Secretary of Labor v. A&G Coal Corporation (ALJ decision, October 30, 2017)

Plain-English summary

A&G Coal failed to join a scheduled conference call, did not respond to a show-cause order, and was defaulted in five penalty cases. The Commission remanded because the record was unclear about who represented A&G and whether the company received the show-cause order. Judge David P. Simonton found repeated communication failures but also recognized that default is a harsh remedy and that the unexplained service discrepancy required further evidence. He reserved the default question for a hearing that would also address the citations on the merits. The Judge ordered counsel to enter a formal appearance, confirm the correct mailing address, and present witnesses explaining the missed call and show-cause response.

Decision snapshot

• Cited authority: Commission procedural rules governing appearances, service, and relief from default
• Outcome: Default was reserved for hearing, the merits cases remained active, and A&G was ordered to correct its representation and contact information.
• Key point: Persistent communication failures may support default, but disputed notice and representation facts should be tested before imposing that harsh remedy.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

OFFICE OF

ADMINISTRATIVE LAW JUDGES

721 19 th

St. Suite 443

Denver, CO 80202-2500

TELEPHONE:

303-844-5266 / FAX: 303-844-5268

October 30, 2017

SECRETARY OF LABOR

MINE SAFETY AND HEALTH    

ADMINISTRATION (MSHA),

Petitioner,

v.

A&G COAL CORPORATION,

Respondent.

CIVIL PENALTY PROCEEDINGS

Docket No. VA 2014-243

A.C. No. 44-04534-346270

Docket No. VA 2014-244

A.C. No. 44-04534-346286

Docket No. VA 2014-364

A.C. No. 44-04534-352768

Docket No. VA 2014-365

A.C. No. 44-04534-353549

Docket No. VA 2014-383

A.C. No. 44-04534-353996

Mine: Prep Plant #2

ORDER

IN RESPONSE TO REMAND

These consolidated

cases are before me on remand from the Commission. See A&G Coal

Corp. , 39 FMSHRC __, slip op. No. VA 2014-243 et al . (Oct. 2017). On

August 16, 2017, I issued an Order to Show Cause to A&G Coal Corporation (“A&G”

or “Respondent”) because its representative failed to appear for a scheduled

conference call to discuss lifting a stay and setting these dockets for hearing.

Unpublished Order dated August 16, 2017. The Order gave A&G until August

28, 2017 to show good cause. A&G did not respond to the order and as a

result I issued an Order of Default on August 30, 2017. On September 29, A&G

filed a petition for discretionary review requesting relief from the default

order, in which it argued it did not receive the show cause order and only discovered

its issuance when A&G received the order of default. See A&G

Coal Corporation Petition for Discretionary Review (“PDR”) at 3-4.

On

review, the Commission noted a lack of clarity regarding the communication

issues in the record and remanded the case “to determine whether relief from

the default is warranted and for further proceedings as appropriate pursuant to

the Mine Act and the Commission’s Procedural Rules, 29 C.F.R. Part 2700.” 39

FMSHRC __, slip op. at 3 (Oct. 2017).

Default

is a harsh remedy, and relief may be granted and the case reopened on the basis

of mistake, inadvertence, excusable neglect, or another reason justifying

relief. See 29 C.F.R. § 2700.1(b); Coal Prep. Servs., Inc. , 17

FMSHRC 1529, 1530 (Sept. 1995); Jim Walter Res., Inc. , 15 FMSHRC 782,

787 (May 1993). Issuance of such an order by the court is never done lightly

without much

thought and deliberation and certainly never with the intent of abusing

discretion. In fact, this is the first time in my five year tenure with the

agency and fifteen year career as a judge that I recall ever finding it necessary

to issue a default order. I do, however, agree that certain aspects of A&G’s

communicative deficiencies in these cases remain unclear and will take this opportunity

to address some of the ambiguities within the record noted by the Commission. In

addition, I will set the dockets for a hearing on the merits as well as on the

issue of default, and order A&G to remedy its communicative deficiencies as

specified below.

I first

address the perceived ambiguity regarding who represented A&G throughout

the procedural history of these matters. The cases had been stayed since 2015

pending a 110(c) investigation, and until early 2017, Mr. James Bowman served

as A&G’s representative. On January 27, 2017, Mr. Bowman filed a notice of

withdrawal and substitution of counsel that identified Mr. Billy Shelton as the

Respondent’s new representative and provided his contact information. Notice of

Withdrawal and Substitution of Counsel, filed January 27, 2017. Mr. Shelton did

not file a formal entry of appearance as required by my prehearing order and 29

C.F.R. § 2700.3(c). See 39 FMSHRC __, slip op. at 5 (Althen, Comm’r,

concurring).

The

court was aware of the withdrawal notice at the time of its filing and initially

assumed that Mr. Shelton was representing A&G in these matters. The court

copied Mr. Shelton along with representatives for the Solicitor on at least one

email requesting a status update on the cases. See Court Email to

A&G and Solicitor, sent March 20, 2017. On March 20, 2017, the representatives

for the Solicitor notified the court that they had instead been working with Mr.

Patrick Graham, who, according to the email, was currently representing A&G

in these matters. Solicitor’s Email to A&G and Court, dated March 24, 2017.

In step with their explanation, the Solicitor copied Mr. Graham’s email address

to the correspondence instead of Mr. Shelton’s. Id . Mr. Graham did not

object or redirect the court to Mr. Shelton at that time, and Mr. Shelton never

responded to the court’s initial email. Given that no A&G representative

had filed a formal entry of appearance or responded to the status emails, the

court believed, consistent with the Solicitor’s email, that Mr. Graham was now acting

as A&G’s representative at that time.

What

followed were several months of intermittent emails regarding the status of

these dockets and the accompanying 110(c) investigation. Correspondences on

March 27, June 30, and August 4 were all sent to the Solicitor and Graham. Mr.

Graham did not respond to those emails, nor did either party indicate that Mr.

Shelton was involved in the cases. On August 7, the Solicitor requested a

conference call with the court and Graham to discuss whether the stay should be

lifted and a hearing date should be selected. Solicitor’s Email to Court and

A&G, dated August 7. The court’s clerk scheduled the conference call for

August 14, 2017 and explicitly instructed Mr. Graham to contact the court within

the week prior to the call if he wished to reschedule. Court Email to A&G

and Solicitor, dated Aug. 7, 2017. Mr. Graham did not respond, and so the court

concluded that the appointment time was acceptable to the parties.

The

court decided that a show cause order was necessary when A&G did not appear

for the August 14 conference call. Mr. Graham later stated that he was

underground at the time of the conference call, which accounts for why he did

not answer the attempts by the court and Solicitor to contact him while on the

line for the conference call. See Aff. of Patrick Graham at 2. Mr.

Graham admitted that he was aware of the scheduled conference call and failed

to appear or to notify Mr. Shelton to attend. Id . Graham therefore had the

opportunity to contact the court on a number of occasions. He could have

notified the court prior to the conference call that he would be unable to

appear and requested to reschedule. He could have directed the court to contact

Mr. Shelton at this point or any point over the past three months during which

he was copied on the status emails, or he could have contacted Mr. Shelton himself

to ask him to appear for the call or otherwise contact the court. He also could

have contacted the court after missing the call to explain the situation. He

did none of these things.

In the

court’s view, A&G had multiple opportunities to adequately maintain

communications with the court and continually failed to do so. Pursuant to the

court’s prehearing order, it is the parties’ responsibility to maintain

communications with the court, including properly filing entries of

appearances, ensuring the court has the proper contact information and

following up on any missed calls or emails. The failure to answer emails or

follow up in any way on the missed conference call thus prompted the court to

issue the Order to Show Cause. [1]

I next

address the service of the Order to Show Cause. A&G asserted in its

Petition for Discretionary Review that Graham was unaware of the show cause

order until the response deadline had lapsed and he received the default order.

See PDR at 2. Mr. Graham’s unawareness remains unexplained.

The

Court maintains that it used the proper mailing address on record to serve the

show cause order to A&G. Graham stated that A&G has an office in Roanoke,

and the address used, 302 South Jefferson Street, Roanoke, VA 24011, is listed

on the Virginia Secretary of State’s website as A&G’s principal office. See

Aff. of Patrick Graham at 3; 2017 Commonwealth of Virginia State Corporation

Commission, Business Entity Details , https://sccefile.scc.virginia.gov/Business/0364069

(last visited Oct. 20, 2017).  Graham also stated that he received the default

order at that same address in early September. Aff. of Patrick Graham at 2. The

proof of service shows that both Orders were signed for by Ms. Leslie Wells. See

Proof of Service – OSC, dated August 16, 2017; Proof of Service – Default

Order, dated August 30, 2017. [2]

A&G

has not been able to explain why it only received the default Order when both documents

were served to the same address and signed for by the same employee. Regardless

of the reasons, the discrepancy stresses the importance for the operator to ensure

it will timely receive and respond to all correspondence from the court. The

court orders the Respondent to address these communicative deficiencies as

specified below, whether they represent a systemic problem within the A&G

office that resulted in misplacement of the show cause order, or indicate that

the provided address is no longer appropriate for correspondence from the court.

It is

lamentable that a simple email or phone call from the operator could have

prevented this sequence of events. Nonetheless, I agree with the Commission

that in all circumstances default is a harsh remedy and that the record is not yet

entirely clear as to A&G’s repeated failures to communicate with the court

and receive the show cause order. I therefore reserve the issue of default to

be addressed at hearing, which will also encompass a hearing on the merits of

the citations at issue, and will be scheduled per a separate hearing order. At

the hearing, the court expects A&G to fully address for the record good

cause explanations for (1) its failure to enter an appearance or in any way

communicate with the court after it’s representative, Mr. Bowman, withdrew from

the proceedings, (2) its failure to participate in the conference call and

follow up with the court, and (3) the reasons behind its failure to receive and

respond to the show cause order. I expect Mr. Graham, Ms. Leslie Wells, and any

other witness that A&G deems necessary to testify under oath to these

issues. If a subpoena for Mr. Graham or Ms. Wells is required, A&G must

notify the court no later than November 30, 2017.

Accordingly, legal counsel for A&G

in these matters, be it Mr. Shelton or another, is ORDERED to file a

formal Entry of Appearance within 5 days of the issuance of this Order as

required by 29 C.F.R. § 2700.3(c) and my prehearing order. Furthermore, A&G

or its legal counsel is ORDERED to provide written confirmation of

A&G’s principal mailing address and whether there is an additional address

at which A&G will timely and efficiently receive the court’s Orders.

/s/

David P. Simonton

David

P. Simonton

Administrative

Law Judge

Distribution: (U.S. First Class Mail)

Karen M. Barefield, Attorney, U.S. Department of

Labor, 211 7 th Avenue North, Suite 420, Nashville, TN 37219

Hagel Campbell, Conference & Litigation

Representative, U.S. Department of Labor, MSHA, P.O. Box 560, Norton, VA 24273

Robert S. Wilson, Regional

Counsel, U.S. Department of Labor, 201 12 th Street South, Arlington,

VA 22202

Patrick Graham, Southern

Coal Corporation, 302 South Jefferson Street, Roanoke, VA 24011

Billy Shelton, Attorney,

Shelton, Branham & Halbert PLLC, 2452 Sir Barton Way, Suite 101, Lexington,

KY 40509

[1] The Commission’s concurrence suggests that the court

could have lifted the stay and set the cases for hearing as a lesser

alternative sanction. See 39 FMSHRC __, slip op. at 6 (Althen, Comm’r,

concurring). However, the court did not consider that option a sanction in that

lifting the stay and setting the dockets for hearing were in fact, the

objectives of the conference call nor, in my view, would it have adequately

addressed A&G’s repeated failures to communicate with the court.

[2]

The court acknowledges that the show cause order bounced back via email,

consistent with Graham’s assertion that he switched email addresses at some

point in August. See Aff. of Patrick Graham at 2. As noted above,

however, Mr. Graham knew of the conference call and failed to follow up with

the court, at which time he could have also informed the court that he was

changing email addresses or was unable to access his email. Id .