Cornell & Co., Inc. v. Occupational Safety and Health Review Com'n

• Decision Date: 09 March 1978
• Docket Number: No. 76-2513,76-2513
• Citation: 573 F.2d 820
• Parties: 6 O.S.H. Cas.(BNA) 1436, 1978 O.S.H.D. (CCH) P 22,646 CORNELL AND COMPANY, INC., Petitioner, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION and Secretary of Labor, Respondents.
• Court: U.S. Court of Appeals — Third Circuit

Page 820

573 F.2d 820

6 O.S.H. Cas.(BNA) 1436, 1978 O.S.H.D. (CCH) P 22,646

CORNELL AND COMPANY, INC., Petitioner, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION and Secretary of Labor, Respondents.

No. 76-2513.

United States Court of Appeals,Third Circuit.

Argued Oct. 17, 1977.

Decided March 9, 1978.

Roger D. Susanin, Cunniff, Bray & McAleese, Bala Cynwyd, Pa., for petitioner.

Carin A. Clauss, Sol. of Labor, Benjamin W. Mintz, Associate Sol. for Occupational Safety and Health, Michael H. Levin, Counsel for Appellate Litigation, Allen H. Feldman, Asst. Counsel for Appellate Litigation, Dennis K. Kade, Nancy L. Southard, U. S. Dept. of Labor, Washington, D. C., for respondents.

Before ROSENN and VAN DUSEN, Circuit Judges, and COHILL, District Judge. ^*

OPINION OF THE COURT

COHILL, District Judge.

On September 22, 1976, the Occupational Safety and Health Review Commission (the "Commission") rendered a decision holding that petitioner, Cornell and Company, Inc. ("Cornell"), had violated the safety standards of 29 C.F.R. §§ 1926.28(a) and 1926.104, promulgated pursuant to the Occupational Safety & Health Act of 1970, 29 U.S.C. § 651 et seq (the "Act"). ¹ The Commission assessed a $700 penalty against Cornell. Pursuant to 29 U.S.C. § 660(a), we are here reviewing that decision.

I

After carefully reviewing the facts, we conclude that the Commission abused its discretion in allowing the Secretary of Labor (the "Secretary"), pursuant to Fed.R.Civ.P. 15, to amend twice a complaint against Cornell, the last one being over 4 months after the original citation alleging a violation by Cornell. We therefore vacate the Commission's order permitting the amendment of the citation and the assessment of a penalty.

Cornell is a steel construction contractor, which in the summer of 1974 was erecting at a refinery in Philadelphia a steel flare stack (a metal chimney) and a supporting three-legged steel frame, resembling an oil derrick. This structure was constructed in two stages. The first stage, known as the "connecting stage," consisted of two steps. In the first step the "vertical connecting" step workers called "connectors" initially secured the vertical beams into position. In the second step the "horizontal connecting" step the vertical beams were secured temporarily by connecting horizontal and diagonal beams as cross-bracing. When these two steps were completed, the procedure was repeated at the next level until the structure reached the required elevation. After the frame was completely erected and connected, the ironworkers proceeded to the second stage of construction, the "bolting up" stage. This involved securing the entire structure by fastening additional bolts at each connection joint. Only after this was completed was the structure sufficiently braced to meet the architect's specifications.

On June 27, 1974, a compliance officer for the Department of Labor, Occupational Safety and Health Administration inspected the jobsite while Cornell's employees were in the connecting stage, working at an elevation of 100 feet. On July 2, 1974, as a result of that inspection, the Secretary issued a citation against Cornell and proposed a $700 penalty for a serious violation of 29 C.F.R. § 1926.750(b)(2), ² which mandates the use of temporary flooring, where practical, for skeleton steel erection in tiered buildings. Cornell timely contested the citation, asserting that the specified safety standard did not apply to Cornell's project, since the frame was a non-tiered structure.

Apparently the Secretary agreed, and on August 22, 1974, he issued a complaint, but moved to amend the citation by adding a violation of another standard, this time citing 29 C.F.R. § 1926.750(b)(1)(ii), ³ which requires the use of safety nets where it is impractical to use temporary flooring for skeleton steel erection in tiered buildings. The unopposed motion was granted, and Cornell's contest letter was treated as an answer to the complaint.

On November 4, 1974, just nine days before the hearing, and more than 4 months after the inspection, the Secretary again moved to amend the citation and complaint by withdrawing the allegations of violations of 29 C.F.R. §§ 1926.750(b)(2) and 1926.750(b)(1)(ii), and alleging instead violations of 29 C.F.R. §§ 1926.28(a) and 1926.104, ⁴ requiring the use of safety belts. The Secretary conceded that the violations previously alleged were inapplicable. Cornell did not receive a copy of the proposed amended complaint until November 6 or 7; the hearing took place on November 13.

At the start of the hearing on November 13, 1974, the administrative law judge ("ALJ") tentatively denied a motion by Cornell to dismiss the complaint on the ground of undue prejudice to Cornell from the Secretary's delay in citing violations of the proper safety standards. At the conclusion of the hearing on the merits, the ALJ offered Cornell 30 days to gather and present additional evidence. Cornell, however concluded that the additional time would not remedy the prejudice it had suffered in preparing its defense and therefore presented no additional evidence.

In his decision, the ALJ ruled that Cornell's ability to prepare a defense had been materially impaired by the delay in filing the last amendment. He also held that even if it were assumed that Cornell's ability to defend the citation had not been impaired, the Secretary had failed to prove a violation. Accordingly he granted Cornell's motion to dismiss and vacated the citation and penalty. On the Secretary's petition for review, the Commission reversed in a 2-1 decision, holding that the amendments did not prejudice Cornell and that the evidence established a safety belt violation. The Commission affirmed the citation, as amended, and assessed a $700 penalty.

The primary issue presented is whether the Commission erred in permitting the Secretary on November 4, 1974 to amend his citation and complaint to allege a violation of the safety belt standards. Cornell argues that the amendment changed the legal and factual basis of the alleged violation, thereby preventing it from presenting its sole defense. We agree. ⁵

II

Under the Commission's procedural rules, the standard applicable to amendment of the Secretary's citation and complaint is Fed.R.Civ.P. 15. See29 C.F.R. § 2200.2; Bloomfield Mechanical Contracting, Inc. v. OSHRC, 519 F.2d 1257, 1262 (3d Cir. 1975). In general, the grant or denial of a motion for leave to amend, pursuant to Fed.R.Civ.P. 15(a), is within the sound discretion of the district court; it will be reversed only for an abuse of discretion. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330-31, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); Canister Co. v. Leahy, 191 F.2d 255, 257 (3d Cir.), cert. denied, 342 U.S. 893, 72 S.Ct. 201, 96 L.Ed. 669 (1951). Rule 15(a) directs that leave to amend "shall be freely given when justice so requires."

In Foman the Supreme Court identified factors governing motions to amend under Rule 15(a):

"Rule 15(a) declares that leave to amend 'shall be freely given when justice so requires'; this mandate is to be heeded. See generally, 3 Moore, Federal Practice (2d ed. 1948), PP 15.08, 15.10. If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. the leave sought should as the rules require, be 'freely given.' "

371 U.S. at 182, 83 S.Ct. at 230. See Moore's Federal Practice P 15.08(4), at 897-900 (2d ed. 1974); 6 C. Wright & A. Miller, Federal Civil Procedure § 1487 (1971). Delay alone, however, is an insufficient ground to deny an amendment, unless the delay unduly prejudices the non-moving party. Deakyne v. Commissioners of Lewes, 416 F.2d 290, 300 n.19 (3d Cir. 1969); Mercantile Trust Company National Association v. Inland Marine Products Corp., 542 F.2d 1010, 1012 (8th Cir. 1976); Moore P 15.08(4), at 901; Wright & Miller § 1488, at 438.

It is well-settled that prejudice to the non-moving party is the touchstone for the denial of an amendment. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330-31, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); Kerrigan's Estate v. Joseph E. Seagram & Sons, 199 F.2d 694, 696 (3d Cir. 1952); Moore P 15.08(4), at 897; Wright & Miller § 1487, at 428. In evaluating the extent of prejudice, courts may inquire into the hardship to the non-moving party if leave to amend is denied. Moore P 15.08(4), at 902; Wright & Miller § 1487, at 429.

Having set out the basic principles concerning Fed.R.Civ.P. 15, we turn to the present case. We are reviewing the order of the Commission, not of the ALJ. 29 U.S.C. § 660(a); Accu-Namics, Inc. v. OSHRC, 515 F.2d 828, 834-35 (5th Cir. 1975), cert. denied, 425 U.S. 903, 96 S.Ct. 1492, 47 L.Ed.2d 752 (1976). Since the Commission allowed the November 4 amendment, the question becomes whether the Commission abused its discretion in so doing. We conclude that it did.

Cornell's sole defense to the last amendment to the complaint was that at the time the compliance officer made his inspection it would have been more dangerous for the ironworkers to use the safety belts than not to use them because the beams were not sufficiently braced. See United States Steel Corp. v. OSHRC, 537 F.2d 780 (3d Cir. 1976); Hunt, The Elusive Burden of Proof Under the Occupational Safety and Health Act of 1970, 30 Sw.L.J. 693, 713 (1976).

In this type of construction there are times when the vertical beams are in place, but not securely fastened, so it may be dangerous to...