Elk Run Coal Company (Commission decision, December 14, 2010)

Plain-English summary

Elk Run intended to contest a proposed penalty assessment and faxed it to counsel, but counsel never received the fax. The company sought reopening promptly after discovering the failure, and the Secretary did not oppose relief. A Commission majority reopened the assessment in the interest of justice and remanded it for proceedings on the merits, although this was Elk Run's fourth reopening request since July 2007. The Secretary urged Elk Run to improve its process for timely contests. Commissioner Cohen dissented because the safety director failed to confirm transmission and the company's repeated defaults showed an inadequate internal system rather than excusable neglect.

Decision snapshot

• Governing provisions: 30 U.S.C. § 815(a); 29 C.F.R. §§ 2700.1(b) and 2700.28
• Outcome: The final assessment was reopened and remanded, with one commissioner dissenting.
• Key point: The majority treated a promptly discovered failed fax as grounds for reopening, but the dissent warned that repeated filing failures can show an unreliable internal process.

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

December 14, 2010

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

ELK RUN COAL COMPANY

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Docket No. WEVA 2009-511

A.C. No. 46-07009-161679

BEFORE: Jordan, Chairman; Duffy, Young, Cohen, and Nakamura, Commissioners

ORDER

BY: Jordan, Chairman; Duffy, Young, and Nakamura, Commissioners

This matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C.
§ 801 et seq. (2006) (“Mine Act”). On December 19, 2008, the Commission received from Elk Run Coal Company (“Elk Run”) 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).

Affidavits submitted by Elk Run stated that the operator intended to contest the proposed penalty assessment and faxed it to counsel. However, the fax allegedly never was received by counsel. When the operator realized that the fax had not been received, it promptly sought reopening.

The Secretary states that she does not oppose the reopening of the proposed penalty assessment. However, as our dissenting colleague and the Secretary note, this case represents the fourth time that Elk Run has filed a request to reopen since July 2007. The Secretary urges that Elk Run take whatever additional steps are necessary to ensure that future contests are filed in a timely manner.

Having reviewed Elk Run’s request and the Secretary’s response, in the interests 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.

Mary Lu Jordan, Chairman

Michael F. Duffy, Commissioner

Michael G. Young, Commissioner

Patrick K. Nakamura, Commissioner

Commissioner Cohen, dissenting:

I cannot agree with my colleagues’ determination that Elk Run has established inadvertence or excusable neglect so as to justify reopening the assessment in this case. Elk Run attributes the failure to file its notice of contest to the fact that the Safety Director had “only recently” been transferred to that position and “was in the process of learning her job duties.” Mot. at 1-2. The Safety Director attempted to fax the proposed assessment to counsel so that a notice of contest could be filed, but the fax did not go through “due to the large volume of documents being faxed.” Id. at 2. As Elk Run acknowledges, “[the Safety Director] did not check to make sure that the fax was accepted and a confirmation received.” Id. The penalties which Elk Run intended to contest total $75,394. Id. at Ex. 1.

In view of Elk Run’s history of failing to file timely contests of proposed assessments,

I
view the Safety Director’s failure to successfully fax the proposed assessment to counsel (and, more importantly, the failure to check on whether the fax had gone through) not as an isolated instance of inadvertence but as the result of an inadequate and unreliable internal processing system, which does not justify reopening. Pinnacle Mining Co., 30 FMSHRC 1061 (Dec. 2008); Pinnacle Mining Co., 30 FMSHRC 1066 (Dec. 2008); Highland Mining Co., 31 FMSHRC 1313, 1315 (Nov. 2009); Double Bonus Coal Co., 32 FMSHRC 1155 (Sept. 2010); see Gibbs v. Air Canada, 810 F.2d 1529, 1537-38 (11th Cir. 1987) (District Court did not abuse its discretion for denying Rule 60(b) motion on the grounds that the movant failed to establish minimum procedural safeguards that would have avoided default). Not to check a fax confirmation cannot be justified by relative inexperience, and the fact of a “large volume of documents being faxed” demonstrates the need for greater attention rather than being an excuse for failure, especially given the large amount of money at stake.

Robert F. Cohen, Jr., Commissioner

Distribution:

Max L. Corley, III, Esq.

Dinsmore & Shohl, LLP

P. O. Box 11887

900 Lee Street, Suite 600

Charleston, WV 25339

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. 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

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

Washington, D.C. 20001-2021