Kenamerican Resources, Inc.

Plain-English summary

Kenamerican Resources intended to contest one penalty assessment but its accounting department sent the hearing request with a check paying 10 other assessments. The operator said the filing error resulted from an accounting and computer-processing mistake, and the Secretary did not oppose reopening the penalty. The Commission held that it can reopen an uncontested assessment that became final under section 105(a) when circumstances satisfy Federal Rule of Civil Procedure 60(b), but found the record insufficient to decide whether Kenamerican met that standard. It remanded the matter to a judge to determine whether relief was appropriate, with two Commissioners stating that the motion should instead be granted because the Secretary did not oppose it.

Decision snapshot

• Governing provision: 30 U.S.C. § 815(a)
• Outcome: The request to reopen the final penalty assessment was remanded for a judge to determine whether Rule 60(b) relief was warranted.
• Key point: A filing mistake may justify reopening a penalty that became final by operation of section 105(a), but the operator must establish the facts supporting relief.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
1730 K STREET NW, 6TH FLOOR
WASHINGTON, D.C. 20006

                                  December 22, 1999

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. KENT 2000-37
: A.C. No. 15-17741-03542
KENAMERICAN RESOURCES, INC. :

BEFORE: Jordan, Chairman; Marks, Riley, Verheggen, and Beatty, Commissioners

                                        ORDER

BY: Jordan, Chairman; Riley and Beatty, Commissioners

   This matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C.

§ 801 et seq. (1994) (“Mine Act”). On November 18, 1999, the Commission received from
Kenamerican Resources, Inc. (“Kenamerican”) a request 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). The Secretary of Labor does not oppose the motion for relief filed by Kenamerican.

   Under section 105(a) of the Mine Act, an operator has 30 days following receipt of the

Secretary of Labor’s proposed penalty assessment within which to notify the Secretary that it
wishes to contest the proposed penalty. 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).

    In its motion, Kenamerican asserts that its failure to file a hearing request to contest the

proposed penalty for Citation No. 7640047 was due to a processing error made by its accounting
department. Mot. at 2. The penalty assessment in question was issued to Kenamerican, along
with 10 other penalty assessments for other violations. Id. at 1. Kenamerican alleges that while
it intended to pay the penalty assessments for the 10 other violations, it intended to contest the
penalty assessment for Citation No. 7640047. Id. Kenamerican states that its accounting
department apparently sent a check in the amount of $550 for payment of the 10 single penalty
assessments, along with a hearing request to contest the penalty assessment for Citation No.
7640047, rather than separately filing the request. Id. Kenamerican maintains that, upon
learning of this misfiling, it sent a letter dated October 28, 1999, to MSHA’s Civil Penalty

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Compliance Office explaining the misfiling and requesting MSHA to accept the letter as its
hearing request. Ex. B. It claims that MSHA responded by letter dated November 17, 1999,
stating that it received Kenamerican’s payment and hearing request on October 29, 1999, but
denying the request because the penalty assessment had become a final order of the Commission
on October 13.1 Ex. C. Finally, Kenamerican states, without elaborating, that the misfiling also
was due to a computer error. Mot. at 3. Kenamerican attached to its request copies of the
proposed penalty assessments, the certified mail receipt, and correspondence with MSHA. Exs.
A-C. Kenamerican requests that the Commission reopen the final order and allow the contest to
proceed to hearing.

    We have held that, in appropriate circumstances and pursuant to Fed. R. Civ. P. 60(b),

we possess jurisdiction to reopen uncontested assessments that have become final by operation
of section 105(a). See, e.g., Jim Walters Resources, Inc., 15 FMSHRC 782, 786-89 (May 1993);
Rocky Hollow Coal Co., Inc., 16 FMSHRC 1931, 1932 (Sept. 1994). We have also observed
that default is a harsh remedy and that, if the defaulting party can make a showing of adequate
or good cause for the failure to timely respond, the case may be reopened and appropriate
proceedings on the merits permitted. See Coal Preparation Services, Inc., 17 FMSHRC 1529,
1530 (Sept. 1995). In accordance with Rule 60(b)(1), we have previously afforded a party relief
from a final order of the Commission on the basis of inadvertence, mistake, or excusable
neglect. See National Lime & Stone, Inc., 20 FMSHRC 923, 925 (Sept. 1998); Peabody Coal
Co., 19 FMSHRC 1613, 1614-15 (Oct. 1997).

   1
      Kenamerican claims that MSHA received its hearing request on October 21, 1999.

Mot. at 1. However, consistent with statements in MSHA’s November 17 letter, the return
receipt indicates that its hearing request was delivered to MSHA and signed for on October 29,
1999. Exs. A, C.

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    On the basis of the present record, we are unable to evaluate the merits of Kenamerican’s

position.2 In the interest of justice, we remand the matter for assignment to a judge to determine
whether Kenamerican has met the criteria for relief under Rule 60(b). See Benton County Stone,
Inc., 21 FMSHRC 5, 5-6 (Jan. 1999) (remanding operator’s request to reopen final order where
the operator’s secretary internally misfiled the proposed penalties); Del Rio, Inc., 19 FMSHRC
467, 467-68 (Mar. 1997) (remanding for judge’s consideration operator’s request to reopen
penalty assessment after green card was misfiled in accounts payable file). If the judge
determines that such relief is appropriate, this case shall proceed pursuant to the Mine Act and
the Commission’s Procedural Rules, 29 C.F.R. Part 2700.

                                         Mary Lu Jordan, Chairman




                                         James C. Riley, Commissioner




                                         Robert H. Beatty, Commissioner




   2
      In view of the fact that the Secretary does not oppose Kenamerican’s motion to reopen

this matter for a hearing on the merits, Commissioners Marks and Verheggen conclude that the
motion should be granted.

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Distribution

Adele L. Abrams, Esq., David Farber, Esq., Patton Boggs, LLP, 2550 M Street, N.W.,
Washington, D.C. 20037

W. Christian Schumann, Esq., Office of the Solicitor, U.S. Department of Labor, 4015 Wilson
Blvd., Suite 400, Arlington, VA 22203

jhe

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