P & Z Co., Inc. and J.F. Shea Co., Inc.

Plain-English summary

OSHA issued two serious and 29 nonserious citation items after inspecting a Washington, D.C., construction site, with proposed penalties totaling $2,180. The complaint sought to add a joint venture to the two corporations named in the citations. The employers moved to dismiss based on notice of the proper party, the presence of allegedly unauthorized personnel during the inspection, and the time taken to issue the citations. The judge granted dismissal and vacated the citations without explaining his factual findings, legal conclusions, or reasons. The Commission held that the Administrative Procedure Act requires those explanations and remanded the case for a legally sufficient decision without resolving the underlying disputes.

Decision snapshot

• Cited standard(s): None identified in the official release
• Outcome: The dismissal was rejected and the case was remanded for findings, conclusions, and reasons addressing the motion.
• Key point: An agency judge could not dispose of 31 citation items through an unexplained one-sentence order.

Full text (OSHRC public release)

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EN-US
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UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,

��������������������������������������������
Complainant,

������������������������ v.

OSHRC DOCKET NO. 14822

P & Z CO., INC. and J. F.
SHEA CO., INC ,

���������������������������������������������
Respondent.

May 21, 1976

�

DECISION

Before BARNAKO,
Chairman; MORAN and CLEARY, Commissioners.

BY THE COMMISSION:

A
December 12, 1975 report of Review Commission Judge Ben D. Worcester is before
this Commission for review pursuant 661(i). By his report Judge Worcester would
grant Respondent�s motion to dismiss the Secretary�s complaint and vacate his
citations. For the reasons given herein, we reject the report and remand the
case for a decision that comports with law.

This
matter arose out of the following facts: As the result of an extensive
inspection at a construction site in Washington, D. C., the Secretary issued
three citations naming P & Z Co., Inc. and J. F. Shea Co., Inc. as
individual Respondents. The citations alleged two serious and 29 nonserious
violations of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651 et
seq., hereinafter �the Act�). A total penalty of $2,180 was proposed. The
citations were timely contested by a letter in which Respondents identified
themselves as �P & Z Co., Inc.,�J. F. Shea Co., Inc. (A Joint Venture).�
The Secretary then filed a complaint in which he sought to amend the citations
by adding the joint venture to the other two named parties. The complaint was
filed within six months of the date of inspection.

In
response to the complaint, Respondents moved to dismiss the complaint and
vacate the citations and notice of proposed penalties. In support of their
motion, Respondents argued that the amendment did not give fair notice to
Respondents as to which party should defend. As further grounds for their
motion, Respondents contended that the inspection was invalid due to the
presence of unauthorized personnel and that the citation was not issued with
reasonable promptness. The Secretary opposed the motion on all grounds. Judge
Worcester thereafter took oral argument and granted Respondents� motion; he
vacated the citations. He then rendered the following as his report to the
Commission:

The motion of the
respondent to dismiss the complaint without leave to amend is granted. It is
therefore hereby ordered that the citation and proposed penalty be vacated.

�

The
Secretary petitioned for discretionary review. Among other things, he excepted
to the judge�s report for failing to give any explanation for his decision in
violation of the Administrative Procedure Act and the Commission�s Rules of
Procedure.

The
Secretary cites � 557(c) of the Administrative Procedure Act (APA). [1]
Commissioner Cleary directed review.

Section
10(c) of our Act requires the Commission to afford contesting employers the
opportunity for a hearing in accordance with section 554 of the APA. Section
554(c)(2) of the APA, in turn, incorporates the requirements of section 557 of
the APA regarding the contents of decisions issued by an administrative agency.
Section 557(c) provides in pertinent part:

All decisions,
including initial, recommended, and tentative decisions, are a part of the
record and shall include a statement of�

(A) findings and
conclusions, and the reasons or basis therefor, on all the material issues of
fact, law, or discretion presented on the record; and

�

(B) the appropriate
rule, order, sanction, relief, or denial thereof.

Accordingly,
the Commission and its administrative law judges are mandated by the Act to
state findings of fact, conclusions of law, and the reasons or basis therefor
in all decisions and reports.

Judge
Worcester�s report clearly does not comply with the requirements set out above.
It does not state the reasons or basis for his conclusions to vacate the
citations. Accordingly, we find that his report is not in accordance with
section 557(c), and remand it for a decision that comports with the section.

We
do not decide any other issue raised by the Secretary�s petition. The remainder
of the petition is predicated on the Secretary�s assumption as to the reasons
the judge might have assigned for his disposition. Since the judge did not
state his reasons we are unwilling to assume what they might be. However, we do
note that the questions presented concern whether the joint venture should be
added as a party and there is case law on the subject. Bloomfield Mechanical
Contracting, Inc. v. OSAHRC , 519 F.2d 1257 (3d Cir. 1975); Vincent Rizzo
Construction Co. , OSHRC Docket No. 4224, BNA 3 OSHC 1841, CCH OSHD para.
20,236 (1975).

Accordingly,
this matter is remanded for further proceedings consistent with this opinion.
So ORDERED.

�

FOR THE
COMMISSION:

�

WILLIAM S.
McLAUGHLIN

Executive
Secretary

DATE: MAY 21,
1976

�

MORAN,
Commissioner, Concurring in Part, Dissenting in Part:

On
February 6, 1976, the same two members who make up the majority for the
decision in this case issued a decision in Secretary v. Francisco Tower
Service, Inc ., OSAHRC Docket No. 4845. That decision contained no findings
of fact or conclusions of law. I dissented from that opinion and�no less than
five times�I pointed out that the decision was wrong because it contained no
findings of fact or conclusions of law. For example, the dissent states at one
point that

Messrs. Barnako and
Cleary have here declined to make any findings with respect to questions of
fact�nor have they adopted the findings with respect to questions of fact which
were made by the Judge below.

�

Not
only did they issue that decision but they followed it up with no less than
forty subsequent decisions which cite it as authority for disposing of a case
without making any findings of fact or conclusions of law. In none of those
cases was there any reference to the point made in the dissent which
accompanied each of them, regarding the absence of any finding of fact or
conclusion of law. See, for example , Secretary v. Mohawk Excavating,
Incorporated , [2] OSAHRC Docket No. 8845,
February 17, 1976; Secretary v. Desarrollos Metropolitanos, Inc. , [3]
OSAHRC Docket No. 11884, February 17, 1976; and Secretary v. Texaco,
Incorporated , [4] OSAHRC Docket No. 11903,
February 17, 1976.

Now,
however, the same two members who, through some 40 decisions earlier this year
steadfastly ignored the requirement that decisions include findings of fact and
conclusions of law, tell us that the law is as follows:

�. . . the
Commission and its administrative law judges are mandated by the
Act to state findings of fact, conclusions of law, and the reasons or basis
therefor in all decisions and reports.� (Emphasis added.)

It
is not surprising to me that they do not acknowledge that they have failed to
observe this mandate even though it has been called to their attention in 40
dissenting opinions issued earlier this year. It is also not surprising that
Messrs. Barnako and Cleary let those decisions stand without reversing a single
one of them�even though their decision in this case states exactly the opposite
of what they did in the above-mentioned cases. Diametrically opposite �rules�
applied�or not applied�depending on the result produced thereby, has become
pretty standard in this Commission during the past nine months.

In
the case presently before us, I concur in the disposition ordering the case
remanded. This will afford the complainant the opportunity to proceed against
either or both respondents individually if he considers such action
appropriate. If complainant elects to proceed against respondent Shea, it will
be necessary for him to establish proper service of the citations and notice of
proposed penalty on that respondent in accordance with 29 U.S.C. � 659(a). [5]
Furthermore, in any further proceeding, I would require complainant to
establish that the more than two month delay in issuing the citations was due
to exceptional circumstances.

����������� In Bloomfield Mechanical
Contracting, Inc., v. OSAHRC , 519 F.2d 1257 (3d Cir. 1975), cited by the
majority, the Secretary of Labor attempted to add a joint venture as a party by
way of the complaint in a manner similar to the attempted amendment in the
instant case. Noting that the Secretary had �failed to amend the citation at
any time,� the court also stated that �[i]t is the citation which serves
as the statutory vehicle for notice of the violation, 29 U.S.C. � 658(a).� 519
F.2d at 2162 (emphasis added). Clearly then, the attempted amendment in that
case, regardless of the statute of limitations problem involved, [6]
was inadequate to amend the citation to name a new party . An amended
citation must be issued. This is particularly apparent since the court noted
that the complaint procedure is only a �creature of administrative regulation�
which is not mentioned in the Act at all. 519 F.2d at 1262. Because notice by
way of a citation and notice of proposed penalty is a particular statutory
requirement, amendment under Rule 15 of the Federal Rules of Civil Procedure by
way of a complaint cannot be allowed. [7]
An amendment which adds a new party creates a new cause of action which must be
commenced by the issuance and proper service of a citation and notice of
proposed penalty upon the named party.

Furthermore
the record in this case tends to indicate that respondent Shea, was never
served with the original citation. Although the citation named �P & Z Co.,
Inc. and J. F. Shea Co., Inc.,� it was only served on P & Z. The two named
respondents are separate corporate entities with different mailing addresses.
As indicated in the Bloom-field decision, service on one member of a joint
venture may be adequate service on the joint venture itself if the joint
venture is named in the citation. 519 F.2d at 1261. It was not in the instant
case. It matters not whether Shea did or did not have actual notice if proper
service rules were not followed. Secretary v. Donald K. Nelson Construction,
Inc ., OSAHRC Docket No. 4309, January 13, 1976. Accordingly, Shea may never
have been a party respondent in this case. If so, allowing an amendment under
Rule 15 to add the joint venture as a party respondent would not merely change
the status of parties already before us, but would add a new party.

If
Shea was never properly served, the only possible legitimate respondent
remaining is P & Z. This Commission, however, has never determined whether
an individual participant in a joint venture is an employer for purposes of
liability under 29 U.S.C. � 654(a)(2) for alleged safety violations committed
by the joint venture. We have never decided this question because in prior
cases where a joint venture was involved the Secretary has cited both the joint
venture and its members [8] 8
or the joint venture alone. [9] 9
Furthermore, the court in Bloomfield Mechanical Contracting, Inc. v. OSAHRC,
supra , specifically declined to answer the question. 519 F.2d at 1261 n.1.

The
National Labor Relations Board (NLRB) has considered the above question in
administering the National Labor Relations Act (NLRA) and has determined that
individual participants in a venture are not employers and any violations of
the NLRA are attributable solely to the joint venture, Grove Shepherd Wilson
& Kruge, Inc ., 109 NLRB No. 21, 34 LRRM 1338 (1954), Willamette
National Lumber Co ., 107 NLRB No. 237, 33 LRRM 1328 (1954). Similarly, in Wilcox
Construction Co., Inc. , 87 NLRB No. 56, 25 LRRM 1110 (1949), a company
participating in a joint venture was found not to be the employer of guards at
the project since the joint venture exercised control of hiring and firing of
personnel and established their working hours. Unfortunately, the record before
us does not contain sufficient evidence to permit a determination such as those
made by the NLRB.

The
inspection of the worksite in the instant case took place between May 30, 1975
and June 6, 1975, but the citations were not issued until August 7, 1975. Since
the delay between the inspection and the issuance of the citation far exceeded
the 72 hours allowed by Congress under normal operating conditions, the
citation must be vacated for failure to comply with the reasonable promptness
requirements of 29 U.S.C. � 658(a) unless complainant establishes that the
delay was justified by exceptional circumstances. Secretary v. Concrete
Construction Corporation , OSAHRC Docket No. 2490, April 8, 1976 (dissenting
opinion).

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,

��������������������������������������������
Complainant,

������������������������ v.

OSHRC DOCKET NO. 14822

P & Z CO., INC. and J. F.
SHEA CO., INC ,

���������������������������������������������
Respondent.

December 12, 1975

ORDER

�

The motion of
the respondent to dismiss the complaint without leave to amend is granted. It
is therefore hereby ordered that the citation and proposed penalty be vacated.

�

BEN D. WORCESTER

Judge, OSAHRC

Dated: December 12, 1975

�

Hyattsville, MD

[1]
1 5 U.S.C. �� 500, et seq.

[2]
Presently on appeal in the U.S. Court of Appeals for the 2d Circuit (No.
76�4068, filed March 3, 1976).

[3]
Presently on appeal in the U.S. Court of Appeals for the 1st Circuit (No.
76�1084, filed April 12, 1976).

[4]
Presently on appeal in the U.S. Court of Appeals for the 10th Circuit (No. 76�1318,
filed April 19, 1976).

[5]
This section requires that a cited employer be notified by certified mail of
the penalty, if any, proposed by the Secretary to be assessed against the
employer for alleged violations.

[6]
A citation may not be issued after the expiration of six months following the
occurrence of any violation. 29 U.S.C. � 658(c).

[7]
I have discussed the reasons why the amendment rules in Rule 15, Federal Rules
of Civil Procedure, do not apply to citations in greater detail in Secretary
v. Warnel Corporation , OSAHRC Docket No. 4587, March 31, 1976.

[8]
See e.g., Secretary v. Underhill Construction Corp., Individually and Dic
Concrete Corp., Individually and trading as Dic-Underhill, a Joint Venture ,
20 OSAHRC 534 (1975).

[9]
Secretary v. Straight Creek Constructors , 7 OSAHRC 1158, 1166 (1974).