CCASE:
TOMROB, INC.,
DDATE:
19880503
TTEXT:
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[1] [88-30.WAB ATTACHMENT]
U. S. DEPARTMENT OF LABOR Office of Administrative Law Judges
525 Vine Street, Suite 900
Cincinnati, Ohio 45202
In the Matter of
Disputes concerning the payment of Date Issued: MAY 3 1988
prevailing wage rates and overtime
and proper classification by:
TOMROB, INC., Prime Contractor Case No. 84-DBA-79
SIERRA CONSTRUCTION COMPANY
Subcontractor
and
Proposed debarment for labor
standards violations by:
TOMROB, INC.
ROBERT R. THOMPSON, President
and
SIERRA CONSTRUCTION COMPANY
JOHN TERRANOVA, Owner
With respect to laborers and mechanics
employed by the subcontractor on U.S.
Department of Housing and Urban Development
Project No. OH-31-1 (Fairfield Street)
Ravenna, Ohio
DECISION AND ORDER OF DISMISSAL OF HEARING
On April 6, 1988, the U.S. Department of Labor filed a Motion
for Judgment by Default in this matter. On April 15, 1988, an
Order to Show Cause was issued by me which required each of the
other parties to demonstrate by April 21, 1988 good cause as to why
that Motion should not be granted or as to why this matter should
not be dismissed pursuant to the provisions of Federal Rule of
Civil Procedure 41(b).
On April 21, 1988, Louis C. Damiani responded on behalf of
Tomrob, Inc., and Robert R. Thompson, Sr., to the Order to Show
Cause. Mr. Damiani argues very vociferously that the provisions of
29 C.F.R. [sec] 18.39(b) authorizing a default judgment are not
applicable to this case since his clients have not failed to
appear at a hearing. While acknowledging the authority of the
Administrative Law Judge, Mr. Damiani contends that the provisions
of Federal Rule of Civil Procedure 55(b) are not applicable here
since the five factors to be weighed have not been satisfied based
upon the circumstances of this matter. The response received does
not address the applicability of the [1]
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[2] provisions of FRCP 41(b). The response did include an affidavit
of Robert R. Thompson, Sr., in which he itemizes prior problems that he has
experienced with former legal counsel representing him in this and
other related matters. No response to the Order to Show Cause was
received from Sierra Construction Company or John Terranova, who
was the owner of that company.
The Employment Standards Administration, Wage and Hour
Division, directed separate determination letters to Tomrob, Inc.
- Prime Contractor; Robert R. Thompson - President; Sierra
Construction Company - Subcontractor; and John Terranova - Owner.
Those two determination letters were subsequently appealed and
hearings were requested by counsel for each of the parties. The
Order of Reference was issued as to all four parties on August
23, 1984 and the case was transmitted to the Office of
Administrative Law Judges for hearing on August 30, 1984.
On October 1, 1984, E. Earl Thomas, Deputy Chief Judge,
issued a Pre-Hearing Order which required the U.S. Department of
Labor (hereinafter DOL) to furnish the prime contractor and
subcontractor all of the information pertinent to a determination
of the underpayments involved in this case, including the names
of the employees involved, the nature of the violations, the
amount, the period covered by the contract, the computations of
the overtime underpayments, and other data. That information was
to have been provided to both contractors and their officers no
later than thirty days from the date of the Order. In addition,
Judge Thomas ordered that not later than twenty days after service
of that response, the prime contractor and the subcontractor were
to serve an Answer admitting or denying the particulars furnished
and setting forth any matter in defense or justification. In a
timely fashion, DOL did comply with that directive and by way of
letter dated November 1, 1984, a copy of DOL's response was mailed
to this office for association with the formal record. On November
30, 1984, an attorney by the name of James Alexander, Jr., who was
representing Tomrob, Inc., requested an extension of time within
which to respond. That request was granted by Judge Thomas on
January 3, 1985 by extending the time for filing an answer to
January 28, 1985. No response to the Pre-Hearing Order was ever
received from Sierra Construction Company and/or John Terranova,
Owner, nor was an answer ever filed by Tomrob, Inc., and/or Robert
R. Thompson, President.
On July 1, 1986, I mailed to all of the parties and the
attorneys of record, a NOTICE which advised them that the case
had been assigned to me for hearing and provided them my full
name and mailing address. Subsequently, on August 6, 1986, I
scheduled this case for hearing on October 1, 1986, in Akron,
Ohio. Shortly thereafter, DOL requested a postponement because
of a conflict in scheduling. I granted the request for
postponement on August 27, 1986. That original Notice of Hearing
[2]
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[3] also included a Pre-Hearing Order which advised all of the
parties that I anticipated full discovery of all of the facts
pertinent to each of the items at issue and, in addition, I
expected a full stipulation of all facts which should not
reasonably be disputed. That Notice of Hearing also advised the
parties that:
Failure to timely comply with this Pre-Hearing Order
without good cause may result in the dismissal of the
proceeding or the imposition of other appropriate
sanctions against the noncomplying party.
On October 17, 1986, I once again issued a Notice of Hearing
and Pre-Hearing Order. On that date, the case was scheduled to
be heard on November 21, 1986 in Akron, Ohio. The Pre-Hearing
Order also directed the parties to submit to the Administrative
Law Judge and exchange by mail, a pre-hearing submission containing
the following information:
(a) A brief statement of each issue and the parties'
position with regard thereto, including the citation of all
relevant statutes, regulations, and case law.
(b) The full name and address of each witness the party
proposes to call with a short summary of the witness' expected
testimony.
(c) A copy of all documents which the party expects to
introduce as evidence. Each document must be properly marked for
identification, paginated, and a copy served on the other
parties.
(d) All preliminary motions and a statement of objections
expected to be made to any documents which are included in the
administrative file. Each party will have three (3) days from the
date of receipt of these materials within which to lodge written
objections to any of the proposed testimony, documentary evidence
submitted or to the preliminary motions filed. Failure to voice an
objection within the three-day period will result in a waiver of
all rights with respect to the introduction of any of the
materials. Counsel will have 10 days from the date of this Order
to lodge objections to any of the Exhibits previously submitted.
Stipulation of Facts. The parties are directed to prepare
a written stipulation of all facts which are not in dispute or
should not reasonably be in dispute. That stipulation is also to
be submitted 10 days prior to the hearing date. It is expected
that the computations of the Department of Labor [] Compliance
Officer, which have been submitted as Government Exhibits 3 and 4
(GX 3, 4), will be fully stipulated to the extent that the parties
agree with the hours worked, rate of pay, [3]
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[4] and amount due each employee or as they agree with any of those
individual items. The Pre-Hearing Order also requested that legible
copies be provided and carried the warning that if the parties failed to
comply with this Pre-Hearing Order without good cause that it may
result in the dismissal of the proceeding, or the exclusion of
the testimony of witnesses who were not listed on the witness
list. This material was to have been exchanged ten days prior to
the scheduled hearing date or November 12, 1986.
The DOL submitted a full response to the Pre-Hearing Order.
On November 12, 1986, David R. Harbarger, Esquire, mailed an Entry
of Appearance on behalf of Tomrob, Inc., and Robert R. Thompson,
Sr., and also mailed a Motion for Postponement of this case. That
request for postponement was granted on the same date that it was
received, which was November 13, 1986. In the memorandum
accompanying the Motion for Postponement, Mr. Harbarger represents
that:
. . . Rest assured that either myself or an attorney
associated with this office will be present at the
hearing of this matter on behalf of the parties making
this request. You can also be assured that no further
requests for continuance will be made. I would only
request that I be consulted as to possible convenient
hearing dates so that court scheduled conflicts can be
avoided . . . .
On January 15, 1988, I had my secretary initiate telephone
contacts with the parties for the purpose of arranging a conference
call in order to settle upon a mutually agreeable date for the
hearing of this case. At that time, it was learned that Mr.
Harbarger no longer represented Tomrob, Inc. Mr. Thompson advised
this office that he was in the process of obtaining the firm of
Alexander and Buchanan to represent him and he was to advise my
secretary immediately following his meeting with the firm. Mr.
Thompson never did return the phone call to advise of newly
retained counsel. Since I was unable to arrange a conference call,
on February 10, 1988, I once again issued a Notice of Hearing and
Pre-Hearing Order which set this matter for hearing on April 12,
1988, in Canton, Ohio. That Pre-Hearing Order provided the parties
over two months advance notice of the scheduled trial date and also
ordered them to conduct the usual pre-hearing exchange of
information as noted above at least twenty (20) days prior to the
hearing date and to execute a Stipulation of Fact. The Stipulation
would take into account the computations of the Department of
Labor, Compliance Officer, which have been submitted as Government
Exhibits to the extent that the parties agree with the hours
worked, rate of pay, and amount due each employee, or as they
agree, with any of those items individually. Once again, the
Pre-Hearing Order contained the standard warning that failure to
comply may result in the [4]
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[5] dismissal of this case or the imposition of other appropriate
sanctions.
On February 22, 1988, I received a letter from a Nathaniel
Baccus, III, who indicated that his firm no longer represented
Tomrob, Inc., and that he was withdrawing his appearance. On
March 22, 1988, DOL submitted another identical set of its
exhibits which had been "paginated" in compliance with my
Pre-Hearing Order. That submission fully complied with the
Pre-Hearing Order in that the other data had previously been
submitted in response to prior Pre-Hearing Orders and counsel for
the DOL advised that he had been unable to arrive at any
stipulations. On February 26, 1988, I received a letter from
David R. Harbarger advising that he no longer represented Tomrob,
Inc.
On March 3, 1988, this office received a telephone call from
a Mr. Damiani, who inquired as to the possibility of a continuance
and informed my secretary that on March 1, 1988 he had been asked
to represent Mr. Thompson in this case. Since I was not in the
office at that time, my secretary advised him that his call would
be returned the following week. Subsequently, my secretary
telephoned the office of Mr. Damiani on both March 8 and March 9,
1988, in an effort to arrange a conference call with all counsel in
this matter, but he was not in the office and our calls were not
returned. On March 10, 1988, we were advised that Mr. Damiani was
out of town and that he would telephone this office upon his
return. On April 7, 1988, my secretary received a telephone call
from Mr. Damiani and he advised her that he would not be
representing Mr. Thompson in this matter. On April 6, 1988, the
DOL filed its Motion for Judgment by Default in this case. As had
been the case with respect to my prior Pre-Hearing Orders, neither
Tomrob, Inc., Robert R. Thompson, President, or Sierra Construction
Company and John Terranova, Owner, filed any response whatsoever to
the Pre-Hearing Order. Apparently no effort whatsoever was made to
stipulate facts in this case even though the vast majority of the
Compliance Officer's computations were apparently not genuinely
disputed. William A. Peterson, who is counsel for Sierra
Construction Company and John Terranova, did submit a single
exhibit which is the affidavit of an individual. That affidavit
was sent on March 25, 1988. No explanation was provided as to why
the individual could not have been called as a witness in this
case, nor did his statement comply in any respect with the
requirements of the Pre-Hearing Order.
The procedures governing Davis-Bacon and Related Acts cases
are controlled by 29 C.F.R. Part 6, the Rules of Practice and
Procedure for Administrative Hearings found at 29 C.F.R. Part 18,
and the Federal Rules of Civil Procedure. 29 C.F.R. Part 6.1, 29
C.F.R. Part 18.1(a). The Administrative Law Judge is assigned
broad powers in handling case matters. 29 C.F.R. [sec] 18.29(a).
[5]
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[6] These Rules also provide for dismissal of the request for
hearing as a result of its abandonment by one of the parties. 29
C.F.R. [sec] 18.39(b). I interpret this provision to be akin to
Federal Rule of Civil Procedure 41(b), which provides for an
involuntary dismissal for the failure of a party to prosecute or to
comply with the procedural rules or any order of the court. The
Motion for Judgment by Default filed by DOL makes specific
reference to Federal Rule of Civil Procedure 55, which authorizes
the entry of a default judgment when a defendant fails to answer or
otherwise defend his law suit. An Order of Dismissal sua sponte
under FRCP 41(b) may be entered by the adjudication officer. Link
v. Wabash Railroad Co., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed. 2d 734
(1962). The key to Rule 41(b) is a finding of a failure to
prosecute whether that finding is styled as a failure to appear at
a pre-trial conference, failure to file a pre-trial statement,
failure to prepare for conference, or failure to comply with the
pre-trial order. Carter v. City of Memphis, Tennessee, CA 6th
(1980), 636 F.2d 159, J. F. Edwards Construction Co. v. Anderson
Safeway Guard Rail Corp., CA 7th (1976) 542 F.2d 1318.
The formal record of this case shows that the notification
letter from the Administrator which formally advised all of the
parties of the alleged liability as determined by the Department
of Labor was issued on December 13, 1983. That letter
constitutes the Complaint in this case. Thus, this matter has
been pending for a period of time in excess of four years. The
record contains no evidence that counsel for either the prime
contractor or subcontractor engaged in any discovery activity in
anticipating the impending litigation.
The October 1, 1984 Pre-Hearing Order entered by Judge E.
Earl Thomas was completely ignored by both the prime contractor
and subcontractor. The DOL did comply with the Order. Each of
the Pre-Hearing Orders which I entered were essentially the same
and required the parties to advise me of specific information
which I deemed to be essential in conducting an orderly hearing
and also in gaining some understanding as to the importance and
the nature of the evidence which I would receive. My Pre-Hearing
Orders warned the parties very clearly that failure to timely
comply without good cause may result in the dismissal of the
proceeding. Each of the parties received that warning on three
different occasions. Neither the prime contractor nor the
subcontractor made any response whatsoever to the Pre-Hearing
Order requirements calling for those parties to advise me
concerning the issues, the law, and their respective positions
involved, witness information, or data pertaining to the
documentary evidence which they intended to introduce.
Additionally, no Stipulation of Facts was executed nor was one
ever discussed. Absent a Stipulation, this type of case
necessitates the court hearing testimony concerning the findings
made by the compliance officer under circumstances where multiple
employees are involved and numerous wage earner records must be
[6]
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[7] considered. A complete Stipulation of Fact should narrow
the issues as to the compliance officer's findings and, therefore,
conserve the court's time and expedite the entire hearing process.
Although the subcontractor was granted a postponement
following the issuance of the second Notice of Hearing, no relief
was requested from the Pre-Hearing Order that accompanied the
Notice. Similarly, neither of the parties responded to the third
Pre-Hearing Order excepting to the extent that the subcontractor
submitted a single affidavit which would not have been received
into evidence anyway.
The prime contractor has been completely dilatory in obtaining
counsel who would assist him in his case movement. The formal
record contains some indication that Mr. Thompson and Tomrob, Inc.,
discussed representation at varying times by different attorneys,
but no meaningful contributions were made by any. On two different
occasions, I made an effort to arrange a pre-hearing telephone
conference to monitor the progress of the contractors' attorneys in
preparing this matter for hearing, but my efforts in that regard
were frustrated due to the unavailability of attorneys or their
failure to return my telephone calls.
Considering the several warnings which had been provided to
the parties in my Pre-Hearing Orders, the fact that the parties
and their counsel saw fit to totally disregard the Pre-Hearing
Orders and their responsibility to adequately prepare this matter
for hearing or to prosecute their claim in some orderly fashion,
I conclude that the requests for hearing filed by Tomrob, Inc.,
Robert R. Thompson, President, and Sierra Construction Company,
John Terranova, Owner, should be dismissed as provided by 29
C.F.R. [sec] 18.39(b).
In ordering the dismissal of the request for hearing, I am
well aware that the courts do not favor the entry of a default
judgment. United Coin Meter Co., Inc. v. Seaboard Coastline
Railroad, 705 F.2d 839 (1983). Similarly, the courts have
recognized that the dismissal of an action for an attorney's
failure to comply with pre-trial orders is a harsh sanction which
should be used only in extreme situations where there exists a
record of delay or contumacious conduct by the party initiating
the action. Carter v. City of Memphis Tennessee, 636 F.2d 159
(1980); Silas v. Sears Roebuck and Company, Inc., 586 F.2d 382
(5th Cir. 1978). No default judgment is being entered here under
FRCP 55 and thus the argument made by Mr. Damiani is not relevant
to the action being taken. I am dismissing the contractors'
request for hearing and that action is to be distinguished from
the entry of a judgment against a party whose conduct has caused
delay or was contumacious in some form. In this case, it was the
contractors who requested the hearing on DOL's wage determination
[7]
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[8] findings. It was the contractors who sought the relief of
the Administrative Law Judge from the audit activity of DOL. It
was the contractors who caused the delay in making proper payment
to the underpaid employees. It was the contractors, by way of
their conduct in the prosecution of this matter, that caused the
final resolution to be delayed and the determination on the
validity of the DOL determinations to be postponed.
Robert R. Thompson and Tomrob, Inc., had ample opportunity,
in fact years, to obtain counsel who would meaningfully pursue
their hearing request and who would expeditiously prepare this
matter for hearing. Mr. Thompson did not seem able to retain
counsel for any length of time and even as late as one day after
DOL's Motion for Default was received, this office was advised
that Mr. Thompson's current counsel would not be representing him.
It apparently was only after the Order to Show Cause was issued
that Mr. Thompson concluded that the retention of counsel was in
his own best interests.
It was the [*] contractors' [*] request for hearing that these
parties have failed to prosecute. [*Emphasis in original*] I
simply do not believe that our procedural rules require that simply
because the contractors timely make a request for hearing that the
Department of Labor must incur the expense of producing the
evidence necessary to sustain its determinations before any
resolution can be made of the matter. As a corollary to the last
proposition, I also do not believe that it is incumbent upon the
Administrative Law Judge to incur the expense for his agency of
traveling to the site of the scheduled hearing to determine if one
or more of the parties will default. That was essentially Mr.
Damiani's contention with respect to the applicability of our own
Regulation and FRCP 55. Our Regulations expressly provide that a
request for hearing may be dismissed upon its abandonment. This
record shows that the contractors and their attorneys wholly
failed to comply in any respect with the pre-hearing orders,
there was no discovery, settlement discussion, nor was the court
apprised in any respects concerning the contractors' intentions
with respect to the hearing of this matter. I was frustrated in
my efforts to arrange telephone conferences to determine the
status of the case. Clearly, the procedural history evidences
delay and contumacious conduct on the part of the parties who had
requested this hearing. If they have such little regard for the
orderly progression of their case, then why should DOL expend its
attorney time in defending the determinations and the court be
required to expend time and money under circumstances where it is
unclear that any of the parties will even appear. In my
judgment, Link v. Wabash Railroad Co., supra, clearly authorizes
the dismissal of this matter.
Therefore, IT IS ORDERED that the requests for hearing filed
by each of the parties to this proceeding are hereby dismissed as
being abandoned, and for failure to properly prosecute as [8]
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[9]
provided by 29 C.F.R. [sec] 18.39(b) and Federal Rule of Civil
Procedure 41(b), and that the determinations made by Herbert J.
Cohen, Deputy Administrator, Employment Standards Administration,
Wage and Hour Division, by letters dated December 13, 1983 are
reinstated in their entirety as if no request for hearing had
been made by any party to this proceeding.
RUDOLF L. JANSEN
Administrative Law Judge [9]
