Secretary of Labor v. Tintic Consolidated Metals, LLC

Plain-English summary

MSHA proposed $67,007 in penalties against Tintic, and the assessment became final after MSHA did not receive a timely contest. Tintic had filed a contest within 30 days, but mistakenly sent it to the Commission instead of MSHA's Civil Penalty Compliance Office. The Commission majority treated that filing as a good-faith attempt to contest the proposed penalties and found mistake or excusable neglect. It reopened the final order and remanded the case for penalty proceedings. Commissioner Baker dissented, concluding that Tintic's confusion and repeated reopening requests showed an inadequate internal processing system.

Decision snapshot

• Cited authority: 30 U.S.C. § 815(a)
• Outcome: The final penalty order was reopened and remanded to the Chief ALJ.
• Key point: A timely but misdirected penalty contest can establish good cause to reopen a final assessment.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVE., N.W., SUITE 520N

WASHINGTON,
DC 20004-1710

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH

ADMINISTRATION
(MSHA)

v.

TINTIC
CONSOLIDATED METALS,

LLC

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Docket
No. WEST 2024-0067

A.C.
No. 42-00147-584365

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BEFORE: Jordan, Chair; Baker and Marvit, Commissioners

ORDER

BY: Jordan, Chair,
and Marvit, Commissioner

This
matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
801 et seq. (2018) (“Mine Act”). On December 1, 2023, the Commission received
from Tintic Consolidated Metals, LLC (“Tintic”) 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 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).

Records
of the Department of Labor’s Mine Safety and Health Administration (“MSHA”)
indicate that Tintic was issued citations between July 11, 2023, and July 19,
2023. MSHA proposed penalty assessments in the amount of $67,007, on September
5, 2023. The Secretary states in part that the proposed assessment was
delivered to Tintic on September 14, 2023, and became the final order of the
Commission on October 14, 2023. S. Opp’n at 4.

On
October 5, 2023, the operator, acting pro se, filed a document with the
Commission. T. Reply at 2.[1] The document
explained that Tintic was contesting citations “from the Proposed Assessment
and Statement of Account dated 09/05/2023 and received 09/11/2023.” See
Doc. dated 10-5-23, at 1 (Docket No. WEST 2024-0009). Although the document was
filed with the Commission, it was addressed to “US-DOL-MSHA, Civil Penalty
Compliance Office, 201 12th Street South, Suite 401, Arlingtion, VA
22202-5452.” Id.

On November 6, 2023, MSHA sent Tintic a
demand letter for unpaid penalties listed on the proposed assessment. S. Opp’n
at 2. Two days later, on November 8, Tintic contacted MSHA about the status of its
contest. T. Reply at 2. MSHA informed Tintic that the contest had not been
received and directed Tintic to MSHA’s Civil Penalty Compliance Office. Id.
On November 17, 2023, Tintic contacted the Compliance Office, which confirmed
that the penalty contest had not been received. Id. at 3. Tintic filed
the penalty contest with MSHA on November 20, 2023. Id. Two days later,
MSHA rejected the penalty contest as untimely. Id. On November 30, the
operator filed its motion to reopen, and the Commission docketed the motion on
December 1.

Tintic explains that it intended to
contest the proposed penalties with its October 5 filing, but that it mistakenly
filed its contest with the Commission rather than with MSHA’s Civil Penalty
Compliance Office. T. Reply at 2-3; T. Reply to S. Leave to File Surreply at
3-4. The Secretary opposes Tintic’s motion to reopen.

Under the Commission’s Procedural Rules,
an operator may contest proposed penalties by notifying the Secretary of its contest
within 30 days after receipt of the proposed penalty assessment. 29 C.F.R. § 2700.26. However, if a party wishes to contest a
citation, the party must notify both the Commission and the Secretary. See
29 C.F.R. § 2700.20. In circumstances in which an operator contests a citation
(section 2700.20), but fails to file a contest of the penalty (section
2700.26), the proposed penalty becomes a final order of the Commission. 29
C.F.R.

§§
2700.27. 2700.21(a). Here the Commission treated Tintic’s October 5 filing as a
contest of citations, and the proposed penalties became final orders.

Having considered the filings provided by
the parties, we construe Tintic’s October 5 filing as an attempt to contest the
proposed penalties. The contest was filed within 30 days of Tintic’s receipt of
the proposed penalty assessment. The operator’s timely but misdirected filing
with the Commission was a good faith, albeit mistaken, attempt to comply with
the requirements of the Mine Act and the Commission’s procedural rules. We conclude that
the proposed penalty assessment was not timely contested due to a mistake or
excusable neglect and that the operator established good cause to reopen the
final order. See Mulberry Limestone Quarry Co., 45 FMSHRC 814 (Sept.
2023) (concluding that operator’s timely but misdirected filing constituted
good cause for failure to timely contest penalty assessment).

Accordingly, 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/ Moshe Z. Marvit

Moshe Z. Marvit, Commissioner

Commissioner Baker, dissenting:

I would find that
that Tintic Consolidated Metals, LLC (“Tintic”) failed to establish good cause
to reopen in this case.

A
party seeking the reopening of an assessment bears the burden of establishing
that that the default was the result of more than mere carelessness. Noranda
Alumina, LLC, 39 FMSHRC 441, 443 (Mar. 2017). The Commission has
consistently 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 an 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).

Where a defaulting
party was aware of or should have been aware of its responsibilities to the
opposing party and to the court and has failed to live up to those
responsibilities through unexcused carelessness or negligence, relief from
default should not be granted. C.K.S. Eng’rs, Inc. v. White Mountain Gypsum
Co., 726 F.2d 1202, 1206 (7th Cir. 1984); see
also
Lavespere
v. Niagara Machine & Tool Works, Inc., 910 F.2d 167, 173 (5th Cir. 1990)
(stating carelessness or negligence is not sufficient to warrant relief under
Rule 60(b)(1)). Although a default judgment is a harsh sanction and the law
favors trials on the merits, these considerations must be balanced against the
need to promote efficient litigation and to protect the interests of all
litigants. C.K.S. Eng’rs, Inc., 726 F.2d at 1206. Default
judgment is only an effective deterrent against irresponsible conduct in
litigation if relief from a default judgment under Rule 60(b) is perceived as
an exceptional remedy. Id.

As the majority recognizes,
Tintic failed to timely file a contest to the proposed penalties in accordance
with the relevant regulations. The operator attempts to excuse this failure by
arguing that its Safety Coordinator filed a “pre[-]penalty contest of the
citations.” MTR at 1. Tintic submits that its Safety Coordinator exchanged
emails with FMSHRC staff and believed that she filed “a penalty assessment
contest” correctly. Id. When the Safety Coordinator left the company in
early October, the operator believed that the “documentation” had been done
correctly. Id. When “no response was
received,” the operator’s management reviewed what had been filed and reached
out “to rectify the situation.” Id. Tintic states that its former Safety
Superintendent has assumed responsibility for the safety department following
its Safety Coordinator’s departure, and he has correctly contested several
assessments in the past. Id.

Tintic’s counsel, who was
retained following the filing of the motion to reopen, states that the
pre-penalty contest filed by the operator was actually a contest of the
proposed penalty assessment that had been erroneously filed with the Commission
rather than submitted to MSHA. Counsel additionally specifies that on November
8, 2023, Tintic contacted MSHA about the status of its contest, was informed
that the contest had not been received, and was directed to MSHA’s Civil
Penalty Compliance Office. T. Reply at 2.

On November 17, 2023, Tintic
contacted the Compliance Office, which confirmed that the penalty contest had
not been received. Tintic filed the penalty contest with MSHA on November 20,
2023. Id. at 3. MSHA rejected the penalty contest as untimely, and the
operator filed its motion to reopen. Id.

The Secretary opposes the
motion to reopen. The Secretary argues that the operator is not entitled to
relief because it has inadequate or unreliable internal procedures as evident
by the staffing changes justification for the late-filing alleged in the
subject proceeding and in a separate proceeding, Docket No. WEST 2023-0406. The
Secretary also argues that Tintic waited to file its motion to reopen until
after it received the demand letter, made no mention of the demand letter, and
such actions suggest that the operator is not acting in good faith. S. Opp’n at
8-9. The Secretary maintains that Tintic has provided no explanation for why it
failed to timely contest the assessment, or what steps it took to ensure that
it timely contested penalties after filing its other motion to reopen. S.
Surreply at 6.

It appears that the operator
has confused the process for contesting citations before a penalty is proposed
with the process for contesting proposed penalties. See 29 C.F.R. Part
2700 subparts B and C. In its motion to reopen, the operator states that it
filed “pre[-]penalty contest[s] of the citations.” MTR at 1 (emphasis
added). The Commission’s Docket Office received the contests on October 5,
2023, treated the submissions as timely contests of citations, and the
Secretary filed answers to those contests.[2] Tintic’s
counsel, however, submits that the contests of the citations were actually
timely contests of the proposed penalties under 29 C.F.R.

§ 2700.25 that were mistakenly filed with the Commission, rather
than with MSHA. Such confusion shows an inadequate or unreliable processing
system.

In addition, Tintic filed a
motion to reopen in a separate proceeding, Docket No.
WEST 2023-0406, asserting that it was unable to timely file its penalty contest
due to a staffing change. The Commission denied Tintic’s motion, concluding
that Tintic’s explanation was inadequate because it did not provide sufficient
detail regarding how personnel changes caused the untimeliness and which
actions the operator would take to ensure timely filing in the future. 46
FMSHRC ___, No. WEST 2023-0406 (Aug. 28, 2024). The Commission has
recognized that repeated motions to reopen may indicate an inadequate or
unreliable internal processing system. Rockwell Mining, LLC, 45 FMSHRC
491, 493 (June 2023). Here it appears that any actions taken by Tintic to
ensure timeliness were ineffective, and that the repeated motions show an
inadequate or unreliable processing system.

Based on the
operators shifting rationales for re-opening and evident lack of a reliable
contesting process, I would find that it has failed to establish that it is
entitled to the “extraordinary” relief of reopening. See Lone Mountain
Processing, Inc., 35 FMSHRC 3342 (Nov. 2013) (characterizing reopening as
extraordinary relief).

In light of these
circumstances I, respectfully, dissent.

/s/ Timothy J. Baker

Timothy J. Baker, Commissioner

Distribution:

Robert
D. Ayers

Erik
J. Adams

Holland
& Hart LLP

P.O.
Box 68

Jackson,
WY 83001

[email protected]

[email protected]

Kim
Spear, Mine/Safety Superintendent

M.
Marnie Taylor, Safety Coordinator

Zachary
Wallace, Alt. Mine/Safety Superintendent

P.O.
Box 195

Eureka,
UT 84628

[email protected]

[email protected]

[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]

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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

Office
of the Chief Administrative Law Judge

Federal Mine Safety Health Review Commission

1331 Pennsylvania Avenue, NW Suite 520N

Washington, DC 20004-1710

[email protected]

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[1] Tintic filed a
reply to the Secretary’s opposition to its motion to reopen. The Secretary
subsequently filed a motion for leave to file a surreply, and Tintic filed a
response to that request. The Secretary later filed her surreply. We hereby
grant the parties leave to file these submissions and hereby accept these
filings as part of the record.

[2] Contests were
filed with respect to Citation Nos. 9901903 (WEST 2024-0009), 9901905 (WEST
2024-0010), 9901908 (WEST 2024-0011), 9901909 (WEST 2024-0012), 9901910 (WEST
2024-0013), 9901912 (WEST 2024-0014), and 9901914 (WEST 2024-0015). Tintic did
not file a contest of Citation No. 9091915, although it indicated on its
proposed assessment form that it intended to contest the penalty associated
with that citation.