K&E Builders, LLC

Plain-English summary

OSHA issued K&E Builders one serious citation with a proposed $3,880 penalty after inspecting a Texas construction worksite. The company filed a notice of contest but then failed to attend a pretrial conference, answer interrogatories, comply with a discovery order, respond to the Secretary’s default motion, or answer an order to show cause. The judge found a repeated pattern of disregard for the proceeding and concluded that the company had abandoned its contest. K&E Builders was declared in default, its notice of contest was dismissed, and the citation and $3,880 penalty were affirmed.

Decision snapshot

• Cited standard(s): The dismissal order does not identify the substantive OSHA standard.
• Outcome: Notice of contest dismissed by default; serious citation affirmed with a $3,880 penalty.
• Key point: Filing a contest does not preserve it when the employer repeatedly ignores discovery duties, conferences, and court orders.

Full text (OSHRC public release)

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UNITED STATES OF AMERICA

OCCUPATIONAL SAFETY AND HEALTH REVIEW
COMMISSION

SECRETARY
OF LABOR,

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

�������������

���������������������������������������������
v. ���

K
& E BUILDERS, LLC, ��
��������������������������������������������

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

�

�����

���� OSHRC DOCKET NO. 18-0522

Attorneys and Parties:

Navi Jani, Esq., Office of the Solicitor, U.S. Department of Labor, Dallas,
TX

������������������������������� For Complainant

��������������� Michael Almager ,
Pro Se, Albuquerque, NM

������������������������������� For Respondent

JUDGE: � Patrick B. Augustine, United States
Administrative Law Judge

DECISION
AND ORDER OF DISMISSAL PURSUANT TO 29 C.F.R. � 2200.101

����������� � SEQ CHAPTER \h \r 1 This proceeding is before the
Occupational Safety and Health Review Commission (�the Commission�) pursuant to
Section 10(c) of the Occupational Safety and Health Act of 1970, 29 U.S.C. � 651
et seq . (�the Act�). � The
Occupational Safety and Health Administration (�OSHA�) conducted an inspection
of a K & E Builders, LLC (�Respondent�) worksite at 120 111 th ,
Lubbock, Texas on September 14, 2017. � As
a result of the inspection, OSHA issued a Citation and Notification of Penalty
(�Citation�) to Respondent alleging one serious violation of the Act with a proposed
penalty of $3,880.00. � The Citation was
issued on March 1, 2018. � Respondent filed
a Notice of Contest. This case was
designated to proceed under simplified proceedings of the Commission. � See 29
C.F.R. � 2200.203. � Therefore, no Complaint or Answer was
required.

Jurisdiction

����������� The Commission has jurisdiction over this action pursuant to Section
10(c) of the Act due to the filing of a Notice
of Contest by Respondent. 29 USC � 659(c). �

����������� Respondent
is engaged in a business affecting interstate commerce within the meaning of
Section 3(5) of the Act, 29 U.S.C. � 652(5). �
See � Slingluff v. OSHRC , 425 F.3d 861 (10th Cir. 2005). � The Commission has stated �[t]here is an
interstate market in construction materials and services and therefore
construction work affects interstate commerce.� Id ., citing NLRB v. Int�l
Union of Operating Engineers, Local 571, 317 F.2d 638, 643 n. 5 (8th Cir.
1963) (judicial notice taken that construction industry affects interstate
commerce). Even a small employer, like Respondent, whose activities and
purchases are purely local, when aggregated with other engaged in similar
activities, has a substantial effect on interstate commerce. Slingluff , 425 F.3d at 867, Clarence M. Jones , 11 BNA OSHC 1529, 1531 (No. 77-3676, 1983)( �There is an interstate market in construction
materials and services and therefore construction works affects interstate
commerce.�) Because Respondent is engaged in construction work, the undersigned
finds it is engaged in a business affecting interstate commerce.

����������� Respondent
has presented no contrary proof to dispute that it is an employer except to
state in its Notice of Contest that
�the guys you found working were subcontracted.� While Complainant has the
burden of proving its case by substantial evidence, what constitutes
substantial evidence varies with the circumstances. The �evidence a reasonable
mind might accept as adequate to support a conclusion� is surely less in a case
like this where it stands entirely unrebutted in the record by a party having
full possession of all the facts, than in a case where there is contrary
evidence to detract from its weight. See,
e.g., Noranda Aluminum, Inc. v. OSHRC , 593 F.2d 811, 814 & n.5 (8th
Cir. 1979) (decision to leave Secretary's case unrebutted �a legitimate but
always dangerous defense tactic in litigation�); Stephenson Enterprises, Inc. v. Marshall , 578 F.2d 1021, 1026 (5th
Cir. 1978). It is well established that when one party has it peculiarly within
its power to produce witnesses whose testimony would elucidate the situation
and fails to do so, it gives rise to the presumption that the testimony would
be unfavorable to that party. Graves v.
United States , 150 U.S. 118, 121 (1893). �
The Court finds Respondent was an employer under the Act.

Controlling Case Law

����������� Although the Commission recognizes
the difficulties a pro se litigant
may face when participating in the Commission�s proceedings, the Commission
still requires the pro s e litigant to
follow the rules and exercise reasonable diligence in the legal proceedings in
which it is taking part. Sealtite Corp ., 15 BNA OSHC 1130 (No. 88-1431,
1991); Wentzell d/b/a N.E.E.T. Builders , 16 BNA OSHC
1475, 1476 (No. 92-2696, 1993) (stating that �[a] pro se employer is required
to exercise reasonable diligence� [they must] follow the rules and file
responses to a judge�s orders, or suffer the
consequences��).

����������� Not
having counsel, does not obviate a party�s obligation to engage in the
adjudicatory process. All litigants, including those declining to hire counsel,
must obey orders and to permit and respond to discovery as required by the
Commission Rules. See JGB LLC, 21 BNA
OSHC 1402, 1403 (No. 04-2153, 2006) (vacating direction for review when
unrepresented party failed to respond to a briefing notice); Swimmer v. IRS , 811 F.2d 1343, 1345 (9th
Cir. 1987) (�Ignorance of court rules does not constitute excusable neglect,
even if the litigant appears pro se�). An unrepresented employer must �exercise
reasonable diligence in the legal proceedings� and �must follow the rules and
file responses to a judge's orders, or suffer the consequences, which can
include dismissal of the notice of contest.� Wentzel d/b/a N.E.E.T. Builders , 16 BNA OSHC 1475, 1476 (No.
92-2696, 1993) (citations omitted).

Procedural History

����������� � On May 14, 2018, the Court issued a Pretrial Conference Order directing the
parties to appear on a conference call on July 2, 2018. � The Pretrial
Conference Order was not returned as �undeliverable� on either party by the
United States Postal Service. Complainant appeared through counsel. � Respondent did not appear. ��

����������� On
August 8, 2018, Complainant filed Complainant�s
Amended Motion to Compel Responses to Discovery (� Motion to Compel �). [1] � As grounds for the Motion to Compel , Complainant set forth multiple instances of
Respondent�s failure to comply. � These
include:

1. On July 5, 2018, Complainant served
   his First Set of Interrogatories on Respondent, via U. S. Mail. �

2. Discovery responses were due on
   August 8, 2018.

3. Respondent failed to respond to the
   First Set of Interrogatories nor was there any other communication with
   Respondent. �

See generally Secretary�s Motion to Compel. �

����������� Respondent failed to respond to the Motion to Compel . � In response to the Motion to Compel, the Court issued an Order dated August 9, 2018 directing
Respondent to respond to the First Set of Interrogatories by August 23, 2018.

����������� On
August 29, 2018, Complainant filed Complainant�s
Motion for Default (�Default Motion�). �
As grounds for the Default Motion ,
Complainant set forth multiple instances of Respondent�s default. � These include:

1. � Respondent�s failure to attend the July 2,
   2018 conference with the Court.

2. Respondent�s failure to respond to
   the First Set of Interrogatories.

3. Respondent�s failure to comply with
   the Court�s Order dated August 9, 2018 directing Respondent to answer the Frist
   Set of Interrogatories.

4. Respondent has failed to comply with
   the Court�s August 9, 2018 Order.

5. All attempts to communicate with or
   contact Respondent have been fruitless.

See generally Secretary�s Motion for Default. ��� ��

����������� In
response to Complainant�s Motion for Default ,
the Court issued an Order to Show Cause ,
directing Respondent to �SHOW CAUSE WITHIN ELEVEN (11) DAYS why the Court
should not issue judgment against Respondent, affirming the proposed violations
in this case for: � (1) failure to attend
a Pretrial Conference on July 2, 2018; (2) failure to respond to respond to the
Court�s Order Granting Motion to Compel
dated August 9, 2018; and (iii) failure to respond to the Secretary�s Motion for Default. To date, Respondent has failed to
file a response to the Court�s Order to
Show Cause . [2]

Discussion

����������� Commission
Rule 101(a) provides:

When any party has failed to plead or otherwise proceed as provided by
these rules or as required by the Commission or Judge, he may be declared to be
in default either on the initiative of the Commission or the Judge, after having
been afforded an opportunity to show cause why he should not be declared in
default . . . . Thereafter, the Commission or Judge,
in their discretion, may enter a decision against the defaulting party . . . . �

As noted above, Respondent has been
provided an opportunity to show cause why it should not be held in default and
failed to respond to the Court�s request.

����������� The
Court has a duty to �conduct a fair and impartial hearing, to assure that the
facts are fully elicited, to adjudicate all issues, and avoid delay.� � 29 C.F.R. � 2200.67. � In order to carry out that duty, Commission
Rule 67(m) authorizes the Court to �[t] ake any other
action necessary . . . and authorized by the published rules and regulations of
the Commission.� � The Court�s prehearing
procedures aid in the early formulation of issues, which benefits all parties
during trial preparation as well as resulting in the more effective use if the
Court�s resources at the hearing stage. Architectural
Glass & Metal Co ., 19 BNA OSHC 1546, 1547 (No. 00-0389, 2001). The
imposition of appropriate sanctions is important to ensure compliance with
prehearing procedures and to permit the fair and efficient adjudication of
issues. � Id . �� The Judge has broad
discretion to decide whether sanctions should be ordered. Id. � See also, Jersey Steel Erectors,
16 BNA OSHC 1162, 1165 (No. 90-1307, 1993), Sealtite Corp ., 15 BNA OSHC 1130, 1134 (88-1431, 1991) and Duquesne Light Co ., 8 BNA OSHC 1218, 1222
(No. 78-5034, 1980)( consolidated). � Therefore, sanctions are an appropriate tool
to ensure compliance where the sanctioned party has engaged in a pattern of
disregard for Commission rules, or where the party�s conduct is contumacious. See, e.g., Phila. Constr. Equip., Inc, 16
BNA OSHC 1128, 1130-31 (No., 92-899, 1993)( pattern of
disregard for Commission proceedings found where Respondent was late for
hearing twice, failed to certify posting of the citation and failed to file an
answer until threatened with dismissal, failed to respond to a discovery
request and failed to respond to a pre-hearing order). � ��

����������� According
to the Commission, �[D] ismissal is too harsh a sanction for failure to comply with
certain pre-hearing orders unless the record shows contumacious conduct by the
noncomplying party, prejudice to the opposing party, or a pattern of disregard
for Commission proceedings.� Amsco , Inc. ,
19 BNA OSHC 2189, 2191 (No. 02-0220, 2003). �
See also Sealtite
Corporation , 15 BNA OSHC 1130 (No. 88-1431, 1991) (contumacious conduct
established where party engaged in a �consistent pattern� of failure to respond
to judge�s orders). �

����������� Default judgments may be appropriate
when a party fails to comply with an order compelling discovery. 29 C.F.R. �
2200.52(f) (sanctions for failing to comply with discovery requirements); 29
C.F.R. � 2200.101(a) (default appropriate when a party fails to proceed as
provided by the Commission Rules or as required by a judge); see also St. Lawrence Food Corp ., 21 BNA
OSHC 1467, 1472 (Nos. 04-1734 & 04-1735, 2006). Failing to comply with
Commission Rules and orders so as to delay proceedings
may constitute contumacious conduct. Carson
Concrete Corp. v. Sec�y of Labor , 21 BNA OSHC 1393, 168 Fed. Appx. 543 (3d
Cir. 2006) (unpublished) (upholding default judgment for OSH Act violations
when employer sought to disavow admission provided during discovery until a few
days before trial).

����������� The Court finds Respondent�s repeated
failures to engage in the litigation process illustrate a pattern of disregard
for the Commission�s proceedings. �
Respondent has been given multiple opportunities and plenty of time to
comply with Commission Rules of Procedure and this Court�s Orders , and the Court has yet to receive any communication or
contact from Respondent. Based on the representations of Complainant, [3]
the Court finds that the delays in this case are wholly attributable to Respondent,
including Respondent�s failure to respond to mail that was sent to an address
where it is presumed it received the mail since none of the mail was returned
as �undeliverable.� � In that regard, the
Court finds that Respondent�s pattern of disregard for the Commission�s
proceedings constitutes contumacious conduct warranting the sanction of
dismissal.

����������� In
addition, the Court finds that the Commission has conveyed due notice to
Respondent of its procedural rights and provided ample warning that its failure
to comply with Court orders may result in the dismissal of its Notice of Contest . At every instance,
Respondent has failed to take advantage of the opportunity to advise the Court
that it has not abandoned its case before the Commission. Every indication
before the Court is Respondent has walked away from its contest. � Under these circumstances, the Court sees no
worthwhile purpose in allowing this case to proceed to a hearing when there is
no basis to believe Respondent will fulfill its pre-trial obligations or actually appear at the trial. 11 See Twin Pines Constr. Inc./ Teles Constr. ,
24 BNA OSHC 1500, 1504 (No. 12-1328, 2012) (No worthwhile purpose in proceeding
to a hearing where a party has abandoned the case). � The Court finds Respondent relinquished its
case with the intent to abandon. 1 C.J.S. Abandonment � 13 (2013).

��
�������� Accordingly, with respect
to the above-referenced docket, Respondent is declared in DEFAULT, its Notice of Contes t is hereby DISMISSED and the
violations and penalties alleged in the Citation and Notification of Penalty
are AFFIRMED in its entirety and penalties ASSESSED.

ORDER

����������� Based
on the foregoing, it is ORDERED that:

1. Citation 1, Item 1, and the
   corresponding penalty of $3,880.00 are hereby AFFIRMED as

a final
order of the Commission pursuant to Section 10(a) of the Act.

SO ORDERED.

Date: � October 25, 2018 ������������������������������������������������������� �����������������������������������

����������������������������������������������������������������������� ����������� /s/
Patrick B. Augustine ���� ����������������������� ����������������������������������������������������������������������� ______

Denver, Colorado ������������������������������������������������������ Judge
Patrick B. Augustine

����������������������������������������������������������������������������������� Judge,
OSHRC

[1] On July
2, 2018, a pre-hearing conference was held during which the Court authorized
Complainant to propound interrogatories on Respondent, despite the case being
in simplified proceedings. ��

[2] . � The Court�s Order to Show Cause was signed for on September 21, 2018 by Martha
Almager.

[3] . � Because Respondent has failed to submit a
response to either the Court�s Orders
or Complainant�s Motion , the Court
accepts Complainant�s representations of the facts as true. �