CORNELL AND COMPANY, INC., Petitioner, v. OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION and Secretary of Labor, Respondents.
No. 76-2513.
United States Court of Appeals, Third Circuit.
Argued Oct. 17, 1977. Decided March 9, 1978.
573 F.2d 820 | 6 O.S.H. Cas. (BNA) 1436 | 1978 O.S.H.D. (CCH) P 22,646
Carin A. Clauss, Sol. of Labor, Benjamin W. Mintz, Associate Sol. for Occupational Safety and Health, Michael H. Levin, Counsel for Appellate Litigation, Allen H. Feldman, Asst. Counsel for Appellate Litigation, Dennis K. Kade, Nancy L. Southard, U. S. Dept. of Labor, Washington, D. C., for respondents.
Before ROSENN and VAN DUSEN, Circuit Judges, and COHILL, District Judge.*
OPINION OF THE COURT
COHILL, District Judge.
On September 22, 1976, the Occupational Safety and Health Review Commission (the “Commission“) rendered a decision holding that petitioner, Cornell and Company, Inc. (“Cornell“), had violated the safety standards of
After carefully reviewing the facts, we conclude that the Commission abused its discretion in allowing the Secretary of Labor (the “Secretary“), pursuant to
Cornell is a steel construction contractor, which in the summer of 1974 was erecting at a refinery in Philadelphia a steel flare stack (a metal chimney) and a supporting three-legged steel frame, resembling an oil derrick. This structure was constructed in two stages. The first stage, known as the “connecting stage,” consisted of two steps. In the first step the “vertical connecting” step workers called “connectors” initially secured the vertical beams into position. In the second step the “horizontal connecting” step the vertical beams were secured temporarily by connecting horizontal and diagonal beams as cross-bracing. When these two steps were completed, the procedure was repeated at the next level until the structure reached the required elevation. After the frame was completely erected and connected, the ironworkers proceeded to the second stage of construction, the “bolting up” stage. This involved securing the entire structure by fastening additional bolts at each conneсtion joint. Only after this was completed was the structure sufficiently braced to meet the architect‘s specifications.
On June 27, 1974, a compliance officer for the Department of Labor, Occupational Safety and Health Administration inspected the jobsite while Cornell‘s employees were in the connecting stage, working at an elevation of 100 feet. On July 2, 1974, as a result of that inspection, the Secretаry issued a citation against Cornell and proposed a $700 penalty for a serious violation of
Apparently the Secretаry agreed, and on August 22, 1974, he issued a complaint, but moved to amend the citation by adding a violation of another standard, this time citing
On November 4, 1974, just nine days before the heаring, and more than 4 months after the inspection, the Secretary again moved to amend the citation and complaint by withdrawing the allegations of violations of
At the start of the hearing on November 13, 1974, the administrative law judge (“ALJ“) tentatively denied a motion by Cornell to dismiss the complaint on the ground of undue prejudice to Cornell from the Secretary‘s delay in citing violations of the proper safety standards. At the conclusion of the hearing on the merits, the ALJ offered Cornell 30 days to gather and present additional evidence. Cornell, however, concluded that the additional time would not remedy the prejudice it had suffered in preparing its defense and therefore presented no additional evidence.
In his decision, the ALJ ruled that Cornell‘s ability to prepare a defense had been materially impaired by the delay in filing the last amendment. He also held that even if it were assumed that Cornell‘s ability to defend the citation had not been impaired, the Secretаry had failed to prove a violation. Accordingly he granted Cornell‘s motion to dismiss and vacated the citation and penalty. On the Secretary‘s petition for review, the Commission reversed in a 2-1 decision, holding that the amendments did not prejudice Cornell and that the evidence established a safety belt violation. The Commission affirmed the citation, as amended, and assessed a $700 penalty.
The primary issue presеnted is whether the Commission erred in permitting the Secretary on November 4, 1974 to amend his citation and complaint to allege a violation of the safety belt standards. Cornell argues that the amendment changed the legal and factual basis of the alleged violation, thereby preventing it from presenting its sole defense. We agree.5
Under the Commission‘s procedural rules, the standard applicable to amendmеnt of the Secretary‘s citation and complaint is
In Foman the Supreme Court identifiеd factors governing motions to amend under
“Rule 15(a) declares that leave to amend ‘shall be freely given when justice so requires‘; this mandate is to be heeded. See generally, 3 Moore, Federal Practice (2d ed. 1948), PP 15.08, 15.10. If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of аny apparent or declared reason such as 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. the leave sought should as the rules require, be ‘freely given.’ ”
371 U.S. at 182, 83 S.Ct. at 230. See Moore‘s Federal Practice P 15.08(4), at 897-900 (2d ed. 1974); 6 C. Wright & A. Miller, Federal Civil Procedure § 1487 (1971). Delay alone, however, is an insufficient ground to deny an amendment, unless the delay unduly prejudices the non-moving party. Deakyne v. Commissioners of Lewes, 416 F.2d 290, 300 n.19 (3d Cir. 1969); Mercantile Trust Company National Association v. Inland Marine Products Corp., 542 F.2d 1010, 1012 (8th Cir. 1976); Moore P 15.08(4), at 901; Wright & Miller § 1488, at 438.
It is well-settled that prejudice to the non-moving party is the touchstone for the denial of an amendment. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330-31, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); Kerrigan‘s Estate v. Joseph E. Seagram & Sons, 199 F.2d 694, 696 (3d Cir. 1952); Moore P 15.08(4), at 897; Wright & Millеr § 1487, at 428. In evaluating the extent of prejudice, courts may inquire into the hardship to the non-moving party if leave to amend is denied. Moore P 15.08(4), at 902; Wright & Miller § 1487, at 429.
Having set out the basic principles concerning
Cornell‘s sole defensе to the last amendment to the complaint was that at the time the compliance officer made his inspection it would have been more dangerous for the ironworkers to use the safety belts than not to use them because the beams were not sufficiently braced. See United States Steel Corp. v. OSHRC, 537 F.2d 780 (3d Cir. 1976); Hunt, The Elusive Burden of Proof Under the Occupational Safety and Health Act of 1970, 30 Sw.L.J. 693, 713 (1976).
In this type of construction there аre times when the vertical beams are in place, but not securely fastened, so it may be dangerous to attach a safety belt to them; if the beam toppled it would carry the workman with it. To present this defense adequately, Cornell needed as witnesses the workers who were on the job at the time of the inspection. It was undisputed that the workers were wearing but not using safety belts at the time of the inspection, but testimony as to the stability of the beams where they were working at the precise time of the inspection, and the danger of using the belts in accordance with the safety belt standard at that exact time, was vital to Cornell‘s defense. Contrary to the position taken by the Commission and the Secretary, we therefore regard the workers’ testimony as indispensable.
Furthermore, the last amendment to the complaint completely changed the nature of the charges against Cornell. At the time of the inspection the compliance officer alleged that there was no temporary flooring, for which Cornell was subsequently cited under
When the Secretary moved to amend the complaint to allege a safety belt violation, however, months after the inspection and just before the hearing, the legal and factual matters in dispute changed drastically. Instead of the issue being whether the structure was or was not a “tiered building,” the inquiry suddenly shifted to whether that part of the structure near the ironworkers was sufficiently secure at the timе of the inspection to permit the workers to attach their safety belts to it. In the preparation of its defense, Cornell was entitled to rely on the Secretary‘s earlier allegations in the matter; this justifiable reliance obviously prevented Cornell from securing testimony of the ironworkers needed to assert its affirmative defense. Cf. Deakyne v. Commissioner of Lewes, 416 F.2d 290, 300 (3d Cir. 1969); Ricciuti v. Voltarc Tubes, Inc., 277 F.2d 809, 814 (2d Cir. 1960). See also Hayden v. Ford Motor Comрany, 497 F.2d 1292, 1294-96 (6th Cir. 1974). In light of this unmistakable prejudice, we conclude that the Commission abused its discretion in allowing the amendment.
To permit the amendment in the current case would work a greater prejudice to the employer than the amendment denied in Secretary of Labor v. Frank Briscoe Company, Inc., 4 OSHC 1729 (1976). There, the Commission reversed the administrative law judge‘s allowance of an amendment offered two days before the hеaring without any explanation by the Secretary for the delay. The original citation in that case concerned the manner in which guard rails were installed, whereas the amended citation pertained to the lack of different protective equipment. The Commission concluded:
“Complainant completely abandoned the original charge; he changed the factual basis for the charge as well аs his legal theory (the standard on which the charge was based) and thereby injected new issues into the case. In the circumstances we do not consider it fair to require Respondent to defend against an amendment of this kind particularly since the physical condition of the scaffold was observed during the inspection and therefore could have been properly alleged in the first instance.”
4 OSHC at 1132-33. (footnote оmitted.) In the instant case, the prejudice resulting from permitting the amendment is even clearer since the record shows that the Secretary‘s delay was the direct cause of the inability of Cornell to secure the testimony of witnesses vital to its defense.
The Secretary argues that “administrative pleadings are very liberally construed and very easily amended,” citing National Realty and Construction Co. v. OSHRC, 160 U.S.App.D.C. 133, 489 F.2d 1257, 1264 (1973), and that an еmployer “does not have any vested right to go to trial on the specific charge(s) mentioned in the citation,” citing Long Manufacturing Co. v. OSHRC, 554 F.2d 903, 907 (8th Cir. 1977). Nevertheless, there must be limits to such generalizations. It has been said that “the key to pleading and notice in the administrative process is adequate opportunity to prepare. . . .” 1 K. Davis, Administrative Law Treatise § 8.05, at 530 (1958). The potential for prejudice in permitting unlimited and untimely amendmеnts has been realized in the case at bar.
Preparing for a hearing of this nature is not the same as preparing for a football game. Surely it is unfair to charge an employer with the burden of guessing what violations the Secretary might charge and preparing a numbеr of defenses accordingly.6 The Secretary‘s rationale that the underlying hazard was common to all cited standards ignores the crucial distinction that the different standards put different facts in dispute. A defense based on the type of structure Cornell erected, in response to a charge grounded on a lack of flooring or a safety net, is quite different from a defense based on whether or not the use of safety belts might increase, rather than decrease, the hazard of workmen falling at that moment in time when the compliance officer was observing those men from a distance of some 100 feet.
We agree with the principle of National Realty stated above, but a line must be drawn at some procedural point. Comparing the harm to the public interest from dismissing the amended citation in a case where the job has been completed with the prejudice to Cornеll if the last amendment were allowed, permits only the conclusion that allowing the amendment would be to permit procedural unfairness.
Lastly, the Secretary urges that Usery v. Marquette Cement Manufacturing Co., 568 F.2d 902 (2d Cir. 1977) is analogous to the present controversy. We disagree. In Marquette the citation was for a violation of the “general duty clause” of the Act,
The Second Circuit held that the Commission abused its discretion in not permitting the Secretary to amend pursuant to
Although several distinctions exist between Marquette and the case before us, the controlling difference in short is the lack of incurable prejudice in Marquette, as opposed to the severe, irremediable prejudice that Cornell would suffer from allowing the amended complaint. In our view, therefore, Marquette adds no vitality to the Secretary‘s arguments.
III
For the reasons expressed above, the Commission‘s order will be vacated and the Commission directed to dismiss the citation.