2004 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-9-2004

Avon Contractors Inc v. Secretary Labor

Precedential or Non-Precedential: Precedential

Docket No. 03-1615

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 PRECEDENTIAL

UNITED STATES

COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 03-1615

AVON CONTRACTORS, INC.,

 Petitioner

v.

SECRETARY OF LABOR;

OCCUPATIONAL SAFETY AND

HEALTH REVIEW COMMISSION,

 Respondents

On Petition for Review of a Final Order

of the Occupational Safety and Health

Review Commission

(OSHRC No. 02-0772)

Argued February 12, 2004

Before: SCIRICA, Chief Judge,

ROTH and McKEE, Circuit Judges

(Filed: June 9, 2004)

Donald A. Kessler, Esquire (Argued)

Schwartz, Simon, Edelstein,

 Celso & Kessler

10 James Street

Florham Park, New Jersey 07932

Attorney for Petitioner

Ronald J. Gottlieb, Esquire (Argued)

United States Department of Labor

Office of the Solicitor

Suite S-4004

200 Constitution Avenue, N.W.

Washington, D.C. 20210

Attorney for Respondent,

Secretary of Labor

OPINION OF THE COURT

SCIRICA, Chief Judge.

At issue is whether Petitioner Avon

Contractors, Inc. is entitled to relief under

the excusable neglect standard of Fed. R.

Civ. P. 60(b)(1), after it failed to timely

file a notice of contest to Occupational

Safety and Health Administration Citations

and a Notice of Penalty delivered by

certified mail. We addressed similar

issues in George Harms Construction Co.

v. Chao, No. 03-2215 (3d Cir. June 9,

2004), in which we heard oral argument on

the same day as this matter.

We will vacate the Occupational

Safety and Health Review Commission’s

final order and remand for a hearing on the

merits of the OSHA citations.

I.

OSHA conducted an inspection of

Avon’s work site at Northvale, New Jersey

from January 8 through January 10, 2002.1

 

1Congress enacted the Occupational

Safety and Health Act to “assure so far as

possible” safe working conditions for

“every working man and woman in the
2

OSHA found two infractions.2 After the

inspection, Charles Tristitti of OSHA’s

Hasbrouck Heights Area Office contacted

Avon’s Office Manager Lori Muranelli by

telephone and advised her of two

forthcoming citations. OSHA sent the

citations by certified mail to Avon on

February 22, 2002. Avon’s receptionist,

Tonya Grant, signed for the citations on

February 26, 2002. Muranelli, the

employee at Avon responsible for OSHArelated matters, never received the

citations.

In or around March 2002, Avon

discovered it was missing mail and

suspected its receptionist, Tonya Grant,

was responsible. According to Muranelli,

“around” the time of March, 2002,

managers started complaining about

missing mail. “Between February and

March, right before [the receptionist] left

the Company,” Muranelli told the

receptionist that some mail items were

missing. Muranelli warned her to ensure

that the proper recipients got their mail.

Muranelli also told the receptionist that

she was not to sign for any certified mail

Nation.” 29 U.S.C. § 651(b). The

Secretary of Labor is charged with

enforcement of the Act. But the Secretary

has delegated her enforcement duties to

the Assistant Secretary for Occupational

Safety and Health, who heads OSHA.

Secretary’s Order 5-2002, 67 Fed. Reg.

65008 (Oct. 22, 2002). OSHA inspects

workplaces for violations. It may issue a

citation for a violation, establish a date for

abatement, and propose a civil penalty. 

29 U.S.C. §§ 658, 659. An employer can

contest the citation and the proposed

penalty before the Occupational Safety and

Health Review Commission. 29 U.S.C. §

661. Under section 10(a) of the Act, an

employer must file a notice of contest

within 15 working days of receipt of the

citation or the “the citation and the

assessment, as proposed, shall be deemed

a final order of the Commission and not

subject to review by any court or agency.”

29 U.S.C. § 659(a). 

The Commission, an independent

adjudicatory body separate from the

Department of Labor, acts as a neutral

arbiter in proceedings contesting OSHA

citations. Cuyahoga Valley Ry. Co. v.

United Transp. Union, 474 U.S. 3, 7

(1995) (per curiam). Assuming

jurisdiction, an Administrative Law Judge

of the Commission conducts a hearing and

issues a report with his determination of

the proceeding. 29 U.S.C. § 661(j).

Within thirty days, the Commission may

opt to review the ALJ’s report. Id. If no

Commissioner directs review, the ALJ’s

report becomes the Commission’s final

decision. Id. Judicial review may then be

sought. 29 U.S.C. § 660.

 

2

In the citations, OSHA alleges Avon

violated 29 C.F.R. § 1926.300(b)(1), by

operating power tools without a required

guard. It also alleges Avon violated 29

C.F.R. § 1926.501(b)(1), by not providing

a guardrail system, safety net system, or

personal fall arrest system for employees

working on a roof.
3

because it was Muranelli’s responsibility

as office manager to do so. “In the middle

towards the end of March,” the

receptionist resigned. Muranelli testified

that the receptionist was “disgruntled” and

quit because she had heard she would be

terminated for losing or destroying mail.

In April 2002, Avon discovered that some

of its certified mail was missing. Avon

claims it was not aware that its receptionist

was destroying or losing mail at the time

the OSHA citations were mailed and

received.

On April 26, 2002, Muranelli

contacted OSHA to inquire about the

status of the citations. On April 29, 2002,

Avon received a demand letter from

OSHA and a copy of the citations and

notice of penalty. On May 15, 2002, Avon

submitted a late notice of contest. 

The matter was docketed before the

Commission. Avon claimed it was entitled

to relief under the “excusable neglect”

standard of Fed. R. Civ. P. 60(b)(1).

Section 12(g) of the Act provides that the

“Commission is authorized to make such

rules as are necessary for the orderly

transaction of its proceedings. Unless the

Commission has adopted a different rule,

its proceedings shall be in accordance with

the Federal Rules of Civil Procedure.” 29

U.S.C. § 661(g). Fed. R. Civ. P. 60(b)(1)

provides that “[o]n motion and upon such

terms as are just, the court may relieve a

party or a party’s legal representative from

a final judgment, order, or proceeding for

the following reasons: (1) mistake,

inadvertence, surprise, or excusable

neglect . . . .” Id.

On January 21, 2003, an ALJ filed

his decision and order granting the

Secretary’s dismissal motion. See Avon

Contractors, Inc., No. 02-0772, 2003

OSAHRC LEXIS 47 (OSAHRC Jan. 21,

2003). Though finding that Avon made a

“compelling” argument, the ALJ held

against Avon on its excusable neglect

claim because Avon had not shown

“whether the failure [to receive notice of

the violation] was within the control of the

employer.” Id. at *4-5. Particularly, the

ALJ found, the record did “not show how

long the receptionist had been destroying

or misplacing mail or when the company

first became aware of the problem.” Id. at

*4. Accordingly, the ALJ could not tell

whether the de struction was an

“unprecedented and unexpected act, or

whether this type of activity was an

ongoing problem which should have been

corrected.” Id. at *5. The ALJ noted “the

only apparent effort Avon undertook to

rectify the problem was to tell the

receptionist not to accept certified mail,

and . . . this occurred ‘right before’ the

receptionist left the company.” Id. The

ALJ denied relief under Fed. R. Civ. P.

60(b) because he was unable to “find that

it was not within Avon’s reasonable

control to prevent the series of events

which led up to its failure to timely file the

NOC.” Id. The ALJ also rejected the

Sec retary’s conte ntion th at th e

Commission did not have authority to

accept a late-filed notice of contest. The

ALJ noted:

Relying on Le Frois Builder

Inc., 291 F.3d 219 (2d Cir.
4

2002), the Secretary’s

motion asserts that the

Commission does not have

authority to accept a latefiled NOC. The Secretary’s

reliance on Le Frois,

however, is misplaced, as

this case arises in the Third

Circuit, not the Second.

Accordingly, J. I. Hass Co.,

Inc., 648 F.2d 191 (3d Cir.

1981) and Branciforte

Builders, Inc., 9 BNA

OSHC 2113 (No. 80-1920,

1981), not Le Frois, are

controlling.

Id. at *3 n.2.

Avon appeals to vacate the

Commission’s order and remand for a

hearing on the underlying citation.3 It

argues that it is entitled to the relief of

“excusable neglect” under Fed. R. Civ. P.

60(b)(1). Not only does the Secretary

dispute those claims, she also contends

that section 10(a) of the Act, 29 U.S.C. §

659(a), precludes the Commission from

considering the Fed. R. Civ. P. 60(b)(1)

“excusable neglect” standard when a

notice of contest is untimely filed.4

II.

In George Harms Construction Co.

v. Chao, No. 03-2215 (3d Cir. June 9,

2004), we rejected the Secretary’s

contention that J.I. Hass Co. v. OSHRC,

648 F.2d 190 (3d Cir. 1981), had been

undermined by subsequent precedent.

Harms, No. 03-2215, op. at 4-8. We held

that under Hass, section 10(a) is not a bar

to Commission review, and the

Commission has jurisdiction to entertain a

late notice of contest under the excusable

neglect standard of Fed. R. Civ. P.

60(b)(1). See Harms, No. 03-2215, op. at

8.

Moreover, in Harms, we held the

Supreme Court’s holding in Pioneer

Investment Services v. Brunswisk Assoc.,

507 U.S. 380 (1993), applies to

Commission proceedings where the

excusable neglect standard is implicated.

See Harms, No. 03-2215, op. at 8. We

noted that in Pioneer “the Supreme Court

identified, without limitation, these factors

to consider: ‘the danger of prejudice . . . ,

the length of the delay and its potential

impact on judicial proceedings, the reason

for the delay, including whether it was

within the reasonable control of the

movant, and whether the movant acted in

good faith.’” Id. (quoting Pioneer, 507

U.S. at 395). We held the “control” factor

does not necessarily trump all the other

 

3The Commission had jurisdiction

under 29 U.S.C. § 659. We have appellate

jurisdiction under 29 U.S.C. § 660.

 

4The Commission’s factual findings

must be affirmed if supported by

substantial evidence on the record as a

whole. Reich v. D.M. Sabia Co., 90 F.3d

854, 856 (3d Cir. 1996). Its adjudications

are to be affirmed unless they are arbitrary,

capricious, an abuse of discretion, or

contrary to law. Id. (citing 5 U.S.C. §

706(2)(A)).
5

relevant factors. Id. at 9. Furthermore, an

arbiter must take into account all relevant

circumstancessurrounding a party’sfailure

to file a timely notice of contest. Id. We

faulted the ALJ for weighing too heavily

the “control” aspect of the case at the

expense of other relevant Pioneer factors.

See id. at 8-9.

Here, the ALJ made similar errors

in its “excusable neglect” calculus.

Several of the factors weighed in favor of

a finding for Avon. The Secretary did not

apparently suffer prejudice; the delay did

not negatively impact the proceeding; and

as the ALJ noted, “Avon’s argument is

compelling, particularly as Avon initiated

contact with OSHA with respect to the

whereabouts of the citation.” Avon, 2003

OSAHRC LEXIS 47, at *4. But the ALJ

explained that “a key factor in determining

this issue is whether the failure was within

the control of the employer” and found

against Avon because the evidence it

presented was insufficient for showing the

loss “was not within Avon’s reasonable

control.” Id. at *4-5. In doing so, the ALJ

did not properly weigh all the relevant

Pioneer factors.

Moreover, we disagree that Avon

failed to prove that the loss was not within

its reasonable control. The ALJ found

fatal to Avon’s petition the fact that the

record does not show “how long the

receptionist had been destroying or

misplacing the mail or when the company

first became aware of the problem.” Id. at

*4. But the failure to show how long the

receptionist had been destroying or

misplacing mail is not necessarily

controlling on whether the loss of the

citations was within Avon’s reasonable

control. It would be difficult to show

precisely how long the deliberate acts had

been ongoing in part because employees

who commit destructive or negligent acts

generally do not broadcast their conduct.

Until Avon discovered the missing mail

and the receptionist’s allegedly deliberate

acts of destruction, there was little beyond

the established mailing procedures in place

that could be done to prevent mishandled

mail. Nor is there any reason to assume

that a company would know that its mail

was being destroyed or misplaced but

would act against its own self-interest in

choosing to ignore it. Moreover, though

the precise date on which Avon discovered

it was missing mail is unclear, the record

demonstrates that Avon discovered that it

was missing mail just prior to the

receptionist’s departure in February or

March. The record shows that Avon did

not discover that certified items were

destroyed or misplaced until sometime in

April. When OSHA sent the certified mail

containing the citations to Avon in

February, there is no evidence that it was

within Avon’s control to prevent the

unforeseeable acts of destruction by its

employee. Because the Pioneer factors of

good faith, prejudice, efficient judicial

administration, and control all weigh in

favor of Avon, it has sufficiently shown

“excusable neglect” and is entitled to relief

under Fed. R. Civ. P. 60(b)(1).

III.

For the foregoing reasons, we will

vacate the Commission’s final order and
6

remand for a hearing on the merits of the

subject OSHA citations.