LHC, Inc.

Plain-English summary

OSHA issued LHC four serious citation items carrying $10,780 in proposed penalties. The company's president received and signed for the citation, but it remained in his inbox while he tried to gather information from employees working elsewhere in Montana. LHC notified OSHA of its intent to contest about one month after the deadline. The judge found that the company had explicit notice and could have filed a contest, requested an informal conference, or asked for more time before the deadline. Because the delay resulted from the company's document handling and was within its control, the judge found no excusable neglect. The late contest was denied and the citation and penalties became final.

Decision snapshot

• Cited standard(s): The decision does not identify the standards underlying the four serious citation items.
• Outcome: Rule 60(b) relief denied; four serious items and $10,780 in penalties affirmed as final orders.
• Key point: Leaving a citation in an inbox while gathering information is not excusable neglect when the employer received clear notice of the contest deadline.

Full text (OSHRC public release)

                   UNITED STATES OF AMERICA
       OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

SECRETARY OF LABOR,
Complainant,
OSHRC DOCKET NO. 12-1450
v.
LHC, INC.,
Respondent.

    Ed Falkowski, Esq., Office of the Solicitor, U.S. Department of Labor, Denver, CO
            For Complainant

    Daniel Johns, Esq., Crowley Fleck PLLP, Kalispell, MT
             For Respondent

Before: Administrative Law Judge Patrick B. Augustine

                                   DECISION AND ORDER

    This matter comes before the Court on Respondent’s request for relief pursuant to

Federal Rule of Civil Procedure 60(b) (“Rule 60(b)”). On July 17, 2012, Respondent sent

Complainant a letter indicating its intent to file a late notice of contest. On July 20, 2012,

Respondent filed a late Notice of Contest with the Commission, which issued a Notice of

Docketing on July 23, 2012. Although no specific motion was filed by Respondent, the letter to

Complainant, combined with the late Notice of Contest, is clearly a request for relief from the

operation of Section 10(a) of the Occupational Safety and Health Act (“the Act”), and the Court

will treat them as such. See Fed. R. Civ. P. 60(b). If an employer fails to notify the Secretary

within fifteen working days that he intends to contest the citation or proposed assessment of

penalty, Section 10(a) states that “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). On August 21, 2012, Complainant filed its Opposition to Relief under Federal Rules of

Civil Procedure Rule 60(b) (“Opposition”), wherein Complainant requests that the Court affirm
the citation and assessment as final orders of the Commission. On September 14, 2012, the

Court received Respondent’s Response to Complainant’s Opposition to Relief Under Federal

Rules of Civil Procedure Rule 60(b) (“Response”).

                                   Procedural History

   This case began with an OSHA inspection of Respondent’s worksite at Hutton Ranch

Reserve South, Kalispell, MT 59901. During that inspection, OSHA determined that

Respondent had committed four (4) violations of the Act. On May 22, 2012, the Billings,

Montana, OSHA Area Office issued to Respondent a Citation and Notification of Penalty

(“Citation”). See Declaration of Jeff R. Funke; Compl’t Ex. A. The Citation consisted of a four-

item, serious citation and a proposed penalty of $10,780.00.

   The Citation was delivered to Respondent on May 25, 2012, by certified mail, return

receipt requested. See Certified Mail Receipt, May 24, 2012; Compl’t Ex. C. The certified mail

receipt was signed for by Roger Claridge, President and Registered Agent of LHC, Inc. See id.

Based on the date of receipt, Respondent had until June 18, 2012, to notify Complainant of its

intent to contest the Citation. See 29 U.S.C. § 659 (employer has fifteen working days to file a

notice of contest); see also Commission Rule 7(c) (service by personal delivery is effected at

time of receipt). Respondent did not notify Complainant of its intent to contest the Citation until

July 17, 2012, or approximately one month after the deadline to file the notice of contest. See

Daniel Johns letter re: LHC, Inc., July 17, 2012; Compl’t Ex. D.

                                       Discussion

   Rule 60(b) states that “[o]n motion and just terms, the court may relieve a party or its

legal representative from a final judgment, order, or proceeding . . . .” Fed. R. Civ. P. 60(b).

The rule lists the reasons that would provide a sufficient basis for granting the relief requested.

Id. The subsection applicable in this case is (b)(1), which states that “mistake, inadvertence,
surprise, or excusable neglect” constitutes a sufficient basis for Rule 60(b) relief. Id. Rule 60(b)

motions claiming excusable neglect are evaluated pursuant to the criteria set forth in Pioneer

Investment Servs. v. Brunswick Assocs., 507 U.S. 380, 395 (1993). See Northwest Conduit

Corp., 18 BNA OSHC 1948, 1999 OSHD (CCH) ¶ 31,949 (No. 97-851, 1999). Under Pioneer,

the Court must consider “the danger of prejudice to the [opposing party], 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.”

Pioneer, 507 U.S. at 395. According to the Commission, “the reason for the delay, including

whether it was within the reasonable control of the movant” is the “key factor” in the

determination of whether an employer has established excusable neglect. A.W. Ross Inc., 19

BNA OSHC 1147, 2000 OSHD (CCH) ¶ 32,197 (No. 99-0945, 2000) (citing Calhar Constr., 18

BNA OSHC 2151, 2000 OSHD (CCH) ¶ 32,081 (No. 98-0367, 2000)).

   Complainant contends that Respondent has failed to establish mistake, inadvertence,

surprise, or inexcusable neglect. Specifically, Complainant argues that Respondent received

actual notice of the Citation and failed to comply with the instructions—typed in bold-face

print—indicating the deadline for filing a notice of contest. See Compl’t Ex. B at 2. Respondent

admits that the filing of the notice of contest was within its control; however, Respondent claims

that the Citation “inadvertently” remained in Mr. Claridge’s inbox past the fifteen-day deadline

for filing the notice of contest. See Resp’t Response at 3. Respondent states that it was

attempting to gather information about the inspection from the employees that were present at

that time; however, due to the fact that those employees had begun projects in other parts of

Montana, Respondent states that it was unable to gather the requisite information prior to the

lapse of the deadline.

   The Court finds Respondent has failed to provide any reason that would justify relief

pursuant to Rule 60(b). Respondent’s actions are clearly the product of neglect; however, the

Court does not find that such neglect was excusable. The Citation was not only received by

Respondent, it was signed for by the President of the company, Mr. Claridge. Although Mr.

Claridge’s desire to gather additional information to aid the decision of whether to request an

informal conference or file a notice of contest is understandable, that does not excuse the failure

to either: (a) file a notice of contest and/or request an informal conference prior to the expiration

of the deadline; or (b) contact Complainant and request additional time to respond. Respondent

received timely and explicit notice of his contest rights and failed to exercise them in the time

provided by law. To the extent that Respondent’s request for relief is premised on its failure to

properly handle mail or documents, the Court would note that the Commission expects

employers to “maintain orderly procedures for handling important documents.” Louisiana-

Pacific Corp., 13 BNA OSHC 2020, 1987–90 OSHD (CCH) ¶ 28,409 (No. 86-1266, 1989); see

also NYNEX, 18 BNA OSHC 1967, 1999 OSHD (CCH) ¶ 31,942 (No. 95-1671, 1999) (“‘The

Commission has consistently denied relief to employers whose procedures for handling

documents were to blame for untimely filings’ of [Notices of Contest].” (quoting E.K. Constr.

Co., Inc., 15 BNA OSHC 1165, 1166, 1991–93 OSHD (CCH) ¶ 29,412, p. 39,637 (No. 90-2460,

1991))). Respondent’s rationale for its delay in filing the Notice of Contest falls far short of a

reasonable excuse.1

     The Court finds that the service effected by Complainant was “reasonably calculated to

provide [Respondent] with knowledge of the citation and notification of proposed penalty and an

1. Although it is unlikely that Complainant would suffer prejudice if the Court allowed the late filing, which the
   Court has no cause to believe was not in good faith, the Court finds that the reason for the delay itself is sufficient to
   find that Respondent’s failure was not the result of excusable neglect. As pointed out in Complainant’s brief, the
   Commission has been loath to excuse late filings when the failure could be attributable to a rank-and-file employee.
   See, e.g., J.F. Shea Co., Inc., 15 BNA OSHC 1092 (No. 89-976, 1991) (finding that late notice of contest filed eight
   days late because of incorrect date stamp is not inexcusable neglect); NYNEX, 18 BNA OSHC 1944 (No. 95-1671,
   1999) (employee redirected certified mail because company was without adequate procedures). In this case,
   Respondent’s president received, signed for, and was directly aware of the contents of the Citation and its attendant
   requirements.
   opportunity to determine whether to abate or contest.” B. J. Hughes, Inc., 7 BNA OSHC 1471,

1474, 1979 CCH OSHD ¶ 23,675 (No. 76-2165, 1979). The Court further finds that Respondent

has failed to establish any plausible excuse or rationale that would justify relief from the

operation of Section 10(a) of the Act. See 29 U.S.C. § 659.

                                       ORDER

   Based on the foregoing, Respondent’s request for relief, pursuant to Rule 60(b), is

DENIED. Accordingly, it is ORDERED that:

   1. Citation 1, Items 1(a) and 1(b) and the corresponding penalty of $5,390.00 are hereby

       AFFIRMED as final orders of the Commission pursuant to Section 10(a) of the Act.

   2. Citation 1, Items 2(b) and 2(b) and the corresponding penalty of $5,390.00 are hereby

       AFFIRMED as final orders of the Commission pursuant to Section 10(a) of the Act.

Date: October 2, 2012 /s/____
Denver, Colorado Patrick B. Augustine
Judge, OSHRC