Imperial Lumber Company

Plain-English summary

Imperial Lumber received OSHA's citation and penalty notice at its corporate mailing address while its president was abroad. The president wrote a contest letter when he returned, but the judge dismissed it as late because more than 15 working days had passed since the mail arrived. The Commission reversed, holding that the record did not show whether another corporate official with authority to pay the penalty, authorize abatement, or contest the case was present before the president returned. Because that information was within the company's knowledge, the Commission placed the burden on Imperial Lumber to prove that no such official was available before the relevant deadline. The case was remanded for that factual determination.

Decision snapshot

• Cited standard(s): None identified; the decision concerns notice and the deadline for filing a contest.
• Outcome: The dismissal was reversed and the case was remanded to determine when effective corporate notice occurred.
• Key point: Delivery to a corporate address did not conclusively start the contest period without determining whether an official authorized to act for the company was available.

Full text (OSHRC public release)



IMPERIAL LUMBER COMPANY, Docket No. 12699

UNITED STATES
OF
AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,

Complainant,

v.

Docket No. 12699

IMPERIAL LUMBER COMPANY,

Respondent.

DECISION

Before: B ARNAKO , Chairman; M ORAN
and C LEARY , Commissioners.

M ORAN , Commissioner: A decision of Review Commission
Judge Joseph
L.
Chalk, dated April 14, 1975, is before the Commission for review pursuant to 29 U.S.C. § 661(i).

Respondent was cited under the provisions of the Occupational Safety and Health Act of 1970 1
following the inspection of the Imperial Lumber Company’s facility at Bartow Air Base Industrial Park in Bartow, Florida. The citation and notice of prosed penalties addressed to “Imperial
Lumber Compa n y, P.O. Box 350, Bartow, F l orida” was received on February 19, 1975, at which time Mr. Delph, the president of the company was abroad. Upon his return on M ar ch 14, 1975, he wrote a letter
contesting the citation which was forwarded to complainant’s Tampa Area Office by
the Company’s Safety Director. On March 26, complainant filed a motion to dismiss this notice of contest on the grounds that it was not timely filed. The Judge
gr anted this motion. We reverse.

The crucial issue in this case is whether the citation addressed to the Imperial Lumber
C ompany constituted effective service thereof on February 19, 1975, when t h e mail arrived ;
on Mach 14,1975, wen Mr. Delph received it; or on some intermediate date.
2 In
Buckley & Company
v. Secretary of Labor , 507 F.2d 78 (3d Cir. 1975), the court held that “the relevant intent of Congress in enacting section 10(a) was to provide notice to those corporate officials who have the precise authority to spend
corp orate funds to either (a) pay the
proposed penalty, or (b) to abate the alleged violation or (c) to contest the enforcement proceedings.” 3 Before the validity of the notice of contest can be determined in this instance, evidence must be received and a decision reached as to whether proper service could be made in Mr. Delph’s absence.

Whether or not a co r p o rate official with the above-mentioned power
was present in respondent’s facility before the return of Mr. Delph is exclusively within the knowledge of the respondent. Accordingly, in order to establish that its notice of contest was timely filed with it was filed on
March
14, 1975, respondent has the burden of proving that no such official was present before February 21, 1975. See
Allstate Finance Corporation v. Zimmerman , 330 F.2d 740, 744 (5 th
Cir. 1964); 9 Wigmore, Evidence § 2486 (3d ed. 1940).

This case is therefore remanded for appropriate determination.

FOR THE COMMISSION

/s/ William S. McLaughlin

Executive Secretary

Dated: Dec. 13 1976

CLEARY, Commissioner, DISSENTING:

I would hold that notice was effected under section 10(a) of the Act and 29 CFR § 1903.15(a)
on receipt by the corporation of the notice of proposed penalties on February 19, 1975, and therefore is remand is not necessary. The decision of the administrative law judge granting the Secretary’s motion to dismiss respondent’s notice of contest on the grounds that it was not timely filed should be affirmed.

The majority has misinterpreted
Buckley and Co., Inc. v. Secretary of Labor , 507 F.2d 78 (3d Cir. 1975) and has arrived at a conclusion totally at odds with the purposes and policy of the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651
et
seq . [hereinafter “the Act”]. In
Buckley , the Court dealt with the interpretation of the notice requirements of section 10(a) of the Act, which provides in part:

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…(emphasis added).

The source of the majority’s confusion is the following paragraph in the Third Circuit’s decision in
Buckley :

[Commissioner]
Moran emphasized that ‘ [ i ] t is clear that no official of the corporate respondent with authority to spend corporate funds either (a) to pay the proposed penalty, or (b) to abate the alleged violation, or (c) to contest the enforcement proceedings, received notice of either citation until long after both of them had become default judgments.’ We believe that the relevant intent of Congress in enacting § 10(a) was to provide notice to those corporate officials who have the precise authority delineated by
[ Commission er]
Moran. If we were to interpret § 10(a) otherwise, then we would frustrate one of the principal purposes of the Act—abatement of hazardous conditions.

507 F.2d at 80.

In
Buckley , citations and notifications of proposed penalty were sent by certified mail directly to the superintendent of a maintenance shop concerning violations which an OSHA inspection had discovered. The superintendent neglected to forward the citations and notices of proposed penalty to corporate officials whose offices were located at a separate location. The employer, therefore, did not receive notice of the citations and proposed penalties until several
months later when the Secretary sent a letter demanding payment for the assessed penalties. The employer attempted to contest the imposition of the penalties, alleging that its notice of contest
was timely since the earlier notification to the shop superintendent was not sufficient notice to the corporation. The Secretary moved to dismiss the late notice of contest on the ground that the citations and proposed penalties had become final and unreviewable pursuant to sections 19(a) and (b) of the Act. The Commission majority held that the mailing notice to the shop superintendent complied with the requirements of section 10(a) of the Act. 4 In my concurring opinion, I stated that any mailing to an employer that is reasonably ca l culated to give the employer notice of
the citation and proposed penalty comports with the requirements of section 10(a) of the Act. 5 On the facts of that case, I determined that the mailing to the shop superintendent was reasonably calculated to give such notice to this employer.

On appeal, the Third Circuit Court of Appeals reversed,
holding that the mailing to the shop superintendent was improper under section 10(a) of the Act. The Court maintained that it was as reasonable to conclude that the superintendent would attempt to cover up any derelictions as it would be to conclude that he would forward the citations to his supervisors. The Court stated what it thought section 10(a) of the Act required:

As to this corporate
this means at the very least, a notice to the officials at the corporate headquarters, not the employee in charge of a particular worksite.

507 F.2d at 81.

The Court eschewed my view that the mailing of the citations and notices of proposed penalty to a shop superintendent at a maintenance shop was reasonably calculated to afford corporate officials proper notice. By implication, however, it affirmed my basic premise that section 10(a) of the Act only requires a mailing that is reasonable calculated to afford the employer notice. This follows from the Court’s conclusion that notice to “officials” at corporate headquarters would probably have been sufficient notice to the employer. The Court’s reference to the three indicia of corporate authority mentioned by Commissioner Moran seems merely to illustrate the
Court’s reasoning why service upon corporate headquarters as opposed to a
maintenance shop was required by section 10(a) of the Act. The majority had misread
Buckley
so as to mandate service
6
upon specific individuals within the corporate structure who possess specific authority in the following areas: (a) contest of the citation; (b) payment of penalties; and (c) disbursement of corporate funds to abate violations. This interpretation by the majority is predicated on the extraction of the above-quoted language in
Buckley , which the Court
explained was to achieve the prompt abatement of the hazards. In complete disregard of this principle, the majority orders a remand to inquire into specific functions and duties of corporate officials in an attempt to determine if anyone in addition to the president is amenable to service. This result clearly defeats the very result the Court of Appeals desired. It also leads to the disturbing possibility that a corporation may manipulate its line of authority so as to require notice on its terms.

The respondent alleges that Mr. Bill R. Delph had exclusive authority over disbursement of funds and decisions on all legal matters. Thus, it argues that notice my mail was not effective until Mr. Delph, not the corporation, actually received the notice on his return from a business trip to the Middle East. This contention is unpersuasive. 7 Mr. Delph is not the corporation. The corporation continued to function despite his absence. I would hold that notice by mail to this corporate address was adequate under
Buckley .

The misinterpretation of
Buckley
and the concomitant action ordered by the majority seems destined to protract enforcement actions under the Act. After a violation has been found, the Secretary
will be arguably delayed in issuing the citation by the need to determine the existence and whereabouts the particular individuals within the corporate structure who have the applicable corporate authority. This is particularly ironic because one member of the majority still adheres to the view that in order for a citation to be issued with “reasonable promptness” under section 9(a) of the Act, it must
issue within 72 hours of the inspection if it is to be valid. See
Concrete Constr. Corp. , No. 2490, BNA 4 OSHC 1133, CCH 1975-76 OSHD para. 20,610 (1976) (Moran, Commissioner, dissenting).

Moreover, inadequate consideration is given to the fact that neither compliance officers nor Area Directors who have the statutory authority to issue
citations with “reasonable promptness” are equipped to disentangle possible issues of corporate responsibility. These employees have expertise in safety. They lack legal skills. Cf.
National Realty Constr. C o. , v. O.S.H.R.C. , 489 F . 2d 1257, 1264 (D.C. Cir. 1973). They should not be burdened in their efforts to achieve compliance with the Act by the requirement that the expend their efforts in determining matters that are clearly outside their area of competence. It is not a complete answer to this problem to place the burden o proof upon the corporate employer to show inadequate notice under the circumstances of this case. The trial preparation of the Secretary will still likely require some examination of this issue at the investigatory stage.

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,

Complainant,

v.

Docket No. 12699

IMPERIAL LUMBER COMPANY,

Respondent.

DECISION AND ORDER

Chalk, Judge

Complainant has filed a motion for summary dismissal of Respondent’s Notice of Contest because it was not timely filed. As the record supports Complainant’s assertion of untimeliness, the motion will be granted
( Secretary v. Acme Plastering Co. Inc. , Docket No. 9215, October 17, 1974 ;
Secretary v. Owens-Illinois, Inc. , Docket No. 8859, October 22, 1974, ordered for review by the Commission on November 21, 1974).

Complainant’s motion is granted, Respondent’s Notice of Contest is dismissed, and the proceedings are terminated.

So ORDERED.

Joseph L. Chalk

Judge, OSAHRC

Dated: April 14, 1975

Washington, D.C.

"

1
84 Stat. 1590, 29 U.S.C. § 651,
et seq . , hereinafter the Act.

2
A notice of contest is untimely unless an employer notifies the Secretary of Labor within 15 working days from the receipt of the proposed penalty
29 U.S.C. § 659(a).

3
Section 10(a) of the Act, 29 U.S.C. § 659 (a), in pertinent parts reads:

“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.” (Emphasis added.)

4
[Noted as FN 3 in error in original] .
Buckley and Co., Inc. , No. 1342, BNA 1 OSHC 1535, CCH 1973-74 OSHD para. 17,338 (1974).

5
[Noted as FN 4 in error in original]. For a complete discussion of my views concerning the notice requirements under section 10(a) of the Act
see
Donald K. Nelson Constr., Inc. , No. 4309, BNA 3 OSHC 1914, 1975-76 CCH OSHD para. 20,299 (1976) (Cleary, Commissioner, dissenting)
appeal dismissed , 76-1112 (10th Cir., August 5, 1976).

6
[Noted as FN 5 in error in original]. Section 10(a) of the Act states in part: “[T]he Secretary …shall …notify the employer by certified mail of the penalty….” The Act specifically refrains from requiring “service” upon the employer which connotes greater formality and precision than that mandated by the carefully chosen usage of the word “notify.” The Court of Appeals’ decision in
Buckley
scrupulously observed this distinction by not once resorting to the use of the word “service” in lieu of “notify” or “notice.”

7
[Noted as FN 6 in error in original]. The citations and notice of proposed penalties were addressed and mailed as follows:

Imperial Lumber Company

P.O. Box 350

Bartona , Florida 33830

In its answer to the motion to dismiss, respondent alleged that service should have been addressed:

Bill R. Delph, President

Imperial Lumber Company

P.O. Box 350

Bartona, Florida 33830