Secretary of Labor v. Continental Cement Company, LLC

Plain-English summary

Continental Cement's counsel received two penalty petitions but mistakenly forwarded one to himself instead of an assistant, leaving 11 citations unanswered. Counsel later overlooked a show-cause order while engaged in trial, and his tracking system incorrectly showed an active docket. He discovered the default through a delinquency letter and promptly moved to reopen. The Commission majority found mistake, vacated the default, and remanded the case, while warning that future failures caused by inadequate processes might not be excused. Commissioners Baker and Marvit dissented because the missed petition, missed second chance, and inaccurate tracking reflected several internal breakdowns.

Decision snapshot

• Cited authority: 30 U.S.C. §§ 823(d)(1) and 823(d)(2)(A)(i)
• Outcome: The default order was vacated and the case was remanded for further proceedings.
• Key point: Prompt action after discovery supported relief, but repeated processing failures may defeat future reopening requests.

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.

CONTINENTAL
CEMENT COMPANY, LLC

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Docket
No. CENT 2022-0064

A.C.
No. 23-02434-546589

BEFORE:
Jordan, Chair; Althen, Rajkovich , Baker, and
Marvit, Commissioners

ORDER

BY: Jordan, Chair;
Althen and Rajkovich, Commissioners

        This

matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
801 et seq. (2018) (“Mine Act”). On August 10, 2022, the Commission received
from Continental Cement Company, LLC (“Continental”) a motion seeking to reopen
a penalty assessment proceeding and relieve it from the Default Order entered
against it.

        On

April 12, 2022, the Chief Administrative Law Judge issued an Order to Show
Cause in response to Continental’s perceived failure to answer the Secretary of
Labor’s February 10, 2022 Petition for Assessment of Civil Penalty. By its
terms, the Order to Show Cause was deemed a default May 14, 2022, when it
appeared that the operator had not filed an answer within 30 days.

Continental Cement states that it failed
to timely file an answer to the Secretary’s petition due to inadvertence. The
operator explains that it filed a timely contest of penalties associated with
twelve citations listed on a proposed penalty assessment (assessment control
number 000546589). On February 10, 2022, the Department of Labor’s Mine Safety
and Health Administration (“MSHA”) forwarded a petition for one of the
citations and a second petition for the remaining eleven of the twelve
citations. The operator’s counsel attempted to forward the emails to an
assistant to prepare answers. Although one email reached the assistant and one
answer was timely filed, counsel inadvertently forwarded the second email only
to himself, and the answer with respect to the eleven penalties was not filed. On
April 12, 2022, Counsel received the April 12 order. However, Counsel
inadvertently overlooked it because he was engaged in trial litigation at the
time of receipt. The issue was further compounded by the fact that counsel's
tracking of the assessment control number indicated an active docket. Counsel
learned of the mistake upon receiving a July 28, 2022 delinquency letter from
MSHA, and immediately prepared the subject motion to reopen. The Secretary does
not oppose the request to reopen, but notes that she may oppose future requests
to reopen penalty assessments that are not answered in a timely manner.

        The

Judge’s jurisdiction in this matter terminated when the default occurred. 29
C.F.R. § 2700.69(b). Under the Mine Act and the Commission’s procedural rules,
relief from a judge’s decision may be sought by filing a petition for
discretionary review within 30 days of its issuance. 30 U.S.C. §
823(d)(2)(A)(i); 29 C.F.R. § 2700.70(a). If the Commission does not direct
review within 40 days of a decision’s issuance, it becomes a final decision of
the Commission. 30 U.S.C. § 823(d)(1). Consequently, the Judge’s order here has
become a final decision of the Commission.

        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”); Jim
Walter Res., Inc. , 15 FMSHRC 782, 786-89 (May 1993). 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 will be permitted. See Coal Prep.
Servs., Inc. , 17 FMSHRC 1529, 1530 (Sept. 1995).

Having reviewed Continental’s request
and the Secretary’s response, we find that the operator’s failure to
properly file a response was the result of mistake. [1]
We also note the operator’s prompt filing of its motion to reopen upon learning
of the issue. In the interest of justice, we
hereby reopen the proceeding and vacate the Default Order. Accordingly, this
case is remanded to the Chief Administrative Law Judge for further proceedings
pursuant to the Mine Act and the Commission’s Procedural Rules, 29 C.F.R. Part
2700.

/s/ Mary Lu Jordan

                                                                                Mary

Lu Jordan, Chair

/s/ William I. Althen

William I. Althen, Commissioner

/s/ Marco M. Rajkovich, Jr.

Marco M. Rajkovich, Jr., Commissioner

Commissioner Baker and Commissioner
Marvit, dissenting:

We would find that that Continental Cement
Company, LLC (“Continental”) failed to establish good cause to reopen in this
case.

        A

party seeking the reopening of an assessment bears the burden of establishing
that that the default was the result of more than mere carelessness. Noranda
Alumina, LLC , 39 FMSHRC 441, 443 (Mar. 2017). The Commission has
consistently held 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 an assessment. See
e.g. 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).

Where a defaulting party was aware of or
should have been aware of its responsibilities to the opposing party and to the
court and has failed to live up to those responsibilities through unexcused
carelessness or negligence, relief from default should not be granted. C.K.S.
Engineers, Inc. v. White Mountain Gypsum Co. , 726
F.2d 1202, 1206 (7th Cir. 1984); see also Lavespere v.
Niagara Machine & Tool Works, Inc. , 910 F.2d 167, 173 (5th Cir. 1990)
(stating carelessness or negligence is not sufficient to warrant relief under
Rule 60(b)(1)). Although a default judgment is a harsh sanction and the law
favors trials on the merits, these considerations must be balanced against the
need to promote efficient litigation and to protect the interests of all
litigants. C.K.S. Engineers , 726 F.2d at 1206. Default judgment is only
an effective deterrent against irresponsible conduct in litigation if relief
from a default judgment under rule 60(b) is perceived as an exceptional remedy.
Id .

In the instant case, Continental does not
assert a mistake caused its failure to timely respond to the Secretary’s
assessment. Instead, it alleges an entire series of errors. Specifically, on
February 10, 2022, Continental’s counsel received two petitions from MSHA, but
only successfully forwarded one of those petitions to an assistant for
processing. On April 12, 2022, Continental received a Show Cause Order from the
Commission, regarding its failure to timely respond to the February 10, 2022,
assessment. That is, Continental was given a second chance to respond to the
assessment before default. However, counsel for Continental was engaged in a
trial and forgot he had received the Show Cause Order. Finally, counsel for
Continental maintained an internal tracking system for assessments, but that
system contained inaccurate information, showing that the docket was active.

Despite receiving two opportunities to
respond to the Secretary’s assessment, Continental failed to timely file an
answer. This was the result of several breakdowns in its internal processing
system. We do not believe that Continental has established that it is entitled
to a third bite at the apple or the “extraordinary” relief of reopening. See
Lone Mountain Processing, Inc. , 35 FMSHRC 3342 (Nov. 2013) (characterizing
reopening as extraordinary relief).

In
light of these circumstances we, respectfully, dissent.

/s/ Timothy J. Baker

Timothy J. Baker, Commissioner

/s/ Moshe Z. Marvit

Moshe Z. Marvit, Commissioner

Distribution:

William
K. Doran, Esq.

Ogletree,
Deakins, Nash, Smoak & Stewart, P.C.

1909
K Street, N.W., Suite 1000

Washington,
D.C. 20006

[email protected]

April
Nelson, Esq.

Associate
Solicitor

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Emily
Toler Scott, Esq.

Counsel
for Appellate Litigation

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Melanie
Garris

USDOL/MSHA, OAASEI/CPCO

201 12th Street South, Suite 401

Arlington, VA 22202

[email protected]

Chief
Administrative Law Judge Glynn F. Voisin

Federal Mine Safety Health Review Commission

Office
of the Chief Administrative Law Judge

1331 Pennsylvania Avenue, NW Suite 520N

Washington, DC 20004-1710

[email protected]

[1] We caution the
operator that future motions to reopen will not be granted where untimely
filings are due to mistake or neglect that rise to the level of inadequate
internal process or are otherwise not excusable.