Court Opinion

ID: 9461957
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:28:39.261689+00
Date Added: 2024-06-11T17:37:20.330141
License: Public Domain

On Petition for Hearing In Banc
WEIS, Circuit Judge.
We revisit the important question of the right to a jury trial in an OSHA penalty proceeding. A majority of the panel which originally heard this case decided that the administrative proceedings did not run afoul of the Seventh Amendment. 519 F.2d 1200 (3d Cir., 1974). After further briefing and argument before the court in banc, we have concluded that the judgment of the panel should stand.
The factual background of the case is set out in the prior opinion, and we need not repeat it here. The employer-petitioner contends that the assessment of a civil penalty by the Occupational Safety and Health Review Commission was, for all intents and purposes, the same as an in personam monetary judgment. It argues that such a proceeding, being in the nature of debt, presents an issue which historically was tried at common law and, therefore, a jury trial should be available even though the government is the plaintiff. Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L. Ed. 720 (1909).
The requirement of a jury verdict could be met in a de novo trial in the district court on appeal from an administrative agency. However, the Occupational Safety and Health Act permits only limited judicial review of the administrative agency’s factual findings under the “substantial evidence” test. It is that narrow scope of review which, according to petitioner, abrogated its Seventh Amendment right to a trial by jury, both as to the fact of violation and the amount of penalty.1
The Secretary asserts that OSHA proceedings are essentially equitable and for that reason the Amendment does not apply. He contends that the enforcement procedures are designed to insure compliance with safety standards and that the purpose of civil penalties is to prevent recurrences of violations.
Since the scope of review is important to the resolution of this appeal, a survey of the Act’s provisions on judicial review is appropriate. A person against whom a penalty has been imposed may obtain a review of the order in the appropriate United States court of appeals. That court is authorized “to make and enter upon the pleadings, testimony, and proceedings set forth in such record a decree affirming, modifying, or setting aside in whole or in part, the order of the Commission and enforcing the same to the extent that such order is affirmed or modified. * * * The findings of the Commission with respect to questions of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive.” If further evidence is required, the court can order it to be taken before the Commission. 29 U.S.C. § 660(a).
*1216The Secretary also has the right to petition the court for review. Alternatively, an OSHA order which has not been appealed by the employer may be filed by the Secretary with the clerk of the court of appeals, who will then enter a decree enforcing the order unless otherwise directed by the court. 29 U. S.C. § 660(b). The court of appeals may assess the civil penalties of 29 U.S.C. § 666(a)-(d) as well as any other available remedies in a contempt proceeding brought to enforce its decree. When, apparently, neither party has invoked the review jurisdiction of the court of appeals, civil penalties may be recovered in a civil action in the United States district court.2 29 U.S.C. § 666(k).
In summary, while court review of the fact of violation and amount of penalty is limited by the substantial-evidence standard, the agency may compel payment only by resort to the judicial system. The Act does not totally exclude the judicial branch of government from overseeing and enforcing the statutory provisions. See National Labor Relations Board v. Kingston Cake Co., 206 F.2d 604, 611 (3d Cir. 1953). See also JAFFE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION 264 (1965).
The application of the Seventh Amendment to judicial proceedings traditionally depended on whether the suit was legal or equitable in nature. Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 446, 7 L.Ed. 732 (1830). If a statute creates a new remedy which is to be processed in the courts, that distinction is pertinent and may determine whether a jury trial is required. Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974).2
3
But, if the proceeding is before an administrative agency rather than in the courts, the Supreme Court has held that the Seventh Amendment does not apply. In NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893. (1937), an administrative award of back pay was challenged as violative of the Constitution. The Court said:
“It is argued that the requirement is equivalent to a money judgment and hence contravenes the Seventh Amendment with respect to trial by jury. The Seventh Amendment provides that ‘In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.’ The amendment thus preserves the right which existed under the common law when the amendment was adopted. [Citations] Thus it has no application to cases where recovery of money damages is an incident to equitable relief even though damages might have been recovered in an action at law. [Citations] It does not apply where the proceeding is not in the nature of a suit at common law. [Citation]
“The instant case is not a suit at common law or in the nature of such a suit. The proceeding is. one unknown to the common law. It is a statutory proceeding. Reinstatement of the employee and payment for time lost are requirements imposed for violation of the statute and are remedies appropriate to its enforcement. The contention under the Seventh Amendment is without merit.” 301 *1217U.S. at 48-49, 57 S.Ct. at 629. (Emphasis added).4
The Court reiterated its position in Curtis v. Loether, swpra, stating:
“Jones & Laughlin merely stands for the proposition that the Seventh Amendment is generally inapplicable in administrative proceedings, where jury trials would be incompatible with the whole concept of administrative adjudication and would substantially interfere with the NLRB’s role in the statutory scheme . . . These cases uphold congressional power to entrust ■ enforcement of statutory rights to an administrative process or specialized court of equity free from the strictures of the Seventh Amendment.” 415 U.S. at 194-95, 94 S.Ct. at 108-109 (footnote omitted).
The same theme was repeated a few months later in Pernell v. Southall Realty, 416 U.S. 363, 94 S.Ct. 1723, 40 L.Ed.2d 198 (1974), in the context of a statute governing landlord-tenant disputes. While holding that a jury trial was required because of the under-, lying legal nature of the suit in the District of Columbia courts, Mr. Justice Marshall wrote:
“We may assume that the Seventh Amendment would not be a bar to a congressional effort to entrust landlord-tenant disputes, including those. over the right to possession, to an administrative agency.” 416 U.S. at 383, 94 S.Ct. at 1733.
This statement was based on the case of Block v. Hirsh, 256 U.S. 135, 41 5. Ct. 458, 65 L.Ed. 865 (1921).5
A fair reading of the Supreme Court’s decisions on the application of the Seventh Amendment establishes three categories of litigation:
1. Legal proceedings in the courts;
2. Equitable and admiralty cases in the courts; and
3. Administrative adjudications.6
In only the first classification is the jury mandated.
*1218It is curious that while the Court was granting such a broad exemption for administrative adjudications it was enlarging the area of court cases where the jury would be available. It did so. in a trilogy of cases beginning with Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959), where the Court reevaluated the scope of equitable jurisdiction in view of the expansion of legal rights provided by the Federal Rules of Civil Procedure.
Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962), held that a jury trial on legal damage issues could not be withheld because the suit also included equitable claims which under past practice would have been adjudicated on the theory of “incidental jurisdiction” or the “cleanup” doctrine. Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970), allowed a jury trial in a stockholder’s derivative suit. The Ross Court again pointed out that the Federal Rules of Civil Procedure had eliminated the procedural distinctions between law and equity suits and that the value of the historical test based on these differences had been lessened. The Court noted that the legal nature of an issue is determined by considering (1) pre-merger custom with respect to such questions, (2) the remedy sought, and (3) the practical abilities and limitations of juries.7 Id., at 538 n. 10, 90 S.Ct. 733. The dissent in Ross v. Bernhard characterized the decision perhaps accurately:
“as a reflection of an unarticulated but apparently overpowering bias in favor of jury trials in civil actions.” 396 U.S. at 551, 90 S.Ct. at 745.
Falling chronologically between Dairy Queen and Ross was Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966), where a jury trial in a bankruptcy proceeding was denied. The Court held that a summary procedure to order the surrender of a voidable preference was not within the ambit of the Seventh Amendment. The opinion pointed out that the statute created bankruptcy tribunals as courts of equity which “deal in a summary way with ‘matters of an administrative character . . .’” Id., at 327, 86 S.Ct., at 471. Thus, Katchen is consistent with the treatment accorded administrative determinations 8 in NLRB v. Jones & Laughlin Steel Corp., supra, and furnishes some support for the Secretary’s efforts to drape the cloak of equity over OSHA’s shoulders.
Nevertheless, it would seem that reliance upon the claimed equitable coloration of the Occupational Safety and Health Act obscures the simple fact that this is an administrative adjudication. The Supreme Court’s rulings to date leave no doubt that the Seventh Amendment is not applicable, at least in the context of a case such as this one, and that Congress is free to provide an administrative enforcement scheme without the intervention of a jury at any stage.
*1219The petitioner likens the assessment of these OSHA civil penalties to an in personam monetary judgment which can be obtained only in an action at law. But that similarity has not proved decisive to the Supreme Court. Curtis v. Loether, supra, 415 U.S. at 196, 94 S.Ct. 1005. We see no difference in the impact on an employer between an administrative award which requires him to pay a fixed sum of money to certain employees as in the Jones & Laughlin case and one which orders payment of a civil penalty to the United States.
Our function is not to pass upon either the wisdom or desirability of such an administrative adjudicatory process. We are limited to deciding whether it is constitutional within the limitations set by the Supreme Court.9
There is a line beyond which Congress may not transfer traditional remedies from the courts to administrative agencies so as to evade the protection of the Seventh Amendment.10 As so often with constitutional adjudications, such a point need not be defined with precision to cover all cases for all time. We only decide the case before us, and, as the panel previously held, that line has not been crossed in this case. For the reasons stated in the panel opinion of November 4, 1974, the Commission’s decision finding a willful violation of 29 C.F.R. § 1926.652(b) is vacated and remanded for further consideration not inconsistent with this opinion and the order assessing penalties for violations of §§ 1926.652(h), 1926.401(f), 1926.150 (c)(1) (viii), 1926.350(a)(1), 1926.51 (c), and 1926.51(a)(1) will be affirmed.

. That substantial amounts may be involved is demonstrated by Beall Construction Co. v. Occupational Safety & H. Rev. Com’n, 507 F. 2d 1041 (8th Cir. 1974). There, OSHA had proposed penalties totalling $35,442 for alleged safety violations at a construction site. Through administrative proceedings before an administrative law judge and the Commission, the penalties were reduced to $620. The large penalties initially proposed understandably alarm employers in similar circumstances. On the other hand, the final outcome may be cited by those who maintain that the administrative remedies do serve to prevent some injustices.

. An employer who sought to litigate the fact of violation at that stage would be confronted with his failure to utilize the judicial review provided by the statute. United States v. Sykes, 310 F.2d 417 (5th Cir. 1962) ; Weir v. United States, 310 F.2d 149 (8th Cir. 1962). 3 Davis, Administrative Law Treatise § 23.07 (1958).

. The issue to be submitted to the factfinder is the relevant focus of an inquiry rather than the general nature of the proceeding. After the issue has been defined, its historical setting is then determined to see whether it would have been tried “at common law” in contradistinction to equity. 9 Wright & Miller, Federal Practice and Procedure: Civil § 2302 (1971).

. It has been suggested that some administrative remedies have been held outside the Amendment’s ambit because of “a strangeness to the common law” rather than “a correspondence to equity.” Note, The Seventh Amendment and Civil Rights Statutes: History Adrift in a Maelstrom, 08 Nw.U.L. Rev. 503, 527 (1973). See also, Note, Developments in the Law — Employment Discrimination and Title VII of the Civil Rights Act of 1964, 84 Harv.L.Rev. 1109, 1267 (1971), where the author makes the distinction between a statutory proceeding and a statutory cause of action. For the view approving assessment of civil penalties, see Goldschmid, An Evaluation of the Present and Potential Use of Civil Money Penalties as a Sanction by Federal Administrative Agencies, 2 RECOMMENDATIONS AND REPORTS OF THE ADMINISTRATIVE CONFERENCE OF THE UNITED STATES (1972).

. In Block v. Hirsh, the Court sustained the operation of a rent control commission established to cope with critical housing conditions in the District of Columbia caused by World War I. Mr. Justice Holmes wrote:
“While the act is in force there is little to deqide except whether the rent allowed is reasonable, and upon that question the courts are given the last word. A part of the exigency is to secure a speedy and summary administration of the law and we are not prepared to say that the suspension of ordinary remedies was not a reasonable provision of a statute reasonable in its aim and intent.” 256 U.S. at 158, 41 S.Ct. at 460 (four justices dissenting).
The Pernell Court characterized the case in almost the exact language it had used to describe the Jones & Laughlin case in Curtis v. Loether:
“Block v. Hirsh merely stands for the principle that the Seventh Amendment is generally inapplicable in administrative proceedings, where jury trials would be incompatible with the whole concept of administrative adjudication.” 416 U.S. at 383, 94 S.Ct. 1733.

. While the Supreme Court opinion in NLRB v. Jones & Laughlin, supra, uses the words “statutory proceedings” and in Curtis v. Loether, supra, “administrative proceedings,” a more precise term is “administrative adjudications.” Obviously, such functions as rule making may be included within the scope of a “proceeding” but are not pertinent here.

. For an article suggesting that Congress is better suited to determine the adequacy or inadequacy of a jury trial in a statutorily created cause of action, see Note, Congressional Provision for Nonjury Trial under the ¡Seventh. Amendment, 83 Yale L..T. 401, 415 (1973). Of. Note, Application of Constitutional Guarantees of Jury Trial to the Administrative Process, 56 Harv.L.Rev. 282 (1942). “The approach must be to discard the jury only where necessary, not whenever convenient . . .” Id., at 294 (footnote omitted).

. While recognizing that bankruptcy courts would be traditionally viewed as courts of equity where the right to a jury trial would not attach, the Katchen Court went further in saying, "[mjoreover, this Court has long recognized that a chief purpose of the bankruptcy laws is ‘to secure a prompt and effectual administration and settlement of the estate of all bankrupts within a limited period,’ . . . and that provision for summary disposition, ‘without regard to usual modes of trial attended by some necessary delay,’ is one of the means chosen by Congress to effectuate that purpose . . .” Id., at 328-29, 86 S.Ct. at 472 (citations omitted).

. We do not blindly accept a Congressional label as the dissent suggests but rather we defer to the Supreme Court’s determination that the Seventh Amendment does not apply to this type of case. While the dissent differs with our reading of NLRB v. Jones & Laughlin, supra, we believe that the more recent cases of Curtis v. Loether, supra, and Pernell v. Southall Realty, supra, allow no other interpretation than the one we reached.

. See JAFFE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION 87-94, (1965) ; 1 Davis, Administrative Law Treatise § 2.12 (1958).