Secretary of Labor v. Alabama Marble Company, Inc.

Plain-English summary

Alabama Marble asked the Commission to reopen five matters after a paid representative allegedly failed to contest or defend MSHA penalties totaling nearly $80,000. The Commission refused to vacate one approved settlement because the company had an opportunity to be heard and had agreed to its terms. It nevertheless vacated a default order in one docket and reopened three uncontested penalty assessments, remanding those four matters for further proceedings and directing the Secretary to file penalty petitions within 45 days. Commissioner Robert F. Cohen agreed as to the settlement and two recent assessments but would have required fact-finding before reopening two matters because the company waited months after delinquency notices.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 815(a), 823(d)(1), and 823(d)(2)(A)(i)
• Outcome: Four matters were reopened and remanded, while the request to vacate an approved settlement was denied.
• Key point: Failure by a hired representative can support reopening, but prompt action and the operator's own monitoring of case deadlines remain important considerations.

Full text (FMSHRC public release)

FEDERAL MINE
SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON,
D.C. 20004-1710

June
20, 2014

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

ALABAMA MARBLE COMPANY, INC.

Docket No. SE 2012-226-M

A.C. No. 01-02947-277361

Docket No. SE 2012-560-M

A.C. No. 01-02947-291433

Docket No. SE 2013-525-M

A.C. No. 01-02947-308350

Docket No. SE 2013-526-M                    

A.C. No. 01-02947-318268                           

Docket No. SE 2013-527-M

A.C. No. 01-02947-321067

Alabama Marble Quarry

BEFORE: Jordan, Chairman; Young, Cohen, Nakamura, and
Althen, Commissioners

ORDER

BY: Jordan, Chairman; Young,
Nakamura, and Althen, Commissioners

These matters arise under the Federal Mine
Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2012) (“Mine Act”). On
July 26, 2013, the Commission received from Alabama Marble Company (“AMC”) a
motion seeking to reopen a penalty assessment proceeding and relieve the
operator from the Default Order entered against it, reopen a Decision Approving
Settlement, and reopen three 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).[1]

Records of the Department of Labor’s Mine Safety
and Health Administration (“MSHA”) indicate that in Docket No. SE 2012-226-M,
Chief Administrative Law Judge Robert J. Lesnick issued on October 24, 2012, an
Order to Show Cause which by its terms became a Default Order if the operator
did not file an answer within 30 days. The Commission did not receive AMC’s
answer within 30 days, so the default order became effective on November 26,
2012. The judge’s jurisdiction in this matter terminated when the default
occurred. 29 C.F.R. § 2700.69(b). MSHA mailed a delinquency notice on March 20,
2013.

In Docket No. SE 2012-560-M, Administrative Law
Judge Thomas P. McCarthy issued a Decision Approving Settlement on March 20,
2013. 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 judges’ Order and Decision here have become final
orders of the Commission.

In Docket No. SE 2013-525-M, the proposed
assessment was delivered on December 10, 2012, and became a final order of the
Commission on January 9, 2013. MSHA mailed a delinquency notice on February 25,
2013. In Docket No. SE 2013-526-M, the proposed assessment was delivered on
April 17, 2013, and became a final order of the Commission on May 17, 2013. MSHA
mailed a delinquency notice on July 2, 2013. In Docket No. SE 2013-527-M, the
proposed assessment was delivered on May 15, 2013, and became a final order of
the Commission on June 14, 2013.

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. 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).

AMC asserts that it delegated the contest
responsibility to a third party and recently discovered that “nothing was ever
done to contest and defend the charges.” Mot. at 1. The Secretary of Labor
opposes the requests to reopen and asserts that the operator identified no
exceptional circumstances warranting reopening. The Secretary notes that this
operator has been in business for many years and is familiar with MSHA
procedures. The Secretary further states that the inadequate monitoring of MSHA
assessments and lack of communication between the operator and its
representative indicates an inadequate and unreliable processing system. In
light of the operator’s claim of financial difficulties, the significant amount
of proposed assessments, totaling almost $80,000, should have made the operator
more diligent in pursuing a possible appeal.

In response to the Secretary’s opposition, AMC
explains that it hired a representative and regularly paid him for the work it
believed he was doing in these cases. AMC asserts that it is having financial
difficulties and could not afford to hire an attorney. Therefore, it relied on
the work of the representative and agreed to temporarily make payments in order
to avoid further penalties and collection charges.

Having reviewed
AMC’s request and the Secretary’s response, we conclude that AMC had an
opportunity to be heard in Docket No. SE 2012-560-M, we therefore deny its
motion to vacate the Decision Approving Settlement. In the interest of
justice, we hereby vacate the Default Order in
Docket No. SE 2012-226-M, and reopen the proposed penalty assessments in
Docket Nos. SE 2013-525-M, SE 2013-526-M, and SE 2013-527-M. Accordingly, Docket Nos. SE 2012-226-M, SE 2013-525-M,
SE 2013-526-M, and SE 2013-527-M are 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. Consistent with Rule 28, the
Secretary shall file petitions for assessment of penalty within 45 days of the
date of this order. See 29 C.F.R. § 2700.28.

/s/
Mary Lu Jordan      

Mary
Lu Jordan, Chairman

/s/
Michael G. Young

Michael
G. Young, Commissioner

/s/
Patrick K. Nakamura

Patrick
K. Nakamura, Commissioner

/s/
William I. Althen

William
I. Althen, Commissioner

Commissioner Cohen concurring in part and dissenting in
part:

On July 26, 2013, Alabama Marble filed a motion
requesting that the Commission (1) vacate a Decision Approving Settlement, (2)
reopen three cases involving citations that had become final orders because
Alabama Marble neglected to contest their respective penalty assessments, and
(3) vacate an Order of Default entered after it failed to file an Answer to a
penalty petition. Alabama Marble contends that the motions should be granted
because the consultant and attorney it hired to represent it in proceedings
under the Mine Act failed to take adequate steps to “contest and defend the
charges.” Mot. at 1-2.

For the reasons that follow, I dissent from my
colleague’s conclusions in part. I would deny Alabama Marble’s motion to reopen
the cases docketed as SE 2013-525-M and SE 2012-226-M and remand these
proceedings to the Chief Administrative Law Judge for further fact- finding.

1)         The
motion to vacate the Decision Approving Settlement of the case docketed
as SE 2012-560-M.

On February 12, 2013, the Secretary filed a
motion to approve a settlement agreement for the case docketed as SE 2012-560-M
and represented that “[Alabama Marble] has reviewed this motion, [and] has
agreed to its terms.” Mot. at 1. Alabama Marble did not indicate any disagreement
with this statement. On March 20, 2013, a Judge issued a Decision Approving
Settlement.

Because Alabama Marble consented to the
underlying settlement agreement, I agree with the majority’s decision to deny
the motion to vacate the Decision Approving Settlement.

2)         The
motion to reopen the cases docketed as SE 2013-525-M, SE 2013-526-M, and SE
2013-527-M.

The cases docketed as SE 2013-525-M, SE
2013-526-M, and SE 2013-527 became final after Alabama Marble failed to timely
contest the Secretary’s proposed penalty assessments for the subject citations.
Alabama Marble filed its motion to reopen these cases on July 26, 2013. The
motion was filed shortly after the Secretary issued a notice of delinquency for
the case docket as SE 2013-526-M (July 2, 2013), and shortly after the case
docketed as SE 2013-527-M became final (June 14, 2013). Because the record
demonstrates that the operator reacted promptly after it learned that the
proposed assessments were mistakenly ignored, I conclude that there is adequate
cause to reopen these two proceedings.

However, Alabama Marble did not show the same
expeditiousness in its request to reopen the case docketed as SE 2013-525-M. In
this case, a delinquency notice was mailed on February 24, 2013, a full five
months prior to the filing of the motion to reopen.

Under Rule 60(c), a motion to reopen, regardless
of its merit, is only granted if it is filed within a reasonable time. In the
context of penalty assessments, in considering whether an operator has
unreasonably delayed in filing a motion to reopen, the Commission considers the
amount of time that passes between an operator’s receipt of a delinquency
notice and the operator’s filing of its motion to reopen. Highland Mining
Co., 31 FMSHRC 1313, 1316 (Nov. 2009); Left Fork Mining Co., 31
FMSHRC 8, 11 (Jan. 2009).

I conclude that Alabama Marble’s motion lacks
sufficient details to establish the extenuating circumstances necessary to
justify the reopening of the case docketed as SE 2013-525-M.

3)         The
motion to vacate the Order of Default issued for the case docketed as SE
2012-226-M.

Alabama Marble timely contested the
proposed assessment issued for the citation at issue in the case docketed as SE
2012-226-M. However, it subsequently failed to file an Answer to the
Secretary’s Penalty Petition as required by Commission Procedural Rule 29, 29
C.F.R. § 2700.29. On October 24, 2012, the Chief Administrative Law Judge
issued an Order to Show Cause stating that Alabama Marble would be in default
if it failed to file an Answer within 30 days. Alabama Marble again failed to
file an Answer. On March 20, 2013, the Secretary mailed a notice to delinquency
to Alabama Marble.

Alabama Marble waited an additional four months
after receiving the notice of delinquency to file the motion to vacate the
Order of Default. The operator’s motion fails to provide details that justify
its significant delay. Accordingly, I conclude that Alabama Marble has failed
to demonstrate good cause to vacate the default order.

Conclusion

In summation, I concur with the majority’s
denial of the motion to vacate the Decision Approving Settlement issued for the
case docketed as SE 2012-560-M and its grant of the motion to reopen the
proceedings docketed as SE 2013-526-M and SE 2013-527-M.

However, I conclude that Alabama Marble has
failed to establish that its delay in filing a motion to reopen the cases
docketed as SE 2013-525-M and SE 2013-226-M was reasonable. While Alabama
Marble faults a consultant and an attorney it hired for the defaults, it does
not account for its failure to act for five and four months respectively, after
receipt of multiple documents from the Secretary which stated that further
action was necessary on its part.

Therefore, I would remand the cases docketed as
SE 2013-525-M and SE 2012-226-M to the Chief Administrative Law Judge for
further fact-finding regarding the cause of the delay in filing the motions to
reopen.

/s/
Robert F. Cohen, Jr.

Robert
F. Cohen, Jr., Commissioner

Distribution:

Stephen Musolino, President

Alabama Marble Co., Inc.

3400 N.W. 78TH Ave.,

Miami, Florida 33122

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

Administrative Law Judge Thomas P. McCarthy

Federal Mine Safety & Health Review Commission

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

Washington, D.C. 20004-1710

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

[1]
Pursuant to Commission Procedural Rule 12, on our own motion, we hereby
consolidate docket numbers SE 2012-226-M, SE 2012-560-M, SE 2013-525-M, SE
2013-526-M, and SE 2013-527-M, all captioned Alabama Marble Company, Inc.,
and involving similar procedural issues. 29 C.F.R. § 2700.12.