Destiny Builders Construction Services, Inc. (ALJ decision, April 23, 2021)

Plain-English summary

OSHA issued Destiny Builders three serious and two other-than-serious citation items after inspecting a Chicago construction site. The company filed a notice of contest and eventually answered the complaint after an initial show-cause order. It then failed to register for electronic filing, respond to additional show-cause orders, confer with the Secretary, participate in pretrial preparation, or return repeated calls, emails, and text messages. The judge found a pattern of disregard for the proceeding and concluded that Destiny Builders had abandoned its contest. The company was declared in default, its notice of contest was dismissed, and all five items were affirmed. The operative order assessed penalties of $2,902, $13,494, $2,892, $9,639, and $9,639.

Decision snapshot

• Cited standard(s): The default order does not identify the five specific standards.
• Outcome: Notice of contest dismissed; three serious and two other-than-serious items affirmed with the five penalties listed in the order.
• Key point: Repeated failure to respond to court orders and participate in pretrial proceedings can establish abandonment and support dismissal by default.

Full text (OSHRC public release)


Document

UNITED STATES OF AMERICA

OCCUPATI ONAL SAFETY
AN D HEALTH REVIEW COMMISSION

OSHRC DOCKET NO .
20-0930

Attorneys and Parties:

Edward V. Hartman,
Esq. , Office of the Solicitor, U.S. Department of Lab o r, Chi c ago, IL

For Complainant

Ben
Wa tkin s,
Self - Repr e se nt ed
Litigant, Evergreen Park, IL

For Respondent

JUDGE : First Judge
Pat rick B. Augustine , United States Administrative Law Judge

D ECISION AND ORDER
OF DISMISSAL
PURSUANT TO 29 C.F.R. § 220 0 .101

This
proceedi ng i s
befo re 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 Occupation a l Saf ety and Health Administratio n (“OSHA ” ) c on duct ed an inspection of a Destiny Builders Construction Services, Inc. (“ Resp ondent” ) worksite in Chicago, IL on April 21, 202 0 th r ough M ay 7 , 2020
. As a result of the inspection, OSHA issued a Citation and Notification of Penalty (“Citatio n ”) to Respo nd ent alleging three ser ious viola tion s and two other - tha n - serious violations o f the Act with a proposed penalty of
$ 38, 556 . 00 .
The Citation was
issued on
May 18, 2020 . Respondent
filed a
N ot ice of Contest ( “ N otice of Contest ” ) . Th is case was designated to proceed under conventional proceedi ngs of the Commission. The Complaint was filed on J uly 2, 2020. On November 3, 2020, the Court issued an Order to Show Cause Why the Notice of Contest Should Not be Dismi s sed ( “ First Show Cause Order ” ) fo r failure of R es pon dent in filing its Answer. On November 18, 2020 , after receiv ing the First Sh o w Caus e Order, Respondent filed its Answer.

J urisdiction

The
Commission has j urisdiction over this action pursuant to S e ction 10(c ) of the Act due to the filing of a N otice 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 Sling l uff v. OSHR C , 425 F.3d 861 (10 th C ir. 2005) . T he Commiss i o n has stated “[t]here is an in terstate market in construction mate rials and ser vices and therefore construction work affects interstate commerce.” Id ., citing NLRB v. Int’l Union of Operating Engineers, Local 5 71, 317 F.2d 638, 643 n. 5 (8th C ir. 1963) ( j u dicial notice taken that const ruction industry affects interstate commerce). Ev en a small employer, like Respondent, whose activities and purchases are purely local, when aggregated with other s engaged in simi l ar activities, has a s ubstantial effect on i n t erstate commerce. Slingluff, 42 5 F.3d at 867, Clarence M . Jones , 11 BNA OSHC 152 9, 1531 (No. 77-3676, 1983)(“There is an interstate market in construction materials and services and therefore construction work s affects interstat e co mmerce.”) B ecause Resp o n dent is engaged in construction work, the C ourt finds it is e ngaged in a b usiness affecting interstate commerce.

Controlling Case Law

The Co mmission h as
held that “[w]here it is highly probable that a case wi ll be appeale d t o a particular c i r cuit, the C ommission generally has applied the precedent of that circuit in deciding the case— even though it may diff er from the Commission's precedent.” Kerns Bro s. Tree Serv. , 18 BNA OSHC 2064, 2067 (No. 96-1719, 2000). The Court ap pli es the precedent o f the Seven th Circuit where it differs from the Commis sion in deciding th is case.

Although the Commission recogn izes the difficulties a self-represented litig ant may fa ce when participating in the Commission’s proc eedings , the Commission s till requires t h e self-repr esented litigant to follow the rules and exercise reasonable di ligence in the legal proceedings in which it is taking part . Sealtite Corp ., 15 BNA OSHC 1130 ( No. 88-143 1, 1991); Wentzell d/b/a N.E.E.T. Bu ilders , 16 BNA OSHC 147 5, 1476 (No. 92- 2 6 96, 1993) ( stating that “[a] pro se employer is required to exercise reaso nable diligence… [they must] follow the rules and file resp onses to a judge’s orders or suffer the conse que nces…”).

Not having counsel, does
not ob viate a party’s
obligation
to en g a ge in
in th e adjudicatory process.
All litigants, including those declini ng to hire counsel, must obey orders and to permit and resp ond to discovery as required by the Commission Ru les. See JGB LLC, 21 BNA OSHC 1402 , 1403 (No. 04-2153, 2 006) (vacati ng di r e ction for r eview when unrepresented party failed to respond to a briefing notice); Swimmer v. IRS , 811 F.2d 1343, 1345 (9th Cir. 198 7) (“Ignorance of court rules does n ot constit ute excusable neglect, even if the li tigant appears pro se” ). An unrepr esent e d employer m ust “exercise reasonable diligence in the legal proceedings” a nd “must follow the rules and file responses to a judge's o rders, or suffer the consequences, w hich can i ncl ude dismissal of the notice of con test.” Wentzel d/b/a N .E.E.T. Buil ders , 1 6 BNA OSHC 1475, 1476 (No. 92-2696, 1993) (citations omitted). Still, the Court recognizes that sometimes unrepresented employ ers “can fail to grasp exactly what
[it] is be ing
asked to do.”
Id.
Thus, where an
employer has
a substan tial reason
f or having f ailed to com ply with a discovery order, and where the employer's con duct also does not indicate disrespect toward the judge, th e failure to comply may not necessar ily be an ind ication of bad faith or contumacio us conduct. I d.

Proced ural Histor y

On
Novemb er
2 4 , 2020,
the Court issued an Order to Respondent requiring it to register in the electronic filing system of the Court as required by Commission Rules or provide the Court with an explanation as to why regi stering would be a hardship to Re spondent.  Re spondent did not respond to that Order.  Accordingly, the Court issued a Show Cause Order dated December 7, 2020 ( “ Se cond Show Cause Order ” ) to Respondent requiring Respondent to prov ide an explanation for its failure to co mply with the Cour t’ s November 2 4 , 2020 Order requiring registration.  The Second Show Cause Order was sent via U. S. Mail, Certified Mail.  The Court received the signed receipt for the Certified Mail noting th e Second Show Cause Order was re ceive d on Dec ember 14, 2020 w it h the person re ceiving the Certified Mail using the signature “Covid 19.”  No response t o the Second Show Cause Order was received from Respondent. The Court notes that COVID 19 does not prevent Respondent from communicatin g by telephone , email or text .   Therefore, any excuse of Re spondent relying on COVID 19 is rejected.

On
Decembe r 1, 2020,
the Court issued a n
Order
to Confer and Submission of Joint Pretrial Recommendations ( ” O rder to Confer ” ) directi ng the parties to j ointly file wit hin f orty-fiv e (45) days p retrial r ecommendat ions addressing the items set forth in that Order. The Order to Confer wa s n ot returned as “undeliverable” on either party by the United States Postal Service. On January 15, 2021, the Secretary filed his Propo sed Pretrial Re commendations noti ng that vari ous attempts by the Secretary’s representative to cont act and confer with Respondent have been to no avail.  On January 19, 2021, the Court issued an Order to the Secretary (which was sent to Res pondent) requiri ng the Secret ar y’s representative to file an affidavit containing a summary and documentation of his attempt to contact and communicate with Respondent.  On January 26, 2021, the Secretary filed his Response to the Court’s Order.  The Secre tary set forth h is attempts t o communicate with R espondent to comply with the Court’s December 1, 2020 Order.

P ursuant to the Declaration of Edward V. Hartman , attached to the Secretary’s Response dated January 26, 2021, the following is documented:

1. The CS HO received a te xt from Mr. B en
   Watkins, the repr esentative o f Respondent.
   The text contained the email address
   of Mr.  Watkins.

2. The CSHO also received an email from Mr.  Watkins.

3. The Secretary’s representative then utilized the provided email to send Mr.
   Watkins a Notic e of Appearan ce
   and Complaint on
   July 2, 2020 .  Both of these documents contained the contact in formation for the Secretary’s counsel.  

4. The Secretary’s counsel received no response from Mr. Watkins and no response from telephone calls made
   to Mr. Watkins.

5. On
   December 2 1,
   2020,
   the Secreta ry’s counsel
   se n t an email to Mr. Watkins requesting Mr. Watkins contact him to discuss information required in the Court ’ s December 1, 2020 Order.  Mr. Watkins never responded to that email.

6. In an attempt
   to continue to r each out to M r.
   Watkins, the Secr etary’s coun sel called Mr.  Watkins telephone numbers provided in Respondent’s Answer, text, email to the CSHO and in the Notice of Contest. Voice messages were left when the telephone number called permitte d.  Mr. Watkins did not retur n the calls.

7. On Janu ary 22, 2021 , Secretary’s counsel at 1:48 pm attempted
   to contact Mr .
   Watkins again by telephone.  When one of the numbers were called, Secretary’s counsel received a text from Mr. Watkins saying , “I will ca ll you right bac k . ” Secretary ’s counsel responded as follows: “Mr. Watkins let me know when.  I need to step away from my desk at 3 but will be back at 3:30. Ed Hartman”. Secretary’s counsel received no reply and at 4:24 pm Mr. Hartman called the same numb er and left a me ssage for Mr.    Watkins to call hi m back to di scuss the OSHA case. Respondent did not re spond b y return ing the call , n or via email or text.

On ,
February 5, 2021 the Court issued its
Final
Show Cause Order
( “ T hird Show Cause Order ” )
to Re spondent
directi ng Respondent
t o show cause wi thi n fourteen ( 14) days why

the Court should not issue
judgment against Respondent, affirming the proposed vio lations and penalties in this case for: (1) failing to comply with the Court’s Order dated November 14, 2020; (2) f ailure to res po nd to the Court’s Second Show Cause Order dated December 7, 2020; (3) for failure to communicate and confer with the Secretary’s counsel as directed in the Court’s Order dated December 1, 2020; (4) failure to cooperate with S ecretary’s couns el to submit th e Joint Pretrial R ecommendatio ns required by the Court’s Order dated December 1, 2020; and (5) failure to engage and prosecute its case as required by Respondent filing its Notice of Contest and by the above referenced Court Orders. See Comm ission Rules 7( o) and 101.  Pursu ant to the T hird Show Cause Ord er. Respondent was directed to file with the Court an explanation as why it failed to do the above and provide good faith supportable reasons. The Third Show Cause Order wa s se nt to the same a ddress as all p revious Orders whi ch was the a ddress denoted in Respondent ’ s Notice of Contest . T h e Third Show Cause Order was sent by United St ates Mail, Certified Mail, Return Receipt Requested. Accordi ng to the USPS Tr acking record, the Third Show Caus e Order was d el ivered on February 13, 2021. Respondent did not respond to t he Third Show Cause Order .

Discussion

Commi ssion Rule 101(a) provides :

W hen any party has fa iled to plead or otherwise proceed as provided by these rules or as r equired by the C ommission or Ju dge, he may be dec lared to be in defaul t either on the initiative of the Co mmission o r t he Judge, after ha ving been afforded an opportunity to show cause wh y he should not be declared in default
. . . .
T hereafter, the Commis sion or Jud ge, i n their discr et ion, may enter a d ecision agai nst the d efaulting party
. . . .

As noted a bove,
Resp o nd ent has been provi ded an opportunity to show cause why it should not be held in default and failed to respond to the Court’s Orders .

The
Court has
a dut y to “conduct
a
fair and impartia l hearing, t o assure
that the facts are fully elicited,
to adjudic a te
all issues, and a void delay.” 29 C.F.R. § 2200.67. In order to ca rry out that duty, Commission Rule 67(m) authorizes the Court to “[t]a ke any oth er act ion necessary
.
. . and authorize d by the pub lished r ules and regulations of the Commissi on.” The C ou rt’s prehearing pr ocedures aid in the early formulation of issues, w hich benefits all parties during trial preparation as well as resultin g in the m ore ef fective use o f the Court’s resour ces at the h earing s tage. Architectural Glass & Metal Co ., 19 BNA O SH C 1546, 1547 (No. 00-0389, 2001). The imposition of appropriate sanc tions is important to ensure compliance with prehearing procedures and to permit the f air and ef fi cient adjudication of issues. Id . The Judge has broad discretion to decide whether s a nc tions should be or dered. Id. See also, Jersey Steel Erectors, 16 BN A OSHC 1162, 1165 (No. 90-1307, 1993), Sealtite Corp ., 15 BNA OSHC 113 0, 1134 (8 8-1431 , 1991) an d Duquesne Light Co ., 8 BNA OSHC 12 18, 1222 (No. 78-5034, 1980)(consolidated).

Therefore ,
s anctions are an ap propriate tool to ensure compliance where the sanc tioned party has engaged in a pattern of disregard for Commission rule s, or wher e the party’s co nd uct is contumacious. See, e.g., P hila. Co nstr. Equip., Inc, 16 BNA OSHC 1128, 1130-31 ( N o. , 92-899, 1993)(pa ttern of disregard for Commission proceedings foun d where Respondent was late for hearing twice, failed to certify posti ng of the citati on and fai le d to file an answer u ntil threate ned with dismissal, failed to respond to a d iscovery r e qu est and failed to respond to a pre-hearing order).

According to
the
Commission, “[D] ismissal
is too harsh a sanction for failure to c omply with certa in pre-hea ri ng orders unless the record shows contuma cious conduct by the noncomplying pa rty, preju d ic e to the opposing party, or a pattern of disregard for Commission pr oceedings.” Amsco, Inc. , 19 BNA OSHC 2189, 2191 (No. 02-0220, 2003). See also S ealtit e Corporat io n , 15 BNA OSHC 1130 ( No. 88-1431, 1991) ( contumacious conduct established whe re party e n ga ged in a “consiste nt pattern” of failure to respond to judge’s order s).

Default judgments may be appropriate when a party fails to comp ly with an order compellin g discovery. 29 C.F.R.
§ 2200.52(f)
(sancti ons for failing to comply with disco very requi r em ents); 29 C.F.R. § 2200.101(a) (default appropriate when a party fai ls to proceed as provided by the Commission Rules or as required by a judge); se e also St. Lawre nc e Food Corp ., 21 BNA OSHC 1467, 1 472 (Nos . 04-1734 & 04-1735, 2006). Failing to comply w it h Commission Rules and orders so as to delay proceedings may constit ute contumacious conduct. Carson Concrete Corp. v. Sec’y of Labor , 21 BNA OSHC 1 393, 1 68 Fed. Ap px . 543 (3d Cir. 2006) (unpublished ) (uphol ding default judgment for OSH Act vi olations w h en employer sought t o disavow admission provided during discovery unti l a few days before trial).

As noted, none of the communications sent
to Respon dent h ave been r et urned as
“ undeliverab le ” by the U nited S tates Postal Service. 1 All communic ations wer e s ent to the address provided by Respondent in its Notice of Contest. Und er Commission Rule 6, it is Respondent’s duty to advise the Court of a ny change of a ddress.

S ee 29 C.F.R . § 2200.6. 2
Respondent h as not fil ed a change of address with the Cour t.

T he
Court finds that
Respondent’s repeated failures to engage in the li tigation process illustrate a pattern of disregard for the Commission’ s proceedi ngs. Respon de nt has been given multi ple opportun ities and plenty of time to comply with Commis sion Rules of Procedure and thi s Court’s Orders , and the Court has yet to receive an y communication or contact from Respondent. Based on the representa tions of C ompl ainant, th e Court finds that the delays in th is case a re wholly attributable to Respondent , includin g R espondent’s failur e to respond to mail that was sent to t he address that it specifically provided on multiple occasions . In that regard, the Court fin ds Respo nd ent’s patte rn of disreg ard for the Commission’s proceedin g s constitutes contum acious conduct warranting the sanction of dismissa l.

In addition, t he Court finds that the Commission has conveyed due notice to Respondent of its proce dural rights a nd provi de d ample war ning that it s failure to comply with Court ord e rs may result in the dismissal of its Notice of Contest . At every inst ance, Respondent has failed to take advantage of the opportunity to advise the C ourt that it has not aba ndoned its cas e before t he Commissi on. Every in dication bef ore the Cour t is that R es pondent has walked away from its contest. Under these circumstances , the Court sees no worthwhile purpose in allowing this case to proceed to a hea ring when there is no ba sis to believe that Re sp ondent will fulfill its pre-trial o bligations o r actually ap pear 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 that Respondent r elinquished its case w i th the intent to aba ndon. 1 C.J.S. Abandonment § 13 (2013).

Accord ingly, with respect
to the above-referenced docket , Respondent
is declared in DE FAULT, its
Notice of
Con tes t
is hereby
DISMISS ED
and the vi olations
and
penalties
a lleged in th e
Citation
an d 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 ,
   issued as a Serious
   Ci tation
   and the
   corresp on ding penalty of $ 2, 902 . 00 ,
   are here by AFF IRMED
   as final orders of the Commiss ion pursua n t to Section 10(a) o f the Act.

2. Citation 1, Item 2,
   issued as a Serious Citation
   and the correspond ing penalty of $ 13,494 .00 , are hereby AFFIRME D as f inal ord ers of t he Commission p ursuant to Section 10( a) of the Act.

3. Citation 1, Item
   3 ,
   issued as a Serious Citation
   and the correspond ing penalty of $ 2,892. 00 , are hereby AFFIRMED as f inal orders of the Commission p ursuant to Section 10(a) of the Ac t.

4. Citation
   2 ,
   Item
   1 ,
   i ssued as
   an
   Other- T han- Serious Cita tion
   and the correspond ing penalty of $ 9,63 9 .00 , are hereby AFFIRMED as f inal orders of the Commission p ursuant to Section 10(a) of the Act.

5. Citation
   2 , Item
   2 ,
   issued as
   an
   Other- T han- Serious Cita tion
   and the c orrespon d i ng penalty of $ 9,63 9 .00 , are hereby AFFIRMED as f inal orders of the Commission p ursuant to Section 10(a) of the Act.

SO ORDERED.

Date:    March
22,
2021      

   /s/ Patrick B. Augustine

Denver, Colorado   



   Patrick
B. Augus tin e

First
Judge, OSH RC

"

1
In
Crude Oi l Corp. v.
Co mmissioner , 161 F.2d 809 (10th Cir.1947), the Court stated that “[w]hen mail matter is properly addressed and deposited in the United States mails, with postage duly prepaid thereon, there is a rebuttable presumption of fact that it was received by the addressee in the ordinary course of mail.” I d . at 810. See also Ar kans as Motor Coaches, Ltd., Inc. v. C.I.R., 198 F.2d 189, 191 (8th Cir. 1952); Centr al Paper Co. v. C.I.R ., 199 F. 902, 904 (6th Cir. 1952); L e gille v. Dann , 544 F.2d 1 (D.C. Cir. 1976).

2
Rule 6 of the Commission’s Rules of Procedure, 29 C.F.R. § 2200.6, provides that:

Record Address: Every pleading or document filed by any party or intervenor shall contain the name, current address and telephone number of his representative or, if he has no representative, his own name, current address and telephone number. Any change in such information shall be communicated promptly in writing to the Judge, or the Executive Secretary if no Judge has been assigned, and to all other parties and intervenors. A party or inte rvenor who fails to f ur nish such information s hall be deem ed to have waived his right to notice and service under these rules.

29
C.F.R. § 2200.6 (emphasis added).