A judge has ordered OSHA to pay a company $30,000 in attorney’s fees after a review commission threw out a safety violation and fine.
K.E.R. Enterprises, d/b/a Armadillo Underground, is an underground utility excavation contractor that installs water, drainage and sewer systems.
On March 28, 2008, Armadillo was involved in a project to install five miles of PVC pipe for Collier County, FL. One section of pipe had a small leak.
To stop the leak, two employees tightened bolts with hand wrenches. The pipe exploded. Part of it struck Armadillo’s foreman who suffered two broken legs. Three other workers received lacerations.
OSHA issued two citations, including one General Duty Clause (GDC) violation on the grounds that “employees were exposed to the hazard of being struck by fragments of a water main PVC pipe, whose mechanical joints and restraining glands were not being installed in accordance with the manufacturer’s specifications.”
Armadillo received a $3,000 fine for the GDC violation and a $3,000 fine for the second violation. The company appealed, and OSHA dropped the second citation.
When the case came before an administrative law judge (ALJ) of the Occupational Safety and Health Review Commission (OSHRC), the only question was whether OSHA had proven its case for the GDC citation.
OSHA argued that tightening the bolts to stop a leak without first depressurizing the water line constituted a recognized hazard.
The ALJ found that, contrary to what OSHA claimed, Armadillo’s procedures were proper and in accordance with industry practice. The judge threw out the GDC violation. The ALJ’s decision was subsequently upheld by the full OSHRC. OSHA didn’t appeal, so the decision stands.
Equal Access to Justice Act
But that wasn’t the end of this case. Armadillo filed a petition for attorney’s fees and costs under the Equal Access to Justice Act (EAJA), which entitles eligible companies that prevail in litigation against the government to receive related attorney’s fees and expenses.
OSHA’s first line of argument against awarding fees was that Armadillo didn’t properly show it was an eligible company.
An EAJA eligible corporation is one with a net worth not exceeding $7 million that employs no more than 500 workers at the time that a petition is filed.
Armadillo filed its petition on Aug. 8, 2008 and produced records for 2007 through 2009 with a demonstrated net worth of well under $7 million each year. The dates on the statements were Sept. 30 of each year.
OSHA argued the EAJA required a determination of the company’s actual net worth on the precise date the petition was filed.
An ALJ hearing Armadillo’s petition found that argument to be “overly technical and unreasonable.” It found Armadillo was an eligible company.
To keep from paying the company’s attorney’s fees, OSHA had to show issuing the rejected citation was substantially justified.
A citation is substantially justified if it has a “reasonable basis in both law and fact” or is “justified in substance or in the main — that is, justified to a degree that could satisfy a reasonable person.”
The ALJ noted that the underlying basis for the citation was the inspector’s assumption that the bolts were overstressed when tightened to stop a leak in a pipe that was not first depressurized.
Contrary to the inspector’s testimony, the evidence showed the most common reason for a pipe to leak is that the bolts are not tight.
In its decision on whether Armadillo should receive attorney’s fees, the ALJ wrote:
“The evidence revealed that virtually every basis for [OSHA’s] issuance of the [General Duty Clause] allegation was not only unsupported by the record, but also fundamentally flawed.”
For that reason, the ALJ ordered OSHA to pay $30,048.17 in attorney’s fees.
What do you think about the decision? Let us know in the comments.
(Secretary of Labor v. K.E.R. Enterprises d/b/a Armadillo Underground, OSHRC Docket No. 08-1225, 1/8/14)