Evergreen Environmental Services

Plain-English summary

Evergreen Environmental Services received a two-item citation shortly before water damage disrupted its headquarters and forced its safety analyst out of her office. The citation was moved with wet paperwork and found after repairs, leading Evergreen to file its notice of contest six working days late. The judge denied relief, but the Commission found no bad faith, prejudice, or impact on proceedings, and noted that the Secretary did not oppose reinstatement. The Commission also found that Evergreen had normal procedures for routing OSHA citations and that the water damage, not gross carelessness, explained the delay. It reversed the judge, reinstated the notice of contest, and remanded the case for further proceedings.

Decision snapshot

• Cited standard(s): The decision identifies two process-safety-management provisions but does not give their subsection numbers.
• Outcome: Denial of late-contest relief reversed; notice of contest reinstated; case remanded.
• Key point: A short filing delay may be excusable when an unexpected office emergency disrupts otherwise orderly citation-handling procedures and causes no prejudice.

Full text (OSHRC public release)

Document

United States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

1120 20th Street, N.W., Ninth Floor

Washington, DC 20036-3457

SECRETARY OF LABOR,

Complainant,

v.

OSHRC Docket No.
16-1295

EVERGREEN ENVIRONM E NTAL SERVICES ,

Respondent.

APPEARANCES:

Christopher Lopez-Loftis, Trial Attorney; Jin Y. Chong, Attorney; Madeline T. Le, Counsel for Occupational Safety and Health; James E. Culp, Regional Solicitor; Nicholas C. Geale, Acting Solicitor of Labor,
U.S. Department of Labor, Washington, DC

For the Complainant

W. Jackson Wisdom, Esq., Martin, Dis i ere, Jefferson & Wisdom LLP, Houston, TX

For the Respondent

DECISION AND
REMAND ORDER

Before: MACDOUGALL, Chairman; ATTWOOD
and
SULLIVAN, Commissioner s .

BY THE COMMISSION:

B efore the Commission is
a decision by
Administrative Law Judge John B. Gatto
denying
a
motion
by Evergreen Environmental Services
for relief
under Federal Rule of Civil Procedure 60(b)(1)
from a final order
result ing from
Evergreen’s failure to timely
file
a notice of contest
(NOC)
to a citation issued by the Occupational Safety and Health Administration. See
29 U.S.C. §   659(a) (employer’s failure to notify Secretary of intent to contest citation and proposed penalty within fifteen working days results in citation and penalty becoming a final order of the Commission).

For the following reaso ns, we reverse the judge’s decision , reinstate
Evergreen’s
NOC , and remand th e
case to the judge for further proceedings.

BACKGROUND

On
June
28, 2016,
OSHA issued
Evergreen
a tw o- item citation
following
a n
inspection
of
a
worksite
in Pasadena, Texas. 1
It is undisputed that
Evergreen ’s receptionist
received the citation
t wo days later, on
Thursday,
J une 3 0, 2016 . The citation was given
to
Evergreen’s
Safety Analyst, Elizabeth Botello , prior to the beginning of the July 4 th
holiday weekend
(Saturday, July 2, 2016 to Monday, July 4, 2016) .

The following
Tuesday, July 5, 2016 , Ms. Botello returned to work
to find water damage to her office ceiling and
water dripping onto the
equipment
and paperwork on her desk .

T hese items — including the citation — were immediately
re moved
from
her
office ,
and she
began using a conference room
as
a
temporary work space . That same day, Eve rgreen engaged an air conditioning
repair company to determine the cause of the
water
damage ,
and a construction company to
remove mold
and
repair the dama ged sheet rock. I nvoices
submitted by Evergreen show
that the damage was not confined to
Ms.
Botello’ s office, as repairs were
also made
to hallways ,
the reception area , and
other offices .
Evergree n
discovered
mor e damage
approximately three weeks later, on July 23, 2016,
and
hired another air conditioning
repair company
to make
further repairs.

Ms. Botello was able to move back into her office
on
August 1, 2016 . At that point,
the citation
was found
among
the
papers that had be en removed from
her
office due to
water damage.
The following day, August 2, 2016,
Evergreen mailed its
NOC
to Mark Briggs, OSHA’s Area Director fo r the Houston
South
A rea
O ffice . Mr. Briggs
informed
Evergreen
that
the last day of the fifteen-day c on test period was July 22, 201 6 , so the NOC was untimely .

On August 12, 2016 , E vergreen filed
a
motion for relief pursuant to Rule 60(b) (1)
with the Commission , claiming that its
failure
to timely
file
was
excusable
because of the water damage
in
Evergreen’s
headquarters . In response to Evergreen’s motion, the Secretary filed a letter
with the Commission
on August,
31 , 2016,
stating
that
“the Secretary is in receipt of the Respondent’s Motion for Relief under Fed. R. Civ. P. 60(b) and is not opposed to the Motion.”
On
June 9, 2017,
the ju dge
issue d an order denying the motion .

DISCUSSION

When an
employer
does not
notify the Secretary of its intent to contest a citation within fifteen working days of the employer’s receipt of the citation , the citation
becomes
a final order of the Commission
by operation of law . 29 U.S.C . § 659(a). Under
Rule
60(b) (1) ,
the Commission
may provide relief from a
final
order
due to
a party’s
“mistake, inadvertence, surprise, or excusable neglect.” 2 Fed. R. Civ. P. 60(b)(1). See
also
29 U.S.C. § 661(g)
( Commission
proceedings shall be in accordance with the Federal Rules of Civil Procedure
unless the Commissi on has adopted a different rule ) .
In evaluating a claim of excusable neglect under Rule 60(b)(1), the Commission
applies the framework set out in
Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship ,
507 U.S. 380, 395 (1993):

[T]he determination
is at bottom an equitable one, taking account of all relevant circumstances surrounding the party’s omission. These include
. . .
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.

There is no evidence
here
that Evergreen acted in bad faith or that its untimely
NOC — submitted
only
six working days after the expiration of the fifteen-day contest period — had any impact on the Commission’s proceedings. Moreover, there is no prejudice to the Secretary in granting relief because the Secretary does not oppose
Evergreen’s
motion.
As to control,
Evergreen clai ms
that the
reason
for the delay
in filing its NOC
was
the
“temporary crisis”
the water damage created,
requir ing
Evergreen to focus on “repairing its office, preventing and mitigating mold, fixing damaged ceilings, and restoring a safe work environment.” Evergreen
further contends that
it promptly
notified the Secretary of its intent to contest
the citation
once it was found among the wet papers removed from Ms. Botello’s office.

In denying Evergreen’s motion,
the judge acknowledged the
water damage
and the
“ numerous repairs ”
that occurred during
and after
the fifteen-day contest period , but
found
that Evergreen failed to demonstrate that the repairs interfered with its ability to timely file its
NOC . Therefore,
the judge
concluded
that
“the record reflects
that
Evergreen failed to  . . .  maintain orderly office procedures
for handling important documents , ”
which he characterized as “gross carelessness . ”

W e
disagree .

Bill Shaw, Evergreen’s “Vice President f or HSE , ”
states in his
affidavit that Evergreen’s receptionist received the citation and gave it to Ms. Botel lo, Evergreen’s Safety Analyst.

There is nothing in the record to suggest that the citation
was initially mishandled or
f ailed to reach the appropriate employee .
Thus,
we find that
Evergreen had procedures in place for handling and directing the citation
for processing .
Compare
NYNEX , 18 BNA OSHC 1944 , 1947
(No. 95-1671, 1999) (no relief when citation was mistakenly forwarded to different office location) (quoting
E.K. Constr. Co. , 15 BNA OSHC 1165, 1166 (No. 90-2460, 1991);
Villa Marina Yacht Harbor, Inc. , 19 BNA OSHC 2185, 2187 (No. 01-0830, 2003) (no relief when company messenger mishandled mail).

That these procedures did not result in the timely filing of Evergreen’s NOC
does not mean
the
procedures
were inadequate . Rather, the record supports Evergreen’s claim that
its procedures were
hampered by the unanticipated water damage
to
its office s .
The affidavits and repair invoices show that the water damage occurred within one to four days of Evergreen’s receipt of the citation and
that th is
damage was extensive ,
affect ing
not only Ms. Botello’s office, but also the hallways, reception ar ea, and other offices .

R epairs
continued to be
necessary
past
the contest deadline. T he citation was removed from Ms. Botello’s office
because of this water damage,
and she was moved
to
a
conference room
until
August 1, 2016 , five working days after the contest deadline.
The very same day she was able to return to her office to conduct normal business,
Evergreen found the citation among the papers that had been removed
due to water damage
from
this unforeseen event
and mailed its NOC the following day .

In short, nothing in the record supports the judge’s finding of “gross carelessness”
on Evergreen’s part.
Finally, we find it significant,
al though not controlling, that the Secretary
does
not oppose Evergreen’s motion
for relief ;
therefore,
he
does not dispute any of the company’s contentions .

Under these circumstances , we
conclude
that
Evergreen has established that
its untimely filing
was
excusable .

I n addition to establishing that the neglect was excusable, t o prevail on a motion for relief pursuant to Rule 60(b)(1), the Commission and the Fifth Circuit (to which this case may be appealed) require the moving party to allege a meritorious defense. Northwest Conduit Corp. , 18 BNA OSHC 1948, 1951 (No. 97-0851, 1999 ) . See also Marshall v. Monroe & Sons , 615 F.2d 1156, 1160 (5th Cir. 1980). The Commission has generally found this requirement to be “satisfied with minimal allegations that the employer could prove a defense if given the opportunity.” Jackson Assocs. of Nassau , 16 BNA OSHC 1261, 1267 (No. 91-0438, 1993). Here, we find Evergreen has
also
satisfied this requirement by alleging two defenses in its motion:

that it lacked knowledge of the cited conduct, and that OSHA cited the wrong employer .

Accordingly,
we
reverse the judge’s decision deny ing
Evergreen’s
motion
for relief
under
Rule 60(b)(1) , reinstate Evergreen’s
NOC , and remand
the case
to the judge for further proceedings.

SO ORDERED.

/s/               

Heather L. MacDougall

Chairman

/s/               

Cynthia L. Attwood

Commissioner

/s/               

James J. Sullivan, Jr.

Dated: October 12, 2017             Commissioner

United States of America

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION

100 Alabama St. S.W

Building 1924 Room 2R90

Atlanta, GA 30303-314

SECRETARY OF LABOR,

Complainant,

v.

OSHRC Docket No.

OSHRC ,

Respondent.

ORDER DENYING
OSHRC’

MOTION FOR
RULE
60(b )
RELIEF

COUNSEL:

Christopher D'Allen Lopez-Loftis, Attorney, Office of the Solicitor, U.S. Department of Labor, Dallas, TX, for Complainant.

W. Jackson Wisdom, Attorney,
Martin, Disiere, Jefferson & Wisdom, LLP, Houston, TX, for Respondent.

I. INTRODUCTION

Pending before the Court is
Evergreen’s motion
seeking relief
under
Rule
60(b)(1)
of the Federal Rules of Civil Procedure. 3 In its motion, Evergreen argues it
is entitled to relief under Rule 60(b)’s “excusable neglect”
standard. (Mot. 3.) The
Secretary filed
a response
indicating he did not oppose
the motion. However, the
Commission’s jurisdiction may not be created by assent.
Atl.& Gulf Stevedores, Inc.,
3 BNA OSHC 1003, 1004 (No. 2818, 1975). 4
Although unopposed motions are often summarily granted, a motion that effectively seeks to excuse a late-filed notice of contest is different because a timely filed notice of contest establishes the Commission’s jurisdiction .
Sharon & Walter Constr., Inc. , 23 BNA OSHC 1286, 1288, n. 2 (No. 00-1402, 2010) (citation omitted). The burden is still on Evergreen to show it is entitled to relief under the rule.
U.S. v. Harrison County, Mississippi , 463 F.2d 1328, 1330 (5th Cir.1972).

Under section 10(a) of the Occupational Safety and Health Act,
an employer is required to notify the Secretary of
Labor (“Secretary”) of
its intent to contest a citation within 15 working days of receipt.
See
29 U.S.C. § 659(a). Failure to timely file a contest
notice
results in the citation becoming a final order of the Commission by operation of law.
Id.

On June 28, 2016, t he Occupational Safety and Health Administration
(“OSHA”)
issued 5
a
citation
to
Evergreen Environmental Services (“Evergreen”)
with a
proposed penalty of $14,000.00, which was received by Evergreen on
June 30, 2016. Therefore, July 22, 2016, was the last day to timely file a notice of contest. On August 2, 2016, Evergreen mailed its
contest to the
OSHA Area Director, which was rejected by OSHA as untimely
on August 8, 2016, since the citation had already
becom e
a final order of the Commission by operation of law.

I I . UNDISPUTED FACTS 6

The citation was received
on June 30, 2016, by Evergreen's receptionist, Shelia Houston, and
promptly given
to Elizabeth Botello, Evergreen’s Safety Analyst.
(Motion at 1) ( citing
Shaw
Aff.
¶
4; Ex.
A). After
returning to work from
the
July 4 th
holiday weekend,
Botello
found
water damage
to
her office ceiling and water dripping onto her desk,
including
on the paperwork, keyboard computer,
monitor,
and phone
on her desk.
( Id. ) ( citing
Botello
Aff.
¶ 2). These items, including the citation,
were
immediately moved
out of
Botello’s
office
and she began working
out of a conference
room. ( Id.
1-2) ( citing
Botello
Aff.
¶ 3).

Evergreen called an air conditioner repair company to determine the cause of damage and a construction company to repair and repaint the damaged sheet rock. ( Id.
at 1-2) ( citing
Shaw Aff. ¶ 6; Ex. B-C). After more damage was found, Evergreen initiated more repairs on July 23, 2016. ( Id.
at 2) ( citing
Shaw Aff. ¶ 6; Ex. D). Botello
did not
move back into her office
until
August 1, 2016. ( Id. ) ( citing
Botello Aff. ¶ 4).

According
to Bill Shaw, Evergreen’s “Vice President of HSE,” on August 1, 2016, Evergreen found the
citation
among the
wet
papers that had been removed
from
Botello’s office. ( Id. ) ( citing
Shaw
Aff.
¶ 7). On August 2, 2016, Evergreen mailed its
notice of contest to the Area Director
and on August 8, 2016, Mark Briggs, OSHA’s Area Director,
issued a letter to
Evergreen
rejecting the
contest as untimely. ( Id. ) ( citing
Ex.
E; Ex.
F).

I I I. ANALYSIS

Rule 60(b) of the
Federal Rule of Civil Procedure
provides 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).
Under longstanding Commission
and Fifth Circuit 7
precedent , relief may be granted under Rule 60(b) for noncompliance with the contest period specified in section 10(a) of the OSH Act in certain situations.
Calhar Constr., Inc. , 18 BNA
OSHC
¶ 2151,
2153
( No. 98-0367 , 2000)
( citing Northwest Conduit Corp. , 18 BNA OSHC 1948, 1949-50 (No. 97-851, 1999);
Jackson Assocs. o f Nassau , 16 BNA OSHC 1261, 1264-65 (No. 91-438, 1993);
Branciforte Builders, Inc. , 9 BNA OSHC 2113, 2116-17 (No. 80-1920, 1981) ;
Atlantic Marine Inc.
v.
Occupational Safety & Health Review Comm'n , 524 F.2d 476, 478 (5th Cir. 1975) ;
Craig Mechanical Inc.
v.
Occupational Safety & Health Review Comm'n ,
55 F.3d 633
(5th Cir. 1995). 8

Rule 60(b)(1) provides
in relevant part
that relief may be granted from a final order entered due to the party’s excusable neglect.
Fed.R.Civ.P. 60(b)(1).

In
Northwest Conduit , the
Com mission held it applies the meaning of “excusable neglect”
as enunciated by the Supreme Court in
Pioneer Inv. Co. v. Brunswick Assocs. Ltd. Partnership , 507 U.S. 380 (1993).
See
Northwest Conduit , 18 BNA OSHC at 1950. In
Pioneer , the Supreme Court held “e xcusable neglect ”
is
“ understood to encompass situations in which the failure to comply with a filing deadline is attributable to negligence .”
Pioneer , 507 U.S.
at 394. As the
Pioneer
Court found, “t he determination is at bottom an equitable one, taking account of all relevant circ umstances surrounding the party’ s omission . These include … t he danger of prejudice to the
[nonmovant] , 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 .

As
Evergreen
notes,
the Co mm ission has reco gnized in Rule 60(b) (1) late filing cases
“ it is
usually a given that there is
‘ a lack of prejudice to the Secretary or to the interests of efficient
judicial administration, combined with a lack of bad faith by the employer. ’” (Mot. 3) ( citing
Calhar Constr., Inc. , 18 BNA OSHC
at 2151
n.
5). Since the Secretary did not oppose Evergreen’s motion for relief, the Court concludes
there is
no
prejudice to the Secretary or to the interests of efficient
judicial administration
and there is no evidence of
bad faith by
Evergreen.

In support of its argument that it
is entitled to relief under
Rule
60(b)'s
“e xcusable
n eglect ” s tandard ,
Evergreen
asserts “ due to a temporary crisis in the office ,
Evergreen had to
focus its efforts in repairing its office, preventing and mitigating mold, fixing damaged ceilings,
and restoring a safe work environment ” and that “[a] fter
…
Evergreen was able to return to its regular course of business , Evergreen
quickly acted upon the
C itation and sent the Area Office its Notice of Contest. ” (Mot. 4) ( citing
Ex.
E). As indicated
infra , t he Court
concludes
Evergreen ’s conduct did not amount to excusable neglect warranting Rule
60(b) (1) relief.

As the Fifth Circuit has recently reiterated,
Rule 60(b)(1) provides relief for a party
“ if the party dem onstrates that its failure (1) ‘ resulted from justifiable neglect ’
and (2)
‘ that a fair probability of success on the merits existed if the judgment were to be set aside. ’”
Long v. James , 667 F. App'x 862, 863 (5th Cir. 2016)
(citation
omitted ) . Here, even though
Evergreen
was
involved in numerous repairs, “which were a high priority of business,” it has not shown th os e repairs
interfer ed in its ability to timely file its notice
of contest .

While the repairs were ongoing
Botello continued to work out of a conference room
and she offers no explanation in her affidavit for her failure to timely file the notice of contest, other than she was not able to move back into her office “to conduct normal business until August 1, 2016.”
(Botello Aff. ¶
4 ). The Court concludes
this is not an adequate excuse for
Evergreen ’s
inaction under the terms of Rule 60(b)(1 ), “which requires a showing of ‘excusable’
neglect and not just a showing of simple negligence. ”
Louisiana-Pacific Corp. , 13 BNA OSHC 2020, 202 3
(No. 86-1266, 1989). Therefore,
Botello ’s neglect was not “excusable.”

Equally important, e mployers must maintain orderly procedures for handling
important documents,
and when the lack of such procedures results in the untimely filing of a notice of contest, Rule 60(b) relief is not warranted.
A.W.   Ross , Inc ., 19 BNA OSHC 1147, 1149 (No. 99-945, 2000) ;
Louisiana-Pacific Corp. , 13 BNA OSHC
at
2021. Gross carelessness
is an
insufficient bas i s for 60(b)(1) relief.
Edward H. Bohlin Co. v. Banning Co. , 6 F.3d 350, 357
(5th Cir. 1993) .

Cf. Sadowski v. Bombardier Ltd. , 539 F.2d 615, 618 (7th Cir.1976) (Rule 60(b) cannot be invoked “to give relief to a party who has chosen a course of action which in retrospect appears unfortunate or where error or miscalculation is traceable really to a lack of care.”) .

The record reflects Evergreen failed to timely file the notice of contest because it failed to maintain orderly procedures
for handling
its
important
documents. As Evergreen admits, on
August 1, 2016,
it “ found”
the citation
among the wet papers that had been removed due to water damage. (Shaw Aff. ¶ 7)
(emphasis added) . However, Evergreen offered no explanation as to why the citation could not have been found while repairs were being made, in particular, since Botello continued working, albeit, out of the conference room. This g ross carelessness
is an
insufficient bas i s for 60(b)(1) relief .

Thus, t he
Court concludes the
reason for the delay was
within the reasonable control of
Evergreen; had it simply maintained orderly procedures
for handling important
documents such as the citation, it could have ensured that its notice of contest was timely filed. T aking account of all relevant circ umstances surrounding Evergreen’s
omission , the Court concludes Evergreen has not shown excusable neglect under
Rule 60(b)(1). Accordingly,

IV. ORDER

IT IS HEREBY ORDERED THAT
Evergreen’s motion for Rule 60(b) relief based upon excusable neglect is
DENIED , its late Notice of Contest is
DISMISSED , and the scheduling order setting this case for trial is
VACATED .

SO ORDERED .

/s/ John B. Gatto   

John B. Gatto

Administrative Law Judge 

Dated: June 20 , 2017

"

1
In the citation, the Secretary alleges serious violations of two provisions of 29 C.F.R. § 1910.119 (Process safety management of highly hazardous chemicals), and proposes a penalty of $7,000 for each item.

2
Rule 60(b)(1) provides
in full
that “ [o] n motion and just terms, the court may relieve a party or its legal representatives from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect[.]” Fed. R. Civ. P. 60(b)(1).

3
Upon recently reviewing the case file, the Court noted
Evergreen’s
Rule 60(b) motion , which had been filed while the case was still assigned to the chief judge, was still pending .

4
It has long been recognized courts are not bound to accept stipulations as to questions of law. 
Estate of Sanford v. Comm'r of IRS , 308 U.S. 39, 51 (1939).  Rather, when an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law.
See ,
e.g., Kamen v. Kemper Fin. Servs., Inc . ,
500 U.S. 90, 99, (1991); and
Arcadia v. Ohio Power Co.,</sp