On Hearing En Banc July 24, 1975.
OPINION OF THE COURT
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 Occupationl 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
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 7½ 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.
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 Occupational Safety and Health Review Commission
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.
We need not recapitulate the Act in detail here.
Violations fall into four categories:
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.
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.
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.
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.
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.
Irey also objects to the procedures permitting the Secretary to propose a penalty which becomes final unless contested by the employer.
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:
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 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.
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."
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,
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.
GIBBONS, Circuit Judge (dissenting):
Although I agree with most of what the majority opinion says, I dissent from the judgment enforcing the administrative civil penalty on the single and narrow ground that the administrative civil penalty device violates the seventh amendment. As Judge Weis' opinion makes clear, suits for recovery of the penalties assessed by the administrative agency may be brought in the district court, Pub.L. No. 91-596, § 17, 29 U.S.C. § 666(k), but the only judicial review afforded with respect to the fact of violation or the amount of the penalty is in this court. Pub.L. No. 91-956, § 11(a), 29 U.S.C. § 660(a). Although the language of 29 U.S.C. § 666(k) is far from
The central feature of the compromise which produced the Constitution of 1787 was the empowerment of the national government to act directly upon persons rather than, as under the Articles of Confederation, on member States. The extent of the transfer of sovereignty to act upon citizens directly was set forth in Article III. One express limitation upon the central government's power is the provision in Article III, § 2 that the trial of all crimes shall be by jury. When the Constitution was presented to the ratifying conventions the people, fearful of the aggrandizement of power in the national government, insisted on further limitations which were in 1791 incorporated in the Bill of Rights. One of those limitations is the seventh amendment, which guarantees jury trials in civil actions at law. A suit for the recovery of an in personam money judgment is certainly an action at law.
If the civil penalty provisions of the Occupational Safety and Health Act were to be construed as penal, the jury trial provision of Article III, § 2 would apply, as would the double jeopardy clause of the fifth amendment. The respondent so contends, but I agree with the majority that it is now well settled that Congress can, in enforcing federal policies, choose civil or penal remedies, alternatively or concurrently, at least within the limits suggested in cases such as Kennedy v. Mendoza-Martinez, 372 U.S. 144, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963). I agree as well, although with considerable misgivings, that the civil penalty provisions in OSHA fall within the civil parameters delineated in the cases, and thus that the statute does not infringe the right to a jury trial guaranteed in Article III, § 2.
The civil jury trial guarantee of the seventh amendment is not so easily disposed of. The statute permits the determination of a civil penalty without jury trial, which can be reduced to an in personam money judgment and executed upon. If in 1791 an action for such a money judgment would have been an action at law, it follows that the action falls, today, within the amendment. See Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 447, 7 L.Ed. 732 (1830); Fleitmann v. Welsbach Lighting Co., 240 U.S. 27, 36 S.Ct. 233, 60 L.Ed. 505 (1916). Not every legal proceeding whereby the government might recover money was in 1791 an action at law. The same First Congress which recommended the ratification of the seventh amendment recognized as much when it enacted the Act of July 31, 1789, ch. 5, 1 Stat. 29, "An Act to regulate the Collection of the Duties imposed by law on the tonnage of ships or vessels, and on goods, wares and merchandises imported into the United States." That statute created ports of entry and designated collectors of customs,
Judge Blatchford dismissed the case against the master but sustained the libel against the vessel, rejecting the contention that because of the misjoinder the libel should fall. The latter contention was raised by the owner on appeal to the old Circuit Court, which held that it was proper to discharge the master on the claim that he was entitled to a trial by jury, and that his misjoinder did not affect the in rem proceeding against the vessel. United States v. The Queen, 27 Fed.Cas. 672 (No. 16,108) (C.C.S.D.N.Y.1873). I have found no earlier instance in which any attempt was made to proceed civilly in personam against a master under the customs laws in a summary proceeding. All of the subsequent civil penalties cases under the customs laws are in rem proceedings. A case demonstrating the essentially in rem nature of proceedings under the customs laws, though not involving a civil penalty, but a disputed assessment of duty, also written by Justice Blatchford, is In re Fassett, 142 U.S. 479, 12 S.Ct. 295, 35 L.Ed. 1087 (1892). Others include Passavant v. United States, 148 U.S. 214, 13 S.Ct. 572, 37 L.Ed. 426 (1893) and Origet v. Hedden, 155 U.S. 228, 15 S.Ct. 92, 39 L.Ed. 130 (1894). I have found no case arising under the customs laws which sustained an administrative civil penalty exacted in personam rather than in rem.
The first attempt by Congress to deal with the business of importing people
The immigration laws went through a general recodification in the Act of March 3, 1891, ch. 551, 26 Stat. 1084 and a general revision in the Act of March 3, 1903, ch. 1012, 32 Stat. 1213. Although there were criminal and civil judicial remedies in these statutes, the basic enforcement mechanism continued to be the imposition of duties upon owners and masters of vessels, enforceable by detaining the vessel. These proceedings were clearly in rem. Such an enforcement mechanism was challenged in Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 29 S.Ct. 671, 53 L.Ed. 1013 (1909) on the ground that it was penal. Justice White for the Court rejected that contention, and his opinion is frequently cited as authority for an extensive discretion in the Congress to choose civil rather than penal means. The case does not speak to the seventh amendment, however, because although the penalties were challenged in a suit for a refund, they had been exacted by detaining the vessel and paid to obtain its release. The proceeding was in rem. Similar enforcement devices were continued in the Quota Act of 1921, Act of May 19, 1921, ch. 8, 42 Stat. 5, as amended, and the Immigration Law of 1917, Act of February 5, 1917, ch. 29, 39 Stat. 874, as amended. These were challenged in Elting v. North German Lloyd, 287 U.S. 324, 53 S.Ct. 164, 77 L.Ed. 337 (1932) and Lloyd Sabaudo Societa v. Elting, 287 U.S. 329, 53 S.Ct. 167, 77 L.Ed. 341 (1932). The due process contention was once more rejected, but as in Oceanic Navigation Co. v. Stranahan, supra, no seventh amendment issue was presented since the exactions
One other line of cases which must be considered is that commencing with Murray's Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 15 L.Ed. 372 (1855). That case, too, arose out of the collection of import duties. The same Act of July 31, 1789 which created the method for collecting customs duties had provided in § 9:
The collectors thus were fiduciaries collecting monies on behalf of the Treasury of the United States and under a duty to account as such. In 1820 Congress enacted "An Act providing for the better organization of the Treasury Department", Act of May 15, 1820, ch. 107, 3 Stat. 592, which designated specific officers in the Treasury Department for the enforcement of the fiduciary obligations of federal fiscal officers. The statute provided in § 2:
The same section authorized the execution of such a distress warrant on personal property of the delinquent officer or his sureties. It also provided:
Section 4 of the 1820 Act provided that any person aggrieved by a distress warrant could sue in the United States district court for an injunction to stay execution, but no injunction could issue unless the complaining party gave bond with sufficient surety to pay any judgment which might result against him, and no injunction would impair the lien imposed by Section 2. 3 Stat. 595.
The famous Samuel Swartwout became collector of the Port of New York in 1830. When his account was audited in 1838 he was short $1,374,119.65, and a distress warrant was issued in that amount. Swartwout owned real estate in New Jersey, and the lien of the distress warrant was prior in time to an execution on a judgment in favor of another creditor. Purchasers at the judgment execution sale brought an action in ejectment against purchasers at the warrant execution sale, contending that the Act of May 15, 1820 was unconstitutional for a host of reasons, including a claimed seventh amendment violation and thus that their title was superior.
We come, then, to the case upon which the government places its chief reliance. In Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917 (1938), the Supreme Court sustained the 50% civil fraud penalty provisions of the Revenue Act of 1928, ch. 852, § 293, 45 Stat. 791. The case arose on certiorari to the Second Circuit which had reviewed a decision of the Board of Tax Appeals. The chief attack upon the statute was that it was penal. Justice Brandeis rejected this contention. In the course of his discussion he wrote:
The government urges this statement as dispositive of the jury trial contention, but it is abundantly clear that Justice Brandeis' reference to jury trial is to the guarantee of jury trial in Article III, § 2, and not to the seventh amendment. It is abundantly clear, first in the context of
One other case bears mention. In N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893 (1937), the Supreme Court directed the enforcement of a Board order in an unfair labor practice case which required reinstatement and back pay. It was contended that the award of back pay was the equivalent of a money judgment and was in contravention of the seventh amendment. Chief Justice Hughes wrote:
Since the essence of the NLRB enforcement proceeding was injunctive relief directed at the cessation of unfair practices, the proceeding was essentially equitable, and incidental money relief could be awarded without a jury trial. But in the case before us, the only relief sought was the recovery of an in personam money judgment. The civil penalty provisions of OSHA cannot be sustained on the ground that they are incident to the grant of equitable relief.
Summarizing, then, no case in the Supreme Court has ever sustained the imposition of an in personam judgment for a civil penalty in a proceeding in which the defendant claimed and was denied the right of jury trial guaranteed by the seventh amendment. Each case on which the government relies involved the rejection of a penal contention, and hence of a different jury trial guarantee, or involved a proceeding in equity or admiralty, or involved a proceeding in rem. Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970), holding that the seventh amendment applies in stockholder derivative suits, though not directly in point, certainly suggests the result which I would reach.
Nor, does it seem, that compliance with the seventh amendment would seriously frustrate the congressional policy of entrusting primary enforcement authority to an administrative agency. Until recently
Recognizing that there are differences, with respect to the degree of difficulty of the enforcement problem, between OSHA and some of the earlier models such as the Federal Communications Act, still I find it difficult to understand why, with such models in effect and apparently working, Congress has chosen in its more recent regulatory enactments to push so hard and so far in the direction of avoiding compliance with an express provision of the Bill of Rights. I would hold that the civil penalty provisions of OSHA which result in
Before: SEITZ, Chief Judge, STALEY, VAN DUSEN, ALDISERT, ADAMS, GIBBONS, ROSENN, HUNTER, WEIS and GARTH, Circuit Judges.
On Petition for Hearing In Banc
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.
The Secretary asserts that OSHA proceedings are essentially equitable and for that reason the Amendment does not apply. He contends that the enforcement procedures are designed 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).
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).
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:
The Court reiterated its position in Curtis v. Loether, supra, stating:
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:
This statement was based on the case of Block v. Hirsh, 256 U.S. 135, 41 S.Ct. 458, 65 L.Ed. 865 (1921).
A fair reading of the Supreme Court's decisions on the application of the Seventh Amendment establishes three categories of litigation:
In only the first classification is the jury mandated.
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.
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
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.
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.
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.
GIBBONS, Circuit Judge, dissenting, with whom Judges Aldisert and Hunter join.
I do not intend to repeat here the argument set forth in my dissent from the original panel decision in this case. Nothing advanced during its en banc consideration has moved me from the belief that the Supreme Court has yet to reach the seventh amendment issues as presented in the context of penalty proceedings under the Occupational Safety and Health Act. In essence, the en banc majority takes issue with my treatment of NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893 (1937). Today, I will direct my discussion to the majority's consideration of the seventh amendment issue in light of that decision.
The majority reasons that while the Supreme Court has recognized three broad generic categories of litigation:
the Court has found a mandate for a jury trial only in the first classification.
The classification serves to define the issue. It recognizes, and I acknowledge, that if a case is one which in 1791 would have been within the jurisdiction of equity or admiralty it does not implicate the seventh amendment. But it seems clear that the seventh amendment was intended to prevent both federal equity and federal admiralty from swallowing up the jurisdiction of courts of law which afforded jury trials. It was over that very issue that the long battle concerning the extension of admiralty jurisdiction to inland waters was fought,
Our difference then, is solely over the third category, those involving "administrative adjudication." At the outset it is well to recall that the term appears nowhere in the Constitution. In particular, it appears nowhere in Article III, § 2 which defines the categories of cases to which, and parties upon whom, the judicial power of the United States may be brought to bear. Only two of the clauses in Article III, § 2 are relevant to this case:
It might be argued that since the seventh amendment by its terms, applies only to suits at common law, the amendment limits only the first clause of Article III, § 2; that is, that it refers only to federal question cases in law. It might be further argued that the broader language "Controversies to which the United States shall be a Party", since it does not repeat the "Law and Equity" language of the first clause, is not modified by the seventh amendment. Under that interpretation, in any suit to which the United States was a party, including a suit to collect money, a jury trial would be a matter of legislative grace. But that interpretation clearly proves too much, since the grant of diversity jurisdiction in Article III, § 2 is also "to Controversies" rather than to "Cases, in Law and Equity." Yet, no one has ever suggested that the seventh amendment is inapplicable to diversity cases. Thus, I assume, as does the common consensus, that the seventh amendment applies to the entire judicial power of the United States to the extent that the exercise of that power involves suits at common law. I also assume, and I do not suppose the majority disagrees, that the seventh amendment binds the entire federal government, not merely the Article III courts. I also assume that Congress could not confer the entire diversity jurisdiction, including suits at common law, upon a non-Article III tribunal sitting without a jury. Nor, I suppose, would the case be different
But if the majority is right about this case, then my last two assumptions are dead wrong, for nothing in the majority opinion gives any definition to the term "administrative adjudications" other than to simply recognize the label which Congress has fastened upon it. Indeed, that is precisely the government's position. When at oral argument the attorney appearing for the government was asked to suggest a standard by which an "administrative proceeding" falling outside the reach of the seventh amendment could be identified, the only standard he could suggest was the label Congress attached. The majority opinion, although it gives passing lip service to the principle of judicial review, embraces this position by totally omitting any attempt to give content either to the seventh amendment term "Suits at common law" or to its term "administrative adjudication." The extent of its analysis is in three sentences:
But how do we know the line has not been crossed if we are not told where it is? What neutral principle was brought to bear in deciding that this case fell on the permissible side of the invisible line?
If this is the teaching of the one authority upon which the majority relies, then unbeknownst to the world of legal scholarship, NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893 (1937), affected the most profound and enormous redistribution of power among the three branches of the federal government of any case in the Court's history. I had thought until today that the Court, not Congress, was
I suggest, moreover, that the Court has already done so with respect to the seventh amendment. In Pernell v. Southall Realty, 416 U.S. 363, 370, 94 S.Ct. 1723, 1727, 40 L.Ed.2d 198 (1974), Justice Marshall, upholding the right to a jury trial in an action for possession of land, quoted with approval the definition of actions at law in Whitehead v. Shattuck, 138 U.S. 146, 151, 11 S.Ct. 276, 34 L.Ed. 873 (1891):
The so-called "administrative adjudicacation" in this case never had any object other than the recovery of a money judgment, yet the majority simply acceeds to the Congressional determination that it is not an action at law.
I stated earlier that NLRB v. Jones & Laughlin Steel Corp., supra, was the one authority upon which the majority relies. It is true that neither Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974) nor Pernell v. Southall Realty, supra, to which the majority refers, actually support the conclusion that the Court, not Congress, must determine the contents of the constitutional term "Suits at common law." Both upheld demands for jury trial, the first in a suit for damages for violation of Title VIII of the Civil Rights Act of 1968, and the second in a suit for possession of land pursuant to the summary dispossess statute of the District of Columbia. In each case the Court distinguished Jones & Laughlin which was raised as a bar to jury trial, as an administrative proceeding. But neither case can be read for the proposition that by calling something an "administrative adjudication" Congress can decide to handle "Suits at common law"
The majority quotes that part of the Jones & Laughlin opinion which refers to a "statutory proceeding." One thing that is clear from Curtis v. Loether, and Pernell v. Southall Reaty, is that both decisions flatly reject any distinction between "Suits at common law" and "statutory proceedings." Both cases involved statutory proceedings. The first was a statutory proceeding seeking recovery of a money judgment for housing discrimination. It was held to be an action at law. The second was a statutory proceeding seeking possession of land. It, too, was held to be an action at law. Thus the fact that the proceeding is statutory is simply irrelevant; as irrelevant as the fact that all federal judicial proceedings are statutory since all federal jurisdiction is statutory.
Moreover the majority quotation from Jones & Laughlin is no authority for the proposition that if Congress has relegated the proceeding to an administrative agency the seventh amendment does not apply. I read the quote with the following emphasis:
To rely only on the paragraph referring to statutory proceedings unknown to the common law is to distort Chief Justice Hughes' meaning. The suit was one in which the N.L.R.B. sought injunctive relief in the court of appeals, and incidental to that injunctive relief sought a back pay award. Of course an action for injunctive relief was unknown to the common law. No more can be read into Jones & Laughlin than the rejection of a demand for jury trial in the equitable enforcement proceeding. See Albemarle Paper Co. v. Moody, 422 U.S. 405, 443-447, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975) (Rehnquist, J., concurring).
I would concede, however, that Chief Justice Hughes wrote with less than usual precision in the quoted portion of
Thus Jones & Laughlin was sub judice during the 66 days of the Court's modern history when it found itself most completely isolated from the other two branches of federal government and most severely under attack. See e. g., 2 Pusey, Charles Evans Hughes 749-65 (1951); R. Jackson, The Struggle for Judicial Supremacy 176-96 (1941); J. Burns, Roosevelt: The Lion and the Fox 291-304 (1956). The decision in Jones & Laughlin and the four other Wagner Act cases handed down the same day marked at least the beginning of the end of the Court's attempt to impose its subjective economic views on the nation in the guise of substantive due process.
The term "statutory proceedings" when referring to administrative proceedings is imprecise because it is overly generic. There are administrative proceedings in the nature of rule-making, rate-setting, or licensing which have nothing at all to do with this case. An earlier generation of judges probably would have called these proceedings legislative. See e. g., Justice Holmes' description of rate-making in Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 226, 29 S.Ct. 67, 53 L.Ed. 150 (1908). What the case sub judice involves is administrative adjudication, and the question is what kinds of adjudication can be relegated by Congress to decision by executive branch employees rather than by jurors?
In my dissent to the panel's opinion, I attempted at some length to demonstrate that a proceeding, the sole object of which is the obtaining of an in personam money judgment, is a "Suit at common law" and thereby deserving of seventh amendment protection. I again dissent because I am unwilling to accept the majority's view that an Article III court charged with interpreting the Constitution's mandate must blindly defer to a Congressional direction that the proceeding below be labeled something else. Although I am completely in sympathy with the goals Congress sought to achieve in enacting the Occupational Safety and Health Act, the limitations on the exercise of federal power as set forth in the Constitution must, however, be observed by the legislative branch. Scrupulous regard for such principles may often seem to delay the attainment of desirable social goals, but as artificial as they sometimes appear, in the long run, they serve the higher purpose of preserving constitutional government.
Although I agree with the legal analysis set forth by Judge Gibbons in his opinions dissenting from both the panel and en banc majorities, I disagree strongly with his political analysis (pages 1224-1225 of the en banc dissent) of the reasoning underlying the Supreme Court's decision in N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893 (1937). I am critical of any analytical approach which attributes a court decision to the political motivations and other extra-judicial considerations of the five Justices who joined in the majority opinion.
I do not believe that fear of "court-packing" or other "reprisals" governed the decisions of the Supreme Court in 1937 any more than I believe that considerations of "reprisal" or "reward" dictate the decision of members of the judiciary today. The "considerations" about which Judge Gibbons writes are not the product of evidence and are not matters of judicial record; they are rather political theories advanced by secondary source commentators. If true, they rent great tears in the fabric of justice; if false, they do an enormous disservice to dedicated Justices. In either event, these considerations add nothing to an otherwise analytical and compelling opinion dealing with the applicability of the Seventh Amendment to the issues presented here. Indeed, in advancing a hypothetical and pseudo-political analysis of considerations which might have motivated the court (an analysis better suited to a law review note than an opinion), Judge Gibbons detracts from an otherwise scholarly dissertation.
I note, to set the record straight, that many of the Justices who ultimately constituted the majority in Jones & Laughlin, supra, had consistently been in the minority in those cases decided prior to the November 1936 election,
Therefore, I disassociate myself from the dissent's political analysis, while at the same time joining in Judge Gibbons' otherwise excellent opinion, holding that the Seventh Amendment mandates a jury trial with respect to penalty proceedings under the Occupational Safety and Health Act.
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).
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.
These include: (1) the modern compilation of sanctions enforced by the Immigration and Naturalization Service collected in Title 8 of the United States Code whose historical antecedents have already been reviewed. The Report noted the three Supreme Court decisions which sustained the administratively imposed civil penalties. (As indicated previously—all in the context of in rem proceedings). Lloyd Sabaudo Societa v. Elting, 287 U.S. 329, 53 S.Ct. 167, 77 L.Ed. 341 (1932); Elting v. North German Lloyd, 287 U.S. 324, 53 S.Ct. 164, 77 L.Ed. 337 (1932); and Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 29 S.Ct. 671, 53 L.Ed. 1013 (1909). Conference Report at 952 n. 3. (2) The Federal Home Loan Bank Board which is given authority to enforce a number of civil money penalty provisions in Title 12. See, e. g., 12 U.S.C. §§ 1425a(d), 1425b(b). However, as the Conference Report noted, "[c]ounsel for the FHLBB reported that `there has never been a court appeal' but that review would be limited to considering whether the Board has acted arbitrarily or capriciously." Conference Report at 952 n. 5. (3) The United States Postal Service which is authorized to impose civil money penalties on private contract carriers pursuant to 39 U.S.C. § 3603 and 49 U.S.C. § 1471. This authority was upheld in Allman v. United States, 131 U.S. 31, 35, 93 S.Ct. 632, 33 L.Ed. 51 (1889); Great Northern Ry. v. United States, 236 F. 433, 443-444 (8th Cir. 1916). Allman however, does not discuss any seventh amendment issue, undoubtedly because the postal contractor had by contract agreed to the administrative determination of a penalty for non-performance. See Great Northern Ry Co., supra, at 439. Conference Report at 952 n. 6.
In addition to those statutes listed in the Administrative Conference survey, the Endangered Species Act of 1973, 16 U.S.C. § 1540(a) authorizes the Secretary of Interior to assess a variety of civil money penalties subject to judicial review under the "substantial evidence" standard. The provision has not been tested in the courts.
The Pernell Court characterized the case in almost the exact language it had used to describe the Jones & Laughlin case in Curtis v. Loether:
This provision, in somewhat altered form, is now codified in 28 U.S.C. § 1333(1). Its effect is to permit a suitor
Neither the majority nor the government rely upon Crowell v. Benson, 285 U.S. 22, 52 S.Ct. 285, 76 L.Ed. 598 (1932) which upheld the validity of an award made pursuant to the Longshoreman's and Harbor Workers' Compensation Act. 33 U.S.C. § 901 et seq. The Act referred the adjudicative process to an administrative agency, and enforcement of the agency award to the district court. The Supreme Court upheld the procedure, finding no violation of Article III by virtue of Congress' authorizing adjudication by an administrative agency in the first instance rather than by a constitutional court.
See the discussion of Crowell v. Benson, supra, in connection with the limitations on the jurisdiction of Article III court enforcement of administrative penalties in Professor Hart's celebrated "Dialogue." Hart, The Power of Congress to Limit the Jurisdiction of Federal Courts: An Exercise in Dialectic. 66 Harv.L.Rev. 1362, 1374-79 (1953). Such refined analysis as is presented in these materials ought to suggest to the majority, the necessity for closer scrutiny of Congressional "labeling."