WEIS, Circuit Judge.
The petitioner employer launched a broad based attack on the Occupational Safety and Health Act in this appeal. After a careful review of the record, we find that most of the assault stops short and that the constitutional challenges to the statute must fail. However, on one point there was error, and we conclude that the Occupational Safety and Health Review Commission applied an improper definition of the word "willful" in assessing one of the penalties against the petitioner. We remand for further consideration of that violation.
An employee of petitioner, Frank Irey, Jr., Inc., was killed on January 11, 1972, when a side of the trench in which he was working collapsed onto him. As a result of this tragedy, a Compliance Officer of the Occupational Safety and Health Administration performed an inspection of the work site and determined that the Irey Company had violated a number of OSHA's standards. A citation was issued charging that the employer failed to properly shore the trench and that other violations had occurred as well.
Irey was a contractor which was performing a construction subcontract in Morgantown, West Virginia awarded by the Boeing Company. That organization had caused certain test borings to be made in order to determine soil conditions, and the resulting information was made available to the petitioner. Irey was aware of the safety requirements for trenching work since its contract proposal to Boeing reiterated the OSHA standards in substance.
In November of 1971, West Virginia state safety inspectors cited Irey for permitting workers to be in a trench fifteen feet deep, the bottom portion of which appeared to be rock but the upper sides of which were composed of soft earth with substantial water content. Harley Six, the petitioner's construction superintendent, ordered a backhoe operator to slope the sides of the trench, and the inspectors then permitted work to continue. The company was cautioned orally and in writing of the necessity for shoring or sloping the sides of trenches composed of unstable or soft material and of the added dangers posed by water accumulation in the soil.
On the day before the fatal accident, a trench was dug about 75 feet to 100 feet from the one which had come to the attention of the West Virginia inspectors some six weeks earlier. this new trench was started by blasting through solid rock. On the following day, softer material was reached, and a backhoe was used for the digging. The trench was about 33 inches wide and was taken down to a depth of about 7 1/2 feet. The sides of the trench were vertical and had not been shored. Some rain had fallen during the previous night, and water was pumped out from the 6 to 10 feet area of the trench which had been left open. The decedent then began to lay pipe on the bottom, and thereafter backfill consisting of limestone chips was put into the excavation. It was about noon when the accident occurred.
At the hearing before the OSHA examiner, superintendent Six testified that he thought he was digging in shale and that consequently the trench did not have to be shored according to OSHA regulations. He referred to test boring reports which he said described the soil in the area as brown to dark brown weathered shale with silty clay seams.
See 29 C.F.R. 1926.652(b), Table P-1.
The employer also called a soils expert who performed some test borings in the vicinity of the accident some months afterward. This witness described the area as being of weathered limestone which, although similar to weathered shale in appearance, has more of a tendency to slide, particularly when wet.
The hearing officer found that the petitioner was guilty of a willful violation of § 5 of the Occupational Safety and Health Act of 1970, 29 U.S.C. § 654 (1970), (the general duty section of the Act) and of the standards relating to support of trenches published at 29 C.F.R. § 1926.652(b). The Secretary of Labor's proposed sanction of $7,500.00 for this violation was reduced to $5,000.00, and penalties were assessed for other violations of standards which are not of particular relevance at this juncture.
"Sides of trenches in unstable or soft material, 5 feet or more in depth, shall be shored, sheeted, braced, sloped or otherwise supported . . ." (1973). The effective regulation in 1972 required those precautions for trenches four feet or more in depth.
The Occupational Safety and Health Review Commission exercised its discretion to review the case, and the findings were affirmed. One of the three members dissented on the ground that the hearing officer had misinterpreted and misapplied the term "willful."
The Review Commission is composed of three members appointed by the President for 6 year terms. The Commission is independent of the Secretary of Labor. It is authorized to appoint hearing examiners (now called administrative law judges) whose decisions it is authorized to review on a discretionary basis. 29 U.S.C. § 661 (1970). The Commission was established to counter congressional complaints that earlier versions of the Occupational Safety and Health Act would have made the Secretary of Labor, in effect, prosecutor, judge, and jury in violation cases.
The Commission's function was designed to be adjudicative, and formulation of standards, together with the prosecution role, was assigned to the Secretary.
In this case, one of the Commissioners sua sponte, proposed that consideration be given to raising the Secretary's proposed penalty of $7,500.00 to $10,000.00. We suggest that by claiming such power the Commission invites criticism of its impartiality or at least its appearances. The Commission's assertion of a policy role was treated with disfavor in Madden v. Hodgson, 502 F.2d 278 (9th Cir. 1974). Cf. Brennan v. Occupational Safety and Health Review Commission, 492 F.2d 1027 (2d Cir. 1974).
The petitioner has chosen to attack the constitutionality of the Act on a variety of bases, asserting that the enforcement procedures involve an unlawful delegation of power to the executive branch and that the penalties, though denominated civil, are in fact criminal in nature. Some of the procedures to which the petitioner objects, that is, the power of the Commission to increase a proposed penalty, the vagueness of the general duty section, an employer's Sixth Amendment right to be confronted with his accusers, and the imposition of penalties pending determination of an appeal, are not involved in this case, and consequently, we will not decide them.
As provided by the Act, the OSHA inspector who visited the scene of the fatality issued citations against the Irey Company for a number of violations which he found. Included with each was a suggested penalty which would have been binding on the company had it not advised OSHA of its intent to contest the citations. After Irey filed its notice of contest, the case was assigned to a hearing officer of the Review Commission who conducted the hearing at which both the Secretary and the employer presented evidence.
29 U.S.C. §§ 658(a), 659(a), 659(c) (1970).
We need not recapitulate the Act in detail here. Basically, it authorizes the Secretary of Labor to establish standards for safe working conditions at places of employment throughout the United States. OSHA inspectors are authorized to visit job sites and issue citations for violations of specific standards or the broad "general duty" clause.
See the general review of the Act and its purposes in Brennan v. Occupational Safety and Health Review Commission, 487 F.2d 438 (8th Cir. 1973), and Brennan v. Occupational Safety and Health Review Commission, 491 F.2d 1340 (2d Cir. 1974).
29 U.S.C. § 654 (1970):
"(a) Each employer —
(1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees;
(2) shall comply with occupational safety and health standards promulgated under this chapter."
Violations fall into four categories:
1.
De minimis, where no monetary penalty is invoked;
2. Non-serious, where penalties of up to $1,000.00 may be assessed;
3. Serious violations, defined as those which create a substantial probability of death or serious physical harm, where a mandatory penalty of up to $1,000.00 is provided; and
4. Willful or repeated violations, where a civil penalty of up to $10,000.00 may be assessed. The term "willful" is not defined by the statute.
Suits for recovery of the penalties may be brought in the district court, but there is no provision for review of the fact of violation or amount of penalty in that forum. Criminal liability can be invoked in a situation where there is a willful violation which causes death to an employee. Imprisonment for six months and/or a fine of $10,000.00 may be imposed in such an event. Since no mention is made of the forum in which such a proceeding is to be conducted, it may be assumed that it is in the district court.
In the House debate, it was stated that this provision should be narrowly construed and was intended to be limited to any process which might be necessary to actually collect the penalty. 116 Cong.Rec. 42207 (1970). Contrast this procedure with the one provided by the Coal Mines Health and Safety Act, 30 U.S.C. § 819(a)(3) (1969), where findings of fact are required before a penalty is assessed and where an employer is entitled to a limited de novo hearing in the district court. See also 2 Recommendations and Reports of the Administrative Conference of the United States 67, 896 (1970-72), Appendix to the report of Professor Harvey J. Goldschmid compiling the statutes which provide for the use of civil penalties by federal agencies.
Petitioner emphasizes that as to a corporation, the criminal punishment of a fine of $10,000.00 is precisely the same as the civil penalty for a "willful" violation without the constitutional protections afforded a criminal defendant. Thus, the argument goes that the employer is deprived of rights guaranteed by the Fourth, Fifth, Sixth and Seventh Amendments and is not allowed an appeal to the courts on factual issues.
There is force and logic to these arguments, and we do not dismiss them lightly. Fatal to the petitioner's view, however, is a series of Supreme Court decisions which have validated the position that Congress has a wide range of alternatives available to it for enforcing its legislative policy through administrative agencies. Thus, in Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 947 (1938), it was held that monetary sanctions may be imposed administratively without invoking the judicial power, despite the contention that such penalties are essentially criminal in nature. The Court there also held that the same conduct may subject a person to both civil and criminal sanctions, if the civil aspects are considered remedial.
Cf. United States v. U.S. Coin and Currency, 401 U.S. 715, 718, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971), where the Court observed there that "From the relevant constitutional standpoint there is no difference between a man who `forfeits' $8,674 because he has used the money in illegal gambling activities and a man who pays a `criminal fine' of $8,674, as a result of the same course of conduct. In both instances, money liability is predicated upon a finding of the owner's wrongful conduct; in both cases, the Fifth Amendment applies with equal force . . ." In Astol Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974), however, a Puerto Rican forfeiture statute, which sufficiently furthered punitive and deterrent purposes, was upheld against a constitutional challenge.
In the case sub judice, candor compels us to concede that the punitive aspects of the OSHA penalties, particularly for a "willful" violation, are far more apparent than any "remedial" features. However, a deliberate and conscious refusal to abate a hazardous condition may bring about a situation where a heavy civil penalty might be needed to effect compliance with safety standards. In any event, we have now come too far down the road to hold that a civil penalty may not be assessed to enforce observance of legislative policy. See, for example, Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 29 S.Ct. 671, 53 L.Ed. 1013 (1909), and Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L.Ed. 720 (1909). Although the label attached by Congress does not preclude judicial review of a statute which transgresses a constitutional right, no such infraction has occurred here. American Smelting Refining Co. v. Occupational Safety and Health Review Commission, 501 F.2d 504 (8th Cir. 1974).
In United States v. J. B. Williams, Inc., 498 F.2d 414 (2d Cir. 1974), Judge Friendly said. "[w]hile Congress could not permissibly undermine constitutional protections simply by appending the `civil' label to traditionally criminal provisions, the statute here at issue is plainly not of that class." 498 F.2d at 421. That case involved the Federal Trade Commission Act, 15 U.S.C. § 41 et seq. under which defendants were assessed civil penalties of $500,000.00.
Much of the petitioner's opposition is centered on the fact that the civil penalties are imposed, not through normal judicial processes but by administrative action — that is, by the executive branch with very narrow judicial review.
This objection was forcefully expressed by a number of witnesses and statements during the hearings of the House Select Sub-committee on Labor, Occupational Safety and Health Act of 1970 (Oversight and Proposed Amendments) (92nd Cong. 2nd Sess., 1973).
It may be that Congress, by giving broad enforcement roles to OSHA and granting it the power to assess heavy penalties while at the same time limiting the scope of judicial review, has come close to the line which separates executive and judicial powers. However, we do not think that the line has been crossed. The legislation is still in the area where congressional discretion may be exercised, and the question is one of the wisdom of a course of action — not its constitutionality. In that context, of course, we must defer to the legislative judgment.
The dissent focuses on another disturbing element of this case — the denial of a jury trial under the Seventh Amendment. The majority, too, has serious misgivings as to the wisdom of limiting de novo review but does not agree with the dissent's conclusion of unconstitutionality. We do not think that the differences between in rem and in personam actions are sufficient to distinguish the thrust of such precedents as Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 29 S.Ct. 671, 53 L.Ed. 1013 (1909). In that case the Court refused to accept the proposition that Congress could not authorize the imposition of a penalty and commit its collection to an administrative office without the necessity of resorting to the judicial power. This view was tempered somewhat by Lloyd Sabaudo Societa v. Elting, 287 U.S. 329, 53 S.Ct. 167, 77 L.Ed. 341 (1932), which interpreted the statute to require a fair hearing and determination by the administrative officer upon facts produced in evidence. See also Gellhorn, Administrative Prescription and Imposition of Penalties, Wash.U.L.Q. 265 (1970); James, Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655 (1963).
However, we do share Judge Gibbons' reservations about the extremely limited scope of judicial review and the absence of opportunity to a de novo trial on the merits. while the prospect of burdening the court with large numbers of appeals is a matter of concern from the standpoint of efficient judicial administration, we think experience demonstrates rather conclusively that in cases of this nature de novo review is seldom requested. It is the availability of the remedy, not its infrequent utilization, which is important to the cause of justice. The mere existence of a local fire department is a source of satisfaction to a citizen, even though he would hope that he would never be forced to seek its assistance.
We perceive no overriding consideration which favors the congressional policy of recent years to insulate administrative adjudication from the open and searching examination that full judicial review provides. The necessity for an administrative agency on occasion to submit its determination to the scrutiny of a jury of citizens would be a healthful and disciplining experience.
The statutory court in Lance Roofing Co. v. Hodgson, 343 F. Supp. 685 (N.D.Ga.), aff'd 409 U.S. 1070, 93 S.Ct. 679, 34 L.Ed.2d 659 (1972), also expressed concern about judicial review, particularly as to penalties which may be assessed for failure to abate alleged continuing violations.
In Kennedy v. Mendoza-Martinez, 372 U.S. 144, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963), the Court considered the question of the criteria to be applied in determining whether sanctions are penal or regulatory in nature. The Court said that in the absence of an expression of congressional intent such factors as scienter, punishment, and excessiveness, inter alia, may be weighed. We do not perform any such analysis here because the congressional intent is clear.
But see Hay, OSHA Penalties: Some Constitutional Considerations, 10 Idaho L. Rev. 223 (1974), where a Mendoza-Martinez analysis was performed. We note also the comments of Senator Dominick on civil penalties: ". . . We did it this way because I think most of us know how difficult it is to get an enforceable criminal penalty in these type of cases. Over and over again, the burden of proof under a criminal-type allegation is so strong that you simply cannot get there, so you might as well have a civil penalty instead of the criminal penalty and get the employer by the pocketbook if you cannot get him anywhere else." 116 Cong.Rec. 37338 (1970).
Irey also objects to the procedures permitting the Secretary to propose a penalty which becomes final unless contested by the employer. According to the petitioner, this placed an undue and illegal burden on him. We find no merit to this contention. The procedures are expressly authorized by the statute and are an acceptable way to commence an administrative proceeding. From a practical standpoint, the burden on the employer to respond is little different than that which requires a party to answer a complaint within a given time on penalty of a default judgment for a fixed sum. Cf. Morton v. Delta Mining, Inc., 495 F.2d 38 (3d Cir. 1974).
29 U.S.C. § 659 (1970).
The self-executing aspect of the Act is not violative of due process because an employer is given adequate opportunity for a hearing at a time when deprivation can still be averted. An employer who chooses not to file a timely contest is deemed to have waived his right to a hearing. The citation adequately apprises him of his right to contest and of the manner in which it is to be done; subsequent silence, therefore, is properly viewed as a knowing and intelligent waiver.
The discretion granted to the Commission to assess penalties is conditioned upon consideration of four factors:
1. Size of the employer;
2. Gravity of the violation;
3. Good faith; and
4. Previous history.
We find the action of the administrative agency in applying those standards to these facts to be reasonable and within the scope of statutory authority.
When the delegation of legislative authority to an administrative agency is broad in scope, the courts have a greater role to play to prevent or correct disparate treatment of those subjected to regulation. Furthermore, it is the duty of the courts to interpret the statute under which the agency functions and to determine whether the agency is acting within the congressional purpose. See Wright, Beyond Discretionary Justice, 81 Yale L.J. 575 (1972).
It is in this spirit that we approach the issue raised by the dissenting member of the Commission on the proper interpretation of the term "willful."
The statement of Chief Judge Bazelon in Wellford v. Ruckelshaus, 142 U.S.App.D.C. 88, 439 F.2d 598, 603 (1971), is apt. In remanding for reconsideration, he said, "this course is especially appropriate in view of the fact that we are venturing into a new and uncharted area of the law. A new public sensitivity to issues of environmental protection has imposed new responsibilities on the courts, the legislature, and the administrative agencies. A new Environmental Protection Agency has been established, and its Administrator has the critical task of developing standards for administrative action throughout this area . . ."
The hearing officer concluded that a willful violation may exist under the Act when the employer commits an intentional and knowing violation and is conscious that his action is proscribed or, if the employer is not consciously violating the Act, when he is aware that a hazardous condition exists and makes no reasonable effort to eliminate the condition.
The hearing officer found that the failure to shore the trench was a willful violation of the Act even though the superintendent "either misconstrued or misunderstood" the test boring data. He summarized by saying, "Respondent [Irey], in effect, admits that he did not ascertain beforehand the true nature of the soil which it was excavating, or that it failed to either comprehend from the information it had what was the true composition of the material it was excavating." The decision concluded that the knowledge of the citation issued by the state in November of 1971 and the failure to acquaint itself with "the full facts" constituted a willful violation by the employer.
The examiner found that the bottom of the trench was at elevation 1054. Test boring report No. 107 shows shale beginning at elevation 1053.5 or 6 inches below the bottom of the trench, and the hearing officer concluded that the bottom of the trench was 6 inches above the level of the shale seam. However, he failed to note that the test boring was some 30 feet from the scene of the fatality. Another test boring. No. 105, approximately 45 feet from the accident scene showed the shale at elevation 1058.3, indicating that the level was rising from the point at test boring No. 107 to where the accident occurred. Furthermore, the soil expert, whose testimony was not contradicted, pointed out that the reports indicated that the rock levels were higher than the hearing officer found them to be. We make this point not to reverse the examiner's findings of fact but to point out that the difference in interpretation of the technical data weakens any inference that conscious wrongdoing was involved.
The Act defines a "serious" violation as one which requires proof of a substantial probability that death or serious harm could result from a condition, "unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation." To rephrase, a finding of a "serious" violation requires that the condition was hazardous and that the employer knew or should have known of it — precisely the alternative definition of "willful" which the hearing officer adopted.
29 U.S.C. § 666(j).
It is obvious from the size of the penalty which can be imposed for a "willful" infraction — ten times that of a "serious" one — that Congress meant to deal with a more flagrant type of conduct than that of a "serious" violation. Willfulness connotes defiance or such reckless disregard of consequences as to be equivalent to a knowing, conscious, and deliberate flaunting of the Act. Willful means more than merely voluntary action or omission — it involves an element of obstinate refusal to comply.
The meaning of willfulness changes with the context in which it appears. Thus, willfulness in a tax case, e. g., United States v. Bishop, 412 U.S. 346, 360, 93 S.Ct. 2008, 36 L.Ed.2d 941, (1973), varies from the definition in a suit for a penalty for failing to unload cattle, e. g., United States v. Illinois Central Railroad, 303 U.S. 239, 242, 58 S.Ct. 533, 82 L.Ed. 773 (1938).
We believe that a restrictive definition is appropriate here since otherwise there would be no distinction between a "serious" offense and a "willful" one. The lack of demarcation would permit the agency to assess a higher penalty than that which is authorized for conduct defined as a "serious" violation. A broad interpretation of "willful" would disrupt the gradations of penalties and violations so carefully provided in the Act.
The government has the burden of establishing that an offense was willful, and this court has the power to determine whether that burden has been met. National Realty v. Occupational Safety and Health Review Commission, 489 F.2d 1257 (D.C.Cir. 1973). However, since the Commission here based its judgment on an erroneous legal standard, we think it appropriate to remand for further consideration.
29 C.F.R. § 2200.73(a) (1973).
We have reviewed the record applicable to the other violations assessed against the petitioner and find no error.
The Commission's decision finding a willful violation of 29 C.F.R. 192.652(b) is vacated and remanded for further consideration not inconsistent with this opinion. The order assessing penalties for violations of §§ 1926.652(h), 1926.401(f), 1926.150(c)(1)(viii), 1926.350(a)(1), 1926.51(c), and 1926.51(a)(1) will be affirmed.
WEIS, Circuit Judge.
We revisit the important question of the right to a jury trial in an OSHA penalty proceeding. A majority of the panel which originally heard this case decided that the administrative proceedings did not run afoul of the Seventh Amendment. 519 F.2d 1200 (3d Cir., 1974). After further briefing and argument before the court in banc, we have concluded that the judgment of the panel should stand.
The factual background of the case is set out in the prior opinion, and we need not repeat it here. The employer-petitioner contends that the assessment of a civil penalty by the Occupational Safety and Health Review Commission was, for all intents and purposes, the same as an in personam monetary judgment. It argues that such a proceeding, being in the nature of debt, presents an issue which historically was tried at common law and, therefore, a jury trial should be available even though the government is the plaintiff. Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L.Ed. 720 (1909).
The requirement of a jury verdict could be met in a de novo trial in the district court on appeal from an administrative agency. However, the Occupational Safety and Health Act permits only limited judicial review of the administrative agency's factual findings under the "substantial evidence" test. It is that narrow scope of review which, according to petitioner, abrogated its Seventh Amendment right to a trial by jury, both as to the fact of violation and the amount of penalty.
That substantial amounts may be involved is demonstrated by Beall Construction Co. v. Occupational Safety H. Rev. Com'n, 507 F.2d 1041 (8th Cir. 1974). There, OSHA had proposed penalties totalling $35,442 for alleged safety violations at a construction site. Through administrative proceedings before an administrative law judge and the Commission, the penalties were reduced to $620. The large penalties initially proposed understandably alarm employers in similar circumstances. On the other hand, the final outcome may be cited by those who maintain that the administrative remedies do serve to prevent some injustices.
The Secretary asserts that OSHA proceedings are essentially equitable and for that reason the Amendment does not apply. He contends that the enforcement proceedings are designated to insure compliance with safety standards and that the purpose of civil penalties is to prevent recurrences of violations.
Since the scope of review is important to the resolution of this appeal, a survey of the Act's provisions on judicial review is appropriate. A person against whom a penalty has been imposed may obtain a review of the order in the appropriate United States court of appeals. That court is authorized "to make and enter upon the pleadings, testimony, and proceedings set forth in such record a decree affirming, modifying, or setting aside in whole or in part, the order of the Commission and enforcing the same to the extent that such order is affirmed or modified. * * * The findings of the Commission with respect to questions of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive." If further evidence is required, the court can order it to be taken before the Commission. 29 U.S.C. § 660(a).
The Secretary also has the right to petition the court for review. Alternatively, an OSHA order which has not been appealed by the employer may be filed by the Secretary with the clerk of the court of appeals, who will then enter a decree enforcing the order unless otherwise directed by the court. 29 U.S.C. § 660(b). The court of appeals may assess the civil penalties of 29 U.S.C. § 666(a)-(d) as well as any other available remedies in a contempt proceeding brought to enforce its decree. When, apparently, neither party has invoked the review jurisdiction of the court of appeals, civil penalties may be recovered in a civil action in the United States district court. 29 U.S.C. § 666(k).
An employer who sought to litigate the fact of violation at that stage would be confronted with his failure to utilize the judicial review provided by the statute. United States v. Sykes, 310 F.2d 417 (5th Cir. 1962); Weir v. United States, 310 F.2d 149 (8th Cir. 1962). 3 Davis, Administrative Law Treatise § 23.07 (1958).
In summary, while court review of the fact of violation and amount of penalty is limited by the substantial-evidence standard, the agency may compel payment only by resort to the judicial system. The Act does not totally exclude the judicial branch of government from overseeing and enforcing the statutory provisions. See National Labor Relations Board v. Kingston Cake Co., 206 F.2d 604, 611 (3d Cir. 1953). See also JAFFE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION 264 (1965).
The application of the Seventh Amendment to judicial proceedings traditionally depended on whether the suit was legal or equitable in nature. Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 446, 7 L.Ed. 732 (1830). If a statute creates a new remedy which is to be processed in the courts, that distinction is pertinent and may determine whether a jury trial is required. Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974).
The issue to be submitted to the factfinder is the relevant focus of an inquiry rather than the general nature of the proceeding. After the issue has been defined, its historical setting is then determined to see whether it would have been tried "at common law" in contradistinction to equity. 9 Wright Miller, Federal Practice and Procedure: Civil § 2302 (1971).
But, if the proceeding is before an administrative agency rather than in the courts, the Supreme Court has held that the Seventh Amendment does not apply. In NLRB v. Jones Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893 (1937), an administrative award of back pay was challenged as violative of the Constitution. The Court said:
"It is argued that the requirement is equivalent to a money judgment and hence contravenes the Seventh Amendment with respect to trial by jury. The Seventh Amendment provides that `In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.' The amendment thus preserves the right which existed under the common law when the amendment was adopted. [Citations] Thus it has no application to cases where recovery of money damages is an incident to equitable relief even though damages might have been recovered in an action at law. [Citations] It does not apply where the proceeding is not in the nature of a suit at common law. [Citation]
"The instant case is not a suit at common law or in the nature of such a suit. The
proceeding is one unknown to the common law. It is a statutory
proceeding. Reinstatement of the employee and payment for time lost are requirements imposed for violation of the statute and are remedies appropriate to its enforcement. The contention under the Seventh Amendment is without merit."
301 U.S. at 48-49,
57 S.Ct. at 629. (Emphasis added).
The Court reiterated its position in Curtis v. Loether, supra, stating:
"
Jones Laughlin merely stands for the proposition that the Seventh Amendment is generally inapplicable in administrative proceedings, where jury trials would be incompatible with the whole concept of administrative adjudication and would substantially interfere with the NLRB's role in the statutory scheme . . . These cases uphold congressional power to entrust enforcement of statutory rights to an administrative process or specialized court of equity free from the strictures of the Seventh Amendment."
415 U.S. at 194-95, 94 S.Ct. at 108-109 (footnote omitted).
The same theme was repeated a few months later in Pernell v. Southall Realty, 416 U.S. 363, 94 S.Ct. 1723, 40 L.Ed.2d 198 (1974), in the context of a statute governing landlord-tenant disputes. While holding that a jury trial was required because of the underlying legal nature of the suit in the District of Columbia courts, Mr. Justice Marshall wrote:
"We may assume that the Seventh Amendment would not be a bar to a congressional effort to entrust landlord-tenant disputes, including those over the right to possession, to an administrative agency."
416 U.S. at 383,
94 S.Ct. at 1733.
This statement was based on the case of Block v. Hirsh, 256 U.S. 135, 41 S.Ct. 458, 65 L.Ed. 865 (1921).
In Block v. Hirsh, the Court sustained the operation of a rent control commission established to cope with critical housing conditions in the District of Columbia caused by World War I. Mr. Justice Holmes wrote:
"While the act is in force there is little to decide except whether the rent allowed is reasonable, and upon that question the courts are given the last word. A part of the exigency is to secure a speedy and summary administration of the law and we are not prepared to say that the suspension of ordinary remedies was not a reasonable provision of a statute reasonable in its aim and intent."
256 U.S. at 158,
41 S.Ct. at 460 (four justices dissenting).
The Pernell Court characterized the case in almost the exact language it had used to describe the Jones Laughlin case in Curtis v. Loether:
"
Block v. Hirsh merely stands for the principle that the Seventh Amendment is generally inapplicable in administrative proceedings, where jury trials would be incompatible with the whole concept of administrative adjudication."
416 U.S. at 383,
94 S.Ct. 1733.
A fair reading of the Supreme Court's decisions on the application of the Seventh Amendment establishes three categories of litigation:
1. Legal proceedings in the courts;
2. Equitable and admiralty cases in the courts; and
3. Administrative adjudications.
In only the first classification is the jury mandated.
It is curious that while the Court was granting such a broad exemption for administrative adjudications it was enlarging the area of court cases where the jury would be available. It did so in a trilogy of cases beginning with Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959), where the Court reevaluated the scope of equitable jurisdiction in view of the expansion of legal rights provided by the Federal Rules of Civil Procedure.
Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962), held that a jury trial on legal damage issues could not be withheld because the suit also included equitable claims which under past practice would have been adjudicated on the theory of "incidental jurisdiction" or the "cleanup" doctrine. Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970), allowed a jury trial in a stockholder's derivative suit. The Ross Court again pointed out that the Federal Rules of Civil Procedure had eliminated the procedural distinctions between law and equity suits and that the value of the historical test based on these differences had been lessened. The Court noted that the legal nature of an issue is determined by considering (1) pre-merger custom with respect to such questions, (2) the remedy sought, and (3) the practical abilities and limitations of juries. Id., at 538 n. 10, 90 S.Ct. 733. The dissent in Ross v. Bernhard characterized the decision perhaps accurately:
For an article suggesting that Congress is better suited to determine the adequacy or inadequacy of a jury trial in a statutorily created cause of action, see Note, Congressional Provision for Nonjury Trial under the Seventh Amendment, 83 Yale L.J. 401, 415 (1973). Cf. Note, Application of Constitutional Guarantees of Jury Trial to the Administrative Process, 56 Harv.L.Rev. 282 (1942). "The approach must be to discard the jury only where necessary, not whenever convenient . . ." Id., at 294 (footnote omitted).
"as a reflection of an unarticulated but apparently overpowering bias in favor of jury trials in civil actions."
396 U.S. at 551,
90 S.Ct. at 745.
Falling chronologically between Dairy Queen and Ross was Katchen v. Landy, 382 U.S. 323, 86 S.Ct. 467, 15 L.Ed.2d 391 (1966), where a jury trial in a bankruptcy proceeding was denied. The Court held that a summary procedure to order the surrender of a voidable preference was not within the ambit of the Seventh Amendment. The opinion pointed out that the statute created bankruptcy tribunals as courts of equity which "deal in a summary way with `matters of an administrative character . . .'" Id., at 327, 86 S.Ct., at 471. Thus, Katchen is consistent with the treatment accorded administrative determinations in NLRB v. Jones Laughlin Steel Corp., supra, and furnishes some support for the Secretary's efforts to drape the cloak of equity over OSHA's shoulders.
While recognizing that bankruptcy courts would be traditionally viewed as courts of equity where the right to a jury trial would not attach, the Katchen Court went further in saying, "[m]oreover, this Court has long recognized that a chief purpose of the bankruptcy laws is `to secure a prompt and effectual administration and settlement of the estate of all bankrupts within a limited period,' . . . and that provision for summary disposition, `without regard to usual modes of trial attended by some necessary delay,' is one of the means chosen by Congress to effectuate that purpose . . ." Id., at 328-29, 86 S.Ct. at 472 (citations omitted).
Nevertheless, it would seem that reliance upon the claimed equitable coloration of the Occupational Safety and Health Act obscures the simple fact that this is an administrative adjudication. The Supreme Court's rulings to date leave no doubt that the Seventh Amendment is not applicable, at least in the context of a case such as this one, and that Congress is free to provide an administrative enforcement scheme without the intervention of a jury at any stage.
The petitioner likens the assessment of these OSHA civil penalties to an in personam monetary judgment which can be obtained only in an action at law. But that similarity has not proved decisive to the Supreme Court. Curtis v. Loether, supra, 415 U.S. at 196, 94 S.Ct. 1005. We see no difference in the impact on an employer between an administrative award which requires him to pay a fixed sum of money to certain employees as in the Jones Laughlin case and one which orders payment of a civil penalty to the United States.
Our function is not to pass upon either the wisdom or desirability of such an administrative adjudicatory process. We are limited to deciding whether it is constitutional within the limitations set by the Supreme Court.
We do not blindly accept a Congressional label as the dissent suggests but rather we defer to the Supreme Court's determination that the Seventh Amendment does not apply to this type of case. While the dissent differs with our reading of NLRB v. Jones Laughlin, supra, we believe that the more recent cases of Curtis v. Loether, supra, and Pernell v. Southall Realty, supra, allow no other interpretation than the one we reached.
There is a line beyond which Congress may not transfer traditional remedies from the courts to administrative agencies so as to evade the protection of the Seventh Amendment. As so often with constitutional adjudications, such a point need not be defined with precision to cover all cases for all time. We only decide the case before us, and, as the panel previously held, that line has not been crossed in this case. For the reasons stated in the panel opinion of November 4, 1974, the Commission's decision finding a willful violation of 29 C.F.R. § 1926.652(b) is vacated and remanded for further consideration not inconsistent with this opinion and the order assessing penalties for violations of §§ 1926.652(h), 1926.401(f), 1926.150 (c)(1)(viii), 1926.350(a)(1), 1926.51(c), and 1926.51(a)(1) will be affirmed.
See JAFFE, JUDICIAL CONTROL OF ADMINISTRATIVE ACTION 87-94 (1965); 1 Davis, Administrative Law Treatise § 2.12 (1958).