Secretary of Labor v. Ricky J. Palasota, Jr. employed by BVS Construction, Inc. (Commission decision, March 5, 2018)

Plain-English summary

MSHA assessed $65,418 against BVS Construction and mailed the assessment to the company's address with Ricky Palasota Jr.'s name because agency records listed him as an officer. Palasota and his attorney mistakenly believed the assessment imposed personal liability and moved to reopen before the assessment against BVS had even become final. The Secretary clarified that no assessment existed against Palasota personally and argued that he lacked standing to challenge the company's penalty. The Commission agreed that only BVS had the right and responsibility to contest, and BVS had allowed the assessment to become final. It denied Palasota's motion while noting that the ruling did not prevent the Secretary from pursuing derivative liability under another theory.

Decision snapshot

• Cited authority: Federal Rule of Civil Procedure 60(b)
• Outcome: Palasota's motion to reopen was denied, and the final assessment remained an obligation of BVS Construction.
• Key point: A person who was not assessed and faced no personal proceeding lacked standing to reopen a penalty imposed only on the company.

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.

RICKY
J. PALASOTA, JR., employed by

BVS CONSTRUCTION, INC.

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Docket
No. CENT 2017-341-M

A.C.
No. 41-04570-437020

BEFORE:    Althen,
Acting Chairman; Jordan, Young, and Cohen, Commissioners

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 May 30, 2017, the Commission received a filing denominated as a “Motion to Reopen Final Order.”  The motion was filed by an attorney on behalf of Mr. Ricky J. Palasota Jr. (“Palasota Jr.”)  The background of the motion is strange, to say the least.

Records
of the Department of Labor’s Mine Safety and Health Administration (“MSHA”) indicate that on May 8, 2017 MSHA proposed an assessment of $65,418.00 against an operator identified as BVS Construction, Inc. (“BVS”).  MSHA assessed BVS as the operator of the Palasota Mine.  Following appropriate procedures, MSHA mailed the assessment to BVS’ address of record and addressed it to Ricky Palasota Jr. because the MSHA Legal Identification Report listed both Palasota Jr. and a Ricky J. Palasota Sr. as officers.  Further, the Mine Identification Report simply listed “Ricky J. Palasota” as the person in charge of health and safety at the mine.  The assessment was against BVS, the operator, and not against Palasota Jr. personally.

BVS
did not respond to the assessment.  Accordingly, the assessment against BVS became a final order of the Commission with respect to BVS on June 7, 2017.

On
May 30, 2017, eight days before the assessment against BVS became final, the attorney representing Palasota Jr. filed the instant Motion to Reopen a Final Order.  At that time, there was no final order against BVS.  More importantly for present purposes, there was not any proposed assessment against Palasota Jr.  The contents of the motion demonstrate that Palasota Jr. and his attorney apparently believed the assessment was a personal assessment against him.  The motion asserts that Palasota Jr. was not a shareholder or officer at BVS.  It states that Ricky J. Palasota, Sr., is the owner of BVS and requests that the orders, which were not final when the motion was filed, be reopened so that Palasota Jr. could have the “opportunity to defend these allegations and citations.”

The Secretary avers that Palasota Jr. is
not personally responsible for the assessed penalty.  The Secretary further asserts that, because Palasota Jr. has no personal liability for the assessed penalty, he has no standing to move to reopen the penalty.  See Bridgeport Music, Inc. v. Smith , 714 F.3d 932, 940-41 (6 th Cir. 2013) (non-parties do not have standing to file a Rule 60(b) motion; the only exception applies when the moving non-party is strongly and directly affected by the judgement). As a result, the Secretary opposes the motion to reopen.

Based upon the fillings before us, MSHA
has not issued an assessment against Palasota Jr.  The Secretary provided documentation showing that the proposed assessment was against only BVS, and MSHA delivered it to BVS’ address of record.  Thus, there is no proceeding against Palasota Jr.  Accordingly, Palosota Jr. had neither the right nor the responsibility to challenge the assessment.  Only BVS was responsible for contesting the assessed penalty and, now that the penalty has become final, BVS is responsible for paying the penalty.

In order to provide a completed record,
the Motion to Reopen a Final Order is denied. [1]

/s/ William I. Althen

William I. Althen, Acting Chairman

/s/ Mary Lu Jordan

Mary Lu Jordan, Commissioner

/s/ Michael G. Young

Michael G. Young, Commissioner

/s/ Robert F. Cohen, Jr.

Robert F. Cohen, Jr., Commissioner

Distribution:

Rick
J. Palasota, Jr.

P.O.
Box 5409

Bryan
TX, 77805

Stephen
R. Hollas, Esq.

Stephen
R. Hollas, PC

405
Technology Pkwy

Building
C

College
Station, TX 77845

Ali
Beydoun, Esq.

Office
of the Solicitor

U.S.
Department of Labor

201
12th St. South, Suite 401

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 decision
does not preclude the Secretary from seeking to collect an obligation of BVS from any other entity or person under an alter ego or other theory of derivative liability.