Twyman v. TaxMasters, Inc. (agency decision, April 5, 2021)

Plain-English summary

Mark Twyman's SOX case was pending before the Board when TaxMasters sought bankruptcy protection in 2012, triggering an automatic stay. The Board later required quarterly bankruptcy status updates, but the last report it received was dated August 2019. In February 2021, it ordered the parties to explain why the case should not be dismissed as abandoned and warned that failing to respond could result in dismissal. Neither party responded, so the Board exercised its docket-management authority and dismissed the case.

Decision snapshot

• Cited authorities: 18 U.S.C. § 1514A; 29 C.F.R. Part 1980; 11 U.S.C. §§ 362(a)(1) and 362(c)(2)
• Outcome: Case dismissed after the parties failed to respond to the Board's order to show cause.
• Key point: The Board may dismiss a dormant case when the parties fail to comply with its orders and briefing requirements.

Full text (DOL official public release)

U.S. Department of Labor Administrative Review Board
200 Constitution Ave. NW
Washington, DC 20210-0001

 In the Matter of:



 MARK C. TWYMAN,                                 ARB CASE NO.      2011-0031

              COMPLAINANT,                       ALJ CASE NO.      2010-SOX-00055

              v.                                 DATE: April 5, 2021


 TAXMASTERS, INC.,

              RESPONDENT.

 Before: James D. McGinley, Chief Administrative Appeals Judge, and
 Thomas H. Burrell, Administrative Appeals Judge


                                 DISMISSAL ORDER

         This case arises under the whistleblower protection provisions of Section 806
 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the
 Sarbanes-Oxley Act (SOX), and its implementing regulations.1 While the case was
 pending review by the Administrative Review Board, the Respondent, TaxMasters,
 Inc., (TaxMasters), filed in March 2012, for bankruptcy protection. That filing
 triggered the automatic stay provision of the Bankruptcy Code which applies “to
 continuation of any judicial, administrative, or other action or proceeding against
 the debtor that was or could have been commenced before the commencement” of
 the bankruptcy case. 11 U.S.C. §§ 362(a)(1), (c)(2) (2020). On August 2, 2012, the
 Administrative Review Board issued an Order Staying Proceedings until further
 notice.

       On August 10, 2018, the Board issued an order amending a prior order and
 ordered TaxMasters to provide a status update of the bankruptcy proceedings on a
 quarterly basis starting with September 2018. The most recent status report the

 1     18 U.S.C. §1514A (2010); 29 C.F.R. Part 1980 (2020).
                                         2

Board received was dated August 27, 2019. The Board has received no further notice regarding the status of the bankruptcy proceedings from either party.

   On February 4, 2021, the Board issued an Order to Show Cause to the parties

ordering the parties to respond no later than February 22, 2021, to explain why the Board should not dismiss this case on the grounds of abandonment. The Board cautioned that failure to timely respond to the order may result in the dismissal of this case without further order. As of the date of this Order, the parties have not responded.

   The Board’s authority to effectively manage its docket, including authority to

require compliance with the Board orders, is necessary to “achieve orderly and expeditious disposition of cases.”2 This Board has authority to issue sanctions, including dismissal, for a party’s failure to comply with the Board’s orders and briefing requirements.3 Accordingly, this case is DISMISSED.

SO ORDERED.

2 Santoro v. Tekni-Plex, Inc., ARB No. 2011-0052, ALJ No. 2010-SOX-00046 (ARB Aug. 5, 2011) (citing Link v. Wabash, 370 U.S. 626, 630-31 (1962) (“The authority of a court to dismiss sua sponte for lack of prosecution has generally been considered an ‘inherent power,’ governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases”.)). 3 Id.