Secretary of Labor v. Duffy, Inc. and Dennis S. Bell

Plain-English summary

Duffy, Inc. and foreman Dennis Bell sought dismissal of company and individual penalty proceedings based on alleged enforcement delays. Judge William S. Steele held that the Secretary timely filed the company penalty petition and that later delays were reasonable or occurred during a stay Duffy had agreed to and never asked to lift. He also found that Bell's status as an operator's agent required factual development and could not be decided on a motion to dismiss. The individual section 110(c) penalties were assessed less than a month after the special investigation ended, which the judge found reasonable. He denied dismissal in all three dockets.

Decision snapshot

• Governing provisions: 29 C.F.R. §§ 2700.1(c) and 2700.28; 30 U.S.C. §§ 815 and 820(c)
• Outcome: The motion to dismiss the company and individual penalty proceedings for undue delay was denied.
• Key point: A party that consents to a stay and never seeks to lift it cannot later rely on that period as grounds for dismissal, and disputed agent status requires evidence rather than pleadings alone.

Full text (FMSHRC public release)

FO4A.WPD

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

7 PARKWAY CENTER

875 GREEN TREE ROAD, SUITE 290

PITTSBURGH, PA 15220

TELEPHONE: (412)920-7240

FAX:(412)928-8689

July 18, 2013

SECRETARY OF LABOR,   

MINE SAFETY AND HEALTH    

ADMINISTRATION (MSHA),  

Petitioner,

v.

DUFFY, INC.,

Respondent

SECRETARY OF LABOR

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA),

Petitioner,

v.

DENNIS S. BELL,

employed by DUFFY, INC.,

Respondent.

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CIVIL PENALTY PROCEEDING

Docket No. PENN 2011-243-M

A.C. No. 36-09172-247170

Docket No. PENN 2012-149-M

A.C. No. 36-09172-278527

Mine: Port Allegheny Mine

CIVIL PENALTY PROCEEDING

Docket No. PENN 2013-86-M

A.C. No. 36-09172-296177A

Mine: Port Allegheny Mine

ORDER DENYING RESPONDENT’S MOTION TO DISMISS

Before:            Judge Steele 

I.         Procedural Background

Between July 1, 2010 and July 13, 2010 the Secretary of Labor (“Secretary”) issued seven
104(d)(1) citations/orders to Duffy, Inc. (“Duffy” or “Respondent”). The citations were
terminated between July 13, 2010 and August 3, 2010. On October 28, 2010 the Secretary
informed Respondent that MSHA had opened a Section 110(c) investigation into the actions of
Michael Duffy, the mine owner, and Dennis Bell, the mine foreman with respect to those
violations. On March 3, 2011, seven months after the final violations at issue were terminated ,
the proposed penalties were assessed for the citations and orders. On or about March 9, 2011
Respondent contested those assessments. Sixteen days later, the Secretary filed a timely Petition
for Assessment of Civil Penalty.

On July 5, 2011 PENN 2011-243-M was assigned to Judge John Kent Lewis. Between
July 22 and July 25, 2011 the parties discussed the desirability of a stay and ultimately agreed to
request one pending the completion of the 110(c) investigation.

The Secretary requested the
stay and Judge Lewis granted it on August 5, 2011. The Secretary provided periodic updates to
Judge Lewis’ law clerk on October 3, 2011, November 2, 2011, and, allegedly, in May 2012. On
June 14, 2012 Mr. Duffy passed away. On July 27 the Section 110(c) penalties were assessed
and on August 20, 2012 and August 17, 2012 they were received Mr. Duffy (presumably his
estate) and Mr. Bell respectively. Those 110(c) penalties became final orders on September 20,
2012. On October 20, 2012 the stay in PENN 2011-243-M was lifted. Respondent filed an
unopposed motion to re-open those 110(c) proceedings on November 26, 2012.

On November 19, 2012, Respondent filed a “Motion to Dismiss For Undue Delay in
Enforcement.” The Secretary filed a Response on December 19, 2012 to which the Respondent
countered on January 2, 2013. On January 4, 2013 the Secretary filed a letter in response to the
Respondent’s Reply. On January 31, 2013, the Commission re-opened the 110(c) proceedings
and the case against Mr. Bell was assigned to me as PENN 2013-86-M. On June 3, 2013 I
hosted a conference call to discuss these proceedings. On June 4 and 5 2013, each party sent an
additional letter.

II.       Question at Issue

Were the delays in these proceedings sufficient to justify dismissal of the dockets? For
reasons that will be explained more fully below, I find that dismissal is not appropriate.      

III.      Reasoning

a.         PENN 2011- 243-M: Duffy, Inc.

Respondent’s motion raises a novel issue, which it concedes has no case law on point.
(Respondent’s Reply in Support of Motion to Dismiss at 3). Specifically, Respondent argues that
the delay between the issuance of the final citation at issue here on July 13, 2013 and the lifting
of the stay on October 20, 2013 violated its right to a timely adjudication under 29 C.F.R.
§2700.1(c), thereby warranting dismissal. In light of the aforementioned lack of case law,
Respondent suggests that I consider whether there was adequate cause for the delay and whether
Respondent suffered actual prejudice to determine whether a delay requires dismissal. In short,
Respondent suggests I utilize the standard supplied by the Commission in Salt Lake County Road
Department, 3 FMSHRC 1714 (July 1981) which was re-affirmed and explained recently in
Long Branch Energy, 34 FMSHRC 1984 (Aug. 2012).

I do not believe that Salt Lake and its progeny apply to the entire two-plus year life-span
of this case nor do I think they are particularly instructive on how to handle this situation.

Salt
Lake held that under Commission Rule 28 the 45-day deadline for the Secretary to file a petition
following a contest by an operator is not jurisdictional.

Salt Lake at 1716; see also Long
Branch at 1987. Therefore, the failure to file the petition within 45-days does not automatically
lead to dismissal but instead to an analysis of whether there was adequate cause for the delay and
actual prejudice to the operator. Id. at 1717. Only if these conditions are met is dismissal
appropriate. Id.

The statutory basis of this rule and the Commission’s analysis show that the Salt Lake test
is not appropriate here. That 45-day deadline in Rule 28 implements Section 105(d) of the Act,
which requires the petition to be filed “immediately” following an operator’s contest. Medicine
Bow Coal Co., 4 FMSHRC 882, 885 (May 1982). There is no corresponding requirement in the
Act that requires a hearing be held “immediately” following the issuance of citations. Further,
Rule 1(c) does not contain an actual deadline; it contains only broad, aspirational language
regarding a speedy hearing. As such, applying the same rule as Salt Lake would be absurd. The
Salt Lake test is only appropriate because there is an imperative for the Secretary to act
immediately in the statute and 45-day deadline in the Commission’s rules. Here, Respondent is
requesting the Salt Lake test be taken out of context and applied to a vague guarantee of “speedy”
adjudication. I do not believe that to be warranted. Salt Lake and its progeny only apply to Rule
28 and other situations where the Secretary must act “immediately.”

The only time period during which the application of a the Salt Lake standard would be
appropriate would be between the contest of the proposed penalties by Respondent and the filing
of the petition by the Secretary. In this particular case, Respondent contested the proposed
penalties on March 9, 2011 and sixteen days later (with 29 days to spare) the Secretary filed his
petition. As a result, the Secretary complied with even the most stringent reading of Rule 28.
Therefore, Salt Lake and its progeny do not apply

That is not to imply that there is no situation in other areas of the case where a delay by
the Secretary could result in dismissal. However, I do not believe that any delay in this case
would warrant such a severe remedy. Considering each event in the procedural timeline in this
case reveals that any delays in the proceedings were reasonable and/or consented to by
Respondent.

The final citation/order was issued on July 13, 2010 and Respondent terminated the final
citation/order on August 3, 2010. Seven months later, on March 3, 2011 the Secretary issued the
proposed assessments. Under Section 105(a) of the Act, the Secretary is afforded a reasonable
time to notify the cited operator of assessed civil penalties following the termination of the
investigation. The Commission has held that a delay of less than eleven months between the
termination of the inspection and the issuance of a proposed civil penalty is per se reasonable.
See Sedgeman, 28 FMSHRC 322 (June 2006). In this case, the proposed penalty was issued
seven months after the inspection and therefore there was no unreasonable delay.

As stated previously, following Respondent’s contest of that proposed penalty, the
Secretary complied with Commission Rule 28 in issuing the petition16 days later.

Between the issuance of the petition on or about March 25, 2011 and July 5, 2011, the
Secretary took no action in this case. However, that delay is reasonable in light of the fact that no
Judge was assigned to the case at that time. The Secretary could not push towards a hearing or
request a stay because there was no person to preside over a hearing or grant a stay. On July 5,
2011 Judge Lewis was assigned and, roughly three weeks later, the Secretary requested a stay in
this matter pending the related 110(c) investigation.

It is uncontested that the Secretary’s Motion to Stay Civil Proceeding was unopposed by
Respondent during discussions between the parties in July 2011. (Respondent’s Motion to
Dismiss For Undue Delay in Enforcement at p. 3). Most of Respondent’s complaint regarding
delay in this case concern this time between the granting of the stay on August 5, 2011 and the
lifting of the stay on October 20, 2012. However, at no time following the issuance of that stay
did Respondent ever request that Judge Lewis or I lift the stay. Respondent cannot willingly
consent to a stay, willingly refrain from requesting an end to that stay, and then complain about
the length of that stay. This proposition does not even require citation to legal authority, it is
self-evident. Respondent has abdicated any right to complain about this delay through its
consent to the stay 

Respondent presents several arguments as to why it should not be bound by its consent to
the stay. None of those arguments are particularly compelling, but I will address each in turn.
First, Respondent argues that the stay lasted for 15 months. (Id. at 8). Respondent does not
explain how this eliminates its consent. Respondent did not place any time limits on its consent
to the stay and never repudiated its consent at any time.

On a related note, in discussing the length of time the stay existed, Respondent notes that
the Secretary provided only two status updates regarding the 110(c) investigation. The emphasis
Respondent places on this point perfectly illustrates the Respondent’s apparent beliefs that it was
on the sideline waiting for the Secretary to act and also that the Judge did not have a role in this
proceeding. Judge Lewis’ Order Granting Stay did not indicate that the Secretary was required
to provide a status report; it stated that “the parties” were required to provide a status report. In
full, the Order stated, “The parties are ORDERED to provide a status update of this proceeding,
and the related special investigation, within 60 days of the date of this Order.” Those status
updates were not even intended to provide information to Respondent, they were for the benefit
of the Judge. If Respondent had complied with the Order and checked in at 60 day intervals, it
could have used the opportunity to request that the matter move more quickly.

This is similar to Respondent’s constant refrain that the Secretary did not act quickly
enough. However, the Secretary’s role is not preeminent. The Judge has the power to grant and
lift stays, the Secretary does not. If Respondent wanted the stay lifted, it should have gone to the
source: the Judge. Unfortunately, neither Judge Lewis nor I can tell when a party wants a task
completed if we are not asked to do it.

Respondent’s next argument is that the investigation into the case commenced a year
before the stay was requested, indicating that the stay would be for a short duration. (Id.). As
already noted, there were no unreasonable delays in the run-up to the issuance of the stay.
Further, nothing in the Secretary’s stay request or in the Order Granting Stay indicates that the
110(c) investigation was nearly completed or that the stay was to be for a short duration. I cannot
conceive of any “reasonable implication” Respondent was able to glean that this would
necessarily be a short stay. In a related argument, Respondent stated that it could not foresee that
the investigation would take 13 additional months. (Respondent’s Reply in Support of Motion to
Dismiss at 5). However, Respondent presented no legal authority for this proposition that a
consent to a stay has a pre-determined expiration date or that the stay must be considered in light
of an operator’s unspoken expectations.

Respondent further argues that when the stay was requested, discovery had not
commenced. (Respondent’s Motion to Dismiss For Undue Delay in Enforcement at 8). I do not
understand this particular argument. Nothing in the stay prevented the parties from continuing
forward with discovery or settlement of PENN 2011- 243-M while the case was stayed. The stay
only prevented Judge Lewis and I from setting the case for hearing. If the parties wanted to
continue to work together after the stay, nothing would prevent them from doing so. If, with or
without that discovery, Respondent acquired information that indicated that the stay was no
longer in their best interest, it could have requested the stay be lifted.

Next, Respondent argues that cases related to 110(c) investigations are routinely granted,
whether opposed or unopposed. (Id.). Respondent provides no source for this grand assertion.
When confronted with a request for a stay that is opposed, I will consider the matter carefully
before issuing a decision. There are cases in which Judges have refused to issue a stay, or
severely limited the scope of the stay. However, even if this argument were true, Respondent’s
inaction precludes it from complaining about it now. Much like an objection during a hearing,
Respondent must raise an issue in order to preserve their opposition in the future. Respondent
had an opportunity to object to the stay and, in fact, had a continuing opportunity to request that
the stay be lifted. It chose not to exercise those opportunities and therefore cannot complain
now.

Respondent also argues that it does not have an obligation to prod the case forward and
keep the Secretary moving. (Respondent’s Reply in Support of Motion to Dismiss at 5). This is
absolutely true. However, failure to take an action, even one that is not required, can foreclose
certain opportunities. Sadly, this is the nature of life; sometimes taking advantage of one
opportunity (whether it’s enjoying a stay in which civil penalties are not levied or going for a
Sunday drive) can foreclose other opportunities (be it complaining about the pace of a case or
watching a football game). We all manage to get along alright despite the deprivation.
Respondent was not required to request the Secretary move faster or demand that I lift the stay.
However, if Respondent does not do so during the stay, it cannot complain about that delay when
it is lifted.

Finally, Respondent argues that a decision that it waived its right to request the stay be
lifted is unfair because its failure to act quickly was caused by Mr. Duffy’s death. (Id. at 6). It
argues that the Secretary has a double standard whereby he is allowed to take two years to
conduct an investigation, but Respondent has but a short time following the death of its owner
“to implement a successor plan, resume its business activities and inform MSHA that its
enforcement schedule is too slow lest it waive its rights.” This particular argument perhaps says
more than Respondent intended. It shows, once again, that Respondent was not being harmed by
the stay, but was, in fact, enjoying its benefits.

This really reaches the flaw in Respondent’s entire argument regarding delay in this
matter. During the stay, Respondent reaped several benefits. It was not required to pay any civil
penalties, it avoided having several (d) citations and orders on its record, and it had ample
opportunity to explore legal strategies or discuss settlement. Respondent consented to the stay
and did not ask that it be lifted. As a result, it is stuck with the mixed bag of losses and gains that
resulted therefrom.

Therefore, at no time during the pendency of this proceeding has Respondent suffered
from undue delay. Certainly not to the extent to justify something as severe as dismissal. Taking
the entire two-plus years as a whole, I find that any delays resulted from the reasonable time
taken by the Secretary to prosecute the case and that, to a large extent, the delays occurred with
Respondent’s explicit consent.

b.        PENN 2013-86-M: Dennis S. Bell

While the parties’ briefings in this matter primarily concern PENN 2011-243-M,
Respondent appears to have made a related argument that the 110(c) proceeding against Mr. Bell,
PENN 2013-86-M, should also be dismissed.

Respondent’s motion to dismiss this case rests on
two theories. First, Respondent argues that Mr. Bell is not a “agent” of the operator and
therefore, cannot be held accountable under Section 110(c). Second, Respondent argues that an
unreasonable delay under Section 105(a) has caused prejudice to Mr. Bell. Neither of these
arguments is compelling.

Respondent argues that Mr. Bell is not an agent of Respondent, and therefore not liable
under Section 110(c) because:

Although Mr. Bell holds the title of foreman, he is not a salaried employee - he is
paid an hourly wage. Also, Mr. Bell is not part of Respondent’s management. He
does not have the authority to hire, fire or discipline other employees. Indeed, the
Special Assessment Forms in this case indicate that Mr. Bell was making good
faith efforts to comply with the applicable standards, but had to discuss all of the
compliance matters with the late Mr. Duffy. From an operational standpoint, Mr.
Bell was responsible for relaying Mr. Duffy’s instruction to other employees at the
Mine.

(Respondent’s Reply in Support of Motion to Dismiss at 7). Respondent also cites to
Commission precedent for the proposition that determining agent status involves a multi-factor
test. Id. citing Martin Marietta Aggregates, 22 FMSHRC 633, 638 (May 2000).

However, in order to utilize a multi-factor test, a Judge must be equipped with facts.
Facts may come in the form of stipulations in the pleadings and from evidence at a hearing. In
this case, we have neither of those things. We have two parties who promise to offer
diametrically opposed factual presentations regarding Mr. Bell’s job responsibilities. It is
entirely possible that after discovery, or perhaps after a hearing, that the facts will show that Mr.
Bell is not an agent of Respondent. But we do not have facts now, we have assertions. Further, a
Motion to Dismiss is not the proper venue for findings of fact. Therefore, I will wait for proper
time and the presentation of evidence before making a determination as to Mr. Bell’s agency
status.

Respondent’s second argument is similar to an argument it made with Respect to PENN
2011-243-M. Specifically that under Section 105(a) of the Act, the Secretary did not notify
Respondent of the assessed civil penalties within a reasonable time following the termination of
the investigation. Several ALJ decisions hold that the 105(a) “reasonable time” standard also
applies to 110(c) situations. See e.g. Reasor, 34 FMSHRC 943 (April 2012) (ALJ); Wayne
Jones, 20 FMSHRC 1267 (Nov. 1998)(ALJ); James Lee Hancock, 17 FMSHRC 1671 (Sept.
1995) (ALJ). With respect to how that requirement applies, I believe that Judge Turek’s Order
in Denying Motions to Dismiss in Secretary of Labor v. Christopher Brinson, employed by
Kentucky-Tennessee Clay Co. et al, provides a succinct analysis of the relevant law.
Specifically: 

In Secretary of Labor v. Twentymile Coal Co., 411 F.3d 256 (D.C. Cir. 2005)...the
court held that the requirement in §105(a) that notices of proposed assessments
must be issued “within a reasonable time” does not start running when the
underlying citation or order is issued. Id. at 261. The court stated that the period
cannot start running “before the mine had an opportunity to respond to the order,”
since on of the factors to be considered in assessing a penalty against respondent
is how the mine abated the citation. Id. at 262. Instead, the court held the period
starts running when MSHA completes its investigation. The court gave deference
to the Secretary’s position in that litigation that the investigation ended when an
accident investigation report was issued. Id. at 261.

SE 2012-340M, SE 2012-370-M, and SE 2012-348-M, 2013 WL 3152293, *5 (May 7,
2013)(ALJ Turek). In that case, Judge Turek began measuring the “Reasonable Time” from
where the special investigation ended, rather than from the time the citation was issued. Id.

I believe that is appropriate in this case as well. Here, the special investigation was
completed and the penalties assessed On July 27, 2012.

On August 17, 2012 Mr. Duffy received
notice of the assessed penalties. As noted above, The Commission has held that a delay of less
than eleven months is per se reasonable. Sedgeman, supra. The delay in this case was less than
one month, as a result, I cannot find it unreasonable.

I briefly note that Respondent again suggested that I use the two-part analysis in Salt Lake
to determine whether the delay in this case required dismissal. However, as the Respondent and
Bell did not timely contest the 110(c) assessments, I do not believe the time ever began to run on
the 45-day deadline. Respondent has since had the case re-opened and petition has been timely
filed with me in this docket. For reasons explained more fully above, I decline to use the Salt
Lake analysis over the entire period beginning with the issuance of the citations in PENN 2011-243-M or even from the start of the investigation in this docket on October 28, 2010.

IV. Conclusion

In light of the fact that Respondent did not suffer from any unreasonable delay with
respect to PENN 2011-243-M and PENN 2013-86-M, Respondent’s Motion to Dismiss is hereby
DENIED.

/s/ William S. Steele

William S. Steele

Administrative Law Judge

Distribution: 

Bryan C. Shieh, Esq., U.S. Department of Labor, Office of the Solicitor, The Curtis Center, 170
S. Independence Mall West, Suite 630E, Philadelphia, PA 19106

Erik M. Dullea, Esq., Patton Boggs LLP, 1801 California Street, Suite 4900, Denver, CO 80202

/tjb