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Coleman Hammons Construction Company, Inc. v. Occupational Safety and Health Review Commission

United States Court of Appeals, Fifth Circuit

November 6, 2019


          On Petition for Review from a Decision and Order of the United States of America Occupational Safety and Health Review Commission OSHRC No. 17-0992

          Before HIGGINBOTHAM, JONES, and COSTA, Circuit Judges.


         This is an appeal from the Occupational Safety and Health Review Commission's decision that a construction company's 18 working-days-late response to a citation notice that had been misplaced in the company's internal mail system demonstrated "inexcusable neglect" and barred the company from contesting the citations for nearly $70, 000. The Commission's decision misapplied Fed. Rule Civ. Pro. 60(b), which applies under the Commission's own regulations. See 29 U.S.C. § 661(g) (Commission proceedings in accordance with the Federal Rules of Civil Procedure unless the Commission has adopted a different rule). Accordingly, we VACATE and REMAND for further proceedings.

         I. BACKGROUND

         Coleman Hammons ("Coleman"), a Mississippi construction company, received four Occupational Health and Safety Administration ("OSHA") citations for alleged violations that occurred at one of the company's job sites in Madison, Mississippi. The penalties were assessed at $68, 517. OSHA mailed the citations by certified mail to Coleman's office in Pearl, Mississippi, where they arrived on March 15, 2017. The citation notice included standard language requiring the employer to file a notice of contest within fifteen working days of receipt, here, April 5. See 29 U.S.C. § 659(a). Failure to do so, it warned, results in the citations' becoming "a final order not subject to review by any court or agency."

         Coleman's standard operating procedures are undisputed. The company's office manager opens incoming mail and circulates it appropriately to staff within the office. When the company receives OSHA-related mail, the office manager directs the mail to the superintendent of the relevant project. Coleman had received OSHA citations in each of the past seven years. On at least three of those occasions, the system worked, and Coleman settled the citations in a timely manner through informal conferences with OSHA representatives. In this instance, however, Coleman's office manager had left her desk when the mail arrived on March 15. The company secretary/treasurer, who was not normally a mail handler, signed the return receipt, did not open the letter, and placed the OSHA letter on the Madison project superintendent's desk. Unfortunately, that superintendent was out of town, continuing to work on the Madison project until April 24. As soon as the project superintendent returned to the office and discovered the OSHA citation notice, he telephonically informed OSHA on April 25 of the company's hope to resolve the problem that would otherwise cause it considerable hardship. The company followed up with a mailed notice of contest that was received by OSHA on May 1, only 18 working days after the prescribed deadline.

         Coleman attempted to challenge the citation in a hearing before an administrative law judge ("ALJ"), but the government moved to dismiss the notice of contest as untimely. The company admitted untimeliness but argued that its error amounted to "excusable neglect" and deserved relief from the statutory bar pursuant to Federal Rule of Civil Procedure 60(b)(1), which applies to commission proceedings. See 29 U.S.C. § 661(g); Fed.R.Civ.P. 60(b)(1). The ALJ noted that Coleman was acting in good faith; the Secretary had not shown prejudice from the delay or an adverse effect on judicial administration; and the Secretary stipulated that the company "has a meritorious defense." Nonetheless, the ALJ concluded the company's failure was inexcusable because "the delayed filing was within the control of Coleman Hammons and could have been avoided if it had exercised reasonable diligence."

         The Commission granted Coleman's request for discretionary review of the ALJ decision but, in a split decision, affirmed the ALJ. The Commission explained that the Rule 60(b) inquiry for excusable neglect is guided by the Supreme Court's decision in Pioneer Invest. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 113 S.Ct. 1489 (1993), which emphasizes the equitable, multifactor nature of the provision. Nevertheless, the Commission enforced its rulings that a "key factor in evaluating whether a party's delay in filing was due to excusable neglect is 'the reason for the delay' including whether it was within the reasonable control of the movant." (quoting Sec'y of Labor v. A.W. Ross, Inc., 19 BNA OSHC 1147, 1148 (2000)). Because the reason for Coleman's untimely response-its inadequate mail procedures- was within the control of Coleman, the Commission majority discounted that other factors favored granting the company an opportunity to defend against the citations. The dissenting Commissioner would have granted relief. He disagreed with the others' factual findings, construed the record to establish no more than a single unforeseeable human error, and criticized the majority's refusal to take into account all relevant factors, as stated in Pioneer. Coleman seeks review in this court.


         This court reviews the Commission's findings of fact under a substantial evidence standard. 29 U.S.C. § 660(a) (Commission's factual findings are upheld only if they are "supported by substantial evidence on the record considered as a whole"). The Commission's conclusions of law receive the ordinary deference afforded to agency decisions and are upheld unless they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. § 706(2)(A); Austin Indus. Specialty Servs., L.P. v. OSHRC, 765 F.3d 434, 438-39 (5th Cir. 2014).


         The issue in this case is whether the Commission's interpretation of Rule 60(b)(1) was in accordance with law and, if not, whether its decision refusing to find excusable neglect and reach the merits of Coleman's contest was supportable.[1]

         Rule 60(b)(1) authorizes courts, or in this case, the Commission, to "relieve a party or its legal representatives from a final judgment, order, or proceeding" in instances involving "mistake, inadvertence, surprise, or excusable neglect." Whether a party is entitled to relief for excusable neglect is a determination that is "at bottom an equitable one, taking account of all relevant circumstances." Pioneer, 507 U.S. at 395, 113 S.Ct. at 1498. The relevant factors include but are not limited to "the danger of prejudice to the [opposing party], 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." Id. Although Pioneer was a civil bankruptcy case, this court and ...

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