DATE: July 1, 1993
CASE NO. 83-CTA-252
IN THE MATTER OF
U. S. DEPARTMENT OF LABOR,
v.
THE ALASKA NATIVE FOUNDATION, INC.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
This case arises under the Comprehensive Employment and
Training Act (CETA), 29 U.S.C. §§ 801-999 (Supp. V
1981) and the implementing regulations at 20 C.F.R. Parts 675-
680 (1990) and 29 C.F.R. Part 97 (1984).[1]
On May 6, 1986, The Alaska Native Foundation, Inc. (ANF)
appealed the April 23, 1986, order of the Administrative Law
Judge (ALJ) granting the Grant Officer's motion to dismiss ANF's
request to set aside a previous ALJ's order which affirmed the
Grant Officer's disallowance of $94,067 of CETA expenditures
claimed by ANF. The Secretary asserted jurisdiction on May 23,
1986.
BACKGROUND
The Grant Officer issued a Final Determination on May 26,
1983, disallowing $94,067 of expenditures claimed by ANF under
its CETA grant. Administrative File 8-9. The disallowed costs
were excess administrative costs claimed in contravention of the
pertinent CETA regulations. 29 C.F.R. § 97.161(f)(6).
On June 1, 1983, ANF requested a hearing before the Office
of Administrative Law Judges (OALJ), but failed to appear at the
scheduled hearing. In August 1984, ANF received the ALJ's Order
to Show Cause as to why the disallowed costs should be treated as
allowable costs. ANF's then attorney requested and received an
extension to respond to the order, but nevertheless did not
[PAGE 2]
respond. In September 1984, ANF allegedly packed away its copy
of the Order to Show Cause when it moved its offices
approximately three city streets in Anchorage, but neglected to
notify either the OALJ or the Grant Officer of its change of
address. ANF claims that it had no contact with its attorney
for the next year. ANF alleges that it received no other
correspondence regarding this case until it received the Grant
Officer's demand letter dated July 22, 1985. [2] The record
contains the Grant Officer's Certificates of Service of mailings
to ANF in December 1984, (Grant Officer's motion for an order
affirming final determination and disallowance), and in January
1985, (ALJ's order granting that motion). ANF did not except to
the ALJ's order affirming the disallowance which became the final
action of the Secretary. 20 C.F.R. § 676.91(f).
On August 6, 1985, ANF's present counsel appealed the Grant
Officer's demand letter to the OALJ. The Grant Officer moved to
dismiss ANF's appeal of the demand letter and ANF then moved to
set aside the default judgment. The ALJ granted the Grant
Officer's motion to dismiss ANF's request to reopen the case, and
affirmed the default judgment.
DISCUSSION
The issues before me concern: (1) the OALJ's authority to
review the previous ALJ's decision affirming the Grant Officer's
disallowance after it became the final action of the Secretary;
and (2) whether the ALJ abused his discretion in granting the
Grant Officer's motion to dismiss ANF's motion to set aside the
default judgment. The regulation at 20 C.F.R. § 676.89(a)
provides that procedural questions not regulated by subpart F of
Part 676, CETA or the Administrative Procedure Act, shall be
guided to the extent practicable by the Federal Rules of Civil
Procedure (Fed. R. Civ. P.). The Secretary determined that Fed.
R. Civ. P. 60(b), which permits a court, at its discretion, to
relieve a party from a final judgment or order for, inter
alia, excusable neglect, [3] was applicable to cases before
the OALJ. In the Matter of Metlakatla Indian Community,
Case No. 81-CTA-268, Sec. Order Reinstating Decision, Apr. 30,
1984, slip op.
at 3. Therefore the OALJ had the authority to review prior ALJ
decisions.
The ALJ did not abuse his authority denying ANF's request
to reopen the case and granting the Grant Officer's motion to
dismiss ANF's request and affirming the default judgment. The
courts have established criteria applicable to setting aside
default judgments pursuant to Rule 60(b). These criteria require
more than merely "good cause shown". Jackson v. Beech,
636 F.2d 831, 835-36 (D.C. Cir. 1980). "Excusable neglect" which
would be the basis for consideration under Rule 60(b) in this
case, has been characterized as those occasions when the
petitioner was
[PAGE 3]
unable to act on his own behalf, or when the petitioner was
diligent in his concern, but unforeseeable circumstances beyond
the petitioner's control intervened to his detriment.
Klapprott v. United States, 335 U.S. 601 (1949)
(petitioner was incarcerated and weak from illness); United
States v. Cirami, 563 F.2d 26, 34 (2d Cir. 1977)
(petitioner's counsel was suffering from a mental disorder which
induced him to both neglect his duties and assure his client that
he was attending to them). The failure of counsel does not
automatically provide an excuse for the party seeking relief on a
default. Link v. Wabash Railroad Company, 370 U.S. 626
(1962).
ANF's admission of its receipt of the ALJ's Order to Show
Cause and then packing it away prior to moving its offices, its
claim not to have been in contact with its prior attorney for
almost a year after its receipt of the pending order to show
cause, and its failure to notify either the OALJ or the Grant
Officer of its move, are not consistent with a claim of
uncontrollable occurrences or due diligence. [4] The ALJ
determined that ANF's neglect was not excusable, and I am
persuaded that the ALJ was justified in denying ANF's request
to reopen the case. Standard Newspaper, Inc v. King, 375
F.2d 115 (2d Cir. 1967) (misplacing papers during an office move
not adequate reason to set aside previous default judgment);
Thompson v. Housing Authority of City of Los Angeles, 782
F.2d 8219 (9th Cir. 1986) (affirming dismissal by district court
on a record of inexcusable delay and neglect by plaintiff's
counsel); Pena v. Seguros La Commercial, S.A., 770 F.2d
811 (9th Cir. 1985) (failure to provide correct address to
parties for forwarding documents does not constitute excusable
neglect).
ORDER
The ALJ's order issued April 23, 1986, granting the Grant
Officer's motion to dismiss IS AFFIRMED. The Alaska Native
Foundation, Inc. IS ORDERED to repay $94,067 to the U.S.
Department of Labor. This payment shall be from non-Federal
funds. Milwaukee County, Wisconsin v. Donovan, 771 F.2d
983, 993 (7th Cir. 1985), cert.denied, 476 U.S.
1140 (1986).
SO ORDERED.
__________________________
Secretary of Labor
Washington, D.C.
OAA:SBLOOM:kg:05/16/95
Room S-4309:FPB:523-9728
[ENDNOTES]
[1] CETA was repealed effective October 13, 1982, and was
replaced by the Job Training Partnership Act, 29 U.S.C.
§§ 1501-1791 (1988). However, CETA continues to govern
administrative or judicial proceedings pending on October 13,
1982, or begun between October 13, 1982, and September 30, 1984.
29 U.S.C. § 1591(e).
The last year that the CETA regulations were printed in the
Code of Federal Regulations was 1990.
[2] The demand letter was sent to ANF's new address, but a
subsequent letter in July 1985, from the Department's Regional
Solicitor bearing ANF's old address was also received by ANF.
[3] Fed. R. Civ. P. 60 entitled "[r]elief [f]rom Judgment or
Order" provides in pertinent part:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly
Discovered Evidence; Fraud, etc. On motion and
upon such terms as are just, the court may relieve a
party or a party's legal representative from a final
judgment, order, or proceeding for the following
reasons: (1) mistake, inadvertence, surprise, or
excusable neglect; . . . or (6) any other reason
justifying relief from the operation of the judgment.
(1991)
[4] ANF's Response Brief before the OALJ at 7-8.
