Right-Gard Corporation

Plain-English summary

An OSHRC judge dismissed Right-Gard Corporation's notice of contest and assessed $13,470 after the company did not answer the Secretary's complaint or retrieve and respond to a certified show-cause order. The Commission found that the required notice procedures had been followed and that postal employees had left two notices for the certified mailing. Because Right-Gard appeared without counsel and claimed it had not received the filings, the Commission treated its review request as a motion for relief from default. It remanded the case so the company could present evidence that it lacked actual notice or had another sufficient excuse for not responding. The official release also includes the later remand ruling, where the judge found that Right-Gard knew an answer was required and did not justify its failure to file with the Commission, so the default remained in place.

Decision snapshot

• Cited standard(s): None identified in the decision.
• Outcome: Case remanded to permit evidence on whether the pro se employer had sufficient grounds for relief from default.
• Key point: A pro se party's unsworn claim of missing notice may justify a hearing on default relief even when the Commission's service procedures were properly followed.

Full text (OSHRC public release)

Docket No. 91-1004

SECRETARY OF LABOR,

Complainant.

v.

RIGHT-GARD CORPORATION,

Respondent.

OSHRC Docket No. 91-1004

DECISION AND ORDER

This case was directed for review pursuant to 29 U. S. C. �
661(J) and 29 C.F.R. � 2200.92(a). The employer, Right-Gard Corporation, which has
appeared pro se throughout these proceedings, sought review of a Commission administrative
law judge's decision dismissing Right-Gard's notice of contest because of failure to file
the additional responses that were required in the proceedings. Right-Gard claims that the
judge's action of dismissing the notice of contest was inappropriate because the company
had not received any of the documents filed in the case and therefore could not respond as
required. For the following reasons, we remand the case for further proceedings as
appropriate, including an opportunity for Right-Gard to show that, notwithstanding the
notice procedures that were followed in this case, which we outline below, the company did
not receive due notice prior to the dismissal and therefore was unaware that it was
required to respond in the proceedings.

The evidence before the Commission demonstrates that
appropriate procedures for affording due notice were followed in this case. Our
examination of the record reveals that, though there was some initial confusion as to
Right-Gard's street address, inasmuch as the citation stated an incorrect street number.
Right-Gard did successfully file a notice of contest and, thereafter, every document to
which a response was required was sent to the street number stated by Right-Gard itself on
its notice of contest. Specifically, the Secretary's certificate of service filed with her
complaint, see Commission Rule 7(a), (c) and (d), states that it was mailed to "1551
Industry Road." Right-Gard did not file an answer to the complaint; therefore, the
judge issued an order to show cause for the failure to answer. See Commission Rule 41 (a),
29 C.F.R. � 2200.41(a). To this order was attached a statement of notice which shows that
the judge addressed his order to "1551 Industry Road." In fact, the judge's
statement of notice was folded into a window envelope with the order and, on July 16,
1991, was sent by certified mail to the stated address. See Commission Rule 41(d), 29
C.F.R. � 2200.41(d). On August 2, 1991, however, the certified mailing, including the
blank return receipt, came back to the judge with the following official notations by the
United States Postal Service, which we quote and explain below:

(1) "Unclaimed" --which, we note, indicates that the certified mailing remained
unclaimed at the post office until the post office returned it to the sender; and

(2) "1st Notice 7/18," "2nd Notice 7/23," "Return
8/2,"--which, we note, together indicate that postal employees left at Right-Gard's
street address not just one but two notices that a certified mailing was being held at and
should be retrieved from the post office, and that for more than ten days the certified
mailing was so held, waiting for the addressee to retrieve it.

On August 6, 1991, the judge, having received the unclaimed
certified mailing and the blank return receipt, and having received no response to his
order to show cause, dismissed Right-Gard's notice of contest. This action was proper,
inasmuch as the judge had followed the Commission's rules for assuring due notice to a
party and had in fact received sufficient information from the Postal Service to indicate
that Right-Gard had adequate opportunity to receive notice. Cf., Action Group, Inc., 14
BNA OSHC 1934, 1935 n.3, 1987-90 CCH OSHD � 29,166, p. 39,018 n.3 (No. 88-2058, 1990)
("in order to eliminate uncertainty regarding when orders to show cause are received,
the Commission now requires that such orders be sent by certified mail, return receipt
requested"); 29 C.F.R. � 2200.7(c)("[s]ervice is deemed effected at the time of
mailing"). In the circumstances, therefore, there is no basis for reinstating
Right-Gard's notice of contest unless Right-Gard can demonstrate "sufficient"
reason within the meaning of Commission Rule 41(b), 29 C.F.R. � 2200.41(b).

Ordinarily we would expect a party seeking such relief to make
a formal motion supported by sworn affidavits or other evidence of good reason for setting
aside the dismissal. Because Right-Guard's statements are unsworn, they cannot be
considered evidence. Moreover, further evidence appears necessary to determine whether
Right-Gard's failure to file a pleading was excusable neglect. Because Right-Gard is not
represented by counsel and seems unaware of the proper procedure, we will treat
Right-Gard's pro se request for review as a formal motion under Rule 41(b) to set aside
the sanctions and will overlook for now its failure to present evidence in support of its
request to set aside the judge's order.

Accordingly, we remand the case for further proceedings,
including an opportunity for Right-Gard to demonstrate that the company did not receive
either the complaint or the certified mail notice of the show cause order, or to
demonstrate any other reason that might he deemed sufficient to justify excusing the
failures to respond. See Action Group, 14 BNA OSHC at 1935-36, 1987-90 CCH OSHD at p.
39,018; Choice Elec. Corp., 14 BNA OSHC 1899, 1900-01, 1987-90 CCH OSHD � 29,141, p.
38,942 (No. 88-1393, 1990); Bywater Sales & Service, 13 BNA OSHC 1268, 1269,1986-87
CCH OSHD 27,896, p. 36,597 (No. 86-1214, 1987). Compare Vern's Mfg., Inc. 14 BNA OSHC
1846, 1847, 1987-90 CCH OSHD � 29,113, p. 38,905 (No. 89-3082, 1990) (remand for evidence
relating to the pro se employer's unsworn claims). Only if the judge makes a determination
that Right-Gard's failure to respond to his order should be excused need he set aside the
order and schedule a hearing on the merits of the citations.

Edwin G. Foulke, Jr.

Chairman

Donald G. Wiseman

Commissioner

Velma Montoya

Commissioner

Dated: February 20, 1992

SECRETARY OF LABOR,

Complainant.

v.

RIGHT-GARD CORPORATION,

Respondent.

OSHRC Docket No. 91-1004

ORDER

On July 16, 1991, an ORDER was issued directing Respondent to
show cause why the citations and penalties should not be affirmed due to its failure to
file an answer to the Secretary's Complaint. Despite this specific notification,
Respondent has not replied.

Respondent's flagrant failure to plead or otherwise proceed as
provided by the Commission's Rules of Procedure warrants it being declared in default as
provided by Rule 41(a).

Accordingly, Respondent's Notice of Contest is dismissed, and
Citations 1, 2, and 3, are hereby affirmed. The proposed penalties totaling $13,470.00 are
hereby assessed.

IRVING SOMMER

Judge, OSHRC

SECRETARY OF LABOR,

Complainant.

v.

RIGHT-GARD CORPORATION,

Respondent.

OSHRC Docket No. 91-1004

Appearances:

Michael Rosenthal, Esquire [[1]]
         Richard and Jane McGrath, pro se

Office of the Solicitor
                          Right
Gard Corporation

United States Department of Labor

For Complainant
                                  For
Respondent

BEFORE: Administrative Law Judge John H Frye, III

DECISION AND ORDER

In this case, Respondent Right-Gard Corporation seeks to set
aside an Order entered August 26, 1991, which dismissed its Notice of Contest and affirmed
the Secretary's citations, involving penalties totaling $13,470, entered against it. The
August 26 Order was entered after Respondent failed to answer both the Secretary's
complaint and a July 16 Order to Show Cause why the citations should not be affirmed in
light of this failure.

On learning of the August 26 Order, Respondent's President,
Richard McGrath, dispatched a lengthy letter on September 12 to the Commission's Executive
Secretary. This letter was treated as a Petition for Discretionary Review of the August 26
Order and was granted on September 25, On February 20, 1992, the Commission entered its
Decision and Order of Remand in this proceeding.

In its decision, the Commission noted that Respondent claims
that it had not received any of the documents filed in the case and thus was unable to
properly respond. The Commission further noted that the procedures followed to ensure that
Respondent received notice were proper. However, it remanded the case to provide
Respondent an opportunity to demonstrate that, notwithstanding those procedures, it
"...did not receive due notice prior to the dismissal and therefore was unaware that
it was required to respond ...."[[2]] The Commission also stated that it remanded the
case to afford Respondent an opportunity to demonstrate that it "...did not receive
either the complaint or the certified notice of the show cause order, or to demonstrate
any other reason that might be deemed sufficient to justify excusing the failure to
respond.[[3]] Respondent was afforded that opportunity at a hearing held on Wednesday,
March 11, 1992, in Philadelphia, Pennsylvania.[[4]]

The Commission decision affords Respondent an opportunity to
demonstrate that it did not receive "due notice" and thus was unaware of the
requirement to respond to the complaint. The Commission decision also affords Respondent
an opportunity to demonstrate that it did not receive "either the complaint or the
certified notice of the show cause order," which advised Respondent of the
requirement to respond. It appears that the Commission's overriding concern in remanding
this case was to ensure that Respondent, proceeding pro se, not be held in default for
failure to answer the complaint if it was justifiably unaware of this requirement. The
Commission carefully reviewed the procedures followed and concluded that those procedures
were proper. Further, the Commission stated that "[i]n the circumstances ... there is
no basis for reinstating Right-Gard's notice of contest unless Right-Gard can demonstrate
'sufficient' reason within the meaning of Commission rule 41(b), 29 CFR �
2200.41(b)." Therefore, I conclude that if Respondent is to prevail, it must show
that, for reasons beyond its control, it was unaware of the need to answer the Secretary's
formal complaint.

At the hearing, Respondent was represented by its owners,
Richard and Jane McGrath,[[5]] both of whom testified. From Mr. McGrath's testimony, it
appears that the following sequence of events took place with regard to this case. OSHA's
Allentown office issued the citations in question on March 20, 1991. Following their
receipt, Respondent's representative, Jim Sullivan, went to the Allentown office to
discuss them on March 26. According to Mr. McGrath, Sullivan resigned within 24 hours of
that meeting, apparently without informing Mr. McGrath of the results of the meeting. On
April 9, Mr. McGrath wrote to Mr. George J. Tomchick, Director of OSHA's Allentown office,
"...submitting my appeal to the informal settlement agreement issued on
3/20/91."[[6]]

In addition, Mr. McGrath contacted an OSHA attorney with whom
he had dealt concerning earlier citations.[[7]] Mr. McGrath maintains that, in exchange
for making a scheduled payment in accord with the settlement of the earlier citations, he
was promised a meeting to discuss the instant citations prior to any final adjudication by
OSHA. However, despite his efforts to pursue the matter, he heard nothing further from
OSHA.[[8]]

Mr. McGrath acknowledges that he received the complaint filed
by OSHA in this case, spent about one-half hour reading it, and was aware of the necessity
to respond in thirty days.[[9]] Although he was aware of the need to respond in thirty
days, a requirement stated in the Notice to Respondent which accompanied the complaint,
Mr. McGrath apparently was unaware of the need to direct that response to the Commission.
This requirement was stated in the Notice to Respondent along with the thirty-day
requirement for a response. He maintains that he answered the complaint in a June 26
letter to Mr. Tomchick, Director of OSHA's Allentown office.[[10]] While he did not have a
copy of that letter and was unable to testify as to its contents, he introduced a copy of
Mr. Tomchick's letter to him of August 9. The latter acknowledges Mr. McGrath's June 26
Ietter; Mr. McGrath introduced it to show that the June 26 letter was written.[[11]]

Mr. McGrath also acknowledges that employees of Respondent and
Mrs. McGrath were aware of the existence of certified mail at the Post Office containing
the July 16 Order to Show Cause at the time the Post Office attempted delivery,[[12]] but
were unaware of the identity of the sender. He asserts that he did not learn of it until
late in August. During the period in question, he was not on the Respondent's payroll, but
was travelling as a sales representative for another firm and working out of his home
office.[[13]] Mr. McGrath maintains that the Post Office would not release the letter to
anyone other than himself because it was addressed to him individually rather than as
President of Respondent. Mrs. McGrath testified that her attempt to pick up the letter at
the Post Office was unsuccessful.[[14]]

It is clear that Respondent was aware of the existence of the
complaint and the need to answer it in thirty days. It is also clear that Respondent was
aware of the existence of a certified letter at the Post Office addressed to Mr. McGrath,
although Mr. McGrath insists that the sender of the letter was not known. Respondent's
case for setting aside the Order holding it in default may be summarized as follows.
First, that it answered the complaint in Mr. McGrath's June 26 letter to Mr. Tomchick.
Second, that it was attempting to settle this case and was awaiting the scheduling of a
meeting for that purpose.

Respondent's first argument fails for the following reasons.
Respondent did not address the fact that the June 26 letter was improperly filed with the
OSHA area office, rather than the Commission. I believe it to be reasonable for a business
owner, when confronted with a formal complaint of the Secretary of Labor which recites in
its introductory paragraph that the Occupational Safety and Health Act of 1970 (Act) has
been violated and charges that the business is responsible, to investigate carefully in
order to determine what must he done to protect the business. Mr. McGrath's investigation
went only far enough to disclose that an answer was due in thirty days, a fact stated in
the first sentence of the one-paragraph Notice to Respondents. It is reasonable to expect
an employer also to read the last sentence of that paragraph which indicates that the
answer is to be directed to the Commission.[[15]]

Moreover, the June 26 letter was supplied both by Respondent
and by counsel for the Secretary pursuant to the agreement of the parties.[[16]] That
letter does not concern the present controversy. Rather, it clearly responds to
allegations of violations of the Act raised by an unidentified third party on May 15,
1991, and does not refer in any way to the complaint or citations filed in this
case.[[17]]

Respondent"s second argument also fails. We have only Mr.
McGrath's version of conversations with several OSHA officials in which this effort was
allegedly discussed. The only OSHA official to testify was Ms. Myrna Butkovitz, counsel
for the Secretary. Ms. Butkovitz acknowledged that Mr. McGrath brought this topic up in
their one conversation and that she advised him that those officials were concerned with a
different case.[[18]] Moreover, the complaint was filed subsequent to Mr. McGrath having
initiated his settlement efforts and clearly advised Mr. McGrath that Respondent had been
formally charged with violations of the Act arising out of the citations he claims to have
been attempting to settle.

Respondent argues that, while aware of the existence of a
certified letter, which contained the Order to Show Cause, it was unaware of the sender.
Mrs. McGrath testified that her attempt to pick up this letter had been unsuccessful, and
Mr. McGrath testified that he was not personally aware of its existence until sometime in
late August. However, Mr. McGrath was aware of the complaint, concerned over the ongoing
controversy with OSHA, and believed that OSHA was engaging in chicanery, duplicity, and
bad faith.[[19]] Under these circumstances, I believe it reasonable that the existence of
a certified letter would have generated sufficient interest to insure that steps were
taken to retrieve it from the Post Office.

I cannot conclude that Respondent has shown that it was
justifiably unaware of the need to file an answer to the complaint with the Commission in
order to preserve its rights. Consequently, I find no basis on which to excuse
Respondent's failure to answer the complaint and to set aside the Order of August 26,
1991.

FINDINGS OF FACT

All facts relevant and necessary to a determination of the
contested issues have been found specially and appear in the decision above. See Rule
52(a) of the Federal Rules of Civil Procedure.

CONCLUSIONS OF LAW

The burden rest on Respondent to demonstrate that the August
26, 1991, Order entered herein dismissing its Notice of Contest and affirming the
Secretary's citations should be set aside. Choice Electric Corp., 14 BNA OSHC 1899, 1900
(No. 88-1393, 1990). Respondent has not met that burden.

It is so ORDERED.

JOHN H FRYE, III

Judge, OSHRC

Dated: APR 27, 1992

Washington, D.C.

FOOTNOTES:

[[1]] Myrna Butkovitz, Esq., who had previously entered an
appearance on behalf of complainant, withdrew as counsel when it became necessary for her
to testify for complainant.

[[2]] Commission Decision, p.1.

[[3]] Id, p. 3.

[[4]] At the close of that hearing, the Secretary's counsel's unopposed request to hold
the record open until March 31 to permit the parties to submit a copy of a June 26 letter
from Mr. McGrath to George J. Tomchick, Jr., Area Director of OSHA's Allentown office was
granted. Tr. pp.79-80, 88.

[[5]] Tr. p.4.

[[6]] Tr. pp.26. 33-34. The April 9 letter was treated as a Notice of Contest and is in
the docket file.

[[7]] These citations were settled immediately prior to the issuance of the citations here
in question. Mr. McGrath believes that the fines imposed by the instant citations
constitute an attempt by OSHA to reimpose fines, which were dropped as a result of the
negotiations on the earlier citations. See Mr. McGrath's letter of September 12, 1991, to
the Commission's Executive Secretary, to which Mr. McGrath attested (Tr. 6), in the docket
file and Tr. 24-25.

[[8]] September 12, 1991, letter. p.3; Tr. pp. 15-16, 27-28, 62-64.

[[9]] Tr. pp. 22, 25-27, 29, 38, 61.

[[10]] Tr. pp. 22-29. As noted above, at the request of counsel for the Secretary, the
record was held open to permit the submission of this letter.

[[11]] Right-Gard Ex. 1; Tr. pp.27-28.

[[12]] Tr. pp.18-19, 29-30, 42-43.

[[13]] Tr. pp.41-45.

[[14]] Tr. p.73.

[[15]] Cf. Action Group Inc., 14 BNA OSHC 1934, 35 (No. 88-2058, 1990) (Settlement of the
case would provide a reasonable basis on which to conclude that an answer need not be
filed.)

[[16]] See note 3, supra.

[[17]] The submission by Respondent also includes the first page of another June 26 letter
on Respondent's letterhead addressed to Mr. Tomchick. This letter responds to the specific
allegations raised by the third party and recites the actions taken by Respondent to
correct any deficiencies.

[[18]] Tr. p.63.

[[19]] September 12 letter, p.3.