Dole v. Arco Chemical Co., 90-3213

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Citation921 F.2d 484
Docket NumberNo. 90-3213,90-3213
Parties, 14 O.S.H. Cas.(BNA) 1937, 1991 O.S.H.D. (CCH) P 29,173 Elizabeth DOLE, Secretary of Labor, Petitioner, v. ARCO CHEMICAL COMPANY and Occupational Safety and Health Review Commission, Respondents.
Decision Date14 December 1990

Robert P. Davis, Sol. of Labor, Cynthia L. Attwood, Ass'n Sol., Ann Rosenthal, Laura V. Fargas (argued), U.S. Dept. of Labor, Washington, D.C., for petitioner.

Thomas M. Melo, Gregory B. Richards (argued), Bracewell & Patterson, Houston, Tex., for respondent Arco Chemical Co.

Before MANSMANN, COWEN and ALITO, Circuit Judges.


MANSMANN, Circuit Judge.

This case comes to us on a petition for review filed by the Secretary of Labor pursuant to Section 11(b) of the Occupational Safety and Health Act of 1970 ("the Act"), 29 U.S.C. Sec. 660(b) (1977). The Secretary asks that we review an order of the Occupational Safety and Health Review Commission which finalized the decision of an administrative law judge denying the Secretary's motion to amend the complaint and which granted summary judgment in favor of Arco Chemical Company, Inc. Because we conclude that the administrative law judge abused his discretion in failing to allow the Secretary to amend her complaint, we will grant the petition for review and will remand this matter to the Commission for further proceedings consistent with this opinion.


Although the parties controvert some of the historical facts, for the purposes of this discussion, we rely on the following facts generally agreed to by both parties as set forth in their briefs. On September 13, 1988, Arco employees conducted a fire control training exercise for a group of newly-hired employees. This exercise, which was conducted at the facilities of the Lyondell Petrochemical Company in Houston, Texas, involved the use of portable fire extinguishers owned by Lyondell Petrochemical Company. 1

Cherry Briggs, an Arco employee, was killed when the shell of a dry chemical fire extinguisher exploded as she attempted to charge it. Arco notified the Occupational Safety and Health Administration immediately following the accident. On the following day, an OSHA compliance officer inspected the site and the damaged extinguisher.

On October 5, 1988 OSHA cited Arco for serious violations of three OSHA regulations relating to required annual and monthly inspection and hydrostatic testing of portable fire extinguishers, 29 C.F.R. Secs. 1910.157(e)(2), 1910.157(e)(3), and 1910.157(f)(4) (1989). 2 Arco contested the citation and the Secretary filed a complaint with the Commission. The allegations of the complaint differed somewhat from those in the original citation. In recognition of the fact that Arco did not own or control the portable fire extinguisher at issue, the complaint deleted allegations based upon the monthly and annual inspection requirements set forth in Sections 1910.157(e)(2) and (e)(3). The complaint retained the allegation based upon hydrostatic testing as set forth in Section 1910.157(f)(4) and added an allegation based upon the general responsibility of the employer with regard to inspection and maintenance of portable fire extinguishers as set forth in Section 1910.157(e)(1). 3 The then maximum penalty of $640.00 for each of the two violations was proposed.

Answering the complaint, Arco denied liability and raised defenses including failure to state a claim. A hearing was scheduled for May 4, 1989.

On April 17, 1989 the Secretary requested a continuance in order to conduct discovery. The continuance was granted and the parties engaged in limited discovery. On September 18, 1989, Arco filed motions to stay the proceedings and discovery and at the same time, moved for summary judgment. In its summary judgment motion, Arco argued that reliance upon the general standard of Section 1910.157(e)(1) was inappropriate in view of the specific standards relating to maintenance and testing set forth in (e)(2) and (e)(3) and that the hydrostatic testing provisions of (f)(4) were inapplicable in that Arco was unable to conduct hydrostatic tests of fire extinguishers which it did not own or control. Discovery and other proceedings were stayed pending decision on the motion for summary judgment.

The Secretary then sought leave to amend the complaint, to include an alleged violation of Section 1910.156(d) which addresses fire fighting equipment made available to employees functioning as fire brigades. 4 The amended complaint would also have added an assertion that the general requirements of (e)(1) imposed a duty upon Arco to "remove" defective Lyondell fire extinguishers from service and would have deleted the alleged violation of the hydrostatic testing provisions of Section 1910.157(f)(4).

Arco opposed the Secretary's motion to amend, characterizing it as a "dilatory attempt to avoid summary judgment." Arco also claimed undue delay in the filing of the motion and argued that it would be prejudiced by "the allegation of new facts and legal theories."

The motion to amend was denied on December 7, 1989 and, on December 12, 1989, Arco's motion for summary judgment was granted. In ruling on these motions, the administrative law judge did not articulate the reasoning underlying his decisions, but commented only that Arco's arguments were "well taken." A petition by the Secretary for discretionary review by the full Commission was not granted and the rulings on the motion to amend and the motion for summary judgment became final Commission orders by operation of law. 5 The Secretary then filed this timely petition for review.


In the petition, the Secretary focuses primarily upon the denial of the motion to amend the complaint. While the grant of summary judgment is also challenged, we are not asked to reach the merits of that motion. It is the Secretary's position that the denial of the motion to amend was error and that any motion for summary judgment should include an evaluation of the claims set forth in the amended complaint. We agree that the motion to amend should have been granted and that the merits of any summary judgment motion should be addressed first by the Commission. We confine our analysis, therefore, to those issues raised by the denial of the Secretary's motion to amend.

At the outset, we note that the rule governing amendment in Commission proceedings is set forth at 29 C.F.R. Sec. 2200.35(f)(3) (1989). This regulation establishes the applicability of Fed.R.Civ.P. 15(a), which embodies a liberal approach to amendment and provides that, following an initial amendment by right prior to the filing of a responsive pleading, a party is entitled to amend the complaint, even over the objection of the opposing party, "by leave of court." The rule specifies that "leave shall be freely given when justice so requires." We review the Commission's order denying a motion to amend for abuse of discretion. Cornell & Co., Inc. v. OSHRC, 573 F.2d 820, 823 (3d Cir.1978).

In evaluating challenges to the denial of opportunity to amend we have held consistently that leave to amend should be granted freely. Heyl & Patterson Int'l, Inc. v F.D. Rich Housing, 663 F.2d 419, 425 (3d Cir.1981). See also, Bechtel v. Robinson, 886 F.2d 644 (3d Cir.1989) (court should use "strong liberality" in considering whether to grant leave to amend). This approach ensures that a particular claim will be decided on the merits rather than on technicalities. See Wright, Miller and Kane, Federal Practice and Procedure, Vol. 6, Sec. 1471 at 505 (2d ed. 1990).

The policy favoring liberal amendment of pleadings is not, however, unbounded. In Foman, the Supreme Court delineated factors which may weigh against amendment. These include "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." 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962).

Arco argues that liberality is not warranted in this case. Opposing the Secretary's proposed amendment, Arco seeks to position itself within the ambit of those cases where amendment has been denied. Arco argues first that the Secretary delayed unduly in seeking to amend her complaint. As Arco writes in its brief, "Dilatory motive and undue, unexplained delay are ... precisely the factors on which [Arco] relied in its Opposition to [the Secretary's] Motion to Amend." Arco also claims that it would suffer prejudice if amendment were allowed. This prejudice argument has two prongs. First, Arco claims that allowing revision of the theory underlying the general (e)(1) claim to encompass removal of fire extinguishers in addition to inspection, maintenance and testing would require it to make a further motion for summary judgment. Second, Arco claims prejudice in that the amended allegation that Arco trainees acted as a fire brigade within the meaning of Sec. 1910.156(d) would necessitate additional discovery.

Arco argues that the proposed amendments are based upon information long-available to the Secretary. Arco notes that the new theories are advanced "more than fourteen months after the inspection, and well beyond the six month limitation period for issuance of citations." It cites a number of cases for the proposition that where--as it asserts is the case here--there has been a lack of diligence in seeking amendment, the burden shifts to the Secretary to demonstrate that the delay resulted from oversight, inadvertence, or excusable neglect. See, e.g. Stepanischen v. Merchants Despatch Transportation Corp., 722 F.2d 922, 933 (1st Cir.1983) (where considerable time has elapsed between filing of the complaint and the motion to amend, movant is required to establish a valid reason for delay or neglect); and Carroll v....

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