Byholt, Inc.

Plain-English summary

Byholt asked the Commission to reopen two proposed penalty assessments that became final after it missed the 30-day contest deadlines. The company said it misunderstood when to contest section 104(d) orders and later delayed while searching for counsel. Even after the Commission allowed amended motions, Byholt did not adequately explain why it waited months after receiving the assessments and delinquency notices. The Commission found no good cause and denied both motions with prejudice.

Decision snapshot

• Cited provisions: 29 C.F.R. § 2700.1(b); 30 U.S.C. § 815(a)
• Outcome: Both motions to reopen the final penalty assessments were denied with prejudice.
• Key point: Confusion about contest procedures and a prolonged search for counsel do not establish good cause when the operator leaves months of delay unexplained.

Full text (FMSHRC public release)

Federal Mine Safety and Health Review Commission

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

November 5, 2012

SECRETARY OF LABOR, 

MINE SAFETY AND HEALTH 

ADMINISTRATION (MSHA) 

v.

BYHOLT, INC. 

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Docket No. LAKE 2010-903-M

A.C. No. 20-02909-208139

Docket No. LAKE 2010-904-M

A.C. No. 20-02909-211111

BEFORE: Jordan, Chairman; Young and Nakamura, Commissioners

ORDER

BY THE COMMISSION:

These matters arise under the Federal Mine Safety and Health Act of 1977, 30 U.S.C.
§ 801 et seq. (2006) (“Mine Act”). On August 17, 2010, the Commission received from Byholt,
Inc. (“Byholt”) two motions seeking to reopen two penalty assessments that had become final
orders 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 section 105(a) orders, the Commission has found guidance in Rule 60(b) of the
Federal Rules of Civil Procedure under which, for example, a party could be entitled to relief
from a final order of the Commission on the basis of mistake, inadvertence, or excusable neglect.
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).

MSHA’s record indicates that proposed assessment No. 000208139 was delivered on or
about January 13, 2010, signed for by M. Cindrena, and became a final order of the Commission
on February 12, 2010. A notice of delinquency was mailed on March 31, 2010, and the case was
referred to the U.S. Department of Treasury for collection on July 29, 2010. Proposed
assessment No. 000211111 was delivered on February 19, 2010, signed for by M. Andrews, and
became a final order of the Commission on March 22, 2010. A notice of delinquency was mailed
on May 6, 2010, and the case was referred to the U.S. Department of Treasury for collection.

Byholt asserted that although it routinely paid the penalties, it had been advised that it
should contest 104(d) orders if it had a legitimate defense. Byholt stated that upon receiving
assessment No. 000208139 it mistakenly believed it had to wait to contest all the orders together,
and upon receiving assessment No. 000211111 it was unsure how to proceed. Byholt further
contended that by the time it was able to retain counsel the contest deadline had passed.

The Secretary opposed the requests to reopen, noting that the operator identified no
exceptional circumstances warranting reopening. The Secretary stated that the operator’s
professed misunderstanding of MSHA’s contest procedures was particularly inexcusable because
the contest instructions are on the proposed assessment. Moreover, the Secretary asserted that
Byholt failed to explain why it waited over four and three months, respectively, to request
reopening after it received the delinquency notices.

On September 9, 2011 the Commission issued an order denying without prejudice
Byholt’s motions to reopen, since they lacked sufficient detail and did not provide adequate
grounds for reopening. The Commission found it significant that Byholt also failed to explain
why it delayed over four and three months in responding to the delinquency notices. We
encouraged Byholt to include a full description of the facts supporting its claim, and provide
documents detailing the problem preventing it from timely contesting the proposed assessment.
Moreover, we emphasized that we would specifically expect Byholt to provide verified and
detailed affidavits and documentation substantiating what it did after receiving the delinquency
notices and why it delayed in seeking reopening.

In its amended motion to reopen, counsel for Byholt submitted an identical copy of its
original motion, adding only one new paragraph. In the new paragraph, Byholt admits it received
the delinquency notices, but avers that they did not provide instructions to file motions to reopen.
Byholt further states that after receiving the delinquency notices it delayed paying the debt while
searching for counsel. As additional documentation, the amended motion included the affidavit
of Byholt’s president, who added – beyond his original affidavit – that after receiving the
delinquency notices he hesitated to pay, since he did not know whether there were any other steps
he could take. The Secretary notified the Commission that she stands by her opposition.

Despite being given a second chance, Byholt and its counsel failed to answer the
Commission’s specific questions. It remains unclear why Byholt did not contest the proposed
assessments once it received all the section 104(d) orders, i.e. after receiving proposed
assessment No. 000211111 on February 19, 2010. Byholt asserted that it had been advised that it
should contest section 104(d) orders if it had a legitimate defense, and as the Secretary notes, the
contest procedures are included in the proposed assessments. If Byholt was still unsure how to
proceed, it should have begun searching for a counsel as soon as it received proposed assessment
No. 000208139 in January 2010. Byholt’s amended motions fail to explain why it waited an
additional three to four months after receiving the proposed assessments before it began
searching for counsel. Therefore, it appears that Byholt took six to seven months to search for
counsel.

The Commission has made it clear 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. Pinnacle Mining Co., 30 FMSHRC 1061,
1062 (Dec. 2008); Pinnacle Mining Co., 30 FMSHRC 1066, 1067 (Dec. 2008); Highland Mining
Co., 31 FMSHRC 1313, 1315 (Nov. 2009); Double Bonus Coal Co., 32 FMSHRC 1155, 1156
(Sept. 2010); Oak Grove Res., LLC, 33 FMSHRC 103, 104 (Feb. 2011). In this case, we
conclude that the lack of any procedure to properly assess MSHA correspondence and
communicate with MSHA in a timely manner, represents an inadequate or unreliable internal
processing system.

Additionally, in considering whether an operator has unreasonably delayed in filing a
motion to reopen, we find relevant the amount of time that has passed between an operator’s
receipt of a delinquency notice and the operator’s filing of its motion to reopen. See, e.g., Left
Fork Mining Co., 31 FMSHRC 8, 11 (Jan. 2009); Highland Mining Co., 31 FMSHRC at 1316-17 (holding that motions to reopen filed more than 30 days after receipt of notice of delinquency
must explain the reasons why the operator waited to file a reopening request, and lack of
explanation is grounds for the Commission to deny the motion). Here, the delays in responding
to MSHA’s delinquency notices amounted to over three and four months. Byholt’s contention
that it was searching for counsel does not provide adequate grounds for reopening, especially
considering that the delay amounted to six or seven months after receiving the proposed
assessments.

Having reviewed Byholt’s requests and the Secretary’s responses, we conclude that
Byholt has failed to establish good cause for reopening the proposed penalty assessments.
Accordingly, we deny its motions with prejudice.

/s/ Mary Lu Jordan

Mary Lu Jordan, Chair

/s/Michael G. Young

Michael G. Young, Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Distribution:

Nichelle Young, Esq.

Law Office of Adele L. Abrams, P.C.

4740 Corridor Place, Suite D

Beltsville, MD 20705

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA 22209-2296

Melanie Garris

Office of Civil Penalty Compliance

MSHA

U.S. Dept. Of Labor

1100 Wilson Blvd., 25th Floor

Arlington, VA 22209-3939

Chief Administrative Law Judge Robert J. Lesnick

Federal Mine Safety & Health Review Commission

1331 Pennsylvania Avenue, N. W., Suite 520N

Washington, D.C. 20004