Swift Pork Company v. Employment Appeal Board ( 2020 )

IN THE COURT OF APPEALS OF IOWA
No. 20-0040
Filed December 16, 2020
SWIFT PORK COMPANY,
Plaintiff-Appellee,
vs.
EMPLOYMENT APPEAL BOARD,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Wapello County, Myron L. Gookin,
Judge.
Upon judicial review of the decision of the Employment Appeal Board (EAB)
to dismiss Swift Pork Company’s challenge to the issuance of a citation by the
Iowa Occupational Safety and Health Administration, the district court reversed the
EAB decision and remanded to the agency to address the challenge on its merits.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED TO THE
AGENCY.
Thomas J. Miller, Attorney General, and Benjamin J. Flickinger, Assistant
Attorney General, for appellant.
Thomas E. Ullrich and Derek J. Brostek of Wharton Aldhizer & Weaver,
PLC, Harrisonburg, Virginia, for appellee.
Considered by Bower, C.J., and May and Ahlers, JJ.
2
AHLERS, Judge.
After an inspection of Swift Pork Company’s plant, the Iowa Occupational
Safety and Health Administration (IOSHA) issued a citation to Swift Pork alleging
violations of Iowa’s occupational safety and health act (Iowa Code chapter 88) and
notifying Swift Pork of the imposition of a penalty.1 The citation was sent to Swift
Pork by certified mail, as permitted by Iowa Code section 88.8(1) (2018). Swift
Pork responded by sending a notice of contest to the Employment Appeal Board
(EAB). The labor commissioner2 challenged the notice as untimely, asserting
more than fifteen working days passed between the date Swift Pork received the
citation and the date of the notice of contest. See Iowa Code § 88.8(1) (allowing
an employer “fifteen working days from the receipt of the” citation to contest the
allegations and penalty). The EAB agreed with the commissioner and dismissed
Swift Pork’s challenge to the citation. The issue in this appeal is whether the EAB
impermissibly failed to follow its own precedents when it determined the fifteen-
business-day meter started running on the date the citation was delivered to Swift
Pork’s security agent rather than the date the citation was delivered to an
employee of Swift Pork with the authority to act on the citation.
I. Procedural History and Legal Standards.
Before answering the question at hand, some procedural history and
explanation of the applicable legal standards is in order. As mentioned, the
1 For ease of reference, the citation and notice of penalty issued by IOSHA will be
referred to as “the citation.”
2 The labor commissioner is responsible for administering Iowa’s occupational
safety and health act. See, e.g., Iowa Code §§ 88.1(3), 88.2(1), 88.5, 88.6. We
will refer to the labor commissioner as simply the “commissioner.”
3
commissioner issued a citation on August 22, 2018, and sent the citation to Swift
Pork via certified mail. The certified mail receipt shows the citation was delivered
to Swift Pork on August 27. Upon “receipt” of the citation, Swift Pork had fifteen
working days to send a notice of contest to the EAB. Id. If Swift Pork failed to
meet that deadline, the citation and penalty assessment would “be deemed a final
order of the [EAB] and not subject to review by any court or agency.” Id. Swift
Pork’s notice of contest was dated September 19 and stamped “received” on
September 20.
After Swift Pork sent the notice of contest to the EAB, the commissioner
filed a motion with the EAB seeking to dismiss the notice of contest on the basis
that it was not timely. Swift Pork resisted and provided affidavits and other
evidence showing Swift Pork contracted with a third-party security firm to pick up
its mail. Due to delays with the security firm and its own internal procedures, and
because the citation was generically addressed to the plant at a post office box,
the citation reached a Swift Pork employee with authority to respond to it no sooner
than August 31. Citing agency precedent, Swift Pork argued the date the citation
reached this employee is the date Swift Pork received the citation for purposes of
section 88.8(1), making its notice of contest timely.3 The EAB ruled:
When [Swift Pork] failed to notify the [commissioner] of its
contest by the end of the fifteenth working day, [the citation] was
deemed the final order of the [EAB] and therefore, not subject to
review by any court or agency. The [EAB] has no power to waive the
requirements of the nondiscretionary provision of the code and is
barred from acquiring jurisdiction. [Swift Pork’s] notice of contest
must be dismissed. [(citation omitted.)] Only the [commissioner’s]
3 In their arguments to us, the parties agree Swift Pork’s notice of contest was not
timely if the citation was received on August 27, but the notice was timely if the
citation was received on August 31.
4
fraud or deception may excuse late filing, and there has been no
assertion by [Swift Pork] of fraud or deception, therefore [the
commissioner’s] Motion to Dismiss is granted.
Swift Pork sought judicial review of the EAB’s decision. See id. §§ 88.9,
17A.19. The district court reversed the EAB’s decision, finding the agency erred
by ignoring its prior practice or precedent and measuring the fifteen-day period
from the date the citation was received by the security firm rather than the date an
employee with authority to act on the citation received it. See id. § 17A.19(10)(h)
(permitting reversal of an agency decision “that is inconsistent with the agency’s
prior practice or precedents, unless the agency has justified that inconsistency by
stating credible reasons sufficient to indicate a fair and rational basis for the
inconsistency when the agency acts inconsistently with its prior practice or
precedent”). The EAB appeals from the district court’s ruling.
II. Standard of Review.
We turn next to the standard of review. In addressing the standard of
review, it is important to remember the issue on appeal as framed by the parties.
Although Swift Pork raised seven grounds for reversal in its petition filed to initiate
judicial review in the district court, by the time the case reached the hearing stage,
Swift Pork pared its argument down to five grounds for reversal. Specifically, Swift
Pork urged reversal pursuant to Iowa Code section 17A.19(10)(f), (h), (j), (k), and
(n). The district court found Swift Pork was entitled to reversal of the EAB decision
pursuant to Iowa Code section 17A.19(10)(h), so did not address the other
grounds. In its post-hearing motion filed pursuant to Iowa Rule of Civil Procedure
1.904(2) and its brief on appeal, the EAB limited its challenge to the district court’s
conclusions pursuant to section 17A.19(10)(h). We do the same. Based on this
5
procedural posture of the case, we express no opinion on the propriety of the
EAB’s actions on any of the other grounds originally asserted by Swift Pork.
In reviewing agency action pursuant to Iowa Code section 17A.19, the
district court acts in an appellate capacity. Lowe’s Home Centers, L.L.C. v. Iowa
Dep’t of Revenue, 921 N.W.2d 38, 45 (Iowa 2018). On appeal, since we are
reviewing the district court acting in an appellate capacity, we apply the same
standards of Iowa Code section 17.19(10) to determine if we reach the same result
as the district court. Id. Allegations that an agency’s actions should be reversed
pursuant to section 17A.19(10)(h) because the agency failed to follow its prior
practice or precedent are reviewed under the unreasonable, arbitrary, capricious,
or abuse of discretion standard. Office of Consumer Advocate v. Iowa Utils. Bd.,
770 N.W.2d 334, 341 (Iowa 2009). Our supreme court has noted that the reporter-
draftsman of the amendments who created Iowa Code section 17A.19(10)(h) has
stated subparagraph (h) provides “a specific example ‘of agency action that any
reviewing court should overturn as unreasonable, arbitrary, capricious, or an abuse
of discretion.’” Finch v. Schneider Specialized Carriers, Inc., 700 N.W.2d 328, 332
(Iowa 2005) (quoting Arthur Earl Bonfield, Amendments to Iowa Administrative
Procedure Act, Report on Selected Provisions 69 (1998)).
III. Discussion of the Merits.
Turning to the merits of this dispute, our task on appeal is to determine
whether the EAB impermissibly failed to follow its own precedent when it decided
the fifteen-business-day meter began running on the date of delivery indicated on
the certified mail receipt. While the parties disagree as to the interpretation of the
relevant precedent, they are generally in agreement that two decisions of the EAB
6
form the core body of that precedent: (1) Labor Commissioner v. Carroll County
Ambulance Service, IOSHAB Docket No. 3838 (Emp. Appeal Bd. July 24, 1991);
and (2) Labor Commissioner v. City of Sioux City, IOSHAB Docket No. 5560 (Emp.
Appeal Bd. June 20, 2017).4
A. The Precedents at Issue.
In Carroll County, the commissioner issued a citation to and imposed a
penalty upon Carroll County. IOSHAB Docket No. 3838, at 1. The citation and
notice of penalty was sent by certified mail to the ambulance garage owned by the
county and was received by an employee of the ambulance garage. Id. The
county moved to dismiss the citation and corresponding penalty on the basis that
the commissioner failed to properly serve the county under either of the methods
set forth in Iowa Code section 88.8(1) (i.e., personal service or certified mail). Id.
at 2. The EAB granted the motion to dismiss. Id. at 3. Finding that service on the
county’s employee who worked at the ambulance garage was insufficient to fulfill
the commissioner’s obligation to serve “the employer,” the EAB stated:
Unfortunately, the statute does not define the term “employer”
with enough clarity to clearly resolve the issue here, where the
employer is a large entity which carries on different activities at
different locations. The proper approach to such a situation is to
resolve the question in a manner consistent with the purposes of the
Act. The majority members will rely on [Buckley & Co. v. Secretary
of Labor, 507 F.2d 78 (3rd Cir. 1975),] in its holding that the notice of
enforcement action must be received by an official of the corporation
who has the authority to effect the abatement of the condition alleged
to constitute a violation, or to contest the action within 15 days of
receipt of it. Unless notice has been received by such a person, the
[commissioner] has not fulfilled his obligation under the Act to notify
the employer. . . .
....
4Because these two EAB decisions are not readily available online or elsewhere,
we will summarize them, perhaps in more detail than we otherwise would.
7
Although the citation issued in this matter was timely
contested, the [employer] must not be placed in a position where it
has to rely on its various employees at various worksites to promptly
channel the enforcement documents to the [employer’s] proper
officials who have authority to act on them. The Act allows the
[employer] a maximum of 15 days in which to contest the citation and
proposed penalty; therefore, the Labor Commissioner must ensure
that the Employer responsible for contesting such matters be notified
by certified mail.
Id. at 2–3. Finding the commissioner did not fulfill the commissioner’s obligation
to serve a proper employee of the entity against which the citation had been issued,
the EAB vacated the citation and associated penalty.
In Sioux City, the commissioner sent a citation via certified mail to the
employer’s location where the alleged violation took place. IOSHAB Docket No.
5560, at 4. Employees of the city who worked at that location received the citation,
but the mayor or city clerk did not. Id.; see also Iowa Code § 88.8(1) (requiring the
commissioner to notify an employer by “service in the same manner as an original
notice or by certified mail”); Iowa R. Civ. P. 1.305(8) (providing for personal service
of original notice on a city by serving its mayor or clerk). The commissioner sought
to dismiss the city’s notice of contest, claiming it was late when measured from the
date the citation was received by the employees working at the location where the
alleged violation took place. IOSHAB Docket No. 5560, at 4. In addressing the
timeliness of the city’s challenge to the citation, the EAB stated:
Sending the citation to the location where the inspection and violation
took place is, at a minimum, prima facie evidence of notice sufficient
to trigger the deadline. . . . Unfortunately, the [city] provides no detail
on the routing of the notice through its employees. Since the
[commissioner] makes, at least, a prima facie case of untimeliness
and since the [city] is the one with access to its own internal
processing of the Notice it is incumbent on [the city] to come up with
some information that the Notice was not received by a suitable
8
person until within 15 working days of [the date the city mailed its
notice of contest].
Id. at 4–5. Finding no evidence to overcome the prima facie case of untimeliness,
the EAB dismissed the city’s challenge to the citation. Id. at 5–6.
B. The EAB’s Actions.
With those two EAB decisions as background, we turn to the EAB’s actions
in this case. Faced with the commissioner’s motion to dismiss Swift Pork’s
challenge to the citation, Swift Pork responded within the agency proceeding with
detailed, sworn information about who received the citation and how and when it
was routed to an employee of Swift Pork with the authority to act on it. Swift Pork
also cited to the EAB’s decision in Carroll County as EAB precedent controlling the
issue at hand. The commissioner responded by bringing the EAB’s attention to
the EAB’s decision in Sioux City, arguing that Sioux City controlled the outcome.
In spite of having its attention called to both the Carroll County and Sioux
City decisions, the EAB cited neither case in its ruling. Instead, the EAB simply
stated the citation was received by Swift Pork on August 27, calculated the fifteen-
working-day-deadline measured from August 27 as September 18, and concluded
Swift Pork’s notice of contest sent on September 19 was too late, thus depriving
the EAB of jurisdiction to hear Swift Pork’s challenge. As a result, the EAB
dismissed Swift Pork’s challenge, making the citation the final order of the EAB
that is not subject to review by any court or agency.
C. The Disagreement.
The EAB asserts the EAB’s 1991 Carroll County decision, and the federal
Buckley decision cited therein, has been distinguished, if not overruled, by the
9
EAB’s 2017 Sioux City decision; thus, Sioux City requires the outcome reached by
the EAB in this case. The EAB also asserts Swift Pork and other employers should
not be allowed to frustrate the purpose of Iowa Code chapter 88 and delay
implementation of safety precautions in the workplace by establishing
cumbersome internal mail delivery processes. Finally, the EAB asserts substantial
evidence supports a finding that Swift Pork received the citation on August 27, so
its notice of contest sent on September 19 was one day late.
Swift Pork counters that Sioux City did not distinguish or overrule Carroll
County. Instead, Swift Pork argues, Sioux City essentially built off Carroll County
by establishing the standard that mail received by a person without the authority
required by Carroll County is prima facie evidence of delivery, but it can be rebutted
by evidence providing details as to the procedure followed by the employer in
routing the citation to a person with authority to act on the citation.
D. Resolving the Disagreement—Application of the Precedents.
On our review of the agency precedents, we believe the EAB has clearly
established a practice of looking beyond the date a citation is delivered and
examining when a person in authority received the citation in determining when
the citation is received for purposes of section 88.8(1). In Carroll County, the EAB
acknowledged that determining what person needs to be served with a citation is
not clearly answered by section 88.8(1). IOSHAB Docket No. 3838, at 2. To
resolve the ambiguity in the statute, the EAB established that, in order to meet its
obligation under section 88.8(1) to serve the citation on the “employer,” the
commissioner had to deliver the citation to an “official of the corporation who has
the authority to effect abatement of the condition alleged to constitute a violation,
10
or to contest the action within 15 days of receipt of it.” Id. Until the citation has
been received by “such a person,” the commissioner has not fulfilled the
commissioner’s obligation under chapter 88 to “notify the employer.” Id. at 2–3.
Contrary to the EAB’s assertion in this case, the Sioux City decision did not
abandon or step away from the Carroll County precedent. Sioux City simply
clarified the minimum the commissioner must establish to make a prima facie
showing of compliance by holding, “[s]ending the citation to the location where the
inspection and violation took place is, at a minimum, prima facie evidence of notice
sufficient to trigger the deadline.” IOSHAB Docket No. 5560, at 4. Once such a
prima facie showing has been made, it then becomes incumbent on the employer
“to come up with some information that the Notice was not received by a suitable
person.” Id. Although the Sioux City decision does not mention Carroll County by
name, something one would expect it to do if the EAB was overruling or even
distinguishing Carroll County, Sioux City does reference requiring notice to be
given to a “suitable person.” Id. We agree with the following assessment made
by the district court of the interplay between Carroll County and Sioux City:
To comply with the citation notice requirement and trigger
commencement of the “15 working days” period under Iowa Code
Sec. 88.8(1), the citation must be received [by] a person “who has
the authority to effect abatement of the condition alleged to constitute
a violation, or to contest the action within 15 days of receipt of it.”
However, if the citation is sent to the location of the inspection and
violation, irrespective of who receives it, such receipt is prima facie
evidence the “15 working days” period has been triggered for
determining timeliness of filing a notice of contest by the Employer.
The burden then falls on the Employer to detail “some information”
in support of its claim that a suitable person did not receive the notice
until a date certain making the notice of contest timely. Thus, even
if the citation of violation is delivered directly to the location of the
inspection and violation, where one would expect a “suitable person”
11
to receive the notice, the Employer still has a process by which to
rebut the prima facie evidence of proper delivery.
Contrary to these EAB precedents, the EAB made no fact finding regarding
Swift Pork’s arguments as to when a “suitable person” received the citation. This
requires reversal of the EAB’s decision, unless it can be shown the exception
provided for in Iowa Code section 17A.19(10)(h) applies.
E. Resolving the Disagreement—The Statutory Exception
Iowa Code section 17A.19(10)(h) requires an agency to act consistently
with its prior precedent. However, there is an exception stated in that section that
permits an agency to act inconsistently with its precedent. That exception applies
if “the agency has justified that inconsistency by stating credible reasons sufficient
to indicate a fair and rational basis for the inconsistency.” Here, the EAB gave no
explanation for straying from its precedents, let alone an explanation that would
constitute “credible reasons sufficient to indicate a fair and rational basis for the
inconsistency.” Iowa Code § 17A.19(10)(h). Therefore, the statutory exception
does not apply based on the record at this time.
IV. Conclusion.
For the reasons explained herein, we agree with the decision of the district
court that the EAB acted unreasonably, arbitrarily, or capriciously and abused its
discretion by failing to follow its own precedent and determine when a “suitable
person” received the citation. Therefore, we affirm that part of the district court’s
decision reversing the EAB’s decision rejecting Swift Pork’s challenge as untimely.
However, we disagree with that portion of the district court’s ruling in which the
district court engaged in extensive examination of the facts. The agency, “as trier
12
of fact, has a duty to weigh the evidence.” Cedar Rapids Cmty. Sch. Dist. v. Pease,
807 N.W.2d 839, 845 (Iowa 2011). To the extent the district court performed fact
finding and determined whether Swift Pork’s notice of contest was timely as a
matter of fact, we vacate that part of the decision.
The EAB’s decision dismissing Swift Pork’s contest of the citation must be
reversed pursuant to Iowa Code section 17A.19(10)(h), as the EAB’s action was
inconsistent with its prior precedent without adequate justification being provided
for such inconsistency. The matter is remanded to the EAB for further
proceedings, which shall include application of its prior precedents (or an
explanation stating credible reasons sufficient to indicate a fair and rational basis
for any action inconsistent with its prior precedents) and fact finding necessary to
apply those precedents (e.g., when a “suitable person” received the citation).
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED TO THE
AGENCY.