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The 3rd U.S. Circuit Court of Appeals in Philadelphia has found a New Jersey construction company and its president in contempt of court for failing to pay $412,000 in penalties levied by the U.S. Occupational Safety and Health Administration.
OSHA cited Washington Township, New Jersey-based Altor Inc. for numerous safety violations, including multiple willful violations of OSHA’s fall protection standards, according to a statement published by the agency Wednesday.
The appeals court previously ordered Altor and Vasilio Saites to pay the fine after the Occupational Safety and Health Review Commission affirmed the violations, and the court’s July 25 contempt judgment specifies that Mr. Saites is liable for the full amount of the penalty if Altor does not pay. If Altor and Mr. Saites do not fully pay within 30 days or show the court why they cannot do so, the secretary of labor would propose a daily penalty for the court to assess.
The appeals court’s ruling is the result of lengthy litigation by the U.S. Department of Labor’s Office of the Solicitor, including multiple hearings before the review commission and the appeals court to affirm Altor’s violations of OSHA’s safety requirements and remedy the company’s longstanding refusal to pay the associated penalties, the agency said.
A magistrate judge who prepared a report and recommendation concluded that the president of the company and his son failed to demonstrate that Altor was unable to pay anything toward the amount and found that Altor could have made “at least relatively modest” payments against the amount owed based on company bank records from October 2012 through March 2014 that reflected that Altor ended each month with a positive bank balance, according to court documents in Secretary of Labor v. Altor Inc.
The president and his son raised several objections, including that the company’s tax year for 2013 — which reflected a negative taxable income — was ignored and that the judge placed too much weight on Altor’s bank account balances without recognizing its monthly operating expenses. They also argued that the judge mischaracterized the extent to which Altor used corporate funds to pay certain family members’ medical expenses, that there is no legal authority establishing that Occupational Safety and Health Act penalties must be prioritized over legitimate operating expenses, and that Altor was “insolvent” when the appeals court issued its November 2012 decree and insolvency provides an absolute defense to the contempt petition.
“These arguments are beside the point,” the appeals court stated in overruling these objections.
The appeals court noted that the judge rejected Altor’s inability defense because its bank account statements showed positive monthly balances during the relevant period and concluded that Altor had at least some money left at the end of each month to pay toward the decree.
“It is thus irrelevant that Altor reported negative taxable income in June 2013, that it met some definition of ‘insolvent’ at that time, or that it was paying various monthly expenses necessary to maintain its business,” the appeals court stated.
The appeals court’s contempt sanction holds Vasilio Saites responsible only if Altor does not pay the entirety of the $412,000 penalty, according to court documents. But the appeals court declined to hold son Nicholas Saites in contempt, per the recommendation of the judge who found no evidence that Nicholas Saites had the position or capacity, from November 2012 forward, to direct the affairs of Altor.
The attorneys in the case could not be immediately reached for comment.
A circuit court judge dismissed a construction company’s petition to review an Occupational Safety and Health Review Commission decision affirming a citation following a bridge collapse.