[House Report 109-46]
[From the U.S. Government Publishing Office]
109th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 109-46
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OCCUPATIONAL SAFETY AND HEALTH SMALL BUSINESS DAY IN COURT ACT OF 2005
_______
April 18, 2005.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Boehner, from the Committee on Education and the Workforce,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 739]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and the Workforce, to whom was
referred the bill (H.R. 739) to amend the Occupational Safety
and Health Act of 1970 to provide for adjudicative flexibility
with regard to the filing of a notice of contest by an employer
following the issuance of a citation or proposed assessment of
a penalty by the Occupational Safety and Health Administration,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
Purpose
H.R. 739, the ``Occupational Safety and Health Small
Business Day in Court Act of 2005,'' is intended to give to
parties under the Occupational Safety and Health Act of 1970
(the ``OSH Act'') the same basic right to seek relief from a
default judgment as that possessed by nearly every other
federal litigant in the nation. Specifically, H.R. 739
clarifies the authority of the Occupational Safety and Health
Review Commission (``OSHRC'' or the ``Commission'') to grant
relief to an employer that by reason of mistake, inadvertence,
surprise, or excusable neglect fails to respond to a citation
within the fifteen working days provided under law. H.R. 739
maintains Congress' desire to promote a necessary finality in
disputes under the OSH Act while preventing the avoidable
injustices that may result under current law. The legislation
is a remedial measure intended to prevent injustice and assure
fairness in the adjudicatory process, and is purposefully
designed to cause no diminution in the substantive workforce
protections already in place under the OSH Act.
Committee Action
109th Congress
H.R. 739, the ``Occupational Safety and Health Small
Business Day in Court Act of 2005,'' was introduced by
Congressman Charlie Norwood on February 10, 2005, and was
referred to the Committee on Education and the Workforce and
held at full committee. In light of the extensive legislative
record developed with respect to substantively identical
legislation in the 107th and 108th Congresses, the Committee
held no hearings on the bill prior to markup.
On April 13, 2005, the Committee favorably reported the
bill to the House of Representatives, without amendment, by a
roll call vote of 27 to 19.
H.R. 739 is substantively identical to H.R. 2728 as passed
by the House in the 108th Congress.
108th Congress
On April 3, 2003, comprehensive OSHA reform legislation,
H.R. 1583, the ``Occupational Safety and Health Fairness Act of
2003,'' was introduced in the House. The Subcommittee on
Workforce Protections held a hearing on H.R. 1583 on June 17,
2003.\1\ At this hearing, the Subcommittee heard testimony from
Mr. Brian Landon of Canton, Pennsylvania, testifying on behalf
of the National Federation of Independent Businesses; Mr. John
Molovich, Health and Safety Specialist, United Steelworkers of
America, of Pittsburgh, Pennsylvania; Mr. Ephraim Cohen, a
small business owner from New York; and Arthur Sapper, Esq., an
attorney of the law firm McDermott, Will & Emery in Washington,
DC, testifying on behalf of the U. S. Chamber of Commerce.
Legislation incorporating section 2 of H.R. 1583 was
subsequently introduced as H.R. 2728, the ``Occupational Safety
and Health Small Business Day in Court Act of 2003,'' on July
15, 2003.
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\1\ See Hearing on H.R. 1583, ``The Occupational Safety and Health
Fairness Act of 2003,'' before the Subcommittee on Workforce
Protections, Committee on Education and the Workforce, U.S. House of
Representatives, 108th Congress, First Session, Serial No. 108-20
(hereinafter ``Hearing on H.R. 1583'').
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On July 24, 2003, the Subcommittee on Workforce Protections
favorably reported H.R. 2728, without amendment, by voice vote.
On May 5, 2004, the Committee on Education and the
Workforce considered H.R. 2728. An amendment by Chairman John
Boehner, changing the short title of the bill from the
``Occupational Safety and Health Small Business Day in Court
Act of 2003'' to the ``Occupational Safety and Health Small
Business Day in Court Act of 2004'' was accepted by unanimous
consent. The Committee ordered H.R. 2728, as thus amended,
favorably reported to the House of Representatives by a roll
call vote of 24 yeas and 20 nays.
On May 18, 2004, the full House of Representatives passed
the measure without amendment by a vote of 251-177.\2\
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\2\ Pursuant to the rule providing for its consideration, H. Res.
645, upon approval of the bill it was enrolled with four other bills
(H.R. 2729, H.R. 2730, H.R. 2731, and H.R. 2432) and thus transmitted
to the Senate.
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Summary
It is a well-established legal principle in the United
States that relief from a final judgment, order, or proceeding
that is caused by mistake, inadvertence, surprise, or excusable
neglect should be resolved in favor of setting aside that
default judgment so that the case may be tried on the merits.
While this legal maxim is the practice in almost every federal
court in the United States, proceedings under the OSH Act have
at times in the past departed from this rule. H.R. 739 simply
assures that this widely held principle applies to proceedings
under the OSH Act. Specifically, H.R. 739 adds language to
Section 10 of the OSH Act, 29 U.S.C. Sec. 659(a), clarifying
that a litigant under the OSH Act may be relieved from a
default judgment when its failure to contest a citation in a
timely manner results from ``mistake, inadvertence, surprise,
or excusable neglect.'' The language inserted is identical to
language contained in Federal Rule of Civil Procedure 60(b),\3\
and is intended simply to authorize OSHRC to deem any notice of
contest timely filed if it finds under the totality of the
circumstances that an employer's failure to meet its deadline
was the result of one of the aforementioned factors.
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\3\ Federal Rule of Civil Procedure 60(b) states in relevant part:
``Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence;
Fraud, Etc. On motion and upon such terms as are just, the court may
relieve a party or a party's legal representative from a final
judgment, order, or proceeding for the following reasons: (1) mistake,
inadvertence, surprise, or excusable neglect. * * *'' 28 U.S.C.
Sec. 60(b).
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Committee Views
Background
Section 8(a) of the OSH Act specifically empowers the
Secretary of Labor, subject to limitation, to enter places of
work to ``inspect and investigate *** all pertinent conditions,
structures, machines, apparatus, devices, equipment, and
materials therein.''\4\ In cases where such inspection and
investigation reveal the presence of what are perceived to be
violations of the OSH Act, the Occupational Safety and Health
Administration (``OSHA'') is authorized to issue a citation
alleging with specificity the violation(s); identifying the
type or classification of such violation(s) believed to be
appropriate by OSHA; proposing a penalty to be assessed for
such alleged violation(s); and establishing a required date by
which the identified violation(s) must be abated.\5\
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\4\ 29 U.S.C. 657(a).
\5\ See 29 U.S.C. 658(a).
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Section 10(a) of the OSH Act specifies that upon the
receipt of an OSHA citation, an employer has fifteen working
days in which to notify OSHA of its intention to challenge or
contest any or all of the elements contained therein.\6\ If the
employer has properly contested any of the elements of the
citation,\7\ the employer is entitled to a hearing, after which
OSHRC may affirm, modify or vacate the Secretary's citation
and/or the proposed penalty, or direct other appropriate
relief.\8\
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\6\ See 29 U.S.C. 659(a).
\7\ Generally, an employer's notice of intent to contest must be in
writing and must indicate a clear intent on the part of the employer to
contest one or more of the elements of the citation. The fifteen day
working period specified in the OSH Act generally begins to run when
service of a type reasonably calculated to provide an employer with
knowledge of the citation occurs. While the OSH Act does not
specifically define what constitutes ``working days,'' this term is
defined in OSHA's regulations and OSHRC's rules to mean ``Mondays
through Fridays, exclusive of federal holidays.'' See 29 CFR
1903.21(c); 29 CFR 2200.(1)(l).
\8\ See 29 U.S.C. Sec. 659(c).
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If an employer does not contest an OSHA citation within the
specified statutory fifteen day period, under section 10 of the
OSH Act the ``citation and the assessment, as proposed, shall
be deemed a final order of the Commission and not subject to
review by any court or agency.''\9\ Put more simply, the
failure to file a notice of contest within fifteen days, for
any reason, means that a default judgment is entered against
the employer, from which it has no appeal.\10\
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\9\ 29 U.S.C. Sec. 659(a).
\10\ In its consideration of this measure, the Subcommittee on
Workforce Protections heard detailed testimony as to the possible
consequences of an employer's failure to file a timely notice of
contest, which may include: (1) an implied order to abate the cited
condition by the date specified in the citation; (2) an obligation to
pay the amount of the proposed penalty; and (3) an acceptance of OSHA's
classification of the violation. Less obvious consequences may include:
(1) inclusion of the citation in the employer's history of previous
violations (which will increase subsequent proposed penalties); (2)
exposure to possible future citation classifications of ``repeat'' or
``willful'' violations (increasing possible penalty levels and raising
the possibility of criminal liability); (3) possible impact on an
employer's reputation, potentially affecting consumer perception and
damaging market position; (4) possible collateral use of the final
order against the employer in related civil litigation; and (5)
possible disqualification in some jurisdictions from bidding upon
public construction contracts. See Testimony of Arthur G. Sapper,
Hearing on H.R. 1583, at 59-60 (detailing consequences of employer's
failure to file timely notice of contest of OSHA citation).
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By way of contrast, under the Federal Rules of Civil
Procedure, litigants in federal court are entitled to relief
from a default judgment based on the failure to file a timely
response, where such failure is caused by reason of mistake,
inadvertence, surprise, or excusable neglect, determined with
reference to the totality of the circumstances. Despite this
well-established principle of law, a series of court cases and
differing interpretations of the OSH Act by OSHA and the
Commission have made it highly uncertain whether the Commission
has the same power to grant employers such relief in
appropriate circumstances, or whether an employer who misses
the fifteen-day deadline for any reason, no matter how
meritorious, is simply ``guilty'' beforeOSHA. H.R. 739 makes
clear that OSHRC enjoys that authority, and is empowered to grant
relief to an employer in the appropriate circumstances.
Documenting Existing Legal Uncertainty
The current state of legal uncertainty over whether or not
OSHRC is vested with statutory authority to exercise
flexibility in relieving parties, in appropriate circumstances,
from what would otherwise be deemed as final orders under
section 10 is not new. These differing interpretations result
from the conflicting language contained in section 12(g) and
section 10(a) of the OSH Act. Specifically, in section 12(g),
Congress stated that unless OSHRC ``adopted a different rule *
* * its proceedings shall be in accordance with the Federal
Rules of Civil Procedure.''\11\ In section 10(a), however,
Congress provided that if ``within fifteen working days from
the receipt of the notice issued by the Secretary the employer
fails to notify the Secretary that he intended to contest ***
the citation and the assessment, as proposed, shall be deemed a
final order of the Commission and not subject to review by any
court or agency.''\12\ Historically, the conflict in these two
provisions of the OSH Act has been the source of disagreement
over whether OSHRC possesses the authority, pursuant to section
12(g), to relieve employers from a final judgment entered
against them in accordance with Rule 60(b) or whether section
10(a) precludes such relief.
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\11\ 29 U.S.C. Sec. 669(g). OSHRC itself has promulgated a rule
specifying that unless an OSHRC rule governs a point the Federal Rules
of Civil Procedure shall apply. See 29 CFR 2200.2(b).
\12\ 29 U.S.C. Sec. 659(a).
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Historic Judicial Uncertainty and the LeFrois Case
In one of OSHRC's earliest cases, the Commission exhibited
its confusion over Congress' intended meaning of section 10 by
holding that it could not apply Rule 60(b) of the Federal Rules
of Civil Procedure because it lacked jurisdiction over an
appeal of an OSHA citation if a notice of contest were not
timely filed.\13\ In 1981, the Commission reversed its
position, adopting instead the holding of the Third Circuit
Court of Appeals, which held that OSHRC did, in fact, have the
authority to apply Rule 60(b) to excuse some inadvertent late
filings.\14\ The Commission has maintained this position since
that time. OSHA, in contrast, has maintained its position that
OSHRC lacks such authority, and that the fifteen-day rule set
forth in section 10(a) of the OSH Act governs.
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\13\ See Secretary v. Plessy Burton, Inc., 12 OSHRC 577, 1974
OSAHRC LEXIS 145 (Oct. 18, 1974). Remarkably, in Plessy, the Secretary
of Labor had moved OSHRC to vacate an uncontested citation item because
further investigation indicated that ``there was, in fact, no
violation.''
\14\ See Secretary v. Branciforte Builders Inc., OSHRC Docket No.
80-1920, 1981 OSAHRC LEXIS 138 (July 13, 1981) (adopting holding of
U.S. Circuit Court of Appeals for Third Circuit in J.I. Hass Co. v.
OSHRC, 648 F.2d 190, 195 (3d Cir. 1981) (concluding that OSHRC has
authority to excuse late filings through application of Rule 60(b)).
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In 2002, the decision of the United States Court of Appeals
for the Second Circuit in Chao v. Russell P. LeFrois Builder,
Inc.,\15\ renewed urgency in the need for Congress to reexamine
this issue. As the LeFrois case was summarized before the
Subcommittee on Workforce Protections:
\15\ 291 F.3d 219 (2d Cir. 2002).
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OSHA issued citations and $11,265 in proposed
penalties to that company by certified mail. A
secretary for the company got the envelope from the
post office, and put it with the day's other mail on
the front seat of her car. The envelope with the OSHA
citation apparently slipped behind the seat, where it
was found after the fifteen-working-day contest
deadline expired. The company had used the same mail
pickup system for 18 years and had not previously had a
problem with it. LeFrois promptly filed a notice of
contest, and asked the independent Occupational Safety
and Health Review Commission for ``a chance to tell our
side and to defend ourselves.''\16\
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\16\ Testimony of Arthur G. Sapper, Esq., Hearing on H.R. 1583, at
58.
In LeFrois, OSHRC excused the lateness of the employer's
notice of contest, finding that its failure to respond in a
timely fashion was a case of excusable neglect.\17\
Nevertheless, despite the Commission's willingness to excuse
the employer's justified failure to file a timely notice, OSHA
appealed the decision of OSHRC to the U.S. Court of Appeals for
the Second Circuit. OSHA argued that under section 10(a), the
Commission did not have authority to waive the fifteen-day
requirement for any reason. OSHRC in turn argued that it had
the authority under section 12(g) to apply Rule 60(b) to
relieve the employer from the default judgment entered against
it. The Second Circuit found in favor of OSHA, holding that
OSHRC ``does not have this [60(b)] authority.''\18\
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\17\ See 291 F.3d at 225.
\18\ Id. at 230.
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Arthur G. Sapper, Esq., an expert legal witness well-versed
in the law of workplace safety and health, testified before the
Subcommittee on Workforce Protections as to the effect of the
LeFrois case:
According to a recent decision by the U.S. Court of
Appeals for the Second Circuit [LeFrois] * * * an
employer flatly loses its opportunity to defend itself
before the Occupational Safety and Health Review
Commission, and will be deemed guilty, if it misses a
rigid fifteen working-day deadline to file a notice
contesting an OSHA citation, even if the employer had a
good excuse for missing that deadline. The employer is
out of luck and the government wins without even
proving its case.\19\
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\19\ Testimony of Arthur G. Sapper, Hearing on H.R. 1583, at 58.
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Continued Uncertainty: The Villa Marina Yacht Case
More recently this issue was addressed, and the continuing
uncertainty of the law in this area recognized, in Secretary of
Labor v. Villa Marina Yacht Harbor.\20\ In Villa Marina, OSHA
maintained its position that ``Rule 60 is a procedural rule
that cannot be used to avoid a limitation on OSHRC's
authority.''\21\ The facts of Villa Marina were largely not in
dispute:
\20\ Secretary of Labor v. Villa Marina Yacht Harbor, OSHRC Docket
No. 01-0830 (2003).
\21\ Brief of Secretary of Labor, Secretary of Labor v. Villa
Marina Yacht Harbor, at 11.
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OSHA sent the citations and notification in two
separate packages to the Post Office Box designated by
Villa Marina during the OSHA inspection as its mailing
address. On January 18, 2001, the packages were picked
up and signed for by a messenger employed by Villa
Marina. Based on this date of receipt, Villa Marina's
fifteen-day contest period expired on February 8, 2001.
On January 19, 2001, the messenger brought the mail he
had picked up the day before, including the package
from OSHA, to the company. He gave the citations and
notification to a secretary, but did not inform her
that he had picked up the mail the previous day. The
secretary stamped both the citation and the
notification as received on January 19, 2001 leading
Villa Marina to believe it had one more day than it
actually had with which to file a timely notice of
contest. Later that day, a Villa Marina supervisor
discussed the OSHA matter with the employer's attorney.
Thereafter, a notice of contest was prepared and dated
February 9, 2001, one day after the period of contest
had expired.\22\
\22\ Decision, Secretary of Labor v. Villa Marina Yacht Harbor,
OSHRC Docket No. 01-0830 (2003), at 2-3.
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An OSHRC Administrative Law Judge (``ALJ'') found that the
company ``did not have orderly procedures in place for the
handling of important documents and/or that [the messenger] was
not properly supervised'' and that, accordingly, the failure of
the employer to file a timely notice of contest was not
excusable and thus would stand.\23\ In a unanimous decision,
OSHRC adopted the ALJ's findings, agreeing that the company had
failed to demonstrate the facts necessary to make a case for
excusable neglect. More important, OSHRC again expressed its
position that it has the authority to relieve employers from
such judgments when the facts of the case made it appropriate
to do so--they simply did not so warrant in this case.\24\
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\23\ Id. at 10.
\24\ Id. at 4; see also id. at 2 n. 3 & 4. n. 5 (discussing OSHRC
position and precedent with respect to 60(b) authority).
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Resolution of Legal Uncertainty and Judicial Conflict
The Committee finds no fault in OSHRC's application of Rule
60(b) to the facts of the case presented in Villa Marina.
Indeed, the Commission's close, fact-based scrutiny and
judicious application of its authority suggests that, if given
clear statutory authority to excuse a missed deadline in
appropriate circumstances, OSHRC would use such authority
sparingly and on the basis of sound precedent under which the
totality of circumstances surrounding the actions of an
employer would be examined before granting such relief.\25\
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\25\ Indeed, one estimate made by OSHRC in 1996 is that Rule 60(b)
motions are made before OSHRC only about thirty times per year, and
that such motions would constitute only about two percent of its case
activity.
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In contrast, the Committee is deeply concerned with the
legal interpretation advanced by OSHA regarding the appropriate
use of Rule 60(b) by OSHRC. Indeed, this position, and how it
might affect OSHRC's ability to excuse missed deadlines in
future cases concerning the application of Rule 60(b), was
discussed in a prominent footnote in the Villa Marina
decision.\26\ In light of the position maintained by OSHA that
its interpretations are to be given deference over those of
OSHRC, the Committee is concerned that in the future OSHRC may
be faced with no choice but to accept OSHA's argument that it
does not possess the authority to apply Rule 60(b) under the
OSH Act.
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\26\ See Decision, Secretary of Labor v. Villa Marina Yacht Harbor
at 4 n. 5 (noting that ``the Secretary's statutory limitation argument
is a substantial one, particularly in light of the language in sections
10(a) and 12(g) of the Act'' and that ``the decision in to the Second
Circuit in LeFrois further supports the Secretary's position in this
matter'' but declining to overrule Commission 60(b) precedent on
grounds of stare decisis).
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In light of these conflicting views of OSHRC's authority,
the Committee concludes that legislative resolution of this
matter is necessary. The Committee finds it appropriate that
OSHRC have the ability to apply rule 60(b) principles to
provide more just and fair results in the cases that it hears,
and concludes that the legislative solution embodied in H.R.
739 is necessary to this end.
Recent OSHA Directive Regarding Rule 60(b)
Most recently, on December 13, 2004, the Solicitor of Labor
conceded that OSHA's interpretation of Section 10(a) was
incorrect. On two separate occasions the Third Circuit ruled
that the Commission's view of the use of Rule 60(b) was correct
and that inadvertence or excusable neglect should permit an
employer to have its case heard on the merits before the
Commission.\27\ The Solicitor instructed the Regional
Solicitors that it would embrace the Commission's position
regarding the consideration of late contests. In his Memorandum
to Regional Solicitors, the Solicitor states, ``After studying
the statute and relevant case law, the Department has concluded
that late filed notices of contest may be considered under the
conditions specified in Rule 60(b).'' \28\
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\27\ See George Harms Constr. Co. v. Chao, 371 F.3d 156 (3d Cir.
2004) & Avon Contractors v. Chao, 372 F.3d 171 (3d Cir. 2004).
\28\ Howard M. Radzely, Solicitor of Labor, ``Memorandum to
Regional Solicitors re: Late Notices of Contest to OSHA Citations,''
(Dec. 13, 2004) at 1. A copy of this Memorandum was introduced at
markup and is reproduced herein. Also introduced at markup was a copy
of a GAO Report, Workplace Safety and Health: OSHA's Voluntary
Compliance Strategies Show Promising Results, but Should Be Fully
Evaluated before They Are Expanded, No. GAO-04-378 (March 2004),
available at http://www.gao.gov/new.items/d04378.pdf.
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The Committee welcomes the Department of Labor's
recognition that Rule 60(b) may be applied to permit the
consideration of late-filed notices of contest, and commends
the Solicitor for reassessing his position. It is the
Committee's position that enactment of H.R. 739 is still
critically important, to codify this position in the OSH Act
and avoid further legal confusion as to this point.
Conclusion
H.R. 739 gives employers before OSHRC the same right to
seek relief from a default judgment possessed by nearly every
other litigant in federal court, maintaining Congress' desire
to promote a necessary finality in disputes under the OSH Act
while preventing the avoidable injustices that may result under
current law. H.R. 739 does so by simply amending the OSH Act to
include language identical to that of Federal Rule of Civil
Procedure 60(b), thereby extending to OSHRC the specific
authority to excuse missed deadlines when the totality of the
surrounding circumstances renders it appropriate to do so. In
using language identical to that used in Federal Rule of Civil
Procedure 60(b), Congress expresses its intent that the well-
developed area of thelaw that has grown around the use of this
rule in federal practice will guide OSHRC in its application of this
authority.
Section-by-Section: H.R. 739
Section 1. Short title
This act may be cited as the ``Occupational Safety and
Health Small Business Day in Court Act of 2005.''
Section 2. Contesting citations under the Occupational Safety and
Health Act of 1970
This section amends section 10 of the Occupational Safety
and Health Act of 1970 to authorize relief from a default
judgment resulting from an employer's failure to file a notice
of contest with OSHA within 15 working days from receipt, if
such failure results from ``mistake, inadvertence, surprise, or
excusable neglect.''
Section 3. Effective date
The amendments made by this Act shall apply to a citation
or proposed assessment of penalty issued by the Occupational
Safety and Health Administration that is issued on or after the
date of the enactment of this Act.
Explanation of Amendments
No amendments were adopted by the Committee.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1, the Congressional
Accountability Act (CAA), requires a description of the
application of this bill to the legislative branch. H.R. 739
amends the Occupational Safety and Health Act (OSH Act) to
grant relief to an employer that by reason of mistake,
inadvertence, surprise, or excusable neglect fails to respond
to a citation within the fifteen working days provided under
law. Section 215 of the CAA applies certain requirements of the
OSH Act to the legislative branch. The Committee intends to
make the provisions of this bill available to legislative
branch employees and employers in the same way as it is made
available to private sector employees and employers under this
legislation.
Unfunded Mandate Statement
Section 423 of the Congressional Budget & Impoundment
Control Act requires a statement of whether the provisions of
the reported bill include unfunded mandates. The Committee
received a letter regarding unfunded mandates from the Director
of the Congressional Budget Office and as such the Committee
agrees that the bill does not contain any unfunded mandates.
See infra.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the body of this report.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the House of Representatives and section 308(a) of the
Congressional Budget Act of 1974 and with respect to
requirements of 3(c)(3) of rule XIII of the House of
Representatives and section 402 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for H.R. 739 from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 15, 2005.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
Dear Mr. Chairman:
The Congressional Budget Office has prepared the enclosed
cost estimate for H.R. 739, the Occupational Safety and Health
Small Business Day in Court Act of 2005.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Tom Bradley.
Sincerely,
Elizabeth M. Robinson
(For Douglas Holtz-Eakin, Director).
Enclosure.
H.R. 739--Occupational Safety and Health Small Business Day in Court
Act of 2005
H.R. 739 would modify the Occupational Safety and Health
Act to provide exceptions to the 15-day deadline for employers
to file responses to citations made by the Occupational Safety
and Health Agency (OSHA). Under current law, employers who
receive a citation or proposed assessment of penalty from OSHA
must file a notice of contest within 15 days from receipt of
the citation. The citation and assessment are deemed a final
order of the Occupational Safety and Health Review Commission
(OSHRC) if the 15-day deadline is not met. Since the early
1980s, however, OSHRC has applied Rule 60(b) of the Federal
Rules of Civil Procedure and has granted relief from the final
order in cases where an employer filed a late notice of contest
because of ``mistake, inadvertence, surprise, or excusable
neglect.''
H.R. 739 would codify the equitable standard contained in
Rule 60(b) and ensure consistent application of that standard
across all jurisdictions in cases involving an employer's
failure to file a timely notice of contest. CBO estimates that
implementing H.R. 739 would not have any effect on the federal
budget.
H.R. 739 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact is Tom Bradley. This estimate was
approved by Peter H. Fontaine, Deputy Assistant Director for
Budget Analysis.
Statement of General Performance Goals and Objectives
In accordance with Clause (3)(c) of House Rule XIII, the
goal of H.R. 739 is to amend the Occupational Safety and Health
Act (OSH Act) to grant relief to an employer that by reason of
mistake, inadvertence, surprise, or excusable neglect fails to
respond to a citation within the fifteen working days provided
under law. The Committee expects the Department of Labor to
implement the changes to the law in accordance with these
stated goals.
Constitutional Authority Statement
H.R. 739 amends the Occupational Safety and Health Act, and
thus falls within the scope of Congressional powers under
Article I, section 8, clause 3 of the Constitution of the
United States to the same extent as does the OSH Act.
Committee Estimate
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 739. However, clause 3(d)(3)(B) of that rule provides that
this requirement does not apply when the Committee has included
in its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
SECTION 10 OF THE OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970
PROCEDURE FOR ENFORCEMENT
Sec. 10. (a) If, after an inspection or investigation, the
Secretary issues a citation under section 9(a), he shall,
within a reasonable time after the termination of such
inspection or investigation, notify the employer by certified
mail of the penalty, if any, proposed to be assessed under
section 17 and that the employer has fifteen working days
within which to notify the Secretary that he wishes to contest
the citation or proposed assessment of penalty. If, within
fifteen working days from the receipt of the notice issued by
the Secretary the employer fails to notify the Secretary that
he intends to contest the citation or proposed assessment of
penalty (unless such failure results from mistake,
inadvertence, surprise, or excusable neglect), and no notice is
filed by any employee or representative of employees under
subsection (c) within such time, the citation and the
assessment, as proposed, shall be deemed a final order of the
Commission and not subject to review by any court or agency.
(b) If the Secretary has reason to believe that an employer
has failed to correct a violation for which a citation has been
issued within the period permitted for its correction (which
period shall not begin to run until the entry of a final order
by the Commission in the case of any review proceedings under
this section initiated by the employer in good faith and not
solely for delay or avoidance of penalties), the Secretary
shall notify the employer by certified mail of such failure and
of the penalty proposed to assessed under section 17 by reason
of such failure, and that the employer has fifteen working days
within which to notify the Secretary that he wishes to contest
the Secretary's notification or the proposed assessment of
penalty. If, within fifteen working days from the receipt of
notification issued by the Secretary, the employer fails to
notify the Secretary that he intends to contest the
notification or proposed assessment of penalty (unless such
failure results from mistake, inadvertence, surprise, or
excusable neglect), the notification and assessment, as
proposed, shall be deemed a final order of the Commission and
not subject to review by any court or agency.
* * * * * * *
MINORITY VIEWS
We oppose H.R 739 because the Occupational Safety and
Health Review Commission (OSHRC) already possesses the
authority that H.R. 739 purports to grant, obviating any need
for this legislation; and because enacting this legislation
will distort the Commission's authority to grant equitable
relief in ways that are neither equitable nor fair.
H.R. 739 amends sections 10(a) and 10(b) of the OSH Act to
provide that an employer who has failed to contest a citation
and proposed penalty (section 10(a)) or has failed to contest a
notification of failure to correct a violation (section 10(b))
in a timely manner (within 15 working days of receiving the
notice) may still contest the citation (or failure to correct
notice) if the failure to contest in a timely manner was due to
a ``mistake, inadvertence, surprise, or excusable neglect.''
Notwithstanding the bill's title, the ``Occupational Safety and
Health Small Business Day in Court Act,'' this bill has nothing
to do with small businesses, per se, but applies to all OSHA
regulated businesses regardless of size.
The intent of the bill is to overturn a single case in a
single circuit, Chao v. Russell P. Le Frois Builder, Inc.
(United States Court of Appeals for the Second Circuit, May 10,
2002). In that case, the Secretary contended and the court, in
deference to the Secretary, agreed that the Review Commission
does not have authority to grant equitable relief under Rule 60
of the Federal Rules of Civil Procedure, even though Rule 60
otherwise applies the Commission proceedings, because of the
statutory construction of sections 10(a) and 10(b). For its
part, the Commission has consistently held, before and after Le
Frois, that, pursuant to Rule 60, it may consider late notices
of contest if the failure to meet the deadline was due to
excusable neglect.\1\
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\1\ See Majority Views, ``Committee Views: Continued Uncertainty:
The Villa Marina Yacht Case.''
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Le Frois is a unique holding among the circuit courts and
directly contradicts an earlier Third Circuit decision, J.I.
Hass Co. v. OSHRC, 648 F.2d 190 (3d Cir. 1981). The Third
Circuit, in George Harms Constr. Co. v. Chao, F.3d 156 (3d Cir.
2004), reconsidered the issue of whether the Commission may
grant excusable neglect relief again, subsequently to Le Frois.
The Third Circuit concluded:
We discern no basis for the Secretary's contradictory
position that the Commission lacks jurisdiction to
consider relief under Fed. R. Civ. P. 60(b)(1) but has
jurisdiction to consider equitable tolling. A tribunal
cannot exercise an equitable remedy unless it first has
jurisdiction. If the Commission is not barred by
section 10(a) from applying equitable tolling, as the
Secretary now asserts, then it also should not be
barred from granting Fed. R. Civ. P. 60(b)(1)
relief.\2\
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\2\ George Harms Constr. Co. v. Chao, 371 F.3d 156 (3d Cir. 2004)
at 16. See also Avon Contractors lnc. v. Secretary of Labor, 372 F.3d
171 (3d Cir. 2004).
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Notwithstanding Le Frois, we believe that Hass was
correctly decided and has not been undermined by recent
decisions.\3\
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\3\ Id. at 18-19.
In fact, no other circuit court has ruled similarly to Le
Frois Builders.
Not only have other circuits declined to follow Le Frois,
but as the Majority notes, the Secretary, herself, has changed
her position.\4\ On December 13, 2004, the Solicitor of Labor
sent a memorandum to Labor Department attorneys notifying them
that the Department had changed its position regarding the
authority of the Commission to grant excusable neglect. Under
the new policy, the Secretary will no longer argue that the
Commission lacks authority to apply Rule 60(b)'s excusable
neglect standard.\5\
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\4\ Majority Views, ``Committee Views: Recent OSHA Directive
Regarding Rule 60(b).''
\5\ Yin Wilczek, ``Policy Changed Regarding OSHRC's Authority on
Late Notices of Contest,'' Occupational Safety & Health Jan. 13, 2005:
S19-S20.
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The Le Frois decision was premised upon deference to the
Secretary's opinion. Having changed her view there is no longer
a reason for any court to object to the Commission's granting
excusable neglect. Nor is there any means by which anyone else
may object.
The Commission already has authority under Rule 60 to grant
relief based upon excusable neglect. The Secretary, having
changed her view, has already effectively overturned Le Frois,
a case that failed to generate any progeny in the first
instance. Simply and plainly, there is no need for this
legislation.
If there is no need for H.R. 739, there are also good
reasons not to enact it. The bill's proponents state that their
intent is to enable OSHRC to waive a statute of limitations in
the same way that a federal court may pursuant to Rule 60(b) of
the Federal Rules of Civil Procedure. But the bill provides no
reference to Rule 60, it simply says that the Review Commission
may allow an employer to challenge an OSHA citation, even
though it has been properly served by the agency and even
though the employer has failed to challenge the citation, so
long as the employer's failure is due to ``mistake,
inadvertence, surprise, or excusable neglect.''
Rule 60(b) provides that a party may be relieved from final
judgment for mistake, inadvertence, surprise, or excusable
neglect, as does H.R. 739.\6\ Unlike H.R. 739, however, Rule
60(b) goes on to provide that a motion for relief does not
affect the finality of a judgment or suspend its operation.
Unlike H.R. 739, under Rule 60(b) the motion for relief must be
made within a year. Finally, unlike H.R. 739, Rule 60(b)
applies equally to section 10(c) of the OSH Act, as well as
section 10(a) and 10(b). Section 10(c) authorizes workers and
their representatives to challenge the period the Secretary has
provided for abating a safety and health hazard if that period
is unreasonably long. Section 10(c) is subject to the same
fifteen day statute of limitations that is applicable to
sections 10(a) and 10(b). As previously noted, Rule 60(b)
applies equally to section 10(c). H.R. 739, however, applies
only to sections 10(a) and 10(b).
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\6\ Rule 60(b) provides: ``On motion and upon such terms as are
just, the court may relieve a party or a party's legal representative
from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly
discovered evidence which by due diligence could not have been
discovered in time to move for a new trial under Rule 59(b); (3) fraud
(whether heretofore denominated intrinsic or extrinsic),
misrepresentation, or other misconduct of an adverse party; (4) the
judgment is void; (5) the judgment has been satisfied, released, or
discharged, or a prior judgment upon which it is based has been
reversed or otherwise vacated, or it is no longer equitable that the
judgment should have prospective application; or (6) any other reason
justifying relief from the operation of the judgment. The motion shall
be made within a reasonable time, and for reasons (1), (2), and (3) not
more than one year after the judgment, order, or proceeding was entered
or taken. A motion under this subdivision (b) does not affect the
finality of a judgment or suspend its operation. This rule does not
limit the power of a court to entertain an independent action to
relieve a party from a judgment, order, or proceeding, or to grant
relief to a defendant not actually personally notified as provided in
Title 28, U.S.C., Sec. 1655, or to set aside a judgment for fraud upon
the court. Writs of coram nobis, coram vobis, audita querela, and bills
of review and bills in the nature of a bill of review, are abolished,
and the procedure for obtaining any relief from a judgment shall be by
motion as prescribed in these rules or by an independent action.''
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The best that can be said of H.R 739 is that its language
is similar to part of Rule 60. Without specific reference to
Rule 60, there is no assurance that the court decisions that
have otherwise circumscribed the application of that rule would
be applicable to this legislation. The plain language of the
statute provides no such limitation. The Federal Rules of
Administrative Procedure indisputably apply to proceeding
before the Commission and the presumptive view, including that
of the Secretary of Labor, is that the Commission has authority
under Rule 60 to grant excusable neglect. A canon of statutory
interpretation is that the Congress does not enact redundant
laws; that is, as a matter of statutory interpretation, the
Congress would not enact legislation granting an agency
authority it already possesses. Therefore, it is not
unreasonable to expect the courts to interpret H.R. 739 as
achieving something different from Rule 60.
If the Congress acts to statutorily extend excusable
neglect to sections 10(a) and 10(b), but does not make a
similar extension to section 10(c), the virtually inescapable
conclusion is that the Congress intended that only employers
and not similarly situated workers should be entitled to
excusable neglect relief. A court will assume that Congress
acted knowledgeably in enacting H.R. 739 and was aware of the
provisions of 60(b). It, therefore, would not be unreasonable
for a court to conclude that the Congress intentionally did not
limit the time period in which an excusable neglect claim may
be raised. Under this legislation, the responsibility to
correct a health hazard may be indefinitely delayed.
In his memorandum to the regional Solicitors, the Solicitor
pointed out that under Rule 60(b), relief for excusable neglect
cannot be granted ``unless the employer also asserts a
meritorious defense to the citation.'' H.R. 739 imposes no such
limitation. The Solicitor noted that under Rule 60(b) relief is
available only ``upon such terms as are just.'' H.R. 739
imposes no such limitation. As the Solicitor pointed out, the
Secretary can require employers to show that workers are no
longer at risk as a condition for proceeding with a hearing on
the merits. Once again, H.R. 739 imposes no such limits.
The Majority appears to equate an OSH Act proceeding with
any other typical proceeding. In fact, however, much more is at
stake. What is at stake is not merely whether an employer will
pay a monetary fine, but whether workers will have a safe and
healthy workplace or be subject to injury, illness, and death.
H.R. 739 ignores these facts and undermines the safety and
health of workers as a consequence. This legislation should be
rejected.
George Miller.
Danny K. Davis.
Robert E. Andrews.
Chris Van Hollen.
Rush Holt.
Betty McCollum.
Ruben Hinojosa.
Major R. Owens.
Timothy Bishop.
Carolyn McCarthy.
Raul M. Grijalva.
Lynn Woolsey.
Ron Kind.
Dale E. Kildee.
Tim Ryan.
Donald M. Payne.
David Wu.
John F. Tierney.
Dennis Kucinich.