Secretary of Labor v. Revelation Energy, LLC (Commission decision, March 14, 2018)

Plain-English summary

Revelation Energy asked the Commission to reopen a default order after failing to answer the Secretary's civil-penalty petition and later failing to respond on time to an order to show cause. The operator said the docket had been overlooked by its office but did not explain the underlying processing failure or its response more than two months after the default deadline. The Commission noted that Revelation had made three other reopening requests in two years based on office problems or staff oversights. It held that repeated unexplained administrative failures did not establish good cause or entitlement to extraordinary relief and denied the motion, leaving the default in place.

Decision snapshot

• Cited authority: 29 C.F.R. § 2700.1(b) and Federal Rule of Civil Procedure 60(b)
• Outcome: Revelation Energy's motion to reopen the default order was denied.
• Key point: A repeated claim that office staff overlooked a filing does not show good cause without a detailed explanation and corrective action addressing the underlying processing failure.

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.

REVELATION
ENERGY, LLC

:

:

:

:

:

:

:

Docket
No. KENT 2016-310

A.C.
No. 15-19437-405257

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 September 20, 2016, the Commission received from Revelation Energy, LLC (“Revelation”) a motion seeking to reopen a penalty assessment proceeding and relieve it from the Default Order entered against it. The Secretary did not oppose the request.

On
June 9, 2016, the Chief Administrative Law Judge issued an Order to Show Cause in response to Revelation’s perceived failure to answer the Secretary of Labor’s April 26, 2016 Petition for Assessment of Civil Penalty. By its terms, the Order to Show Cause was deemed a Default Order on July 11, 2016, when it appeared that the operator had not filed an answer within 31 days.

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).

The
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 contest the penalty or answer the Secretary’s petition, and any delays in filing for reopening. See Dynamic Energy, Inc. , 39 FMSHRC ___, 2017 WL 3581088 (Aug. 3, 2017); Higgins Stone Co. , 32 FMSHRC 33, 34 (Jan. 2010); Lone Mountain Processing, Inc. , 35 FMSHRC 3342, 3345 (Nov. 2013).

We
find that Revelation has failed to meet this burden here. In this case, the Secretary issued an assessment on April 26, 2016. Revelation never responded to that petition. The only explanation that the operator provided for this failure was that “Docket # KENT 2016-0310 was overlooked by our office and the Answer and Notice were never sent. This was an oversight on our part . . .” This – without any effort to explain the operator’s serial failures or to address their root causes – is at best an admission that Revelation’s failure to timely file its response to the petition was the result of an inadequate internal processing system, which is not a basis for reopening an assessment. See 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).

We note that the operator has filed three
other requests to reopen in the last two years. In all of those instances, the operator’s excuse for its failure to respond to the petitions was that there were problems with or oversights made by office staff. That empty excuse cannot be used repeatedly without elaboration or any effort to address what appears to be a pattern of neglect and disregard for Commission Orders. Ultimately, the operator must be accountable for the actions taken, or not taken, by its office employees.

Because
of Revelation’s failure to respond to the petition, the Chief Administrative Law Judge issued a Show Cause Order on June 9, 2016, ordering the operator to explain its lack of response within 31 days or face default. The operator did not respond in time. In fact, the operator did not respond to the Show Cause Order until September 20, 2016, 103 days after it was issued and more than 10 weeks after the operator’s failure to respond to the Order had resulted in its default. Beyond the inadequate explanation for the delay in responding to the petition, Revelation provided no explanation whatsoever for why it was over two months late in responding to the Show Cause Order.

As a result, we
find that Revelation failed to meet its burden of establishing good cause for failing to file a timely contest of the penalty petition or to comply with the deadline contained in the Order to Show Cause. Accordingly, we find that the operator has failed to demonstrate an entitlement to extraordinary relief, and thus we deny Revelation’s motion.

/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:

Joseph
G. Jacobs

Consultant

Revelation
Energy, LLC

P.O.
Box 249

Stanville,
KY 41659

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