Avon Contractors, Inc. v. Secretary of Labor; Occupational Safety and Health Review Commission

PRECEDENTIAL
UNITED STATES
COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-1615
AVON CONTRACTORS, INC.,
Petitioner
v.
SECRETARY OF LABOR;
OCCUPATIONAL SAFETY AND
HEALTH REVIEW COMMISSION,
Respondents
On Petition for Review of a Final Order
of the Occupational Safety and Health
Review Commission
(OSHRC No. 02-0772)
Argued February 12, 2004
Before: SCIRICA, Chief Judge,
ROTH and McKEE, Circuit Judges
(Filed: June 9, 2004)
Donald A. Kessler, Esquire (Argued)
Schwartz, Simon, Edelstein,
Celso & Kessler
10 James Street
Florham Park, New Jersey 07932
Attorney for Petitioner
Ronald J. Gottlieb, Esquire (Argued)
United States Department of Labor
Office of the Solicitor
Suite S-4004
200 Constitution Avenue, N.W.
Washington, D.C. 20210
Attorney for Respondent,
Secretary of Labor
OPINION OF THE COURT
SCIRICA, Chief Judge.
At issue is whether Petitioner Avon
Contractors, Inc. is entitled to relief under
the excusable neglect standard of Fed. R.
Civ. P. 60(b)(1), after it failed to timely
file a notice of contest to Occupational
Safety and Health Administration Citations
and a Notice of Penalty delivered by
certified mail. We addressed similar
issues in George Harms Construction Co.
v. Chao, No. 03-2215 (3d Cir. June 9,
2004), in which we heard oral argument on
the same day as this matter.
We will vacate the Occupational
Safety and Health Review Commission’s
final order and remand for a hearing on the
merits of the OSHA citations.
I.
OSHA conducted an inspection of
Avon’s work site at Northvale, New Jersey
from January 8 through January 10, 2002.1
1Congress enacted the Occupational
Safety and Health Act to “assure so far as
possible” safe working conditions for
“every working man and woman in the

-- 1 of 6 --

2
OSHA found two infractions.2 After the
inspection, Charles Tristitti of OSHA’s
Hasbrouck Heights Area Office contacted
Avon’s Office Manager Lori Muranelli by
telephone and advised her of two
forthcoming citations. OSHA sent the
citations by certified mail to Avon on
February 22, 2002. Avon’s receptionist,
Tonya Grant, signed for the citations on
February 26, 2002. Muranelli, the
employee at Avon responsible for OSHA-
related matters, never received the
citations.
In or around March 2002, Avon
discovered it was missing mail and
suspected its receptionist, Tonya Grant,
was responsible. According to M uranelli,
“around” the time of March, 2002,
managers started complaining about
missing mail. “Between February and
March, right before [the receptionist] left
the Company,” Muranelli told the
receptionist that some mail items were
missing. Muranelli warned her to ensure
that the proper recipients got their mail.
Muranelli also told the receptionist that
she was not to sign for any certified mail
Nation.” 29 U.S.C. § 651(b). The
Secretary of Labor is charged with
enforcement of the Act. But the Secretary
has delegated her enforcement duties to
the Assistant Secretary for Occupational
Safety and Health, who heads OSHA.
Secretary’s Order 5-2002, 67 Fed. Reg.
65008 (Oct. 22, 2002). OSHA inspects
workplaces for violations. It may issue a
citation for a violation, establish a date for
abatement, and propose a civil penalty.
29 U.S.C. §§ 658, 659. An employer can
contest the citation and the proposed
penalty before the Occupational Safety and
Health Review Commission. 29 U.S.C. §
661. Under section 10(a) of the Act, an
employer must file a notice of contest
within 15 working days of receipt of the
citation or the “the citation and the
assessment, as proposed, shall be deemed
a final order of the Commission and not
subject to review by any court or agency.”
29 U.S.C. § 659(a).
The Commission, an independent
adjudicatory body separate from the
Department of Labor, acts as a neutral
arbiter in proceedings contesting OSHA
citations. Cuyahoga Valley Ry. Co. v.
United Transp. Union, 474 U.S. 3, 7
(1995) (per curiam ). Ass um ing
jurisdiction, an Administrative Law Judge
of the Commission conducts a hearing and
issues a report with his determination of
the proceeding. 29 U.S.C. § 661(j).
Within thirty days, the Commission may
opt to review the ALJ’s report. Id. If no
Commissioner directs review, the ALJ’s
report becomes the Commission’s final
decision. Id. Judicial review may then be
sought. 29 U.S.C. § 660.
2In the citations, OSHA alleges Avon
violated 29 C.F.R. § 1926.300(b)(1), by
operating power tools without a required
guard. It also alleges Avon violated 29
C.F.R. § 1926.501(b)(1), by not providing
a guardrail system, safety net system, or
personal fall arrest system for employees
working on a roof.

-- 2 of 6 --

3
because it was Muranelli’s responsibility
as office manager to do so. “In the middle
towards the end of March,” the
receptionist resigned. Muranelli testified
that the receptionist was “disgruntled” and
quit because she had heard she would be
terminated for losing or destroying mail.
In April 2002, Avon discovered that some
of its certified mail was missing. Avon
claims it was not aware that its receptionist
was destroying or losing mail at the time
the OSHA citations were mailed and
received.
On April 26, 2002, Muranelli
contacted OSHA to inquire about the
status of the citations. On April 29, 2002,
Avon received a demand letter from
OSHA and a copy of the citations and
notice of penalty. On May 15, 2002, Avon
submitted a late notice of contest.
The matter was docketed before the
Commission. Avon claimed it was entitled
to relief under the “excusable neglect”
standard of Fed. R. Civ. P. 60(b)(1).
Section 12(g) of the Act provides that the
“Commission is authorized to make such
rules as are necessary for the orderly
transaction of its proceedings. Unless the
Commission has adopted a different rule,
its proceedings shall be in accordance with
the Federal Rules of Civil Procedure.” 29
U.S.C. § 661(g). Fed. R. Civ. P. 60(b)(1)
provides that “[o]n motion and upon such
terms as are just, the court may relieve a
party or a party’s legal representative from
a final judgment, order, or proceeding for
the following reasons: (1) mistake,
inadvertence, surprise, or excusable
neglect . . . .” Id.
On January 21, 2003, an ALJ filed
his decision and order granting the
Secretary’s dismissal motion. See Avon
Contractors, Inc., No. 02-0772, 2003
OSAHRC LEXIS 47 (OSAHRC Jan. 21,
2003). Though finding that Avon made a
“compelling” argument, the ALJ held
against Avon on its excusable neglect
claim because Avon had not shown
“whether the failure [to receive notice of
the violation] was within the control of the
employer.” Id. at *4-5. Particularly, the
ALJ found, the record did “not show how
long the receptionist had been destroying
or misplacing mail or when the company
first became aware of the problem.” Id. at
*4. Accordingly, the ALJ could not tell
whether the de struction was an
“unprecedented and unexpected act, or
whether this type of activity was an
ongoing problem which should have been
corrected.” Id. at *5. The ALJ noted “the
only apparent effort Avon undertook to
rectify the problem was to tell the
receptionist not to accept certified mail,
and . . . this occurred ‘right before’ the
receptionist left the company.” Id. The
ALJ denied relief under Fed. R. Civ. P.
60(b) because he was unable to “find that
it was not within Avon’s reasonable
control to prevent the series of events
which led up to its failure to timely file the
NOC.” Id. The ALJ also rejected the
S e c r e t a r y ’ s c o n t e n t i o n t h a t t h e
Commission did not have authority to
accept a late-filed notice of contest. The
ALJ noted:
Relying on Le Frois Builder
Inc., 291 F.3d 219 (2d Cir.

-- 3 of 6 --

4
2002), the Secretary’s
motion asserts that the
Commission does not have
authority to accept a late-
filed NOC. The Secretary’s
reliance on Le Frois,
however, is misplaced, as
this case arises in the Third
Circuit, not the Second.
Accordingly, J. I. Hass Co.,
Inc., 648 F.2d 191 (3d Cir.
1981) and Branciforte
Builders, Inc., 9 BNA
OSHC 2113 (No. 80-1920,
1981), not Le Frois, are
controlling.
Id. at *3 n.2.
Avon appeals to vacate the
Commission’s order and remand for a
hearing on the underlying citation.3 It
argues that it is entitled to the relief of
“excusable neglect” under Fed. R. Civ. P.
60(b)(1). Not only does the Secretary
dispute those claims, she also contends
that section 10(a) of the Act, 29 U.S.C. §
659(a), precludes the Commission from
considering the Fed. R. Civ. P. 60(b)(1)
“excusable neglect” standard when a
notice of contest is untimely filed.4
II.
In George Harms Construction Co.
v. Chao, No. 03-2215 (3d Cir. June 9,
2004), we rejected the Secretary’s
contention that J.I. Hass Co. v. OSHRC,
648 F.2d 190 (3d Cir. 1981), had been
undermined by subsequent precedent.
Harms, No. 03-2215, op. at 4-8. We held
that under Hass, section 10(a) is not a bar
to Commission review, and the
Commission has jurisdiction to entertain a
late notice of contest under the excusable
neglect standard of Fed. R. Civ. P.
60(b)(1). See Harms, No. 03-2215, op. at
8.
Moreover, in Harms, we held the
Supreme Court’s holding in Pioneer
Investment Services v. Brunswisk Assoc.,
507 U.S. 380 (1993), applies to
Commission proceedings where the
excusable neglect standard is implicated.
See Harms, No. 03-2215, op. at 8. We
noted that in Pioneer “the Supreme Court
identified, without limitation, these factors
to consider: ‘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.’” Id. (quoting Pioneer, 507
U.S. at 395). We held the “control” factor
does not necessarily trump all the other
3The Commission had jurisdiction
under 29 U.S.C. § 659. We have appellate
jurisdiction under 29 U.S.C. § 660.
4The Commission’s factual findings
must be affirmed if supported by
substantial evidence on the record as a
whole. Reich v. D.M. Sabia Co., 90 F.3d
854, 856 (3d Cir. 1996). Its adjudications
are to be affirmed unless they are arbitrary,
capricious, an abuse of discretion, or
contrary to law. Id. (citing 5 U.S.C. §
706(2)(A)).

-- 4 of 6 --

5
relevant factors. Id. at 9. Furthermore, an
arbiter must take into account all relevant
circumstances surrounding a party’s failure
to file a timely notice of contest. Id. We
faulted the ALJ for weighing too heavily
the “control” aspect of the case at the
expense of other relevant Pioneer factors.
See id. at 8-9.
Here, the ALJ made similar errors
in its “excusable neglect” calculus.
Several of the factors weighed in favor of
a finding for Avon. The Secretary did not
apparently suffer prejudice; the delay did
not negatively impact the proceeding; and
as the ALJ noted, “Avon’s argument is
compelling, particularly as Avon initiated
contact with OSHA with respect to the
whereabouts of the citation.” Avon, 2003
OSAHRC LEXIS 47, at *4. But the ALJ
explained that “a key factor in determining
this issue is whether the failure was within
the control of the employer” and found
against Avon because the evidence it
presented was insufficient for showing the
loss “was not within Avon’s reasonable
control.” Id. at *4-5. In doing so, the ALJ
did not properly weigh all the relevant
Pioneer factors.
Moreover, we disagree that Avon
failed to prove that the loss was not within
its reasonable control. The ALJ found
fatal to Avon’s petition the fact that the
record does not show “how long the
receptionist had been destroying or
misplacing the mail or when the company
first became aware of the problem.” Id. at
*4. But the failure to show how long the
receptionist had been destroying or
misplacing mail is not necessarily
controlling on whether the loss of the
citations was within Avon’s reasonable
control. It would be difficult to show
precisely how long the deliberate acts had
been ongoing in part because employees
who commit destructive or negligent acts
generally do not broadcast their conduct.
Until Avon discovered the missing mail
and the receptionist’s allegedly deliberate
acts of destruction, there was little beyond
the established mailing procedures in place
that could be done to prevent mishandled
mail. Nor is there any reason to assume
that a company would know that its mail
was being destroyed or misplaced but
would act against its own self-interest in
choosing to ignore it. Moreover, though
the precise date on which Avon discovered
it was missing mail is unclear, the record
demonstrates that Avon discovered that it
was missing mail just prior to the
receptionist’s departure in February or
March. The record shows that Avon did
not discover that certified items were
destroyed or misplaced until sometime in
April. When OSHA sent the certified mail
containing the citations to Avon in
February, there is no evidence that it was
within Avon’s control to prevent the
unforeseeable acts of destruction by its
employee. Because the Pioneer factors of
good faith, prejudice, efficient judicial
administration, and control all weigh in
favor of Avon, it has sufficiently shown
“excusable neglect” and is entitled to relief
under Fed. R. Civ. P. 60(b)(1).
III.
For the foregoing reasons, we will
vacate the Commission’s final order and

-- 5 of 6 --

6
remand for a hearing on the merits of the
subject OSHA citations.

-- 6 of 6 --