San Benito Aggregates, Incorporated

Plain-English summary

San Benito Aggregates asked to reopen six penalty assessments that had become final Commission orders after the operator missed the 30-day contest period. The company cited internal management problems and financial hardship, while the Secretary opposed relief under Federal Rule of Civil Procedure 60(b). The Commission found that the record contained unresolved factual disputes and remanded the matter to an administrative law judge to determine whether San Benito met the standard for reopening. The Commission did not decide whether the penalties should ultimately be reopened.

Decision snapshot

• Governing provision: 30 U.S.C. § 815(a)
• Outcome: The request to reopen six final penalty assessments was remanded for fact-finding under Rule 60(b).
• Key point: When a reopening request and response raise factual issues, the Commission sends the matter to an ALJ to resolve the record before deciding relief.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
1730 K STREET NW, 6TH FLOOR
WASHINGTON, D.C. 20006

                                      May 11, 2000

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH : Docket No. WEST 2000-155-M
ADMINISTRATION (MSHA) : WEST 2000-156-M
: WEST 2000-157-M
v. : WEST 2000-158-M
: WEST 2000-159-M
SAN BENITO AGGREGATES, : WEST 2000-160-M
INCORPORATED :

BEFORE: Jordan, Chairman; Marks, Riley, Verheggen, and Beatty 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. (1994) (“Mine Act”). On February 7, 2000, the Commission received from San
Benito Aggregates, Inc. (“San Benito”) a request to reopen six penalty assessments that had
become final orders of the Commission pursuant to section 105(a) of the Mine Act, 30 U.S.C.
§ 815(a). On March 2, the Commission received the Secretary’s response, opposing the request.

   Under section 105(a) of the Mine Act, an operator has 30 days following receipt of the

Secretary of Labor's proposed penalty assessment within which to notify the Secretary that it
wishes to contest the proposed penalty. 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).

    In his letter, David Grimsley, owner of San Benito Aggregates, Inc. (“San Benito”), a

small quarry in Hollister, California, asserts that he was not informed by his staff of the
violations associated with these penalty assessments until he received a demand letter for
payment from the Department of Labor’s Mine Safety and Health Administration (“MSHA”) in
late December 1999. Mot. Grimsley states that he was not informed “for reasons unbelievable
to me.” Id. He claims that he has reevaluated his operations and has made “serious adjustments
where needed.” Id. He offers that his company is in financial crisis and that the penalties would
have a substantial impact. Id. Accordingly, San Benito requests an opportunity to contest the six
proposed penalties. Id.

                                     22 FMSHRC 589

Page 2

     The Secretary asserts that San Benito does not meet the standards for relief under Fed. R.

Civ. P. 60(b) because it has failed to establish that its conduct amounts to “excusable neglect.”
S. Opp’n. to Mot. at 1-2. She states that the only explanation San Benito offers for its failure to
contest the penalty assessments is that it had internal management problems, and that mistakes
and omissions of an operator’s staff do not constitute excusable neglect. Id. at 5-7. The
Secretary notes that San Benito received the six penalty assessments at issue, which include 61
violations totaling $33,722 in penalties, over the course of 6½ months. Id. at 2-3, 7; Attach. A.
She asserts that San Benito also received five notices, one for each of the first five penalty
assessments, but failed to respond to either the penalty assessments or the notices until it received
a letter from MSHA dated December 8, 1999, demanding payment of all six penalty assessments
and threatening referral to the Department of Justice for collection. Id. at 3-4; Attach. B-D. The
Secretary also offers that San Benito is familiar with MSHA procedure because it received
penalty assessments for 120 violations over the past 13½ years. Id. at 4; Attach. E. Finally, the
Secretary contends that granting San Benito relief under these circumstances would be unfair to
compliant operators and inconsistent with effective enforcement of the Mine Act. Id. at 7-8.
Accordingly, the Secretary requests that the Commission deny San Benito’s request for relief. Id.
at 8.

     We have held that, in appropriate circumstances and pursuant to Rule 60(b), we possess

jurisdiction to reopen uncontested assessments that have become final under section 105(a).
Rocky Hollow Coal Co., 16 FMSHRC 1931, 1932 (Sept. 1994); Jim Walter Resources, Inc., 15
FMSHRC 782, 786-89 (May 1993). We have also observed 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
timely respond, the case may be reopened and appropriate proceedings on the merits permitted.
See Coal Preparation Servs., Inc., 17 FMSHRC 1529, 1530 (Sept. 1995). In accordance with
Rule 60(b)(1), we have previously afforded a party relief from a final order of the Commission
on the basis of inadvertence or mistake. See Kinross DeLamar Mining Co., 18 FMSHRC 1590,
1591-92 (Sept. 1996); General Chem. Corp., 18 FMSHRC 704, 705 (May 1996); Drummond
Co., 17 FMSHRC 883, 884 (June 1995).

                                     22 FMSHRC 590

Page 3

    On the basis of the present record, we are unable to evaluate the merits of San Benito’s

request. Although it appears that San Benito has offered an explanation for its failure to timely
file a hearing request, it has not attached sufficiently reliable documents to substantiate its
allegations. Moreover, the Secretary, in her opposition, has alleged facts in addition to those
raised by San Benito. We are unable to evaluate this factual record at an appellate level.1 In the
interest of justice, we thus remand the matter for assignment to a judge to determine whether San
Benito has met the criteria for relief under Rule 60(b). If the judge determines that such relief is
appropriate, this case shall proceed pursuant to the Mine Act and the Commission’s Procedural
Rules, 29 C.F.R. Part 2700.

                                          Mary Lu Jordan, Chairman




                                          Marc Lincoln Marks, Commissioner




                                          James C. Riley, Commissioner




                                          Theodore F. Verheggen, Commissioner




                                          Robert H. Beatty, Jr., Commissioner



   1
     Commissioners Beatty and Riley believe that the Commission should remand to an

administrative law judge to determine whether the criteria for relief under Rule 60(b) have been
met whenever the request to reopen or any response thereto raises factual issues irrespective of
whether or not the Secretary of Labor objects to or opposes an operator’s request for relief.
Commissioners Beatty and Riley believe that any factual issues raised by a request to reopen
under Rule 60(b) or any response should be resolved in the first instance by a judge, as the trier
of fact.

                                     22 FMSHRC 591

Page 4

Distribution

David P. Grimsley
San Benito Aggregates, Inc.
151 Hillcrest Road
Hollister, CA 95023

W. Christian Schumann, Esq.
Office of the Solicitor
U.S. Department of Labor
4015 Wilson Blvd., Suite 400
Arlington, VA 22203

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

                               22 FMSHRC 592