S.A. Healy Co.

Plain-English summary

S.A. Healy Co. was the tunneling contractor on a Milwaukee sewer project where a methane explosion killed three employees. OSHA issued 68 willful citation items under its instance-by-instance policy, and 49 of those items covered conduct for which the company was also criminally convicted and fined $750,000. The Commission held that assessing civil OSHA penalties after the criminal case did not violate the Fifth Amendment's double-jeopardy clause because the government's investigation and prosecution costs exceeded the maximum possible civil penalties. It nevertheless remanded the penalty determination because the judge had assessed the same $6,500 amount for each of the 49 items without making individualized gravity findings. The remand also required consideration of two apparently duplicative light-fixture items and correction of service defects in the parties' settlement. Chairman Weisberg concurred in the result but questioned whether the Supreme Court's government-cost test was the right measure for OSHA penalties.

Decision snapshot

• Cited standard(s): 29 C.F.R. §§ 1926.21(b)(2), 1926.21(b)(6)(i), 1926.407(b), 1926.800(c)(1)(i), 1926.800(c)(2)(i), 1926.800(c)(2)(vi), and 1926.800(e)(1)(iii).
• Outcome: Remanded. The double-jeopardy defense was rejected, but the case was sent back for individualized penalty findings and related corrections.
• Key point: Instance-by-instance OSHA penalties may follow a criminal conviction for the same conduct, but each instance still requires a penalty supported by its own gravity and the statutory assessment factors.

Full text (OSHRC public release)

                                       UNITED STATES OF AMERICA
                 OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
                                      One Lafayette Centre
                                1120 20th Street, N.W. - 9th Floor
                                  Washington, DC 20036-3419

PHONE:
COM (2021806-5100
FTS (202) 006-6100

SECRETARY OF LABOR,

                        Complainant,

                   V.                                    OSHRC Docket No. 89-1508

S.A HEALY COMPANY,

                        Respondent.


                                           DECISION

BEFORE: WEISBERG, Chairman; FOULKE and MONTOYA, Commissioners.

BY THE COMMISSION:

          This case presents a significant issue of first impression-whether the assessment of

penalties against an employer for willful violations of the Occupational Safety and Health
Act of 1970, 29 U.S.C. §§ 651-678 ("the Act") is contrary to the double jeopardy clause of
the Fifth Amendment1 when the employer has previously been criminally convicted and
sentenced to criminal fines for the same conduct. Administrative Law Judge James D.
Burroughs concluded that the Fifth Amendment does not here bar the Commission from
assessing penalties despite the prior conviction and sentence of Respondent, S.A. Healy
Company ("Healy"). For the reasons stated below, we affirm that portion of the judge's
decision, but we remand for additional factual findings regarding the amount of penalties to
be assessed.

1Toe clause states in pertinent part, "nor shall any person be subject for the same offence
to be twice put in jeopardy of life or limb."

                                                                           95 OSHRC No. 28
                                          2
                                 INTRODUCTION
   Healy was the tunneling contractor for the Crosstown Seven Collector System, part

of a water pollution abatement project being constructed for the Milwaukee Metropolitan
Sewerage District. After three of its employees died in a methane gas explosion in what was
known as the Crosstown North Tunnel, the Secretary cited Healy for sixty-eight willful
violations of OSHA standards. The Secretary issued the citation under his so-called
"egregious" or "instance-by-instance" policy, which defines each individual instance of
noncompliance with a specific standard as a separate and distinct violation with its own
penalty. See Caterpillar, Inc., 15 BNA OSHC 2153, 2170, 1991-93 CCH OSHD ,I 29,962, pp.
41,003-04 (No. 87-922, 1993). Pursuant to section 17(a) and G) of the Act, 29 U.S.C.
§ 666(a) & G), which authorizes the Secretary to propose and the Commission to assess civil
penalties for willful violations, the Secretary proposed the then-maximum penalty of
$10,0oo2 for each alleged violation, for a total of $680,000. Healy contested the citation
items, and the matter was heard before Judge Burroughs.
Under section 17(e) of the Act, 29 U.S.C. § 666(e), which provides that an employer
may be criminally prosecuted for a willful violation which results in death to an employee,
Healy was criminally indicted and convicted on three counts-one count for each deceased
employee. Each criminal count alleged that Healy had failed to comply with standards
dealing with: (1) employee training (29 C.F.R. § 1926.Zl(b)(2) and 21(b)( 6)(i) ), (2) approval
of electrical equipment for the hazardous atmosphere inside a tunnel (29 C.F.R.
§ 1926.407(b)), and (3) cut off of electrical power in an area having an excessive
concentration of flammable gas (29 C.F.R. § 1926.800(c)(2)(vi)). Federal District Court
Judge Terence T. Evans sentenced Healy to a $250,000 fine on each count, for a total fine
of $750,000. Tiris fine was one-half of the maximum possible fine prescribed by statute.3

2The maximum civil penalty for a willful violation was increased to $70,000 in the Omnibus
Budget Reconciliation Act of 1990, Pub. L. No. 101-508, § 3101 (1990).
329 U.S.C. § 666(e) provides for a fine of not more than $10,000. The Comprehensive Crime

Control Act of 1984 generally increased the criminal penalties for violations of Federal law;
an organization committing a felony or a misdemeanor which results in death may now be
fined up to $500,000. 18 U.S.C. § 3571.
3

The parties agreed that the criminal conviction covered the same conduct that was at issue
in forty-nine of the citation items. They also agreed to settle the remaining nineteen citation
items which have no relationship to the guilty verdict, and those items are not before the
Commission. Healy then argued before Judge Burroughs that the purpose of the civil penal-
ties sought by the Secretary was in fact retribution or deterrence, and since these are char-
acteristics of punishment, assessment of penalties in the Commission proceeding for the
forty-nine items covered by the criminal verdict would violate the "double jeopardy" clause.
In rejecting this contention, Judge Burroughs relied on United States v. Halper, 490
U.S. 435,446 (1989), in which the Supreme Court held that an ostensibly civil and remedial
penalty in fact is punitive for purposes of the double jeopardy clause if it "does not remotely
approximate the Government's damages and actual costs." Judge Burroughs concluded that
Healy's penalty liability was not disproportionate to the government's costs of investigation
and prosecution. Accordingly, the judge determined that assessment of penalties against
Healy in this proceeding would not be punitive under Halper. However, the judge also found
that a penalty of $6500 was appropriate for each of the forty-nine violations4 rather than
$10,000 as the Secretary proposed, and he assessed a total penalty of $318,500.
L HEALY DID NOT WAIVE DOUBLE JEOPARDY CLAIM
At the criminal sentencing hearing, Healy raised several factors in an attempt to
mitigate the fine. In addition to the potential for OSHA civil penalties, Healy also noted that
it faced lawsuits arising out of the fatalities and that it had lost contracts as a result of the
criminal proceedings. In sentencing Healy to one-half of the maximum possible fine, Judge
Evans regarded all of these as mitigating circumstances, and the judge also found that Healy
had cooperated during the investigation and had shown remorse over the fatalities. The
Secretary argues that because Healy asked the district court judge to take the possibility of

4After Healy was convicted, the Secretary moved for partial summary judgement on the
issues of liability and willfulness on the ground that the criminal proceedings constituted
collateral estoppel with respect to the citation items covered by the criminal verdict.
Although Healy did not object to the Secretary's motion with respect to these two issues, it
initially contended on review before us that it was not estopped from denying that it had
committed 49 separate violations as charged in the citation. At oral argument, however,
Healy conceded the existence of 49 separate violations.
4

civil penalties into account in arriving at an appropriate criminal fine, Healy waived any
double jeopardy claim.
Judge Burroughs rejected the waiver argument when it was raised before him. In his
view, the Secretary's argument incorrectly assumed that the pendency of the civil liability was
the only factor that caused Judge Evans to sentence Healy to less than the maximum
criminal penalty. Furthermore, Judge Burroughs concluded that Healy had not made a
"deal" with the district court judge but rather had simply advised him of the status of the
civil actions and that Healy was not asked to give up any of its legal rights in exchange for
a reduction in the fine.
The principle regarding waiver of a constitutional right is set forth in such cases as
Johnson v. Zerbst, 304 U.S. 458, 464 (1938), where the Court stated:
It has been pointed out that "courts indulge every reasonable presumption
against waiver" of fundamental constitutional rights and that we "do not
presume acquiescence in the loss of fundamental rights." A waiver is ordinarily
an intentional relinquishment or abandonment of a known right or privilege.
(Footnotes citing cases omitted). See Boyldn v. Alabama, 395 U.S. 238 (1969) (rejection of
right to counsel must be intelligent and understandable). In our view, Judge Burroughs
properly determined that the circumstances here do not arise to the level of a knowing and
intentional waiver of Healy's right to claim the benefit of the double jeopardy clause.
The Secretary relies on inapposite decisions involving defendants who made express
agreements with the government that allowed the government to bring multiple proceedings.
United States v. Broce, 488 U.S. 563 (1989) (guilty plea); United States v. Britt, 917 F.2d 353
(8th Cir. 1990), cert. denied, 498 U.S. 1090 (1991) (plea bargain); United States v. Marcus
Schloss & Co., 724 F. Supp. 1123 (S.D.N.Y. 1989) (consent order); and Jeffers v. United
States, 461 F. Supp. 300 (N.D. Ind. 1978) (defendant who requested separate trials could not
later object to the second trial on double jeopardy grounds). These cases clearly do not
establish that Healy should be prevented from raising the double jeopardy issue in the
circumstances here. As Judge Burroughs properly found, there was no bargained-for
exchange between Healy and Judge Evans from which we could conclude that Healy
knowingly waived its double jeopardy argument.
5
IL COMMISSION HAS AUTHORTIY TO RULE ON DOUBLE JEOPARDY CLAIM:
On review before the Commission, the Secretary also renewed his contention that the
Commission lacks authority to decide Healy's double jeopardy claim because the
Commission cannot entertain a challenge to the constitutionality of the Act. In his decision,
Judge Burroughs concluded that the constitutionality of the Act is not in question here. We
agree. Arguably, the Commission would not be competent to decide whether an employer
may present a double jeopardy claim in a proceeding under the Act or whether the Act
would be unconstitutional if interpreted to exclude such a claim. As the Halper decision
makes clear, however, the double jeopardy clause is not limited to criminal prosecutions
only, and a civil proceeding following a criminal prosecution constitutes double jeopardy if
the sanction imposed in the civil proceeding is in fact punitive in nature. 490 U.S. at 448-51
& n.10 (1989). See United States v. WRW Corp., 986 F.2d 138 (6th Cir. 1993) (mine operator
may argue double jeopardy under the Federal Mine Safety and Health Act). The Secretary,
moreover, does not contend that an employer in a proceeding under the Act is not entitled
to the constitutional protection against double jeopardy. The question presented here is
whether an infringement of the Fifth Amendment has been shown on the facts of the case,
which is an issue the Commission is empowered to decide. Chromolloy Am. Corp., 7 BNA
OSHC 1547, 1979 CCH OSHD ,r 23,707 (No. 77-2788, 1979).
m. PUNITIVE POTENTIAL OF INSTANCE-BY-INSTANCE PENALTIES
The double jeopardy clause prohibits successive punishments for the same offense.
North Carolina v. Pearce, 395 U.S. 711, 717 (1969). Although the Fifth Amendment speaks
in terms of "life or limb," it is well-settled that any punitive sanction can implicate the
double jeopardy clause even if the sanction does not involve imprisonment, and that a
monetary penalty can be considered punitive for purposes of applying the double jeopardy
clause. Department of Revenue of Montana v. Ku11h Ranch, 114 S.Ct 1937, 1941 n.1 (1994).
See Austin v. United States, 113 S.Ct. 2801 (1993). Accordingly, the question before us is
whether the penalties against Healy at issue in this proceeding are punitive in nature. See
United States v. Tilley, 18 F.3d 295, 297-98 & n.5 (5th Cir. 1994).
6

   Generally speaking, a punitive sanction is one which satisfies certain criteria, including

but not limited to whether it serves "the traditional aims of punishment," that is, "deterrence
and retnbution." Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-69 (1963).5 However, the
courts historically have deferred to Congress, and if a statute plainly states that its penalty
provisions are civil in nature, that characterization will be accepted unless "the statutory
scheme [is] so punitive either in purpose or effect as to negate [Congress'] intention." United
States v. Ward, 448 U.S. 242, 249 (1980). As the Court stated in Helvering v. Mitchell, 303
U.S. 391, 399 (1938):
[T]he legislation of Congress from the beginning, not only as to tariff but as
to internal revenue, taxation, and other subjects, has proceeded on the
conception that it was within the competency of Congress, when legislating as
to matters within its control, to impose appropriate obligations, and sanction
their enforcement by reasonable money penalties, giving to executive officers
the power to enforce such penalties without the necessity of invoking the
judicial power.
There can be little doubt that Congress created a civil penalty structure when it
passed the Act. With the exception of the criminal penalties prescribed in section 17(e ), the
Act otherwise expressly denominates the penalties as civil and provides an administrative
mechanism for their assessment. Moreover, it is well-settled that the Act is remedial social
legislation whose purpose is the effectuation of safe and healthful working conditions
through an administrative mechanism of promulgation and enforcement of mandatory safety
and health standards in addition to the statutory duty imposed by section 5(a)(l), 29 U.S.C.
§ 654(a)(l), to keep a worksite free from "recognized hazards." Section 2(b), 29 U.S.C.

5"[T]he tests traditionally applied to determine whether an Act of Congress is penal or
regulatory in character," 372 U.S. at 168-69, include:
1) Whether the sanction involves an affirmative disability or restraint
2) Whether it has historically been regarded as punishment
3) Whether it comes into play only on a finding of scienter
4) Whether its operation will promote the traditional aims of punishment--deterrence
and retnbution
5) Whether the behavior to which it applies is already a crime
6) Whether an alternative purpose to which it may rationally be connected is
assignable to it
7) Whether it appears excessive in relation to the alternative purpose.
7

§ 651(b); Brock v. Cardinal Indus., Inc., 828 F.2d 373, 376 (6th Cir. 1987); Phillips 66 Co., 16
BNA OSHC 1332, 1335, 1993 CCH OSHD ,r 30,191, p. 41,540 (No. 90-1549, 1993).
Sanctions imposed under such statutes have long been considered to be civil, that is,
nonpunitive, in nature. Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320,339 (1909)
(upholding validity of statute imposing a civil penalty for the protection of the public health);
Hepner v. United States, 213 U.S. 103 (1909) (monetary penalty for bringing illegal aliens into
the country is enforceable in civil litigation). As the Second Circuit stated in United States
v. lB. Wzlliams Co., 498 F.2d 414, 421 (2d Cir. 1974):
In many instances Congress has provided, as a sanction for the violation
of a statute, a remedy consisting only of civil penalties or forfeitures; in others
it has provided both criminal and civil sanctions. When Congress has
characterized the remedy as civil and the only consequence of a judgment for
the Government is a money penalty, the courts have taken Congress at its
word.
As Ward indicates, however, the deference normally accorded the intent and
determination of Congress to establish a civil penalty is not conclusive, and an ostensibly civil
penalty can be found to have in fact a punitive character. See Mitchell (discussion of
"appropriate" and "reasonable" penalties and obligations). More recently, the Court empha-
sized in Halper that "a civil sanction, in application," may become punitive for purposes of
applying the double jeopardy clause. 490 U.S. at 443. The Court explained as follows:
[T]he Government argues ... that whether a proceeding or penalty is civil or
criminal is a matter of statutory construction, and that Congress clearly
intended the proceedings and penalty at issue here to be civil in nature. The
Government, in our view, has misconstrued somewhat the nature of the
multiple-punishment inquiry and, in so doing, has overread the holdings of our
precedents. Although, taken together, these cases establish that proceedings
and penalties under [civil statutes] are indeed civil in nature ... they do not
foreclose the possibility that in a particular case a civil penalty authorized by
[a statute] may be so extreme and so divorced from [a remedial goal] as to
constitute punishment.
Id. at 441-42. Thus, the Court reasoned that it would not be bound by the "statutory
language, structure, and intent" of Congress but instead would look to the "character of the
actual sanctions imposed." Id. at 447. The primary purpose to be taken into account under
the Halper test is whether the sanction is deterrent or retributive in character, rather than
8

remedial. Id. at 448 (citing Mendoza-Martinez and Bell v. Wolfish, 441 U.S. 520, 539 n.20
(1979) ("[r]etnbution and deterrence are not legitimate nonpunitive governmental
objectives")).
These decisions, however, do not specify precisely what is meant either by
"retnbution" or "deterrence" in this context. Nevertheless, retribution is generally
understood to refer to a sanction that seeks to exact a penalty from a wrongdoer in
proportion to the degree of harm caused by the wrongdoer. See Atlas Roofing Co. v.
OSHRC, 518 F.2d 990, 1002 & n.41 (5th Cir. 1975), aff'd on other issues, 430 U.S. 442
(1977). The court in that decision observed that OSHA penalties have a retributive effect
because "gravity," that is, the severity of a violation, is one of the factors to be taken into
account in the assessment of penalties under section 17G) of the Act. Indeed, the Com-
mission has recognized that gravity normally is the most significant element in a penalty
assessment. Hem Iron Worb, Inc., 16 BNA OSHC 1619, 1624, 1994 CCH OSHD ,r 30,363,
p. 41,883 (No. 88-1962, 1994). Therefore, in determining whether and under what
circumstances penalties under the Act can assume a punitive character, it is logical to
conclude that, generally speaking, an aspect of retributiveness is necessarily present when
the amount of the penalty increases with the magnitude of the violation. Clearly, however,
a civil OSHA penalty cannot be considered punitive, even if it has a partial retributive
character, if the amount of the penalty is reasonable and appropriate to effectuate the
remedial purposes of the Act, that is, to achieve the goal of a safe and healthful workplace.
One of the means established by Congress for accomplishing the Act's purposes is the
assessment of penalties as a deterrent, that is, a means for inducing employers to comply.
Section 2(b)(10). The commonly understood definition of a deterrent is a force which
induces or compels a change in conduct, or, as Webster's defines the word "deter," "to tum
aside, discourage, or prevent from acting." Webster's Third New Int'l Dictionary 616 (1971).
Because the Act creates a mandatory enforcement mechanism, it clearly has a deterrent
purpose, and Congress expected and intended that employers will seek to comply with the
9

Act in order to avoid citation and penalty. See Whirlpool Corp. v. Marshall, 445 U.S. 1, 11-13
& n.16 (1980). As discussed more fully below, however, deterrence has both civil (remedial)
and punitive aspects.
It cannot be seriously disputed that even substantial penalties for willful violations
such as those in question here may legitimately have a deterrent purpose insofar as such
penalties may be required to induce a recalcitrant employer into compliance with the re-
quirements of the Act or standards issued under the Act. For example, in Frank Irey, Jr., Inc.
v. OSHRC, 519 F.2d 1200, 1204 (3d Cir. 1974), aff'd on hearing en bane, 519 F.2d 1215
(1975), aff'd sub nom. on other issues Atlas Roofing Co. v. OSHRC, 430 U.S. 442 (1977), the
court relied on the corrective nature of a civil penalty in concluding that the constitutional
protections accorded a criminal defendant did not apply:
[C]andor compels us to concede that the punitive aspects of the OSHA
penalties, particularly for a "willful" violation, are far more important than any
"remedial" features. However, a deliberate and conscious refusal to abate a
hazardous condition may bring about a situation where a heavy civil penalty
might be needed to effect compliance with safety standards. In any event, we
have now come too far down the road to hold that a civil penalty may not be
assessed to enforce observance of legislative policy. [citing Hepner and
Stranahan.]
(Emphasis added). Similarly, there is an extensive line of case law holding that proceedings
to hold persons in contempt of court are civil in nature where the intent of the sanction is
to afford the defendant an opportunity to conform his behavior to the court's order as
opposed to simply punishing him for his disobedience. E.g., Shillitani v. United States, 384
U.S. 364 (1966); McComb v. Jacksonville Paper Co., 336 U.S. 187 (1949); Gompers v. Bucks
Stove & Range Co., 221 U.S. 418 (1911). Accordingly, the Commission is faced with the
difficult task of determining whether a civil penalty under the Act, which unquestionably
serves a remedial deterrent purpose, can nevertheless assume punitive characteristics and
if so, under what circumstances.
While both civil and penal sanctions have a deterrent effect in that both are intended
to induce a certain type of behavior, normally penal sanctions are for the protection or the
benefit of society as a whole whereas a civil sanction functions as an inducement to the
10
individual employer who is the subject of the enforcement action. As the Court stated in
Trop v. Dulles, 356 U.S. 86, 96 (1958), "[i]f the statute imposes a disability for the purposes
of punishment-that is, to reprimand the wrongdoer, to deter others, etc., it has been
considered penal" (emphasis added). See Kurth Ranch, 114 S.Ct. at 1946 (where a state
imposes a tax on marijuana for the purpose of deterring the general society from possessing
marijuana, the deterrent purpose is consistent with a punitive character). Moreover, this
distinction is implicit in both the penalty structure set forth in the Act and the case law
under the Act. In addition to gravity, section 17G) directs the Commission, in assessing
penalties, to take into account the size of the employer, its prior history of violation, and its
good faith. The gravity criterion may be characterized as generic in the sense that it treats
violations of similar quality and severity alike regardless, for example, of whether they are
committed by a large or small employer. The remaining three criteria, however, require the
Commission to consider circumstances pertaining specifically to the individual cited
employer. See Specialists of the South, Inc., 14 BNA OSHC 1910, 1987-90 CCH OSHD
,r 29,140 (No. 89-2241, 1990).
Very early in the history of the Act the Commission recognized that the achievement
of the Act's objectives is the overriding goal of a penalty assessment, and it held that indeed
no penalty should be assessed if in the circumstances compliance with the Act could be
assured without a penalty assessment. Colonial Craft Reproductions, 1 BNA OSHC 1063,
1065, 1971-73 CCH OSHD ,r 15,277, p. 20,370 (No. 881, 1972). Similarly, the Commission
considered the deterrent effect on the individual employer alone in Trinity Indus., 15 BNA
OSHC 1481, 1991-93 CCH OSHD ,r 29,582 (No. 88-2691, 1992). In that decision, the
Commission concluded that an employer who had substantially eliminated a hazard by the
time of the inspection and whose failure to entirely correct the condition was the result of
difficulties it encountered rather than lack of diligence was entitled to substantial credit for
good faith "in order to encourage a large employer to protect its employees and to coop-
erate with the Federal occupational safety and health program, by taking voluntary measures
to abate ... hazards." Id. at 1489, 1991-93 CCH OSHD at p. 40,039. We reaffirmed this
deterrence principle in Quality Stamping Prods. Co., 16 BNA OSHC 1927, 1929, 1994 CCH
11
OSHD t 30,516, p. 42,189 (No. 91-414, 1994),peddonfor review filed, No. 94-3978 (6th Cir.
Sept. 19, 1994), where we stated: "The purpose of a penalty is to achieve a safe workplace,
and penalty assessments ... are keyed to the amount an employer appears to require before
it will comply" (citing D & S Grading Co. v. Secretary of Labor, 899 F.2d 1145 (11th Cir.
1990) and George Hyman Constr. Co. v. OSHRC, 582 F.2d 834, 841 ( 4th Cir. 1978)).
This focus on the deterrent effect of civil penalties is essentially consistent with the
law under the Federal Coal Mine Health and Safety Act of 1969, the precursor to the
current Federal Mine Safety and Health Act of 1977. Addressing the penalty assessment
provision which requires the Secretary of the Interior to assess civil penalties based on
penalty assessment criteria similar to those under our Act, the Court held:
Section 109 provides a strong incentive for compliance with the mandatory
health and safety standards. That the violations of the Act have been abated
or miners withdrawn from the dangerous area before § 109 comes into effect
is not dispositive; if a mine operator does not also face a monetary penalty for
violations, he has little incentive to eliminate dangers until directed to do so
by a mine inspector. The inspections may be as infrequent as four a year. A
major objective of Congress was prevention of accidents and disasters; the
deterrence provided by monetary sanctions is essential to that objective.
National Indep. Coal Operators' Assn. v. Kleppe, 423 U.S. 388, 401 (1976).
In general principle, therefore, an ostensibly civil penalty can nevertheless assume a
punitive character to the extent it exceeds the amount warranted in order to effectuate the
purposes of the Act, and in particular the objective of deterring or preventing future viola-
tions by the cited employer. Thus, a punitive potential, that is, a potential for penalties in
excess of what is justified by the purposes of the Act, is inherent in the "egregious" or
instance-by-instance penalties at issue here.
The background of the "instance-by-instance" penalty mechanism is set forth in detail
in Caterpillar. Briefly, it is a practice the Secretary instituted under which individual penalties
would be proposed for each "instance" of a violation in situations where the Secretary felt
that the employer was acting in a flagrant manner or the violations were particularly severe.
The policy is set forth in the Secretary's Field Operations Manual ("FOM"). Although the
FOM has been amended several times since the policy was first implemented, the following
language is illustrative:
12
In egregious cases; i.e., willful, repeated and high gravity serious citations and
failures to abate, an additional factor of up to the number of violation
instances (number of days since the abatement date for failure to abate) may
be applied to the gravity-based penalty . . . .
OSHA Instruction CPL 2.45B, Field Operations Manual, Chapter VI, section B.2.i.(4) (June
15, 1989), reprinted in 3 BNA OSHR Ref. File 77:2713, 77:2716. Normally, the Secretary
issues one single citation item for each standard he alleges to have been violated. When the
Secretary acts under the "egregious" policy, however, he sets forth each alleged instance of
violation of a particular standard as a separate and distinct citation item. E.g., JA. Jones
Constr. Co., 15 BNA OSHC 2201, 1991-93 CCH OSHD ,r 29,964 (No. 87-2059, 1993). In
Caterpillar the Commission concluded that the Act neither mandated nor prohibited separate
penalties with respect to each instance of a violation of a particular standard. The
Commission held that such penalties would be permissible where the "unit of prosecution"
under the standard was an individual act rather than an overall course of conduct, and it
noted that "[n]ot all violations ... lend themselves to multiple citations." In that case, the
Commission determined that multiple instances of the regulation requiring the employer to
record occupational injuries and illnesses could be cited because the violation was concerned
with the application of the Secretary's recordkeeping criteria to each individual employee.
15 BNA OSHC at 2172-73, 1991-93 CCH OSHD at p. 41,006. In IA. Jones, the Commission
reached a similar conclusion where the employer failed to provide fall protection at discrete,
individual locations where employees were exposed to a fall hazard. 15 BNA OSHC at
2212-13, 1991-93 CCH OSHD at pp. 41,031-32.
When the Secretary issues a citation that is not based on the instance-by-instance
policy, that is, where all the allegations of violation of one particular section or subsection
of a standard are combined within a single item, the resulting penalty, as a general
proposition, is not likely to have a punitive character. As the foregoing discussion indicates,
the Commission has the authority to ensure that a penalty is not unduly burdensome or
excessive by evaluating the penalty assessment criteria set forth in the Act and determining
a reasonable and appropriate penalty based on that evaluation. See Colonial Craft ( emphasis
13

on the "size" criterion in order to avoid a "destructive" penalty). A different situation exists,
however, in the case of an "egregious" or "instance-by-instance" penalty proposal.
Depending upon the nature of the violations and the extent to which the Secretary
has separated out individual instances of noncompliance, an instance-by-instance citation has
the potential to reduce or make extremely difficult to apply the flexibility the Commission
would otherwise have to assess a fair and equitable penalty consistent with the objective of
ensuring compliance with the Act by the cited employer. Wnen the Secretary issues citations
under that policy, he not only increases the absolute number of citation items by multiplying
each violation according to the number of individual instances, but he also proposes that a
separate penalty be assessed for each individual instance. When the Commission applies the
criteria set forth in section 17G) of the Act, it assesses penalties that are appropriate for
each instance of violation. For example, if the occurrences cited separately in the citation
are instances of a violation that is of substantial gravity, the Commission will have to assess
a penalty commensurate with the gravity factor, Hem Iron Works, 16 BNA OSHC at 1624,
1994 CCH OSHD at p. 41,884, even though such an assessment may result in an aggregate
penalty which exceeds what is justified for the deterrence of the cited employer. Accordingly,
there is a punitive potential, or possibility of a punitive effect, inherent in the Secretary's
instance-by-instance penalty policy. Moreover, while deference ordinarily is due to Congress'
intention to establish civil penalties, the "egregious" or instance-by-instance violation formula
is not provided for in the Act but rather is an administrative policy adopted by the Secretary.
The fact that Congress generally enacted a civil penalty structure carries less weight than it
would had Congress also indicated a specific legislative intent with respect to instance-by-in-
stance penalties. See Halper, 490 U.S. at 447 ("in determining whether a particular civil
sanction constitutes criminal punishment, it is the purposes actually served by the sanction
in question, not the underlying nature of the proceeding giving rise to the sanction, that must
be evaluated") ( emphasis added).
The Secretary's own directives acknowledge that the purpose of the
instance-by-instance penalty is to provide a deterrent effect on employers in general. The
section of the FOM addressing penalties contains a section entitled "General Policy" which
states as follows:
14
OSHA has always taken the position that the penalty structure implemented
under section 17 of the Act was not designed as a punishment for violations
nor as a source of income for the agency. Rather, the penalty is designed
primarily to provide an incentive toward correcting violations voluntarily, not
only to the offending employer but, more especially, to other employers who may
be guilty of the same infractions of the standards or regulations. Large proposed
penalties, therefore-e.g., where penalties are proposed on a
violation-by-violation basis in egregious cases-serve this public purpose; and
criteria guiding approval of such penalties by the Assistant Secretary are based
on meeting this public purpose. (See B.2.i.( 4). )
FOM, Chapter VI, section A, 3 BNA OSHR Ref. File at 77:2713 ( emphasis added). Similar
language appears in the current version of the FOM. OSHA Instruction CPL 2.45B CH-4,
Field Operations Manual, Chapter VI, section A (Dec. 13, 1993), reprinted in 3 BNA OSHR
Ref. File 77:2701. Nevertheless this policy statement asserts that such penalties are not
punitive. However, the Secretary has also issued another directive specifically addressing
instance-by-instance penalties which uses somewhat different wording:
1. In the context of the Act, penalties are intended to provide an
incentive to employers to prevent safety and health violations in their
workplaces and to correct such violations which do exist voluntarily.
2. The Act intends that this incentive be directed not only to an
inspected employer but also to any employer who has hazards and violations
of standards or regulations.
a. The large proposed penalties that accompany violation-by-violation
citations are not, therefore, primarily punitive nor exclusively directed at
individual sites or workplaces; they serve a public policy purpose; namely, to
increase the impact of OSHA's limited enforcement resources.
OSHA Instruction CPL 2.80, Subject: Handling of Cases To Be Proposed for
Vzolation-By-Vzolation Penalties, section G (Oct. 1, 1990) (emphasis added). Furthermore,
Leo Carey, a Director of Field Programs for OSHA, testified in a Commission proceeding
as follows:
That policy [instance-by-instance penalties] was instituted because of
concern about whether or not existing OSHA policy for proposing
penalties offered a deterrent from what the Act envisioned.
There was a congressional concern in a report by the Office of
Technology Assessment concerning the adequacy of OSHA's penalties to serve
the purpose of the intent of the Act, and a deterrent intent.
15
Sanders Lead Co., 91 OSAHRC 29/C9, p. 35 (No. 87-260, 1989) (AU) (emphasis added),
remanded on other grounds, 15 BNA OSHC 1640, 1991-93 CCH OSHD ,r 29,690 (No. 87-260,
1992)). Consequently, the Secretary must act cautiously when seeking instance-by-instance
penalties, since whenever one employer is highly penalized to deter or induce other
employers in their actions, such penalties border on being punitive.
While the foregoing discussion focuses on the issue of deterrence, the same reasoning
applies equally to the factor of retribution. In Halper, the Court reaffirmed the long-standing
principle that "civil proceedings may advance punitive as well as remedial goals," but it also
held that "a civil sanction that cannot fairly be said to serve a remedial purpose, but rather
can on'/y be explained as also serving either retributive or deterrent purposes, is punish-
ment." 490 U.S. at 448. See Trop, 356 U.S. at 96 (a sanction which otherwise would appear
punitive in nature will be considered non-penal if its purpose is not to punish but to
accomplish some other legitimate governmental purpose). The Secretary therefore is not
precluded from taking the deterrent effect on employers generally into account in proposing
a penalty, but the resultant penalty must nevertheless be of an amount appropriate to
effectuate the purpose of deterring the cited employer. Similarly, the penalty assessed against
the cited employer cannot be so large that it loses any connection with the legitimate
remedial purposes of the Act and becomes only a means for exacting retribution from the
employer. As the court noted inAtlas Roofing, 518 F.2d at 1002 n.41, criminal sanctions, and
the retributive element of such sanctions, are reserved for the most severe infractions. The
Commission implicitly recognized this point in Cate,pillar, cautioning that "although the
Secretary may cite separate omissions to record injuries as separate violations, he may not
exact a total penalty that is inappropriate in light of the four factors listed in section 170)
of the Act." 15 BNA OSHC at 2173, 1991-93 CCH OSHD at p. 41,007. The Commission in
Cate,pillar also concluded that the Secretary's reasons for proposing higher penalties,
including one which extended beyond the individual employer's circumstances-a policy to
focus resources on the most hazardous industries-were not factors that are usually taken
16
into account in penalty assessment. 15 BNA OSHC at 2179, 1991-93 CCH OSHD at pp.
41,012-13. See Hem Iron Worlcr, 16 BNA OSHC at 1622, 1994 CCH OSHD at p. 41,882
(Commission assesses an appropriate penalty based solely on the facts of each case).
In Caterpillar, the instance-by-instance violation policy did not preclude the
Commission from assessing a penalty appropriate on the facts of that case because the
Commission concluded that the violations, although cited as willful, were neither willful nor
serious in nature, and it found them to be of low gravity. Thus, the Commission assessed a
total penalty of approximately $25,000 whereas the Secretary had sought a penalty of $4000
for each affirmed citation item, a total of $668,000. A similar situation occurred in JA. Jones,
where the Secretary originally sought penalties totalling $258,000 for seventy-seven instances
of violation of the Secretary's fall protection standard, section 1926.500. The Commission
affirmed the judge's decision finding that Jones had committed forty-five instances of
violation of that standard and that those violations were not willful in nature. Following a
remand from the Commission, the judge assessed a total penalty of $14,600. No. 87-2059
(Sept. 23, 1993).
In the case now before us, however, the Commission's flexibility to adjust the
aggregate penalty amount is severely constrained. As indicated, supra note 4, Healy has in
effect conceded that the violations are willful. In discussing the penalty assessment criteria,
Judge Burroughs noted that Healy was a large employer with a history of prior violations
of similar standards,6 and he concluded that Healy had not demonstrated good faith prior
to the accident which resulted in the inspection in question. Although as discussed infra we
remand for more particularized findings on the gravity of the various citation items, we
cannot conclude that the violations are of low or inconsequential gravity in view of the fact

6The judge did not consider prior history to be a significant factor in the penalty assessment
because he concluded that prior violations would not be unexpected in the high-hazard
industry in which Healy was engaged. By the same token, however, Healy is not entitled to
have the penalties mitigated based on prior history.
17
that three deaths occurred. Nor do we see any basis to reduce substantially the overall
penalty from the amount the Secretary sought, as we did in Caterpillar and J.A. Jones. 1
Moreover, the circumstances of this case demonstrate the potential of the
instance-by-instance policy to inflate the total penalty through the compounding of multiple
violations. Forty-three citation items dealt with Healy's failure to use electrical equipment
approved for the conditions inside the tunnel. Generally speaking, each of these items
alleges noncompliance with the electrical standard, 29 C.F.R. § 1926.407(b), with respect to
a specific piece of electrical equipment or an electrical device at a specific location in- the
tunnel. For example, thirteen light fixtures are alleged as deficient, each one set forth in a
separate citation item. Each of these items is identical except for the location where it is
alleged to have occurred.8 There is one item for a 440-volt electrical panel and a separate
item for a 110/208-volt panel at the same location. In at least one instance, a single piece
of equipment is itself further subdivided: one item alleges that an electric locomotive was
not approved for the hazardous location whereas another item alleges that a component on
that locomotive, its flasher light, was unapproved. While our precedents recognize the
discretion of the Secretary to propose penalties for individual instances of violative conduct,9
the particularity with which the Secretary chooses to separate out such instances within an

7There is even more constraint on our ability to adjust the overall amount of the penalty in

the case of willful violations under the current penalty structure. As Healy points out,
Congress specifically acknowledged the deterrent effect of such penalties when it amended
the Act. H.R. Conf. Rep. No. 964, 101st Cong., 2d Sess. 688-89, reprinted in 1990 U.S. Code
Cong. & Admin. News. 2393-94, states that "returning OSH Act civil penalties to their
original 1970-level will not be enough to deter violations and ensure adequate enforcement
by [OSHA]" (emphasis added).

8Two of these items involve the same location within the tunnel. These two items are
addressed at the end of this decision.

~ere is no contention that the Secretary acted improperly in structuring the citation on an
instance-by-instance basis. See supra note 4. The issue before us, however, is not whether the
Secretary acted properly in defining the unit of prosecution for purposes of the number of
citation items issued but rather the amount of the penalty to be assessed, which is a matter
solely within the authority of the Commission. Hem Iron Works, Inc., 16 BNA OSHC 1619,
1621-23, 1994 CCH OSHD ,i 30,363, pp. 41,881-83 (No. 88-1962, 1994).
18
overall violative occurrence solely for the purpose of increasing the size of the penalty, and
the extent to which he has done so here, underscores again the punitive potential of
penalties proposed according to the instance-by-instance policy.
In a case such as this, where penalties in a civil proceeding are preceded by criminal
fines, the punitive elements of retribution and general societal deterrence have been satisfied
in a constitutionally permissible manner through the imposition of a fine or other
punishment in the criminal action. However, the fact that penalties such as the instance-by-
instance penalties at issue here have the potential for becoming punitive rather than civil or
remedial does not establish that they necessarily violate the double jeopardy clause. In
Halper the Supreme Court held that a penalty assessed in a civil action following a criminal
conviction and punishment would not be considered punitive in nature if it permitted the
government to recover its costs. As explained more fully below, Halper provides that an
action under a civil remedial statute becomes punitive when the amount of money sought
is disproportionate to the amount invested by the government in investigating and
prosecuting the violator.
IV. THE HALPER DECISION
The defendant in the Halper case had been fined and imprisoned under the False
Claims Act, 18 U.S.C. § 287, for inflating 65 claims for reimbursement under Medicare by
$9.00 per claim. Although the total amount of the false claims was $585, the government
thereafter sought a civil penalty of over $130,000 under the civil provisions of the False
Claims Act, 31 U.S.C. §§ 3729-3731, which at that time prescribed a civil penalty of $2000
for each false claim plus double the amount of the damages sustained by the govemment.10
In determining whether the ostensibly civil and remedial penalty was in fact punitive for
purposes of the double jeopardy clause, the Supreme Court on review concluded as a
general proposition that "whether a given civil sanction constitutes punishment in the
relevant sense requires a particularized assessment of the penalty imposed and the purposes

1°The False Claims Act has since been amended to increase the penalty to not less than
$5000 and not more than $10,000 plus three times the amount of actual damages. The
significance of this amendment is discussed infra.
19
that the penalty may fairly be said to serve." 490 U.S. at 448. It expressed concern about
what it characterized as "the rare case ... where a fixed-penalty provision subjects a prolific
but small-gauge offender to a sanction overwhelmingly disproportionate to the damages he
has caused," id. at 449 (emphasis added), and it announced the following rule for such
instances:
The rule is one of reason: Where a defendant previously has sustained a
criminal penalty and the civil penalty sought in the subsequent proceeding
bears no rational relation to the goal of compensating the Government for its
loss, but rather appears to qualify as "punishment" in the plain meaning of the
word, then the defendant is entitled to an accounting of the Government's
damages and costs to determine if the penalty sought in fact constitutes a
second punishment.
Id. The Court held that the district court had acted properly in concluding that the disparity
between its estimate of the government's costs and the penalty the government sought was
so disproportionate as to constitute a second punishment in violation of the double jeopardy
clause. The Court remanded to allow the government to put on specific evidence regarding
the actual amount of damages it had sustained.
In relying on Halper, Healy notes that recovery of costs to the government is not the
purpose of the OSH Act and that the Act provides for a graduated penalty rather than the
fixed-penalty provision at issue in Halper. It contends, therefore, that because it had already
been penalized in the criminal case for the same conduct at issue here, assessment of any
penalty in this proceeding would be punitive. In other words, Healy takes the position that
the principle underlying Halper-a civil proceeding may be punitive if it follows a criminal
prosecution for the same conduct-should be applied here but that the cost-proportionality
test applied in Halper is not relevant under the OSH Act. The Secretary, on the other hand,
argues that Halper should be strictly limited to its facts and that the decision deals only with
exceptional situations in which a penalty is facially so extreme or exorbitant that it appears
unjust unless there is a showing that a penalty of that magnitude is warranted by the
government's costs.
Following a conference call with the parties, Judge Burroughs scheduled a hearing
and directed that the parties present evidence regarding the government's costs. He also
20
stated that he would resolve the "Halper issue" once all relevant evidence had been received.
His order does not reflect his reasons for concluding that Halper is pertinent to this pro-
ceeding.
We recognize that the False Claims Act at issue in Halper is fundamentally different
from the OSH Act in two respects-its specific purpose is the recovery of out-of-pocket costs
the government sustained due to the claimant's conduct and it contained a fixed-penalty
provision. Nevertheless, the Halper test of whether the government's costs bear a rational
relationship to the penalty sought is a legitimate criterion for determining when an ostensibly
civil penalty assumes a punitive character under the OSH Act. Taking all the circumstances
into account, we do not find the differences between the OSH Act and the False Claims Act
to be dispositive, and they are less significant under the amended version of the False Claims
Act currently in effect. Additionally, we note that the federal courts have applied Halper in
a variety of contexts, including a proceeding under the Federal Mine Safety and Health Act.
Although the False Claims Act seeks to reimburse the government for losses directly
attnbutable to the conduct of the individual submitting the false claims, the courts have
recognized that violative conduct frequently subjects the government and indeed society as
a whole to indirect costs or losses. For example, forfeiture of property belonging to drug
offenders has been upheld under Halper based upon the costs of investigating and enforcing
drug laws generally and the overall societal costs of drug-related crime and drug abuse
programs. Tilley, 18 F.3d at 298-99; United States v. Certain Real Property & Premises, 954
F.2d 29 (2d Cir.), cert. denied, 113 S.Ct 55 (1992); United States v. A Parcel of Land, 884 F.2d
41, 43-44 (1st Cir. 1989). Similarly, forfeiture of a boat after its owner was convicted of
violations of fish and game laws was held to be nonpunitive taking into account the damage
to wildlife caused by the defendant's conduct. United States v. United States Fishing Vessel
Maylin, 125 F. Supp. 1222 (S.D. Fla. 1989). Moreover, Halper itself observed that the
government's expenses include more than just the immediate cost of payment on a fraudu-
lent claim. In discussing United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943), which
involved a civil penalty for collusive bidding on government contracts following a criminal
conviction for the same conduct, Halper concluded that the "injuries [to the government],
21
of course, included not merely the amount of the fraud itself, but also ancillary costs, such
as the costs of detection and investigation, that routinely attend the Government's efforts to
root out deceptive practices directed at the public purse." 490 U.S. at 445 (emphasis added).
Generally speaking, the courts have recognized that the key principle expressed in
Halper-costs resulting from violative conduct should be taken into account in determining
when a monetary sanction becomes so excessive as to approach punitiveness-is relevant
regardless of whether the purpose of the statute in question is to reimburse the government
for monies which it paid to the violator. Cases that apply Halper broadly involve situations
as diverse as importation of illegal merchandise, United States v. Walker, 940 F.2d 442 (9th
Cir. 1991) (district court properly took judicial notice of the costs of maintaining check
points and administering the customs system), trading practices in violation of the
Commodity Exchange Act, United States v. Furlett, 974 F.2d 839 (7th Cir. 1992) (costs
attnbutable to the brokers' conduct include losses suffered by their customers), civil action
under the Racketeer Influenced and Corrupt Organizations Act, United States v. Barnette,
10 F.3d 1553, 1558 (11th Cir. 1994) (government's total loss includes investigation and
prosecution costs) and violations of the Federal Mine Safety and Health Act, United States
v. WRW, 731 F. Supp. 237,239 (E.D. Ky. 1989), aff'd, 986 F.2d 138 (6th Cir. 1993), in which
the court stated as follows:
While it is difficult, if not impossible[,] to ascertain the United States' actual
loss due to the defendant's mine safety and health violations, its losses include
the ancillary costs of detection, investigation, and prosecution, that routinely
occur as a result of the United States' enforcement of the Act.
See also Helvering, 303 U.S. at 401, in which the Court held that an additional deficiency
assessment for filing a fraudulent tax return is remedial in nature because it reimburses the
government for the expense of investigation as well as the loss resulting from the fraud itself.
The Court there cited a much earlier decision, Stockwell v. United States, 80 U.S. (13 Wall.)
531 (1871), in which it upheld a penalty of double the value of goods illegally imported and
concealed on the ground that those acts obstructed government seizure and therefore
"impair[ed] the value of the government right."
22
Turning to the matter of the fixed penalty provision at issue in Halper, we note that
courts have distinguished Halper in situations involving statutes which, like the OSH Act,
provide for a graduated penalty with the specific amount left to the discretion of the
assessing authority. E.g., WRW, 986 F.2d at 140 (Mine Safety and Health Act); United States
v. Valley Steel Prods. Co., 729 F. Supp. 1356 (Ct. Int'l Trade 1990) (Tariff Act of 1930). We
also note, however, that the false claims at issue in Halper arose before the False Claims Act
was amended. That amendment prescribed a graduated civil penalty of between $5000 and
$10,000 rather than a fixed penalty of $2000. False Claims Amendments Act of 1986, Pub.
L. No. 99-562, § 2, 100 Stat. 3153 (1986). This amendment reflected congressional intent to
provide for discretion in the determination of an appropriate penalty. United States v.
Fliegler, 756 F. Supp. 688, 694 (E.D.N.Y. 1990); United States v. Hill, 676 F. Supp. 1158
(N.D. Fla. 1987). In this respect, the penalty structure under the False Claims Act as
amended is analogous to that set forth in the OSH Act, which likewise places discretion in
the assessing authority, the Commission. Hem Iron Works-, 16 BNA OSHC at 1622,
1994 CCH OSHD at p. 41,882. In both Fliegler and United States v. Pani, 717 F. Supp. 1013
(S.D.N.Y. 1989), the courts, citing Halper, weighed the government's costs of investigation
and prosecution against the penalties prescribed by those courts under the amended False
Claims Act in resolving a double jeopardy argument. 11 Indeed, even though the court in
WRW distinguished Halper as involving a fixed penalty provision, it nevertheless affirmed the
district court's holding that "[u]nder Halper, the civil assessment must be rationally related
to the goal of making the United States whole" and that "[t]he penalty assessment in this

11Although the government in Fliegler sought a penalty of up to the statutory maximum of

$10,000 for each false claim, the court imposed the minimum penalty of $5000 for each of
23 false claims, a total penalty of $115,000, and concluded that the Halper test was satisfied
because the government's costs of approximately $110,000 bore a "rational relation" to that
penalty. 756 F. Supp. at 697. In Pani the court granted the government's motion for
summary judgment in the amount of $10,000 for each of three false claims and similarly
applied the Halper criteria to that amount for which it had granted judgment. 717 F. Supp.
at 1019. While Pani, unlike Fliegler, does not explicitly acknowledge that the amendment to
the False Claims Act creates a discretionary penalty adjudication procedure analogous to
that in the OSH Act, it is clear that both apply the Halper test to the penalty determined by
the tribunal in the adjudicative process.
24
Fiore, Deputy Regional Solicitor for the Department of Labor; averred that his office had
spent 4320 hours; and (4) Sally Mitchell, Office Manager for the Regional Solicitor,
documented travel costs of approximately $20,000. Based on a figure of $100 per hour for
attorney time, see, e.g., Napier v. Thirty or More Unidenti.fied Agents, 855 F.2d 1080 (3d Cir.
1988); United States v. Kirksey, 639 F. Supp. 634 (S.D.N.Y. 1986), the Secretary argued that
his total costs of investigation and prosecution were approximately $795,000. Judge
Burroughs accepted that figure and concluded that both the penalty he found appropriate
and the amount the Secretary originally proposed were justified under Halper because they
were "rationally related" to the government's costs.
We agree with the judge. Although Healy argues that the Secretary's affidavits are
not entitled to weight because they are speculative and hypothetical, we find that the
affidavits set forth a sufficient foundation to support most if not all of the costs claimed by
the Secretary. All of the affidavits reflect that their figures are based on either personal
knowledge, discussion with others having personal knowledge, documents (travel vouchers
and work logs), or a combination of these sources. The weakest affidavit is Klumb's, in which
he admits that his office does not maintain records of the number of hours devoted to
specific cases and that he has "little, if any" experience in estimating such time. He stated,
however, that he does keep monthly "resource summaries" which estimate the time devoted
to particular categories of cases. He arrived at a figure for the number of hours spent on the
Healy matter based on those summaries as well as his own personal recollection and
consultation with his associate. Healy did not depose the affiants or otherwise seek to
introduce any rebuttal to the affidavits. See Fliegler, 756 F. Supp. at 697 (affidavits are
competent evidence of the government's costs requiring opposing affidavits from the adverse
party). Moreover, even assuming the affidavits do not reflect with certainty the actual costs
incurred by the government, the Court in Halper expressly declined to require such
exactitude: "ff)he Government is entitled to rough remedial justice, that is, it may demand
compensation according to somewhat imprecise formulas." 490 U.S. at 446. The Court
explained,
the precise amount of the Government's damages and costs may prove to be
difficult, if not impossible, to ascertain. . . . Similarly, it would be difficult if not
25
impossible in many cases for a court to determine the precise dollar figure at
which a civil sanction has accomplished its remedial purpose of making the
government whole, but beyond which the sanction takes on the quality of
punishment. In other words, as we have observed above, the process of
affixing a sanction that compensates the Government for all its costs inevitably
involves an element of rough justice.
. . . the defendant is entitled to an accounting of the government's
damages and costs . . . . We must leave to the trial court the discretion to
determine on the basis of such an accounting the size of the civil sanction the
government may receive without crossing the line between remedy and punish-
ment....While the trial court's judgment in these matters may often may
amount to no more than an approximation, even an approximation towards
ensuring both that the Government is fully compensated ... and that ... the
defendant is protected from a sanction so disproportionate to the damages
caused that it constitutes a second punishment.
Id. at 449-50 ( emphasis added). In the absence of any contrary evidence, we find that the
affidavits submitted here are sufficient to meet the standard of proof announced in Halper.
As the court held in Furlett, 974 F.2d at 844, affidavits need not specify the exact costs to
the government; general approximations of the amount of time spent are acceptable under
Halper. Nevertheless, while the government may legitimately estimate its cost figures, as
Halper indicates, there must be some reasonable and tangible basis for those estimates. The
case law does not obligate us to accept nor would we accept cost estimates which are merely
conjecture or incapable of verification.
Since the costs established by the Secretary are well in excess of the statutory
maximum penalty of $490,000 for the forty-nine citation items at issue ($10,000 for each
item), we conclude that the "rough justice" standard of Halper has been met even assuming
Healy were to be assessed the maximum penalty permitted under the Act. It necessarily
follows that any penalty we might assess up to the statutory maximum similarly would satisfy
the Halper criteria.13 We now turn to the assessment of an appropriate penalty.

13The phrase "civil penalty sought" used in Halper, to which the Chairman refers in his

separate opinion, merely characterizes the nature of the statute before the Court and does
not constitute a holding that the test the Court announced is available only in the case of a
fixed penalty statute. As we have noted in the text of our opinion, the post•Halper case law
consistently applies the Halper test to variable•penalty as well as fixed-penalty statutes.
26
VI. CONCLUSION
For the reasons stated above, we hold that assessment of civil penalties in this
proceeding does not subject Healy to double jeopardy contrary to the Fifth Amendment.
However, we remand for further factual findings on the appropriate amount of penalties to
be assessed against Healy.
Although Judge Burroughs took into account the factors of size, good faith, and prior
history in assessing a penalty of $6500, he did not properly evaluate the element of gravity.
While his decision does not explicitly so state, he clearly treated each instance of violation
as being of equal gravity, and he did not make individual findings as to gravity for each
particular instance of violation. Subsequent to his decision, the Commission held inJA. Jones
that where, as here, the Secretary acts within his discretion in proposing penalties on an
instance-by-instance basis, the judge must base his penalty assessment on specific factual
findings relating to the penalty assessment criteria for each individual instance. 15 BNA
OSHC at 2214, 1991-93 CCH OSHD at p. 41,033. Unlike JA. Jones, however, in this case
there has been no evidentiary record from which findings can be made regarding the gravity
of each of the forty-nine instances in question. Accordingly, we remand to the Chief Judge
for assignment to another judge14 to develop an appropriate factual record and to afford
the parties an opportunity to file briefs or otherwise present arguments, if they so desire, on
the issue of the appropriate penalties considering the gravity of those items and the other
factors relating to penalty assessment. The judge shall then make proper individualized
findings and assessments in accordance with JA. Jones and consistent with our analysis of
the government's costs under Halper.
We also direct the judge on remand to address two additional matters. Items 21 and
22 of the citation both allege a non-approved light fixture at segment 479. The judge shall
determine whether these two items are in fact duplicative as they appear to be and if so, he
shall make an appropriate disposition to ensure that a double penalty is not assessed for a
single instance of violation. See H.H. Hall Constr. Co., 10 BNA OSHC 1042, 1046, 1981 CCH
,r 25,712, p. 32,056 (No. 76-4765, 1981); CTM, Inc., 4 BNA OSHC 1468, 1470, 1976-77 CCH

14Judge Burroughs is no longer with the Commission.
27
OSHD ,r 20,912, p. 25,107 (No. 5106, 1976), rev'd on other grounds, 512 F.2d 262 (10th Cir.
1978) (authority of Commission assess a single penalty for separate violations that constitute
one single condition). Also, the parties' settlement agreement does not conform to the
Commission's requirements. The agreement fails to certify service on the two unions who
represent Healy's employees. Such service is required regardless whether the unions have
appeared as parties to the proceeding. National Steel & Shipbuilding Co., 14 BNA OSHC
1866, 1867, 1987-90 CCH OSHD ,r 29,127, p. 38,919 (No. 88-227, 1990) (consolidated);
General Electric Co., 14 BNA OSHC 1763, 1764 n.2, 1987-90 CCH OSHD ,I 29,072, p. 38,849
n.2 (No. 88-2265, 1990).
Finally, we direct that further proceedings be expedited under Commission Rule 103,
29 C.F.R. § 2200.103.

                                                             Edwin G. Foulke, Jr.
                                                             Commissioner




                                                          ti~Commissioner

Dated: Apri J 20, 1995
WEISBERG, Chairman, concurring:
For the reasons set forth in the majority opinion, I agree that Healy did not waive its
claim under the Double Jeopardy Clause of the Fifth Amendment and that the Commission
is empowered to consider that claim. Accordingly, I join in Parts I and II of the majority
opinion. Also, I do not dispute my colleagues' conclusion in Part ill that penalties proposed
under the Secretary's "egregious" or "instance-by-instance'' policy may have a punitive as
well as remedial component. Furthermore, assuming arguendo that the test set forth in
United States v. Halper, 490 U.S. 435 (1989) is appropriate here, I join my colleagues in Part
V of the opinion in concluding that Judge Burroughs properly determined that the Secretary's
affidavits were sufficient to make a prima facie showing under Halper of proportionality or
rational relationship between the government's costs and the statutory maximum penalty of
$490,000 for these 49 separate violations. I also concur with the remand in Part VI of the
lead opinion for more particularized findings on the gravity of the various citation items for
purposes of penalty assessment since that is required by the Commission's decision in J.A.
Jones Constr. Co., 15 BNA OSHC 2201, 2214, 1991-93 CCH OSHD ,r 29,964, p. 41,033
(No. 87-2059, 1993). However, unlike my colleagues, I am not convinced that Halper is
controlling and should be applied in this case.
In the Halper case, a medical doctor was convicted under the False Claims Act, 18
U.S.C. § 287, for inflating 65 claims for reimbursement under Medicare by $9 per claim.
The doctor was seeking $12 in reimbursement for medical services worth only $3. After
Halper was sentenced to two years in prison and fined $2000, and notwithstanding that
Halper had defrauded the government of the total amount of only $585, the government
thereafter sought a civil penalty of over $130,000 under the civil provision of the False
Claims Act, 31 U.S.C. §§ 3729-3731, which at the time prescribed a civil penalty of $2000
for each false claim. The Supreme Court in Halper announced the following rule:
The rule is one of reason: Where a defendant previously has sustained a
criminal penalty and the civil penalty sought in the subsequent proceeding
bears no rational relation to the goal of compensating the Government for its
2

   loss, but rather appears to qualify as "punishment'' in the plain meaning of the
   word, then the defendant is entitled to an accounting of the Government's
   damages and costs to determine if the penalty sought in fact constitutes a
   second punishment.
   In my view, Halper should be limited to its facts. The Halper court appeared to

expressly limit its holding by stating ''What we announce now is a rule for the rare case, the
case such as the one before us, where afaed-penalty provision subjects a prolific but small-
gauge offender to a sanction overwhelmingly disproportionate to the damages he has
caused." Id at 449 (emphasis added). 1 Halper involved an exceptional situation in which
the penalty on its face was so extreme and exorbitant and so divorced from a remedial goal
as to constitute punishment.
There are significant and :fundamental differences between the OSH Act and the
fraudulent claims statute at issue in Halper. The purpose of the OSH Act is "to assure so far
as possible every working man and woman in the Nation safe and healthful working
conditions," not to protect the government against financial loss. Under the OSH Act the
damage is not to the government but to the workers who are injured and killed on the job and
their families. The instant case involves nonobservance of safety standards, not violations
of a statute dealing with fraud against the government.
Since the offenses at issue in Halper were activities which resulted in direct financial
loss to the government, it was reasonable and logical in that case to condition the validity of
very high civil penalties on the recovery of the government's out-of-pocket costs. Indeed,
both the original version of the False Claims Act at issue in Halper and the amended version
to which the majority refers explicitly provide that the government is entitled to recover its

See United States v. Barnette, 10 F.3d 1553 (11th Cir. 1994) where the court found that "the
1

Halper Court carefully limited its holding, which it called 'a rule for the rare case."' The
circuit court noted: "Here, unlike in Halper, the civil penalty is not exponentially
exaggerated by a fixed penalty disproportionate to the defendant's actual fraud." Id. at 1559.
3

litigation costs. 2
Ha/per was not intended to apply in a situation where the amount of the penalty is
discretionary and the statute sets forth criteria for the assessment of a penalty. Unlike the
fixed-penalty provision of the False Claims Act under consideration in Halper, the OSH Act
provides for the assessment of civil penalties according to a statutory range based on
prescribed criteria. Under section 17(j) of the Act, the Commission must give "due
consideration" to four factors when assessing penalties: the size of the employer's business,
gravity of the violation, good faith of the employer, and prior history of violations. Gravity
is normally the most important element in the penalty assessment. Nacirema Operating Co.,
1 BNA OSHC 1001 (No. 4, 1972). The litigation or other costs to the government is not one
of the factors to be considered in assessing an appropriate penalty.
The majority concedes that the courts have found Halper distinguishable in cases
involving a graduated civil penalty scheme like that of the OSH Act. In United States v.
Valley Steel Prods. Co., 729 F. Supp. 1356, 1359 (Ct. Int'l Trade 1990), which involved a
statute providing for a civil penalty in an amount up to the value of illegally imported
merchandise, the court expressly held as follows:
Unlike the situation in Halper, the remedial formula authorized under 19
U.S.C § 1592 does not fix a civil penalty; rather, it establishes the maximum
penalty which is the domestic or dutiable value of the merchandise, and gives
the Court discretionary authority to determine the size of such penalty.
Therefore, the rule in Halper cannot serve as the basis for disn:1.issing this
action; the amount of civil penalty remains to be assigned by the Court
consistent with its sound discretion.

Although, as the majority observes, this case and WRW nevertheless used the Halper cost-

2The original version of the statute states, in pertinent part, that "[a] person not a member of
an armed force of the United States is liable to the United States Government for a civil
penalty of$2000 ... and costs ofthe civil action ...." 31 U.S.C. § 3729 (emphasis added).
The amended statute provides that "[a] person violating this subsection shall also be liable
to the United States Government for the costs of a civil action brought to recover any such
penalty ...." 31 U.S.C. § 3729(a).
4

proportionality test in determining that the penalties in question were not punitive, neither
decision explains why the court did so in light of the admitted significant differences
between the False Claims Act and the statutes at issue in those cases. In the absence of any
direct analysis of this point, and considering the fact that the Halper approach simply
corroborated the courts' conclusion that the civil penalties in issue were not punitive in
nature, I conclude that 1hese decisions are not compelling authority to support a proposition
that Halper is the appropriate measme of the punitive or remedial natme of penalties
assessed by the Commission.
Similarly, I do not find it persuasive that decisions of two district courts, United States
v. Fliegler, 756 F. Supp. 688,694 (E.D.N.Y. 1990) and United States v. Pani, 717 F. Supp.
1013 (S.D.N.Y. 1989) weighed the government's costs of investigation and prosecution
against the penalties sought by the government under the amended False Claims Act in
resolving a double jeopardy argument. In addition to the fact that the False Claims Act as
amended is itself a cost recovery statute, the range of discretion in its civil penalty
provision-between $5000 and $10,00~is considerably more limited than the much
broader authority given the Commission under the OSH Act to assess a penalty for a civil
willful violation of any amount up to $10,000 and, under the amendment to section l 7(j) now
in effect, from $5000 to $70,000. Moreover, while the district court in Pani held that the
amendment to the False Claims Act which increased the penalty to not less than $5,000 and
not more than $10,000 plus three times the amount of actual damages applied retroactively,
neither Pani nor Fliegler specifically discussed the impact of this amendment in terms of
Halper. These courts merely assumed that the Halper test was relevant without specifically
addressing the point. Accordingly, it cannot be said that they attribute any significance to
the discretionary penalty provision in terms of Halper. 3

As the majority noted in footnote 11, in Fliegler the court imposed the minimum penalty of
3

$5000 for each of 23 false claims, a total penalty of $115,000. The comt found that "the
Government's cost of $110,564.90 bears a rational relation to the $115,000 civil penalty the
(continued... )
5

   There is an element of punitiveness and deterrence in any penalty situation. Similarly,

an element of retributiveness is necessarily present when the amount of the penalty under the
OSH Act increases with the gravity or severity of the violation. See Atlas Roofing Co. v.
OSHRC, 518 F.2d 990 (5th Cir. 1975). However, a civil penalty under the OSH Act cannot
be considered punitive, even if it has a partial retributive character, if the penalty is
reasonable and appropriate to effectuate the remedial purpose of the Act, that is, to achieve
the goal of providing a safe and healthful workplace.
In this regard, I note that in addressing the question of whether civil penalties for
violation of the Federal Mine Safety and Health Act were remedial or punitive, the Sixth
Circuit concluded that Halper "did not abandon earlier analytical framework." United States
v. WRW Corp., 986 F.2d 138, 140 (6th Cir. 1993). Thus the court applied the traditional

criteria set forth in Kennedy v. Mendoza-Martinez, 372 U.S. 144 (1963). In particular, the
Sixth Circuit reasoned that "imposing a civil penalty for health and safety violations which
varies in amount based on the severity of the violation and the [mine] operator's attempts to
come into immediate compliance may as readily be ascribed to the remedial purpose of
promoting mine safety." 986 F.2d at 141-42. Because the court relied on t..lie traditional
concept that a penalty of an amount appropriate to deter the violator and induce him to future
compliance is civil in nature, it is clear that the Halper-type of analysis in which the court
also engaged was not the principal focus of its decision.
Therefore, in my view civil penalties under the OSH Act, as a general proposition, are
not likely to have a punitive character for purposes of applying the double jeopardy clause.
I specifically reject Healy's contention that where there has been a criminal fine, any

3(. .. continued)
Court imposes in its discretion pursuant to 31 USC section 3729(a) ($5000 for each of the
23 Laser Modification Kit false claims), and therefore the civil penalty does not violate the
Double Jeopardy Clause." 756 F. Supp at 697. There was no discussion or reasons given
by the court for assessing the minimum penalty. It appears that the court may have tailored
the amount of the penalty to the government's costs to satisfy Halper.
6

subsequent civil penalty for the same conduct, whether it be a penalty of $45 or $350,000,
would constitute an impermissible second "punishment." However, I recognize that penalties
proposed under the Secretary's "egregious" or "instance-by-instance" policy have the
potential to be "punitive" for purposes of double jeopardy analysis. "Egregious" civil
penalties proposed by the Secretary in a particular case "may be so extreme and so divorced
from [a remedial goal] as to constitute punishment." Halper, 490 U.S. at 443. Similarly, the
multiplier effect of the Secret31)' seeking individual penalties for each "instance" of a
violation may in a given case make the aggregate penalty pll!litive simply based on its
magnitude. This does not mean, as Healy argues, that any time the Secret31)' seeks instance-
by-instance civil penalties following a criminal conviction and fine, it is a form of
punishment and per se violates the Double Jeopardy Clause. In a double jeopardy claim
inquiry, we have an obligation to examine whether the instance-by-instance penalties
proposed by the Secret31)' are in excess of what is justified by the remedial purpose of the
OSH Act, and are so punitive in nature as to violate the multiple-punishments component of
the Double Jeopardy Clause. A close scrutiny is necessaiy to insure, as suggested by Healy's
counsel during the oral argument, that the Secretary doesn't "throw the kitchen sink at the
respondent." (Tr. 18).
However, the Halper test is not the appropriate yardstick for determining whether a
civil penalty under the OSH Act constitutes "punishment'' for the purpose of double jeopardy
analysis. The cost-proportionality test applied in Halper is not relevant to the OSH Act.
Halper simply does not fit in the case of a worker protection health and safety statute.
Further, applying the Halper test in this case to detennine whether a disparity exists between
the Secretaty's costs in investigating and prosecuting the case and the Secret31)''s proposed
penalty would be at odds with the Commission's authority to assess penalties de novo in
contested cases which was recently reaffirmed in the Commission's decision in Hem Iron
Works. In Hem Iron Works, we held that the Act expressly grants to the Commission the
sole authority to determine the amount of the penalty to be assessed. By focusing on the
7

penalties that the Secretary seeks rather than the penalties assessed de novo by the
Commissio~ the Commission would be giving undue weight and influence to the Secretary's
proposed assessment of penalty.
My colleagues, however, have excised reference to the penalty proposed by the
Secretary and frame their holding to reflect that since the costs established by the Secretary
are well in excess of the statutory maximum penalty of$490,000 ($10,000 for each of 49
citation items), any penalty the Commission might assess would satisff the rough justice
standard of Halper. This further illustrates the inappropriateness of applying Halper as the
Supreme Court there specifically based the test on the "penalty sought'' [by the government]
and not in terms of the penalty assessed by the court or adjudicative agency:
The rule is one of reason: Where a defendant previously has sustained a
criminal penalty and the civil penalty sought in the subsequent proceeding
bears no rational relation to· the goal of compensating the Government for its
loss, but rather appears to qualify as "punishment" in the plain meaning of die
word, then the defendant is entitled to an accounting of the Government's
damages and costs to determine if the penalty sought in fact constitutes a
second punishment. (emphasis added) 490 U.S. at 449.

The majority takes the position that the phrase "civil penalty sought'' used in Halper merely
characterizes the nature of the statute before the Court. Irrespective of whether this phrase
by itself could be read to limit the Court's holding in Halper to the case of a fixed penalty
statute, the Court explicitly limited its holding by stating, "What we announce now is a rule
for the rare case, the case such as the one before us ..."
My colleagues have eschewed taking a position on whether the cost-proportionality
test in Halper should be based on the penalty sought by the Secretary or the penalty assessed
by the Commission. The former is inconsistent with the Commission's authority to assess
penalties de novo. The latter is contrary to the Supreme Court's express language in Halper.
Either way, it demonstrates why the test set forth in Halper is inappropriate to determine
whether a specific civil penalty under the OSH Act is punitive and constitutes a second
punishment in violation of the Double Jeopardy Clause of the Fifth Amendment.
8

     Rather than resort to external criteria such as the test set forth in Halper, I would look

to the section 17(j) factors to determine whether the instance-by-instance civil penalty sought
by the Secretary is so disproportionate as to constitute a second punishment in violation of
the Double Jeopardy Clause.
The Secretary proposed a civil penalty of $10,000 for each of the 49 citation items
covered by the criminal conviction. Judge Burroughs found that a penalty of $6500 per
violation was appropriate, and he assessed a total civil penalty of $318,500. I join my
colleagues in remanding this case for additional factual :findings regarding the amount of
penalties to be assessed based on J. A. Jones.
Judge Burroughs found that Healy is a large company with approximately 1,000
employees. It has a history of prior violations of similar standards and in the instant case
committed an extensive number of willful violations4 resulting in the deaths of three workers.
This is clearly not the rare case of a prolific but small gauge offender within the meaning
of Halper. Although the particular gravity of each individual violation cannot be ascertained
from the existing record, the majority correctly notes that the violations present at least a
significant level of gravity. Additionally, as the judge found, Healy exhibited a lack of good
faith before the explosion:

     Healy's conduct leading up to the explosion was far from exemplary. There
     is no excuse for not devoting more time and resources to safety. The company
     did not have a safety officer or anyone performing those duties. . . . The
     company obviously paid little attention to the safety of its employees.

There is ample authority to establish that in situations of this nature, a substantial penalty is
warranted under section 17(j) to accomplish the civil, remedial purpose of inducing the cited
employer to satisfy its statutory obligation to provide a safe workplace. For example, in a
very recent decision, Valdak Corp., No. 93-239, 1995 OSHRC No. 16, the Commission
doubled the $14,000 penalty assessed by the judge in view of the employer's blatant

4 Healey conceded that it had committed 49 separate violations.
9

disregard for the safety of its employees and the high gravirJ of the violations. See also
Wheeling-Pittsburgh Steel Corp., 16 BNA OSHC 1780, 1785, 1994 CCH OSHD ,r 30,445,
pp. 42,040-41 (No. 91-2524, 1994)(large size, lack of good faith, and high gravity as factors
in assessing a penalty of high magnitude); Hern Iron Works, Inc., 16 BNA OSHC 1619,
1625, 1994 CCH OSHD ,r 30,363, pp. 41,884-85 (No. 88-1962, 1994)(lack of good faith as
a significant factor in penalty assessment). As the Commission recognized in Quality
Stamping Prods. Co., 16 BNA OSHC 1927, 1929, 1994 CCH OSHD ,r 30,516, p. 42,189
(No. 91-414, 1994), penalties must be assessed in an amount sufficient to preclude their
being assumed by the employer as "simply another cost of doing business." The
Commission reached a similar conclusion in E.L. Davis Contrac. Co., 16 BNA OSHC 2046,
2053, 1994 CCH OSHD ,r 30,580, p. 42,343 (No. 92-35, 1994), where, acting under the .
enhanced penalty provision now in effect, it assessed a penalty of $60,000 for a single willful
violation on the ground that a penalty of this magnitude was necessary to cause the company
to "[appreciate] the vital importance of complying with OSHA regulations."
The circumstances of this case are comparable. Given the number and severity of the
violations and the undisputed fact that even though Healy was engaged in an inherently high
hazardous industry, the company paid little attention to the safety of its workers before the
explosion, penalties of the magnitude sought in this proceeding are hardly outlandish or
excessive under the criteria of the OSH Act. Rather, substantial penalties are reasonable and
appropriate for the remedial purpose of ensuring Healy's future compliance with the Act.
Accordingly, I conclude here, as I did in R. G. Friday Masonry, Inc., 17 BNA OSHC 1070,
1076 n. 14 (No. 91-1873, 1995) (consolidated), that the Commission's authority to determine
an appropriate penalty de novo by applying the facts to the section 17G) criteria ensures the
assessment of a penalty in an amount adequate to effectuate the purposes of the Act.
While the actual amount of the penalty to be assessed in this case will be determined
on remand, I am satisfied based on the section 17G) criteria that substantial penalties in the
case would not be inappropriate or unreasonable. Accordingly, I would find that civil
10

penalties in the range recommended by Judge Burroughs and to be assessed with particularity
on remand effectuate the Act's remedial objectives, are not punitive, and therefore do not
subject Healy to double jeopardy contrary to the Fifth Amendment.

                                              ~.ante.. '"~!3
                                             Stuart E. Weisberg
                                             Chairman

Dated: Apr i J 2G, 1995
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
One Lafayette Centre
1120 20th Street, N.W. - 9th Floor
Washington, DC 20036-3419

PHONE: FAX:
COM (202) 806-5100 COM (202) 808-6050
FTS (202I 806-5100 FTS (202) 806-6050

SECRETARY OF lABOR,

                  Complainant,

       v.                                                        Docket No. 89-1508

S.A. HEALY CO.,

                  Respondent.




                      NOTICE OF COMMISSION DECISION AND REMAND

The attached Decision and Remand by the Occupational Safety and Health Review Commission
was issued on April 20,1995. The case will be referred to the Office of the Chief Administrative
Law Judge for further action.

                                                  FOR THE COMMISSION

April 20, 1995
Date
/?~11-~~.
Ray H. Darling, Jr.
Executive Secretary
Docket No. 89-1508

NOTICE IS GIVEN TO THE FOLLOWING:

Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, U.S. DOL
Room S4004
200 Constitution Ave., N.W.
Washington, D.C. 20210

John H. Secaras, Esq.
Regional Solicitor
Office of the Solicitor, U.S. DOL
Room 844
230 South Dearborn St.
Chicago, IL 60604

James L. Fox, Esq.
Abramson & Fox
One East Wacker Drive - Ste. 3800
Chicago, II 60601
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
1825 K STREET N.W.
4TH FLOOR
WASHINGTON D.C. 20006-1246

                                                                      FAX:
                                                                      COM (202) 634-4008
                                                                      FTS 634-4008

SECRETARY OF LABOR
Complainant,
v. OSHRC DOCKET
NO. 89-1508
S. A HEALY COMPANY
Respondent.

                NOTICE OF DOCKETING
          OF ADMINISTRATIVE LAW JUDGE'S DECISION
 The Administrative Law Judge's Report in the above referenced case was

docketed with the Commission on July 9, 1992. Tne decision of the Judge
will become a final order of the Commission on August 10, 1992 unless a
Commission member directs review of the decision on or before that date. ANY
PARTY DESIRING REVIEW OF THE JUDGE'S DECISION BY THE
COMMISSION MUST FILE A PETITION FOR DISCRETIONARY REVIEW.
Any such peti!ion should be re_ceive~ ~y th~ Execut!ve Se~retary on or before
July 29., ~992 m order to J?_ernnt s~fflci~nt time for its review. See
Commiss1on Rule 91, 29 ~.F.R. 2"'00.91..
All further pleadings or communications regarding this case shall be
addressed to:
Executive Secretary
Occupational Safety and Health
Review Commission
1825 K St. N.W., Room 401
Washington, D.C. 20006-1246
Petitioning parties shall also mail a copy to:
Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, U.S. DOL
Room S4004
200 Constitution Avenue, N.W.
Washington, D.C. 20210
If a Direction for Review is issued by the Commission, then the Counsel for
Regional Trial Litigation will represent the Department of Labor. Any pa~
having questions aoout review rights may contact the Commission's Executive
Secretary or call (202) 634-7950.
FOR THE COMMISSION

Date: July 9, 1992
£7f.of::3r,#/.,IW
Executive Secretary
Docket No. 89-1508

NOTICE IS GIVEN TO THE FOLLOWING:

Daniel J. Mick, Esq.
Counsel for Regional Trial Litigation
Office of the Solicitor, U.S. DOL
Room S4004
200 Constitution Ave., N.W.
Washington, D.C. 20210

John H. Secaras, Esq.
Regional Solicitor
Office of the Solicitor, U.S. DOL
Room 844
230 South Dearborn St.
Chicago, IL 60604

James L. Fox, Esq.
Abramson & Fox
One East Wacker Drive
Chicago, IL 60601

James Johnson, Esq.
Michael, Best & Friedrich
100 East Wisconsin Ave.
Milwaukee, WI 53202

James D. Burroughs
Administrative Law Judge
Occupational Safety and Health
Review Commission
Room 240
1365 Peachtree Street, N.E.
Atlanta, GA 30309-3119
UNITED STATES OF AMERICA
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
1365 PEACHTREE STREET, N.E., SUITE 240
ATLANTA, GEORGIA 30309-3119

                                                                                           FAX:

PHONE:
COM (404) 347-0113
COM (404) 347-4197
FTS 257-0113
FTS 257-4086

SECRETARY OF LABOR,

                 Complainant,

                 v.                                           OSHRC Docket No. 89-1508

S. A. HEALY COMPANY,

                 Respondent.

APPEARANCES:

                 Kevin Koplin, Esquire                        James Fox, Esquire
                 Richard J. Fiore, Esquire                    Thomas P. carney, Esquire
                 Joan E. Gestrin, Esquire                        Abramson and Fox
                 Susan Bissegger, Esquire                        Chicago, Illinois
                    Office of the Solicitor                            For Respondent
                    U. S. Department of Labor
                    Chicago, Illinois
                            For Complainant

Before Administrative Law Judge James D. Burroughs

                                   DECISION AND ORDER


     S. A. Healy Company, Inc. ("Healy"), contested a willful citation issued to it on

May 1, 1989. The citation contained a total of 68 allegations cited on an
instance-by-instance basis pursuant to the Secretary's egregious policy. The Secretary
proposed a penalty of $10,000 for each item. Items 1 through 5 alleged a violation of
§ 1926.21(b)(2), for failure to instruct each employee in the recognition and avoidance of
unsafe conditions. Items 6 through 50 pertain to alleged violations of§ 1926.407(b), for the
installation of equipment in hazardous locations that was not approved as intrinsically safe
for use in a hazardous location. Item 51 alleges a violation of § 1926.800(c)( 1)(i), for failure
to maintain a record of air quantity and quality. Items 52 and 53 involve an alleged violation
of§ 1926.800(c)(2)(i), for failure to provide mechanically induced primary ventilation in all
work areas. Items 54 through 67 pertain to alleged violations of § 1926.800(c)(2)(vi), for
failure to cut off power and withdraw employees from an area endangered by flammable gas
(methane). The last allegation, item 68, pertains to a violation of§ 1926.800(e)(l)(iii), for
failure to prohibit matches and other flame-producing smoking materials.
Healy is a corporation with an office and place of business at 9600 West 47th Street,
McCook, Illinois. It is engaged in the business of construction and related activities. At all
times relevant to this proceeding, it maintained a workplace at 1596 West Spruce Street,
Milwaukee, Wisconsin, where it was engaged in constructing an underground tunnel for the
Milwaukee Metropolitan Sewerage District ("MMSD"). In 1977 the MMSD began a 2.1
billion dollar effort, known as the Water Pollution Abatement Program, to improve its
sewerage collection and treatment system. The program was directed primarily toward
abatement of polluted discharges into Lake Michigan during periods of heavy rain. During
March of 1987, MMSD entered into a contract with Healy to construct the Crosstown Seven
North Tunnel, known as the CT-7 project. This particular tunnel was designed as a sloping
collector tunnel that leads to an already completed storage tunnel.
On November 10, 1988, a methane explosion occurred within the tunnel work site of
Healy in Milwaukee. This explosion resulted in the death of three Healy employees. An
investigation of the explosion was conducted by the Occupational Safety and Health
Administration ("OSHA"). On May 1, 1989, after an investigation, OSHA issued Healy the
willful citation that is the subject of this proceeding.
Subsequent to the issuance of the wiliful citation, OSHA referred its investigative
findings to the United States Attorney's office for consideration of possible criminal
prosecution. On June 26, 1990, a Federal grand jury returned a twelve-count indictment
charging Healy with willful criminal violations of four safety and health regulations which
independently or in combination resulted in the death of three employees. On

                                            2

December 11, 1990, the grand jury returned a superseding indictment containing three,
rather than twelve, counts. The superseding indictment was obtained in response to a ruling
by the United States district court that the proper "unit of prosecution" in OSHA criminal
matters is "per death" and not "per violation" as is appropriate in civil proceedings. The
ruling limited Healy's potential criminal fine to $500,000 per death as opposed to $500,000
per regulation violated.
On February 20, 1991, after a three-week trial, a jury found Healy guilty of violating
three standards which pertain to 49 of the 68 allegations at issue in this proceeding. The
Secretary sought a total of $1,500,000 in criminal fines. United States District Court Judge
Terrence T. Evans imposed a fine of $250,000 on each of the three counts. Healy did not
appeal the jury's verdict.
Subsequent to the criminal conviction,1 the Secretary filed a motion for partial
summary judgment with the Commission on April 18, 1991. The Secretary alleged that
Healy was collaterally estopped from litigating the facts and legal issues determined by the
court in the final judgment in the criminal case. She inferred that the district court case
involved the same facts and elements of proof necessary for adjudication of 49 of the
violations alleged in this proceeding, and precluded Healy from relitigating those issues in
this proceeding. The Secretary concluded that the criminal proceeding decided the issues
of liability and willfulness which are set forth in subparagraph ( c)(2) of the complaint,
paragraphs 12 through 39, 41 through 55, and 66, 67 and 68.
On October 3, 1991, a document entitled "Response and Memorandum of Law of
S. A. Healy in Opposition to Motion for Partial Summary Judgment" was received from
Healy.2 Despite its title, the document does not argue the inapplicability of the doctrine
of collateral estoppel. The document goes beyond being a response to the Secretary's
motion. It is in itself a motion that raises an affirmative defense based upon the

1 Aside from the filing of the complaint and answer, no action was taken in the civil proceeding until the
criminal proceeding had concluded. The complaint was received by the Commission on October 17, 1990.
An answer was received on November 16, 1990.

2 New counsel for Healy entered an appearance in the civil proceeding. Because the new counsel needed extra
time to familiarize himself with the voiuminous criminal record, extensions of time to file a reply were granted.

                                                   3

constitutional privilege of double jeopardy. The penalties sought in this case, according to
Healy, are punitive in nature and a violation of the double jeopardy clause.
Healy interprets the Supreme Court decision in United States v. Halper, 109 S. Ct.
1892, 1897 (1989), to hold that the double jeopardy clause protects against three distinct
abuses: ( 1) a second prosecution for the same offense after conviction, (2) a second
prosecution for the same offense after acquittal, and (3) multiple punishments for the same
offense. Halper involved the third category, i.e., multiple punishments. The Supreme Court
in Halper made clear that a civil penalty assessed in a subsequent civil proceeding may
violate the double jeopardy clause.
Healy stated that it "was admittedly prosecuted for the same violations which are the
subject of the current proceeding." It admits that it was found guilty of some of the charges
and was punished by a $750,000 fine and that this amount is being paid by it to the U. S.
Treasury. On the basis of the conviction, it notes that the Secretary asserts that it is
collaterally estopped from denying 49 of the allegations raised in the current proceeding.
On page 9 of Healy's memorandum, the following statement is made: "There can be,
therefore, no question that the fines sought i.."l the current proceeding is [sic] for the same
conduct that served as the basis for the criminal conviction." It points out that Halper, in
its opinion, applies to the factual situation presented by this case; that the penalties are
punitive in nature and a violation of the double jeopardy clause.
Subsequent to the filing of the memorandum in opposition to the Secretary's motion
for partial summary judgment, the Secretary asked and was granted permission to file a
response. The Secretary considered the double jeopardy defense to be an important
development. On November 25, 1991, the Secretary filed a response in which she alluded
to the fact that the memorandum filed by Healy was not filed in opposition to her motion
for partial summary judgment, that her motion for partial summary judgment was
unopposed, and that Healy did not dispute that it was collaterally estopped from litigating
the issues of liability and willfulness. The Secretary regarded the memorandum of Healy to
be a motion to dismiss based on the belief that the penalties sought violated the double
jeopardy clause of the fifth amendment. She concluded that Healy's claim regarding double

                                           4

jeopardy is without merit and raised the point that Healy is estopped from relying upon the
defense as a result of litigating strategy it pursued during the sentencing hearing in the
criminal case.
Order of Januaty 7, 1992, Granted
The Secretaiy's Motion for Partial Summaiy Judgment
Based on the Doctrine of Collateral Estoimel

   The doctrine of collateral estoppel was held to be applicable by order dated

January 7, 1992. This Judge proceeded on the representation by the Secretary and conceded
by Healy that there was a final judgment against Healy that afforded Healy a full and fair
opportunity to litigate the issues in dispute in the criminal proceedings. "It is well-settled
that a criminal conviction, by jury verdict or guilty plea, constitutes estoppel in favor of the
United States in a subsequent civil proceeding as to those matters determined by the
judgment in the criminal case." United States v. Podell, 572 F.2d 31, 35 (2d Cir. 1978).
The Secretary and Healy separately agreed that the final judgment in the criminal
case involved the same facts and elements of legal proof necessary for the adjudication of
49 of the violations alleged in this civil proceeding. Healy did not dispute that it was
collaterally estopped from litigating the issues of liability and willfulness and tacitly concurred
with the Secretary's position. It expressly stated that "the same conduct that served as a
basis for the criminal conviction" is at issue in the current proceeding. The motion for
summary judgment on the issues of liability and willfulness was determined to be meritorious
and was granted by order dated January 7, 1992.
The January 7, 1992, order reserved ruling on the amount of the penalties to be
assessed, pending development of established facts, and on the double jeopardy defense.
The matter was set for hearing on April 6, 1992. The hearing was to "include all issues
before the Commission, including the Secretary's damages and costs which were alleged to
rebut Healy's double jeopardy defense."

                                             5
                             Secretaiy's Second Motion for
                              Partial Summaiy Judgment

   On March 20, 1992, a motion for partial summary judgment on the issue of penalties

and a motion to postpone the hearing scheduled for April 6 was received from the Secretary.
The Secretary argued that the only issue remaining for adjudication was the appropriateness
of the proposed penalties. In the Secretary's opinion, the double jeopardy defense was a
constitutional challenge which was beyond the jurisdiction of the Review Commission and
could not be decided in this proceeding. The Secretary urged affirming the $10,000 penalty
for each violation. The memorandum focused its discussion on the four penalty factors, the
deference to be given the Secretary's proposed penalties, and whether the Commission has
jurisdiction to address the constitutional question of double jeopardy.
On March 26, 1992, this Judge held a conference call regarding the motions with
Thomas P. Camey, Jr., attorney for S. A. Healy Company, and Richard Fiore and Kevin
Koplin, counsel for the Secretary. The motions filed by the Secretary were discussed with
the parties. The postponement was denied. No ruling was made on the amount of penalties
to be assessed. After some discussion, a written order was issued on March 26, 1992, which
stated, among other things:
(1) That the hearing scheduled for April 6, 1992, would proceed as scheduled;
(2) That the hearing would be held to afford Healy an opportunity to submit
information relevant to the amount of penalties that should be assessed for the issues
involved in the criminal case;
(3) That after Healy submits its relevant evidence on the amount of penalties that
should be assessed, a bench ruling would be made on the Secretary's motion for partial
summary judgment;
(4) That after the matter of the penalties was resoived, evidence would be received
on the issue presented in United States v. Halper, 109 S. Ct. 1892 (1989), involving double
jeopardy. Costs incurred by the Government would be relevant. Once all relevant evidence
had been received on the Halper issue, a bench ruling would be made to resolve that issue.

                                           6
   A hearing was held in Chicago on April 6 and 7, 1992. Evidence was received from

both parties, and bench rulings were made on the amount of penalties to be assessed and
the double jeopardy defense. Several preliminary issues had to be decided prior to a
determination being made on the primary issues. The written opinion details the disposition
of all issues before the Commission.
Determination of Appropriate Penalties
Preliminary Issues
A. Collateral Estoppel Revisited
The issues of liability and willfulness were determined for the Secretary on the basis
of her motion for collateral estoppel. After hearing the evidence presented on April 6
and 7, 1992, the Judge, in answer to his own rhetorical question, concluded that the motion
for collateral estoppel should not have been granted. The jury decided there was a violation
of the standards and not whether the 49 allegations existed. All of the allegations were not
presented to the jury. The allegations actually presented to the jury were not established
(Tr. 340).3
The doctrine of collateral estoppel acts as a bar to relitigation of only those issues
actually raised and determined. It means that when an issue of ultimate fact has been once
determined by a final judgment, that issue cannot again be litigated between the same
parties in any future lawsuit. U. S. v. Rogano, 520 F.2d 1191 (5th Cir. 1975). It could be
applicable to this type of case--
[B]ut that doctrine only means that matters actually litigated in the first action
may not be retried in the subsequent action; it does not mean that questions
which were not, but might have been, raised in the farmer action cannot be
litigated in the second action, or that the subsequent action is barred.
(Emphasis in original)

Speed Products Co. v. Tinnerman Products, 222 F.2d 61, 67 (2d Cir. 1955).

3 The jury did not have to find but one of the allegations listed for each standard was true to determine a
violation of the standard. The jury could have determined a violation of the three standards and not
considered 46 of the allegations.

                                                7

Absent agreement of the parties, the trial judge needs to examine the record of the
antecedent case to determine the issues decided by the judgment. See Emich Motor Corp. v.
General Motors Corp., 71 S. Ct. 408, 415 (1951). This procedure did not seem necessary in
view of the representations made by the Secretary and Healy's subsequent acquiescence.
The Secretary fails to distinguish the fact that the criminal case placed emphasis on
a violation of the standards, whereas the civil proceeding places emphasis on the number
of instances the standard was violated. It was not necessary to prove all of the allegations
prior to finding a violation of the standard. Healy wouid be coiiaterally estopped from
litigating only those allegations actually litigated in the criminal case.
Having granted the motion for collateral estoppel, the chosen course was to go
forward with the initial decision (Tr. 340). While reliance on the initial legal ruling is of
doubtful validity based on facts later gleaned from the hearing, Healy is deemed estopped
from challenging that order since it must bear primary responsibility for acquiescing in the
Secretary's representations. Healy chose to accept collateral estoppel as a bar to facilitate
its reliance on the double jeopardy defense. It cannot now sweep clean its initial conduct
and insist on a ruling contrary to its acquiescence in the Secretary's motion.
The memorandum filed in opposition by Healy did not dispute that it was collaterally
estopped from litigating the issues of liability and willfulness. Healy readily accepted the
Secretary's position. In support of its motion, Healy stated: "There can be, therefore, no
question that the fine sought in the current proceeding is for the same conduct that served
on the basis for the criminal conviction" (Healy Response, pgs. 9-10). Healy further referred
to and acquiesced in the following statements made by the Secretary:
The issues involved in parallel, civil and criminal prosecutions [sic] of an
OSHA violation are identical .... (Healy Response, pg. 3, quoting Secretary's
memorandum)

   The indictment in the criminal case charged that respondent violated the same
   training standards regarding the same employees on the same date ....
   (Same reference as above)




                                            8
   Identical to the civil proceeding here, the criminal trial addressed the entry of
   the three employees into the northbound tunnel on November 10, 1988.
   (Healy Response, pg. 4)

   In the criminal proceeding the jury determined that respondent willfully
   violated the identical standards at issue here. (Healy Response, pg. 4)

Healy further points out that the jury in the criminal case determined that it willfully violated
the identical standards at issue in this case.
B. Egregious Policy

   Healy contends the Secretary is without authority to propose penalties on an

instance-by-instance basis. It is the position of Healy that the allegations should have been
combined under the applicable standard and one penalty assessed for the violation of the
standard. The Secretary charged Healy with instance-by-instance violations pursuant to her
egregious policy. Supposedly, this policy is one that is utilized in cases of flagrant violations
of ignoring the Act or failure to abate the violations.
The Occupational Safety and Health Act of 1970 ("Act") grants the Secretary the sole
responsibility for its enforcement, including the authority to decide whether, and in what
manner, an employer is to be issued a citation for violations of the Act. Cuyahoga Valley
Railway Co. v. United Transportation Union, 106 S. Ct. 286 (1985). The Act authorizes the
use of broad discretion by the Secretar1 in fulfilling the Act's goal "to ensure so far as
possible ... safe and healthful working conditions" for "every working man and woman in
the Nation." Martin v. OSHRC ( C.F.& L Steel), 111 S. Ct. 1171 (1991 ); Donovan v. OSHRC,
635 F.2d 544 (6th Cir. 1980). Generally, ."[a]n agency has wide latitude in setting up an
enforcement scheme that will best serve the convenience of the agency as long as the
scheme is a rational one in light of the statute's overall purpose." George Hyman
Construction Co. v. OSHRC, 582 F.2d 834, 838 ( 4th Cir. 1978), ciiing Udall v. Tallman, 85
S. Ct. 792 (1965).
The egregious policy essentially consists of separately citing, rather than grouping, all
violations of a particular standard. The Secretary's interpretation of her enforcement
authority, as permitting her to cite instance-by-instance violations in this case, is consistent

                                             9

with accomplishing the goal of the Act to assure, insofar as feasible, "that no employee will
suffer material impairment of health or functional capacity." 29 U.S.C. § 655(b)(5). This
purpose is advanced by increasing the maximum penalties to deter employers from violating
safety and health standards and to increase their compliance with the standards. The
Secretary's interpretation of her enforcement discretion is consistent with broad policy
concerns articulated during the passage of the Act. Congress intended the Secretary's
enforcement policies to encourage compliance through the penalty-setting process. The
Senate Committee believed that within the framework of the Act, the penalty assessor
"should have as much flexibility as possible to enable him to assess the amount of civil
penalty which he determines is appropriate to the violation in question." Leg. Hist. at 156.
The Secretary finds it necessary in certain cases to issue a citation for separate violations
(with separate penalties) to promote broad compliance with the Act.
A ruling that instance-by-instance violations are impermissible would destroy the
Secretary's authority to individually cite and penaiize violations of the Act. This is not to
imply that the Secretary may exercise her prosecutorial authority without due regard for the
underlying goals of the Act. The Secretary must be free to utilize limited investigative and
prosecutorial resources in whatever manner and priority she deems essential for achieving
the stated goal of the Act.
Where an employer has an extensive history of prior violations, has intentionally
disregarded its safety and health responsibilities, or has committed a large number of
violations so as to undermine significantly the effectiveness of any safety and health
programs in place, it is within the Secretary's discretion to consider charging the employer
with separate violations of the Act for each occasion that a requirement of a standard has
been violated. The Secretary has the responsibility to use all of her authority, if necessary,
and to develop the best enforcement policy calculated to attain the goal of the Act as
established by Congress. As long as that authority is used in a fair and impartial manner,
the Secretary has broad discretion, including the right to issue instance-by-instance violations.
In the Omnibus Budget Reconciliation Act of 1990, Congress increased sevenfold the
maximum amounts of civil penalties that can be assessed for violations of the Act. The
stated purpose of the increase was to keep pace with inflation and to ensure the prospect

                                           10

of penalties effectively deterring violations and enhancing enforcement. The litigation history
of the amendment offers strong evidence that Congress was aware of the Secretary's highly
publicized egregious policy and tacitly approved it.
The Commission has on prior occasions recognized the right of the Secretary to
charge multiple violations of a single standard. In Hoffman Construction Co. 6 BNA OSHC
1274, 1978 CCH OSHD ,r 22,489 (No. 4182, 1978), the judge concluded that, as a matter of
general policy and in accordance with provisions of OSHA's Field Operations Manual,
multiple violations of a single standard disclosed during the inspection of a single
establishment should constitute one alleged violation. He combined two violative conditions
into one. The Commission reversed, stating:
We agree that the Secretary was justified in issuing separate citations. The
two citations involve entirely different and separate scaffolds. Thus, the
charges are not duplicative. Compare Stimson Contracting Co., 77 OSAHRC
38/A2, 5 BNA OSHC 1176, 1977-78 CCH OSHD para. 21,675 (No. 13812,
1977). The Secretary chose to cite Hoffman for separate violations of the
same standard, and under these circumstances, it is within his discretion as the
prosecutor under the Act to do so.

   The case of RSR Corporation, 11 BNA OSHC 1163, 1983 CCH OSHD ,r 25,207 (Nos.

79-3813, 5062, 6392, 80-1602, 1983), involved, in part, an employer's failure to comply with
the medical removal protection provisions of the lead standard. The Secretary issued a
separate proposed penalty of $10,000 for each terminated employee entitled to medical
removal protection benefits. The issue of separate citations and penalties was discussed by
Commissioners Cottine and Cleary; Commissioner Rowland did not address the issue.
Commissioner Cottine, citing Hoffman, concluded that "the Secretary has the discretion to
seek separate penalties for separate instances of the same violation." 11 BNA OSHC at
1181. Based on the individual nature of the violations and the fact that separate penalties
would serve to promote compliance, Commissioner Cottine concluded that he would affirm
the twelve willful violations as charged and assess separate penalties for each violation.
The decision to seek instance-by-instance penalties for the willful violations in this
case is within the Secretary's mandate to enforce the Act and is a valid exercise of statutory
authority.

                                           11
                        C. C.F.& I. Steel Is Not Applicable

  The Secretary contends that since she "determined the penalties pursuant to the

exercise of her prosecutorial discretion," the Commission should not dictate the penalties
in this case, citing Manin v. OSHRC (C.F.&I. Steel), 111 S. Ct. 1171 (1991), in the absence
of an express finding that her penalty proposals are unreasonable.
The Secretary's reliance on C.F. & L is misplaced. That case involves interpretation
of nebulous regulatory language. The holding in C.F. & L states the general rule "that an
agency's construction of its own regulation is entitled to substantial deference." It applies
this rule in favor of the Secretary rather than the Commission in a case which involved the
determination of the division of powers under the Act between the Secretary and the
Commission.
The assessment of penalties in contested cases involves no division of powers between
the Secretary and the Commission. Section 170) of the Act states unequivocally that "[the]
Commission shall have authority to assess all civil penalties." The Secretary has the
responsibility to propose penalties, but the Commission has the authority to assess all
penalties for contested vioiations. The authority to assess penalties for contested violations
must be the responsibility of the Commission since the actual facts established by trial may
differ from those on which the Secretary based her proposed penalty. The penalties
assessed have to be based on established facts and not on what the facts are deemed to have
been. The Commission need not grant deference to the penalties proposed by the Secretary.
Section 17G) specifies that the Commission is to give "due consideration to the
appropriateness of the penalty with respect to the size of the business of the employer being
charged, the gravity of the violation, the good faith of the employer, and the history of
previous violations." It is the Secretary's responsibility to establish the facts. The
Commission has a responsibility to be fair and impartial. The amount of penalty assessed
must be based on a fair and reasonable analysis of the evidence rather than granting
deference to the Secretary. A policy of deferring to the Secretary would impede the
independence of the Commission and interfere with a fair and impartial determination of

                                          12

an appropriate penalty. The Commission must not afford one party an advantage over the
other when it analyzes the facts to assess a penalty.

                                Appropriate Penalties

   Ultimate authority for assessment of penalties lies with the Commission in all

contested cases. RSR Corporation, 11 BNA OSHC 1163, 1180-81, 1983 CCH OSHD t25,207
(Nos. 79-3813, Et Al., 1983). The Secretary is a proposer of penalties under the Act, while
the Commission is the assessor in contested cases. Under section 170) of the Act, the
Commission is required to find and give "due consideration" to the size of the employer's
business, the gravity of the violation, the good faith of the employer, and the history of
previous violations in determining the assessment of an appropriate penalty. The gravity of
the offense is the principal factor to be considered. Nacirema Operating Co., 1 BNA OSHC
1001, 1971-73 CCH OSHD t 15,032 (No. 4, 1972).
Healy argues that there have been no facts established to prove the seriousness of
the violations. Evidence was not necessary to establish the violations or the fact that they
were willful. Since the motion for collateral estoppel was granted, facts alleged in the
citation were assumed to be true as to liability and culpability. Evidence was established as
to size, prior history, good faith and gravity.
Healy is a large corporation and is engaged in an inherently high hazardous industrj.
It has approximately 1,000 employees. Healy has been issued 15 citations in its nationwide
operations that contain violations of standards similar to those in this case (Exh. C-10). It
would be unreasonable to draw an inference of bad conduct as a result of the issuance of
the prior citations. The record does not establish the facts surrounding the prior violations
and whether they were abated. Since Healy engages in inherently dangerous construction
activities, it is not surprising that it has previously been issued citations. As Judge Evans
observed, "Healy is not a stranger to OSHA violations;" however, Judge Evans did not
consider prior history to be a major factor in determining a penalty.
Healy failed to exhibit good faith before the explosion, but the evidence indicates
good faith was displayed by Healy subsequent to the explosion. Judge Evans stated in the
sentencing proceeding that the company had displayed good faith during the investigation

                                              13

and had not attempted to hide any facts. Judge Evans made findings that the company
engaged in no dehoerate falsehoods or destruction of evidence, and displayed no
uncooperative attitude in producing any employee concerning the investigation. He
indicated that if there had been any such evidence, he would have weighed it against the
company. Good faith is also displayed by the new managerial changes and safety procedures
instituted since 1989. Healy exhibits a new attitude.
While Healy contends it has financial problems, the Secretary believes that Healy is
economically sound and that its financial status should have no bearing on the amount of
the penalty. The financial status of the company is superficially sound. There have been
substantial losses in the past five years. Arrangements had to be made to pay the criminal
fine in monthly payments of $50,000 a month. Future contracts are shown on the balance
sheet as assets, but the expenses are not shown as a liability. It is impossible to ascertain
whether there will be a profit on those jobs when the contracts are fulfilled. While the
corporation is viable in the short term, some apprehension must be felt toward its operations
on a long term basis.
The Secretary makes much out of the fact that the parent corporation of Healy
expresses an intention to meet the liabilities of Healy to its creditors. This is not a binding
statement and cannot be considered as a financial strength of Healy. It is simply an
expression on the part of the parent corporation. There is no evidence that the parent
corporation has entered into any separate contract with any company to assume Healy's
liability. Since there is no evidence to pierce the corporate veil, the parent corporation
cannot be held responsible for Healy's liabilities. The evidence reflects that the parent
invested in Healy as a profit-making venture and that it is concerned about the losses.
Healy's conduct leading up to the explosion was far from exemplary. There is no
excuse for not devoting more time and resources to safety. The company did not have a
safety officer or anyone performing those duties. Patrick Freeman, the present corporate
safety director, testified that prior to 1989 he was shown as a safety director for the purpose
of securing a bid, but that he did not perform those duties. He was safety director in name
only. This procedure was followed because he was the only person with the company who

                                          14

had a resume reflecting safety training. The company obviously paid little attention to the
safety of its employees. The criminal case caught their attention.
There was usually a total of eight to ten employees working in the tunnel. At any
given time there were as many as fifteen Healy employees that would have occasion to work
in the tunnel. In view of the fact that three deaths resulted from the explosion and the
violations were willful, the gravity must be considered high.
After consideration of the four factors required by section 17(j) of the Act, a penalty
of $6,500 is deemed appropriate for each of the 49 violations.
Double Jeopardy
Preliminaty Issues
A. The Defense Was Properly Allowed
Even If Not Pleaded in Answer
The Secretary raised three objections at the hearing to the double jeopardy defense
asserted by Healy. All the objections are without merit. First, the Secretary argued that
double jeopardy is an affirmative defense and that Healy had an obligation to raise the issue
in its answer to the complaint. The Secretary contends that raising the defense in the
answer would have placed the issue properly before the Commission. The Secretary
expresses the opinion that the issue was not pleaded because Healy wanted to use the civil
case as leverage in the sentencing proceedings. According to the Secretary, Healy waited
to raise the defense of double jeopardy until after it had used the threat of civil penalties
to gain an advantage in the criminal case.
As a result of its criminal conviction, it is ludicrous to assume, as the Secretary does,
that the civil case constituted leverage which Healy skillfully utilized to gain a reduction of
the fines. It had no leverage. The status of the civil case was a factor that Judge Evans
took into consideration in setting an appropriate fine. He was certainly aware that the civil
case was pending and would have given it consideration before establishing the fine. The
Secretary alleges that to permit the defense would "irreparably prejudice" the Government.
This is pure hyperbole. The Secretary recognized its fallacious argument since it failed to
present any facts showing it was prejudiced by the ruling.

                                          15
  The failure to plead double jeopardy as a defense in the answer is viewed as a

harmless technicality. The parties expressly or impliedly consented to the trial of the
unpleaded issue. The defense was first raised in the context of a defense to the Secretary's
Motion For Collateral Estoppel. It was raised by new counsel who assumed direction and
responsibility of the case after the criminal proceeding was completed. The answer had
already been filed by prior counsel.
The double jeopardy defense is a novel argument in an OSHA case. This Judge has
not seen the issue raised and discussed in an OSHA case. It is doubtful Healy was aware
of the defense at the time its answer was filed. The defense was raised in the memorandum
filed on October 3, 1991, in opposition to the Secretary's motion for partial summary
judgment, and no objection was filed against the defense. Instead, the Secretary sought
permission and additional time in which to file a response. The Secretary filed an opposition
on November 25, 1991, but, again, did not object to the defense but directed her remarks
primarily toward establishing there was no merit to the defense. The Secretacy's failure to
timely object constituted acquiescence. The parties at all times treated the matier as a
viable issue, and it was so considered by this Judge.
An amendment of the answer would have been allowable if advocated by Healy.
Rule lS(b) of the Federal Rules of Civil Procedure deals with the situation that arises where
there is an objection to the introduction of evidence at the trial on the grounds that it is not
within the issues set forth by the pleadings. The Commission has permitted amendment of
the pleading under Rule lS(b) where an employer, who objected at the hearing to evidence
supporting an unpleaded charge, failed to establish that it would have been prejudiced by
the amendment to include the unpleaded charge. Morgan and Culpepper, Inc., 9 BNA
OSHC 1533, 1981 CCH OSHD ,r 25,293 (No. 9850, 1981), appeal filed, No. 81-4203 (5th Cir.
1981); Frank Briscoe Co., 4 BNA OSHC 1706, 1976-77 CCH OSHD ,I 21,191 (No. 12136,
1976); General Electric Co., 3 BNA OSHC 1031, 1974-75 CCH OSHD ,r 19,567 (No. 2739,
1975), rev'd on other grounds, 540 F.2d 67 (2d Cir. 1976). "The essential determinants of
prejudice under the second part of Federal Rule 15(b) are whether the party opposing the
amendment was denied a fair opportunity to prepare and present its case on the merits, and

                                          16

OSHAREVIEW l"lnl J.L ::JJ

                            ,,.

.
'
whether it could offer additional evidence if the case were tried again on a different theory."
Morgan and Culpepper. supra, 9 BNA OSHC at 1537. Absent a showing of prejudice, leave
to amend will be freely granted by the Commission. The SecretaJJ had a full and fair
opportunity to chaJJenge the defense on its merit.i;,
The hearing was commenced on April 6, 1992. No objection was interpoaed to the
defense until the hearing. The Secretary was aware of the defense as an issue no later than
October 3, 1991. She had sufficient notic.e and time to prepare for the issue. The Secretmy
has not been prejudiced by allowing the issue to be decided on the merits.

                           B. The Review Commis~ion Has Authority
                      to Hear and Decide Healy's Double Jeopardy Defense

          The SC<.-retary's argument that the Judge and Commission lacked jurisdiction to
   decide the double jeopardy defense was unexpected. The difficulty with the Secretary's
   argument is that it makes no distinction between constitutional applicability of legislation to
   particular facts and constitutionality of the legisJation. The Commission has decided a
  · multitude of cases, as the Secretary's erudite lawyers wen know, involving constitutional
   challenges by employers to particular circumstanc.es which have been alleged to have
   violated some constitutional right, e.g., violations of due process. The defense in this case
   is not directed towards challenging tht: constitutionality of the Act. Jt is directed towards a
   particular act of the Secretary.
          The Judge and Commission have the jurisdiction to hear the facts on the issue and
   to resolve the question based on the facts of record. The law on the issue is succinctly
   stated in 3 K. Davis, Administrative Law Treatise, § 20.04, at 74 (19S8) as follows:
          A fundamental distinction must he recognized between constitutional
          applicability of legislation to particular fncts and constitutionality of the
          legislation. When a tn"bunal passes upon constitutional applicability, it is
          carrying out the legislative intent, either express or implied or presumed.
          When a tn"bunal passes upon constitutionality of the legislation. the question
          is whether it shall take action which runs counter to the legislative intent. We
          commit to administrative agencies the power to determine constitutional
          applicability, but we do not commit to administrati"e agencies the power to
          determine constitutionality of legislation. Only the couns have authority to
          take action which runs counter to the ClCJ>ressed will of the legislative body.

                                                  17

Even as to those issues challenging the constitutionality applicability of the Act, the
Commission is the proper and only tribunal available to the parties to develop a factual
record. The court in Babcock and Wilcox Co. v. Marshall, 610 F.2d 1128, 1136-37 (3d Cir.
1979), considered Babcock's insistence that it was entitled to adjudication by an Article III
court of its constitutional rights and that the factual record for constitutional claims must be
developed by an Article III district court rather than by the Article I Review Commission
and concluded:
The crux of the matter, then, is a claim by Babcock that the factual record for
constitutional claims must be developed by an Article III district court rather
than by the Article I Review Commission. But that proposition has been
decisively rejected by the courts, because it would seriously impede the use
and effectiveness of administrative tribunals in the many statutory schemes in
which they operate.

Citing Bethlehem Steel Corp. v. OSHRC, 607 F.2d 871 (3d Cir. 1979), the court in Babcock
further states (610 F.2d at 1136-37):
Conceding, arguendo, that an administrative agency is not ordinarily
considered the appropriate forum for the resolution of constitutional claims,
we think there are compelling reasons for insisting that fourth amendment
claims for the suppression of evidence in OSHA enforcement cases be
tendered first to the Commission. Those claims in most cases, if not all,
require the development of a factual record concerning such issues as consent,
waiver, and emergency. Under the enforcement and review scheme of the
Occupational Safety and Health Act ... the Commission is the only tribunal
available for the development of a factual record. If we were to hold that these
constitutional arg-dments need not be presented to the Commission, the
alternative would be either separate litigation in a district court, which has
facilities for ma.king a record, or fact-finding in this court, which lacks such
facilities. Assuming we could find a statutory justification for either course,
neither is attractive. Thus we hold that fourth amendment claims must be
presented, in the first instance, to the Commission. (Emphasis added)

   The court in Babcock (610 F.2d at 1139), indicated the Review Commission has a

limited role under the Constitution since it cannot review the constitutionality of the Act.
However, the court recognized the fact that the Commission has the responsibility to
interpret the Act and to apply constitutional principles to specific facts. Professor Davis is

                                           18

recognized by the court in footnote 40. In recognizing the fact that all factual and statutory
defenses must be presented to the Review Commission, the court stated (582 F.2d at 1124):
Congress established the Review Commission as a forum independent of the
Secretary of Labor for the adjudication of all factual and statutory defenses
to the Secretary's enforcement actions. See the statutory provisions cited
supra. Its final orders are reviewable as of right in the Courts of Appeals and
by writ of certiorari in the Supreme Court. 29 U.S.C. § 660(a); 28 U.S.C. §
1254. That review can include consideration of any viable constitutional
defenses to enforcement.

   There is no merit to the Secretary's argument. The issue is one which does not

involve any ruling on the constitutionality of the Act. The defense does not challenge the
right of the Secretary to propose penalties. The defense is directed towards a particular act
of the Secretary.
C. Defense Not Prohibited by Litigation
Strategy During Sentencing
The Secretary asserts that the defense of double jeopardy is not absolute and that a
defendant's conduct is always at issue when the defense is raised. Even if the Commission
has jurisdiction to hear and decide the question, the Secretary contends Healy, as a result
of an alleged litigation strategy pursued during the sentencing hearing, forfeited the right to
rely upon the defense. The facts do not support the argument that Healy waived or
forfeited any of its rights.
During the sentencing hearing before Judge Evans, Healy urged the court to assess
a fine of no more than $10,000 per count instead of the maximum $500,000 per count under
the statute. In so doing, it pointed out that it still faces a potential fine of $680,000 in a civil
proceeding. As Healy's counsel stated to Judge Evans, "There is a civil OSHA matter
pending before an administrative law judge, Judge Burroughs, in which OSHA has filed a
68-count complaint against Healy. And the potential penalties there are $10,000 per count.
So that's a potential $680,000 that the company is still facing." The Secretary states that
Judge Evans found Healy's argument persuasive in arriving at the eventual fine and gave
Healy credit for the fact that it faced OSHA civil violations.

                                            19
   The Secretary contends that Healy's litigating tactic should not be rewarded. It

submits that when Healy consciously chose to pursue its litigating strategy and supposedly
gained a potential $750,000 windfall reduction of criminal fines, it forfeited its right to use
the double jeopardy issue. The Secretary contends that the argument against the application
of the defense is especially compelling since she cannot undo the effect of Healy's strategic
decision in the criminal proceeding. The Secretary's argument is based on the fact that a
reduction was allowed in the assessing of penalties in the criminal case. Healy still faced
civil penalties. The Secretary contends that allowing the defense would somehow prejudice
her. It is assumed that the Secretary theorizes that it would be unfair to allow Healy to
escape civil penalties since Judge Evans did not impose the maximum penalty. It is true that
the maximum penalty which could have been imposed was $1,500,000, and that Healy was
only fined $750,000. The pending civil proceeding was only one factor considered in
establishing the penalty. The Secretary assumes the maximum penalty was not imposed
because Healy referred to the civil case.
The statement by Healy's counsel to Judge Evans was simply advising him as to the
status of the civil actions against it. The statement in no way misled the Judge. Healy's
counsel's actions were proper. The Secretary's characterization that Healy consciously chose
to embrace the civil proceedings as a shield against the criminal fine is pure supposition.
If Judge Evans considered the pending civil case in determining the penalties, there is no
evidence to suggest that he demanded any legal rights of Healy in return. The Secretary has
failed to show that Healy exchanged any of its legal rights for a reduction of criminal
penalties. The Secretary's argument is without merit.

                                   Double Jeopardv Defense
                                       Is Inapplicable

    Healy argues that the purpose of the penalties is retribution and deterrence, which

are concepts of punishment and are barred by the double jeopardy defense.4 This
argument is based on the decision of the Supreme Court in United States v. Halper, 109

4 The double jeopardy clause of the fifth amendment provides that no person shall ''be subject for the same
offenses to be twice put in jeopardy of life or limb."

                                                     20

S. Ct. 1892 (1989).5 Halper had been criminally convicted for submitting false claims for
reimbursement under Medicare from the U. S. Treasury. The Federal Government was
overcharged in the amount of $585 as a result of Halper's false claims. Halper was
prosecuted, convicted and sentenced to imprisonment for two years and fined $5,000. In a
subsequent action brought by the Government under the Civil False Claims Act, a civil
penalty of $130,000 was sought. The Supreme Court concluded that the civil remedy was
tantamount to a second punishment since the penalties bore no relationship to the damages
suffered and the expenses incurred by the Government. The Supreme Court held that "a
defendant who already has been punished in a criminal proceeding may not be subjected to
additional civil sanctions to the extent that the second sanctions may not fairly be categorized
as remedial, but only a deterrent for retribution." 109 S. Ct. at 1902.
The Court in Halper held that the Government may not proceed civilly against a
defendant already criminally convicted for the same offense if it seeks a punitive rather than
a remedial sanction. The Court found that a statutory penalty constitutes "punishment"
when the amount sought is entirely disproportionate to any reasonable amount that the
Government could claim for damages and costs incurred because of the defendant's acts.
The Court stated:
The rule is one of reason: Where a defendant previously has sustained a
criminal penalty and the civil penalty sought in the subsequent proeeeding
bears no rational relation to the goal of compensating the Government for its
loss, but rather appears to quality as "punishment" in the plain meaning of the
word, then the defendant is entitled to an accounting of the Government's
damages and costs to determine if the penalty sought, in fact, constitutes a
second punishment. 109 S. Ct. at 1902.

    The Secretary considers the proposed penalties to be remedial in nature and not

imposed as a punishment. Healy asserts that the penalties are punitive and that they are
in essence another "punishment." A "civil sanction that cannot fairly be said solely to serve
a remedial purpose, but rather can only be explained as also serving either retributive or
deterrent purposes, is punishment." 109 S. Ct. at 1902. A punitive purpose is implicated

5 Liability was not an issue in United States v. Halper, 109 S. Ct. 1892 (1989).
The district court granted
summary judgment for the Government on the issue of liability. 660 F. Supp. 531-533 (1987).

                                                21

when " .... [t]he sanction [is] overwhelmingly disproportionate to the damages [the
defendant] has caused."
In United States v. Hess, 63 S. Ct. 379 (1943), Justice Frankfurter indicated that a
penalty becomes punishment when it exceeds what could reasonably be regarded as the
equivalent of compensation for the Government's loss. The Secretary, citing statutory
authority in support of her belief that the Act is remedial in nature, and Healy, citing
authority to support the opposite conclusion, imply that the determination is a matter of
statutory construction. The Court discounted such argument, stating (109 S. Ct. at 1901):
In making this assessment, the labels "criminal" and "civil" are not of
paramount importance. It is commonly understood that civil proceedings may
advance punitive as well as remedial goals, and conversely, that both punitive
and remedial goals may be served by criminal penalties.

The Court concluded that the determination of whether a given civil sanction "constitutes
punishment in the relevant sense requires a particularized assessment of the penalty imposed
and the purposes that the penalty may fairly be said to serve." 109 S. Ct. at 1901.
Regardless of how the penalty is classified, "a civil as well as a criminal sanction constitutes
punishment when the sanction as applied in the individual case serves the goal of
punishment." 109 S. Ct. at 1902. Clearly, this indicates that the courts must determine, on
a case-by-case basis, whether a given penalty is reasonably calculated to achieve and actually
does achieve the non-punishment goals of recompense and regulation.6
Healy contends that the imposition of the total penalty is clearly for the purpose of
deterrence and retribution and can in no way be characterized as remedial or compensatory.
The amount of the penalty, according to Healy, is sought solely to deter Healy from violating
OSHA standards and to punish it for having done so. It states that the Secretary's intent
is not to reimburse the Government for lost revenue since she has suffered no direct harm
and has lost no money to a fraudulent act. It points out that in spite of the Secretary's

6 In footnote 7, the Court adds that "in determining whether a particular civil sanction constitutes criminal
punishment, it is the purpose actually served by the sanction in question, not the underlying nature of the
proceeding giving rise to the sanction that must be evaluated." The Court concludes that "a civil as well as
criminal sanction constitutes punishment when the sanction as applied in the individual case serves the goals
of punishment."

                                                 22

assertion of collateral estoppel, she has not incurred any significant investigating expenses
in connection with the current proceeding. It makes a distinction between the expenses
incurred in connection with the criminal prosecution and those incurred in connection with
the current proceeding. Finally, Healy makes the point that the penalty asserted in the civil
proceeding is indistinguishable from punishment. According to Healy, the Secretary was not
satisfied that the district judge meted out enough punishment. Healy submits that it already
has been punished and that the Constitution demands an end to these proceedings and that
it could have no better defense against the nature of the penalty assessed in this case than
its defense of double jeopardy under the fifth amendment.
To insure that Halper would be narrowly construed and selectively applied, the court
stated (109 S. Ct. at 1902):
What we announce now is a rule for the rare case, the case such as the one
before us, where a fixed-penalty provision subjects a prolific but small-gauge
offender to a sanction overwhelmingly disproportionate to the damages he has
caused.

The impact of the decision was limited further by announcing a rule of reason that the issue
of double jeopardy is not broached unless the penalty sought "bears no rational relation to
the goal of compensating the Government for its loss ...." 109 S. Ct. at 1902. Since Healy
has had a separate criminal penalty imposed on it and in view of the fact that proposed civil
penalties are high and are construed as punishment by Healy, it was determined that Healy
was entitled to an accounting of the Government's damages and costs. Costs in this instance
include not only court costs, narrowly defined, but include "the Government's investigative
and prosecutorial costs." 109 S. Ct. at 1900, n. 5.
While Healy emphasizes proposed penalties aggregating $680,000, the full amount
of the penalties in this case has not been established. The Act authorizes the Commission
to assess civil penalties and, pursuant to that authority, $318,500 has been assessed for 49
of the 68 items. There are still 19 items for which penalties must be assessed. Assuming

                                         23

$10,000 was assessed for the remaining 19 items, the assessed penalties would total
$508,500.7
Four affidavits (E,chs. C-14, C-15, C-16, C-17) were introduced by the Secretary to
support the costs incurred for investigation and prosecution. The figures were based on a
reconstruction of the Government's costs. Exhibit C-14 is an affidavit of Compliance Officer
Patrick Ostrenga estimating total investigative costs of $201,434.01. Exhibit C-16 is an
affidavit of Eric Klumb, Deputy U.S. Attorney, who tried the criminal case. He estimated
that he and his assistant, Patrick Gorence, spent 1,500 hours prosecuting the case. Exhibit
C-16 is an affidavit of Richard Fiore, Deputy Regional Solicitor of Region 5, who estimated
a total of 4,320 hours incurred by attorneys in his office in the investigation and prosecution
in this matter. The affidavit attaches considerable supporting data. Exhibit C-17 is an
affidavit of Sally Mitchell, Office of the Regional Solicitor, Chicago, Illinois. She reviewed
the travel vouchers submitted by the attorneys working on this case. The total amount
expended for travel was $11,946.30.
E,chibit C-14 reflects $201,434.01 expended by the Secretary in investigating this
matter. The affidavits of Klumb and Fiore (Exhs. C-16 and C-17) indicate that a total of
5,820 hours of attorney time was devoted to the investigation and trial of the criminal and
civil cases. The Secretary takes the position that $100 an hour is an appropriate hourly rate
for the attorneys working on the case (Tr. 370). Exhibit C-15 supports a total amount of
$11,946.30 in travel expenses. The affidavits show a total cost of $213,380.31, plus the cost
to be allocated to 5,820 hours of attorney time. The total cost to date, according to the
Secretary, is $795,380.31 (Tr. 370).
Healy objects to the costs claimed by the Secretary since the total cost would include
several related matters. Healy submits that some of the costs and hours expended were
devoted to the ventilation standard for which a violation was not determined and the charge
against Patrick Doick, which was dismissed. It is argued that the costs reconstructed by the
Secretary are only approximations and are unreliable. The Secretary does not claim that the

7 As a practical matter, this Judge would not have assessed penalties in excess of those previously determined.
Since the settled items were not included in the criminal case, there may have been mitigating factors which
would have justified in assessing less than $6500 per violation.

                                                  24

cost figures submitted by her are completely accurate and that they do not include some
matters not germane to the issues here. The Secretary has simply reconstructed as closely
as possible the costs of investigating and prosecution that were incurred as a result of
Healy's conduct.
The Secretary need not be precise in submitting costs. The Court in Halper indicated
that the Government is entitled to rough remedial justice, i.e., it may demand compensation
according to somewhat imprecise formulas, such as reasonable liquidated damages or a fixed
sum plus double damages, without being deemed to have imposed a second punishment.
In so stating, the Court acknowledged "that the precise amount of the Government's damage
and costs may prove to be difficult, if not impossible, to ascertain." 109 S. Ct. at 1902.
"[T]he process of affixing a sanction that compensates the Government for all its costs
inevitably involves an element of rough justice." 109 S. Ct. at 1902. The Court in Halper
further stated (109 S. Ct. at 1902):
We acknowledge that this inquiry will not be an exact pursuit. In our decided
cases we have noted that the precise amount of the Government's damages
and costs may prove to be difficult, if not impossible, to ascertain. See, Rex.
Trailer, 350 U.S., at 153, 76 S. Ct., at 222. Similarly, it would be difficult if not
impossible in many cases for a court to determine the precise dollar figure at
which a civil sanction has accomplished its remedial purpose of making the
Government whole, but beyond which the sanction takes on the quality of
punishment. In other words, as we have observed above, the process of
affixing a sanction that compensates the Government for all its costs inevitably
involves an element of rough justice.

This was a long and complex case which involved a considerable amount of time and
expenditures by the Government. While costs in excess of $700,000 may not be cast in
stone, the figures are a good rough estimate.
There is no tremendous disparity in the damages suffered and the civil penalty
assessed. The double jeopardy clause offers protection against those civil penaities that do
not remotely approximate the Government's damages and actual costs, and which bear no
relation to the goal of compensating the Government for its loss. The disparity between the
approximations of the Government's costs and Healy's liability are not sufficiently
disproportionate so as to constitute a second punishment. The penalties proposed by the

                                            25

Secretary are justified since they are rationally related to the Government's costs of
investigation and prosecution. They serve to further the remedial purposes of the Act. They
must be viewed as reasonable in view of the loss of life and property which resulted from
Healy's conduct. The defense is denied.

                              Subsequent Settlement
                               of Remaining Issues

   On May 6, 1992, a partial settlement agreement was received from the Secretary

which disposed of all issues that were not addressed at the hearing in Chicago, Illinois, on
April 6 and 7, 1992. Healy agreed to affirm the violations and consented to penalties for
the violations as follows:
Item Agreed
No. Penalty

                    1                                 $2,975
                    5                                  2,975
                    6                                  2,975
                   35                                  2,975
                   51                                  2,975
                   52                                  2,975
                   53                                  2,975
                   54                                  2,975
                   55                                  2,975
                   56                                  2,975
                   57                                  2,975
                   58                                  2,975
                   59                                  2,975
                   60                                  2,975
                   64                                  2,975
                   65                                  2,975
                   66                                  2,975
                   67                                  2,975
                   68                                  2,950




                                         26
                                Personal Observation

    The judge would like to thank counsel for the parties for their diligence in pursuing

this matter to a conclusion. You were always focused toward disposition of die matters in
issue without the procrastination that usually unduly prolongs litigation. You were
cooperative with the judge and with one another, and amicably resolved all conflicts that
invariably arose. Your professionalism and competence transformed a difficult case into one
that this judge found to be a pleasure to handle. Thanks for a job well done.

                             FINDINGS OF FACT
                          AND CONCLUSIONS OF LAW

    The findings of fact and conclusions of law contained in this opinion are incorporated

herein accordance with Rule 52(a) of the Federal Rules of Civil Procedure.

                                       ORDER

    In view of the foregoing, and good cause appearing in support of the determinations,

it is
ORDERED: (1) That the willful violations are affirmed and the following penalties,
determined by trial and settlement, are assessed:
Item Assessed
No. Penalty

                    1                                   $2,975
                    2                                    6,500
                    3                                    6,500
                    4                                    6,500
                    5                                    2,975
                    6                                    2,975
                    7                                    6,500
                    8                                    6,500
                    9                                    6,500
                   10                                    6,500
                   11                                    6,500
                   12                                    6,500

                                          27

Item Assessed
No. Penalty

13 6,500
14 6,500
15 6,500
16 6,500
17 6,500
18 6,500
19 6,500
20 6~500
21 6,500
22 6,500
23 6,500
24 6,500
25 6,500
26 6,500
27 6,500
28 6,500
29 6,500
30 6,500
31 6,500
32 6,500
33 6,500
34 6,500
35 2,975
36 6,500
37 6,500
38 6,500
39 6,500
40 6,500
41 6,500
42 6,500
43 6,500
44 6,500
45 6,500
46 6,500
47 6,500
48 6,500
49 6,500
50 6,500
51 2,975
52 2,975

   28
                 Item                               Assessed
                  No.                               Penalty

                 53                                  2,975
                 54                                  2,975
                 55                                  2,975
                 56                          I
                                                     2,975
                 57                                  2,975
                 58                                  2,975
                 59                                  2,975
                 60                                  2,975
                 61                                  6,500
                 62                                  6,500
                 63                                  6,500
                 64                                  2,975
                 65                                  2,975
                 66                                  2,975
                 67                                  2,975
                 68                                  2,950

                 (2) That the double jeopardy defense is denied.




                                     JA1ffa,so. BURROUS
                                     Judge

Date: July 2, 1992

                                       29