Pentecost Contracting Corp.

Plain-English summary

Pentecost admitted willful excavation violations but successfully reduced proposed penalties from $105,000 to $42,000 by grouping related items at each trench. It then sought attorney's fees under the Equal Access to Justice Act. The Commission held that success on a significant penalty issue can make an employer a prevailing party for EAJA purposes. It nevertheless found the Secretary substantially justified in seeking separate penalties because employees worked in multiple unprotected trenches, one had already partly collapsed from water seepage, and Pentecost had a history of similar violations. The Commission affirmed denial of the fee application.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1926.651(h)(1); 29 C.F.R. § 1926.651(k)(2); 29 C.F.R. § 1926.652(a)(1)
• Outcome: The denial of Pentecost's EAJA fee application was affirmed.
• Key point: Winning a substantial penalty reduction can establish prevailing-party status, but fees remain unavailable when the Secretary's original penalty position was substantially justified.

Full text (OSHRC public release)

SECRETARY OF LABOR,
Complainant,
v. OSHRC Docket Nos. 92-3789 & 92-3790
PENTECOST CONTRACTING CORP.,
Respondent.

                                     DECISION

BEFORE: WEISBERG, Chairman and GUTTMAN, Commissioner.
Before the Commission is an order of Administrative Law Judge John H. Frye, III,
denying Pentecost’s application for fees and expenses under the Equal Access to Justice Act
(EAJA) 5 U.S.C. § 504. The judge determined that Pentecost was not entitled to an award
because the Secretary was substantially justified in proposing individual penalties for
violations of several excavation standards even though compliance with one standard would
have abated the violations of the other standards at each excavation. For the reasons stated
below, we affirm the judge’s decision.
Background
The two willful citations that give rise to Pentecost’s application for attorney’s fees
were issued following an inspection of Pentecost’s worksite in Tarrytown, N.Y., Docket No.
92-3789 involves a willful citation that alleged violations of §§ 1926.651(h)(1)1 because
Pentecost failed to take special precautions in trenches where employees were exposed to
water accumulation; 1926.651(k)(2)2 because a competent person failed to remove
employees from working inside of an unshored, unsheeted, unsloped, and unprotected trench;
and 1926.652(a)(1)3 because the company failed to slope or otherwise protect employees
working in the trench from the hazard of trench collapse. Docket No. 92-3790 involves a
different trench. At issue here is a willful citation which, as in Docket No. 92-3789, alleged
violations of both 29 C.F.R. §§ 1926.651(k)(2) and 1926.652(a)(1). Penalties of $21,000
were proposed for each willful item for a total proposed penalty of $105,000 for the two
willful citations.

1
§ 1926.651 Specific excavation requirements.
....
(h) Protection from hazards associated with water accumulation. (1)
Employees shall not work in excavations in which there is accumulated water,
or in excavations in which water is accumulating, unless adequate precautions
have been taken to protect employees against the hazards posed by water
accumulation. The precautions necessary to protect employees adequately
vary with each situation, but could include special support or shield systems
to protect from cave-ins, water removal to control the level of accumulating
water, or use of a safety harness and lifeline.
2
§ 1926.651 Specific excavation requirements.
....
(k) Inspections.
....
(2) Where the competent person finds evidence of a situation that could result
in a possible cave-in, indications of failure of protective systems, hazardous
atmospheres, or other hazardous conditions, exposed employees shall be
removed from the hazardous area until the necessary precautions have been
taken to ensure their safety.
3
§ 1926.1926.652 Requirements for protective systems.

      (a) Protection of employees in excavations. (1) Each employee in an
      excavation shall be protected from cave-ins by an adequate protective system
      designed in accordance with paragraph (b) or (c) of this section . . . .

Judge’s Decision on the Merits
The parties entered into a stipulation in which Pentecost admitted the violations, but
continued to argue that the penalties were duplicative. After a hearing, the judge issued a
decision affirming each item of the two willful citations. However, he found that a single
abatement would have eliminated the violations in Docket No. 92-3789 and a single
abatement would have eliminated the violation in Docket No. 92-3790. Relying on Capform,
Inc., 13 BNA OSHC 2219, 1987-90 CCH OSHD ¶ 28,503 (No. 84-0556, 1989), and Dec-
Tam Corp., 15 BNA OSHC 2072, 1991-93 CCH OSHD ¶ 29,942 (No. 88-523, 1993), he
grouped each set of violations and assessed a $21,000 penalty for each willful citation, for
a total penalty of $42,000.4
Judge’s Decision on the EAJA Application
Under the EAJA, a party that has prevailed against the federal government in an
administrative adjudication and meets certain limits on net worth and number of employees,
is entitled to an award of attorney fees and other expenses, unless the government as a party
to the proceeding was substantially justified in its position or special circumstances make an
award unjust. 5 U.S.C. §§ 504(a)(1) and 504(b)(1); K.D.K. Upset Forging, Inc., 12 BNA
OSHC 1856, 1857, 1986-87 CCH OSHD ¶ 27,612, p. 35,879 (No. 81-1932, 1986). The
judge denied Pentecost’s EAJA application, concluding that the Secretary was substantially
justified in demanding separate penalties. He found that the Secretary had the authority to
propose separate penalties for each standard violated because employers are required to
comply with all standards.

                                 Prevailing Party
   As a threshold matter, we first consider whether successfully challenging a penalty

proposal qualifies an employer as the prevailing party under the EAJA. We conclude that

4
The judge found that the two inspections were separate and distinct and that, in that regard,
the penalties would not be combined.
it does. For purposes of attorney’s fees statutes, a “prevailing party” is one that has
succeeded on any of the significant issues in the litigation, and, as a result of that success,
achieves some of the benefit sought in the litigation. Hensley v. Eckerhart, 461 U.S. 424,
431(1983); K.D.K. Upset Forging, Inc., 12 BNA OSHC at 1857, 1986-87 CCH OSHD at
p. 35,879. The 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. H.P. Fowler Contracting
Corp., 11 BNA OSHC 1841, 1845, 1983-84 CCH OSHD ¶ 26,830, p. 34,357 (No. 80-3699,
1984).
Section 10(a) of the OSH Act, 29 U.S.C. § 659(a), specifically allows a party to
contest either the underlying citation, the penalty, or both. Thus where, as here, a party
succeeds in its challenge to the proposed penalty it has prevailed in a discrete portion of the
case and has achieved some of the benefit it sought by the litigation. Under Hensley, this
qualifies it as the prevailing party for EAJA purposes.
Our conclusion is not affected by the 1996 amendment to the EAJA which specifically
allows a party to seek fees and expenses when the agency’s demand “is substantially in
excess of the decision of the adjudicative officer and is unreasonable when compared with
such decision. . .” 29 U.S.C. § 504(a)(4). The Secretary argues that because Congress
specifically amended the EAJA to provide for fee awards where no such provision previously
existed, it must be presumed that Congress previously considered penalty reduction alone
as ineligible for a fee award.
We do not need to reach the import of the 1996 EAJA amendments, however. We find
that considering the language of the OSH Act even prior to its amendment, EAJA was
available to parties that substantially prevailed on penalty issues before the Commission. Cf.
Dole v. Phoenix Roofing, Inc., 922 F.2d 1202, 1204 (5th Cir. 1991)(language peculiar to
OSH Act supplements that of EAJA). Thus, prior to the 1996 EAJA amendments, if an
employer had successfully contested the penalties on the grounds that the Secretary
proposed a penalty in excess of the statutory maximum, we would have concluded that the
employer was a ”prevailing party.”5
Substantial Justification
Because Pentecost has established that it was the prevailing party, it is entitled to an
award of fees and costs unless the Secretary establishes that her position was substantially
justified or the record shows special circumstances that would make an award unjust. K.D.K.
Upset Forging, Inc., 12 BNA OSHC at 1858, 1986-87 CCH OSHD at p. 35,880. To
establish “substantial justification” the Secretary must show that her position was reasonable
in law and fact. William B. Hopke Co., 12 BNA OSHC 2158, 2159, 1986-87 CCH OSHD
¶ 27,729, p. 36,255 (No. 81-0206, 1986). We conclude that the Secretary has carried this
burden.
Pentecost correctly points out that at least in cases where the issue of grouping has
been raised, if the Secretary has proposed separate penalties for similar violations that could
be cured by a single act of abatement, the Commission has grouped the penalties. E.g., L.E.
Myers Co., 16 BNA OSHC 1037, 1048, 1993-95 CCH OSHD ¶ 30,016, p. 41,135 (No. 90-
945, 1993); Dec-Tam Corp., 15 BNA OSHC 2072, 2081, 1991-93 CCH OSHD at p. 40,927.
However, a Commission decision to group violations for penalty purposes is a discretionary
exercise of the Commission’s power to assess penalties, based on a factual assessment of
the case. In no case has the Commission ruled out the assessment of separate penalties
where they are justified by the facts of the case. Nonetheless, given the Commission
precedent, it is incumbent on the Secretary to show substantial justification for her decision
to group penalties where, as here, she seeks separate penalties for violations that the
Commission would likely group.6 Although the question of whether it was appropriate to
group penalties here is not before us, our review of the record establishes that the Secretary

5
Whether the employer satisfied the other EAJA requirements would have still been at issue.
6
We also note that the Secretary groups penalties under some circumstances.
had a substantial basis for her determination that the violations in this case justified a
separate penalty for each standard violated.
At the threshold, the Secretary recognized and addressed our prior rulings. The
Secretary also points out that the record discloses that employees were working in several
trenches that were neither properly shored or sloped. One of the cited trenches had water
seeping into it , which had caused part of the trench to collapse. While this partial collapse
should have warned Pentecost of the severity of the hazard, it nonetheless allowed employees
to work in the trench, knowingly exposing them to an extreme hazard of trench collapse.
The record also establishes that Pentecost has a history of prior violations for similar
trenching violations that should have given it a heightened awareness of the trenching
standards and the hazards associated with noncompliance.7

7
Pentecost was cited for trench violations in 1988.
 Accordingly, we find that the Secretary’s determination that separate penalties were
appropriate was substantially justified. The judge’s decision denying Pentecost’s EAJA
application is affirmed.8

                                              /s/
                                              Stuart E. Weisberg
                                              Chairman

                                              /s/
                                              Daniel Guttman
                                              Commissioner

Dated: August 6, 1997

8
The Secretary also contends that Pentecost improperly documented and justified its legal
fees, seeks reimbursement of unallowable expenses and seeks reimbursement at an hourly
rate in excess of the statutory maximum. In view of our decision, it is unnecessary for us to
reach these issues.