Secretary of Labor v. Omya, Inc.

Plain-English summary

Omya had filed notices contesting the underlying citations before MSHA issued the proposed assessment. A shipping manager later received a combined invoice and mistakenly paid the penalties while believing the earlier notices had preserved the company's contest rights. The Secretary did not oppose reopening and Omya had filed no other reopening motions in the prior two years. The Commission majority treated the failure to contest and payment as an internal processing error, reopened the assessment, and remanded it. Commissioner Baker dissented because he viewed the payment as an affirmative litigation choice caused by an inadequate filing system rather than excusable neglect.

Decision snapshot

• Cited authority: 30 U.S.C. § 815(a); 30 C.F.R. § 100.7
• Outcome: The assessment was reopened and remanded, with one Commissioner dissenting.
• Key point: Prior citation contests may demonstrate an intent to challenge penalties despite a later mistaken payment, but the Commission divided over whether the internal process justified relief.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON,
D.C. 20004‑1710

SECRETARY OF LABOR,                             :                    

MINE SAFETY AND HEALTH                  
:                                            

ADMINISTRATION (MSHA)                     
:

:

v.                                              
:         Docket No.  WEST 2022-0119

:         A.C. No. 04-00167-529152            

OMYA, INC.                                                   :

BEFORE:  Jordan, Chair; Althen, Rajkovich, and Baker,
Commissioners

ORDER

BY:     Jordan, Chair; Althen
and Rajkovich, Commissioners

This
matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
801 et seq. (2012) (“Mine Act”). On January 11, 2022, the Commission received from
Omya, Inc. (“Omya”) 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), 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 orders, the Commission
has found guidance in Rule 60(b) of the Federal Rules of Civil Procedure, under
which the Commission may relieve a party from a final order of the Commission
on the basis of mistake, inadvertence, excusable neglect, or other reason
justifying relief. 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).

The Department of Labor’s Mine Safety and Health Administration (“MSHA”)
indicates that the proposed assessment was delivered to the operator on February
10, 2021. The assessment became a final order of the Commission on March 12,
2021.

Omya asserts that it had always intended to contest the penalties,
which is evidenced by its Notices of Contest filed on November 8, 2020. Omya
subsequently received a combined invoice, which contained an outstanding
balance and new penalties. However, believing that the notices of contest had preserved
the operator’s contest rights, Omya’s Packaging Shipping Manager erroneously paid
the penalties on March 19, 2021, in an effort to avoid a delinquency. The
operator seeks reopening so that it may properly contest the penalties. Omya has not filed any other motions to reopen with
the Commission in the last two years. The Secretary does not oppose the request to reopen but urges the
operator to take steps to ensure that future penalty contests are timely filed in accordance with MSHA’s regulations at 30 C.F.R. §
100.7 and the Commission’s procedural rules.

The Commission has granted requests to reopen
where operators have mistakenly paid penalties and shown that they
intended to contest the penalties or contested the underlying citations. See Rockwell Mining, LLC , 42 FMSHRC 793, 793-94 (Oct. 2020)
(finding that operator sufficiently explained
its failure to timely contest which was the result of excusable neglect) ;
Doe Run Co. ,  21 FMSHRC 1183, 1184-85
(Nov. 1999);  Cyprus Emerald Resources Corp .,  21 FMSHRC 592, 592-93 (June 1999) ; compare
Sterling Sand & Gravel Co ., 22 FMSHRC 935, 936 (Aug. 2000) (motion to
reopen denied where operator failed to show that it intended to contest the
penalty that was paid). In Kaiser Cement
Corporation , the operator’s failure to contest a proposed assessment and
its inadvertent payment of the penalties was determined to be the result of a
processing error which the Commission reasonable found to qualify as
“inadvertence” or “mistake.” Kaiser Cement Corp. , 23 FMSHRC 374, 375
(Apr. 2001); see also Cyprus ,
21 FMSHRC at 593-94.

Having
reviewed Omya’s request and the Secretary’s response, we find that due to an internal
processing error, the operator failed to properly contest the penalty assessment.
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, Chair

/s/ William I. Althen

William I. Althen, Commissioner

/s/ Marco M. Rajkovich, Jr.

Marco M. Rajkovich, Jr., Commissioner

Commissioner Baker, dissenting:

Omya, Inc. received its proposed
assessment in this matter on February 10, 2021 and that assessment became final
on March 12, 2021. On or about March 19, 2021, Omya paid the outstanding
amounts contained in the final assessment. On January 11, 2022, Omya filed the
instant Motion to Reopen claiming both that it had mistakenly failed to contest
the proposed assessment and had mistakenly paid the assessed penalty.

In the past, the Commission has held that
where a failure to contest a proposed assessment results from an inadequate or
unreliable internal processing system, the operator has not established grounds
for reopening the assessment. See e.g. Shelter Creek Capital, LLC , 34
FMSHRC 3053, 3054 (Dec. 2012); Oak Grove Res., LLC , 33 FMSHRC 103, 104
(Feb. 2011); Double Bonus Coal Co. , 32 FMSHRC 1155, 1156 (Sept. 2010). Further,
the Commission has also held that an operator accidentally paying a citation it
intends to contest amounts to such an inadequate or unreliable internal
processing system and cannot form the basis for reopening. See e.g. Pinnacle
Mining Company, LLC , 30 FMSHRC 1061 (Dec. 2008); Moose Lake Aggregates ,
34 FMSHRC 1 (Jan. 2012); Kuhlman
Construction , 34 FMSHRC
2894 (Nov. 2012); Noranda
Aluminum, LLC , 37 FMSHRC
2731 (Dec. 2015); and Enviro Care, Inc. , 39 FMSHRC 819 (2017). Similarly,
the Commission has found that in situations where the operator had already paid
the penalty in full, a motion to reopen is moot. See e.g. Riverton
Investment Corp. , 31 FMSHRC 1067 (Oct. 2009); Performance Coal Co. ,
32 FMSHRC 466 (June 2010); Marfork Coal Company , 32 FMSHRC 1185 (Oct.
2010); see also Lee Mechanical Contractors, Inc. , 38 FMSHRC 44 (Jan.
2016) (Jordan, concurring).

In fact, the case where the Commission
first recognized its ability to reopen cases under Rule 60(b) concerns an
alleged mistaken payment. Jim Walter Res., Inc. , 15 FMSHRC 782, 789 (May
1993). In that case, the Commission concluded that administrative confusion
caused by processing a large number of proposed penalty assessments does not
excuse an operator from making deliberate litigation choices. Id . at

790. Further, the Commission noted that it is not a court of general equity and
     further that equity aids those who vigilantly pursue their own rights. Id .;
     see also Pittsburg & Midway Coal Mining Company , 15 FMSHRC 969 (Jun.
     1993); Monterey Coal Company , 15 FMSHRC 997 (Jun. 1993); and Mountain
     Coal Co. , 15 FMSHRC 1012 (Jun. 1993).

In this case, Omya failed to timely
contest a proposed penalty and then paid the amount owed. I do not believe it
is accurate to characterize this action as a justifiable mistake or excusable
neglect, as Omya took an affirmative step in making a payment. Instead, Omya’s
default and payment were the result of an inadequate or unreliable internal
processing system. Omya’s mistaken payment indicates that it has failed to
vigilantly pursue its own rights.

Therefore, I would deny its motion to
reopen.

/s/ Timothy J. Baker

Timothy J. Baker, Commissioner

Distribution:

Adele L. Abrams, Esq., CMSP

Law Office of Adele L.
Abrams, P.C.

4740 Corridor Place, Suite D

Beltsville, MD 20705

[email protected]

Josh Schultz, Esq.

Law Office of Adele L.
Abrams, P.C.

600 17th St #2800 South

Denver, Co. 80202

[email protected]

April Nelson, Esq.

Associate Solicitor

Office of the Solicitor

U.S. Department of Labor

Division of Mine Safety and
Health

201 12th Street South, Suite
401

Arlington, VA 22202

[email protected]

Emily Toler Scott, Esq.

Counsel for Appellate
Litigation

Office of the Solicitor

U.S. Department of Labor

Division of Mine Safety and
Health

201 12th Street South, Suite
401

Arlington, VA 22202

[email protected]

Melanie Garris

USDOL/MSHA, OAASEI/CPCO

201 12th Street South, Suite
401

Arlington, VA 22202

[email protected]

Chief Administrative Law
Judge Glynn F. Voisin

Federal Mine Safety Health
Review Commission

1331 Pennsylvania Avenue, NW
Suite 520N

Washington, DC 20004-1710

[email protected]