# U.S. Department of Labor

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URL: https://www.frixlaw.com/law-library/documents/agency%3Adol%3A952cfe62429c315b

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

U.S. Department of Labor

Administrative Review Board
200 Constitution Ave. NW
Washington, DC 20210-0001

IN THE MATTER OF:
RHONDA MILLER, O/B/O
EUGENE MITCHELL,

ARB CASE NO. 2024-0002

COMPLAINANT,

ALJ CASE NO. 2021-STA-00041
ALJ LYSTRA A. HARRIS

v.

DATE: July 18, 2024

RHINO, INC.,
RESPONDENT.
Appearances:
For the Complainant:
Rachel B. Canfield, Esq.; The Kirby G. Smith Law Firm, LLC; Atlanta,
Georgia
For the Respondent:
Douglas H. Duerr, Esq. and Andrew C. Suarez, Esq.; Elarbee,
Thompson, Sapp & Wilson, LLP; Atlanta, Georgia
Before WARREN, THOMPSON, and ROLFE, Administrative Appeals
Judges; Judge Rolfe, concurring
ORDER VACATING AND REMANDING
This case arises from a complaint filed by Eugene Mitchell (Complainant)
against his employer, Rhino, Inc., (Respondent), alleging retaliation in violation of
the whistleblower protections of the Surface Transportation Assistance Act of 1982
(STAA) and its implementing regulations.1 After Complainant moved for sanctions
for Respondent’s failure to comply with several discovery orders, the Administrative
Law Judge (ALJ) entered a default judgment against it and a second, corresponding
order awarding damages including $147,974.94 in back pay, $5,565.66 in pre1

49 U.S.C. § 31105(a); 29 C.F.R. Part 1978 (2024).

2

judgment interest, post-judgment interest, and $150,000.00 in compensatory
damages for emotional distress.
As discussed below, however, we find that the ALJ abused her discretion in
finding that a default judgment was an appropriate sanction under 29 C.F.R. §
18.57(b)(1)(vi) as the record (at this juncture) does not permit such a harsh penalty
for Respondent’s failure to comply with discovery and other orders. We therefore
vacate both orders and remand the case to the ALJ to analyze the factors necessary
to support a default judgment or to determine what sanctions, if any, are
appropriate for Respondent’s failure to respond to the ALJ’s orders. Alternatively,
the ALJ may determine that further adjudication of this claim on the merits is
warranted.
BACKGROUND
On February 22, 2021, Complainant filed a complaint with the Occupational
Safety and Health Administration (OSHA), alleging that Respondent violated the
employee protection provisions of the STAA when it terminated his employment as
a commercial truck driver on September 1, 2020.2 In a letter dated March 10, 2021,
OSHA dismissed the complaint, finding that there was no cause to believe that
Respondent violated the STAA.3
Complainant timely requested a hearing before an ALJ.4 On May 14, 2021,
the ALJ issued a Notice of Assignment, Hearing, and initial Pre Hearing Order
(Hearing Order), which provided the parties directives regarding initial disclosures,
discovery, and prehearing submissions.5 The Hearing Order further provided, in
pertinent part, that “failure to comply with this order may result in sanctions
including, but not limited to, the following: the exclusion of evidence, the dismissal
of the claim, the entry of a default judgment, or the removal of the offending
representative from the case.”6
On August 31, 2021, Complainant filed a “Motion to Compel Discovery and
for Sanctions” alleging that Respondent had failed to respond to his discovery
requests and had not provided the initial disclosures directed by the Hearing

2

Order Granting Motion for Default Judgment (Default Order) at 1 (ALJ Nov. 8,

2021).
3

See March 10, 2021 OSHA letter at 1.

4

Default Order at 1.

5

Id.

Id. at 3. The May 14, 2021 Hearing Order was served to Respondent at its business
address. See Service Sheet attached to Hearing Order.
6

3

Order.7 Complainant attached an August 13, 2021 letter and mailing envelope that
were addressed to “Rhino & K.A.C.E.A. 6 Corp c/o Donald D. Liaping.”8
On September 15, 2021, the ALJ issued an Order Granting Complainant’s
Motion to Compel Discovery (Order to Compel Discovery), which directed
Respondent to respond to Complainant’s previously served discovery requests.9
Respondent, however, did not respond.10
On October 7, 2021, the ALJ issued an Order Directing Respondent to Show
Cause as Why Sanctions Should Not Be Imposed Against It (Order to Show
Cause).11 The order directed Respondent to explain, within 15 days of receipt, why a
default judgment should not be entered against it for its failure to comply with the
ALJ’s previous orders directing initial disclosure and discovery responses.12
Respondent again did not respond.13
On November 8, 2021, the ALJ issued an Order Granting Motion for
Default Judgment against Respondent.14 In the Order, the ALJ reasoned that
a default judgment was justified because “Respondent repeatedly failed to
comply with the discovery and other orders issued by the [ALJ].”15 The ALJ
went on to note that Respondent further failed to provide “any explanation
for its failure to comply with these orders . . . [which] resulted in the denial of
Complainant’s right to discovery, as well as the impeding of the OALJ’s

7

Default Order at 2.

See Complainant’s August 31, 2021 Motion to Compel, Attachment 1. As discussed
below, after obtaining counsel, Respondent explained that Rhino & K.A.C.E.A.6 Corp. is its
competitor owned by Donald D. Liaping, a relative and former employee who did not
forward the correspondence. Petition for Review at 2.
8

The September 15, 2021 Order to Compel Discovery was served to Respondent at its
business address and to Rhino & K.A.C.E.A.6 at its Piedmont Circle address. See Service
Sheet attached to Order to Compel Discovery.
9

10

Default Order at 3.

The Order to Show Cause also suspended all deadlines and directives set forth in the
May 14, 2021 Hearing Order. Order to Show Cause at 4.
11

The October 7, 2021 Order to Show Cause was served to Respondent at its business
address and to Rhino & K.A.C.E.A.6 at its Piedmont Circle address. See Service Sheet
attached to Order to Show Cause.
12

13

Default Order at 4.

Default Order (formally cited as Mitchell v. Rhino, Inc., ALJ No. 2021-STA-00041
(ALJ Nov. 8, 2021)).
14

15

Id. at 4.

4

adjudication of the instant matter.”16 Thus, the ALJ found that “pursuant to
29 C.F.R. § 18.57(b)[(1)](vi), the issuance of a default decision and order
against Respondent is deemed an appropriate sanction for Respondent’s
persistent noncompliance.”17
On November 10, 2021, Respondent’s general manager contacted the ALJ,
explaining he had received the default order and requesting an opportunity to obtain
counsel to respond to it.18 On November 30, 2021, the ALJ issued an Order Granting
Respondent’s Request for Additional Time to Obtain Representation.19
On January 28, 2022, after retaining counsel, Respondent filed a pleading
entitled “Response to Default Order” that moved the ALJ to set aside the November
8, 2021 Default Order.20 Respondent for the first time alleged it had no notice of the
proceeding, and contended it would have engaged counsel and vigorously defended
OSHA’s preliminary decision had it been aware of the appeal—as it had with
similar litigation Complainant had filed against it.21 While Respondent admitted
the ALJ sent the orders to the correct address, it denied ever receiving them.22 And
it noted that some of Complainant’s correspondence had been sent to a former
employee—Respondent’s nephew—at an allegedly incorrect address and never
forwarded.23
By order dated May 10, 2022, the ALJ denied Respondent’s motion,
specifically finding that Respondent was properly served the May 12, 2021 Hearing
Order, the September 15, 2021 Order to Compel, and the October 7, 2021 Order to
Show Cause.24 The ALJ additionally analyzed the motion as seeking
16

Id.

17

Id.

Mitchell v. Rhino, Inc., ALJ No. 2021-STA-00041, slip op. at 2 (ALJ Nov. 30, 2021)
(Order Granting Respondent’s Request for Additional Time to Obtain Representation). The
ALJ construed the email as Respondent’s request for additional time. Id.
18

19

Id. at 3.

20

Decision and Order on Damages (D. & O.) at 1 (ALJ Sept. 25, 2023).

21

Respondent’s Response to Order Granting Motion for Default Judgment at 1-3.

22

Id. at 2-3.

23

Id. at 1-2.

Mitchell v. Rhino, Inc., ALJ No. 2021-STA-00041, slip op. at 8 (ALJ May 10, 2022)
(Order Denying Respondent’s Motion). The ALJ primarily relied on the rationale that the
“Mailbox rule” establishes a rebuttable presumption that correctly labeled mail is received
by parties and the fact that the UPS tracking information showed that each of the abovementioned orders were properly addressed and delivered to Respondent’s business address.
Id. at 6-8.
23

5

reconsideration, and summarily found that Respondent established no new evidence
or error of law that would permit revisiting the prior order.25 The ALJ further
pointed out that Respondent’s failure to respond to the previous orders constituted
“willful noncompliance throughout the pendency of this case.”26
On May 11, 2022, the ALJ issued an Order Regarding Relief and Damages,
which instructed Complainant to file proof of damages, setting forth the
compensatory and special damages Complainant alleges entitlement to under the
STAA.27
On September 1, 2022, Complainant submitted an unopposed motion
requesting an extension of the deadline for filing submissions regarding the issue of
relief and damages because Complainant had passed away on August 30, 2022.28
The ALJ granted Complainant’s motion on September 8, 2022.29 On January 19,
2023, the ALJ granted the request for Rhonda Miller (Miller) to be substituted in
place of Complainant as his common law wife.30
On March 6, 2023, Miller submitted Complainant’s proof of damages and
evidence in support of Complainant’s request for damages.31 Respondent did not
respond.32 On September 25, 2023, the ALJ issued a Decision and Order Awarding
Damages directing Respondent to pay Complainant: (1) back pay in the amount of
$147,974.94, pre-judgment interest in the amount of $5,565.66, and post-judgment
interest; and (2) compensatory damages in the amount of $150,000.00.33
On October 9, 2023, Respondent timely filed a petition for review of the ALJ’s
November 8, 2021 Default Order and September 25, 2023 D. & O. arguing that it
had not received proper notice and, therefore, default judgment was

25

Id. at 8.

26

Id.

D. & O. at 2; see also Mitchell v. Rhino, Inc., ALJ No. 2021-STA-00041, slip op. at 1-2
(ALJ May 11, 2022) (Order Regarding Relief and Damages). The ALJ subsequently granted
two requests for extensions by Complainant regarding submissions on the issue of relief
and damages.
27

28

D. & O. at 2.

29

Id.

30

Id.

31

Id.

32

Id.

33

Id. at 8.

6

inappropriate.34 Miller filed a Response Brief on December 11, 2023, defending the
ALJ’s orders. Respondent filed a Reply Brief.
JURISDICTION AND STANDARD OF REVIEW
The Secretary of Labor has delegated authority to the ARB to hear appeals
from ALJ decisions and issue agency decisions in cases arising under the STAA.35
The Board reviews ALJ’s determinations on procedural issues, evidentiary rulings,
and sanctions under an abuse of discretion standard.36
DISCUSSION
1. The Process an ALJ Must Follow Prior to Entering a Default Judgment
The Department of Labor’s Rules of Practice and Procedure for hearings
before the Office of Administrative Law Judges (OALJ) permit an ALJ to issue
sanctions against parties for failing to comply with a judge’s discovery order,
including to “[r]ender[] a default decision and order against the disobedient party.”37
The Board has recognized that ALJs have a reasonable degree of discretion in
the imposition of discovery sanctions under the OALJ’s rules, as well as sanctions
pursuant to the inherent authority of ALJs to manage the orderly and expeditious
disposition of cases.38 ALJs, however, still “must exercise this power cautiously . . .

Complainant’s Response Brief (Resp. Br.) at 17 and Respondent’s Reply Brief (Reply
Br.) at 3-4.
34

Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of
Responsibility to the Administrative Review Board (Secretary’s discretionary review of ARB
decisions)), 85 Fed. Reg. 13,186 (Mar. 6, 2020).
35

Butler v. Anadarko Petroleum Corp., ARB No. 2012-0041, ALJ No. 2009-SOX-00001,
slip op. at 2 (ARB June 15, 2012) (the Board reviews an ALJ’s imposition of discovery
sanctions on an abuse of discretion standard); Waechter v. J.W. Roach & Sons Logging and
Hauling, ARB No. 2004-0183, ALJ No. 2004-STA-00043, slip op. 2 (ARB Dec. 29, 2005)
(same) see also Forrand v. FedEx Express, ARB No. 2019-0041, ALJ No. 2017-AIR-00016,
slip op. at 2 (ARB Jan. 4, 2021) (“The Board reviews an ALJ’s determinations on procedural
issues under an abuse of discretion standard, examining whether the ALJ abused [their]
power to preside over the proceedings in ruling as [they] did.”).
36

37

29 C.F.R. § 18.57(b)(1)(vi).

Jenkins v. EPA, ARB No. 2015-0046, ALJ No. 2011-CAA-00003, slip op. at 8 (ARB
Mar. 1, 2018); Newport v. Fla. Power & Light Co., ARB No. 2006-0110, ALJ No. 2005-ERA00024, slip op. at 4 (ARB Feb. 29, 2008); see Link v. Wabash R. R. Co., 370 U.S. 626, 630-31
(1962) (“The authority of a court to dismiss sua sponte for lack of prosecution has generally
been considered an ‘inherent power,’ governed not by rule or statute but by the control
38

7

and should take care in fashioning sanctions for conduct that abuses the judicial
process.”39 And given the drastic nature of a default sanction, ALJs must follow
uniquely strict guidelines prior to imposing such a sanction: default “deserves closer
scrutiny within the abuse-of-discretion framework.”40
Given its uniquely harsh consequence, the Board has held that an ALJ
should consider several factors when determining whether a default judgment or
dismissal under 29 C.F.R. § 18.57(b)(1)(vi) is warranted:
(1) the prejudice to the other party, (2) the amount of
interference with the judicial process, (3) the culpability,
willfulness, bad faith or fault of the litigant, (4) whether
the party was warned in advance that dismissal of the
action [or default judgment] could be a sanction for failure
to cooperate or noncompliance, and (5) whether the efficacy
of lesser sanctions [was] considered.[41]
The Eleventh Circuit, which has appellate jurisdiction over this case, has
limited the “severe” sanction of default to instances where “a party demonstrates a

necessarily vested in courts to manage their own affairs so as to achieve the orderly and
expeditious disposition of cases.”).
Pfeifer v. AM Retail Grp., Inc., ARB No. 2023-0009, ALJ No. 2021-SOX-00030, slip
op. at 3-4 (ARB Mar. 22, 2023) (citing Newport, ARB No. 2006-0110, slip op. at 4).
39

Adm’r, Wage & Hour Div., U.S. Dep’t of Lab. v. Global Horizons Manpower, Inc.,
ARB No. 2009-0016, ALJ No. 2008-TAE-00003, slip op. at 11 (ARB Dec. 21, 2010); see also
Jenkins, ARB No. 2015-0046, slip op. at 10 (citing Washington Metro. Area Transit Comm’n
v. Reliable Limousine Serv., 776 F.3d 1, 4 (D.C. Cir. 2015) (noting that “where a lower
court’s order of dismissal or default as a discovery sanction is under review, the review ‘is
more thorough because the drastic sanction deprives a party completely of its day in
court.’”)).
40

Adm’r, Wage & Hour Div., U.S. Dep’t of Lab. v. Deepali Co., LLC, ARB No. 20210028, ALJ No. 2017-DBA-00022, slip op. at 4 (ARB Sept. 20, 2021) (citing Howick v.
Campbell-Ewald Co., ARB Nos. 2003-0156, 2004-0065, ALJ Nos. 2003-STA-00006, 2004STA-00007, slip op. at 8 (ARB Nov. 30, 2004)); see also Jenkins, ARB No. 2015-0046. The
Board acknowledges that it has not consistently applied the above-mentioned factors when
determining whether the issuance of a default judgment or dismissal was a proper sanction
under the OALJ’s Rules of Practice and Procedure and that the current case requires
stronger consideration of lesser sanctions as required by the Eleventh Circuit. Because
these factors have not been consistently applied, we are providing clarification in this
Decision and Order. Accordingly, as the concurrence notes, the ALJ’s approach in this case
is understandable.
41

8

flagrant disregard for the court and the discovery process.”42 Thus, violation of a
discovery order caused by “simple negligence, misunderstanding, or inability to
comply” will not justify default judgment.43 Instead, the factfinder must make a
determination of willfulness or bad faith to comply with a discovery order. 44
2. The ALJ Abused Their Discretion by Not Considering the Relevant
Factors Prior to Entering Default Judgment
The Eleventh Circuit, in reviewing default judgments as a sanction, has
made clear that a tribunal abuses its discretion “if it applies an incorrect legal
standard, follows improper procedures in making the determination, or makes
findings of fact that are clearly erroneous.”45 In the present case, the ALJ did not
properly consider the above-mentioned factors before issuing a default judgment
against Respondent under 29 C.F.R. § 18.57(b)(1)(vi). The ALJ thus abused her
discretion.46
Aztec Steel Co. v. Fla. Steel Corp., 691 F.2d 480, 481-82 (11th Cir. 1982) (in which
the Eleventh Circuit concluded that the district court did not abuse its discretion in
dismissing the claim as a discovery sanction after Aztec Steel willfully refused to provide
the defendants with basic information in the six years that the case was pending); see also
Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1556 (11th Cir. 1986) (“The decision to
dismiss a claim, like the decision to enter a default judgment, ought to be a last resort—
ordered only if noncompliance with discovery orders is due to willful or bad faith disregard
for those orders.”).
42

In re Se. Banking Corp., 204 F.3d 1322, 1332 (2000) (quoting Malautea v. Suzuki
Motor Co., 987 F.2d 1536, 1542 (11th Cir. 1993)); see also EEOC v. Troy State Univ., 693
F.2d 1353, 1357 (11th Cir. 1982) (“A party’s simple negligence or other action grounded in a
misunderstanding of a court order does not warrant dismissal.”) (citation omitted).
43

Maus v. Ennis, 513 F. App’x 872, 878 (11th Cir. 2013) (in which the Eleventh Circuit
concluded that the district court did not abuse its discretion when it imposed a default
judgment based on the pro se defendant’s disrespectful conduct and refusal to participate in
discovery); Malautea, 987 F.2d at 1542 (citation omitted) (“a default judgment sanction
requires a willful or bad faith failure to obey a discovery order.”) (citing Societe
Internationale pour Participations Industrielles et Commerciales v. Rogers, 357 U.S. 197,
212 (1958)).
44

Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1264 (11th Cir. 2009) (quoting Klay v.
Humana, Inc., 382 F.3d 1241, 1251 (11th Cir. 2004)).
45

See Pfeifer, ARB No. 2023-0009, slip op. at 4 (dismissal as a discovery sanction was
not warranted when complainant made “good-faith efforts to comply with the ALJ’s orders
and directives”); see also Stalworth v. Justin Davis Enters., Inc., ARB No. 2009-0038, ALJ
No. 2009-STA-00001, slip op. at 5 (ARB June 16, 2010) (in which the Board concluded the
ALJ abused his discretion in finding Respondent defaulted because Respondent’s conduct
was “not so egregious that [it] should be denied the opportunity to present its case”); Adm’r,
Wage & Hour Div., U.S. Dep’t of Lab. v. Siliconlinks, Inc., ARB No. 2009-0131, ALJ 2009LCA-00024, slip op. at 6-7 (ARB Oct. 28, 2009) (in which the Board concluded that the ALJ
46

9

In this case, while the ALJ referenced some of the factors listed above when
determining that a default judgment was a proper sanction for Respondent’s
repeated failure to comply with the discovery and other orders, the ALJ did not
address all the factors necessary to properly balance the harsh consequence of a
default judgment with the effects of Respondent’s conduct. Specifically, the ALJ
briefly referenced prejudice to the other party, interference with the judicial
process,47 willful noncompliance,48 and advanced warning of the possibility of a
default judgment in both the May 14, 2021 Hearing Order and October 7, 2021
Order to Show Cause.49
The ALJ erred, however, by failing to address why lesser sanctions would be
ineffective.50 Here, default constituted the first and only sanction by the ALJ.
While a court is not required to issue lesser sanctions before finding default
judgment appropriate, the Board has held it must at least “explain its reason for
issuing a default judgment rather than a lesser sanction.”51 Likewise, the Eleventh
Circuit has established that default judgment is “appropriate only as a last resort,
when less drastic sanctions would not ensure compliance with the court’s orders.”52
Here, the ALJ failed to provide any discussion of the other sanctions allowed under
abused his discretion in dismissing the claim as a discovery sanction where the
Administrator did not receive the pre-hearing order and had no notice of the hearing until
the day before it was scheduled); Adm’r, Wage & Hour Div., U.S. Dep’t of Lab. v. Mitchem
Transports, Inc., ARB No. 2003-0115, ALJ No. 2002-SCA-00016, slip op. 7-8 (ARB June 30,
2004) (in which the Board concluded that the ALJ abused his discretion in entering default
judgment when the respondents had filed an answer to the complaint).
47

Default Order at 4.

48

Order Denying Respondent’s Motion at 8.

49

Default Order at 3-4.

In re Se. Banking Corp., 204 F.3d at 1333, 1334-35 (in which the Eleventh Circuit
agreed with district judge’s determination that defendant’s violation of discovery orders was
willful, not due to misunderstanding or negligence, but nonetheless reversed dismissal of
the claim under Fed. R. Civ. P. 41(b) because the district judge failed to consider lesser
alternative sanctions); see also Pfeifer, ARB No. 2023-0009, slip op. at 4 (the Board noted
that it was error “for the ALJ to conclude that sanctions less than dismissal would be
ineffective.”).
50

Jenkins, ARB No. 2015-0046, slip op. at 11 (citing Webb v. Dist. of Columbia, 146
F.3d 964, 971 (D.C. Cir. 1998)); see also Malautea, 987 F.2d at 1544 (“A default sanction
may be proper even when not preceded by the imposition of lesser sanctions.”).
51

Malautea, 987 F.2d at1542 (citing Navarro v. Cohan, 856 F.2d 141, 142 (11th Cir.
1988)); see also Wouters v. Martin Cnty., Fla., 9 F.3d 924, 933-34 (11th Cir. 1993) (“We have
consistently held that while district courts have broad powers under the rules to impose
sanctions for a party’s failure to abide by court orders, dismissal is justified only in extreme
circumstances and as a last resort.”).
52

10

29 C.F.R. § 18.57(b)(1), nor did they offer an explanation as to why these sanctions
would be insufficient to induce Respondent to comply with the previous orders.53
Because the ALJ did not follow the process outlined in Board precedent and
required by the Eleventh Circuit, the Board finds the ALJ abused their discretion in
issuing a default judgment against Respondent as a discovery sanction under
29 C.F.R. § 18.57(b)(1)(vi) and, therefore, remands this matter to the ALJ. On
remand, the ALJ should consider the above-mentioned factors as applied to
Respondent’s conduct and consider what other sanction(s), if any, are appropriate
under the applicable factors and circumstances of this case.
CONCLUSION
For the above reasons, we VACATE the ALJ’s Order Granting Motion for
Default Judgment and REMAND this matter for further proceedings consistent
with this order. Furthermore, in light of this Order Vacating and Remanding the
default judgment against Respondent, the Decision and Order on Damages issued
on September 25, 2023, and the Supplemental Decision and Order Awarding
Attorney’s Fees and Costs are hereby VACATED as well.
SO ORDERED.

____________________________________
IVEY S. WARREN
Administrative Appeals Judge

____________________________________
ANGELA W. THOMPSON
Administrative Appeals Judge

See Manoharan v. HCL Am., Inc., ARB No. 2021-0060, ALJ Nos. 2018-LCA-00029,
2021-LCA-00009, slip op. at 7 (ARB Apr. 14, 2022) (The Board specifically noted that the
ALJ had concluded that “lesser sanctions would not alter Complainant’s conduct . . . .”).
53

11

Judge Rolfe, concurring:
I agree with my colleagues that the ALJ did not do enough under controlling
ARB and Eleventh Circuit precedent in discussing why lesser sanctions would not
be effective before entering the extreme sanction of a default judgment. I therefore
concur in the decision to remand the case for a determination of what lesser
sanction, if any, is appropriate under the circumstances.
I write separately, however, to express my view that in addition to not
considering whether lesser sanctions would be effective, the ALJ also did not
sufficiently address the remaining factors of Respondent’s culpability, the prejudice
suffered by Complainant, or the amount of interference with the judicial process to
adequately sustain a default sanction.
Balancing those factors, I do not believe the prejudice suffered by the delay at
the outset of the ALJ proceedings -- at a time when Respondent was not represented
by counsel -- reasonably can justify the $322,940.60 in resulting fines the ALJ
ultimately imposed. I would therefore instruct the ALJ on remand to take default
off the table for now and consider a more proportional sanction for Respondent’s
misconduct, while keeping default available in the event of future misconduct.
Jenkins, ARB No. 2015-0046, slip op. at 10 (citation omitted) (the choice of penalty
initially must be “guided by the ‘concept of proportionality’ between offense and
sanction.”).54
The bar under the relevant factors for entering either a default judgment or a
dismissal as a sanction is high. As a threshold matter, a party’s offending conduct
must go beyond mere negligence. The ARB has held an ALJ may only impose these
sanctions after she first concludes “willfulness, bad faith, or fault” caused “a party’s
failure to cooperate in discovery.” Global Horizons Manpower, Inc., ARB No. 20090016, slip op. at 11 (citation omitted). The Board has further explained that if
“‘fault’ has any meaning not subsumed in ‘willfulness’ and ‘bad faith,’ it must at
least cover gross negligence amounting to a ‘total dereliction of professional
responsibility’ even though not a conscious disregard of a court’s orders.” Jenkins,
ARB No. 2015-0046, slip op. at 12 (citation omitted).

The ALJ entered default in this case six months after issuing the initial scheduling
order and less than two months after Complainant filed a motion to compel production of
initial disclosures and responses to his initial discovery requests. That failure to respond to
discovery at the outset of the case was the only misconduct at issue. In calculating
damages, the ALJ subsequently accepted Complainant’s unopposed submission in its
entirety, awarding: $147,974.94 in backpay with pre-judgment interest of $5,565.66 and
post-judgment interest pursuant to 26 U.S.C. § 6621(a)(2) compounding quarterly;
compensatory damages of $150,000.00 for emotional distress; and attorney fees of
$19,400.00. Default Order at 5; D. & O. at 8; Attorney Fee Order at 2.
54

12

The Eleventh Circuit similarly holds “the severe sanction of a dismissal or
default judgment is appropriate only as a last resort, when less drastic sanctions
would not ensure compliance with the court’s orders.” Malautea, 987 F.2d at 1542.
“Violation of a discovery order caused by simple negligence, misunderstanding, or
inability to comply” does not justify “a default judgment or dismissal.” Id.
Moreover, the prejudice suffered by the opposing party must be severe,
quantifiable, and attributable to the bad faith action. An ALJ must determine a
party “severely hampered the other party’s ability to present his case,” to the point
where “it would be unfair to require him to proceed” or that it “impairs [his] ability
to determine the factual merits of [his] claim.” Jenkins, ARB No. 2015-0046, slip op.
at 12 (citations omitted). The Eleventh Circuit has likewise affirmed default
sanctions in instances where a party prejudiced their opponent’s preparation for
trial, preventing it from effectively litigating the case. See, e.g., Lyons v. O’Quinn,
746 F. App’x 898, 902 (11th Cir. 2018).
An ALJ must be similarly direct when addressing the harm to the judicial
process. Rather than speaking in generalities, an ALJ should explain how the
misconduct “put an intolerable burden on the trial court” by explaining the extent to
which a party’s failure to comply with a discovery order required the ALJ “to modify
its own docket and operations to accommodate the delay.” Jenkins, ARB No. 20150046, slip op. at 12. The Eleventh Circuit similarly limits default to instances where
“a party demonstrates a flagrant disregard for the court and the discovery process.”
Aztec Steel Co., 691 F.2d at 481.
In my view, the ALJ did not do enough under these demanding standards to
establish either Respondent’s bad faith or a significant enough harm to
Complainant or the judicial process to justify a default as a sanction. In her initial
order granting default, the ALJ first found “self-represented parties are not excused
from any orders issued regarding initial disclosures and discovery in these
proceedings.” Default Order at 2.
The ALJ then provided a general justification for the sanction, stating only
Respondent’s unexplained failure to comply with her discovery order “has resulted
in the denial of Complainant’s right to discovery, as well as the impeding of the
OALJ’s adjudication of the instant matter.” Id. at 4. Without explaining how an
unrepresented party’s failure to initially answer discovery automatically amounted
to bad faith or quantifying the degree of harm to Complainant and the process, the
ALJ then concluded “the issuance of a default decision is deemed an appropriate
sanction for Respondent’s persistent noncompliance.” Id.55
Default would comprise the first and only sanction the ALJ would contemplate in
the case; as my colleagues correctly hold, the ALJ independently erred by not discussing
whether lesser sanctions would be effective.
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In her order denying reinstatement after Respondent retained counsel, the
ALJ primarily relied on the rationale that the “mailbox rule” establishes a
rebuttable presumption that correctly labeled mail is received by parties and that
Respondent failed to rebut the presumption. Order Denying Respondent’s Motion
at 6. The ALJ additionally analyzed the motion as seeking reconsideration, and
summarily found that Respondent established no new evidence or any error of law
that would permit revisiting her prior order. Id. at 8.
Finally, the ALJ briefly analyzed reinstatement under Fed. R. Civ. P. 60(b),
which provides an “excusable neglect” standard for reinstatement of final
judgments. Id. The ALJ found under that standard that Respondent did “not offer
any credible reason for its failure to comply” and is not entitled to relief “for that
reason alone.” Id. at 10. The ALJ then mentioned Complainant’s multiple
allegations of prejudice, but did not evaluate any of them, finding “[r]egardless of
the veracity of Complainant’s claims [of harm]” there “would certainly be some
amount of prejudice to Complainant if the undersigned set aside the default
decision.” Id. The ALJ thus refused to reinstate the action.56
Once again, however, the ALJ did not discuss whether bad faith motivated
Respondent (other than arguably suggesting the failure to respond itself
automatically amounted to “willful noncompliance” notwithstanding that some of
Complainant’s discovery correspondence was sent to the wrong address), the degree
to which the delay prejudiced Complainant or to the OALJ’s ability to manage its
docket (other than to generally infer reinstatement would necessarily cause “some”
prejudice to Complainant), or whether something less drastic than a default
judgment could remedy Respondent’s failure to initially respond. The ALJ
concluded instead that the regulations authorize “rendering a default decision as a
discovery sanction” and “the undersigned did just that.” Id. at 8.
But that, in my view, is just not enough to bypass the merits of this case and
subsequently enter fines of this magnitude. While Respondent did not participate at
The ALJ erred to the extent she analyzed reinstatement under Fed. R. Civ. P. 60
instead of Fed. R. Civ P. 55(c). As noted, Rule 60 applies only to final judgments. The
judgment here was not final: a final judgment “ends the litigation on the merits and leaves
nothing for the court to do but execute [it,]” Pearson v. Kemp, 831 F. App’x 467, 470 (11th
Cir. 2020), and the ALJ had yet to determine damages in this case. Significantly, the
importance in distinguishing these two rules “lies in the standard to be applied in
determining whether or not to set aside the default.” EEOC v. Mike Smith Pontiac GMC,
Inc., 896 F.2d 524, 528 (11th Cir. 1990) (emphasis added). Good cause, the standard under
Rule 55(c), is far more lenient than excusable neglect: “‘Good cause’ is a mutable standard,
varying from situation to situation.” Compania Interamericana Exp-Imp, S.A. v. Compania
Dominicana de Aviacion, 88 F.3d 948, 951 (11th Cir. 1996). “It is also a liberal one[.]” Id.
(emphasis added).
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the ALJ level prior to the default order, I find it unreasonable, without more, to
automatically infer the kind of bad faith, willfulness, or even gross negligence
amounting to a blatant disregard for the process necessary to support default,
motivated Respondent’s inaction.
Instead, Respondent’s initially unrepresented status provides a much more
likely cause of its unresponsiveness. Although proceeding pro se does not give
unfettered license to ignore court orders as the ALJ correctly noted, it does provide
meaningful context to Respondent’s explanation why it failed to initially respond -particularly since Respondent actively participated both below and at the Board
after retaining counsel.
Indeed, that lack of counsel must be considered in determining “the standard
of gross negligence amounting to a ‘total dereliction of professional responsibility,’”
Jenkins, ARB No. 2015-0046, slip op. at 12, the Board has required for a negligencebased default rather than one based on intentional bad faith: whether a party is
represented by counsel necessarily establishes the standard of care covering
professional responsibility. It also makes intentional bad faith more difficult to
establish in these circumstances where Respondent alleges it thought the action
was over when OSHA dismissed Complainant’s complaint and further points out
that it did hire counsel and vigorously defend the other actions it was aware of
arising out of the same facts.57
Regardless of Complainant’s motivation, in my view the roughly two-month
period between the time Complainant filed his motion to compel and the time the
ALJ entered the default order also cannot be shown to cause the degree of harm
independently necessary to justify “the death penalty of sanctions.” EEOC v.
General Dynamics, 999 F.2d 113, 119 (5th Cir. 1993). While on remand that delay
The ARB recently has held that a party’s unrepresented status does not insulate it
from a default sanction. Smith v. Akal Express, Inc., ARB No. 2022-0041, ALJ No. 2021STA-00028 (ARB Apr. 21, 2023). That much is true. Smith, however, inexplicably did not
address the factors the ARB and the courts have long held must be considered prior to
entering a default, including whether a party’s pro se status can be a consideration in
establishing bad faith or gross negligence. It merely held that a party’s pro se status,
standing alone, is not enough to avoid a default. Id. at 6 (holding “ignorance of the law is
neither a sufficient basis for granting equitable tolling nor by itself an independent ground
for establishing entitlement.”). Moreover, the facts of the two cases are materially distinct
on this issue. In Smith, the offending party had appeared before the OALJ and entered
some pleadings that the Board held undermined its argument it thought the case was over.
Id. at 6, n.35 (“Filing a response with the OALJ contradicts Respondents’ argument that
they believed the matter to be over following the OSHA dismissal. If Respondents thought
the matter was truly over, there would have been no reason for [it] to have prepared and
filed such a response.”) Here, Respondent’s behavior, not appearing in the case at all prior
to the default, is in line with such a belief.
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absolutely could be shown to prejudice Complainant to some degree in developing
her claim, it cannot be reasonably found so severe at this point to prevent
Complainant from developing her case going forward. Jenkins, ARB No. 2015-0046,
slip op. at 12. Neither the ALJ’s decision, nor Complainant’s Response Brief, contain
any discussion of the kind of spoilation of evidence that can support a default
judgment. Likewise, there is nothing inherent about the several month delay that
can reasonably be said to have put an “intolerable burden” on OALJ’s docket. Id.58
Indeed, a survey of ARB cases and those arising in the Eleventh Circuit
demonstrates that default or dismissal are typically reserved for far longer delays
caused by far more serious intentional disruptions of the judicial process. See, e.g.,
Pfeifer, ARB No. 2023-0009, slip op. at 5 (dismissal not warranted despite party
intentionally ignoring several court orders and warnings because “errors and lack of
proper courtesy” do not warrant the extreme sanction of dismissal); Deepali Co.,
LLC, ARB No. 2021-0028, slip op. at 4 (default justified where party’s repeated
misconduct over three years generated extensive back and forth between the
parties, three motions to compel, and a postponed hearing); Jenkins, ARB No. 20150046, slip op. at 32-37 (default justified where EPA’s intentional refusal to
participate in discovery resulted in several motions to compel and a postponement
of the hearing); In re Sunshine Jr. Stores, Inc., 456 F.3d 1291, 1305, 1306 (11th Cir.
2006) (affirming default where a party’s bad faith “stonewalling,” including ignoring
multiple discovery orders and orders to appear over several years, interfered with
the “courts ability to manage its case load”); Aztec Steel Co., 691 F.2d at 481-82
(dismissal warranted after party willfully refused to provide basic information in
the six years that the case was pending); Hornady v. Outokumpu Stainless USA,
572 F.Supp.3d 1162, 1175 (S.D. Ala. 2021) (granting default judgment where the
record was “littered with discovery orders, discovery conferences, [five] motions to

The ALJ’s entering of the default judgment (while premature and in my view
counter to controlling law) was understandable given the difference between the Federal
Rules of Civil Procedure and OALJ’s Rules of Practice and Procedure. The Federal Rules
contemplate default in two distinct circumstances: under Rule 55 when a party fails to
respond to a complaint and under Rule 37 when a party who has responded subsequently
fails to cooperate in discovery. Because ordinarily there is no need to respond to a complaint
under the OALJ rules, there is no OALJ corollary to Fed. R. Civ. P. 55. Instead, OALJ Rule
18.57 is based on Fed. R. Civ. P. 37, which requires a continued pattern of abuse to justify
default rather than a simple failure to initially respond to discovery requests. This case -where Respondent did not appear at all before the default was entered -- is much more
analogous to a Rule 55 default rather than a Rule 37 default. But the distinction ultimately
makes no difference: whether analyzed under the demanding Rule 37 standards to impose
the sanction or under the “liberal” good cause standard to forgive it under Rule 55, the
degree of Respondent’s bad faith and resulting harm to Complainant simply are not
significant enough to sustain a default judgment.
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compel, and [two] motions for sanctions” all designed to “deter Defendant’s . . .
continued obstinate refusal” to participate in discovery).59
This is not to say Complainant should go without recourse or Respondent
should get a free pass for its conduct to this point. To the contrary, to the extent
Respondent’s delay can be shown to have caused the spoilation of evidence or other
difficulties in the prosecution of Complainant’s case, more measured responses -such as creating inferences regarding credibility for unavailable witnesses or
unpreserved documents or limiting defenses affected by any lost or damaged
evidence -- should be considered on remand to appropriately address the
circumstances.
I would therefore instruct the ALJ to hold off on default (for now). And I would
also vacate the damage and attorney fee orders.60

____________________________________
JONATHAN ROLFE
Administrative Appeals Judge

Given the lack of discussion in some recent ARB cases regarding default, the ALJ’s
approach is, once again, understandable. In Deepali, for example, the Board provided a onepage summary affirmance of an ALJ’s default judgment. But while the discussion was
similar to that in this case, the underlying substance dramatically differed. The
Department of Labor’s Wage and Hour Division concluded there the respondent
disregarded labor standards under several contracts, failed to pay employees their full
hourly rate, failed to pay required overtime, did not submit certified payrolls, and
misclassified workers as independent contractors. During the debarment procedures in
front of the ALJ, the respondent continued to engage in a continued pattern of abuse of
discovery lasting nearly three years. By contrast, OSHA dismissed Complainant’s action
here finding both that Respondent legitimately terminated Complainant after he was
involved in an accident and that he had not engaged in any protected activity prior to his
termination. Miller, for her part, continues to vigorously dispute OSHA’s findings. These
legitimate conflicts, in my view, should be resolved based on substance: “Defaults are seen
with disfavor because of the strong policy of determining cases on their merits.”
Fla. Physician’s Ins. Co. v. Ehlers, 8 F.3d 780, 783 (11th Cir. 1993) (citation omitted).
59

Notably, Respondent’s failure to respond to the ALJ’s Order Regarding Relief and
Damages after retaining counsel remains deeply concerning and highly relevant to any
future sanction the ALJ might impose. But in my view it is not yet enough (even when
combined with Respondent’s prior misconduct) to sustain a default judgment under the
authority cited above.
60

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Adol%3A952cfe62429c315b. Public record. Not legal advice.