . . with the issue being whether Respondent can meet the burden of proving that there are not feasible engineering and/or long range administrative controls to limit to the point of operation, dust produced in production hand grinding by portable pneumatic hand grinding wheels used in steel casting cleaning operations."
Notwithstanding the fact that the Secretary has conceded that it [*12] is impossible to determine whether abatement of a very difficult hazard could be accomplished by January 1, 1976, the Secretary has submitted for approval a proposed settlement which includes a proposed penalty of $630.
The Secretary in his response to a pre-trial order, after conceding that section 6(d) of the Act guarantees an employer seeking a variance an opportunity for hearing, attempts to justify his summary rejection of the employer's application without a hearing on the ground that the employer did not ask for a hearing. In support of this assertion the Secretary cites the regulations published as Part 1905, Title 29, Code of Federal Regulations.
The employer is not represented by an attorney, yet the Secretary failed and neglected to explain to the employer that Part 1905 provides for an opportunity to be heard until now. Only now has it been revealed that the employer's application was very detailed and specific. The Secretary's response through his Associate Assistant Secretary for Regional Programs (attached to the complaint as Exhibit D) was phrased in general terms and conclusions. It does not set forth the facts relied upon in the "careful study" to reach the [*13] qualified conclusion that "It appears that . . ." the methods proposed would not provide adequate protection to employees. Finally, this same employee of the Secretary although not identified as a hearing examiner duly appointed, qualified and acting under authority of the Administrative Procedure Act (5 U.S.C. section 551 et seq.) as required by 29 CFR 1905.22 assumed the authority to adjudicate the application. However, he denied it without prejudice to the filing of another application.
The effect of this action was to postpone final disposition of the variance application and thus to continue the Commission order staying the abatement relating to the item of the citation alleging noncompliance with 29 CFR 1910.94(b)(1).
The Secretary's attempt to assess a penalty of $1,260 for failure to abate Item 7(b) of the citation before final disposition of the variance application was a nullity. Even if the Secretary's denial of the variance application were to be construed as a final order, the May 19, 1975, citation would have to be vacated because of the Secretary's failure to notify Deemer of the right to a hearing. This was a denial of due process of law under the 5th [*14] Amendment to the Constitution of the United States.
As long ago as 1914, in construing the term due process of law as applicable to the states under the 14th Amendment the Supreme Court said in Grannis v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 783:
"The fundamental requisite of due process of law is the opportunity to be heard."
In Morgan v. United States et al, 304 U.S. 1, 14, 58 S.Ct. 773, 775 (1938) the Supreme Court said:
[1] The first question goes to the very foundation of the action of administrative agencies intrusted by the Congress with broad control over activities which in their detail cannot be dealt with directly by the Legislature. The vast expansion of this field of administrative regulation in response to the pressure of social needs is made possible under our system by adherence to the basic principles that the Legislature shall appropriately determine the standards of administrative action and that in administrative proceedings of a quasi-judicial character the liberty and property of the citizen shall be protected by the 15 rudimentary requirements of fair play. These demand "a fair and open hearing," essential alike to the legal [*15] validity of the administrative regulation and to the maintenance of public confidence in the value and soundness of this important governmental process. Such a hearing has been described as an "inexorable safeguard." St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 73, 56 S.Ct. 720, 735, 80 L.Ed. 1033; Ohio Bell Telephone Co. v. Public Utilities Commission, 301 U.S. 292, 304, 305, 57 S.Ct. 724, 730, 81 L.Ed. 1093; Railroad Commission of California v. Pacific Gas & Electric Co. 302 U.S. 388, 393, 58 S.Ct 334, 338, 82 L.Ed. 319; Morgan v. United States, supra. And in equipping the Secretary of Agriculture with extraordinary powers under the Packers and Stockyards Act, the Congress explicitly recognized and emphasized this requirement by making his action depend upon a "full hearing."
In the case of Inland Steel Co. v. NLRB, 109 F.2d. 9, 20 (7th Cir. 1940) the court held that:
(1) A "hearing" means a trial by a tribunal free from bias and prejudice and imbued with the desire to accord the parties equal consideration.
(2) No judgment is just if not obtained by due process of law and that
(3) This principle is as essential in proceedings before administrative agencies [*16] as it is before courts.
Exhibit E to the complaint reveals that the Secretary, through his counsel for regional litigation without prior notice or opportunity to be heard, attempted to convert the October 29, 1974, denial without prejudice as a final order upon which to base a citation for failure to abate. In Greene v. McElroy, 360 U.S. 474, 496, 76 S.Ct. 1400, 1413 (1959) the court held that certain principles have remained relatively immutable in our jurisprudence. One of these is that where governmental action seriously injures an individual, and the reasonableness of the action depends on fact findings, the evidence used to prove the government's case must be disclosed so that the other party has an opportunity to introduce evidence to the contrary. The Supreme Court noted that this fundamental principle of justice has ancient roots n3; that under the 6th Amendment the accused had the right to be confronted with the witnesses against him; and finally that the court had applied this rule not only in criminal cases but also in all types of cases where administrative and regulatory actions were under scrutiny.
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n3 "25. When Festus more than two thousand years ago reported to King Agrippa that Felix had given him a prisoner named Paul and that the priests and elders desired to have judgment against Paul, Festus is reported to have stated: 'It is not the manner of the Romans to deliver any man to die, before that he which is accused have the accusers face to face, and have licence to answer for himself concerning the crime laid against him.' Acts 25.16."
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The right to be heard has recently been extended to the termination of welfare benefits even though public assistance benefits are a "privilege" rather than a "right." Goldberg v. Kelly, 397 U.S. 254, 269, 90 S.Ct. 1011, 1021 (1970).
In the case at bar, what opportunity has the respondent Deemer had to test the credibility of the evidence upon which the conclusion was made that Deemer's application asked for an exemption? n4 No facts were given. The names and qualifications of those persons who made the "careful study" relied upon were not revealed. Deemer was given no opportunity to confront them or to present evidence [*18] to the contrary. Instead, the Secretary's own failure to fulfill his constitutional duty to enforce the Act only through due process of law as required by the 5th Amendment was used as the basis for the citation for failure to abate now in issue. n5
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n4 Exhibit D to complaint
n5 Exhibit E to complaint
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The Secretary of Labor as the public official charged with enforcement of the Act is supplied with a substantial sum of public funds with which to pay the cost of administration of the Act. He has the benefit of expert advice, both technical and legal. His solicitor advises him as to the procedural requirements of the Act in enforcement proceedings. Even in a criminal proceeding counsel for the government has a duty to assure the accused of a fair trial. It has been held that failure of the United States Attorney to notify the court of the defendant's desire to be represented by counsel was a denial of due process of law. Melonson v. O'Brien, 191 F.2d 963 (1st Cir. 1951). Those who are brought into contest [*19] with the government in a quasi-judicial proceeding are entitled to be fairly advised as to what action the government proposes to take and to be heard upon the issue before a final order is issued. Gonzales v. United States, 348 U.S. 407, 75 S.Ct. 409 (1955).
Whenever a notice of contest is filed pursuant to the provisions of 29 U.S.C. 659(a), section 10(a) of the Act, the Commission has sole jurisdiction of the proceeding. The Secretary of Labor is required to comply with any order of the Commission thereafter. The Commission remanded the proceeding to the Secretary for the purpose of giving the respondent an opportunity to file a petition for a variance. It was filed. The Secretary's subsequent issuance of a citation for failure to abate a hazard which he now concedes may be difficult to accomplish is clearly a nullity. However, so much of the proposed settlement as provides for extension of time to abate to January 1, 1976, should be, and hereby is, affirmed.
The citation for failure to abate and proposed penalty are ordered vacated. It is further ordered that the $630 tendered by the [*20] respondent to the Secretary be refunded.
BEN D. WORCESTER, Judge, OSAHRC