Rheem Manufacturing Co., Inc.

Plain-English summary

Rheem Manufacturing filed its notice of contest three weeks late after a security guard signed for the OSHA citation but the document never reached the responsible personnel. Rheem sought relief for excusable neglect and described its mail-handling procedures through an affidavit. The judge denied relief on the written record, finding the procedures convoluted and within Rheem's control. The Commission held that this ruling was premature because the limited affidavits did not establish what happened to the citation or whether the procedures were orderly in practice. It set aside the decision and remanded for an evidentiary hearing.

Decision snapshot

• Cited standard(s): No specific OSHA standard number is identified in the remand decision.
• Outcome: Denial of Rule 60(b) relief set aside; case remanded for an evidentiary hearing on the late contest.
• Key point: A disputed excusable-neglect claim may require testimony and factual development before a late notice of contest can be dismissed.

Full text (OSHRC public release)

RHEEM MANUFACTURING CO., INC., Docket No. 15-1248

United States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

1120 20 th Street, N.W., Ninth Floor

Washington, DC 20036-3457

SECRETARY OF LABOR,

Complainant,

v.

OSHRC Docket No. 15-1248

RHEEM MANUFACTURING CO., INC.,

Respondent.

APPEARANCES:

Angela F. Donaldson, Counsel; Stanley E. Keen, Regional Solicitor; M. Patricia Smith, Solicitor;
U.S. Department of Labor, Washington, DC and Atlanta, GA

For the Complainant

Carla Gunnin, Esq., and Nickole Winnett, Esq.; Jackson Lewis P.C., Atlanta, GA

For the Respondent

REMAND ORDER

Before: ATTWOOD, Acting Chairman and MacDOUGALL , Commissioner.

BY THE COMMISSION:  

At issue before the Commission is a November 20, 2015 decision of Administrative Law
Judge John B. Gatto denying Respondent’s motion for relief from a final order under Federal
Rule of Civil Procedure 60(b) after Respondent filed a notice of contest with the Occupational
Safety and Health Administration after the statutory deadline. See 29 U.S.C. § 659(a) (failure to
contest citation within fifteen working days results in citation becoming final order of
Commission). For the reasons that follow, we set aside the judge’s decision and remand this
case to the judge for further proceedings.

On May 6, 2015, OSHA issued Respondent a citation, which was sent via certified mail
to Respondent’s facility in Montgomery, Alabama, and signed for by the facility’s security guard
on May 8, 2015. Respondent filed its notice of contest on June 24, 2015, three weeks after the
expiration of the fifteen-day contest period and, according to Respondent, two days after it
contacted OSHA and learned that the citation had issued. Since the notice of contest was
untimely filed, the Secretary contends it was “properly dismissed.” Id.

In its motion for Rule 60(b) relief from a final order, Respondent details the company’s
mail procedures in an affidavit from its human resource manager and claims that its failure to
timely file the notice of contest was due to excusable neglect. See Fed. R. Civ. P. 60(b) (“On
motion and just terms, the court may relieve a party . . . from a final judgment, order, or
proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable
neglect . . . .”). As set forth in its motion, Respondent claims that excusable neglect is
established because, despite its orderly procedures for handling mail, the citation never reached
the appropriate personnel after the security guard signed for it, and the citation has yet to be
found at Respondent’s facility. The Secretary’s response includes a motion to dismiss
Respondent’s late notice of contest, along with two supporting affidavits from OSHA personnel.

In ruling on Respondent’s motion, the judge had before him the motion for relief, the
motion to dismiss, and the parties’ supporting affidavits, and concluded based on the human
resource manager’s affidavit that Respondent’s mail-handling procedures were “convoluted.”
He also found that because Respondent had “sole control” over these procedures, its neglect was
not excusable under Rule 60(b) and denied Respondent’s motion. While the Commission, as
acknowledged by the judge, “ ‘has consistently denied relief to employers whose procedures for
handling documents were to blame for untimely filings’ ” of notices of contest, we find that his
order denying the requested relief is premature based on the limited record. See NYNEX , 18
BNA OSHC 1967, 1970 (No. 95-1671, 1999) ( citing E.K. Constr. Co. , 15 BNA OSHC 1165,
1166 (No. 90-2460, 1991)). Therefore, we remand this case to the judge for an evidentiary
hearing. See, e.g., Dore & Assocs. Contracting, Inc. , 19 BNA OSHC 1438, 1439 (No. 01-0067,
2001) (remanding for evidentiary hearing, because “[o]n the limited record before us here we
cannot determine whether [Respondent] has established a basis to excuse the untimely filing of
its notice of contest”).

Accordingly, we set aside the judge’s decision and remand this case to the judge for
further proceedings.

SO ORDERED.

/s/                                                                                   Cynthia L. Attwood

Acting Chairman

/s/  

Heather L. MacDougall

Dated:   January 8, 2016                                                Commissioner

UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

THOMAS E. PEREZ , Secretary of Labor,
United States Department of Labor,

Complainant,

v.

OSHRC DOCKET No. 15-1248

RHEEM MANUFACTURING COMPANY,

Respondent.

ORDER DENYING RESPONDENT’S MOTION FOR RELIEF OF THE FINAL ORDER
UNDER RULE 60(B) OF THE FEDERAL RULES OF CIVIL PROCEDURE

Attorneys and Law firms

M. Patricia Smith, Solicitor of Labor, Stanley E. Keen, Regional Solicitor, Rolesia Butler Dancy,
Counsel, Office of the Solicitor, U.S. Department of Labor, Atlanta, GA, for Complainant.

Carla Gunnin, Nickole Winnett, Jackson Lewis P.C., Atlanta, GA, for Respondent.

John B. Gatto, United States Administrative Law Judge.

I. INTRODUCTION

A citation and notice of the associated proposed penalty was issued by the Mobile,
Alabama, Area Director of the Department of Labor’s Occupational Safety and Health
Administration (“OSHA”)

to Rheem Manufacturing Company (“Rheem”), which Rheem
contested after the statutory deadline. The citation and notice was issued under the Occupational
Safety and Health Act of 1970 (“Act”), 29 U.S.C. §§ 651–678, and according to the Secretary of
Labor, was “deemed” a final order of the Commission. Thus, OSHA notified Rheem it would
not treat the case as contested and refused to forward Rheem’s untimely notice of contest to the
Commission. If the Secretary’s assertion is true, “any relief from that order can only be granted
under Federal Rule of Civil Procedure 60(b).” Northwest Airlines, Inc. , 19 BNA OSHC 1383
(No. 00-0954, 2001).  

On July 7, 2015, Rheem filed a motion with the Commission seeking relief under Rule
60(b) and the Secretary filed a response to Rheem’s motion on September 11, 2015, which
included within it a motion to dismiss Rheem’s late notice of contest. Rheem filed a reply on
September 25, 2015. The court notes the Secretary’s response was not timely. See 29 C.F.R. §§
2200.4(a), (b) and § 2200.40(c) for permissible response period and time computation. Both
parties also failed to comply with Commission Rule 40(a), which requires that prior to filing a
motion, the moving party “confer or make reasonable efforts to confer with the other parties”
and “state in the motion if any other party opposes or does not oppose the motion.” § 2200.40(a).
Rheem has also failed to comply with the corporate disclosure requirements of Commission Rule
35(a). See § 2200.35(a) (“initial pleadings filed under these rules by a corporation shall be
accompanied by a separate declaration listing all parents, subsidiaries, and affiliates of that
corporation or stating that the corporation has no parents, subsidiaries, or affiliates, whichever is
applicable”).

The court also notes Rheem’s untimely notice of contest is not properly before the court
since it did not file it with the Commission but merely attached it as an exhibit to its motion.
Therefore, the Secretary’s motion to dismiss Rheem’s late notice of contest is moot. Further, the
Secretary’s motion to dismiss Rheem’s late notice of contest is also not properly before the court
since he included it within his response to Rheem’s motion in violation of Commission Rule
40(a), which mandates “[a] motion shall not be included in another document,” but “shall be
made in a separate document.” 29 C.F.R. §2200.40(a); see also Elan Lawn & Landscape Serv.,
Inc. , 22 BNA OSHC 1337, 1340 (No. 08-0700, 2008).

Long-standing Commission precedent indicates relief may be granted under Rule 60(b)
from a final order of the Commission resulting from an untimely filed notice of contest. Elan
Lawn & Landscape Serv., Inc. , 22 BNA OSHC 1337, 1338 (No. 08-0700, 2008) ( citing
Northwest Conduit Corp. , 18 BNA OSHC 1948, 1949 (No. 97-851, 1999). Thus, the court
concludes it has jurisdiction to rule on Rheem’s motion seeking Rule 60(b) relief. However, for
the reasons indicated infra , Rheem has not established excusable neglect or any other reason
justifying relief and its motion is therefore DENIED .

II. FACTS

On March 24-25, 2015, OSHA conducted a two-day inspection of Rheem’s Gunter Park
Drive facility in Montgomery, Alabama, where Rheem manufacturers heating and cooling
products. (Mot. p. 1; see also Ex. A.) The inspection was conducted following a report that an
employee's thumb had been crushed by machinery or equipment. (Resp. p. 1; see also Sanders
Decl., Ex. A.) On May 6, 2015, OSHA issued the citation and notice to Rheem via certified
mail, return receipt requested, and as evidenced by the certified mail return receipt, it was signed
for by Charles Berg, Rheem’s security guard, on May, 8, 2015. (Mot. p. 3, see also Ex. A, Ex.;
Day Decl., Ex. B, Ex. C.) Rheem did not file its notice of contest until June 24, 2015. (Resp. p.
2.) OSHA determined the citation and notice was deemed a final order of the Commission on
June 2, 2015, and notified Rheem on June 25, 2015, it would not treat the case as contested and
refused to forward Rheem’s notice of contest to the Commission. (Mot. p. 5; see also Ex. E.)
Therefore, on July 7, 2015, Rheem filed its Rule 60(b) motion in the Commission.

Prior to January 17, 2015, Rheem’s process for mail delivery was handled “by an
assigned Rheem mailroom attendant.” (Mot. p. 4; see also Burnette Decl., ¶ 6.) However, on or
around that date, Rheem eliminated the assigned mailroom attendant position and from that day
forward, Rheem’s mail delivery process consisted of the following:

(1) First, FedEx, U.P.S. and U.S. Postal Service deliveries arrive at Gate 1 and
any letters or packages requiring signatures are signed for by the security guard
on duty. (2) The security guard then returns the letters or packages requiring
signatures to the FedEx, U.P.S. or U.S. Postal Service delivery person.

(3) The FedEx, U.P.S. or U.S. Postal Service delivery person then deposits all
mail (certified, packages, and other) in a designated area inside the door of
Rheem’s mailroom located adjacent to the shipping receiving dock doors on the
East side of the facility.

(4) Next, one of three Rheem employees sort the mail at some point during the
day and add it to dedicated bins in the mail room for each department/area.

(5) Finally, the dedicated bins are delivered to the departments for distribution.

( Id. ) (Emphasis added).

According to Rheem, “[t]he person usually tasked with sorting mail states that, when she
is doing the task, she personally delivers any FedEx or U.P.S. envelopes or certified mail to the
actual department to whom it is addressed.” ( Id. ; see also id. at ¶ 4.) Rheem also asserts, “[o]n
the day in question, the person who performed this task most frequently stated that she had taken
a half-day of vacation.” ( Id. ; see also id. at ¶ 5.) Therefore, Rheem asserts a “back-up person
most likely sorted and delivered the mail on May 8, 2015.” ( Id. ; see also id. )

III. ANALYSIS

Rule 60(b)(1) of the Federal Rule of Civil Procedure provides that “[o]n motion and just
terms, the court may relieve a party or its legal representative from a final judgment, order, or
proceeding” for “mistake, inadvertence, surprise, or excusable neglect[.]” Fed. R. Civ. P.
60(b)(1). The D.C. Circuit has noted the trial judge, “who is in the best position to discern and
assess all the facts, is vested with a large measure of discretion in deciding whether to grant a
Rule 60(b) motion, and the [judge’s] grant or denial of relief under Rule 60(b), unless rooted in
an error of law, may be reversed only for abuse of discretion.” Computer Professionals for Soc.
Responsibility v. U.S. Secret Serv., 72 F.3d 897, 903 (D.C. Cir. 1996), amended (Feb. 20, 1996).

B. Citation and Notice

Deemed Final Order of the Commission

Under the Act when the Secretary issues a citation, he is also required to “notify the
employer by certified mail of the penalty, if any, proposed to be assessed.” 29 U.S.C. § 659(a)
(emphasis added). If the employer fails to “notify the Secretary that [it] intends to contest” the
citation or notice within “fifteen working days from the receipt of the notice,” the citation and
notice is “deemed a final order of the Commission.” Id. Rheem does not dispute that the citation
and notice was signed for by its security guard on May, 8, 2015, and that it was not contested by
June 1, 2015. Thus, the Secretary argues, and the court agrees, his citation and notice was
deemed a final order of the Commission by operation of law on June 2, 2015. See 29 U.S.C. §
659(a). (Resp. p. 2.)

Rheem argues it has been unsuccessful in its attempts to locate the citation and notice and
“no management officials or mailroom personnel recall seeing or delivering an envelope from
OSHA in May or June.” (Mot. p. 5; see also Ex. C-9.) “The question in this case is not whether
[Rheem] had actual notice of the [citation and notice], but whether such reasonable steps had
been taken to give [it] notice[.]” Atherton v. Atherton , 181 U.S. 155, 172 (1901). The court
concludes such reasonable steps were taken by the Secretary. While it would have been better if
Rheem’s management had actually received the citation and notice, as indicated infra , the failure
of its management “to receive it was due partly to its own dereliction.” S & G Inv. Inc. v. Home
Fed. Sav. & Loan Ass'n , 505 F.2d 370, 375 (D.C. Cir. 1974).

Rheem also argues “despite acknowledging delivery,” the mail is not “received” by the
security guard “but remains in the possession of the U.S. Postal Service delivery person at this
point.” (Mot. p. 3; see also Burnette Decl., ¶ 3.) To state it in terms of the Act, Rheem
essentially argues that even though it signed for the certified mail, it was not in “receipt of the
notice issued by the Secretary.” 29 U.S.C. § 659(a). However, under the Act, since the date of
the employer’s “receipt of the notice” triggers the “fifteen working days” time limit to initiate a
contest, the Act’s additional requirement that the Secretary “notify the employer by certified
mail” effectuates one of Congress’ declared purposes of the Act, of “providing an effective
enforcement program.” 29 U.S.C. § 651(b)(10). Rheem’s position is contrary to this legislative
purpose and not only leads to an absurd result, it is itself absurd, particularly since it chose to
implement such a convoluted mail-handling process.

The “absurd results doctrine” embodies “the long-standing rule that a statute should not
be construed to produce an absurd result.” Ctr. for Biological Diversity v. E.P.A. , 722 F.3d 401,
411 (D.C. Cir. 2013) ( citing Mova Pharmaceutical Corp. v. Shalala , 140 F.3d 1060, 1068 (D.C.
Cir. 1998)); cf. Griffin v. Oceanic Contractors, Inc. , 458 U.S. 564, 575 (1982) (“interpretations
of a statute which would produce absurd results are to be avoided if alternative interpretations
consistent with the legislative purpose are available.”). Under Rheem’s interpretation, there
would never be a date certain of the employer’s “receipt of the notice” and the Secretary would
therefore never know with certainty when the “citation and the assessment, as proposed, shall be
deemed a final order of the Commission.”

Further, upon “receipt” of any citation under the Act, the Secretary’s regulations require
the employer to “immediately post” the citation “at or near each place an alleged violation
referred to in the citation occurred.” 29 C.F.R. §1903.16(a). The Secretary’s regulations also
require each citation to “remain posted until the violation has been abated, or for 3 working days,
whichever is later.” §1903.16(b). Further, any employer that fails “to comply with the
provisions of paragraphs (a) and (b) of this section” is subject to a “citation and penalty in
accordance with the provisions of section 17 of the Act.” §1903.16(d). Again, without a date
certain of the employer’s “receipt of the notice,” the Secretary would not know with certainty
whether the employer has complied with his posting requirements. Clearly, the Secretary could
not operate “an effective enforcement program” under such an absurd interpretation.

However, the court concludes there is an alternative interpretation consistent with the
legislative purpose of “providing an effective enforcement program” that avoids Rheem’s
argument and absurd result. Since the Act requires the Secretary to “notify the employer by
certified mail ” of his notice and also limits initiating contests to within “fifteen working days
from the receipt of the notice,” the court interprets the phrase within “fifteen working days from
the receipt of the notice” to mean within “fifteen working days from the” day the company signs
for the certified mail , as evidenced by the certified mail return receipt. See e.g. , NYNEX , 1996
WL 109585 (No. 95-1671, 1996) (ALJ) (“A signed receipt for certified mail is prima facie
evidence of delivery of the citation”), aff'd , 18 BNA OSHC 1967 (No. 95-1671, 1999). There is
no dispute here that the citation and notice was signed for by Rheem’s security guard on May, 8,
2015. Since Rheem did not notify the Secretary within fifteen working days from the day it
signed for the certified mail, the court concludes the Secretary’s citation and notice was “deemed
a final order of the Commission” by operation of law on June 2, 2015. 29 U.S.C. § 659(a).

D. Meritorious Claim or Defense

The Commission and the D.C. Circuit have recognized that motions for relief under Rule 60(b) are not to be
granted unless the movant can demonstrate a meritorious claim or defense. Northwest Conduit
Corp. , 18 BNA OSHC 1948, 1953 (No. 97-851, 1999); Lepkowski v. U.S. Dep't of Treasury , 804
F.2d 1310, 1314 (D.C. Cir. 1986). See also FG Hemisphere Associates, LLC v. Democratic
Republic of Congo , 447 F.3d 835, 842 (D.C. Cir. 2006). That element has been “satisfied with
minimal allegations that the employer could prove a defense if given the opportunity.” Jackson
Assoc. of Nassau , 16 BNA OSHC 1261, 12675 (No. 91-438, 1993). “The key consideration is
‘to determine whether there is some possibility that the outcome of the suit after a full trial will
be contrary to the result achieved by the default.”’ Northwest Conduit , 18 BNA OSHC at 1953
(citation omitted). Stated another way, to clear the “meritorious defense” hurdle, Rheem need
only provide “reason to believe that vacating the judgment will not be an empty exercise or a
futile gesture.” Marino v. Drug Enforcement Admin ., 685 F.3d 1076, 1080 (D.C. Cir. 2012)
(citation omitted). This is not a high bar. Id.

A meritorious defense is not measured by “[l]ikelihood of success,” but by whether it
“contain[s] ‘even a hint of a suggestion’ which, proven at trial, would constitute a complete
defense.” Keegel v. Key West & Caribbean Trading Co. , 627 F.2d 372, 374 (D.C. Cir. 1980)
(citation omitted). Rheem asserts in its motion it will allege employee misconduct, as well as
other defenses to OSHA's citation and notice, “including a prior and longstanding interpretation
by OSHA that indicates that guarding was not necessary.” (Mot. p. 8.) Rheem’s motion has the
requisite “minimal allegations” that it “could prove a defense if given the opportunity” and
provides at least “a hint of a suggestion” which, if proven at trial, “would constitute a complete
defense.” Therefore, Rheem has cleared the “meritorious defense” hurdle.  

F. Merits of Rheem’s Rule 60(b) Request for Relief

On the merits, Rheem asserts it is entitled to Rule 60(b)(1) relief because the citation and
notice “was either mistakenly not dropped off in the designated mailroom” by the U.S. mail
carrier after its security guard signed for its delivery “or it was inadvertently and unforeseeable
lost or misplaced in the mailroom.” (Mot. pp. 1-2; Burnette Decl., ¶ 8.) Thus, Rheem argues “an
inadvertently lost or misplaced envelope by Rheem mail personnel” or “a failure” of the carrier
“to properly delivery the certified mail to the mailroom after the signature” warrants a finding of
“excusable neglect” or “mistake.” ( Id. p. 8.) On the other hand, the Secretary argues Rheem
“has not established excusable neglect because the reason for the late filing was entirely within
its control, and [ ] has only speculated regarding a possible mail delivery failure, after the
Citation package was successfully delivered to its address of record.” (Resp. p. 5.) The court
agrees with the Secretary.

Rheem does not support its motion with evidence the court credits and its assertions are
therefore not accepted as fact. Rheem relies on bald assertions in hearsay statements,

coupled
with mere speculation and hypothesis, concerning what may have happened to the citation and
notice after Rheem’s security guard signed for it, which the court does not find sufficiently
reliable to credit. Rheem offers the declaration of Greg Burnette, the company’s Human
Resource Manager, which clearly is not based on Burnette’s first-hand knowledge of the relevant
events. (Mot. Ex. C.) Burnette speculates that the citation and notice did not remain in the
possession of its security guard after the guard signed for it but rather, remained in the
possession of the U.S. mail carrier.

Thus, the company hypothesizes that the citation and notice may have been “mistakenly
not dropped off in the designated mailroom” by the mail carrier. (Mot. pp. 3, 5; Burnette Decl., ¶
3, 8.) Rather than speculating and hypothesizing, Rheem should have supported its assertions
with affidavits or declarations from its security guard and the U.S. mail carrier based upon their
first-hand knowledge. See e.g. , Grant v. U.S. Air Force , 197 F.3d 539, 541 (D.C. Cir. 1999)
(where the mail carrier who attempted delivery testified regarding those attempts). Rheem’s
motion also relies on a hearsay statement in Burnette’s Declaration purportedly made by the
person “usually tasked” with sorting mail “that she had taken a half-day of vacation.” (Mot. p. 4;
Burnette Decl., ¶ 4.) Again, rather than supporting this assertion with this hearsay statement,
Rheem should have supported its motion with an affidavit or declaration from the actual person
“usually tasked” with sorting mail that purportedly made that statement. Likewise, rather than
speculating that the “back-up person most likely sorted and delivered the mail on May 8, 2015,”
( id. ), Rheem should have supported its motion with an affidavit or declaration from that “back-up” employee. Moreover, even if Rheem’s assertions are accepted as true, they do not establish
any ground for relief under Rule 60(b)(1).

In evaluating motions for Rule 60(b)(1) relief, both the Commission and the D.C. Circuit
have adopted the Supreme Court's “excusable neglect” analysis as set forth in Pioneer Ins. Servs.
Co. v. Brunswick Assocs. Ltd. Pship. , 507 U.S. 380 (1993). See , e.g. , Northwest Conduit , 18
BNA OSHC at 1952 and In re Vitamins Antitrust Class Actions , 327 F.3d 1207, 1209 (D.C. Cir.
2003) (both applying the Pioneer analysis to a Rule 60(b) motions). Relevant circumstances for
the court to consider under Pioneer’s equitable analysis include: “(1) the danger of prejudice to
the opposing party, (2) the length of delay and its potential impact on the proceeding, (3) the
reason for the delay, including whether it was within the reasonable control of the party seeking
relief, and (4) whether the party seeking relief acted in good faith.” Northwest Conduit , 18 BNA
OSHC at 1950 , quoting Pioneer , 507 U.S. at 395. In determining whether a party’s neglect of a
deadline is “excusable,” the Supreme Court noted in Pioneer that Congress provided no
guideposts for determining what sorts of neglect will be considered “excusable.” Pioneer , 507
U.S. at 395.

Thus the Pioneer Court concluded that “the determination is at bottom an equitable one,
taking account of all relevant circumstances surrounding the party's omission.” Id. However, for
purposes of Rule 60(b), “‘excusable neglect’ is understood to encompass situations in which the
failure to comply with a filing deadline is attributable to negligence.” Pioneer , 507 U.S. at 394.
Thus, “[b]ecause of the language and structure of Rule 60(b), a party's failure to file on time for
reasons beyond his or her control is not considered to constitute ‘neglect.’” Id. (emphasis
added). Here, however, the court finds this case does involve “neglect” since the delayed filing
of the notice of contest was within the control of Rheem and could have been avoided if Rheem
had exercised reasonable diligence by not implementing such a convoluted mail-handling
process.

Under the first factor, the D.C. Circuit has held prejudice “appears typically and properly
to contemplate costs that reconsideration of the final judgment would inflict on the non-moving
party independent of the chance of reversal.” FG Hemisphere , 447 F.3d at 840. The
Commission has also recognized it is usually a given that there is “a lack of prejudice to the
Secretary[.]” CalHar Constr., Inc. , 18 BNA OSHC 2151, 2157 n. 5 (No. 98-367, 2000). The
Secretary has also not asserted Rule 60(b)(1) relief should be denied due to costs “independent
of the chance of reversal.” Therefore, the court concludes the first factor does not weigh against
granting Rule 60(b)(1) relief.

Under the second factor, the Secretary has not asserted Rule 60(b)(1) relief should be
denied due to the length of delay and its potential impact on these proceedings. The
Commission has also held there is usually a lack of prejudice “to the interests of efficient judicial
administration.” CalHar Constr. , 18 BNA OSHC at 2157 n. 5. The D.C. Circuit has held where
“a neutral rule of general application require[s] a response” to be filed within a certain period of
time, “in such situations, violation of the rule itself indicates prejudice to an already
overburdened system of litigation.” Lepkowski , 804 F.2d at 1313. However, since that case did
not address a statutory provision, but rather, Rule 1–9(d) of the Local Rules of the District Court,
which require that an opposition to a motion to dismiss be filed within ten days, that case is
factually distinguishable and is not controlling. Therefore, the court finds there is no prejudice
“to the interests of efficient judicial administration” and therefore concludes the second factor
also does not weigh against granting Rule 60(b)(1) relief.

As to the fourth factor, there is no suggestion that Rheem acted in other than good faith
and the record shows that Rheem and its attorney showed some diligence in pursuing their
remedies. Rheem contacted its counsel “when several weeks went by after the closing
conference and they had yet to receive the [citation and notice]” and Rheem’s counsel
“immediately reached out to OSHA's Mobile Area Office on June 22, 2015, to determine if and
when [it] had been delivered.” (Mot. p. 9.) Upon learning that it had been delivered, “Rheem
immediately filed a late” notice of contest “in the attempt to preserve its rights.” ( Id. ) The
Secretary did not dispute these assertions. The court concludes the fourth factor also does not
weigh against granting Rule 60(b)(1) relief.

As to the third factor, the reason for the delay, the Commission has held it is “a key
factor” in determining whether a late filing was due to excusable neglect, “including whether it
was within the reasonable control of the movant.” CalHar Constr. , 18 BNA OSHC at 2153,
citing to Pioneer , 507 U.S. at 395. In appropriate circumstances, the Commission has held this
to be the dispositive factor. A.W. Ross, Inc. , 19 BNA OSHC 1147, 1149 (No. 99-945, 2000).
Here, the court concludes the reason for the delay was within Rheem’s reasonable control. The
Commission has held that “[e]mployers must maintain orderly procedures for handling important
documents.” Louisiana–Pacific Corp. , 13 BNA OSHC 2020, 2020 (No. 86–1266, 1989). Thus,
the Commission requires an employer to exercise “due diligence” before it will find excusable
neglect. Keefe Earth Boring Company, Inc. , 14 BNA OSHC 2187, 2192 (No. 88-2521, 1991);
Craig Mechanical , 16 BNA OSHC at 1763. Clearly, given Rheem’s convoluted mail-handling
process, it did not “maintain orderly procedures for handling important documents” and did not
exercise “due diligence.”

Rheem relies on LeFrois Builder, Inc. , 18 BNA OSHC 1978, 1981 (No. 98-1099, 1999),
arguing the Commission has found excusable neglect and mistake when there was “a highly
unusual, inadvertent error.” (Mot. p. 8.) Rheem’s reliance on LeFrois is misplaced since LeFrois
is factually distinguishable. In that case, as Rheem points out, the reason for the delay was “a
highly unusual, inadvertent error” by the company employee who picked up the mail on the day
in question. A secretary for Le Frois received and signed for the citation on May 15, 1998, and
placed it in her car before returning to the office and subsequently discovered the certified mail
under the front seat of her car on the July 4th weekend. The secretary gave the certified mail to
the company president on Monday, July 6, and he promptly contacted OSHA and filed a late
notice of contest on July 8. Further, the company previously had not experienced a problem with
its mail pickup system during the eighteen years it had been in effect.

Here however, unlike in LeFrois , Rheem’s untimely filing did not result from an
employee picking up mail and later finding it in her car since Rheem admits the citation “has yet
to be found within the facility.” Although Rheem asserts the “person usually tasked with sorting
mail indicates that, when she is doing the task, she personally delivers any FedEx or U.P.S.
envelopes or certified mail to the actual department to whom it is addressed,” on the day in
question, Rheem also admits “the person who performed this task most frequently stated that she
had taken a half-day of vacation” and therefore a “back-up person most likely sorted and
delivered the mail on May 8, 2015.” However, Rheem offered no evidence that the “back-up
person” also “personally delivers any FedEx or U.P.S. envelopes or certified mail to the actual
department to whom it is addressed.” Therefore, the court has no basis for determining whether
the delay in filing was “excusable,” and Rule 60(b) requires a showing of excusable neglect, not
just simple negligence. Further, unlike in LeFrois , where the company had not experienced a
problem with its mail pickup system during the eighteen years it had been in effect, Rheem’s
new convoluted mail-handling process was in place less than four months before the citation and
notice was delivered.

Therefore, LeFrois is not controlling.

Further, even though Rheem asserts a “back-up person most likely sorted and delivered
the mail on May 8, 2015,” “[a]n employer's failure to have a procedure in place to address such
occurrences does not provide a basis for relieving an employer from the effects of the final
order,” E. K. Construction , 15 BNA OSHC at 1167, and “[h]andling important business matters
in this manner cannot be considered excusable neglect such that relief under Rule 60(b) would
be appropriate.” A.W. Ross , 19 BNA OSHC at 1149. In J.F. Shea Co. , 15 BNA OSHC 1092,
1093 (No. 89-0976, 1991), relief was also denied by the Commission since the company’s
failure to demonstrate “orderly procedure for handling important documents” indicates that “this
is a case of simple negligence, which is not an adequate excuse for relief under Rule 60(b).”

Here, prior to January 17, 2015, Rheem had orderly procedures for handling important
documents since its process for mail delivery was handled “by an assigned Rheem mailroom
attendant. The court finds Rheem no longer had “orderly procedures for handling important
documents” when it eliminated the assigned Rheem mailroom attendant position and began
using its convoluted mail-handling process. However, such “staff changes” “do not support a
conclusion of justifiable mistake or inadvertence, or excusable neglect.” Rebco Steel Corp. , 8
BNA OSHC 1235, 1238 (Nos. 77-2040 & 77-2947, 1980).

Rheem argues this is not a case where it “did not properly route the mail to the
appropriate person upon delivery,” (Mot. p. 10), but as indicated supra , this is exactly such a
case. Clearly, Rheem did not properly route the citation or it would know where it is. Relief
was denied by the Commission in Stroudsburg Dyeing & Finishing Co. , 13 BNA OSHC 2058
(No. 88-1830, 1989), where the failure of the employee “who received the mailed citation to
bring it to the attention of the proper officer of the company does not constitute ‘excusable
neglect’ or ‘any other reason justifying relief.’” Likewise, in Louisiana–Pacific Corp. , supra ,
and in Rebco Steel , 8 BNA OSHC at 1238, the Commission held relief under Rule 60(b) was not
justified where the employer failed to properly supervise the employee who mishandled the
OSHA citation.

In Villa Marina Yacht Harbor, Inc. , 19 BNA OSHC 2185, 2187 (No. 01-0830,
2003), consistent with the Louisiana–Pacific precedent, the Commission also affirmed the
judge’s conclusion that the company “did not have orderly procedures in place for the handling
of important documents” based upon the judge’s finding that the company's messenger
“mishandled” the mail.

In, NYNEX , a company clerical employee signed for the citation, which was recorded in
the company’s log the same day. The next known action on the certified mail was when
OSHA’s compliance officer telephoned NYNEX's OSHA representative concerning the citation,
who was unaware of the citation. As the Commission found in affirming the judge’s denial of
Rule 60(b)(1) relief, NYNEX failed to explain “what happened to the citation after it was
received and logged in at the New York City office, or what procedures the employer had at that
office to ensure a timely response to important documents.” NYNEX , 18 BNA OSHC 1970.
Again the Commission reiterated it expects employers to “maintain orderly procedures for
handling important documents.” Id. ( citing Louisiana-Pacific , 13 BNA OSHC at 2020). Here, as
in NYNEX , Rheem has not explained what happened to the citation and notice after it was
received by its security guard. However, like in NYNEX , the company is “responsible for
redirecting the citation.” NYNEX , 18 BNA OSHC at 1947.

Rheem also argues the failure to grant it relief under Rule 60(b) would be prejudicial
since the final order “could be used by OSHA in future investigations as a means of establishing
that Rheem committed a ‘Repeat’ or ‘Willful’ violation” under the Act. (Mot. p. 10.) However,
the equitable analysis announced in Pioneer does not take into account the danger of prejudice to
the party seeking Rule 60(b) relief, but rather, takes into account “the danger of prejudice to the
opposing party.” Pioneer , 507 U.S. at 395. Although this analysis takes into account “all
relevant circumstances,” id. , and the factors listed by Pioneer are of course not exclusive, id. at
395–96, the court does not find prejudice to Rheem a “relevant circumstance” in this case since
any such prejudice could have been avoided if Rheem had simply exercised reasonable
diligence. Further, Rheem’s position overlooks or ignores a critical element in this case, and that
is the undisputed fact that Rheem had sole control over its convoluted mail-handling procedures
at its facility both before and after its security guard signed for the citation and notice. Such
control carries with it a duty to exercise reasonable diligence in handling important documents.

Based upon the record in this matter, the court finds, as the Commission did in
Stroudsburg , the failure of Rheem’s employee to bring the citation and notice to the attention of
the proper officer of the company does not constitute “excusable neglect” or “any other reason
justifying relief.” As in Louisiana–Pacific and in Rebco Steel , relief is not justified under Rule
60(b)(1) since Rheem failed to properly supervise the employee who mishandled the citation and
notice. The Commission “has consistently denied relief to employers whose procedures for
handling documents were to blame for untimely filings” of notice of contests. NYNEX , 18 BNA
OSHC 1967 (No. 95-1671, 1999) ( citing E. K. Constr. Co. , 15 BNA OSHC 1165, 1166 (No. 90-2460, 1991). The court concludes this is also such a case. Thus, the court finds the delayed
filing of the notice of contest was within the reasonable control of Rheem and could have been
avoided if Rheem had exercised reasonable diligence. Therefore, as in E. K. Construction and in
J.F. Shea , the company has failed to demonstrate an “orderly procedure for handling important
documents” and at best, has shown only carelessness or simple neglect, which is not an adequate
excuse for relief under Rule 60(b)(1). Accordingly,

IV. ORDER

IT IS HEREBY ORDERED THAT Rheem’s motion for relief under Rule 60(b) is DENIED .

SO ORDERED THIS 20 th day of November, 2015.

/s/  

John B.Gatto, Judge