Meridian Contractors, Inc.

Plain-English summary

OSHA issued Meridian Contractors serious and willful construction citations with proposed penalties after two inspections. The ALJ dismissed both cases under Commission precedent treating the actions as moot because Meridian had stopped employing workers and was preparing to dissolve. After that precedent was reversed and overruled, the Commission held that the cases were not moot because OSHA continued to seek penalties and Meridian continued to defend against them. It reversed the dismissals, denied Meridian's motion, consolidated the two dockets, and remanded them for further proceedings.

Decision snapshot

• Cited standard(s): Multiple construction standards covering safety programs, training, housekeeping, protective equipment, electrical safety, scaffolds, fall protection, ladders, fire protection, saw guarding, and access, plus the general duty clause.
• Outcome: The dismissals were reversed, the dockets were consolidated, and both citation cases were remanded to the ALJ.
• Key point: An employer's cessation of business does not moot an OSHA penalty case while the Secretary seeks penalties and the employer contests them.

Full text (OSHRC public release)

SECRETARY OF LABOR,
Complainant,
v. OSHRC Docket Nos. 94-0719 & 94-1305
MERIDIAN CONTRACTORS, INC. ,
Respondent.

                            DECISION AND ORDER

Before: WEISBERG, Chairman; GUTTMAN, Commissioner.
BY THE COMMISSION:
At issue is whether Administrative Law Judge Benjamin R. Loye erred in granting the
motion to dismiss filed by Meridian Contractors, Inc. (“Meridian”) for both of the actions
pending against it. Judge Loye dismissed the two cases under the then controlling precedent
established by the Commission’s decision (Chairman Weisberg, dissenting) in Jacksonville
Shipyards, Inc., 16 BNA OSHC 2053, 1993-95 CCH OSHD ¶ 30,539 (No. 94-0888, 1994),
rev’d, 102 F.3d 1200 (11th Cir. 1997)(“Jacksonville”). The Commission’s decision in
Jacksonville was reversed by the Eleventh Circuit. Thereafter, the Commission held that it
decided Jacksonville wrongly and overruled the decision. Kenny Niles, d/b/a Kenny Niles
Constr. & Trucking Co.,17 BNA OSHC 1940, 1997 CCH OSHD ¶ 31,300 (No. 94-1406,
1997)(“Kenny Niles”). Therefore, for the reasons discussed below, we reverse the judge,
deny the motion to dismiss, and remand these actions for further proceedings.
Meridian, a construction company that had its principal office and place of business
in Dallas, Texas, was engaged in an apartment construction project in Broomfield, Colorado
in 1993 and 1994. The Occupational Safety and Health Administration ("OSHA") first
inspected the Broomfield worksite on November 18 and 19, 1993. Based on the inspection,
the Secretary issued a citation on February 4, 1994 for serious violations of the Act and
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proposed penalties totaling $27,000.1 Meridian contested only the proposed penalties. The
case was given docket number 94-0719 and assigned to Judge Loye.
OSHA inspected the worksite again on January 19, 1994. Based on that inspection,
the Secretary issued a citation on March 25, 1994 for serious violations with proposed
penalties totaling $37,800, and a citation for willful violations with proposed penalties
totaling $88,200.2 Meridian contested both the citations and proposed penalties. The case
was given docket number 94-1305 and was also assigned to Judge Loye.
While these cases were pending before the judge, Meridian filed a motion to dismiss
the two actions based on the Commission’s decision in Jacksonville, in which the

1
In Docket Number 94-0719, the citation alleged serious violations of 29 C.F.R.
§ 1926.20(b)(1) (failure to have a safety program); § 1926.1060(a) (failure to train
employees about ladders); § 1926.25(a) (failure to clear debris); § 1926.100(a) (failure to
wear hard hats); § 1926.300(b)(2) (failure to guard exposed belt and pulley on compressor);
§ 1926.403(b)(1) (failure to protect employees from electrical hazards while using damaged
receptacles); § 1926.403(b)(2) (failure to install electrical switch properly);
§ 1926.405(g)(2)(iv) (failure to install restraining device); § 1926.451(a)(4) (failure to install
guardrails); § 1926.451(d)(4) (failure to provide adequate footing for scaffold);
§ 1926.451(d)(7) (failure to secure scaffold to building); § 1926.451(d)(10) (failure to install
guardrails on scaffolds); § 1926.451(u)(3) (failure to install catch platform on roof);
§ 1926.500(b)(1) (failure to guard floor openings); § 1926.500(c)(1) (failure to guard wall
openings); § 1926.500(d)(1) (failure to guard open-sided floors); § 1926.1052(c)(1) (failure
to install handrails on stairways); § 1926.1053(a)(1)(ii) (failure to ensure job-made ladders
built in accordance with ANSI standards); § 1926.1053(b)(1) (failure to extend and secure
ladders); and § 1926.1053(b)(16) (failure to identify and withdraw from service defective
ladders).
2
In Docket Number 94-1305, the alleged serious violations were based on noncompliance
with: 29 C.F.R. § 1926.21(b)(2) (failure to train about safety hazards); § 1926.25(a) (failure
to clear debris); § 1926.102(a)(1) (failure to wear eye protection); § 1926.150(c)(1)(iv)
(failure to ensure that fire extinguishers were adjacent to each stairway); § 1926.300(b)(2)
(failure to guard exposed belt and pulley on compressor); § 1924.304(d) (failure to keep
lower guard on saw closed); § 1926.451(a)(13) (failure to provide ladder for scaffold);
§ 1926.500(b)(8) (failure to guard floor holes); and § 1926.1051(a) (failure to provide safe
means of access). The alleged willful violations were based on noncompliance with:
§ 1926.95(a) or, in the alternative, Section 5(a)(1) of the Occupational Safety and Health Act
of 1970 (failure to use safety equipment such as safety belts); § 1926.451(u)(3) (failure to
install catch platforms on roofs); and § 1926.500(c)(1) (failure to guard wall openings).
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Commission held that an administrative enforcement proceeding under the Occupational
Safety and Health Act of 1970, 29 U.S.C. §§ 651-78 (“the Act”), is rendered moot “where
the employer has effectively corrected the alleged violations by terminating its employees
and where there is no reasonable likelihood that the employer will resume the employment
relationship.” 16 BNA OSHC at 2055, 1993-95 CCH OSHD at p. 42,229. Meridian
submitted an affidavit signed by Charles M. Holbrook, Meridian’s president and only
stockholder, in which he states “[t]hat since June 1, 1995 Meridian has had no employees,
and the only remaining matters are to complete the necessary tasks prior to dissolution of the
corporation” and “[t]hat Meridian is permanently and irrevocably out of the construction
business or business directly related to construction.” The Secretary did not dispute
Holbrook’s affidavit, but instead objected to summary judgment in part on the ground that
Jacksonville was wrongly decided.3 The judge found in both of these cases that “Meridian
has made the requisite showing for a dismissal under Jacksonville” and granted its motion
for dismissal of these actions.4
In Kenny Niles, the Commission overruled its decision in Jacksonville. The
Commission found that “it is error to dismiss a case on the ground that it is ‘moot’” if “the
Secretary continues to seek the assessment of penalties, and the employer continues to
defend against them.” 17 BNA OSHC at 1945, 1997 CCH OSHD at pp. 44,000-01. Under
this test, it is clear that the two actions pending against Meridian are not moot.

3
Although the Secretary initially argued in her response to the motion to dismiss and in her
motion for reconsideration that the decision in Jacksonville can be distinguished from the
issue presented in these actions, the Secretary has now abandoned that claim.
4
In granting Meridian’s motion to dismiss, the judge also relied on Ralph Taynton d/b/a
Service Specialty Co., 17 BNA OSHC 1205, 1993-95 CCH OSHD ¶ 30,766 (No. 92-0498,
1995)(the Commission is deprived of jurisdiction where the employer has ceased business
and has no employees prior to the citation being issued). However, Taynton does not apply
because unlike the respondent in that case, Meridian was still an employer when the citations
giving rise to these cases were issued.
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                                      Order
   For the reasons discussed above, we reverse the judge’s decision below, deny

Meridian’s motion to dismiss, and remand this case to Judge Loye for further proceedings
consistent with this decision.5

                                                    /s/
                                                    Stuart E. Weisberg
                                                    Chairman



                                                    /s/
                                                    Daniel Guttman

Dated: June 12, 1997 Commissioner

5
Because the parties to both cases are the same and there are common issues of law and fact,
we conclude that consolidation is appropriate under Rule 9 of the Commission's Rules of
Procedure, 29 C.F.R. § 2200.9. We therefore consolidate Docket Numbers 94-0719 and 94-
1305.