Secretary of Labor v. Freeport-McMoRan Morenci, Inc. (Commission decision, July 18, 2013)

Plain-English summary

Freeport-McMoRan said it mailed a timely penalty-contest notice to MSHA's St. Louis payment office instead of the Arlington civil penalty office. It discovered the mistake after a collection agency contacted it. The Secretary did not oppose reopening but noted the earlier delinquency notice and Treasury referral. The Commission also noted that Freeport had previously promised controls to prevent another missed contest. It reopened the assessment in the interest of justice, remanded the matter, and again directed the company to use the address printed on the assessment form.

Decision snapshot

• Governing provisions: 30 U.S.C. § 815(a); 29 C.F.R. §§ 2700.1(b) and 2700.28
• Outcome: The final penalty assessment was reopened and the matter was remanded for proceedings on the merits.
• Key point: A timely contest misdirected to MSHA's payment office may be reopened, but repeated filing failures undermine assurances that corrective controls are working.

Full text (FMSHRC public release)

Federal Mine Safety and Health Review Commission

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

July 18, 2013

SECRETARY OF LABOR, 

MINE SAFETY AND HEALTH 

ADMINISTRATION (MSHA) 

v.

FREEPORT-MCMORAN MORENCI, INC.

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Docket No. WEST 2013-371-M

A.C. No. 02-00024-279683

BEFORE: Jordan, Chairman; Young and Nakamura, 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. (2006) (“Mine Act”). On January 11, 2013, the Commission received from Freeport-McMoRan Morenci, Inc. (“Freeport”) 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).

We have held, however, 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 mistake, inadvertence, or excusable neglect. 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).

Records of the Department of Labor’s Mine Safety and Health Administration (“MSHA”) indicate that the proposed assessment was delivered on February 8, 2012, and became a final order of the Commission on March 9, 2012. Freeport asserts that it mailed a timely notice of contest on February 20, to St. Louis, Missouri. Freeport states that it discovered the error after being contacted by a collection agency. The Secretary does not oppose the request to reopen but notes that a delinquency letter was mailed on April 24, and the case was referred to the Department of Treasury for collection on August 16. The Secretary urges the operator to take steps to ensure that future penalty contests are timely filed and mailed to the civil penalty compliance office in Arlington, VA.

We note that Freeport previously filed a motion to reopen on February 7, 2012, asserting that controls have been established to ensure that failures to timely contest will not happen in the future. 34 FMSHRC___, slip op. at 2, No. WEST 2012-463-M (Dec. 20, 2012). We remind the operator that contest forms must be mailed to MSHA’s Civil Penalty Compliance Office, 1100 Wilson Blvd., Arlington, VA 22209, as instructed on the proposed assessment form.

Having reviewed Freeport’s request and the Secretary’s response, in the interest of justice, we hereby reopen this matter and remand it to the Chief Administrative Law Judge for further proceedings pursuant to the Mine Act and the Commission’s Procedural Rules, 29 C.F.R. Part 2700. Accordingly, consistent with Rule 28, the Secretary shall file a petition for assessment of penalty within 45 days of the date of this order. See 29 C.F.R. § 2700.28.

/s/ Mary Lu Jordan

Mary Lu Jordan, Chairman

/s/Michael G. Young

Michael G. Young, Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Distribution:

Kristin R. B. White, Esq.

Jackson Kelly PLLC

1099 18th Street, Suite 2150

Denver, CO 80202

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA 22209-2296

Melanie Garris

Office of Civil Penalty Compliance

MSHA

U.S. Dept. Of Labor

1100 Wilson Blvd., 25th Floor

Arlington, VA 22209-3939

Chief Administrative Law Judge Robert J. Lesnick

Federal Mine Safety & Health Review Commission

1331 Pennsylvania Avenue, N. W., Suite 520N

Washington, D.C. 20004-1710