[House Report 109-46]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     109-46

======================================================================



 
 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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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)).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \17\ See 291 F.3d at 225.
    \18\ Id. at 230.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------
          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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \1\ See Majority Views, ``Committee Views: Continued Uncertainty: 
The Villa Marina Yacht Case.''
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
          Notwithstanding Le Frois, we believe that Hass was 
        correctly decided and has not been undermined by recent 
        decisions.\3\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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).
---------------------------------------------------------------------------
    \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.''
---------------------------------------------------------------------------
    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.

                                  
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