Deepali Company, LLC (agency decision, September 20, 2021)

Plain-English summary

Deepali Company worked as a subcontractor on construction of a visitor center at the Detroit Wildlife Refuge. The Wage and Hour Division alleged Davis-Bacon Act and Contract Work Hours and Safety Standards Act violations involving wage rates, overtime, certified payrolls, and worker classification. Deepali and its owner repeatedly provided deficient discovery responses, did not cure them after further requests, and failed to comply with an order compelling discovery that warned of default. The ALJ entered default judgment. Applying abuse-of-discretion review, the Board held that the ALJ properly considered the repeated noncompliance, warning, and effect on the proceeding. It affirmed the default judgment without reaching the contractors' arguments about the underlying labor-standard violations.

Decision snapshot

• Cited authorities: 40 U.S.C. §§ 3141 and 3701; 29 C.F.R. §§ 18.12(b) and 18.57(b)
• Outcome: ALJ order granting default judgment affirmed.
• Key point: Repeated failure to answer discovery after an explicit order and warning can support default judgment.

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:

   Proposed debarment for                     ARB CASE NO. 2021-0028
   labor standards violated
   by:                                        ALJ CASE NO. 2017-DBA-00022

   DEEPALI COMPANY, LLC,                      DATE: September 20, 2021

               Subcontractor,

               and

   DHARMENDRAKUMAR HARMANBHAI
   PATEL,

               an individual.

   With respect to laborers and mechanics
   employed by DEEPALI COMPANY, LLC,
   on a subcontract for Contract No. F13PC00229,
   for construction of the Visitor Center for the
   Detroit Wildlife Refuge in Trenton, Michigan

   Appearances:

   For the Petitioners:
         Dharmendrakumar H. Patel; pro se; Redford, Michigan

   For the Administrator:
         Seema Nanda, Esq., Jennifer S. Brand, Esq., Sarah K. Marcus Esq.,
         Jonathan T. Rees, Esq., Rebecca Azhdam Esq.; U.S. Department of
         Labor, Office of the Solicitor; Washington, District of Columbia

   Before: James D. McGinley, Chief Administrative Appeals Judge, Thomas
   H. Burrell and Stephen M. Godek, Administrative Appeals Judges
                                            2



                          DECISION AND ORDER

  PER CURIAM. This case arises under the Davis-Bacon Act (DBA),1 the

Contract Work Hours and Safety Standards Act (CWHSSA),2 and the applicable implementing regulations.3 On March 31, 2021, an Administrative Law Judge (ALJ) issued an order granting default judgment. Petitioners, Deepali Company, LLC (Deepali), and Dharmendrakumar Harmanbhai Patel (Patel), appealed to the Administrative Review Board (ARB or Board). For the following reasons, the Board summarily affirms the ALJ’s order.

                                    BACKGROUND

  Mr. Patel is the sole owner of Deepali, a construction company. Deepali was a

subcontractor on the construction site of a visitor center for the Detroit Wildlife Refuge in Trenton, Michigan. The Department of Labor’s Wage and Hour Division (WHD) conducted an investigation and concluded that Petitioners violated the DBA and CWHSSA by disregarding labor standards with respect to Deepali’s subcontract and second-tier subcontracts, failed to pay employees the full hourly rate, failed to pay required overtime compensation, did not submit certified payrolls, and misclassified workers as independent contractors.

   On May 17, 2017, Petitioners requested a hearing before an ALJ with the

Office of Administrative Law Judges. On May 16, 2018, the Administrator served Petitioners with discovery requests. Petitioners’ responses were substantially deficient. The Administrator explained these deficiencies and requested that Petitioners supplement their answers and complete the outstanding requests. However, Petitioners failed to correct the deficiencies. The Administrator attempted several additional communications pertaining to the matter to no avail.

   On December 19, 2018, the Administrator filed a motion to compel

Petitioners to complete their discovery responses. The ALJ did not rule on that motion. The Administrator continued to attempt to resolve the discovery disputes. However, Petitioners remained uncooperative with regard to the discovery requests.

  1      40 U.S.C. § 3141 et seq. (2013).
  2      40 U.S.C. § 3701 et seq. (2018).
  3      29 C.F.R. Part 5 (2020).
                                           3


   The Administrator filed a second updated and renewed motion to compel on

January 29, 2020. The ALJ granted the motion on March 17, 2020, and ordered Petitioners to provide the requested responses or otherwise show cause as to why default judgment should not be granted for continued discovery failures. Petitioners failed to comply with the order. On March 31, 2020, the ALJ entered an order of default judgment against Petitioners.

   Petitioners filed a timely appeal with the Board. Both parties filed briefs.

                   JURISDICTION AND STANDARD OF REVIEW

  The Secretary of Labor has delegated his authority to issue decisions under

the DBA to the Board.4 The Board reviews the imposition of discovery sanctions under an abuse of discretion standard.5

                                    DISCUSSION

  On appeal, Petitioners contend the ALJ’s order granting default judgment is

not supported, and that the hearing process was unfair.6

   ALJs have an inherent authority to “manage their own affairs so as to

achieve the orderly and expeditious disposition of cases.”7 Failure to comply with a judge’s order may result in sanctions, which includes dismissal of the proceeding.8

   4       Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of

Responsibility to the Administrative Review Board (Secretary’s discretionary review of ARB decisions)), 85 Fed. Reg. 13186 (Mar. 6, 2020).
5 See Saporito v. Fla. Power & Light Co., ARB No. 2009-0009, -0010, ALJ No.
2008-ERA-00014, slip op. at 2 (ARB Feb. 28, 2011); Powers v. Pinnacle Airlines, Inc., ARB No. 2005-0022, ALJ No. 2004-AIR-00032, slip op. at 10 (ARB Jan. 31, 2006); Mao v. Nasser, ARB No. 2006-0121, ALJ No. 2005-LCA-00036, slip op. at 12 (ARB Nov. 26, 2008).
6 Petitioners make several additional arguments pertaining to the substantive
merits of the DBA and CWHSSA violations. However, these are not at issue.
7 Newport v. Fla. Power & Light, Co., ARB No. 2006-0110, ALJ No. 2005-ERA-
00024, slip op. at 4 (ARB Feb. 29, 2008); Link v. Wabash R.R. Co., 370 U.S. 626, 630-31 (1962); see also 29 C.F.R. § 18.12(b) (“[i]n all proceedings . . . the [ALJ] has all powers necessary to conduct fair and impartial proceedings”).
8 29 C.F.R. § 18.57(b).
4

When determining whether dismissal is warranted, there are several factors an ALJ may consider, including:

     (1) prejudice to the other party, (2) the amount of interference with the
     judicial process, (3) the culpability, willfulness, bad faith or fault of the
     litigant, (4) whether the party was warned in advance that dismissal of
     the action could be a sanction for failure to cooperate or noncompliance,
     and (5) whether the efficacy of lesser sanctions [was] considered.9

   In entering a default judgment, the ALJ considered the factors listed above,

and the procedural background supports his reasoning. From 2018 through 2020, the Administrator made repeated attempts to resolve the discovery dispute, including explaining to Petitioners why their responses were deficient.10 Despite these efforts, Petitioners failed to complete and/or supplement the Administrator’s discovery requests. In addition, the Administrator filed two motions to compel, the second of which the ALJ granted.11 In the order to compel, the ALJ provided Petitioners with an additional chance to respond to discovery requests and warned that failure to comply with the order could result in a default judgment.12

  However, Petitioners remained uncooperative and did not respond to any of

the outstanding discovery requests. Further, the ALJ considered Petitioners’ failure to comply with the order to compel, and their continued failure to participate in discovery when he determined that default judgment was warranted.13

  Therefore, we conclude that the ALJ did not abuse his discretion in entering

a default judgment against Petitioners.

                                    CONCLUSION


     9      Howick v. Campbell-Ewald Co., ARB No. 2004-0065, ALJ No. 2004-STA-00007,

slip op. at 8 (Nov. 30, 2004) (citations omitted).
10 Order Granting Default Judgment (ALJ Mar. 31, 2021); the Administrator’s
Response in Opposition to “Defendant’s Respond Motion to Compel” and Motion for Entry of Default Judgment (filed Apr. 20, 2020).
11 Order Continuing Hearing and Granting Motion to Compel (ALJ Mar. 17,
2020).
12 Id.
13 Order Granting Default Judgment (ALJ Mar. 31, 2020).
5

 Accordingly, we summarily AFFIRM the ALJ’s order granting default

judgment.

 SO ORDERED.