*

Honorable Ann Aldrich, Senior U.S. District Judge for the

Northern District of Ohio, sitting by designation. 

United States Court of Appeals, Eleventh Circuit.

No. 95-2807.

Robert B. REICH, Secretary of Labor, Petitioner,

v.

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION; Jacksonville

Shipyards, Inc., Respondents.

Jan. 7, 1997.

Petition for Review of an Order of the Occupational Safety and

Health Review Commission. (OSHRC No. 92-888), Stuart E. Weisberg,

Judge.

Before EDMONDSON, Circuit Judge, FAY, Senior Circuit Judge, and

ALDRICH*

, Senior District Judge.

EDMONDSON, Circuit Judge:

This appeal raises the question whether a proceeding for civil

penalties under the Occupational Safety and Health Act (OSHA), 29

U.S.C. § 651-678, becomes moot when an employer permanently ceases

doing business. Because we conclude that this case is not moot, we

vacate the order of dismissal and remand for further proceedings.

I. Background

Jacksonville Shipyards, Inc. ("JSI") was formerly engaged in

the ship repair business in Florida. In August 1991, two JSI

employees were killed in a work-related fall at JSI's Mayport Naval

Station facility. The Secretary of Labor (the Secretary) issued

citations totaling $692,000, including citations for alleged

willful violations leading directly to the deaths. JSI contested

the citations and the proposed penalties. The Occupational Safety

and Health Commission (the Commission) assigned the case to an
Administrative Law Judge (ALJ) for hearing and disposition.

By November 1992, JSI had released almost all of its

workforce, retaining only a small number of administrative

employees to wind-up; and it had sold almost all of its assets.

At this time, JSI filed a motion with the ALJ seeking to have the

case dismissed as moot. The ALJ granted the motion.

The Secretary petitioned the Commission to review the

decision. The Commission, in a two to one decision, concluded that

an OSHA citations proceeding is moot where the employer has

terminated its employees and where there is no likelihood of

resuming the employment relationship. The dissenting commissioner

maintained that an employer's voluntary cessation of illegal

conduct does not render a proceeding moot, because the citation is

based on the employer's status at the time the violation occurred.

The case was remanded to the ALJ to determine whether JSI was still

an "employer" under OSHA.

On remand, the ALJ dismissed the case as moot based on an

unrebutted affidavit of JSI's president that all employees had been

terminated. The Secretary petitioned the Commission to review the

ALJ's decision, and the Commission denied review. The ALJ's second

dismissal of the case became a final order of the Commission, and

the Secretary appealed.

II. Discussion

 A case becomes moot "when the issues presented are no longer

"live' or the parties lack a legally cognizable interest in the

outcome." Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944,

1950-51, 23 L.Ed.2d 491 (1969). The Commission made a legal
 1

We decide the case before us and the issues it raises. By

the way, we do not independently decide today that Article III

mootness principles necessarily control administrative agency

tribunals. See generally Climax Molybdenum Co. v. Secretary of

Labor, MSHA, 703 F.2d 447, 451 (10th Cir.1983) ("[A]n agency

possesses substantial discretion in determining whether the

resolution of an issue before it is precluded by mootness. 

However, in exercising this discretion, an agency receives

guidance from the policies that underlie the "case or

controversy' requirement of Article III."); Tennessee Gas

Pipeline Co. v. Federal Power Commission, 606 F.2d 1373, 1380

(D.C.Cir.1979) ("The limitations imposed by Article III on what

matters federal courts may hear affect administrative agencies

only indirectly."). 

determination that the OSHA proceeding was "moot" in the ordinary

sense—that is, no live case or controversy—of that word. 1 In

general, a case does not become moot by a party's cessation of

allegedly illegal conduct. United States v. W.T. Grant Co., 345

U.S. 629, 632, 73 S.Ct. 894, 897, 97 L.Ed. 1303 (1953); Atlantic

States Legal Foundation v. Tyson Foods, 897 F.2d 1128, 1135 (11th

Cir.1990). The Supreme Court has recognized an exception to this

principle in certain cases where injunctive relief is sought.

County of Los Angeles v. Davis, 440 U.S. 625, 99 S.Ct. 1379, 59

L.Ed.2d 642 (1979). A claim for injunctive relief may become moot

if:

(1) it can be said with assurance that there is no reasonable

expectation that the alleged violation will recur and (2)

interim relief or events have completely and irrevocably

eradicated the effects of the alleged violation.

Id., at 631, 99 S.Ct. at 1383 (internal quotations and citations

omitted).

Appellee JSI urges us to decide mootness for civil money

penalties under the standard set forth in Davis for injunctive

relief. JSI advances these points: (1) that the proceedings are

moot because its cessation of business means that the violations
 2

At oral argument, we asked counsel for JSI whether he was

aware of a decision which had considered a money claim to have

become moot as a result of the defendant's own acts. He

responded, "I do not know of any such cases which hold that, your

Honor. We searched, and we could not find any." 

cannot recur and the effects of the violations have been

eradicated; and (2) that JSI can have no liability under OSHA

because it is no longer an "employer" within the meaning of the

Act.

 We know—to say the least—that, in general, claims for money

do not become moot as a result of the defendants' acts following

the occurrence giving rise to the claims. 2 Courts have

traditionally treated monetary relief claims differently than

injunctive relief claims for the purpose of mootness challenges.

See, e.g. Tyson, 897 F.2d at 1134; Powell, 395 U.S. at 496 n. 8,

89 S.Ct. at 1951 n. 8; Castaneda v. Dura-Vent Corp., 648 F.2d 612,

615 (9th Cir.1981). We reject the appellee's suggestion that we

use the mootness analysis for injunctive relief to decide whether

a money penalty claim is moot. Unlike injunctive relief which

addresses only ongoing or future violations, civil penalties

address past violations; liability attaches at the time the

violation occurs. See, e.g., Chesapeake Bay Foundation, Inc. v.

Gwaltney of Smithfield, Ltd., 890 F.2d 690, 696 (4th Cir.1989)

(liability for civil penalties "is fixed by the happening of an

event ... that occurred in the past.").

We are guided by our decision in Atlantic States Legal

Foundation, Inc. v. Tyson Foods, Inc., 897 F.2d 1128 (11th

Cir.1990). In Tyson, a private plaintiff brought an action for

civil penalties under the Clean Water Act, 33 U.S.C. § 1365,
against the defendant corporation for violations of permit

limitations on the discharge of pollutants. After the complaint

was filed, but before trial, the defendant began complying with the

limitation requirements. The district court dismissed the case as

moot because the defendant was no longer in violation of the Act.

We reversed, holding that "the mooting of injunctive relief will

not moot the request for civil penalties as long as such penalties

were rightfully sought at the time the suit was filed." Id. at

1134. Accord Atlantic States Legal Foundation, Inc. v. Pan

American Tanning Corp., 993 F.2d 1017, 1021 (2d Cir.1993); Natural

Resources Defense Council v. Texaco Refining & Marketing, Inc., 2

F.3d 493, 503 (3d Cir.1993); Gwaltney, 890 F.2d at 696-97.

 JSI argues that the facts of this case are distinguishable

from a case such as Tyson where the employer has come into

compliance with the statute but remains in business. In those

post-complaint compliance cases, JSI asserts, there is a risk that

the wrong will be repeated; but the risk does not exist where the

employer has ceased all operations.

JSI's argument does not fit the reasoning in Tyson. In Tyson,

we did not base our decision on a determination that the defendant

corporation continued to operate and, therefore, presented a risk

of future violations. Although injunctive relief was mooted

because "the allegedly wrongful behavior could not reasonably be

expected to recur," we held in Tyson that the claim for civil

penalties was not moot. Id. at 1134.

JSI also argues, and the Commission agreed, that JSI is no

longer an "employer" for purposes of OSHA. See 29 U.S.C. § 652(5)
(defining "employer" as person engaged in business who has

employees). This argument fails because, for purposes of civil

money penalties, a tribunal looks to the employer's status at the

time of the violation, not at the time of trial. See, e.g.

Gwaltney, 890 F.2d at 696-97 (characterizing past violations as

"the only possible basis for assessing a penalty"). Accepting the

Commission's view of mootness would mean the existence of a "case

or controversy" is dependent on an employer's post-violation acts

as well as the date a tribunal sets for a hearing in the

proceedings. This innovative view seems to inject unneeded

confusion into traditional mootness principles. We agree with the

Secretary's view of the pertinent statute, 29 U.S.C. § 666: JSI

was an "employer" when the OSHA violations occurred as well as when

JSI received citations, and it remains one for the proceedings to

assess the penalties arising from the citations.

Although we do not rely much on OSHA-related policy

considerations in deciding this case, we think our decision is

consistent with the policies that OSHA was enacted to advance. We

expect that to adopt JSI's proposed rule for mootness would

frustrate the purpose of OSHA. OSHA was enacted to "assure so far

as possible every working man and woman in the Nation safe and

healthful working conditions...." 29 U.S.C. § 651(b). Because of

the large number of workplaces which OSHA must regulate, relying

solely on workplace inspections is an impractical means of

enforcement. We accept that OSHA must rely on the threat of money

penalties to compel compliance by employers. See Atlas Roofing Co.

v. OSHRC, 518 F.2d 990, 1001 (5th Cir.1975) aff'd, 430 U.S. 442, 97
 3

We understand that criminal penalties can be sought for

some violations. We doubt that those kinds of penalties will or

should face most employers who violate OSHA. So, we do not

believe the existence of possible criminal penalties has much

impact on the mootness question presented here. 

S.Ct. 1261, 51 L.Ed.2d 464 (1977) (OSHA penalties act as

"pocket-book deterrence").

To let the cessation of business by an employer render a civil

penalty proceeding moot might greatly diminish the effectiveness of

money penalties as a deterrence. Employers in violation of OSHA

could become complacent in the knowledge that future civil

penalties could be avoided by ceasing operations on the eve of the

Commission hearing. Violators would be encouraged "to delay

litigation as long as possible, knowing that they will thereby

escape liability even for post-complaint violations, so long as

violations have ceased at the time the suit comes to trial."

Tyson, 897 F.2d at 1137. We worry about creating an economic

incentive to avoid a penalty by going out of business and, perhaps,

then reincorporating under a different name.

More important, employers who were going out of business for

ordinary commercial reasons would have little incentive to comply

with safety regulations to the end if monetary penalties could be

evaded once the business quit altogether. As long as a business

operates, it should feel itself to be effectively under the

applicable laws and regulations—even on the last day. And, the

continuing potential of penalties—more so than injunctive

relief—makes these feelings real.3

Because the Commission's dismissal for mootness was not in

accordance with the law, we vacate the Commission's order and
 4

We do not rule out today that JSI's having ceased to do

business might be important to the amount of penalties; the

appropriate amount is for the Commission to set. 

remand for further proceedings.4

VACATED and REMANDED.