On February 27, 2013, the United States Supreme Court issued its decision in Gabelli v. SEC. The Gabelli case centered on the interpretation of a federal statute of limitations that provides that “an action… for the enforcement of any civil fine, penalty, or forfeiture . . . shall not be entertained unless commenced within five years from the date when the claim first accrued.” The SEC asked the Court to read the so-called “discovery rule” into this statute of limitations so that the five year clock would not begin to tick until the alleged violation was discovered.
The Court rejected the SEC’s argument, instead holding that once a claim accrues, the five-year clock begins to run. The “standard rule,” the Court held, “is that a claim accrues when the plaintiff has a complete and present cause of action.” Although Gabelli involved the SEC rather than OSHA, and a different statute of limitations, the Court’s reasoning should apply equally to the six-month statute of limitations established by the OSH Act, thus preventing OSHA from relying on the discovery rule to extend the OSH Act’s limitations period.
In determining that the discovery rule cannot be read into the federal statute of limitations at issue, the Court reasoned that the statute established a “fixed date when exposure to the specified Government enforcement efforts ends,” advancing the very purpose of statutes of limitations, that is, the elimination of stale claims, and certainty about a plaintiff’s opportunity for recovery and a defendant’s potential liabilities. Specifically, statutes of limitations are intended to “promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.” This is a particularly salient point in the OSHA context where compliance officers have issued numerous citations for violations (such as recordkeeping violations) which allegedly took place years ago, and sometimes by predecessors of the employer receiving the citation. In such instances, documents and employees who may have been able to provide relevant information about the alleged violations are usually long gone, leaving the employer with little or no resources with which to defend itself.
The Court flatly declined to “leave defendants exposed to Government enforcement action not only for five years after their misdeeds, but for an additional uncertain period into the future.” While pointing out a number of reasons that an agency may not detect a violation before the statute expires (e.g., enforcement is not sufficiently funded or the agency’s enforcement program is ill-designed), the Court explained that this cannot justify a rule that would extend the limitations period in perpetuity.
This reasoning begs the question whether the continuing violation theory can be read into statutes of limitations in government enforcement actions. OSHA often argues that certain alleged violations, again recordkeeping is a good example, are continuing in nature, thus the statute of limitations is ongoing each day the violation persists. OSHA’s reliance on the continuing violation theory to extend the statute of limitations presents the same problems presented by the SEC’s reliance on the discovery rule – a statute of limitations that may never end.
For more information, please contact Mark Dreux, Head of the Arent Fox OSHA Group, at 202-857-6405.