ARB CASE NO. 03-115
ALJ CASE NO. 02-SCA-16
DATE: June 30, 2004
In the Matter of:
MITCHEM TRANSPORTS, INC.,
DAVID MITCHEM, and PEGGY
MITCHEM, Individually and Jointly,
RESPONDENTS.
A dispute regarding the payment of wages and
fringe benefits to employees providing services
under Respondents' contracts with the U.S. Postal
Service and U.S. Veterans Administration.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
Appearances:
For Respondents:
Hugh E. Hackney, Esq., Jeffrey D. Wilson, Esq., Locke Liddell & Sapp LLP, Dallas, Texas
For Administrator, Wage and Hour Division:
Leif G. Jorgenson, Esq., Paul L. Frieden, Esq., Steven J. Mandel, Esq., Howard M. Radzely, Esq., Solicitor, U.S. Department of Labor, Washington, D.C.
DECISION AND ORDER OF REMAND
This matter is before the Administrative Review Board (the Board) pursuant to the statutory authority of the McNamara-O'Hara Service Contract Act of 1965, as amended (SCA or the Act), 41 U.S.C.A. § 351-357 (West 1994). Our jurisdiction to hear and decide appellate matters under the Act is established by the regulations at 29 C.F.R. Parts 4 and 8 (2003) and Secretary's Order 1-2002, 67 Fed. Reg. 64,272 (Oct. 17, 2002). Mitchem Transports, Inc., David Mitchem, and Peggy Mitchem (collectively Mitchem Transports or Respondents) filed a Petition for Review seeking reversal of a default judgment issued against them. The Administrator, Wage and Hour Division of the U.S. Department of Labor (Administrator), who was the prosecuting party below, opposes the Petition for Review. We hold that the Petition for Review warrants consideration by the Board and that the ALJ exceeded his discretion when he entered default judgment against Mitchem Transports. We therefore grant the Petition for Review and remand this matter for further action.
[Page 2]
BACKGROUND
The material facts in this matter consist of the procedural history surrounding the Administrator's request for, and the ALJ's entry of, the default judgment against Mitchem Transports. Throughout the proceeding before the ALJ, Mitchem Transports were represented only by Peggy Mitchem, appearing pro se. Default Judgment at 1.
Based on the results of an investigation conducted by the Wage and Hour Division, the Administrator issued a Complaint on August 27, 2002. That Complaint was filed with the Office of Administrative Law Judges (OALJ) on September 4, 2002. In the Complaint, the Administrator alleged that Mitchem Transports held three Federal service contracts which were subject to the SCA and that they "failed and refused" to pay the contracts' service employees the required prevailing hourly wages and fringe benefits. Complaint at 2, ¶ 4, ¶ 5, ¶ 6. See 41 U.S.C.A. § 351(a)(1), (a)(2); 29 C.F.R. § 4.6(b). Further, the Administrator contended that Mitchem Transports "failed to make available … adequate and accurate records with respect to many of their service employees showing, among other things, their daily and weekly hours worked, as required by Section 4(g) of 29 C.F.R. Part 4." Id. at ¶ 10. The Administrator submitted that Mitchem Transports was liable for $84,489.09 in back wages, and should be debarred from government contracting (pursuant to 41 U.S.C.A. § 354(a)), for these violations. Id. at 3-4, ¶ 10. On the last page of the Complaint, below the attorney's signature and above the certification of mailing, there was a single spaced "NOTICE TO RESPONDENT" which stated, "Pursuant to 29 CFR Section 6.16, you are required to file with the Office of Administrative Law Judges a complete answer to the above Complaint within thirty (30) days after service of this Complaint upon you…. Failure to timely file an answer may result in a default judgment being filed against you." Id. at 4 (emphases added).
On September 11, 2002, the OALJ issued a Notice of Docketing. Regarding the requirements for an Answer, the Notice of Docketing stated that: "29 C.F.R. §6.16 provides that the Respondent shall file an Answer with the Chief Administrative Law Judge within 30 days after service of the Complaint." Notice of Docketing at 1 (emphasis in original).
2 In her brief to the Board, the Administrator's appellate counsel states: "[Respondents] did not file anything in the allotted time in response to this Order to Show Cause." Statement of the Administrator in Response to the Petition for Review (Adm. Stmt.) at 5. However, the Administrator's trial counsel previously conceded that "Peggy Mitchem responded to the Order to Show Cause. On December 18, 2002, the OALJ faxed a copy of a letter received by the OALJ from Peggy Mitchem to [the Administrator's] counsel." Administrator's March 24, 2003 Motion for Default Judgment at 2. The OALJ record contains the original undated fax transmittal cover sheet and a copy of Peggy Mitchem's September 20, 2002 letter, which is date-stamped as being received by the OALJ at 10:51 A.M. on November 19, 2002, only 13 days after issuance of the OSC and well within the 30 days provided by that Order. Thus, the record evidences that a timely response to the Order was submitted.
3 The Wage and Hour Division promulgated the SCA hearing procedure regulations found at 29 C.F.R. Part 6, Subpart B, including Section 6.16(b). See 49 Fed. Reg. 10627 (Mar. 21, 1984). General rules of practice for proceedings before the OALJ are set forth at 29 C.F.R. Part 18. See n.6, infra.
4 The Mitchem letter carries a clearly erroneous typewritten date of April 8, 2002, rather than 2003. Default Judgment, Attachment B.
5 Prior to the establishment of this Board in 1996, the Board of Service Contract Appeals was responsible for issuing final agency decisions under the SCA. See 61 Fed. Reg. 19985 (May 3, 1996).
6 The rules of practice found at 29 C.F.R. Part 18 are generally applicable to all ALJ proceedings, although specific provisions must yield to rules of "special application," like the rules promulgated under the SCA that are codified at 29 C.F.R. Part 6. See 29 C.F.R. § 18.1(a). The ALJ in this matter based entry of default solely upon 29 C.F.R. § 6.16, and the default judgment standards found at 29 C.F.R. § 18.6(d)(2)(v) are not at issue here.
7 The record does not demonstrate that either the ALJ or counsel for the Administrator actually received a copy of Peggy Mitchem's September 20, 2002 letter within the 30-day period. However, the Administrator's appellate counsel concedes that this letter "was received and considered prior to entry of the default judgment." Adm. Stmt. at 4 n.2. Peggy Mitchem's response to the Order stated that she was sending another copy of a document previously submitted. In any event, the Default Judgment rested solely on Mitchem Transports' failure to file proper answers; the timeliness of Mitchem's initial response letter is not at issue.
8 The ALJ specifically notes that "Peggy Mitchem filed a response to the complaint. …. A copy of Peggy Mitchem's response [dated April 8, 2002 (sic)] is attached [to the Default Judgment] as Attachment B. Attached as Peggy Mitchem's initial response [dated September 20, 2002] to the complaint is Attachment C." Default Judgment at 1.
9 While an ALJ is under the obligation to construe a pro se party's pleadings liberally, he is not, however, required to develop arguments on behalf of the complainant. SeeYoung v. Schlumberger Oil Field Services, ARB No. 00-075, ALJ No. 2000-STA-28 (ARB Feb. 28, 2003),slip op. at 3 n.1, 9-11 (ALJ's obligation to assist pro se complainant did not obviate requirement for the ALJ to remain impartial).