Penrod's Palace

Plain-English summary

Penrod's Palace timely contested a willful citation but did not answer the Secretary's complaint or respond to the ALJ's show-cause order. The ALJ dismissed the notice of contest, affirmed the citation, and assessed a $3,200 penalty. Penrod's argued that its counsel believed the Secretary's counsel had granted an extension and had not told counsel about the show-cause order. The Commission held that only the Commission or ALJ could grant an extension and that counsel did not file the required extension motion or enter an appearance. It also found no evidence of deception or any duty on the Secretary's counsel to relay the order. The Commission found no sufficient reason to set aside the sanction and affirmed the default dismissal. The decision does not identify the OSHA standard underlying the citation.

Decision snapshot

• Cited standard(s): None identified in the decision
• Outcome: Default dismissal affirmed; citation and $3,200 penalty remain in effect.
• Key point: An informal understanding with opposing counsel does not extend a Commission deadline unless the judge or Commission grants a proper motion.

Full text (OSHRC public release)

Docket No. 88-1078

SECRETARY OF LABOR,

Complainant,

v.

PENROD'S PALACE,

Respondent.

OSHRC Docket No. 88-1078

DECISION

Before: FOULKE, Chairman; MONTOYA and WISEMAN,
Commissioners.

BY THE COMMISSION:

Administrative Law Judge Paul L. Brady issued a
default judgement against Penrod's Palace ("Penrod's") for its failure to file
an answer to the Secretary of Labor's ("Secretary's") Complaint as required by
Commission Rule 34(d)(1).[[1/]]  At issue is whether there is "sufficient"
reason to set aside the judge's order under Commission Rule 41(b).[[2/]]

I. Background

On April 7, 1988, the Secretary issued to
Penrod's a citation for a willful violation.  Penrod's filed a timely Notice of
Contest, and the Commission docketed the case.  The Commission sent Penrod's a Notice
of Docketing, copies of "A Guide to Procedures of the United States Occupational
Safety and Health Review Commission," and the Commission's Rules of Procedure.

The Secretary filed her Complaint on June 20,
1988.  Under Commission Rule 34(d)(1), Penrod's had 30 days from the service of the
complaint to file an answer.  On June 21, the Commission gave notice to Penrod's that
the case was assigned to Judge Brady and that all pleadings should be filed with him until
he released jurisdiction of the case.

On August 1, after the time for filing an answer
to the Secretary's Complaint had expired, the judge issued an order requiring Penrod's to
show cause, within 10 days of receipt of the order, why it should not be declared in
default for its failure to answer the Secretary's Complaint.  On August 23, having
received no response from Penrod's, the judge issued an order dismissing Penrod's Notice
of Contest.  He noted that Penrod's had both failed to respond to the show cause
order and failed to answer the Secretary's Complaint.  The judge affirmed the
citation that had been issued to Penrod's and assessed a penalty of $3,200.

II. Contentions of the Parties

On review, Penrod's asserts that it did not file
an answer to the Secretary's Complaint because Penrod's counsel believed that he had
obtained from the Secretary's counsel an extension of time in which to file an answer.
  Penrod's submitted with its Petition for Discretionary Review a copy of a letter
addressed to the Regional Solicitor dated August 11th, in which Penrod's counsel stated
"[t]his confirms your granting an extension of time in which to file a responsive
pleading."[[3/]]

Penrod's claims that when its counsel telephoned
the Secretary's counsel to obtain an extension of time, the Secretary's counsel "must
have known about the Order to Show Cause in this matter, and this nondisclosure directly
resulted in the entry of the Order of Dismissal in this case."  Penrod's argues
that it would be "unfair and improper" to allow the Order of Dismissal to stand,
because the Secretary's counsel agreed to an extension of time, "knowing full well
that an Order to Show Cause had been issued, while the undersigned counsel had not
received this document until the time when the Motion to Reinstate was filed."
  Penrod's counsel admits that "[a]pparently, the notice had been served on
[Penrod's], and a copy had not been provided to the undersigned counsel." Penrod's
claims that because its counsel did not receive a copy of the order from its client until
after the judge dismissed the case, counsel was prevented from answering the order in
time.

The Secretary contends that "if the
purported facts appearing only as averments in [Penrod's] pleadings are not competent
evidence . . . then there are almost no facts upon which the Commission could find that
respondent has provided 'reasons deemed sufficient' to warrant the granting of relief
under Rule 41."  The Secretary makes a conditional request that if the
Commission decides to consider Penrod's averments as evidence, then the Commission should
also accept the Secretary's averment that, at the time of the telephone conversation with
Penrod's counsel, the Secretary's trial counsel had not yet seen or otherwise learned of
the show cause order issued to Penrod's.  The Secretary notes that Penrod's does not
allege that the Secretary's attorney deceived Penrod's attorney as to the requirement of
filing a motion with the judge.

The Secretary also submits that it is not her
obligation to notify an employer of a show cause order, since that responsibility rests
with the judge issuing the order.  She argues that the judge properly discharged that
responsibility by sending a copy of the order to Penrod's president, its only
representative of record at that point since Penrod's counsel failed to file an entry of
appearance.  The Secretary concludes that the dismissal of Penrod's Notice of Contest
is due to two factors:  the failure of Penrod's president to forward or otherwise
advise its counsel of the show cause order, and Penrod's failure to file a motion for
extension of time.  The Secretary contends that "[t]o grant relief in these
circumstances . . ., particularly when there is virtually no record evidence supporting
respondent's claims, would effectively declare the provisions of Rule 41(b) to be without
meaningful content or neutral application."

III. Analysis

The Commission has broad discretion in reviewing
a sanction imposed on a party for not proceeding under the Commission's rules. Under
Commission Rule 41(b), the Commission may set aside a sanction imposed under Rule 41(a)
"[f]or reasons deemed sufficient by the Commission."  Normally, we require
a party seeking relief under Rule 41(b) to make a formal motion supported by sworn
affidavits or other evidence showing good reason for setting aside the dismissal.  We
have overlooked these requirements when an employer is not represented by counsel and
seems unaware of the proper procedure.  Action Group, Inc ., 14 BNA OSHC 1934,
1990 CCH OSHD � 29,166 (No. 88-2058, 1990); Choice Electric Corp. , 14 BNA OSHC
1899, 1990 CCH OSHD � 29,141 (No. 88-1393, 1990) ; Wes Jones & Son, Inc. , 13
BNA OSHC 1277, 1279, 1986-87 CCH OSHD � 27,924 p. 36,625 (No. 86-1095, 1987); Bywater
Sales & Service, Byco-MCS Div . [ "Byco" ], 13 BNA OSHC 1268, 1269,
1986-87 CCH OSHD � 27,896 p. 36,597 (No. 86-1214, 1987).

Here, although Penrod's is represented by
counsel, it has failed to make a formal motion to set aside the sanction under Commission
Rule 41(b).  Instead, Penrod's claims that under Commission Rule 5, [[4/]] its Notice
of Contest should not have been dismissed because an extension of time had been agreed to
by the Solicitor's Office.  However, Rule 5 clearly requires that a motion for an
extension of time must be made to the judge or Commission.  Penrod's failed to do
this.

Even if we treated Penrod's Petition for
Discretionary Review as a formal Motion to Set Aside Sanctions under Commission Rule
41(b), Penrod's has not provided a sufficient reason to set aside the judge's sanction.
  As stated, Penrod's claims that it should be relieved of the sanction because it
had received an extension of time in which to answer the complaint from the Secretary's
counsel, and because the Secretary's counsel failed to inform Penrod's counsel that the
judge had issued a show cause order to Penrod's. However, based on the record before us,
we find no act or omission on the part of the Secretary's counsel that would justify a
decision to set aside the judge's dismissal order.

There is no evidence of record to substantiate
Penrod's assertion that the Secretary purported to grant it an extension of time in which
to file an answer.  The Secretary's counsel may not have objected to Penrod's
request, but he is not empowered to grant an extension of time, and Penrod's has not
provided us with any reason to believe that the Secretary's counsel misrepresented his
authority when he spoke to Penrod's counsel concerning the extension.  Commission
Rule 5 clearly states that only the Commission or one of its administrative law judges may
grant an extension of time.  Penrod's counsel may have been unaware of the
requirements of this rule, but his client was sent a copy of the Commission's rules with
the Notice of Docketing.  The Commission's rule on extensions of time is similar to
rules in other adjudicative forums.  It is standard practice in the federal courts to
seek the court's permission for an extension of time.  See Fed. R. Civ.
P.6(b).  Neither inadvertence by Penrod's in transmitting the copy of the
Commission's Rules of Procedure to its counsel nor its counsel's apparent failure to
otherwise acquaint himself with the Commission's rules qualify as grounds for relief.

There is also no evidence of record that the
Secretary's counsel knew of the show cause order at the time of his conversation with
Penrod's counsel.  Penrod's assumes that the Secretary's counsel knew of the show
cause order, but the Secretary has made a proffer in her brief indicating that, at the
time of the conversation, the Secretary's counsel did not know of the show cause order.
Moreover, the Secretary is correct in arguing that her counsel was under no obligation to
notify Penrod's counsel of the show cause order.  We also conclude that there is
nothing in the record that suggests deception on the part of the Secretary.

The failure of Penrod's counsel to learn of the
show cause order from his client does not establish a sufficient cause for relief from the
sanction.

Penrod's argues that the standard of review in
this case should be "liberal" because Penrod's was an employer proceeding
without counsel "up to the point when counsel was retained."  However,
Penrod's claim for relief is based on the actions of its counsel.  In particular, it
was Penrod's counsel who claimed that upon receiving this case, he telephoned the
Secretary's counsel to receive from the Secretary an "extension of time" in
which to file a responsive pleading.  Yet, the conduct of Penrod's counsel does not
provide a basis for equitable relief since it was Penrod's counsel who never filed a
motion for an extension of time with the judge, as required by Commission Rule 5, or
entered an appearance with the judge, as required under Commission Rule 23(a)(3).[[5/]]

Even if we consider Penrod's actions before it
was represented by counsel, there still is no basis for relief from the judge's sanction.
In some circumstances, we have remanded cases to a judge to determine whether employers
proceeding without counsel had a sufficient reason for failing to file an answer.
  However, the employers in those cases made some factual claims before the
Commission that, if proven, might have justified an order setting aside the sanctions.
  See, e.g., Action Group, Inc. , 14 BNA OSHC 1934, 1990 CCH OSHD � 29,166
(No. 88-2058, 1990) (employer proceeding without counsel failed to answer the complaint
because he believed the case had settled); Choice Electric Corp. , 14 BNA OSHC 1899,
1990 CCH OSHD � 29,141 (No. 88-1393, 1990) (employer proceeding without counsel failed to
file an answer in the belief that it had already responded to the complaint). Where, as
here, the employer offers only claims that even if proven would not justify relief, there
is no reason to remand for further proceedings.

We find that the judge did not err in dismissing
Penrod's Notice of Contest.  Accordingly, the judge's decision is affirmed.

Edwin G. Foulke, Jr.

Chairman

Velma Montoya

Commissioner

Donald G. Wiseman

Commissioner

Dated: January 15, 1991

SECRETARY OF LABOR,

Complainant,

v.

PENROD'S PALACE,

Respondent.

OSHRC Docket No. 88-1078

ORDER DISMISSING NOTICE OF CONTEST

Respondent having failed to respond to an order
to show cause and pursuant to Rule 41(a) of the Commission's Rules of Procedure [29 C.F.R.
� 2200.41(a)], respondent is hereby declared in default for its failure to comply with
Commission Rule 36, 2200.36, requiring the filing of an answer to the complaint in this
cause.

Therefore, it is ORDERED:

1. The notice of contest is dismissed.

2. The citation is affirmed and a penalty in the sum of $3,200.00 is hereby assessed.

Dated this 23rd day of August, 1988.

PAUL L. BRADY

Judge

FOOTNOTES:

[[1/]] Commission Rule 34 (d) (1), 29 C.F.R. �
2200.34 (d)(1) , provides that, with specific exceptions not applicable to this case,

the employer shall file with the Commission an answer conforming to the requirements of �
2200.36 [rule on content of the answer] within 30 days after service of the complaint.

[[2/]] Rule 41(b) is part of Commission Rule 41,
29 C.F.R. � 2200.41, which provides:

� 2200.41 Failure to obey rules.

(a) Sanctions .  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:

(1) On the initiative of the Commission or Judge, after having been afforded an
opportunity to show cause why he should not be declared to be in default; or

(2) On the motion of a party.  Thereafter, the Commission or Judge, in their
discretion, may enter a decision against the defaulting party or strike any pleading or
document not filed in accordance with these rules.

(b) Motion to set aside sanctions .  For reasons deemed sufficient by the
Commission or Judge and upon motion expeditiously made, the Commission or Judge may set
aside a sanction imposed under paragraph (a) of this rule. . . .

[[3/]] Penrod's did not aver that the letter was
mailed to the Secretary.

[[4/]] Commission Rule 5 provides as follows:

� 2200.5 Extensions of time.

Upon notion of a party for good cause shown, the Commission or Judge may enlarge any time
prescribed by these rules or prescribed by an order.  All such motions shall be in
writing but, in exigent circumstances in cases pending before Judges, an oral request may
be made and followed by a written motion.  A request for an extension of time should
be received in advance of the date on which the pleading or document is due to be filed.
  However, an extension of time may be granted even though the request was filed
after the designated time for filing has expired, but in such circumstances, the party
requesting the extension must show good cause for his failure to make the request before
the time prescribed for the filing had expired.  The motion may be acted upon before
the time for response has expired.

[[5/]] Commission Rule 23(a)(3) is part of
Commission Rule 23, 29 C.F.R. � 2200.23, which provides:

� 2200.23 Appearances and withdrawals.

(a) Entry of appearance .

(1) General .  A representative of a party . . . shall enter an appearance by .
. . filing an entry of appearance in accordance with paragraph (a) (3) of this section.

(3) Subsequent appearance .  Where a representative has not previously appeared
on behalf of a party . . . , he shall file an entry of appearance with the Executive
Secretary, or Judge if the case has been assigned. . . .