Secretary of Labor v. Drilling & Blasting Systems, Inc. (Commission decision, July 22, 2013)

Plain-English summary

Drilling & Blasting Systems missed a penalty-contest deadline after downsizing, heavy travel, and an overloaded safety manager caused the assessment mail to sit unnoticed. The company then waited about five months after a delinquency notice to request reopening. The Secretary opposed relief, noting the operator's prior contest experience, lack of backup coverage, and unexplained delay. The company said it had trained the safety manager and adopted new mail and contest procedures. Although the Commission warned that unreliable internal systems normally do not justify relief, it reopened the assessment in the interest of justice and remanded the case.

Decision snapshot

• Governing provisions: 30 U.S.C. § 815(a); 29 C.F.R. §§ 2700.1(b) and 2700.28
• Outcome: The final penalty assessment was reopened over the Secretary's opposition and remanded for proceedings on the merits.
• Key point: Corrective procedures may help support reopening, but understaffing, travel, and unreliable mail handling remain serious weaknesses in a good-cause showing.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

July 22, 2013

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

DRILLING & BLASTING SYSTEMS, INC.

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Docket No. SE 2013-183-M

A.C. No. 31-02074-290358 C5A

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 January 16, 2013, the Commission received from Drilling
& Blasting Systems, Inc. (“DBS”) 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).

Records of the Department of Labor’s Mine Safety and Health Administration (“MSHA”) indicate that the proposed assessment was delivered on June 1, 2012, and became a final order of the Commission on July 2, 2012. MSHA mailed a delinquency notice on August 16, 2012, and referred this case to the Department of Treasury for collection on December 6, 2012. DBS asserted that its safety manager was unfamiliar with the contest process. DBS further stated that due to staff downsizing and excessive workload outside the office, the safety manager was not aware of the received mail on his desk before finding the delinquency notice in August.

The Secretary opposed the request to reopen, noting that DBS has contested many penalties since 2006 and should have had someone responsible for the safety manager’s duties while he was traveling. Moreover, the Secretary stated that DBS failed to explain why it took five months to request reopening after it received the delinquency notice.

On March 4, 2013, the Commission sent DBS a letter asking it to explain the delay in filing the motion to reopen and what office procedures were implemented to prevent future defaults. In response, DBS states that the safety manager has been in contact with counsel through January 2013 to draft this motion to reopen. DBS asserts that the delay was caused by the safety manager’s workload outside the office, communication availability, and holiday schedules. DBS maintains that its safety manager now understands the contest process, and that it implemented new policies to ensure that proposed assessments are timely opened and contested.

The Commission has made it clear that where a failure 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). We urge the operator and counsel to take all steps necessary to ensure that future penalty contests are timely filed.

Having reviewed DBS’ request and the Secretary’s response, in the interest of justice, we hereby reopen this matter and remand it 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. Accordingly, consistent with Rule 28, the Secretary shall file a petition 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, Commissioner

/s/ Michael G. Young

Michael G. Young, Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Distribution:

Tina Stanczewski, Esq.

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

4740 Corridor Place, Suite D

Beltsville, MD 20705

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