Secretary of Labor v. Cooper Stone, LLC

Plain-English summary

Cooper Stone said it did not receive a proposed assessment because its mine office was in a high-crime area with mail problems. The company had identified those problems and proposed changing its address in 2021, but had not corrected the address when the assessment was delivered in 2023. Postal records also showed that the mine's operations manager signed for the assessment. The Commission found additional gaps in Cooper Stone's explanation, including its reliance on silence in an informal email and its failure to explain why it waited six months after a delinquency notice. It denied reopening because the operator had not shown good cause and its mail and contest processes were inadequate.

Decision snapshot

• Cited authority: 30 U.S.C. § 815(a)
• Outcome: The motion to reopen the final penalty assessment was denied.
• Key point: Known mail-delivery problems do not excuse a missed contest when the operator fails to correct its address and cannot explain later delays.

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.

COOPER
STONE, LLC

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Docket
No. CENT 2024-0017

A.C.
No. 41-05051-570029

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BEFORE: Jordan,
Chair; Baker, and Marvit, 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. (2018) (“Mine Act”). On November 7, 2023, the Commission received
from Cooper Stone, LLC (“Cooper Stone”) 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 to Cooper Stone’s address
of record on January 23, 2023, and became a final order of the Commission on
February 22, 2023.

Cooper Stone asserts that it never
received the assessment paperwork because the mine office is in a “high crime”
area, and that the operator has taken steps to address the issue by changing
the operation’s mailing address to the owner’s home address. Cooper Stone explains
that it emailed MSHA in April 2023 to request a status update on various
citations, including those at issue, and to state that it wished to contest
them. When MSHA’s response made no reference to the citations at issue, the
operator assumed they had been properly contested. Cooper Stone asserts that it
learned the citations had not been properly contested on October 26, 2023, and
moved to reopen the assessment the next day.

The Secretary opposes the motion. With
respect to Cooper Stone’s assertion that it never received the assessment, the
Secretary notes that the assessment was successfully delivered to the
operator’s address of record on January 23, 2023.[1]
She also notes that the operator indicated an intent to change its address of
record to resolve mail delivery problems as far back as April 2021 (Cooper
Stone LLC, 43 FMSHRC 515 (Dec. 2021)), and yet its address had not been
updated as of December 15, 2023.[2]
With respect to Cooper Stone’s asserted belief the citations had been contested,
the Secretary claims the operator should have known how to properly contest a
proposed assessment, as Cooper Stone had been in operation for over 30 years
and every assessment includes contest instructions. Finally, the Secretary
asserts that Cooper Stone failed to explain why it only became aware of the
issue in October 2023, six months after MSHA’s April 10, 2023 delinquency
notification. In light of these considerations, the Secretary alleges that
Cooper Stone has shown an inadequate internal processing system and a lack of
good faith, and has failed to justify reopening.

The Commission has long 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 the assessment. See, e.g., Pinnacle Mining Co. LLC,
30 FMSHRC 1066, 1067 (Dec. 2008) (denying motion to reopen where an
operator condoned a mail delivery system which predictably resulted in missed
deadlines). Additionally, we have held that a repeated failure to update one’s
address of record would indicate an inadequate internal process. ITAC,
46 FMSHRC 80, 82 (Feb. 2024).

Here, Cooper Stone determined in April
2021 that it had systemic mail delivery issues that could likely be resolved by
changing its mailing address, but still had not resolved the issue by January
2023 when the assessment at issue was delivered. In other words, two system
inadequacies contributed to Cooper Stone’s failure to timely contest the
January 2023 assessment: the mail system itself, and the failure to correct it.[3]
In light of this, Cooper Stone’s assertion that it never received the
assessment does not constitute good cause to reopen the final penalty.

Furthermore, a party seeking to reopen a
final penalty bears the burden of showing that it is entitled to such relief,
through a detailed explanation of its failure to timely resond. E.g., Revelation
Energy LLC, 40 FMSHRC 375, 375-76 (Mar. 2018). We find that certain
elements of Cooper Stone’s explanation lack sufficient detail to justify
reopening. First, the operator has failed to reconcile the owner’s claim that
he never received the assessment with documentation indicating that the
assessment was signed for by the mine’s operations manager. Second, the
operator has not adequately explained how it ultimately learned that the
assessment had not been properly contested, or why it did not become aware of
the issue until six months after MSHA issued a delinquency notice.[4]
See Highland Mining Co., 31 FMSHRC 1313, 1317 (Nov. 2009) (motions filed
more than 30 days after an operator receives a delinquency notice should
include an explanation for the delay).

Having
reviewed Cooper Stone’s request and the Secretary’s response, we find that the
operator has not demonstrated good cause for reopening the captioned
proceeding. Accordingly, we deny Cooper Stone’s motion.

/s/ Mary Lu Jordan

Mary
Lu Jordan, Chair

/s/ Timothy J. Baker

Timothy J. Baker, Commissioner

/s/ Moshe Z. Marvit

Moshe Z. Marvit, Commissioner

Distribution:

Micah
Flippen

Cooper
Stone LLC

1003
Hemingway Drive

College
Station, TX 77845

[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] USPS records
indicate the assessment was signed for by “N Abrham,” most likely the mine’s Operations
Manager Neil Abraham. Sec’y Opp. Exs. B, C.

[2] While the
operator’s address of record had not been updated as of the Secretary’s filing
(December 15, 2023), MSHA records show that the mine’s legal address has since
been changed to the owner’s home address. The date on which this occurred is
not in the record.

[3] We also agree
with the Secretary that the operator’s apparent ignorance of the proper
procedure for contesting a proposed assessment despite over 30 years of
operation may indicate further inadequacies with the operator’s internal
processing system.

[4] Cooper Stone implies
that between May and October it believed the assessment had been
properly contested, because MSHA’s May 26 response email made no mention of the
relevant citations. However, we question whether it was reasonable for a mine
operator of over 30 years’ experience, who has been sent a delinquency notice
indicating that an assessment has become final, to interpret a non-response to
an informal email stating that an operator wishes to contest an
assessment as confirmation that the assessment had been properly contested. This
is particularly true where the email which contained MSHA’s non-response
regarding the citations at issue specifically noted that contest proceedings
regarding other assessments would not begin until MSHA had received the proper
paperwork.