Secretary of Labor v. ITAC

Plain-English summary

ITAC moved in 2009 without updating its MSHA address, and a 2023 assessment was delivered to the former location and signed for by an unidentified recipient. An employee looking for missing packages recovered the assessment on May 25, and ITAC contacted MSHA on the next business day and moved to reopen before receiving a delinquency notice. The Commission majority treated the stale address as an excusable first-time mistake because ITAC had received only two citations since 2009 and acted promptly after discovery. It reopened the assessment and warned that a repeated address failure could show an inadequate process. Commissioner Baker dissented because updating the address was a legal duty and the 14-year lapse should not be excused.

Decision snapshot

• Cited authority: 30 U.S.C. §§ 815(a) and 819(d); 30 C.F.R. Part 41
• Outcome: The assessment was reopened and the case was remanded.
• Key point: Prompt action after recovering misdelivered mail supported relief, despite a long-unupdated address of record.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVE., N.W., SUITE 520N

WASHINGTON,
DC 20004-1710

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH

ADMINISTRATION
(MSHA)

                    v.

ITAC [1]

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Docket
No. SE 2023-0197

A.C.
No. 31-00212-573986 [2]

BEFORE:
Jordan, Chair; Althen, Rajkovich, and Baker, Commissioners

ORDER

BY: Jordan, Chair;
Althen and Rajkovich, Commissioners

        This

matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
801 et seq. (2018) (“Mine Act”). On June 5, 2023, the Commission received from ITAC,
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 orders, the Commission has found guidance
in Rule 60(b) of the Federal Rules of Civil Procedure, under which the
Commission may relieve a party from a final order of the Commission on the
basis of mistake, inadvertence, excusable neglect, or other reason justifying
relief. 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 to 13203 N. Enon Church
Road on April 3, 2023, and became a final order of the Commission on May 3,
2023. On June 20, 2023, MSHA sent ITAC a delinquency notice. ITAC explains that
the proposed assessment was mailed to its former address, which has since been occupied
by Rivers Bend East Office Group & Technology Center I, LLC (“Rivers Bend”).
It states that on May 25, 2023, ITAC’s Senior Procurement Agent went to its
former address to look for missing packages and was provided with a number of
misplaced mail and packages kept in a locked office, including the assessment
package. The operator hand-delivered the assessment package to ITAC’s Corporate
Office Attendant, who delivered the package the next day to the appropriate
personnel to handle the processing of the assessment.

On the next business day, May 30, ITAC
contacted MSHA to notify MSHA of the circumstances involving the assessment
package. MSHA informed the operator that because no contest had been received,
a final order had been issued. ITAC also was informed that MSHA's address of
record for the operator was the 13203 N. Enon Church Road address. ITAC began
taking steps to prevent reoccurrence of this situation by updating its address
of record with MSHA.

The Secretary opposes reopening. The
Secretary argues that MSHA mailed the Proposed Penalty Assessment to the
operator’s address of record and that a U.S. Postal Service delivery record
indicates that the “item was delivered to an individual at the address” on
April 3, 2023, and that the item was signed for by ITAC. The Secretary contends
that the operator’s failure to fulfill its legal responsibility to update its
address of record does not constitute excusable neglect warranting reopening.

        ITAC

does not dispute that the assessment was mailed to the correct address of
record. Corporate
counsel for ITAC contacted Rivers Bend and confirmed that the locked office
containing ITAC’s unclaimed mail belonged to an employee of Rivers Bend. ITAC
has otherwise been unable to determine who signed for delivery of the
assessment package.
Thus, although USPS indicated that the assessment had been delivered to ITAC’s
former address and “signed by ITAC,” the recipient of delivery is unclear. In
addition, it appears that ITAC may not have been aware that its former address
was listed as its address of record with MSHA since ITAC has received only two
citations since 2009, including the citation at issue. Given that this is
likely the contractor’s first contest of a citation in fourteen years, ITAC’s
mistake in failing to update its address was an excusable one.

We note that the motion to reopen was
timely filed once ITAC discovered the error. The Commission
has previously held that “[m]otions to reopen received within 30 days of an
operator’s receipt of its first notice from MSHA that it has failed to timely
file a notice of contest will be presumptively considered as having been filed
within a reasonable amount of time.” Highland Mining Co., 31 FMSHRC
1313, 1316-17 (Nov. 2009). Here, the motion to reopen was filed on June
5, 2023, within 30 days of having received the assessment package on May 25,
and before the delinquency notification was received. Therefore, the motion was
filed within a reasonable amount of time.

Having reviewed ITAC’s request and the Secretary’s response, we find that the
operator has demonstrated good cause for its failure to timely respond and
acted in good faith by timely filing its request to reopen. 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. We note, however, that a repeated failure to update one’s
address of record would indicate an inadequate internal process and may result
in future motions to reopen being denied. 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, Chair

/s/ William I. Althen

William I. Althen, Commissioner

/s/ Marco M. Rajkovich, Jr.

Marco M. Rajkovich, Jr., Commissioner

Commissioner Baker, dissenting:

I respectfully dissent.

Section 109(d) of the Mine Act
requires each operator of a coal or other mine to file with the Secretary of
Labor the name and address of such mine, the name and address of the person who
controls or operates the mine, and any revisions in such names or addresses. 30
U.S.C. § 819(d). Under the authority granted by the Act, the Secretary has
promulgated regulations requiring an operator to provide MSHA with, among other
things, its correct address of record. 30 C.F.R. § 41.11. If any changes occur
with respect to this information, an operator is required to notify MSHA of the
change within 30 days of its occurrence. 30 C.F.R. § 41.12. Any failure by an
operator to notify MSHA in writing of a change is considered a violation of
Section 109(d) of the Act and subject to a civil penalty as provided in section
110 of the Act. 30 C.F.R. § 41.13. The regulations further provide:

Service
of documents upon the operator may be proved by a post office return receipt
showing that the documents could not be delivered to such address of record
because the operator had moved without leaving a forwarding address or because
delivery was not accepted at that address, or because no such address existed.

30 C.F.R. § 41.30.

In light of these statutory
and regulatory requirements, the Commission has denied motions to reopen, in
part, because the operator failed to maintain its correct address of record. See
Southwest Rock Products, Inc. , 45 FMSHRC ___, No. WEST 2021-0275 (Aug.
30, 2023). In addition, the Commission has previously held 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 . See e.g. Shelter Creek Capital, LLC , 34 FMSHRC
3053, 3054 (Dec. 2012); Oak Grove Res., LLC , 33 FMSHRC 103, 104 (Feb.
2011); Double Bonus Coal Co. , 32 FMSHRC 1155, 1156 (Sept. 2010).

In the instant case, it is
undisputed that the proposed assessment was delivered to the operator’s address
of record on April 3, 2023, and became a final order of the Commission on May
3, 2023. ITAC’s excuse for its failure to respond to the proposed assessment in
a timely manner is that it changed offices in 2009 without notifying MSHA. As a
result, it did not learn about the assessment until May 25, 2023, when its
Senior Procurement Agent went to its former address to look for missing
packages. It was not until May 30, 2023, 14 years after the deadline, that ITAC
contacted MSHA, and performed its legal obligation to update its address of
record.

The operator’s failure to
update its address of record does not constitute excusable neglect. In fact,
the explanation is itself an independent violation of the Mine Act that could
have been cited. Rather than excuse the operator’s failure to timely contest
the citation, it compounds the error. Further, the operator’s processing system
amounted to allowing mail to pile up at the wrong address for months at a time.
Obviously, that is inadequate and unreliable and does not justify the
operator’s failure here. I note that the Secretary opposes reopening.

It is significant that the
operator provided no justification for why it took 14 years to update its
official address. The majority supplies its own justification for the operator’s
delay, noting, “it appears that ITAC may not have been aware that its former
address was listed as its address of record with MSHA since ITAC has received
only two citations since 2009, including the citation at issue.”

Leaving aside the fact that
the operator did not cite this information in support of its motion, I do not
believe that the long gap between citations issued to the operator is relevant.
An operator, under the relevant regulations, is defined as “any owner, lessee,
other person who operates, controls, or supervises a coal or other mine or any
designated independent contractor performing services or construction at such
mine.” 30 C.F.R. § 41.1(a). As a result, the regulations requiring operators to
inform MSHA of a change of address (among other things) apply equally to all
operators, including an operator that could be characterized as “infrequent.” All
operators must conform their behavior to the requirements of the Mine Act, and
in the interest of fairness we must consider failure to comply with those
requirements consistently.

Therefore, I would find that
ITAC failed to establish good cause and I would deny ITAC’s motion to reopen.

/s/ Timothy J. Baker

Timothy J. Baker, Commissioner

Distribution:

Allen
L. West, Esq.

Hamilton
Stephens Steele + Martin, PLLC

525
N. Tryon Street, Suite 1400

Charlotte,
NC 28202

[email protected]

April
Nelson, Esq.

Associate
Solicitor

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Emily
Toler Scott, Esq.

Counsel
for Appellate Litigation

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Melanie
Garris

USDOL/MSHA,
OAASEI/CPCO

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Chief
Administrative Law Judge Glynn F. Voisin

Federal
Mine Safety Health Review Commission

Office
of the Chief Administrative Law Judge

1331
Pennsylvania Avenue, NW Suite 520N

Washington,
DC 20004-1710

[email protected]

[1] The operator’s
motion to reopen refers to the operator as “Industrial TurnAround Corporation.”
However, in its 2000-7 Legal Identity Report, the operator lists its name as
“ITAC.” For the purposes of this proceeding, we will use “ITAC,” the operator’s
official name on file with MSHA.

[2] The operator’s
motion to reopen incorrectly lists number 31-00212-573989 in the caption, but
the assessment attached to its motion is 31-00212-573986.