Secretary of Labor v. Dominion Coal Corporation

Plain-English summary

Dominion Coal defaulted after failing to answer MSHA's penalty petition or a later show-cause order. It sought reopening eleven months after the show-cause order, citing personnel changes, staffing shortages, misrouted mail, and unsuccessful settlement efforts. The Secretary opposed relief and noted that Dominion waited six months after a delinquency notice, the matter had gone to Treasury collection, and payment had already been applied. The Commission found that Dominion's mail-routing system was inadequate and that the company did not explain its lengthy delays. It denied reopening with prejudice.

Decision snapshot

• Governing provisions: 29 C.F.R. §§ 2700.69(b) and 2700.70(a); 30 U.S.C. § 823(d)(1)
• Outcome: The motion to reopen and vacate the default order was denied with prejudice.
• Key point: An unreliable internal mail system and unexplained delays after both a show-cause order and delinquency notice do not establish good cause for reopening.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

January 31, 2013

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

DOMINION COAL CORPORATION

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VA 2010-304

A.C. No. 44-06499-214250-01

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 February 16, 2012, the Commission received from
Dominion Coal Corporation (“Dominion”) a motion seeking to reopen a penalty assessment
proceeding and relieve it from the default order entered against it.

On March 16, 2011, 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 Dominion’s failure to answer the
Secretary’s May 13, 2010 Petition for Assessment of Civil Penalty. The Commission did not
receive Dominion’s answer within 30 days, so the default order became effective on April 18,
2011.

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).

Dominion asserted that it attempted to reach a settlement agreement with MSHA, but was
unable to do so. On March 23, 2012, the Commission sent Dominion a letter asking it to explain
why it did not timely answer the penalty petition and Show Cause Order, and what office
procedures were implemented to prevent future defaults. In response, Dominion asserts that it
failed to file timely answers due to personnel changes and a shortage of personnel. Moreover,
Dominion states that the Default Order was not received by the correct person at the company.
Dominion’s compliance coordinator maintains that he made this issue his primary responsibility,
trained employees regarding the importance of receiving and routing mail, and began working
with a law firm to timely file future motions.

The Secretary opposes the request to reopen, and notes that MSHA mailed a delinquency
notice on August 25, 2011, and the case was referred to the Department of Treasury for
collection on October 13, 2011. The Secretary maintains that the operator makes no showing of
exceptional circumstances that warrant reopening. Moreover, the Secretary states that Dominion
does not explain why it took eleven months after the Show Cause Order was issued, and six
months after receiving the delinquency notice, to request reopening. The Secretary further
asserts that a settlement agreement was not reached in this case, and notes that MSHA received a
payment through Treasury collection and applied it to this case on November 17, 2011.

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). In this case, we conclude
that the lack of any procedure to properly route and assess MSHA correspondence represents an
inadequate or unreliable internal processing system.

Additionally, in considering whether an operator has unreasonably delayed in filing a
motion to reopen, we find relevant the amount of time that has passed between an operator’s
receipt of a delinquency notice and the operator’s filing of its motion to reopen. See, e.g., Left
Fork Mining Co., 31 FMSHRC 8, 11 (Jan. 2009); Highland Mining Co., 31 FMSHRC at 1316-17 (holding that motions to reopen filed more than 30 days after receipt of notice of delinquency
must explain the reasons why the operator waited to file a reopening request, and lack of
explanation is grounds for the Commission to deny the motion). Here, the delays in responding
to MSHA’s delinquency notice and the Commission’s Show Cause Order amounted to six and
eleven months. Despite being given a second chance, Dominion failed to explain in detail why it
did not address its personnel shortage in the ten months it had from the date MSHA filed its
penalty petition on May 13, 2010, until the issuance of the Show Cause Order on March 16,
2011.

Having reviewed Dominion’s request and the Secretary’s response, we conclude that
Dominion has failed to establish good cause for reopening the penalty assessment proceeding and
vacating the Default Order. Accordingly, we deny its motion with prejudice.

/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:

Randy Taylor

Compliance Coordinator

Dominion Coal Corp.

15498 Riverside Dr.

Oakwood, VA 24631

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. 20004-1721