Shelter Creek Capital, LLC

Plain-English summary

Shelter Creek sent a proposed assessment to its lawyer, but office staff placed the contest form in the client file instead of mailing it to MSHA. The operator asked the Commission to reopen the final assessment and moved to strike the Secretary's late opposition. The Commission held that a client is accountable for counsel's acts and that an office lacking a reliable process to confirm filing does not establish excusable neglect. Counsel also failed to explain the specific confusion or identify corrective procedures. The Commission denied both the reopening motion and the motion to strike.

Decision snapshot

• Cited provisions: 29 C.F.R. §§ 2700.1(b) and 2700.10(d); 30 U.S.C. § 815(a)
• Outcome: The motion to reopen and the motion to strike the Secretary's opposition were denied.
• Key point: An unexplained law-office filing failure and lack of a reliable tracking procedure do not establish good cause to reopen a final assessment.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

December 11, 2012

SECRETARY OF LABOR, 

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA) 

v.

SHELTER CREEK CAPITAL, LLC 

:

:

:

:

:

:

:

:

Docket No. SE 2012-100-M 

A.C. No. 31-02242-265451

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 November 28, 2011, the Commission received from
Shelter Creek Capital, LLC (“Shelter Creek”) a motion seeking 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).

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).

The record indicates that the proposed assessment became a final order of the
Commission on October 6, 2011. Shelter Creek asserts that it sent the proposed assessment to its
counsel on September 7, 2011. Counsel submits that due to administrative confusion, her
support staff placed the contest form in the client’s file instead of mailing it to MSHA.

The Secretary opposes the request to reopen and asserts that the counsel’s conclusory
statements of “administrative confusion” are insufficient to justify reopening. The Secretary
maintains that under well-established case law, attributing the failure to timely contest to the
counsel rather than the operator, is not an adequate basis for reopening. The Secretary further
notes that the counsel’s office does not appear to have an internal tracking system to monitor and
ensure that contests are timely filed.

In response to the Secretary’s opposition, counsel for Shelter Creek maintains that the
administrative confusion did not represent a pattern of inadequate office procedures. Counsel
further avers that she has a long history of dealing adequately with proposed assessments. In
addition, counsel submitted a motion to strike the Secretary’s opposition, due to the Secretary’s
delay in filing beyond the required 8-day time frame. 29 C.F.R. § 2700.10(d).

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. 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). Moreover, as the
Commission stated in M3 Energy Mining Co., 33 FMSHRC 1741, 1746 (Aug. 2011):

The fact that many of the inadequate and unreliable office
procedures in these cases occurred at counsel’s office rather than
the office of the operators does not affect our analysis. As the
Commission noted in Keokee Mining, LLC, 32 FMSHRC 64, 66
n.1 (Jan. 2010), “[i]n requesting relief from a final order, a client
may be held accountable for the acts and omissions of its
attorney.” Keokee Mining relied on Pioneer Investment Services
Co. v. Brunswick Associates Ltd. P’ship, 507 U.S. 380, 397 (1993),
where the Supreme Court made clear that when a party’s failure to
meet a deadline was caused by the actions of its counsel, and the
issue is whether the party would be exonerated on the basis of
“excusable neglect,” the party would “be held accountable for the
acts and omissions of [its] chosen counsel.” This is because the
party “‘voluntarily chose this attorney as his representative in the
action, and he cannot now avoid the consequences of the acts or
omissions of this freely selected agent.’” Id. (quoting Link v.
Wabash R. Co., 370 U.S. 626, 633-34 (1962)).(Footnote omitted). In this case, we conclude that the lack of any procedure to confirm that the
required paperwork was timely filed represents an inadequate or unreliable internal processing
system.

Despite taking the opportunity to submit a reply, Shelter Creek’s counsel failed to
respond to the Secretary’s arguments and explain in detail what caused the administrative
confusion, how counsel’s office procedures were ineffective in this instance due to unusual
circumstances, and how new office procedures have been implemented as a result of this failure,
so as to prevent future defaults.

Having reviewed Shelter Creek’s requests and the Secretary’s response, we conclude that
Shelter Creek has failed to establish good cause for reopening the proposed penalty assessment.
Accordingly, we hereby deny Shelter Creek’s motion to reopen and deny its motion to strike the
Secretary’s opposition.

/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:

Adele L. Abrams, Esq.

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

4740 Corridor Place, Suite D

Beltsville, MD 20705

[email protected]

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA 22209-2296

[email protected]

Melanie Garris

Office of the Penalty Compliance

U.S. Department of Labor, MSHA

1100 Wilson Boulevard

Arlington, VA 22209

[email protected]

Chief Administrative Law Judge Robert J. Lesnick

Federal Mine Safety and Health Review Commission

1331 Pennsylvania Ave., NW, Suite 520N

Washington, D.C. 20004-1710