Secretary of Labor v. Noranda Alumina, LLC (Commission decision, December 18, 2015)

Plain-English summary

Noranda Alumina paid a proposed penalty assessment in full instead of contesting it. The employee who normally handled assessments had left the company on the day it arrived, and replacement staff treated the assessment as an ordinary bill despite repeated contest instructions and a separate notice of contest rights. The Secretary opposed reopening because the company lacked a reliable internal procedure for handling assessments. The Commission agreed that the personnel transition exposed an inadequate processing system and denied the motion, leaving the final assessment in place.

Decision snapshot

• Cited authority: 29 C.F.R. § 2700.1(b); 30 U.S.C. § 815(a)
• Outcome: Noranda's motion to reopen the final penalty assessment was denied.
• Key point: Staff turnover does not establish good cause when the company has no dependable system for recognizing and processing a proposed penalty assessment.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

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

WASHINGTON,
DC 20004-1710

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH   

ADMINISTRATION
(MSHA),       

v.

NORANDA
ALUMINA LLC

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Docket
No. CENT 2015-71-M

A.C.
No. 16-00352-355843

BEFORE:  Jordan,
Chairman; Cohen, and Nakamura, Commissioners[1]

ORDER

BY THE
COMMISSION:

This
matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C.   
§ 801 et seq. (2012) (“Mine Act”). On November 3, 2014, the Commission received from Noranda Alumina LLC (“Noranda”) a motion seeking to reopen a penalty assessment that had become a final order of the Commission pursuant to section 105(a) of the Mine Act, 30 U.S.C. § 815(a).

Under
section 105(a) of the Mine Act, an operator who wishes to contest a proposed penalty must notify the Secretary of Labor no later than 30 days after receiving the proposed penalty assessment. If the operator fails to notify the Secretary, the proposed penalty assessment is deemed a final order of the Commission. 30 U.S.C. § 815(a).

We
have held, however, that in appropriate circumstances, we possess jurisdiction to reopen uncontested assessments that have become final Commission orders under section 105(a). Jim Walter Res., Inc., 15 FMSHRC 782, 786-89 (May 1993) (“JWR”). In evaluating requests to reopen final orders, the Commission has found guidance in Rule 60(b) of the Federal Rules of Civil Procedure under which the Commission may relieve a party from a final order of the Commission on the basis of mistake, inadvertence, excusable neglect, or other reason justifying relief. See 29 C.F.R. § 2700.1(b) (“the Commission and its Judges shall be guided so far as practicable by the Federal Rules of Civil Procedure”); JWR, 15 FMSHRC at 787. We have also observed that default is a harsh remedy and that, if the defaulting party can make a showing of good cause for a failure to timely respond, the case may be reopened and appropriate proceedings on the merits permitted. See Coal Prep. Servs., Inc., 17 FMSHRC 1529, 1530 (Sept. 1995).

Records
of the Department of Labor’s Mine Safety and Health Administration (“MSHA”) indicate that the proposed assessment was delivered on July 18, 2014, and that the proposed assessment was paid in full by check dated July 25, 2014.  Noranda asserts that it failed to timely contest the proposed assessment because the individual who was responsible for handling proposed assessments left the company the day the proposed assessment was delivered. Noranda further contends that the company officials who then handled the proposed assessment thought it was a “bill” and directed that it be paid. The Secretary opposes the request to reopen, arguing that the operator failed to timely contest the proposed assessment because of its inadequate internal procedures. The Secretary notes that the proposed assessment explicitly and repeatedly explained that it was a proposed assessment which the operator could contest if it wished to do so, with a separate sheet designated as “Notice of Contest Rights and Instructions”.

The Commission
has made it clear that where a failure to contest a proposed assessment results from an inadequate or unreliable internal processing system, the operator has not established grounds for reopening the assessment. Shelter Creek Capital, LLC, 34 FMSHRC 3053, 3054 (Dec. 2012); Oak Grove Res., LLC, 33 FMSHRC 103, 104 (Feb. 2011); Double Bonus Coal Co., 32 FMSHRC 1155, 1156 (Sept. 2010); Highland Mining Co., 31 FMSHRC 1313, 1315 (Nov. 2009); Pinnacle Mining Co., 30 FMSHRC 1066, 1067 (Dec. 2008); Pinnacle Mining Co., 30 FMSHRC 1061, 1062 (Dec. 2008). Here, the failure to timely contest the proposed assessment after the departure of the individual who previously handled such matters  represents an inadequate internal processing system, and fails to establish good cause for reopening a final order.

Accordingly,
we deny Noranda’s motion.    

/s/ Mary Lu
Jordan

Mary Lu Jordan, Chairman

/s/ Robert F. Cohen, Jr.

Robert F. Cohen Jr., Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Distribution:

Linda
Otaigbe, Esq.

Jackson
Lewis, P.C.

10701
Parkridge Blvd.

Suite
300

Reston,
VA 20191

W.
Christian Schumann, Esq.

Office
of the Solicitor

U.S.
Department of Labor

201
12th St. South, Suite 500

Arlington,
VA 22202-5450

Chief
Administrative Law Judge Robert J. Lesnick

Federal
Mine Safety & Health Review Commission

1331
Pennsylvania Ave. N.W., Suite 520N

Washington,
DC 20004-1710

Melanie
Garris

Office
of Civil Penalty Compliance

Mine
Safety and Health Administration

U.S.
Department of Labor

201
12th St. South, Suite 500

Arlington,
VA 22202-5450

[1] This case has
been delegated to a panel of three Commissioners pursuant to section 113(c) of the Mine Act for the limited purpose of assessing the merits of the motion to reopen. 30 U.S.C. § 823(c).