Bonham Concrete, Inc. (ALJ decision, October 15, 2012)

Plain-English summary

Bonham Concrete asserted that it could not pay a proposed $23,857 civil penalty. The Secretary asked to subpoena the company's accountant for tax returns, financial statements, asset and debt records, financing documents, corporate minutes, and sale records. Judge Thomas P. McCarthy held that Commission Rule 60(a) permits subpoenas for physical evidence from nonparties and that the Federal Rules of Civil Procedure provide additional guidance. He granted the request and directed that the subpoena be issued separately.

Decision snapshot

• Cited rules: 29 C.F.R. §§ 2700.1(b) and 2700.60(a)
• Outcome: The Secretary's request for a subpoena to Bonham Concrete's accountant was granted.
• Key point: An operator's inability-to-pay claim can support discovery of detailed financial records from its nonparty accountant.

Full text (FMSHRC public release)

Federal Mine Safety and Health Review Commission

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

1331 PENNSYLVANIA AVE., N.W., SUITE 520N

WASHINGTON, DC 20004-1710

TELEPHONE: 202-434-9958 / FAX: 202-434-9949

October 15, 2012

SECRETARY OF LABOR,   

MINE SAFETY AND HEALTH    

ADMINISTRATION (MSHA), 

Petitioner

v.

BONHAM CONCRETE, INC.,

Respondent

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CIVIL PENALTY PROCEEDING

Docket No. CENT 2011-49-M

A.C. No. 34-00353-233829

Mine: Hope Sand & Gravel

ORDER GRANTING PETITIONER’S REQUEST

FOR SUBPOENA DUCES TECUM

Before:            Judge McCarthy

This case is before me upon a petition for assessment of a civil penalty under section 105(d) of the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 815(d). On October 5, 2012, a conference call was held between the parties and the undersigned to discuss the status of settlement negotiations and to schedule a hearing date for the above-captioned case. During the call, the Secretary requested that a subpoena duces tecum be issued to Respondent’s accountant, Steve Mohundro, for the purpose of obtaining documents relating to Respondent’s alleged inability to pay the propose penalty of $23,857. The Secretary has requested that Mohundro produce the following documents:

1.         complete copies of federal tax returns for Bonham Concrete, Inc. and its subsidiaries, from 2007 to present, including all schedules, worksheets, and forms;

2.         copies of all audited or unaudited financial reports or statements for Bonham Concrete, Inc. and its subsidiaries from 2007 to the present;

3.         copies of documents provided by Bonham Concrete, Inc. and its subsidiaries, for the purpose of preparing tax returns from 2007 to the present;

4.         copies of documents provided by Bonham Concrete, Inc. and its subsidiaries, that reflect sales made and income from sales from 2007 to the present. This request specifically includes, but is not limited to, sales of products sold and the sale of any subsidiary of Bonham Concrete (and any of its assets);

5.         copies of documents provided by Bonham Concrete, Inc. and its subsidiaries, that reflect or identify assets owned by Bonham Concrete, including, but not limited to, cash, notes, accounts receivable, securities, inventories, items of ownership convertible into cash, goodwill, fixtures, machinery, and/or real estate;

6.         copies of documents provided by Bonham Concrete, Inc. and its subsidiaries that reflect any debts, accounts receivables or accounts payables;

7.         copies of documents provided by Bonham Concrete, Inc. and its subsidiaries, indicating that Bonham Concrete, Inc. and its subsidiaries secured for any type of loan or financing during the past five years;

8.         copies of corporate books and minutes for Bonham Concrete, Inc. and its subsidiaries from 2007 to the present;

9.         copies of any bills of sales, sales agreements, and/or documents related to any sale of Bonham Concrete Inc. and its subsidiaries; and

10.       copies of any bills of sales, sales agreements, and/or documents related to the sale of any entity, land or tangible or intangible property owned by Bonham Concrete, Inc. and its subsidiaries.

Commission Rule 2700.60(a) specifically authorizes an ALJ to issue a subpoena for the production of physical evidence on his own motion or on the oral or written application of a party. Rule 60(a) places no limit on the types of parties (i.e. individuals, parties, non-parties, etc.) to which a subpoena may be issued. Further, Federal Rule of Procedure 34(c), explicitly allows for the issuance of a subpoena to a non-party for the production of “documents and tangible things.” The Commission’s procedural rules provide that on questions of procedure not regulated by the Act, the Commission’s Rules, or the Administrative Procedure Act, 5 U.S.C. § 551 et seq., the Commission and its Judges shall be guided buy the Federal Rules of Civil Procedure so far as “practicable.” 29 C.F.R. § 2700.1(b).

Accordingly, the Secretary’s motion is GRANTED. A subpoena will be issued under separate cover to be served on Mr. Mohundro by the Secretary.

/s/ Thomas P. McCarthy

Thomas P. McCarthy

Administrative Law Judge

Distribution:

Lauren McDougal, Esq., Office of the Solicitor, U.S. Department of Labor, 1999 Broadway, Suite 800, Denver, CO 80202-5710

Gerald Hope, Bonham Concrete, Inc., 805 W. Sam Rayburn Drive, Bonham, TX 75418

/tjr

Lauren McDougal, Esq.

Office of the Solicitor

U.S. Department of Labor

1999 Broadway, Suite 800

Denver, CO 80202-5710

Gerald Hope

Bonham Concrete, Inc.

805 W. Sam Rayburn Drive

Bonham, TX 75418