Ralph Taynton d/b/a Service Specialty
EAJA fee request denied despite prevailing
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This order from 1996 bound only the parties to this case; it isn't precedent. Ezel answers your situation under the current OSHA standards and Commission precedent, with citations.
Plain-English summary
Service Specialty sought $34,512.95 in attorney, agent, and other expenses after the Commission vacated its citation in full. The Commission had held that OSHA lacked jurisdiction because the sole proprietorship had stopped operating and no longer had an employee before the citation issued. The fee judge found that Service was eligible and had prevailed, but that the Secretary's position was substantially justified because the jurisdictional ruling addressed a novel question and did not contradict settled law. The judge also found the Secretary's positions on the underlying hazard-communication, crane, and marine-access items reasonable based on the facts known during the abbreviated inspection. The fee application was denied.
Decision snapshot
- Cited standard(s): Underlying items included 29 C.F.R. §§ 1926.59(e)(1), 1926.59(g)(1), 1926.59(h), 1926.550(a)(5), 1926.550(a)(6), 1926.605(b)(2), and 1926.605(d)(2).
- Outcome: The prevailing employer's $34,512.95 EAJA fee and expense application was denied.
- Key point: A prevailing employer is not entitled to EAJA fees when the Secretary's unsuccessful position had a reasonable factual and legal basis, including on a novel jurisdictional question.
Full text (OSHRC public release)
United States of America
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
1120 20th Street, N.W., Ninth Floor
Washington, DC 20036-34 19
Office of Phone: (202) 606-5400
Executive Secretary Fax: (202) 606-5050
SECRETARY OF LABOR, ..
.
Complainant, .
v. OSHRC Docket No. 92-0498
(EAJA)
RALPH TAYNTON d/b/a SERVICE
SPECIALTY COMPANY,
Respondent.
NOTICE OF DOCKETING
OFADMZNISTRATIKELAWJUDGE’SDECISION
The Administrative Law Judge’s Report in the above referenced case was docketed with the
Commission on September 12, 1996. The decision of the Judge will become a final order of the
Commission on October 15, 1996 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 petition
should be received by the Executive Secretary on or before October 2,1996. In order to permit sufficient
time for its review. See Commission Rule 91,29 C.F.R. 2200.91.
All further pleadings or communications regarding this case shall be addressed to:
Executive Secretary
Occupational Safety and Health
Review Commission
1120 20th St., N.W., Suite 980
Washington, D. C. 20036-3419
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 party having questions about review rights may contact the
Commission’s Executive Secretary or call (202) 6063400.
FOR THE COMMISSION
Date: September 12, 1996
@TkQL%&
Ray H. arling, Jr.
Executiee Secretary
92-0498
NOTICE IS GIVEN TO THE FOLLOWING:
Daniel J. Mick
Office of the Solicitor, U.S. DOL
Room S4004
200 Constitution Ave., N. W.
Washington, D.C. 20210
Jaylynn Fortney
Regional Solicitor
Office of the Solicitor, U.S. DOL
Suite 339
1371 Peachtree Street, N. E.
Atlanta, GA 30367
Ralph Taynton
Ralph Tanyton, d/b/a Service
Specialty Co.
19084 Saint George Drive
Dunnellon, FL 34432
Nancy J. Spies
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 30309-3 119
Phone: (404) 347-4 197 Fax: (404) 347-0113
SECRETARY OF LABOR,
Complaint-Respondent,
.
v. .. OSHRC Docket No. 92-498
.. (EAJA)
RALPH TAYNTON d/b/a ..
SERVICE SPECIALTY COMPANY, ..
Respondent-Petitioner. ..
..
DECISION ON FEE ANZ) EmENSE APPLICATION
Ralph Taynton cl/b/a Service Specialty Co., seeks attomeytir
d and agent fees, as well as
expenses it incurred during its successful defense against a willful citation issued by the Secretary
of Labor on January 8,1992. Pursuant to The Equal Access to Justice Act [S U.S.C. 5041 (EAJA)
and implementing regulations at 29 C.F.R. 5 2204.101, Service petitioned for a total of $34,5 12.95
in fees and expenses.
The underlying case arose from the second of two Occupational Safety and Health
Administration (OSHA) investigations relating to Service, Taynton’s wholly-owned,wted
dredging company in Southern Florida. The citation asserted six willful multiple-item violations,
containing 17 separate items or subitems. In his post-hearing brief, the Secretary withdrew five of
the asserted violations. The July 8,1993, administrative law judge (ALJ) decision affirmed nine of
the remaining violations and vacated three. Three of the items were affirmed as willful, four as
serious, and two were characterized as nonserious with no penalty. The Secretary proposed a penalty
of $75,000; the ALJ decision assessed $12,200.
Taynton and Service appealed. The Review Commission directed review. On April 27,
1995, the Review Commission reversed the ALJ and vacated the citation in its entirety on
jurisdictional grounds. The decision did not reach the ALJ’s factual findings. The Secretary initially
appealed to the United States Court of Appeals for the Eleventh Circuit. When he unilaterally
withdrew his appeal, the April 27,1995, decision became final. Taynton timely filed his fee petition.
Criteria for Eligibility
The EAJA was designed to encourage persons of limited means to seek review of, or defend
against, unjustified governmental actions. Nitro Electric Co., 16 OSHC 1596 (No. 91-3090, 1994).
The EAJA does not routinely provide for awards to the prevailing party, even if that party meets the
financial eligibility criteria. Payment is to be ordered only if the Secretary has acted without
substantial justification or other circumstances make an award unjust.
The applicant has the burden of proving eligibility. A sole owner of an unincorporated
business, such as Taynton, cannot have a net worth of more than $7 mill.ion or employ more than
500 employees. Taynton and Service have submitted financial and other data, affied to be correct;.
which are sufficient to establish eligibility under the Act.
Prevailing Party
An eligible applicant must establish that he was the prevailing party. Without dispute,
Taynton was the prevailing party based on the Review Commission decision of April 27, 1995.
It may also be argued that Taynton was the prevailing party as to discrete portions of the
administrative law judge’s (ALJ’s) decision below. A party seeking fees “need not have prevailed
as to the central issue in the case but only as to a discrete substantive portion of the proceeding.”
HP. Fowler Contracting Corp., 11 BNA OSHC 1841, 1845 (No. 80-3699, 1984). To qualify, the
portion of the case must be significant and must result in some of the benefit the party sought in
initiating litigation. Id. Thus, even if the ALJ decision discounted some, but not all, of the variously
asserted instances of a single violation, if the violation was tirmed the respondent could not be said
to have prevailed on a significant portion of the case. The contrary may be true where the ALJ
decision substantially reduced the proposed penalty or the classification of the violation.
Substantial JustiJication
Was the Secretary substantially justified in proceeding as if he had subject matter
jurisdiction, even though Taynton had ceased operating as Service by the time the citation was
issued? Secondarily, was the Secretary substantially justified in proceeding with those portions of
the underlying case which he withdrew or lost before the ALJ?
2
The Secretary has the burden of demonstrating that an award should not be made in a given
case. Dole V. Phoenix RooJing, Inc., 922 F.2d 1202, 1209 (5th Cir. 1991). The action must remain
substantially justified from the time of citation through the time of hearing. Cor&idated Constr.,
Inc., 16 BNA OSHC 1001 (NO. 89-2839, 1993). Legal precedents and the facts known to the
Secretary when he proceeded with the case are weighed.
The Review Commission Decision
After the first investigation resulted in a citation with fines, OSHA advised Taynton to expect
a further substantial assessment if he employed a helper and continued to operate without repairing
the barge-mounted crane characterized as a “piece of junk.” On August 27’1991, OSHA conducted
its second investigation of Service in four months. By December 12, 1991, Taynton had “scrapped
out” that crane and barge, dismissed Service’s one employee, and ceased his business operation. As
a result of the August 27, 1991, inspection, OSHA issued Service a second citation, classified as
willful, on January 8, 1992, less than a month after Service had gone out of business.
The Review Commission saw the case as raising a “novel question” ofjurisdiction. Tqnton,
17 BNA OSHC 1205 (No. 92.498,1995). Reading $5 9(a), 3(5), and 3(6) of the Act together, the
Commission’s majority for the first time held that the terms “has employees” and “is employing”
in the Act’s definitional section defeated jurisdiction for an entity which was not in business when
a citation was issued.’ It rejected the Secretary’s argument that the “jurisdictional snapshot” should
be taken at the time the violation occurred. Id.
Taynton argues that since the Commission unequivocally ruled that the Secretary was
without jurisdiction, “the government should not have created the case at all,” and there could be “no
justification for issuing the citation and pursuing this action” (Pet. brief pp. 3’4). The Secretary’s
burden to prove substantial justification is not insurmountable, even if the Secretary lost the case on
jurisdictional grounds. “The standard . . . should not be read to raise a presumption that the
Government’s position was not substantially justified, simply because it lost the case.” 1980 U.S.
Code Cong. & Admin. News at 4989 & 4997. “Conceivably, the Government could take a position
’ The Commission did not decide whether jurisdiction existed if an entity remained in business but no
longer had employees. Tqnton, 17 OSHC 1207, fh 6.
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that is not substantially justified, yet win; even more likely, it could take a position that is
substantially justified, yet lose.” Pierce v. Underwood, 487 U.S. 552,569 (1988).
If the Secretary had a reasonable basis in fact and in law to proceed with the case, he was
substantially justified. Id. at 565. A reasonable legal position must be based on more than
supposition or conjecture. It should be of a kind a reasonable mind might accept as adequate to
support the proposed legal conclusion. A party which appears before a court or administrative
tribunal is responsible for knowing the precedent and procedures applicable to the adjudicative body.,
This is not a case where the Secretary took a legal position contrary to settled law.
Because the Commission enunciated its jurisdictional rationale for the first time in this case,
the Secretary cannot be charged with knowledge based on the case itself. Nor had the Commission
reached an analogous conclusion in a previous case.2 Prior to Tqnton and Jacksonville Shipyard,
the Secretary pursued the infrequent but routinely occurring cases in which a business entity ceased
its operations. Those cases were usually resolved prior to hearing. See Jacksonville Shipyards,
.
16 OSHC 2053,2055 (Weisberg, dissenting). Neither the courts, the Commission, nor the Secretary
distinguished between whether the entity, which was an employer at the time of the violative
conduct, abandoned its business before or after OSHA issued the citation. Following precedent and
the then-accepted view of the jurisdictional issue, the Secretary proceeded in Tqnton as if he had
subject matter jurisdiction. His position that there was jurisdiction was reasonable and, thus, was
substantially justified. Taynton’s application for fees is denied to the extent that it is based on the
April 27, 1995, Review Commission decision.
The Underlving ALJ Decision
Interpreting INS v. Jean, 496 U.S. 154 (1990), the Fourth Circuit observed that the EAJA
does not favor, as Jean termed it, an “atomized line-item” analysis. Roanoke River Basin Association
v. Hudson, 991 F.2d 132,137 (4th Cir. 1993). Rather, courts are to look beyond the issue on which
the fee-petitioner prevailed to determine, from the totality of the circumstances, whether the
government acted reasonably in the litigation. Id at 139. Viewing the case as a whole, it is
2 The Commission’s most similar ruling, Jacksonville Shipyards, Inc., 16 BNA OSHC 2053 (No. 92-888,
1994), appeal pending, was not decided until September 30, 1994, a year after the ALJ decision and 3 years after
OSHA’s citation to Service.
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concluded that the Secretary acted reasonably based on the facts he knew and the assumptions he
made. Indeed, the Secretary was encouraged to proceed by the conclusion reached after the hearing
on the first citation. Although he vacated that citation based on his finding that the purported
employee may have been a visitor, Judge James D. Burroughs observed:
The dismissal of the citations [is not]. . . a vindication of [Service’s] approach, or
non-approach, to safety. Had the Secretary established the existence of one
employee, the evidence was more than sufficient to justify the finding of violations
for each of the nineteen items cited . . . Compliance with the Act for employers is
mandatory, whether or not an employer considers certain standards to be
“ridiculous.”
Taynton d/b/a Service Specialty Co., slip op. (No. 914709, 1992).
In litigating OSHA’s second citation, the Secretary sought to prevent employee exposure
resulting from Taynton’s contined operation of the deteriorated barge-mounted crane. A primary
issue, whether Service employed an employee, was decided in the Secretary’s favor. Also of major
dispute was the question of whether Taynton unacceptably altered the barge-mounted crane and
compromised its safety. The Secretary, likewise, prevailed on this issue. The ALJ decision vacated
certain of the alleged violations, reduced the classifications, or reduced the penalties. Failure to
accept each aspect of the government’s case does not negate the overall success of the action.
In fact, even if an EAJA analysis focused on the individual issues on which the petitioner
prevailed, fees would not be awarded. The facts forming the basis for a governmental action need
not be uncontradicted to support a “substantially justified” finding. If reasonable persons may fairly
disagree whether evidence established a fact in issue, it can be said to be substantial. An important
consideration in the ALJ’s reduction of the classification and penalty was Taynton’s testimony at
the hearing. Because Taynton was refloating his barge at the time, the Secretary conducted ‘an
abbreviated inspection. The inspector observed that the barge-mounted crane appeared to be in the
same bad shape or worse than when he had observed it during the first inspection. The investigator
looked for such things as load charts and safety devices and found none there. Taynton did not
advise the inspector at that time that, when the barge began sinking, he allegedly carried such items
to a tug. Taynton provided no corroborating testimony or physical evidence to support the alleged
transfer. The ALJ decision credited Taynton’s testimony, although the issue clearly was not without
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doubt. The Secretary’s position to proceed with certain violations has not been rendered
unreasonable because he failed to accept Taynton’s possibly self-serving assertions.
With this in mind, the specific items on which Taynton prevailed need be only briefly
discussed. Item 2a, $ 192659(e)(l), asserted that Taynton had no hazard communication program.
The ALJ decision accepted a more informal program since the substances were common products
and Taynton had discussed the MSDSs with his only employee. The Secretary could reasonably
assert, however, that Taynton did not have an adequate written program. Items 2b and 2c ,
$ 1926.59(g)( 1) and .59(h), were withdrawn. These items alleged that Taynton had not secured
material safety data sheets (MSDS’s) for hazardous chemicals or properly trained his employee on
their use. Taynton had hazardous chemicals on board. The Secretary initially believed that Taynton
had not secured MSDSs for the chemicals since they were not at the worksite at the time of the
inspection and Taynton did not assert that he had them when initially asked by OSHA’s investigator.
In withdrawing the items, the Secretary stated (Sec.‘s brief below pp. 30,3 1):
While respondent did not produce the MSDS[s] at the time of the inspection, the
Secretary concedes that Mr. Taynton was occupied with a more important task, that
of refloating his barge.
The Secretary concedes that respondent’s problems at the time of the inspection did
not allow an adequate interview of respondent and his employee, Mike Clark, to
determine whether or not respondent fully complied with the provision of the cited
standard.
The Secretary’s original determination that Taynton failed to secure the MSDS’s or train his
employee on hazardous chemicals was reasonable based on the facts known to him at the time.
Item 3d, 5 1926.550(a)(S), alleging exposure to rotating gears, was vacated. The ALJ
decision agreed with the Secretary that the gears were not properly guarded. It rejected Taynton’s
argument that the gears did not need to be guarded. However, Taynton’s one employee was not
specifically shown to have been exposed to running gears when he performed his tasks. The
Secretary relied on the fact that when the crane operated and the employee was on board, sufficient
exposure was shown. The position was reasonable although not ultimately persuasive.
Item 4b, $ 1926.550(a)(6), failing to make an annual inspection, was vacated. Item 4c,
$ 1926.550(a)(6), failing to record the results of the annual inspection, was withdrawn. The ALJ
6
vacated item 4b based on a credibility determination that, as stated, was not without doubt. The
Secretary’s position that credibility was lacking was reasonable. The Secretary withdrew item 4c
because it was his theory that no inspection was made. He considered it to be inconsistent to assert
that a nonexistent inspection was not properly documented (Sec.? brief below p. 39). Had it not
been withdrawn, item 4c may have been affirmed. The Secretary’s initial position was reasonable.
Item 5a, 0 1926.605(b)(2), required access to the barge. Item 5b, $ 1926.605(d)(2) required
that an employer provide lifesaving equipment, specifically a ladder to allow employees to get out
of the water. In withdrawing the item 5a, the Secretary stated (Set’s brief below p. 39):
While the respondent did not, in fact, comply with the provisions of this standard, his
ftilure to do so is explained in part by the circumstances at the time of the inspection.
Since Taynton did not comply with item 5a, the Secretary was reasonable in pursuing the
violation. As to item 5b, the Secretary accepted Taynton’s testimony at face value, without
additional proof of the assertion, that Taynton had permanently affixed a ladder on the stem of the
barge which was underwater at the time of the inspection. The Secretary withdrew the item because
the inspector “might not have seen a ladder so attached” (Sec. brief below p. 40). The Secretary was
reasonable in concluding that there was no ladder since the investigator did not see a ladder, was not
told that one had been added since the first inspection, and other cited deficiencies not been repaired.
In sum, because the Secretary’s position both in the case as a whole and for the noted
individual items was substantially justified, no award is made. It is unnecessary to determine which
of the claimed fees and expenses are properly compensable.
NANCY J. SPIES
Judge
Dated: August 29, 1996
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