Lance Roofing Company v. Hodgson, Civ. A. No. 16012.

• Decision Date: 23 May 1972
• Docket Number: Civ. A. No. 16012.
• Citation: 343 F. Supp. 685
• Parties: LANCE ROOFING COMPANY, Inc., et al. v. James D. HODGSON, Secretary of Labor, United States Department of Labor, et al.
• Court: U.S. District Court — Northern District of Georgia

343 F. Supp. 685

LANCE ROOFING COMPANY, Inc., et al. v. James D. HODGSON, Secretary of Labor, United States Department of Labor, et al.

Civ. A. No. 16012.

United States District Court, N. D. Georgia, Atlanta Division.

May 23, 1972.

Stokes, Boyd & Shapiro, Atlanta, Ga., for plaintiffs.

L. Patrick Gray, III, Asst. Atty. Gen., Dept. of Justice, Richard F. Schubert, Solicitor of Labor, Dept. of Labor, Washington, D. C., Stanley M. Baum, Asst. U. S. Atty., Atlanta, Ga., for defendants.

Before BELL, Circuit Judge, and EDENFIELD and FREEMAN, District Judges.

EDENFIELD, District Judge:

Plaintiffs are four construction companies which have been issued citations and proposed assessments of fines by defendant Hodgson, the Secretary of Labor, pursuant to the Occupational Safety and Health Act of 1970 "the Act", 29 U.S.C. § 651 et seq. (1970). To prevent the proposed fines from becoming uncontestable, plaintiffs timely filed "notices of contest" in accordance with the Act and the Secretary duly filed complaints against each plaintiff with the Occupational Safety and Health Commission "the Commission" alleging violations of the Act. Plaintiffs answered the Secretary's complaints and then filed demands with the Commission for "procedural due process" and jury trials. The Commission summarily denied the demands of three of the plaintiffs and is apparently still considering the demands of the fourth. The cases against plaintiffs have been assigned by the Commission to its hearing examiners and are pending.

Plaintiffs have brought this complaint seeking declaratory and injunctive relief on the grounds that certain sections of the Act which defendants are enforcing against them are unconstitutional on their face and as applied. Specifically, they contend that the "civil" penalties which may be imposed by the Commission for violations of the Act are, in fact, "criminal" penalties.¹ They argue that anyone charged with a violation who chooses to challenge the imposition of these so-called "civil" penalties² before the Commission must be accorded all the constitutional safeguards provided in a criminal proceeding, including trial by jury. Since the Act itself does not provide such safeguards, plaintiffs desire a declaration that it is unconstitutional. And since the Commission has refused to grant them such safeguards, they wish to enjoin the proceedings initiated before the Commission against them.

Defendants argue that the so-called "civil" penalties which the Commission may impose are not "criminal" in nature but merely regulatory, and they move for summary judgment on the merits. However, they also argue that plaintiffs have failed to exhaust their administrative remedies, and they ask the court to dismiss the complaint on that ground.

Jurisdiction is conferred by 28 U.S.C. § 1331 (1970)³ and a three-judge court was convened pursuant to 28 U.S.C. § 2282 (1970). We hold that the complaint must be dismissed for failure to exhaust administrative remedies.

The Act is a comprehensive and seemingly unique piece of legislation whose declared purpose is "to assure so far as possible every working man and woman in the Nation safe and healthful working conditions. . ." 29 U.S.C. § 651(b). The job of securing initial compliance with the Act has been delegated to the newly-created Occupational Safety and Health Administration of the United States Department of Labor. Inspectors from the Department are authorized to conduct investigations at places of employment for the purpose of detecting safety and health violations. 29 U.S.C. § 657; 29 C.F.R. § 1903 (1972); Occupational Safety and Health Administration, U. S. Dep't. of Labor, Compliance Operations Manual "Manual", ch. V (Jan. 1972). If, upon such investigation, the Secretary of Labor or his authorized representative believes that an employer has violated the Act or a regulation promulgated pursuant to the Act, he issues a citation describing the violation and fixing a reasonable time for its abatement. 29 U.S. C. § 658(a). The Secretary must also notify the employer of the penalty, if any, proposed to be assessed for the violation, and must advise him that he has 15 working days within which to notify the Secretary that he wishes to contest the citation or the proposed assessment of penalty. 29 U.S.C. § 659(a).

If the employer does not timely file such a "notice of contest" the citation and penalty become the "final order" of the Commission which cannot be reviewed by any agency or court. 29 U.S. C. § 659(a). The violation penalty may amount to $1000 per violation, and if wilful or repeated, up to $10,000 per violation. 29 U.S.C. § 666(a)-(c). Failure to abate by the end of the period specified in the citation subjects a non-contesting employer to an additional non-abatement penalty of no less than $100 per day of non-abatement for a minor violation and $1000 per day of non-abatement for a serious violation. 29 U. S.C. § 666(d); Manual, ch. XI, ¶ B, § 8(e), (f).

If the employer does timely file a "notice of contest" the Secretary must so notify the Commission. 29 U.S.C. § 659(c). Pleadings are then filed with the Commission, an examiner may be assigned, and a full-dress hearing with exhibits, testimony, and proposed findings and conclusions is held. 29 U.S.C. §§ 659(c), 661(i); 29 C.F.R. §§ 2200, et seq. At the conclusion of the hearing the examiner makes a decision and issues a report which becomes the "final order" of the Commission within 30 days after it is issued unless the Commission grants a review. 29 U.S.C. § 661(i); 29 C.F.R. § 2200.42(c). Such review is entirely discretionary and may be granted either on petition of a party or on the initiative of a member of the Commission. The review order of the Commission becomes "final" 30 days after its issuance. 29 U.S.C. § 659(c). Generally, the abatement period specified in the citation does not run during the course of the administrative proceedings so the contesting employer cannot be assessed any non-abatement per day penalty pending the entry of a "final order." 29 U.S.C. §§ 659(b), 666(d); Manual, ch. XI, ¶ B, § 8(c) (2). If the Commission's order affirms the examiner's report, of course, the abatement period commences the day after the order becomes "final" and a failure to abate at the end of that period would subject the employer to a non-abatement per day penalty. Manual, supra. However, if the Occupational Safety and Health Administration determines that the employer did not initiate the review proceedings in "good faith" but solely for delay or avoidance of penalties, or if the employer contests only the amount of the violation penalty, upon entry of a "final order" affirming the examiner's report the abatement period will be considered to have retroactively commenced on the date specified in the citation and the employer will be assessed a non-abatement per day penalty retroactive from the day following the last day of the abatement period. 29 U.S.C., supra; Manual, ch. XI, ¶ B, § 8(c) (3).

An aggrieved party may obtain judicial review of the examiner's report which became the "final order" of the Commission or of the Commission's review order by filing an appropriate petition in the United States Court of Appeals for the circuit in which the violation is alleged to have occurred or where the employer has his principal place of business, or in the Court of Appeals for the District of Columbia Circuit, within 60 days of the issuance of the order. 29 U.S.C. § 660(a). The filing of the petition does not, by itself, operate as a stay of the Commission's order, but the Court of Appeals may grant such a stay. 29 U.S.C., supra. The decree of the Court of Appeals is final and subject to review only by grant of the writ of certiorari by the Supreme Court. 29 U.S.C., supra.

As noted earlier, plaintiffs in this case have received citations and proposed penalties for alleged violations of the Act. Although they have initiated review proceedings before the Commission, they contend that those proceedings will be constitutionally infirm because full procedural due process and trial by jury will not be made available. They argue that since they attack the constitutionality of the very administrative remedies which defendants say they must exhaust, and since the Commission has no authority to declare these remedies unconstitutional, it is pointless to insist upon exhaustion in this case.

The Supreme Court has recognized that its broad pronouncement in Myers v. Bethlehem Shipbuilding Co., 303 U.S. 41, 50-51, 58 S.Ct. 459, 82 L.Ed. 638 (1938), that "no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted" is subject to numerous exceptions. See ...