FILING OF COMPLAINT; ALJ MAY LIMIT CONSIDERATION OF ADVERSE ACTIONS TO THOSE STATED IN THE OSHA COMPLAINT AND OBJECTIONS TO THE OSHA RULING WHERE THE COMPLAINANT FAILED TO FILE A FORMAL COMPLAINT AS ORDERED BY THE ALJ
In Brookman v. Levi Strauss & Co., ARB No. 07-074, ALJ No. 2006-SOX-36 (ALJ July 23, 2008), the ALJ ordered the Complainant to file a complaint specifically identifying the alleged protected activities and adverse actions supporting his case. The Employer filed a motion to dismiss based on the Complainant's failure to comply. By that time the Complainant was no longer represented by counsel, so the ALJ denied the motion to dismiss, but restricted the hearing to the allegations contained in the OSHA complaint and the Complainant's subsequent objections to the OSHA findings. On appeal, the Complainant alleged that a meeting he had with an attorney for the Respondent was an interrogation, and an adverse action under SOX. This meeting was not identified as adverse action in the original OSHA complaint or in the Complainant's objections to the OSHA finding. The ARB found that the "interrogation" was not adverse action given the ALJ's proper limitation of the actions to be considered as a result of the Complainant's failure to file a formal complaint as directed by the ALJ. The ARB found that the ALJ acted properly in not addressing the meeting in his recommended decision.
ADMINISTRATIVE LAW JUDGE DECISIONS
AMENDED COMPLAINT; WHETHER AN ANSWER IS REQUIRED
In Gonzalez v. Colonial Bank, 2004-SOX-39 (ALJ Sept. 14, 2004), the ALJ ruled that the Respondent was not required to file an answer to the Complainant's amendment of his complaint. The ALJ noted that under the Part 1980 rules, the complaint initiates an investigation by OSHA; it is not the type of complaint that initiates a judicial proceeding.
[Editor's note: For rulings on the standards for the amendment of complaints to add a publicly traded company as a respondent, see the "Covered Employer" section of this Digest]
AMENDMENT OF COMPLAINT; MISTAKE IN FAILING TO NAME PARENT CORPORATION
In Gonzalez v. Colonial Bank, 2004-SOX-39 (ALJ Aug. 17, 2004), the Complainant moved to amend his complaint before the ALJ to include as a Respondent the publicly held parent company of his employer. Applying the Secretary's holding in an STAA case, Wilson v. Bolin Associates, Inc., 1991-STA-4 (Sec'y Dec. 30, 1991), the ALJ permitted the amendment under 29 C.F.R. § 18.5(e) and FRCP 15(c). The named Respondent did not dispute that it had received notice of the claim when originally filed or that the claim arose out of the same transaction described in the original complaint, but argued that Rule 15(c) did not apply because the failure to name it as a Respondent from the beginning was not based on a "mistake." Respondent contended that a "mistake" under Rule 15(c) permits a relation back only when a complainant had named the "correct defendant by the wrong name or other cases of genuinely mistaken identity." Slip op. at 3, quoting Respondent's opposition brief. The ALJ rejected this contention, finding that the relevant "mistake" is not one of identity, but of a mistake in identifying the responsible party. The ALJ, therefore permitted the amendment of the complaint, where the Complainant had alleged that the parent company was responsible for his employment at the employer and had responsibility for his termination. The ALJ also found that it was undisputed that there was a shared management and function between the parent and the subsidiary.
[Editor's note: the Complainant's amendment of his complaint to include the publicly traded parent corporation enabled him to withstand his employer's motion for summary decision on the ground that it was not a publicly traded company. SeeGonzalez v. Colonial Bank, 2004-SOX-39 (ALJ Aug. 20, 2004).]
ALJ AUTHORITY TO CONTROL LITIGATION; IMPOSITION OF REQUIREMENT OF CERTIFICATION OF GOOD FAITH ATTEMPT TO RESOLVE DISPUTES BEFORE SEEKING INTERVENTION OF THE ALJ
In Davis v. The Home Depot, 2006-SOX-17 (ALJ Dec. 19, 2006), the ALJ found it necessary to impose rules of behavior in regard to the filing of motions based on the manner in which the litigation had proceeded, with almost any dispute resulting in the filing of a motion and several counter-motions. The ALJ ordered that, prior to the filing of a motion, counsel must first contact opposing counsel and attempt, in good faith, to reach a resolution without the intervention of the court. Then, only if that attempt failed, would the ALJ entertain a motion. Such a motion, however, was required to include an explicit statement of the steps taken by the party in an attempt to resolve the matter and a certification that the all good faith measures were taken in an attempt to avoid the filing of the motion. Finally, the ALJ quoted the Ninth Circuit in Mattel, Inc. v. MCA Records, 296 F.3d 894, 908 (9th Cir. 2002): "The parties are advised to chill."
CLAIM SPLITTING; DISMISSAL ON GROUND OF CLAIM SPLITTING IS NOT SUPPORTED BASED ON COMPLAINANT'S PURSUIT OF A STATE WHISTLEBLOWER CAUSE OF ACTION WHERE THE SOX AND THE STATE LAW ARE MATERIALLY DIFFERENT IN PROCEDURE, POTENTIAL ASSISTANCE TO THE COMPLAINANT, AND THE OBLIGATIONS IMPOSED ON THE SECRETARY OF LABOR
In Gonzalez v. Colonial Bank, 2004-SOX-39 (ALJ Aug. 9, 2004), the Complainant filed a SOX whistleblower complaint with OSHA and several days later filed a complaint in a Florida state court for damages under the Florida Whistleblower statute based on defamation. On motion of the Respondent, the latter proceeding was transferred to U.S. District Court. Before the ALJ in the SOX case, the Respondent moved to dismiss arguing that the SOX case was based on the same facts and seeks the same relief as the claim filed under Florida law, and therefore is contrary to the rule against claim splitting.
The ALJ denied the motion, finding that the cases cited by the Respondent were decided all on the basis of res judicata or claim preclusion. The ALJ observed that the SOX whistleblower provision imposes obligations on the Secretary of Labor and provides additional support to a complainant different from the Florida law. Specifically, the ALJ pointed out that the Assistant Secretary for OSHA and the SEC could participate as amicus curiae at any time in the administrative process; that the SOX process provides for expeditious handling by DOL, for ALJ's broad authority to limit discovery, for immediate reinstatement, and for DOL authority to file a civil action to enforce an order of reinstatement. The ALJ also observed that settlements of SOX complaints must be approved by the ALJ or the ARB, who have the obligation of ensuring that the settlement is fair, adequate and reasonable not only in regard to the complainant's individual interests, but also those of the public.
Thus, the ALJ found that the SOX case before DOL was not barred by res judicata or by claim-splitting as there was no prior judgment, the SOX claim was filed first, and most significantly, because the SOX action differs materially from the Florida law.
CONSOLIDATION; SAME OR SUBSTANTIALLY SIMILAR EVIDENCE STANDARD OF 29 C.F.R. § 18.11
In Davis v. The Home Depot U.S.A., Inc., 2006-SOX-17 (ALJ Mar. 13, 2007), three Complainants moved under 29 C.F.R. § 18.11 for consolidation of their SOX complaints against the Respondent before an administrative law judge who had already conducted an evidentiary hearing in the first of the three cases. The Complainants contended, inter alia, that all three cases involved retaliation for protesting the same type of actions by the Respondent. One of the two new cases was already scheduled for a hearing before that same ALJ, while a third new case was scheduled to be heard by an ALJ from a different office. The Chief ALJ denied the motion to consolidate based on the very different stages of litigation for the three cases, because the complaints alleged different acts taking place in different stores in different regions of the country. The Chief ALJ found that the complaints did not involve the "same or substantially similar evidence" and that the evidence in one hearing may not be relevant or material in another.
ALJ'S DECISION AND ORDER MUST MAKE SPECIFIC FINDINGS AND STATE THE REASONS SUPPORTING THOSE FINDINGS
In Pittman v. Diagnostic Products Corp., ARB No. 06-079, ALJ No. 2006-SOX-53 (ARB May 30, 2008), the Complainant had filed a SOX complaint alleging that following his discharge the Respondent company and its agents had retaliated against him within the 90 day period for filing a SOX complaint. The ALJ found, without explanation, that none of the post-termination acts alleged by the Complainant "appear to constitute adverse employment actions within the meaning of the Act" and therefore that the complaint was time barred. On review, the ARB found that the ALJ's decision failed to comply with 29 C.F.R. § 18.57(b) and 29 C.F.R. § 1980.109(a), which require an ALJ to issue an opinion with specific findings and the reasons supporting those findings. The ARB, therefore remanded the case to the ALJ for issuance of a revised recommended Decision and Order discussing whether SOX covers retaliatory acts against former employees and whether the specific acts of retaliation proffered by the Complainant were actionable.
SUFFICIENCY OF ALJ DECISION; MAKING FINDINGS ON ALL CONTESTED ISSUES FACILITATES APPELLATE REVIEW
In Klopfenstein v. PCC Flow Technologies Holdings, Inc., ARB No. 04-149, ALJ No. 2004-SOX-11 (ARB May 31, 2006), the ARB found that the ALJ's lack of findings on whether the complainant had engaged in protected activity and on causation hampered its ability to review the decision on appeal. The Board indicated that the ALJ should make findings on all contested issues.
CompareErickson v. U.S. Environmental Protection Agency, ARB No. 03-002, ALJ No. 1999-CAA-2 (ARB May 31, 2006) (ARB, assumes without deciding, that the Complainant engaged in protected activity because her complaints failed on other grounds).
TIMELY RAISED CLAIMS; OSHA INVESTIGATION DOES NOT ESTABLISH BOUNDARIES OF FACTUAL INQUIRY BEFORE ALJ
In Morefield v. Exelon Services, Inc., 2004-SOX-2 (ALJ Jan. 28, 2004), the Respondents contended that any "new claims" that Morefield failed to raise within 90 days of his termination and allegations which were not raised and investigated by OSHA are not properly subject to adjudication in the proceeding before the ALJ. The ALJ clarified that
The violation . . . is not the whistleblower's protected conduct, it is the retaliatory action which it allegedly triggered. In this instance it was the termination, and, although there are exceptions not here pertinent, Morefield generally would not now be free to charge additional violations. In contrast, neither [a decision cited by the Respondent -- Ford v. Northwest Airlines, Inc., 2002 AIR 21, at n.3 (ALJ Oct.18, 2002)] nor the statute require that every instance of protected activity be brought to OSHA's attention or that OSHA investigate every instance that is alleged in a complaint. The scope of an OSHA investigation does not establish boundaries of the factual inquiry permitted in the subsequent adjudication. After 90 days, new violations generally may not be raised, but the statute and the implementing regulations contemplate both discovery and a de novo hearing of the facts relating to both the protected activities and the reasons for the adverse action regardless of OSHA's findings. It involves no transgression of the "two tiered" scheme for handling whistleblower claims to adjudicate fully the circumstances of a timely filed complaint.
DISCOVERY; DEPOSITION OF CEO; WHETHER "APEX" RULE APPLIES TO SOX WHISTLEBLOWER CASES; IMPOSITION OF DISCOVERY LIMITS TO ADDRESS POSSIBILITY OF HARASSMENT
In Blanton v. Biogen IDEC, Inc., 2006-SOX-4 (ALJ Apr. 18, 2006), the Respondent sought a protective order to prevent deposition of its CEO based on a line of decisions indicating concern for the potential for harassment and disruption of corporate business if parties can routinely depose high-level (or "apex") executives who have no personal knowledge of relevant and material facts, and requiring the requester to utilize other, less-intrusive methods to initially demonstrate that the executive has unique or superior relevant personal knowledge. The ALJ noted that, of the decisions cited, only one had been decided after enactment of SOX, and that a number of the decisions involved products liability cases in which the CEO was unlikely to have "superior or unique" knowledge. Moreover, the ALJ noted that the general rule in federal civil litigation is that it is exceedingly difficult to demonstrate an appropriate basis for barring the taking of a deposition, even where the proposed witness is a busy person or professes lack of knowledge of the matters at issue, as the party seeking discovery is entitled to test the asserted lack of knowledge. The ALJ reviewed the decision in Thomas v. IBM Corp., 48 F.3d 478 (10th Cir. 1995), in which the court acknowledged a "corporate officer lacking personal familiarity" exception, but found it distinguishable because the plaintiff in that case was a very low level clerk who sought to depose the CEO of a very large corporation, whereas in the instant case, the Complainant was a high level officer in a much smaller corporation. The ALJ also pointed out the nature of SOX litigation, which was a comparatively new brand of corporate litigation, suggested greater scrutiny of the "apex" rule than products liability or insurance cases. The ALJ also pointed out that the Respondent's CEO's affidavit denying any "first-hand" knowledge of many matters, was obviously very carefully prepared, and did not assert lack of any knowledge of the matters at issue in the instant case. The ALJ observed, as the Complainant had pointed out, that the CEO likely would have had contact with employees who did have direct contact with the Complainant. Thus, the ALJ denied the request for a protective order and granted the Complainant's motion to compel the deposition. The ALJ, however, "not being blind to the possibility of harassment" set limitations on the deposition, including not requiring the CEO to travel outside Boston unless convenient, not permitting a videotape deposition unless all parties agreed, prohibiting inquiry into certain topics unless a succinct preface was presented showing how the inquiry might lead to the discovery may lead to the discovery of relevant evidence, and limiting the duration of the deposition to three hours.
DISCOVERY; FAILURE TO TIMELY RESPOND TO REQUEST FOR ADMISSIONS; STANDARD FOR PERMITTING WITHDRAWAL OR AMENDMENT OF ADMISSIONS
In Lowe v. Terminex International Co., LP, 2006-SOX-89 (ALJ Sept. 15, 2006), the Respondent filed a motion for summary decision arguing that it was not a publicly held company subject to the whistleblower provision of the SOX. The parties were granted time to conduct discovery on the issue propounded by the summary decision motion. The Complainant failed to timely respond to the Respondent's requests for admissions, and the Respondent filed a motion requesting that the requests for admissions be deemed admitted. The ALJ observed that under OALJ's rules of practice, failure to timely respond to a request for admissions results in that matter being deemed admitted. 29 C.F.R. § 18.20(b). The ALJ stated that the proper procedure for withdrawing or amending admissions made by virtue of a failure to response is by motion to withdraw or amend. Because OALJ's rules are silent on this topic, the ALJ referenced FRCP 36(b), and found that courts have employed a two-part test in considering whether to exercise the discretion to permit amendment or withdrawal of admissions: (1) presentation of the merits of an action must be served, and (2) the party obtaining the admission must not be prejudiced in the presentation of his case by the withdrawal. The prejudice at issue is a party's facing a sudden need to obtain evidence with respect to questions previously answered by the admissions. In the instant case, the Complainant's counsel stated that he had substantially finished preparing responses when a power outage caused loss of those responses. He had intended to raise the issue during a telephone conference call the next day with the ALJ, but because of the length of the conference and his conclusion that his responses were not crucial at the present stage of the proceeding, he did not mention the problem. The ALJ found that the Complainant had failed to establish good cause why he should be allowed to amend or withdraw the admissions made by virtue of failure to timely respond to the Respondent's admissions request.
DISCOVERY; DEPOSITION OF CEO; WHETHER "APEX" RULE APPLIES TO SOX WHISTLEBLOWER CASES; IMPOSITION OF DISCOVERY LIMITS TO ADDRESS POSSIBILITY OF HARASSMENT
In Blanton v. Biogen IDEC, Inc., 2006-SOX-4 (ALJ Apr. 18, 2006), the Respondent sought a protective order to prevent deposition of its CEO based on a line of decisions indicating concern for the potential for harassment and disruption of corporate business if parties can routinely depose high-level (or "apex") executives who have no personal knowledge of relevant and material facts, and requiring the requester to utilize other, less-intrusive methods to initially demonstrate that the executive has unique or superior relevant personal knowledge. The ALJ noted that, of the decisions cited, only one had been decided after enactment of SOX, and that a number of the decisions involved products liability cases in which the CEO was unlikely to have "superior or unique" knowledge. Moreover, the ALJ noted that the general rule in federal civil litigation is that it is exceedingly difficult to demonstrate an appropriate basis for barring the taking of a deposition, even where the proposed witness is a busy person or professes lack of knowledge of the matters at issue, as the party seeking discovery is entitled to test the asserted lack of knowledge. The ALJ reviewed the decision in Thomas v. IBM Corp., 48 F.3d 478 (10th Cir. 1995), in which the court acknowledged a "corporate officer lacking personal familiarity" exception, but found it distinguishable because the plaintiff in that case was a very low level clerk who sought to depose the CEO of a very large corporation, whereas in the instant case, the Complainant was a high level officer in a much smaller corporation. The ALJ also pointed out the nature of SOX litigation, which was a comparatively new brand of corporate litigation, suggested greater scrutiny of the "apex" rule than products liability or insurance cases. The ALJ also pointed out that the Respondent's CEO's affidavit denying any "first-hand" knowledge of many matters, was obviously very carefully prepared, and did not assert lack of any knowledge of the matters at issue in the instant case. The ALJ observed, as the Complainant had pointed out, that the CEO likely would have had contact with employees who did have direct contact with the Complainant. Thus, the ALJ denied the request for a protective order and granted the Complainant's motion to compel the deposition. The ALJ, however, "not being blind to the possibility of harassment" set limitations on the deposition, including not requiring the CEO to travel outside Boston unless convenient, not permitting a videotape deposition unless all parties agreed, prohibiting inquiry into certain topics unless a succinct preface was presented showing how the inquiry might lead to the discovery may lead to the discovery of relevant evidence, and limiting the duration of the deposition to three hours.
DISCOVERY; ATTORNEY WORK PRODUCT, ATTORNEY-CLIENT AND SELF EVALUATION PRIVILEGES; PROTECTION OF REPORT PREPARED BY CONSULTANT FOR RESPONDENT'S GENERAL COUNSEL
In Penesso v. LLC International, Inc., 2005-SOX-16 (ALJ Mar. 18, 2005), the Complainant had filed a discovery request for a report and related documents prepared by a consultant hired by the Respondent to investigate its subsidiary's operations in response to the Complainant's allegations of financial mismanagement. The Respondent asserted three privileges: attorney work product, attorney-client and self-evaluation. The ALJ agreed with the Respondent's argument that the consultant, who had been hired for an investigation initiated by the Respondent's general counsel and who reported only to the general counsel, was considered to be an agent of the attorney and its report therefore subject to the same privileges as if the attorney had prepared the report himself.
The ALJ found that attorney work product privilege did not apply because the consultant's report had not been prepared "in anticipation of litigation." However, the ALJ found that the attorney-client privilege did apply in light of the Supreme Court decision in Upjohn Co. v. U.S., 449 U.S. 383, 101 S.Ct. 677 (1981). The ALJ did not reach the question of whether the self-evaluation privilege would be recognized (the ALJ noting that most jurisdictions do not recognize it).
In Stevenson v. Vertex Pharmaceuticals, Inc., ARB No. 06-107, ALJ No. 2006-SOX-56 (ARB Feb. 29, 2008), the ALJ had issued an order directing the Complainant to respond to the Respondents’
motion to dismiss based on lack of timeliness of the complaint. When the ALJ did not receive a response, she dismissed the case based on the record before her, which showed that the Complainant’s complaint was five days late. On appeal, the Complainant argued that she had responded to the ALJ’s order to “everyone” by e-mail. The Board, however, found that the Complainant had not sent the e-mail to the ALJ, and therefore affirmed the dismissal.
The Respondents had argued that e-mail filings were not permitted by the applicable rules. The ARB did not rule on this argument, but observed that the SOX regulations do permit e-mail filings in certain circumstances.
MOTION TO RECONSIDER BEFORE ALJ; AUTHORITY OF ALJ TO CONSIDER
In Steffenhagen v. Securitas Sverige, AR, 2003-SOX-24 (ALJ Aug. 13, 2004), the ALJ found that she did not have jurisdiction to rule on a motion to reconsider when the Complainant also filed on the same day an appeal to the ARB.
RECUSAL; DISTINCTION BETWEEN PERSONAL BIAS AND JUDICIAL BIAS
In Levi v. Anheuser Busch Companies, Inc., ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant argued that the ALJ, who had been the presiding judge in an earlier proceeding involving the same parties, erred in failing to recuse himself. The ARB wrote:
Absent specific allegations of personal bias, prejudice, or interest, neither a judge's prior adverse rulings, nor his participation in a related or prior proceeding is sufficient to require recusal. Davis v. Fendler, 650 F.2d 1154, 1163 (9th Cir. 1981); 13A Charles Allen Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure § 3542 (West Supp. 2008). Federal courts have required personal bias rather than judicial bias to support recusal. Id. The ARB has held that previous unfavorable dispositions do not amount to personal bias. Eash v. Roadway Express, Inc., ARB No. 00-061, ALJ No. 1998-STA-028, slip op. at 8 (ARB Dec. 31, 2002) (ALJ twice recommended dispositions contrary to Eash's interests, which fact was found insufficient to show personal bias); Roach v. National Transp. Safety Bd., 804 F.2d 1147, 1160 (10th Cir. 1986). Consequently, the ALJ did not err in failing to recuse himself.
REMAND; OSHA MOTION TO REMAND ON GROUND THAT IT ERRONEOUSLY DENIED THE COMPLAINT ON JURISDICTIONAL GROUNDS
In Penesso v. LLC International, Inc., 2005-SOX-16 (ALJ Jan. 5, 2005), the Assistant Secretary for OSHA moved for a remand because OSHA now believed that denial of the complaint based on a lack of jurisdiction was in error and that it should conduct an investigation on the merits. The Respondent agreed with the motion and cited section 1980.111(b) for the proposition that the Assistant Secretary has the right to withdraw a determination prior to the expiration of the 30-day period to object. The ALJ, however, found that the Assistant Secretary does not have a right to withdraw the OSHA determination once an objection has been filed. Moreover, the ALJ found that section 1980.109(a) precluded a remand. Moreover, even if the regulations did not preclude a remand, the ALJ would not grant it in the instant case given the time constraints in SOX cases, that the proceeding before an ALJ is de novo, and that OSHA has the authority to appear as a party before the ALJ.
SERVICE OF PROCESS; FAILURE TO SERVE AGENT OF THE RESPONDENT AUTHORIZED TO ACCEPT SERVICE OF PROCESS
In McCloskey v. Ameriquest Mortgage Co. , ARB No. 06-033, ALJ No. 2005-SOX-93 (ARB Feb. 29, 2008),
the ALJ entered a default judgment when the Respondent did not attend the hearing or respond to the ALJ’s order to
show cause why it had failed to attend the hearing. The ALJ had served the Respondent by certified mail at the field
office address where the Complainant had worked. The Complainant appealed, challenging the ALJ’s damages award.
On appeal, the ARB received a letter from the Respondent’s attorney alleging that the Respondent had not received
proper notice of the ALJ's hearing or any other proceedings in the case, and asserted that the field office address was
not a proper address for service of process and that no one at that office was authorized to accept service on behalf of
the company. Consequently, the ARB held that the ALJ erroneously entered default judgment,
and remanded the case to provide the Respondent an opportunity to respond to the ALJ’s order to show cause.
ALLEGATION OF ALJ'S FAILURE TO SERVE ORDER TO SHOW CAUSE; IN ABSENCE OF EVIDENCE TO THE CONTRARY, ALJ'S CERTIFICATE OF SERVICE SHOWING CORRECT ADDRESS IS SUFFICIENT TO REJECT ALLEGATION
In Harvey v. Home Depot U.S.A., Inc., ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant contended on appeal that the ALJ failed to serve an Order to Show Cause on him, thereby prejudicing his ability to adequately respond to the question of whether his complaint stated a cause of action under SOX. The ARB rejected this contention because the ALJ's Order to Show Cause had a certificate of service attached attesting that a copy had been sent to the Complainant and showing the Complainant's correct address as of that date, and because there was no evidence to the contrary in the record.
ASSISTANT SECRETARY FOR OSHA'S PETITION TO INTERVENE FOR PURPOSE OF SEEKING INTERLOCUTORY REVIEW BY THE ARB OF AN ALJ'S ORDER IS PROPERLY FILED WITH THE ALJ RATHER THAN THE ARB
SUBPOENA; CERTIFICATION OF FACTS TO DISTRICT COURT; QUESTION OF AUTHORITY OF ARB TO REVIEW ALJ'S CERTIFICATION ORDER MOOTED BY DISTRICT COURT'S REFUSAL TO FILE ALJ'S ORDER
In Davis v. The Home Depot, Inc., ARB No. 08-114, ALJ No. 2006-SOX-17 (ARB Sept. 29, 2008), the ALJ issued a subpoena to compel a former Home Depot employee to testify at a SOX hearing. The former employee failed to appear. The ALJ then certified the facts to the District Court for the District of Columbia pursuant to 29 C.F.R. § 18.29(b)(2008), and requested the court to compel the former employee's attendance and testimony before the ALJ. The Assistant Secretary for OSHA then filed with the ARB a motion to intervene, and a petition for review of the ALJ's order certifying facts to the U.S. district court. In the meantime, the Chief Judge of the district court wrote to the ALJ refusing to accept her order, and questioning her authority to file the order within the participation of the U.S. Attorney's office or the Department of Justice. The ALJ replied that she believed that the Chief Judge's interpretation was incorrect, but because the Assistant Secretary was seeking interlocutory review of the order before the ARB, she would await the ARB's decision and then consider whether to resubmit the order to the district court. The ARB, not knowing about the exchange of letters between the Chief Judge and the ALJ, issued an order permitting the parties to brief the question of whether the Assistant Secretary should be permitted to intervene. The ALJ then issued an order granting the Assistant Secretary's petition to intervene, finding that such a motion should have been filed before her since the only proceedings in the case were pending before her.
The ARB suggested that the proper procedure would have been for it to decide where the Assistant Secretary's petition to intervene should have been filed, but since it agreed with the conclusion that it should have been filed before the ALJ, found no useful purpose to remand to the ALJ. The ARB dismissed the Assistant Secretary's petition for review (assuming that it would even have been proper for the ARB to review the ALJ's certification order), finding that the Chief Judge's refusal to file the ALJ's certification order and the ALJ's decision not to refile it, left no justiciable issue to decide.
SUMMARY DECISION; ADEQUACY OF HEARSAY, CONCLUSORY STATEMENTS AND STATEMENTS CONTRADICTING PREVIOUS DEPOSITION TESTIMONY IN OPPOSING MOTION FOR SUMMARY DECISION
In Wengender v. Robert Half International, Inc., 2005-SOX-59 (ALJ Mar. 30, 2006), the Respondent objected to a portion of the Complainant’s evidence advanced to oppose summary decision. The ALJ rejected an objection based on hearsay, but granted objections based on conclusory allegations. Specifically, allegations made by the Complainant based only on belief were found by the ALJ to amount to nothing more than speculation, the ALJ noting that in opposing summary judgment a non-movant may not rely on ignorance of facts, on speculation, or on suspicion. The ALJ also sustained the Respondent’s objection to statements made by the Complainant which were in contradiction of previous sworn testimony, citing caselaw to the effect that “mere conclusory allegations, without support or where contradicted by former deposition testimony, will not create a genuine issue of material fact.” Slip op. at 14 (citations omitted).
EXPERT WITNESSES; OPINION ON ULTIMATE LEGAL QUESTION
In Livingston v. Wyeth, No. 1:03-CV-00919 (M.D.N.C. July 28, 2006), the court granted the Plaintiff’s motion to strike the affidavits of two proposed expert witnesses from consideration on the Defendant's summary judgment motion. One of the proposed witnesses was an expert in the field of FDA regulatory practices, and the other was an expert in the field of securities law. The court found both witnesses well qualified, but found that their application of law to the facts of the case on an ultimate legal question would not be helpful to the court.
ADMINISTRATIVE LAW JUDGE DECISIONS
MOTION IN LIMINE; EXPERT TESTIMONY ABOUT SECURITIES LAWS AND OTHER LEGAL MATTERS
In Lee v. Pitney Bowes, Inc., 2006-SOX-5 (ALJ Jan. 13, 2006), the Respondent filed a Motion in Limine seeking to prevent the Complainant from calling an expert witness to testify regarding "the interpretation of securities laws or other legal matters." The ALJ found that in a SOX whistleblower case, "a fact in issue is whether Complainant reasonably believed he was reporting illegal conduct by Respondent." Consequently, the ALJ granted the Motion in Limine in regard to expert testimony about what law applies in the case and how it applies to the facts; but he denied the Motion in regard to testimony about "industry practices and commonly accepted principles which would tend to show that Complainant's belief that Respondent's conduct was in violation of the law was consistent with those practices and principles and therefore reasonable."
MOTION IN LIMINE; EXPERT OPINION OF LAW PROFESSOR ON LEGAL ETHICS ISSUE
In Welch v. Cardinal Bankshares Corp., 2003-SOX-15 (ALJ Aug. 15, 2003), Complainant had listed as a witness a law professor with qualifications as an expert in legal ethics and professional responsibility in regard to Respondent's assertion that allowing Complainant's personal attorney to attend during meetings of Respondent's Audit Committees would have abrogated the attorney-client privilege by Respondent and its attorneys. Respondent filed a motion objecting to the witness' qualifications as an expert, which the ALJ construed as a motion in limine, arguing that the law professor's testimony was excludable because it would amount to "an expert opinion on a legal issue" which the ALJ must decide. The ALJ, however, concluded that the law professor's expert opinion would relate to an issue of fact – the reasonableness of Respondent's assertion regarding the abrogation of the attorney-client privilege in Audit Committee meetings – rather the issue of law of whether there would have been an abrogation. The ALJ also observed that formal rules of evidence did not apply to SOX proceedings and that the specialized knowledge of an expert in legal ethics and professional responsibility would clearly assist him in deciding, if required to do so, whether Respondent reasonably believed that the presence of Complainant's personal attorney would negate attorney-client privilege.
