Cyprus Emerald Resources Corporation

Plain-English summary

Cyprus Emerald Resources asked the Commission to reopen a penalty assessment after the proposed penalty was accidentally paid. The company said it had intended to contest the citation, but the assessment was issued with other penalties that it did not plan to contest and was mistakenly paid. The Secretary did not oppose the request. The Commission majority treated the oversight as inadvertence or mistake under Rule 60(b)(1) and reopened the assessment, while two Commissioners would have remanded the matter for a judge to decide whether relief was justified.

Decision snapshot

• Governing authority: 30 U.S.C. § 815(a), 29 C.F.R. § 2700.1(b)
• Outcome: The Commission reopened the penalty assessment for Citation No. 7013288.
• Key point: An operator's mistaken payment of a penalty can support reopening when the operator intended to contest the related citation.

Full text (FMSHRC public release)

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

                                       June 21, 1999

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. PENN 99-201
: A.C. No. 36-05466-04136
CYPRUS EMERALD :
RESOURCES CORPORATION :

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

                                          ORDER

BY: Jordan, Chairman; Riley, and Verheggen, 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 May 18, 1999, the Commission received from Cyprus
Emerald Resources Corporation ("Cyprus") 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 Cyprus.

   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, Cyprus maintains that it failed to timely file a request for a hearing ("green

card") for the proposed penalty associated with Citation No. 7013288 because the proposed
penalty was accidentally paid. Mot. at 1-2. The operator submits that it timely filed a notice of
contest of the citation, and that the contest proceeding was stayed pending initiation of the
associated civil penalty proceeding. Id. at 2. Cyprus states that, on March 1, 1999, the proposed
assessment for the citation was issued along with other proposed penalties for citations that
Cyprus did not intend to contest and that, on March 29, the subject penalty was mistakenly paid.

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Page 2

Id. It states that, on April 30, 1999, the administrative law judge assigned to the contest
proceeding issued a show cause order "which suggested that [Cyprus] should move to reopen the
penalty assessment if it desired to continue its contest of the citation." Id. at 3. It contends that
its payment constitutes "mistake" under Fed. R. Civ. P. 60(b), and requests that the Commission
reopen the proposed penalty assessment. Id. at 3-4. Cyprus attached to its motion, among other
documents, the affidavit of Cyprus's Safety Manager, which provides that payment of the penalty
was a mistake. Ex. 1.

    We have held that, in appropriate circumstances and pursuant to Rule 60(b), we possess

jurisdiction to reopen uncontested assessments that have become final by operation of section
105(a). Jim Walter Resources, Inc., 15 FMSHRC 782, 786-90 (May 1993). 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 Servs., 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 or
mistake. See National Lime & Stone, Inc., 20 FMSHRC 923, 925 (Sept. 1998); Peabody Coal
Co., 19 FMSHRC 1613, 1614-15 (Oct. 1997).

    It appears from the record that Cyprus intended to contest the penalty related to Citation

No. 7013288 and that, but for an oversight by the operator, it would likely have returned the
green card and contested the proposed penalty assessment. While Cyprus does not deny
receiving the proposed assessment, its failure to submit the green card and payment of the
proposed assessment can be reasonably found to qualify as "inadvertence" or "mistake" within
the meaning of Rule 60(b)(1). See Stillwater Mining Co., 19 FMSHRC 1021, 1023 (June 1997)
(holding that failure by Secretary to send the proposed penalty assessment to operator's counsel
and payment by operator amounted to mistake sufficient to reopen penalty).

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Page 3

   Accordingly, in the interest of justice, we grant Cyprus's unopposed request for relief and

reopen the penalty assessment that became a final order with respect to Citation No. 7013288.
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




                                         Theodore F. Verheggen, Commissioner




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Commissioner Marks and Commissioner Beatty, dissenting:

    On the basis of the present record, we are unable to evaluate the merits of Cyprus's

position and would remand the matter for assignment to a judge to determine whether Cyprus has
met the criteria for relief under Rule 60(b). See Tug Valley Coal Processing, 16 FMSHRC 216,
217 (Feb. 1994) (remanding to judge to determine whether payment of proposed penalty
assessment amounted to mistake sufficient to reopen the penalty).

                                       Marc Lincoln Marks, Commissioner




                                       Robert H. Beatty, Jr., Commissioner




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Distribution

R. Henry Moore, Esq.
Buchanan Ingersoll
One Oxford Centre
301 Grant St., 20th Floor
Pittsburgh, PA 15219-1410

Andrea J. Appel, Esq.
Office of the Solicitor
U.S. Department of Labor
Gateway Bldg., Rm. 14480
3535 Market St.
Philadelphia, PA 19104

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

Chief Administrative Law Judge Paul Merlin
Federal Mine Safety and Health Review Commission
1730 K Street, N.W., Suite 600
Washington, D.C. 20006

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