Independence Coal Company (Commission decision, August 15, 2007)

Plain-English summary

Independence Coal sought to reopen four penalty assessments that became final when it did not contest them within 30 days. The company said its safety director faxed the assessment form to outside counsel, but transmission problems prevented counsel from receiving and filing the contests. Independence learned of the omission months later when MSHA sent an invoice, and the Secretary did not oppose reopening. The Commission explained that it may grant relief from a final assessment for mistake or inadvertence when good cause is shown. It remanded the matter for the Chief Administrative Law Judge to determine whether Independence had good cause and whether the four contests should proceed on the merits.

Decision snapshot

• Governing provisions: 29 C.F.R. § 2700.1(b) and 30 U.S.C. § 815(a)
• Outcome: The reopening request was remanded for a determination of good cause and possible relief from the final assessment.
• Key point: A claimed fax failure may justify reopening a final penalty assessment, but the operator must first establish good cause before an administrative law judge.

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

August 15, 2007

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

INDEPENDENCE COAL COMPANY

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Docket No. WEVA 2007-582
A.C. No. 46-07273-93168

BEFORE: Duffy, Chairman; Jordan and Young, 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 June 25, 2007, the Commission received from Independence Coal Company (“Independence”) 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 or about July 11, 2006, the Department of Labor’s Mine Safety and Health Administration (“MSHA”) issued to Independence proposed penalty assessment No. 93168, which covered approximately 80 citations or orders. Independence paid the penalties for most of the citations and orders by a check dated July 27, 2006. In its motion, Independence alleges that it had intended to contest the proposed penalty assessments for Order/Citation Nos. 7233011, 7246280, 7246281 and 7245680, and that its safety director had faxed the assessment form to counsel who were handling civil penalty matters. Independence asserts that, due to problems with the fax transmission, the assessment form was not received by counsel and the contests of the four proposed penalty assessments were not submitted. Independence further alleges that it learned of this inadvertence in February 2007, when its safety director received an invoice from

MSHA indicating that an outstanding balance was due on the four violations. In response, the Secretary states that she does not oppose reopening the proposed penalty assessment.

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 Independence’s request, in the interests of justice, we remand this matter to the Chief Administrative Law Judge for a determination of whether good cause exists for Independence’s failure to timely contest the penalty proposal and whether relief from the final order should be granted. 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.

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Michael F. Duffy, Chairman

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Mary Lu Jordan, Commissioner

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Michael G. Young, Commissioner

Distribution

Carol Ann Marunich, Esq.

Dinsmore & Shohl, LLP

215 Don Knotts Blvd., Suite 310

Morgantown, WV 26501

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA 22209-2296

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