Before: STALEY, GIBBONS and WEIS, Circuit Judges
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 Occupational 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 Morgantown, West Virginia awarded by the Boeing Company. That organization had caused certain test borings to be made in order to determine soil conditions, and the resulting information was made available to the petitioner. Irey was aware of the safety requirements for trenching work since its contract proposal to Boeing reiterated the OSHA standards in substance.
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 7 1/2 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.1 He referred to test boring reports which he said described the soil in the area as brown to dark brown weathered shale with silty clay seams.
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).2 The Secretary of Labor's proposed sanction of $7,500.00 for this violation was reduced to $5,000.00, and penalties were assessed for other violations of standards which are not of particular relevance at this juncture.
The Occupational Safety and Health Review Commission3 exercised its discretion to review the case, and findings were affirmed. One of the three members dissented on the ground that the hearing officer had misinterpreted and misapplied the term "willful."
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 petitioners object, 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.4 After Irey filed its notice of contest, the case was assigned to a hearing officer of the Review Commission who conducted the hearing at which both the Secretary and the employer presented evidence.
We need not recapitulate the Act in detail here.5 Basically, it authorizes the Secretary of Labor to establish standards for safe working conditions at places of employment throughout the United States. OSHA inspectors are authorized to visit job sites and issue citations for violations of specific standards or the broad "general duty" clause.6
Violations fall into four categories:
1. De minimis, where no monetary penalty is invoked;
2. Non-serious, where penalties of up to $1,000.00 may be assessed;
3. Serious violations, defined as those which create a substantial probability of death or serious physical harm, where a mandatory penalty of up to $1,000.00 is provided; and
4. Willful or repeated violations, where a civil penalty of up to $10,000.00 may be assessed. The term "willful" is not defined by the statute.
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.7 Criminal liability can be invoked in a situation where there is a willful violation which causes death to an employee. Imprisonment for six months and/or a fine of $10,000.00 may be imposed in such an event. Since no mention is made of the forum in which such a proceeding is to be conducted, it may be assumed that it is in the district court.
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, 82 L. Ed. 917, 58 S. Ct. 630 (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.8
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, 53 L. Ed. 1013, 29 S. Ct. 671 (1909), and Hepner v. United States, 213 U.S. 103, 53 L. Ed. 720, 29 S. Ct. 474 (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.9 American Smelting & Refining Co. v. Occupational Safety and Health Review Commission, F.2d (No. 73-1721, 8th Cir. July 15, 1974).
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.10
It may be that Congress, by giving broad enforcement roles to OSHA and granting it the power to assess heavy penalties while at the same time limiting the scope of judicial review, has come close to the line which separates executive and judicial powers. However, we do not think that the line has been crossed. The legislation is still in the area where congressional discretion may be exercised, and the question is one of the wisdom of a course of action - not its constitutionality. In that context, of course, we must defer to the legislative judgment.11
In Kennedy v. Mendoza-Martinez, 372 U.S. 144, 9 L. Ed. 2d 644, 83 S. Ct. 554 (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.12
Irey also objects to the procedures permitting the Secretary to propose a penalty which becomes final unless contested by the employer.13 According to the petitioner, this placed an undue and illegal burden on him. We find no merit to this contention. The procedures are expressly authorized by the statute and are an acceptable way to commence an administrative proceeding. From a practical standpoint, the burden on the employer to respond is little different than that which requires a party to answer a complaint within a given time on penalty of a default judgment for a fixed sum. Cf. Morton v. Delta Mining, Inc., 495 F.2d 38 (3d Cir. 1974).
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:
1. Size of the employer;
2. Gravity of the violation;
3. Good faith; and
4. Previous history.14
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."15
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.16 He summarized by saying, "Respondent [Irey], in effect, admits that he did not ascertain beforehand the true nature of the soil which it was excavating, or that it failed to either comprehend from the information it had what was the true composition of the material it was excavating." The decision concluded that the knowledge of the citation issued by the state in November of 1971 and the failure to acquaint itself with "the full facts" constituted a willful violation by the employer.
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."17 To rephrase, a finding of a "serious" violation requires that the condition was hazardous and that the employer knew or should have known of it - precisely the alternative definition of "willful" which the hearing officer adopted.
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, 36 L. Ed. 2d 941, 93 S. Ct. 2008 (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, 82 L. Ed. 773, 58 S. Ct. 533 (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,18 and this court has the power to determine whether that burden has been met. National Realty v. Occupational Safety and Health Review Commission, 160 U.S. App. D.C. 133, 489 F.2d 1257 (D.C. Cir. 1973). However, since the Commission here based its judgment on an erroneous legal standard, we think it appropriate to remand for further consideration.
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 clear, the legislative history referred to in footnote 7 of the majority opinion suggests that the role of the district court is to do nothing other than issue execution on what is essentially an administrative in personam money judgment.
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, 9 L. Ed. 2d 644, 83 S. Ct. 554 (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, 60 L. Ed. 505, 36 S. Ct. 233 (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,1 imposed tonnage duties on vessels2 and import duties on goods,3 and provided that the exactions could be collected by detaining the vessels or the goods.4 This has been the uninterrupted course of customs duties assessment in the United States ever since; in rem against the importing vessels.5 Neither libels in admiralty nor customs valuation proceedings were in the Colonies, in England, or in the States prior to 1791 actions at law. The First Congress, which simultaneously considered both the text of the seventh amendment and the first customs act was well aware of the distinction. There is no indication that it believed an in personam judgment for more than $20.00 could after ratification of the proposed bill of rights be recovered by the government without a jury trial. The customs law was revised extensively by the Act of March 2, 1799, ch. 22, 1 Stat. 627. That act imposed not only in rem penalties against the vessel, but civil and criminal penalties against the master. It was still in effect, with certain amendments, when in 1870 the case of United States v. The Queen, 4 Ben. 237, 27 F. Cas. 669 (No. 16,107) (S.D. N.Y. 1870) came before then district judge, later Justice, Blatchford. That case started when the United States Attorney filed an information against both the master and the vessel for breach of certain duties imposed by the customs laws, seeking forfeitures in excess of twenty dollars. The case against both was tried before the district court, which held that it had admiralty jurisdiction to enforce the penalty against the vessel in rem. Judge Blatchford went on to hold:
"The remaining questions are, as to whether there can be joint suit against the vessel and the master, and as to whether the master is entitled to a trial by jury, and as to whether this suit, if not maintainable as to both vessel and master, can be dismissed as to the master, and yet a decree be rendered in it against the vessel.
As regards the enforcement of the penalty against the master, he is entitled to a trial by jury. The seventh amendment to the Constitution of the United States provides, that, in suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved. The expression "suits at common law," as there used, means all civil suits, in which legal rights are to be ascertained and determined, which are not of equity or admiralty jurisdiction, whatever may be the peculiar forms of such suits. Parsons v. Bedford, 3 Pet. [28 U.S.] 433, 447. The ninth section of the judiciary act of September 24, 1789 (1 Stat. 76, 77), declares, that the trial of issues of fact in the district courts, in all causs except civil causes of admiralty and maritime jurisdiction, shall be by jury. The suit against the master, under the statute in question, for the penalty imposed, is not made by statute cognizable in admiralty, nor is there any provision that the penalty may be recovered against the master summarily, by libel, as there is in respect to the vessel." 27 F. Cas. at 671.
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 F. 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, 35 L. Ed. 1087, 12 S. Ct. 295 (1892). Others include Passavant v. United States, 148 U.S. 214, 37 L. Ed. 426, 13 S. Ct. 572 (1893) and Origet v. Hedden, 155 U.S. 228, 39 L. Ed. 130, 15 S. Ct. 92 (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 (aside from measures for the suppression of the slave trade) was the Act of March 2, 1819, ch. 46, 3 Stat. 488. Concerned over inhumane treatment of immigrant passengers, Congress determined to enact limitations upon the number of passengers a vessel could safely carry. It forbade vessels landing at United States ports from carrying more than two passengers for every five tons of vessel according to customs house measurement. For an enforcement mechanism it turned to the example of the earlier customs laws, enacting in personam civil penalties and in rem forfeitures. Section 1 provided that the owner would be liable to forfeit to the United States $150.00 for each excess passenger "... to be recovered by suit, in any circuit or district court of the United States, where the said vessel may arrive, or where the owner or owners aforesaid may reside...." Quite obviously the forfeiture could be collected by a libel against the vessel in the district court, as to which there would be no jury trial, or by an in personam action in the old circuit court where the owner resided, as to which there was a right to a jury trial.6 The Act of February 22, 1847, ch. 16, § 1, 9 Stat. 127 added criminal provisions, and a major revision of the Act of March 3, 1855, ch. 213, 10 Stat. 715, in § 19 saved the earlier penalty provisions from repeal. 10 Stat. 721. These passenger vessel safety laws provided the models for an enforcement mechanism when Congress, in 1882, first passed a comprehensive immigration law. Act of Aug. 3, 1882, ch. 376, 22 Stat. 214.7 That Act imposed a head tax of fifty cents an immigrant passenger, and provided:
"The duty imposed by this section shall be a lien upon the vessels which shall bring such passengers into the United States, and shall be a debt in favor of the United States against the owner or owners of such vessels; and the payment of such duty may be enforced by any legal or equitable remedy." § 1, 22 Stat. 214.
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, 53 L. Ed. 1013, 29 S. Ct. 671 (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, 77 L. Ed. 337, 53 S. Ct. 164 (1932) and Lloyd Sabaudo Societa v. Elting, 287 U.S. 329, 77 L. Ed. 341, 53 S. Ct. 167 (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 had been paid in order to obtain clearance of the vessel. See also Osaka Shosen Kaisha Line v. United States, 300 U.S. 98, 81 L. Ed. 532, 57 S. Ct. 356 (1937). I have found no case arising under either the passenger safety laws or the immigration laws sustaining an administrative civil penalty exacted in personam rather than in rem.
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:
"That... the collectors of the different ports shall at all times pay to the order of the officer who shall be authorized to direct the same, the whole of the monies which they may respectively receive by virtue of this act (such monies as they are otherwise by this act directed to pay, only excepted), and shall also, once in every three months, or oftener if they shall be required, transmit their accounts for settlement to the department or officer before mentioned." 1 Stat. 38.
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:
"That... if any collector of the revenue... who shall have received the public money before it is paid into the Treasury of the United States, shall fail to render his account, or pay over the same in the manner, or within the time required by law, it shall be the duty of the first Comptroller of the Treasury to cause to be stated the account of such collector... exhibiting truly the amount due to the United States, and certifying the same to the agent of the Treasury, who is hereby authorized to issue a warrant of distress against such delinquent officer...." 3 Stat. 592.
The same section authorized the execution of such a distress warrant on personal property of the delinquent officer or his sureties. It also provided:
"And the amount due by any such officer... shall be... a lien upon the lands, tenements, and hereditaments of such officer and his sureties, from the date of a levy in pursuance of the warrant of distress issued against him or them, and a record thereof, made in the office of the clerk of the district court of the proper district, until the same shall be discharged according to law." 3 Stat. 593.
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. The opinion of Justice Curtis in Murray's Lessee, supra, is often cited in support of a broad authority in Congress to resort to summary remedies for the collection of debts claimed to be due the United States. More refined analysis than is sometimes made, however, leads me to conclude that it is no authority for the proposition that there is no right to a jury trial when the United States seeks to recover an in personam money judgment. In the first place, although the plaintiffs urged the seventh amendment8 Justice Curtis does not discuss it. Possibly this silence reflects a conclusion that remote successors to Swartwout's title lacked standing to assert his right to a jury trial rather than to the provision for equitable relief set forth in Section 4. But more likely Justice Curtis did not take the seventh amendment claim seriously, because Swartwout was a fiduciary under a duty to account. The enforcement of the duty of a fiduciary to account is a matter of equitable jurisdiction. See 4 Pomeroy's Equity Jurisprudence 1978-79 (5th ed. 1941). Secondly, the case involved an in rem proceeding. The lien of the United States, under foreclosure of which the successful defendant held title, had not resulted from the execution of an in personam judgment against Swartwout. Thus the case, for seventh amendment purposes, is indistinguishable from those arising under the customs, immigration, and vessel safety laws. The statute sustained in Murray's Lessee v. Hoboken Land and Improvement Co., supra has served as the model not only for those statutes securing the federal fisc from defaulting fiduciaries, but also for those securing the internal revenue. See Act of July 13, 1866, ch. 184, § 9, 14 Stat. 107, now codified in the Internal Revenue Act, 26 U.S.C. § 6321. These in rem lien statutes do not present a seventh amendment problem.
We come, then, to the case upon which the government places its chief reliance. In $2Helvering v. Mitchell, 303 U.S. 391, 82 L. Ed. 917, 58 S. Ct. 630 (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:
"Thus the determination of the facts upon which liability is based may be by an administrative agency instead of a jury,7..
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 the entire sentence, which goes on to contrast civil versus criminal procedure. It is clear, as well, in the context of the prior sentence, contrasting those constitutional guarantees applicable to criminal prosecutions. Moreover no seventh amendment issue was presented, since the taxpayer had elected to pursue the administrative remedy before the Board of Tax Appeals rather than to pay the tax and sue for a refund in the district court, where he could have had a jury trial. See Int. Rev. Code of 1954, § 7422, 26 U.S.C. § 7422, 28 U.S.C. § 1346 and notes. Finally, and most significantly, Justice Brandeis shows a complete awareness of the essentially in rem nature of the tax collection machinery. See especially 303 U.S. at 400. Indeed every case listed in footnote 7 to the opinion in Helvering v. Mitchell involves a penalty or forfeiture assessed in rem rather than in personam. His principal references I have discussed hereinabove. His reference to jury trial in Helvering v. Mitchell is not a reference to jury trial in actions at law guaranteed by the seventh amendment. It is a reference solely to the guarantee in Article III, § 2.
One other case bears mention. In N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1, 81 L. Ed. 893, 57 S. Ct. 615 (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:
"The Seventh Amendment provides that 'In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.' The Amendment thus preserves the right which existed under the common law when the Amendment was adopted.... Thus it has no application to cases where recovery of money damages is an incident to equitable relief even though damages might have been recovered in an action at law.... It does not apply where the proceeding is not in the nature of a suit at common law." 301 U.S. at 48 (citations omitted)
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, 24 L. Ed. 2d 729, 90 S. Ct. 733 (1970), holding that the seventh amendment applies in stockholder derivative suits, though not directly in point, certainly suggests the result which I would reach.9 I am unenthusiastic about narrowing the specific guarantees of the Bill of Rights. In the absence of a case in point in the Supreme Court, I prefer to assume that the seventh amendment still has meaning.
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 recently10 Congress commonly provided for civil penalties which could be proposed by an agency but recovered in a civil suit in which the defendant obtained a trial de novo.11 With respect to such statutes Professor Jaffe referring particularly to 47 U.S. §§ 503 & 504 of the Federal Communications Act writes:
"Here it will be seen is a flexible penalty of substantial proportions. By the device of a notice of 'apparent liability', the commission is able to make a semi-formal though legally inconclusive adjudication. It will be seen that by failing to prosecute or by a process of remission and mitigation the Commission has considerable control over the amount of the penalty. To date, so far as I know, in not a single determination of apparent liability has the Government been put to a suit to recover." L. Jaffe, Judicial Control of Administrative Action 113 (Student ed. 1965).
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 an in personam money judgment, but deprive the defendant of the jury trial guaranteed by the seventh amendment, are unconstitutional.12
1. See 29 C.F.R. 1926.652(b), Table P-1.
2. "Sides of trenches in unstable or soft material, 5 feet or more in depth, shall be shored, sheeted, braced, sloped or otherwise supported..." (1973). The effective regulation in 1972 required those precautions for trenches four feet or more in depth.
3. The Review Commission is composed of three members appointed by the President for 6 year terms. The Commission is independent of the Secretary of Labor. It is authorized to appoint hearing examiners (now called administrative law judges) whose decisions it is authorized to review on a discretionary basis. 29 U.S.C. § 661 (1970). The Commission was established to counter congressional complaints that earlier versions of the Occupational Safety and Health Act would have made the Secretary of Labor, in effect, prosecutor, judge, and jury in violation cases. 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, - F.2d - (No. 72-1874, 9th Cir. July 29, 1974). Cf. Brennan v. Occupational Safety and Health Review Commission,c 492 F.2d 1027 (2d Cir. 1974).
4. 29 U.S.C. §§ 658(a), 659(a), 659(c) (1970).
5. See the general review of the Act and its purposes in Brennan v. Occupational Safety and Health Review Commission, 487 F.2d 438 (8th Cir. 1973), and Brennan v. Occupational Safety and Health Review Commission, 491 F.2d 1340 (2d Cir. 1974).
6. 29 U.S.C. § 654 (1970): "(a) Each employer - (1) shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees; (2) shall comply with occupational safety and health standards promulgated under this chapter."
7. In the House debate, it was stated that this provision should be narrowly construed and was intended to be limited to any process which might be necessary to actually collect the penalty. 116 Cong. Rec. 42207 (1970). Contrast this procedure with the one provided by the Coal Mines Health and Safety Act, 30 U.S.C. § 819(a)(3) (1969), where findings of fact are required before a penalty is assessed and where an employer is entitled to a limited de novo hearing in the district court. See also 2 Recommendations and Reports of the Administrative Conference of the United States 67, 896 (1970-72), Appendix to the report of Professor Harvey J. Goldschmid compiling the statutes which provide for the use of civil penalties by federal agencies.
8. Cf. United States v. U.S. Coin and Currency, 401 U.S. 715, 718, 28 L. Ed. 2d 434, 91 S. Ct. 1041 (1971), where the Court observed there that "From the relevant constitutional standpoint there is no difference between a man who 'forfeits' $8,674 because he has used the money in illegal gambling activities and a man who pays a 'criminal fine' of $8,674, as a result of the same course of conduct. In both instances, money liability is predicated upon a finding of the owner's wrongful conduct; in both cases, the Fifth Amendment applies with equal force..." In Astol Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S. Ct. 2080, 40 L. Ed. 2d 452 (1974), however, a Puerto Rican forfeiture statute, which sufficiently furthered punitive and deterrent purposes, was upheld against a constitutional challenge.
9. In United States v. J. B. Williams, Inc., F.2d (No. 73-1624, 2d Cir. May 2, 1974), Judge Friendly said, "[while] Congress could not permissibly undermine constitutional protections simply by appending the 'civil' label to traditionally criminal provisions, the statute here at issue is plainly not of that class." Slip opinion at 3155. That case involved the Federal Trade Commission Act, 15 U.S.C. § 45 et seq. under which defendants were assessed civil penalties of $500,000.00.
10. This objection was forcefully expressed by a number of witnesses and statements during the hearings of the House Select Subcommittee on Labor, Occupational Safety and Health Act of 1970 (Oversight and Proposed Amendments) (92nd Cong. 2nd Sess., 1973).
11. The dissent focuses on another disturbing element of this case - the denial of a jury trial under the Seventh Amendment. The majority, too, has serious misgivings as to the wisdom of limiting de novo review but does not agree with the dissent's conclusion of unconstitutionality. We do not think that the differences between in rem and in personam actions are sufficient to distinguish the thrust of such precedents as Oceanic Navigation Co. v. Stranahan, 214 U.S. 320, 53 L. Ed. 1013, 29 S. Ct. 671 (1909). In that case the Court refused to accept the proposition that Congress could not authorize the imposition of a penalty and commit its collection to an administrative office without the necessity of resorting to the judicial power. This view was tempered somewhat by Lloyd Sabaudo Societa v. Elting, 287 U.S. 329, 77 L. Ed. 341, 53 S. Ct. 167 (1932), which interpreted the statute to require a fair hearing and determination by the administrative officer upon facts produced in evidence. See also Gellhorn, Administrative Prescription and Imposition of Penalties, WASH. U. L.Q. 265 (1970); James, Right to a Jury Trial in Civil Actions, 72 YALE L.J. 655 (1963). 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 courts 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. 1972), aff'd 409 U.S. 1070, 34 L. Ed. 2d 659, 93 S. Ct. 679 (1972), also expressed concern about judicial review, particularly as to penalties which may be assessed for failure to abate alleged continuing violations.
12. But see Hay, OSHA Penalties: Some Constitutional Considerations, 10 IDAHO L. REV. 223 (1974), wherein a Mendoza-Martinez analysis was performed. We note also the comments of Senator Dominick on civil penalties: "... We did it this way because I think most of us know how difficult it is to get an enforceable criminal penalty in these type of cases. Over and over again, the burden of proof under a criminal-type allegation is so strong that you simply cannot get there, so you might as well have a civil penalty instead of the criminal penalty and get the employer by the pocketbook if you cannot get him anywhere else." 116 Cong. Rec. 37338 (1970).
13. 29 U.S.C. § 659 (1970).
14. 29 U.S.C. § 666(i) (1970). But see Madden v. Hodgson, supra.
15. The statement of Chief Judge Bazelon in Wellford v. Ruckelshaus, 142 U.S. App. D.C. 88, 439 F.2d 598, 603 (D.C. Cir. 1971), is apt. In remanding for reconsideration, he said, "this course is especially appropriate in view of the fact that we are venturing into a new and uncharted area of the law. A new public sensitivity to issues of environmental protection has imposed new responsibilities on the courts, the legislature, and the administrative agencies. A new Environmental Protection Agency has been established, and its Administrator has the critical task of developing standards for administrative action throughout this area..."
16. The examiner found that the bottom of the trench was at elevation 1054. Test boring report No. 107 shows shale beginning at elevation 1053.5 or 6 inches below the bottom of the trench, and the hearing officer concluded that the bottom of the trench was 6 inches above the level of the shale seam. However, he failed to note that the test boring was some 30 feet from the scene of the fatality. Another test boring, No. 105, approximately 45 feet from the accident scene showed the shale at elevation 1058.3, indicating that the level was rising from the point at test boring No. 107 to where the accident occurred. Furthermore, the soil expert, whose testimony was not contradicted, pointed out that the reports indicated that the rock levels were higher than the hearing officer found them to be. We make this point not to reverse the examiner's findings of fact but to point out that the difference in interpretation of the technical data weakens any inference that conscious wrongdoing was involved.
17. 29 U.S.C. § 666(j).
18. 29 C.F.R. § 2200.73(a) (1973).
1. Act of July 31, 1789, ch. 5, § 1, 1 Stat. 29.
2. Act of July 20, 1789, ch. 3, 1 Stat. 27.
3. Act of July 4, 1789, ch. 2, 1 Stat. 24.
4. Act of July 31, 1789, ch. 5, § 12, 1 Stat. 39.
5. The statute also provided for civil penalties recoverable in an action at law, Act of July 31, 1789, ch. 5, § 12, 1 Stat. 39, § 36, 1 Stat. 47.
6. Section 2 provided for total in rem forfeiture of the vessel for overloading by more than twenty passengers. Section 3 created a private cause of action for passengers suffering from short allowances "to be recovered in the same manner as seamans wages are or may be recovered."
7. See an earlier limited immigration law, Act of March 3, 1875, ch. 141, 18 Stat. 477.
8. See 59 U.S. (18 How.) at 273. 7 Passavant v. United States, 148 U.S. 214, 37 L. Ed. 426, 13 S. Ct. 572 ; Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 53 L. Ed. 1013, 29 S. Ct. 671 ; Elting v. North German Lloyd, 287 U.S. 324, 327-28, 77 L. Ed. 337, 53 S. Ct. 164 ; Lloyd Sabaudo Societa v. Elting, 287 U.S. 329, 334, 77 L. Ed. 341, 53 S. Ct. 167 ; cf. Hamburg-American Line v. United States, 291 U.S. 420, 78 L. Ed. 887, 54 S. Ct. 491 ; Osaka Shosen Kaisha Line v. United States, 300 U.S. 98, 81 L. Ed. 532, 57 S. Ct. 356 . Compare also San Souci v. Compagnie Francaise de Navigation A Vapeur, 71 F.2d 651, 653 (C.C.A. 1); Lloyd Royal Bel e, S.A. v. Elting, 61 F.2d 745, 747 (C.C.A. 2); Navigazion e Libera Triestina v. United States, 36 F.2d 631, 633 (C.C.A. 9); Clay v. Swope, 38 F. 396 (C.C.D. Ky.). And see cases cited in note 2, supra. Administrative determination of sanctions imposed by the income tax laws has likewise been upheld. Berlin v. Commissioner, 59 F.2d 996, 997 (C.C.A. 2); McDowell v. Heiner, 9 F.2d 120 (W.D. Pa.), aff'd on opinion below, 15 F.2d 1015 (C.C.A. 3); Board v. Commissioner, 51 F.2d 73, 76 (C.C.A. 6); Wickham v. Commissioner, 65 F.2d 527, 531-32 (C.C.A. 8); Little v. Helvering, 75 F.2d 436, 439 (C.C.A. 8); Bothwell v. Commissioner, 77 F.2d 35, 38 (C.C.A. 10); Doll v. Evans, Fed. Cas. No. 3,969 (C.C.E.D. Pa.)." 303 U.S. at 402-03.
9. Justice Holmes, in Fleitmann v. Welsbach Co., 240 U.S. 27, 29, 36 S. Ct. 233, 60 L. Ed. 505 (1916), noted "When a penalty of triple damages is sought to be inflicted, the statute should not be read as attempting to authorize liability to be enforced otherwise than through the verdict of a jury in a court of common law."
10. A recent survey conducted for the Administrative Conference of the United States on the use of civil money penalties by federal administrative agencies indicated only three other agencies which claim the power to impose sanctions administratively subject to judicial review solely upon the "substantial evidence" test. 2 Recommendations and Reports of the Administrative Conference of the United States 948-52 (Appendix A) (1972). 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, 77 L. Ed. 341, 53 S. Ct. 167 (1932); Elting v. North German Lloyd, 287 U.S. 324, 77 L. Ed. 337, 53 S. Ct. 164 (1932); and Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 53 L. Ed. 1013, 29 S. Ct. 671 (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, "[counsel] 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, 33 L. Ed. 51, 9 S. Ct. 632 (1889); Great Northern Ry. v. United States, 236 F. 433, 443-44 (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.
11. The survey conducted for the Administrative Conference, indicated that with the exception of those civil money penalties enumerated in note 10 supra, the remaining monetary sanctions were either administratively imposed, or administratively assessed and judicially imposed, by some 34 different executive departments and independent agencies subject always to de novo judicial review.
12. In Brennan v. Occupational Safety and Health Review Comm'n, No. 73-1131 (3d Cir., Aug. 14, 1974) the seventh amendment issue was not raised in connection with the administrative imposition of a civil penalty because the employer-respondent, while not withdrawing its contest of the Secretary's citation, filed no response to the Secretary's petition for review.