Howard Sheppard, Inc. (Commission decision, April 4, 2013)

Plain-English summary

Howard Sheppard defaulted even though it said it had answered the penalty petition and later negotiated a settlement with MSHA. The Secretary did not oppose reopening for the limited purpose of allowing a previously filed settlement motion to be considered, and confirmed that the case had been settled in good faith before the agency representative received the show-cause order. In the interest of justice, the Commission vacated the default and remanded the case.

Decision snapshot

• Governing authority: 30 U.S.C. § 823(d); 29 C.F.R. §§ 2700.1(b), 2700.69(b), and 2700.70(a)
• Outcome: The default order was vacated and the case was remanded for consideration of the settlement.
• Key point: A default could be reopened where the parties had already reached a good-faith settlement.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

April 4, 2013

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

HOWARD SHEPPARD, INC.

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Docket No. SE 2011-525-M

A.C. No. 09-00705-252500 X33

BEFORE: Jordan, Chairman; Young and Nakamura, 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. (2006) (“Mine Act”). On July 18, 2012, the Commission received from Howard Sheppard, Inc. (“Howard”) a motion seeking to reopen a penalty assessment proceeding and relieve it from the default order entered against it.

On February 13, 2012, Chief Administrative Law Judge Lesnick issued an Order to Show Cause which by its terms became a Default Order if the operator did not file an answer within 30 days. This Order to Show Cause was issued in response to Howard’s perceived failure to answer the Secretary of Labor’s June 1, 2011 Petition for Assessment of Civil Penalty. The Commission did not receive Howard’s answer within 30 days, so the default order became effective on March 15, 2012.

Howard asserts that it had filed an answer on June 13, 2011, and negotiated a settlement on February 14, 2012. Howard further states that it received a delinquency notice dated June 14, 2012. The Secretary does not oppose the request to reopen for the limited purpose of allowing the submission of his motion to approve settlement, filed May 1, 2012. The Secretary further states that the Conference and Litigation Representative (“CLR”) had settled this case in good faith prior to receiving the Show Cause Order.

The judge’s jurisdiction in this matter terminated when the default occurred. 29 C.F.R.
§ 2700.69(b). Under the Mine Act and the Commission’s procedural rules, relief from a judge’s decision may be sought by filing a petition for discretionary review within 30 days of its issuance. 30 U.S.C. § 823(d)(2)(A)(i); 29 C.F.R. § 2700.70(a). If the Commission does not direct review within 40 days of a decision’s issuance, it becomes a final decision of the Commission. 30 U.S.C. § 823(d)(1). Consequently, the judge’s order here has become a final decision of the Commission.

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, 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”); Jim Walter Res., Inc., 15 FMSHRC 782, 786-89 (May 1993) (“JWR”). 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).

Having reviewed Howard’s request and the Secretary’s response, in the interest of justice, we hereby reopen the proceeding and vacate the Default Order. Accordingly, this case is remanded to the Chief Administrative Law Judge for further proceedings pursuant to the Mine Act and the Commission’s Procedural Rules, 29 C.F.R. Part 2700.

/s/ Mary Lu Jordan

Mary Lu Jordan, Commissioner

/s/ Michael G. Young

Michael G. Young, Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Distribution:

Jamie Swint

Howard Sheppard, Inc.

P. O. Box 797

Sandersville, GA 31082

[email protected]

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. 20004-1710