Secretary of Labor v. Big Laurel Mining Corporation

Plain-English summary

An ALJ assessed $252,304 in penalties against Big Laurel Mining, after which the operator notified the Commission that its corporate family had filed for Chapter 11 bankruptcy and invoked the automatic stay. The Commission explained that Mine Act enforcement is an exercise of the government's police or regulatory power and therefore falls within the Bankruptcy Code exception to the automatic stay. It treated the notice as a petition for discretionary review and a motion to stay. The Commission denied the petition because it stated no grounds for review under the Mine Act and Commission rules, while allowing Big Laurel until October 1, 2015, to file an amended petition.

Decision snapshot

• Governing provisions: 29 C.F.R. § 2700.70 and 30 U.S.C. § 823(d)(2)(A)
• Outcome: The bankruptcy notice was treated as a petition for discretionary review and motion to stay, and the petition was denied without prejudice to a timely amended filing.
• Key point: A mine-enforcement proceeding falls within the governmental police-power exception to the bankruptcy automatic stay, and a petition for review must independently state valid grounds for Commission review.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON,
D.C. 20004-1710

SECRETARY OF LABOR,                           
 :                         

MINE SAFETY AND HEALTH                  
 :                               

ADMINISTRATION (MSHA)                     
 :                                           

:                                                 

v.                                              
 :        Docket Nos.    VA 2012-56

:                                VA 2012-337       

BIG LAUREL MINING CORPORATION    :                                             

:                               

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

ORDER

BY THE COMMISSION:

These civil
penalty proceedings arise under the Federal Mine Safety and Health Act of 1977,
30 U.S.C. § 801 et seq. (2012) (“Mine Act”). On September 1, 2015, a Commission
Administrative Law Judge issued a decision, disposing of issues and assessing
civil penalties in the sum of $252,304 relating to citations and orders issued
to Big Laurel Mining Corporation by an inspector with the Department of Labor’s
Mine Safety and Health Administration (“MSHA”). 37 FMSHRC ___, slip op. at 36,
Nos. VA 2012-337, et al. (Sept. 1, 2015) (ALJ).

On September 9,
counsel for Big Laurel filed a Notice of Suggestion of Pendency of Bankruptcy
and Automatic Stay of Proceedings. In the notice, counsel states that on August
3, 2015, Alpha Natural Resources, Inc. and certain of its direct and indirect
subsidiaries filed Chapter 11 petitions in the United States Bankruptcy Court
for the Eastern District of Virginia. Counsel further states in part that, in
accordance with the automatic stay imposed by 11 U.S.C.

§ 362(a), no party may
commence or prosecute any cause of action outside of the Bankruptcy Court
either against Big Laurel or its successor, Mill Branch Coal Corporation,
without first obtaining an order lifting the stay from the Bankruptcy Court. In
addition, Counsel states that actions taken in violation of the automatic stay,
and judgments entered or enforced against the debtors, including Big Laurel or
Mill Branch, while the stay is in effect, are void.

Section
362(a) of the Bankruptcy Code provides that the filing of a Chapter 11
bankruptcy petition operates as an automatic stay of the continuation of
administrative proceedings against the bankruptcy petitioner. 11 U.S.C. § 362. However,
section 362(b)(4) exempts from the automatic stay provisions the continuation
of a proceeding by a “governmental unit” to enforce the governmental unit’s
police or regulatory power.[1]
As the Commission has previously recognized, the Secretary of Labor, the
Department of Labor, and MSHA are all “governmental units” within the meaning
of the Bankruptcy Code.[2]
Jim Walter Res., Inc., 12 FMSHRC 1521, 1530 (Aug. 1990) (“JWR”).

The
present case was brought by the United States, through the Secretary, to
effectuate and enforce mandatory safety standards that implement the Mine Act. Thus,
it is the kind of regulatory action covered by the police or regulatory power
exception to the automatic stay. See Hidden Splendor Res., Inc., 35
FMSHRC 1548, 1549-50 (June 2013); Holst Excavating, Inc., 17 FMSHRC 101,
102 (Feb. 1995); JWR, 12 FMSHRC at 1530.

We construe Big
Laurel’s notice as a petition for discretionary review and motion to stay. We
hereby deny the petition because it fails to set forth grounds for review as
required by the Mine Act and the Commission’s procedural rules. See 30
U.S.C. § 823(d)(2)(A); 29 C.F.R.

§ 2700.70. In accordance with
those provisions, Big Laurel must file any amended petition for discretionary
review by October 1, 2015.

/s/ Mary Lu Jordan

Mary
Lu Jordan, Chairman

/s/
Michael G. Young

Michael
G. Young, Commissioner

/s/ Robert F. Cohen, Jr.

Robert F. Cohen, Jr., Commissioner

/s/
Patrick K. Nakamura

Patrick
K. Nakamura, Commissioner

/s/ William I. Althen

William I. Althen, Commissioner

[1]
Section 362(b)(4) provides in part:

(b) The
filing of a petition under section 301, 302, or 303 of this title . . . does
not operate as a stay–

(4)
under paragraph (1) . . . of subsection (a) of this section, of the
commencement or continuation of an action or proceeding by a governmental unit
. . . to enforce such governmental unit’s . . . police and regulatory power,
including the enforcement of a judgment other than a money judgment, obtained
in an action or proceeding by the governmental unit to enforce such
governmental unit’s . . . police or regulatory power.

11 U.S.C. § 362(b)(4).

[2]
11 U.S.C. § 101(27) defines “governmental unit” as the “United States; . . .
department, agency, or instrumentality of the United States.”