Genwal Resources Inc. (Commission decision, November 25, 2008)

Plain-English summary

Two August 2007 accidents at Genwal's Crandall Canyon Mine resulted in nine fatalities and ended mining operations. After the mine safety director was reassigned, a September penalty assessment was misplaced in unrelated personnel files until April 2008. The Secretary did not oppose reopening but noted that MSHA had mailed a delinquency notice in December. The Commission remanded for an ALJ to determine good cause, directing consideration of the assessment's post-accident timing. It also required Genwal to explain why it waited four months after the delinquency notice before seeking relief.

Decision snapshot

• Governing provisions: 29 C.F.R. § 2700.1(b); 30 U.S.C. § 815(a)
• Outcome: The reopening request was remanded for a determination of good cause and entitlement to relief.
• Key point: Extraordinary post-accident disruption may support reopening, but the operator must still explain its later inaction after receiving a delinquency notice.

Full text (FMSHRC public release)

Federal Mine Safety and Health Review Commission

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

601 NEW JERSEY AVENUE, NW

SUITE 9500

WASHINGTON, DC 20001

November 25, 2008

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

GENWAL RESOURCES INC.

:

:

:

:

:

:

:

:

Docket No. WEST 2008-861
A.C. No. 42-01715-127742

BEFORE: Duffy, Chairman; Jordan, Young, and Cohen, 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. (2000) (“Mine Act”). On April 18, 2008, the Commission received from Genwal Resources, Inc. (“Genwal”) a motion seeking to reopen a penalty assessment that had become a final order of the Commission pursuant to section 105(a) of the Mine Act, 30 U.S.C. § 815(a).

Under section 105(a) of the Mine Act, an operator who wishes to contest a proposed penalty must notify the Secretary of Labor no later than 30 days after receiving the proposed penalty assessment. 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).

On September 21, 2007, the Department of Labor’s Mine Safety and Health Administration (“MSHA”) issued Proposed Assessment No. 000127742 to Genwal, proposing a penalty for Citation No. 7286499 that previously had been issued to the company’s Crandall Canyon Mine. In its motion, Genwal asserts that because of two major accidents that occurred at the mine in August 2007, which resulted in nine fatalities, mining operations ceased entirely. In an accompanying declaration, James Poulson, the safety manager of Genwal’s parent company, states that the mine’s safety director was reassigned to another mine within a week or two after the August accidents and that, as a result, the proposed penalty assessment that was issued in September was misplaced until April 2, 2008, when Mr. Poulson discovered it among some unrelated personnel files. The Secretary does not oppose the motion to reopen the penalty assessment but indicates that a notice of delinquency was mailed to Genwal on December 13, 2007.

We have held that in appropriate circumstances, we possess jurisdiction to reopen uncontested assessments that have become final Commission orders under section 105(a). Jim Walter Res., Inc., 15 FMSHRC 782, 786-89 (May 1993) (“JWR”). In evaluating requests to reopen final section 105(a) 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 inadvertence or mistake. 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”); JWR, 15 FMSHRC at 787. 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).

Having reviewed Genwal’s motion and the Secretary’s response, in the interests of justice, we remand this matter to the Chief Administrative Law Judge for a determination of whether good cause exists for Genwal’s failure to timely contest the penalty proposal and whether relief from the final order should be granted. In making that determination, the judge should consider that the proposed assessment was not sent until September 21, 2007, three weeks after rescue attempts had ceased. We also direct the judge to obtain from Genwal evidence regarding why it waited four months to respond to the delinquency notice dated December 13, 2007. If it is determined 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.

______

Michael F. Duffy, Chairman

______

Mary Lu Jordan, Commissioner

______

Michael G. Young, Commissioner

______

Robert F. Cohen, Jr., Commissioner

Distribution:

Thomas C. Means, Esq.

Crowell & Moring LLP

1001 Pennsylvania Avenue, NW

Washington, DC 20004-2595

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA 22209-2296

Myra James, Chief

Office of Civil Penalty Compliance

MSHA

U.S. Department of Labor

1100 Wilson Blvd., 25th Floor

Arlington, VA 22209-3939

Chief Administrative Law Judge Robert J. Lesnick

Federal Mine Safety & Health Review Commission

601 New Jersey Avenue, N.W., Suite 9500

Washington, D.C. 20001-2021