A. H. Smith Stone Company

Plain-English summary

A. H. Smith Stone Company failed to answer MSHA's civil penalty complaint and two orders to show cause, leading the ALJ to enter a default order and assess $362 for four alleged violations. A related company later asked to reopen the case, explaining that the filings had been sent to former employees. The Commission treated the request as a late petition for discretionary review, granted relief, vacated the default order, and remanded for the judge to decide whether the explanation justified the failure to respond. The underlying violations and penalty were not resolved by this order.

Decision snapshot

• Governing provisions: 30 U.S.C. § 814(a); 29 C.F.R. § 2700.65(c); 29 C.F.R. § 2700.7
• Outcome: The default order and $362 penalty assessment were vacated, and the matter was remanded for further proceedings.
• Key point: A default may be set aside when a party presents a potentially adequate explanation such as mistake, inadvertence, or excusable neglect.

Full text (FMSHRC public release)

CCASE:
MSHA V. A. H. SMITH STONE
DDATE:
19890508
TTEXT:

          FEDERAL MINE SAFETY & HEALTH REVIEW COMMISSION
                         WASHINGTON, D.C.
                             May 8, 1989

SECRETARY OF LABOR,
MINE SAFETY AND HEALTH
ADMINISTRATION (MSHA),

   v.                            Docket No. VA 88-44-M

A. H. SMITH STONE COMPANY

BEFORE: Ford, Chairman; Backley, Lastowka, Doyle and Nelson,
Commissioners

               ORDER

BY THE COMMISSION:

 This civil penalty proceeding arises under the Federal Mine

Safety and Health Act of 1977, 30 U.S.C. $ 801 et seq. (1982). On
February 22, 1989, Commission Chief Administrative Law Judge Paul
Merlin issued an Order of Default finding respondent A. H. Smith
Stone Company ("Smith Stone") in default for failure to answer the
Secretary of Labor's civil penalty complaint and the judge's two
subsequent orders to show cause. The judge assessed a civil penalty
of $362 proposed by the Secretary for four violations of mandatory
safety standards. By letter dated April 10, 1989, addressed to
Judge Merlin, A. H. Smith Associates Limited Partnership ("Smith
Associates"), on behalf of Smith Stone, requested that the order
of default be removed from the proceeding and that the operator be
allowed to contest the alleged violations. On May 1, 1989, the
Secretary filed an opposition to the request. We deem the April 10
letter to constitute a request for relief from a final Commission
order incorporating a late-filed petition for discretionary review,
and, for the reasons set forth below, we grant review, vacate the
judge's default order and remand for further proceedings.

On January 5 and 6, 1988, an inspector of the Department of

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Labor's Mine Safety and Health Administration ("MSHA") issued to Smith

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Stone four citations pursuant to section 104(a) of the Mine Act,
30 U.S.C. $ 814(a). On March 29, 1988, MSHA's Office of Assessments
notified Smith Stone that it proposed a total civil penalty of $362
for the alleged violations. On May 4, 1988, Smith Stone filed its
"Blue Card" request for a hearing before this independent Commission.
On June 9, 1988, the Secretary filed a complaint proposing the
assessment of civil penalties for the violations. The record reflects
that Smith Stone did not file an answer to the complaint, which was
served by first class mail on it at its Mitchell, Virginia, address.

 On August 15, 1988, Judge Merlin issued a show cause order

directing Smith Stone to answer the complaint within 30 days or be
found in default. The order was sent via certified mail, return
receipt requested, to Joseph McElfish, A. H. Smith Stone Company
at the Mitchell, Virginia, address. The record reflects that the
certified mail return receipt for the order was signed on August 22,
1988, by one Clyde Wayland as agent for Smith Stone. No response to
the order appears in the official file.

On November 8, 1988, the judge's law clerk noted, via a

memorandum to the file, that Mr. McElfish was no longer employed
by Smith Stone and that service should be directed to a Ms. Pridgen
at Smith Associates' corporate headquarters in Branchville, Maryland.
On December 8, 1988, Judge Merlin issued a second order to show
cause, directing Smith Stone to answer the complaint within 30 days,
indicating that since "it has subsequently been learned that
Mr. McElfish is no longer employed by the operator and ... the
proper company officials may not have received the order.... the
second show cause order is being issued [to Ms. Pridgen at the
corporate headquarters of A. H. Smith Associates in Branchville,
Maryland]." The certified mail return receipt for the second order
was signed by one R. Bailey.

 On February 22, 1989, Judge Merlin issued an Order of Default

stating, inter alia, that the respondent had "failed to comply ...
[with the second order to show cause]." The judge accordingly
assessed the total civil penalty amount of $362.

By letter dated April 10, 1989, which encloses an answer to

the complaint, Smith Associates' Director of Safety/Government
Affairs essentially requested that the order of default be vacated
and its right to contest the citations reinstated. The submission
asserts that the delay in responding is attributable to the fact
that the Secretary's complaint, the orders to show cause and the
order of default were directed to persons no longer employed by

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Smith Associates.

On May 1, 1989, the Secretary opposed the request on the

grounds that the respondent's proffered excuses for its nonresponse
to Commission orders are not persuasive.

The judge's jurisdiction in this matter terminated when

his default order was issued on February 22, 1989. 29 C.F.R.
$ 2700.65(c). Because the judge's decision has become final by
operation of law, we can consider the merits of A. H. Smith
Associates' request only if we construe it as a request for relief
from a final Commission decision

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incorporating a late-filed petition for discretionary review.
See, e.g., Amber Coal Company, 11 FMSHRC 131, 132 (February 1989);
Kelley Trucking Co., 8 FMSHRC 1867 (December 1986); M.M. Sundt
Construction Co., 8 FMSHRC 1269 (September 1986).

Smith Associates, proceeding without benefit of counsel, has

raised what may be a colorable excuse for its nonresponse to the
judge's orders. See, e.g., Columbia Portland Cement Co., 8 FMSHRC
1644 (November 1986)(nonresponse attributable to mistake or neglect
of a former employee); Mohave Concrete and Materials, Inc., 8 FMSHRC
1646 (November 1986)(failure to respond attributable to mistake or
neglect of a former bookkeeper); see also, Ten-A Coal Co., 10 FMSHRC
1332 (September 1988); Perry Drilling Co., 9 FMSHRC 370 (March 1987).
The Commission has previously afforded such a party relief from final
orders of the Commission where it appears that the party's failure to
respond to a judge's order and the party's subsequent default are due
to inadvertence, mistake, or excusable neglect. Amber, supra; Kelley,
supra; Sundt, supra. Under these circumstances, we will accept Smith
Associates' letter as a request for relief from a final Commission
order incorporating by implication a petition for discretionary
review. We accordingly grant the petition.

We have observed repeatedly that default is a harsh remedy

and that if the defaulting party can make a showing of adequate or
good cause for the failure to respond, the failure may be excused
and appropriate proceedings on the merits permitted. Sundt,
8 FMSHRC at 1271; Kelley, 8 FMSHRC at 1869. The Commission has
recently noted that "under appropriate circumstances a genuine
problem in communication or with the mail may justify relief from
default." Ten-A Coal Company, 10 FMSHRC 1132, 1133 (September 1988),
quoting Middle States Resources, Inc., 10 FMSHRC 1130 (September
1988); Con-Ag, Inc., 9 FMSHRC 989, 990 (June 1987)(emphasis supplied).
Since we are unable, on the basis of the present record, to evaluate
the merits of the respondent:s assertions, we will permit the parties
to present their positions to the judge, who will determine whether
sufficient grounds exist for excusing the failure to timely respond.
Perry Drilling Co., 9 FMSHRC 377, 380 (March 1987), citing Kelley,
supra, 8 FMSHRC at 1869.

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Accordingly, the judge's default order is vacated and
this matter is remanded for proceedings consistent with this order.
Respondent is reminded to serve the Secretary of Labor with copies
of all its correspondence and other filings in this matter. 29 C.F.R.
$ 2700.7.

                 Ford B. Ford, Chairman

                 Richard V. Backley, Commissioner

                 Joyce A. Doyle, Commissioner

                 James A. Lastowka, Commissioner

                 L. Clair Nelson, Commissioner

Distribution

Lisa M. Wolf
Director Safety
A.H. Smith
9101 Railroad Avenue
Branchville, Maryland 20740

Jack E. Strausman, Esq.
Office of the Solicitor
U.S. Department of Labor
4015 Wilson Blvd.
Arlington, VA 22203

Chief Administrative Law Judge Paul Merlin
Federal Mine Safety & Health Review Commission
1730 K Street, N.W., Suite 600
Washington, D.C. 20006