United States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION 

 

OSHRC Docket No. 18-0616

 

Appearances:

Alicia A.W. Truman, Esq., Department of Labor, Office of Solicitor, Denver, CO

For Complainant

Curtis Rangeloff, pro se, North Dakota Innovations, Inc., Tappen, ND 

For Respondent

Before: Judge Patrick B. Augustine, U. S. Administrative Law Judge 

DECISION AND ORDER

I. Procedural History

This proceeding is before the Occupational Safety and Health Review Commission (“the 

Commission”) pursuant to Section 10(c) of the Occupational Safety and Health Act of 1970, 29 

U.S.C. § 651 et seq. (“the Act”). The Occupational Safety and Health Administration (“OSHA”) 

conducted an inspection of a North Dakota Innovations, Inc. (“Respondent”) worksite in Tappen, 

North Dakota on February 15, 2018. As a result of the inspection, Complainant issued a Citation 

and Notification of Penalty (“Citation”) to Respondent alleging seven serious and three other-thanserious violations of the Act. Respondent timely filed a Notice of Contest (“NOC”) with the 

Commission.

SECRETARY OF LABOR, 

 

 Complainant,

 

 v. 

NORTH DAKOTA INNOVATIONS, INC.,

 

 Respondent.
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On July 9, 2018, the Court held a pretrial telephone conference with the parties in which 

Respondent clarified that he only wished to contest the amount of the penalties. (Order, July 9, 

2018). Subsequently, Respondent withdrew his NOC as it relates to the citations and classification.

Id. The withdrawal was affirmed in a second pretrial telephone conference on August 2, 2018. 

(Order, Aug. 7, 2018). Accordingly, the amount of the penalties is the only issue left before the 

Court. Both parties agreed to submit the penalty issue to the Court on argument and stipulation

under Commission Rule 61, which states, in part, “[A] case may be fully stipulated by the parties 

and submitted to the commission or Judge for a decision at any time.” 29 C.F.R. § 2200.61 (2018). 

The Court granted the parties two weeks to submit their stipulations and argument. (Order, Aug. 

7, 2018). An additional two weeks were provided for both parties to submit Reply Briefs. Id.

During the July 9, 2018 pretrial conference, Respondent raised inability to pay as a part of 

its challenge to the penalty amount. (Order, July 9, 2018). The Court ordered Complainant to 

produce a list of documents necessary to consider reducing the penalty based on financial hardship.

Id. The Court then required Respondent to produce those documents for Complainant. Id. 

Complainant requested signed tax returns and financial statements for the last three years and bank 

statements from the last year. (Req. for Conference Call, July 31, 2018). Respondent only provided 

four months of bank statements—April through July of 2018—as well as various annual lease 

payments for industrial equipment. (Resp’t Rule 2200.61 Submission). Respondent stated that no 

further documentation would be produced. (Req. for Conference Call, July 31, 2018). 

II. Jurisdiction

The parties have stipulated that the Act applies and the Commission has jurisdiction over this 

proceeding pursuant to § 10(c) of the Act, 29 U.S.C. § 659(c). (Order, July 9, 2018). Further, 

Respondent conceded that, at all times relevant to this matter, it was an employer engaged in a 
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business affecting commerce within the meaning of § 3(5) of the Act, 29 U.S.C. § 652(5). Slingluff 

v. OSHRC, 425 F.3d 861 (10th Cir. 2005).

III. Stipulations

As previously noted, Respondent withdrew his contest of the citation items and their 

associated classifications. In doing so, Respondent agreed to the factual basis supporting the 

finding of violations and their classification. Based on the partial withdrawal of the NOC, the 

following disputed issues remain:

Docket Number 18-0616 (OSHA Insp. No. 1295519)

Citation 1, Items 1a, b and c: Respondent’s contest was withdrawn for all elements except

the amount of the proposed penalty.

Citation 1, Items 2a and b: Respondent’s contest was withdrawn for all elements except the 

amount of the proposed penalty.

Citation 1, Items 3a and b: Respondent’s contest was withdrawn for all elements except the 

amount of the proposed penalty.

Citation 2, Items 1, 2 and 3: Respondent’s contest was withdrawn for all elements. 

IV. Factual Background

Respondent is a flax grain seed handling company owned by Curtis Rangeloff. (Ex. 2). The 

company consists of five employees, four of which are members of the Rangeloff family. (Ex. 2); 

(NOC). Respondent owns and operates a grain elevator in Tappen, North Dakota. (Ex. 2). 

Complainant received a complaint involving Respondent that related to the Regional 

Emphasis Program on Grain Handling Facilities and subsequently scheduled an inspection of 

Respondent’s elevator. Id. At the time of the inspection, a written safety and health plan was in 

place. Id. Respondent hired a safety consultant four months before the inspection; the consultant
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was actively in the process of implementing the grain handling program elements at the time of 

the inspection. Id. Despite these efforts, Complainant found multiple violations during the 

walkthrough inspection. Id.

Complainant observed an exposed floor hole adjacent to a sifter machine that was operated 

daily. Id. The hole was 14 inches wide by 72 inches long and dropped 10 feet to the back hopper. 

Id. The grating cover had been removed, which violated the standard for an employer to protect 

each employee from a fall hazard greater than four feet. Id. Complainant issued Citation 1, Item 

1a for the violation. Id.

Citation 1, Items 1b and 1c were issued for an auger that was missing the required guard. 

Id. The unguarded auger exposed employees to unenclosed pulleys and belts which violated 

standards to protect employees against caught-in and amputation hazards. Id. Complainant 

grouped the three citations and considered each of the citations to have a high severity due to the 

likelihood of the hazards to produce serious and potentially fatal injuries. Id. However, 

Complainant considered the probability of injury to be low and therefore made a moderate gravity 

determination. Id. An initial penalty of $9,239 was calculated for the three violations. Id.

The next group of citations were related to dust accumulation and employee exposure to 

fire and explosion hazards. Id. Excess grain dust deeper than 1/8 inch was found in “priority 

housekeeping areas.”

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Id. This distribution area had dust accumulation as high as 3 to 4 inches and 

the 12-foot-deep boot pit had been filled with grain dust. Id. Respondent informed Complainant

that the last time either area was cleaned was August 2017. Id. Complainant issued Citation 1, Item 

2a for failing to develop and implement a housekeeping program to reduce grain dust accumulation 

 

1 The violations were cited under 29 C.F.R. 1910.272(j)(2) which defines “priority housekeeping areas” as “(A) Floor 

areas within 35 feet (10.7 m) of inside bucket elevators; (B) Floors of enclosed areas containing grinding equipment;

(C) Floors of enclosed areas containing grain dryers located inside the facility.”
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and Citation 1, Item 2b for failing to remove grain dust accumulation that exceeded 1/8 inch in 

priority areas. Id. Complainant grouped the two items and assessed the severity, probability, and 

gravity of the violations as high, with an initial calculated penalty of $12,934. Id.

Complainant observed additional fire and explosion hazards related to electric equipment. 

Id. A general service power tap, powered by an installed general service electrical receptacle, was 

energized and used daily, but it was not designed for safe use in a dust heavy location. Id. 

Additional equipment, such as a general service barrel vacuum and general service Shop-Vac 

vacuum, were not approved for the hazardous location due to the ignitable properties of the dust 

present. Id. Complainant issued Citation 1, Items 3a and 3b for violating the standard to provide 

electrical equipment and devices designed and approved to be operated in hazardous locations with 

combustible properties. Id. The actual dust in the area was limited and the electrical equipment 

was left permanently plugged in (limiting the opportunity to produce sparks) so the Complainant 

found the severity, probability, and gravity of the violations to be lesser. Id. Complainant 

calculated the initial penalty as $5,543. Id.

The final set of violations related to continual maintenance of an effective safety program. 

Id. Citation 2, Item 1 was issued for failing to post required danger signs related to confined spaces. 

Id. Respondent claimed it provided monthly safety training to employees but was unable to 

produce training records to the inspector. Id. Complainant issued Citation 2, Item 2 for not 

providing training at least annually. Id. Similarly, Complainant issued Citation 2, Item 3 because 

Respondent was unable to provide required certification records of each preventive maintenance 

inspection despite claiming that preventative maintenance had been implemented. Id. Each of the 

violations were considered other-than-serious, and no penalty was assessed. Id.
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Complainant calculated penalties for each citation in accordance with the OSHA Field 

Operation Manual. (Ex. A). Complainant applied a 70% reduction for size because Respondent

has fewer than 10 employees. Id. The initial penalties of $9,239; $12,934; and $5,543 were reduced 

to $2,772; $3,880; and $1,663 respectively with the size reduction applied. (Ex. 2). Complainant 

did not apply a good faith reduction because “the employer did not demonstrate any effort to 

implement an effective workplace safety and health management system.” (Ex. A). Complainant

also did not apply a reduction for history because the employer had not been inspected by OSHA 

in the previous five years. Id. The final proposed penalties totaled $8,315. Id. 

Respondent states he is unable to pay the penalties in full in light of North Dakota 

Innovation, Inc.’s financial hardships. (NOC). Respondent originally milled flax for Ag Motion at 

a rate of up to six loads per week until Ag Motion was purchased, reducing Respondent’s 

processing to 1–2 loads of milling every other week. (Resp’t Rule 2200.61 Submission). 

Respondent claims it is barely able to make payroll and various monthly payments with the current 

work load. Id. Respondent further states that he has already spent $15,000 on electrical work to 

abate the Citations and that any penalty higher than $400 would be financially disastrous. Id.

V. Controlling Case Law

In calculating appropriate penalties for affirmed violations, Section 17(j) of the Act requires 

the Commission give due consideration to four criteria: (1) the size of the employer’s business2,the 

 

2 Size refers to the number of employees of Respondent but may include financial condition. See e.g., Colonial Craft 

Reprod., 1 BNA OSHC 1063, 1064 (No. 881, 1972) (size includes financial condition); Jasper Constr., Inc., 1 BNA 

OSHC 1269, 1270 (No. 119, 1973) (size is determined by looking at both “gross dollar volume and the number of 

persons employed”). 
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gravity of the violation3, (3) the good faith of the employer4, and (4) the employer’s prior history 

of violations5. Gravity is the primary consideration and is determined by the number of employees 

exposed, the duration of the exposure, the precautions taken against injury, and the likelihood of 

an actual injury. J.A. Jones Construction Co., 15 BNA OSHC 2201 (No. 87-2059, 1993). It is 

well established that the Commission and its judges conduct de novo penalty determinations and 

have full discretion to assess penalties based on the facts of each case and the applicable statutory 

criteria. Valdak Corp., 17 BNA OSHC 1135 (No. 93-0239, 1995); Allied Structural Steel, 2 BNA 

OSHC 1457 (No. 1681, 1975).

When considering penalty factors, the Commission can apply different standards to each 

factor than those used by OSHA. Pentecost Contracting Corp., 17 BNA OSHC 1429 (No. 92-

3789, 92-3790, 1995) (A.L.J.) (“Although the language in the Field Operations Manual is absolute, 

the FOM is not binding on the Commission...”); see Valdak Corp., 17 BNA OSHC at 1135. For 

history, OSHA only considers inspections and violations that occurred within the previous five 

years. U.S. OCCUPATIONAL SAFETY AND HEALTH ADMIN., CPL-02-00-160, Field Operations 

Manual 6–7 (2016), https://www.osha.gov/OshDoc/Directive_pdf/CPL_02-00-160.pdf

[hereinafter FOM].

6 The Commission is not similarly limited. For example, in American Stair 

 

3 Assessing gravity involves considering: (1) the number of employees exposed to the hazard; (2) the duration of 

exposure; (3) whether any precautions have been taken against injury; (4) the degree of probability that an accident 

would occur; and (5) the likelihood of injury. See e.g., Capform, Inc., 19 BNA OSHC 1374, 1378 (No. 99-0322, 

2001), aff’d, 34 F. Appx. 152 (5th Cir. 2002) (unpublished). See also Ernest F. Donley’s Son, Inc., 1 BNA OSHC 

1186 (No. 43, 1973) (viewing gravity as the probability of an accident's occurrence and the extent of exposure). “A 

lack of injuries is not a measure for determining gravity or any other penalty factor.” Altor Inc., 23 BNA OSHC 1458, 

1468 (No. 99-0958, 2011), aff’d 498 F. Appx. 145 (3d Cir. 2012) (unpublished). 

4 Good faith entails assessing an employer’s health and safety program, its commitment to job safety and health, its 

cooperation with OSHA, and its efforts to minimize any harm from the violation. Monroe Drywall Constr., Inc., 24 

BNA OSHC 1209, 1211 (No. 12-0379, 2013); Nacirema, 1 BNA OSHC at 1002. 

5 History, examines an employer’s full prior citation history, not just prior citations of the same standard. Manganas 

Painting Co., 21 BNA OSHC 2043, 2055 (No. 95-0103, 2007) (Consol.) (history includes prior uncontested citations). 

6 The manual contains only guidelines for the execution of enforcement operations. Moreover, the guidelines provided 

by the manual are plainly for internal application to promote efficiency and not to create an administrative straight 

jacket. They do not have the force and effect of law nor do they accord important procedural or substantive rights to 

individuals. See Brennan v. Ace Hardware Corp. 495 F.2d 368, 376 (8th Cir. 1974); McCullough v. Redevelopment
8

Corporation, 6 BNA OSHC 1899 (No. 77-4048, 1978) (A.L.J.), the only fact relevant to the history 

factor was that the employer did not have an unfavorable history. The Court considered the history 

factor positively—among many other factors—when reducing two proposed $10,000 penalties to 

$2,000 and $300. Id. 

The Commission also has discretion to consider good faith in broader terms than those 

established by the FOM. Pentecost Contracting Corp., 17 BNA OSHC at 1429; see Valdak Corp., 

17 BNA OSHC at 1135. While OSHA looks for a documented and effective safety and 

management program, the Commission makes a more holistic examination of an employer’s safety 

program and overall efforts toward employee safety. FOM at 6–7; Natkin & Co., Mechanical 

Contractors, 1 BNA OSHC 1204 (No. 401, 1973) (“The extent of an employer's good faith is 

determined by an examination of its overall safety program.”). As such, the Commission has 

considered partial compliance with OSHA standards to be enough to support a finding of good 

faith. Monroe Drywall Construction, Inc., 24 BNA OSHC 1209 (No. 12-0379, 2013). De novo

review of penalty determinations allows the Commission to make more holistic decisions based 

on a broader consideration of relevant factors. Pentecost Contracting Corp., 17 BNA OSHC at 

1429; see Valdak Corp., 17 BNA OSHC at 1135.

Although ability to pay is not one of the four consideration criteria, the Commission has 

considered financial hardship in certain cases. Colonial Craft Reproductions, Inc., 1 BNA OSHC 

1063 (No. 881, 1972) (considering a large operations loss for a small family-run business); Tice, 

2 BNA OSHC 1489 (No. 1622, 1975) (considering the “marginal financial situation” of a company 

with four employees); Ohio State Home Services, D/B/A Everyday Waterproofing, 15 BNA OSHC 

1492 (Nos. 91-1085, 91-1448, 1992) (considering “serious financial difficulties due to economic 

 

Authority of Wilkes Barre, 522 F.2d 858, 867-868 n. 27 (3d Cir. 1975) and American Farm Lines v. Black Ball Freight 

Service, 397 U.S. 532, 538-539. (1970).
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conditions in the area and that imposition of the full penalties proposed by the Secretary may have 

dire consequences upon Respondent’s ability to continue its operations.”). OSHA’s guidance on 

penalty determination solely uses number of employees to determine size of the employer’s 

business. FOM at 6–9. The Commission is not bound by the methods used by OSHA inspectors 

and instead can consider both number of employees and economic status of an employer when 

determining the size factor. Jasper Construction, Inc., 1 BNA OSHC 1269 (No. 119, 1973).

Complainant offers three cases to support their position that inability to pay should not be 

considered in penalty determination. The Court does not find any of the cases cited by Complainant 

to be controlling nor persuasive. In Dream Set Fashion, Inc., 16 BNA OSHC 1876 (No. 92-2962, 

1994), the Commission explicitly considered the fiscal loss of the employer in a fiscal year. The 

Commission found that the loss did not outweigh the other factors in the penalty determination, 

not that the fiscal difficulties should not be considered at all. Id. Both of Complainant’s remaining 

cases, Pentecost Contracting Corp., 17 BNA OSHC at 1429 and Venago Environmental, Inc., 18 

BNA OSHC 1785 (No. 98-0408, 1999) (A.L.J.), are non-binding on this Court and their use by 

Complainant is unpersuasive. The court in Pentecost Contracting Corp. cites the decision in

Dream Set Fashion, Inc. to support an argument that inability to pay should not be considered. 17 

BNA OSHC at 1429. For reasons already discussed, Dream Set Fashion, Inc. does not support this 

argument. The Court in Venago Environmental, Inc. simply states “the financial condition of the 

employer is not one of the four factors the Commission is required to consider in arriving at an 

appropriate penalty.” 18 BNA OSHC at 1785 (emphasis added). The relevant question is whether 

the Commission can consider inability to pay, not whether it must. Inability to pay is one fact 

among many considered by the Commission when exercising its discretion in assessing penalties.
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Respondent asserts an inability to pay which operates as an affirmative defense. Thus, 

Respondent bears the burden of proof to establish its inability to pay. Hamilton Fixture, 16 BNA 

OSHC 1073, 1077 (No. 88-1720, 1993) aff’d, 28 F.3d 1213 (6th Cir. 1994). An employer is not 

entitled to a penalty reduction where its claim of financial harm is unsubstantiated. Hern Iron 

Works, Inc., 16 BNA OSHC 1619, 1624 (No. 88-1962, 1994). While the Commission can consider 

a claim of financial harm, it will only do so if the claim is substantiated. E. Smalis Painting Co., 

Inc., 22 BNA OSHC 1553 (No. 94-1979, 2009). The Commission must be able to draw a clear 

conclusion about the financial health of an employer based on the evidence provided. Id. 

Testimony about financial hardship alone is insufficient for the Court to justify a penalty reduction 

based on Respondent’s purported inability to pay. Hern Iron Works, Inc., 16 BNA OSHC at 1619.

VI. Discussion

Citation 1, Items 1a, 1b and 1c

For Citation 1, Items 1a, 1b and 1c, Complainant assessed the severity as high, the probability 

as lesser, and the overall gravity as moderate. The gravity determination is appropriate for the fall 

and caught-in/amputation hazards present and does not need to be revisited. Similarly, the size 

reduction of 70% is appropriate for the small number of employees at North Dakota Innovations, 

Inc. Complainant did not award reductions for the history and good faith elements of the penalty 

determination. 

Lack of bad history is not enough to award a large reduction on the history factor alone, but 

it can factor positively into the overall penalty determination. The FOM dictates that history 

reductions that reward prior compliance are solely available to employers who have been evaluated 

by OSHA in the last five years. FOM at 6–7. Under this standard, employers who have a history 

of compliance but have not been recently evaluated by OSHA are ineligible to receive fitting
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penalty reductions. A lack of evidence should not support a presumption of bad history and justify 

the categorical exclusion of an employer from potential penalty reductions. The choice in 

American Stair Corporation to factor history positively into the penalty determination where there 

is no evidence of history is persuasive. 6 BNA OSHC 1899 (No. 77-4048, 1978) . In this case, 

Complainant did not provide evidence of Respondent’s inspection history other than a lack thereof. 

No facts demonstrate the Respondent has a history of non-compliance with relevant statutes. As 

such, the Court will consider history positively in the penalty determination.

Good faith should also factor positively into the balancing of the different penalty factors. 

Respondent had a written safety plan and hired a safety consultant to help implement it to provide 

a safe work environment. Although violations of safety standards were present, Respondent was 

at least attempting to achieve compliance with OSHA standards and willingly cooperated 

throughout the inspection. The Commission looks at overarching efforts toward achieving 

workplace safety and considers partial compliance when evaluating good faith; Respondent met 

this standard and is entitled to some positive consideration of good faith for penalty determination.

Natkin & Co., Mechanical Contractors, 1 BNA OSHC at 1204; Monroe Drywall Construction, 

Inc., 24 BNA OSHC at 1209.

Considering the low possibility of injury, and factoring in considerations for good faith and 

history, the Court assesses a $1,750 penalty.

Citation 1, Items 2a and 2b

For Citation 1, Items 2a and 2b Complainant assessed the severity as high, the probability as 

high, and the gravity as high. In light of the safety concerns associated with fire and explosion on 

a dust heavy worksite, the gravity determination is appropriate. A proper size reduction has already 
12

been applied. The same considerations for good faith and history used for Citation 1, Items 1a, 1b 

and 1c apply for this citation as well. The Court assesses a $2,500 penalty.

Citation 1, Items 3a and 3b

For Citation 1, Items 3a and 3b Complainant assessed the severity, probability and gravity 

as lesser. Considering the limited amount of dust and low chances of spark associated with the 

cited equipment the gravity determination is appropriate. Applying the same considerations in the 

former two penalty determinations and considering that each of the gravity factors are in the lowest 

range possible, the Court assesses a $500 penalty.

Citation 2, Items 1, 2 and 3

Citation 2, Items 1, 2 and 3 were classified as other-than-serious and were issued a $0 penalty. 

The evaluation of the penalty for the three recordkeeping violations is appropriate and the Court 

assesses no penalty.

Inability to Pay

As previously stated, Respondent bears the burden to prove that it warrants a further 

reduction in penalties due to its inability to pay beyond the reduction it has already received in its 

size reduction credit. Notwithstanding Respondent’s claimed inability to pay, no further penalty 

reductions will be applied7. The Court requested Respondent to comply with Complainant’s 

request to present signed tax returns and financial statements for the last three years and bank 

statements from the last year. Respondent never produced the documents and leaves the Court 

without sufficient evidence to draw a clear conclusion about the financial health of North Dakota 

 

7 The penalties assessed already consider, to some extent, Respondent’s ability to pay. Complainant provided the 

maximum penalty reduction available for a company of Respondent’s size. There is a built-in presumption in the size 

reduction that a 70% reduction would offset the financial hardship that a full penalty would cause a small business.

Natkin & Co., Mechanical Contractors, 1 BNA OSHC at 1204 (“Consideration for employer size is based upon factors 

extraneous to safety and health and is primarily an attempt to avoid oppressive penalties.”). Additionally, Complainant 

made multiple strategic choices while grouping citations which significantly decreased the initial penalty total and 

benefited Respondent. 
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Innovations, Inc. The four months of bank statements provided by Respondent do not provide an 

adequate basis to substantiate Respondent’s claim. An unsubstantiated claim of inability to pay 

will not be considered by the Court. E. Smalis Painting Co., Inc., 22 BNA OSHC at 1553.

VII. Order

The foregoing Decision and the partial withdrawal of Respondent’s Notice of Contest

relating to the classifications of the Citation issued constitutes the Findings of Fact and 

Conclusions of Law in accordance with Rule 52(a) of the Federal Rules of Civil Procedure. Based 

upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED that:

1. Citation 1, Items 1(a), (b) and (c) is AFFIRMED as a GROUPED SERIOUS citation 

and a penalty of $1,750 is ASSESSED.

2. Citation 1, Items 2(a) and (b) is AFFIRMED as a GROUPED SERIOUS citation and a 

penalty of $2,500 is ASSESSED.

3. Citation 1, Items 3(a) and (b) is AFFIRMED as a GROUPED SERIOUS citation and a 

penalty of $500 is ASSESSED.

4. Citation 2, Item 1 is AFFIRMED as an OTHER-THAN-SERIOUS citation and a 

penalty of $0 is ASSESSED.

5. Citation 2, Item 2 is AFFIRMED as an OTHER-THAN-SERIOUS citation and a 

penalty of $0 is ASSESSED. 

6. Citation 2, Item 3 is AFFIRMED as an OTHER-THAN-SERIOUS citation and a 

penalty of $0 is ASSESSED. 

/s Patrick B. Augustine 

Date: October 25, 2018 ____________________________________

Denver, Colorado Judge Patrick B. Augustine

Judge, OSHRC