D.R.T.G. Builders, L.L.C. v. Occupational Safety & Health Review Comm'n

• Decision Date: 14 February 2022
• Docket Number: No. 20-61190,20-61190
• Citation: 26 F.4th 306
• Parties: D.R.T.G. BUILDERS, L.L.C., Petitioner, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION; Martin Walsh, Secretary, U.S. Department of Labor, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

26 F.4th 306

D.R.T.G. BUILDERS, L.L.C., Petitioner,

v.OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION; Martin Walsh, Secretary, U.S. Department of Labor, Respondents.

No. 20-61190

United States Court of Appeals, Fifth Circuit.

FILED February 14, 2022

Steven Randolph McCown, Andrew R. Gray, Littler Mendelson, P.C., Austin, TX, for Petitioner.

John X. Cerveny, Occupational Safety & Health Review Commission, Washington, DC, Christopher Lopez-Loftis, Trial Attorney, U.S. Department of Labor, Dallas, TX, Kate S. O'Scannlain, U.S. Department of Labor, Office of the Solicitor, Washington, DC, for Respondent Occupational Safety and Health Review Commission.

Juan Carlos Lopez, U.S. Department of Labor, Office of the Solicitor, Occupational Safety & Health Division, Washington, DC, John X. Cerveny, Occupational Safety & Health Review Commission, Washington, DC, Christopher Lopez-Loftis, Trial Attorney, U.S. Department of Labor, Dallas, TX, Kate S. O'Scannlain, U.S. Department of Labor, Office of the Solicitor, Washington, DC, for Respondent Martin Walsh, Secretary, U.S. Department of Labor.

Before Higginbotham, Smith, and Ho, Circuit Judges.

Patrick E. Higginbotham, Circuit Judge

Today we decide whether the Occupational Safety and Health Administration (OSHA) properly served D.R.T.G. Builders (DRTG) with notice of a workplace violation citation. DRTG argues that as OSHA failed to properly serve it with the citation, it is entitled to relief from default entry of the citation under Rule 60(b)(1) or Rule 60(b)(6) or, alternatively, that it should receive equitable tolling.

We hold that the finding of the Occupational Safety and Health Review Commission (Commission) that notice was properly served was neither arbitrary nor capricious and deny DRTG's requested relief.

I.

After receiving information about a worksite fatality, OSHA investigated DRTG, a construction company in Houston, Texas. At the inspection two DRTG employees, Israel Rodriguez and Humberto Guzman, provided OSHA DRTG's business address. This is also the home address of Jose Padron, DRTG's sole owner.

On September 13, 2019, OSHA issued a two-item citation and a notice of a proposed penalty of $10,608 to DRTG. OSHA mailed the citation to DRTG at the provided address by USPS certified mail. The mailing was deemed unclaimed by USPS after an unsuccessful delivery attempt was made on September 16, 2019. USPS left a standard delivery slip saying that the certified mailing would be held at the Post Office for pick-up; DRTG never retrieved the mailing. Upon learning that DRTG had not claimed the mailing, OSHA sent the citation by UPS Next Day Air on September 23, 2019. According to UPS tracking, the citation was successfully delivered to DRTG's doorstep on September 24, 2019.

DRTG had fifteen working days from receipt of the citation to file a notice of contest.¹ OSHA calculated the fifteen working days from the date of the UPS delivery, thus DRTG had until October 16, 2019 to file its notice of contest. DRTG did not file the notice of contest by this deadline and the citation became a final order of the Commission on October 16, 2019.² The next day, an OSHA representative spoke with Padron regarding an abatement certification and other documentation required by the citation.³

OSHA also sends next of kin letters whenever an OSHA inspection relates to a workplace fatality. On October 1, 2019, OSHA sent a next of kin letter to Israel Rodriguez, a DRTG employee and the deceased employee's cousin. The letter included a copy of the citation. Rodriguez received this on October 18, 2019 and immediately forwarded it to DRTG's counsel.

On November 5, 2019, OSHA received DRTG's notice of contest. On November 6, 2019, OSHA responded that the notice of contest had not been timely filed. On February 11, 2020, DRTG filed a Motion for Relief from a Final Order Pursuant to Rule 60(b)(1) & (6). An Administrative Law Judge denied DRTG's motion, dismissed its untimely notice of contest, and affirmed the underlying citation. DRTG timely petitioned the Commission for discretionary review. The matter was not directed for review, and the ALJ decision became the final order of the Commission. DRTG now appeals the Commission's decision.

II.

We review ALJ decisions that the Commission declines to review under the same standards as we review decisions of the Commission.⁴ "This [C]ourt must accept findings of fact by the Commission as ‘conclusive’ if they are supported by ‘substantial evidence on the record considered as a whole.’ "⁵ We "uphold factual findings if a reasonable person could have found what the Commission found, even if the appellate court might have reached a different conclusion."⁶

We review the Commission's legal conclusions as to whether they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."⁷ Additionally, "the decision to grant or deny relief under Rule 60(b) lies within the sound discretion of the [Commission] and will be reversed only for abuse of that discretion."⁸ The Commission abuses its discretion when it bases its decision on an erroneous view of the law or on a clearly erroneous assessment of the evidence.⁹

III.

When OSHA finds a worksite violation it must "notify the employer by certified mail" of the citation and proposed penalty; employers then have fifteen working days to contest a citation.¹⁰ If the notice of contest is not postmarked in the fifteen days, the citation and any proposed penalty are "deemed a final order of the Commission and not subject to review by any court or agency."¹¹

DRTG argues that OSHA did not properly serve it with the citation because it was delivered by UPS, not certified mail. OSHA argues that alternative modes of delivery, such as UPS, may be used where certified mail has been used first and failed. The test for proper notice is "whether the service is reasonably calculated to provide an employer with knowledge of the citation and notification of proposed penalty and an opportunity to determine whether to abate or contest."¹² The government cannot "simply ignore" when delivery has failed and should "take[ ] additional reasonable steps to notify [the party], if practicable to do so."¹³ OSHA need not take "heroic efforts" to ensure that the notice is delivered, nor is it required to substitute petitioner's proposed procedures for those in place.¹⁴

Consistent with precedent and with the OSHA Field Operations Manual,¹⁵ after learning that DRTG had not responded to the USPS delivery notice, OSHA took the additional step of sending the citation by UPS Next Day Air. Because OSHA first sent the notice by USPS certified mail and then took steps that were reasonably calculated to provide DRTG with notice, OSHA properly served DRTG with notice of the citation.

DRTG further argues that proper service must conform to Federal Rule of Civil Procedure 4(h) and be effected through certified mail, hand delivery, or personal service.¹⁶ However, Rule 4(h) service requirements only apply "unless federal law provides otherwise."¹⁷ Because 29 U.S.C. 659(a) governs notification of OSHA citations, Rule 4(h) does not apply here.

IV.

DRTG alternatively moved for relief from the late-filed notice of contest under Rule 60(b)(1) and Rule (60)(b)(6).

A.

Rule 60(b)(1) provides relief from a final judgment due to "mistake, inadvertence, surprise, or excusable neglect."¹⁸ DRTG does not allege any "mistake, inadvertence [or] surprise," therefore we look only at excusable neglect. Whether a party is entitled to relief for excusable neglect is "at bottom an equitable [determination]."¹⁹ We rely on the standard from Pioneer Invest. Servs. Co. v. Brunswick Assocs. Ltd. P'ship to analyze excusable neglect under Rule 60(b)(1).²⁰ Under Pioneer , we look to "the danger of prejudice, ... the length of the delay and its potential impact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the movant, and whether the movant acted in good faith."²¹ The party seeking relief bears the burden of showing that Rule 60(b) relief should be granted.²²

DRTG contends that the ALJ improperly relied solely on the reason for delay and that the Pioneer analysis cannot be "limited to whether a party's mistake caused the delay," rather, courts must "take into account all relevant circumstances surrounding a party's failure to file."²³

The first Pioneer factor is the danger of prejudice to the nonmoving party, here, the Commission.²⁴ The notice of contest was fourteen working-days late; this did not prejudice the agency.²⁵

The second factor is the length of delay. This Court found in Coleman Hammons Constr. Co., Inc. v. O.S.H.R.C. that where the other factors weighed for the employer, an eighteen working-day delay did not foreclose relief.²⁶ However, we emphasized there that the company responded to the citations "as soon as the project superintendent saw them."²⁷ Here, even if DRTG did not see the citation until October 18, 2021, it still waited more than two weeks to file the notice of contest and made no effort to contact OSHA in the interim. This factor favors OSHA.

The third factor is whether DRTG acted in good faith. DRTG did not respond promptly once it learned of the citation.²⁸ DRTG provided a single address, which it knew could be unoccupied. And unlike in Coleman , DRTG had no system in place to receive, open, and respond to mail such that the missed citation was only "attributable to a single instance of unforeseen human error."²⁹ That DRTG acted in good faith is unsupported; this factor weighs in OSHA's favor.

The fourth factor is "the reason for the delay, including whether it was in the reasonable control of the movant."³⁰ The reason for the delay was DRTG's failure to institute a mail process that enabled it to receive USPS certified mail or a UPS delivery in a timely manner. DRTG misreads Coleman to argue that notwithstanding its role in the delay, it should still receive relief under ...