United States Court of Appeals, Eleventh Circuit.
No. 95-2807.
Robert B. REICH, Secretary of Labor, Petitioner,
v.
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION; Jacksonville
Shipyards, Inc., Respondents.
Jan. 7, 1997.
Petition for Review of an Order of the Occupational Safety and
Health Review Commission. (OSHRC No. 92-888), Stuart E. Weisberg,
Judge.
Before EDMONDSON, Circuit Judge, FAY, Senior Circuit Judge, and
ALDRICH*, Senior District Judge.
EDMONDSON, Circuit Judge:
This appeal raises the question whether a proceeding for civil
penalties under the Occupational Safety and Health Act (OSHA), 29
U.S.C. § 651-678, becomes moot when an employer permanently ceases
doing business. Because we conclude that this case is not moot, we
vacate the order of dismissal and remand for further proceedings.
I. Background
Jacksonville Shipyards, Inc. ("JSI") was formerly engaged in
the ship repair business in Florida. In August 1991, two JSI
employees were killed in a work-related fall at JSI's Mayport Naval
Station facility. The Secretary of Labor (the Secretary) issued
citations totaling $692,000, including citations for alleged
willful violations leading directly to the deaths. JSI contested
the citations and the proposed penalties. The Occupational Safety
and Health Commission (the Commission) assigned the case to an
*
Honorable Ann Aldrich, Senior U.S. District Judge for the
Northern District of Ohio, sitting by designation.
Administrative Law Judge (ALJ) for hearing and disposition.
By November 1992, JSI had released almost all of its
workforce, retaining only a small number of administrative
employees to wind-up; and it had sold almost all of its assets.
At this time, JSI filed a motion with the ALJ seeking to have the
case dismissed as moot. The ALJ granted the motion.
The Secretary petitioned the Commission to review the
decision. The Commission, in a two to one decision, concluded that
an OSHA citations proceeding is moot where the employer has
terminated its employees and where there is no likelihood of
resuming the employment relationship. The dissenting commissioner
maintained that an employer's voluntary cessation of illegal
conduct does not render a proceeding moot, because the citation is
based on the employer's status at the time the violation occurred.
The case was remanded to the ALJ to determine whether JSI was still
an "employer" under OSHA.
On remand, the ALJ dismissed the case as moot based on an
unrebutted affidavit of JSI's president that all employees had been
terminated. The Secretary petitioned the Commission to review the
ALJ's decision, and the Commission denied review. The ALJ's second
dismissal of the case became a final order of the Commission, and
the Secretary appealed.
II. Discussion
A case becomes moot "when the issues presented are no longer
"live' or the parties lack a legally cognizable interest in the
outcome." Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944,
1950-51, 23 L.Ed.2d 491 (1969). The Commission made a legal
determination that the OSHA proceeding was "moot" in the ordinary
1
sense—that is, no live case or controversy—of that word. In
general, a case does not become moot by a party's cessation of
allegedly illegal conduct. United States v. W.T. Grant Co., 345
U.S. 629, 632, 73 S.Ct. 894, 897, 97 L.Ed. 1303 (1953); Atlantic
States Legal Foundation v. Tyson Foods, 897 F.2d 1128, 1135 (11th
Cir.1990). The Supreme Court has recognized an exception to this
principle in certain cases where injunctive relief is sought.
County of Los Angeles v. Davis, 440 U.S. 625, 99 S.Ct. 1379, 59
L.Ed.2d 642 (1979). A claim for injunctive relief may become moot
if:
(1) it can be said with assurance that there is no reasonable
expectation that the alleged violation will recur and (2)
interim relief or events have completely and irrevocably
eradicated the effects of the alleged violation.
Id., at 631, 99 S.Ct. at 1383 (internal quotations and citations
omitted).
Appellee JSI urges us to decide mootness for civil money
penalties under the standard set forth in Davis for injunctive
relief. JSI advances these points: (1) that the proceedings are
moot because its cessation of business means that the violations
1
We decide the case before us and the issues it raises. By
the way, we do not independently decide today that Article III
mootness principles necessarily control administrative agency
tribunals. See generally Climax Molybdenum Co. v. Secretary of
Labor, MSHA, 703 F.2d 447, 451 (10th Cir.1983) ("[A]n agency
possesses substantial discretion in determining whether the
resolution of an issue before it is precluded by mootness.
However, in exercising this discretion, an agency receives
guidance from the policies that underlie the "case or
controversy' requirement of Article III."); Tennessee Gas
Pipeline Co. v. Federal Power Commission, 606 F.2d 1373, 1380
(D.C.Cir.1979) ("The limitations imposed by Article III on what
matters federal courts may hear affect administrative agencies
only indirectly.").
cannot recur and the effects of the violations have been
eradicated; and (2) that JSI can have no liability under OSHA
because it is no longer an "employer" within the meaning of the
Act.
We know—to say the least—that, in general, claims for money
do not become moot as a result of the defendants' acts following
2
the occurrence giving rise to the claims. Courts have
traditionally treated monetary relief claims differently than
injunctive relief claims for the purpose of mootness challenges.
See, e.g. Tyson, 897 F.2d at 1134; Powell, 395 U.S. at 496 n. 8,
89 S.Ct. at 1951 n. 8; Castaneda v. Dura-Vent Corp., 648 F.2d 612,
615 (9th Cir.1981). We reject the appellee's suggestion that we
use the mootness analysis for injunctive relief to decide whether
a money penalty claim is moot. Unlike injunctive relief which
addresses only ongoing or future violations, civil penalties
address past violations; liability attaches at the time the
violation occurs. See, e.g., Chesapeake Bay Foundation, Inc. v.
Gwaltney of Smithfield, Ltd., 890 F.2d 690, 696 (4th Cir.1989)
(liability for civil penalties "is fixed by the happening of an
event ... that occurred in the past.").
We are guided by our decision in Atlantic States Legal
Foundation, Inc. v. Tyson Foods, Inc., 897 F.2d 1128 (11th
Cir.1990). In Tyson, a private plaintiff brought an action for
civil penalties under the Clean Water Act, 33 U.S.C. § 1365,
2
At oral argument, we asked counsel for JSI whether he was
aware of a decision which had considered a money claim to have
become moot as a result of the defendant's own acts. He
responded, "I do not know of any such cases which hold that, your
Honor. We searched, and we could not find any."
against the defendant corporation for violations of permit
limitations on the discharge of pollutants. After the complaint
was filed, but before trial, the defendant began complying with the
limitation requirements. The district court dismissed the case as
moot because the defendant was no longer in violation of the Act.
We reversed, holding that "the mooting of injunctive relief will
not moot the request for civil penalties as long as such penalties
were rightfully sought at the time the suit was filed." Id. at
1134. Accord Atlantic States Legal Foundation, Inc. v. Pan
American Tanning Corp., 993 F.2d 1017, 1021 (2d Cir.1993); Natural
Resources Defense Council v. Texaco Refining & Marketing, Inc., 2
F.3d 493, 503 (3d Cir.1993); Gwaltney, 890 F.2d at 696-97.
JSI argues that the facts of this case are distinguishable
from a case such as Tyson where the employer has come into
compliance with the statute but remains in business. In those
post-complaint compliance cases, JSI asserts, there is a risk that
the wrong will be repeated; but the risk does not exist where the
employer has ceased all operations.
JSI's argument does not fit the reasoning in Tyson. In Tyson,
we did not base our decision on a determination that the defendant
corporation continued to operate and, therefore, presented a risk
of future violations. Although injunctive relief was mooted
because "the allegedly wrongful behavior could not reasonably be
expected to recur," we held in Tyson that the claim for civil
penalties was not moot. Id. at 1134.
JSI also argues, and the Commission agreed, that JSI is no
longer an "employer" for purposes of OSHA. See 29 U.S.C. § 652(5)
(defining "employer" as person engaged in business who has
employees). This argument fails because, for purposes of civil
money penalties, a tribunal looks to the employer's status at the
time of the violation, not at the time of trial. See, e.g.
Gwaltney, 890 F.2d at 696-97 (characterizing past violations as
"the only possible basis for assessing a penalty"). Accepting the
Commission's view of mootness would mean the existence of a "case
or controversy" is dependent on an employer's post-violation acts
as well as the date a tribunal sets for a hearing in the
proceedings. This innovative view seems to inject unneeded
confusion into traditional mootness principles. We agree with the
Secretary's view of the pertinent statute, 29 U.S.C. § 666: JSI
was an "employer" when the OSHA violations occurred as well as when
JSI received citations, and it remains one for the proceedings to
assess the penalties arising from the citations.
Although we do not rely much on OSHA-related policy
considerations in deciding this case, we think our decision is
consistent with the policies that OSHA was enacted to advance. We
expect that to adopt JSI's proposed rule for mootness would
frustrate the purpose of OSHA. OSHA was enacted 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). Because of
the large number of workplaces which OSHA must regulate, relying
solely on workplace inspections is an impractical means of
enforcement. We accept that OSHA must rely on the threat of money
penalties to compel compliance by employers. See Atlas Roofing Co.
v. OSHRC, 518 F.2d 990, 1001 (5th Cir.1975) aff'd, 430 U.S. 442, 97
S.Ct. 1261, 51 L.Ed.2d 464 (1977) (OSHA penalties act as
"pocket-book deterrence").
To let the cessation of business by an employer render a civil
penalty proceeding moot might greatly diminish the effectiveness of
money penalties as a deterrence. Employers in violation of OSHA
could become complacent in the knowledge that future civil
penalties could be avoided by ceasing operations on the eve of the
Commission hearing. Violators would be encouraged "to delay
litigation as long as possible, knowing that they will thereby
escape liability even for post-complaint violations, so long as
violations have ceased at the time the suit comes to trial."
Tyson, 897 F.2d at 1137. We worry about creating an economic
incentive to avoid a penalty by going out of business and, perhaps,
then reincorporating under a different name.
More important, employers who were going out of business for
ordinary commercial reasons would have little incentive to comply
with safety regulations to the end if monetary penalties could be
evaded once the business quit altogether. As long as a business
operates, it should feel itself to be effectively under the
applicable laws and regulations—even on the last day. And, the
continuing potential of penalties—more so than injunctive
relief—makes these feelings real.3
Because the Commission's dismissal for mootness was not in
accordance with the law, we vacate the Commission's order and
3
We understand that criminal penalties can be sought for
some violations. We doubt that those kinds of penalties will or
should face most employers who violate OSHA. So, we do not
believe the existence of possible criminal penalties has much
impact on the mootness question presented here.
remand for further proceedings.4
VACATED and REMANDED.
4
We do not rule out today that JSI's having ceased to do
business might be important to the amount of penalties; the
appropriate amount is for the Commission to set.