Secretary of Labor v. Riverton Investment Corporation

Plain-English summary

Riverton Investment sought to reopen a $224,136 MSHA assessment after an Essroc safety manager requested an informal conference but did not file a timely contest. Essroc discovered the failure after the manager resigned, amid other delinquency notices and collection actions involving its penalty assessments. The Secretary opposed reopening, arguing that an informal conference does not extend the contest deadline and that the repeated collection issues should have prompted closer review. The Commission found that Essroc had no reliable procedure to confirm filings and that Riverton did not explain its seven-month delay after the delinquency notice. It denied the motion with prejudice.

Decision snapshot

• Governing provision: 30 U.S.C. § 815(a)
• Outcome: The motion to reopen the $224,136 final assessment was denied with prejudice.
• Key point: Centralized routing is inadequate without a confirmation step, especially when repeated delinquency notices and a large assessment put the operator on notice of filing problems.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

January 31, 2013

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

RIVERTON INVESTMENT CORPORATION

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Docket No. WEVA 2012-1406-M

A.C. No. 46-00007-266987

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 July 2, 2012, the Commission received from Riverton
Investment Corporation (“Riverton”) 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).

The record indicates that the proposed assessment was delivered on September 21, 2011,
signed for by C. Knisley, and became a final order of the Commission on October 21, 2011. A
notice of delinquency was mailed on December 6, 2011, and the case was referred to the U.S.
Department of Treasury (“Treasury”) for collection on March 29, 2012.

Riverton asserts that in 2009 it adopted a centralized procedure for handling proposed
penalty assessments, requiring employees to forward all MSHA correspondence to Essroc’s
corporate safety manager (“Manager”). In 2011, Essroc began to receive delinquency notices
from Treasury and several collection agencies regarding unpaid MSHA penalty assessments.
Essroc maintains it has been working with MSHA, Treasury, and the collection agencies to
properly account for the outstanding penalties. Upon receiving this proposed assessment,
Essroc’s Manager scheduled an informal conference with MSHA and indicated to Essroc’s
management that he had contested the assessment. In April 2012, the Manager resigned his
position, and Essroc discovered that the assessment was not timely contested.

The Secretary opposes the request to reopen and asserts that the operator identified no
exceptional circumstances warranting reopening. She states that Essroc and Riverton have been
in business for many years and are familiar with the contest procedures, and that Essroc should
have known that a conference request does not alter the deadline or the procedure for contesting a
proposed penalty. Riverton has two additional motions to reopen with similar circumstances
pending before the Commission (VA 2012-234-M; VA 2012-235-M). The Secretary asserts that
these motions to reopen, combined with the other delinquency notices and collection actions
Essroc has been receiving since 2011, should have put it on alert. The Secretary further notes
that the inadequacy of the operator’s procedures is underscored by the significant amount of
money at stake in this proposed assessment, $224,136. Moreover, the operator fails to explain
why it took seven months after receiving the delinquency notice and three months after
discovering the collection action to request reopening.

Riverton has not replied to the Secretary’s opposition to its motion. We encourage
parties seeking reopening to provide further information in response to pertinent questions raised
in the Secretary’s response. See, e.g., Climax Molybdenum Co., 30 FMSHRC 439, 440 n.1 (June
2008); Highland Mining Co., 31 FMSHRC 1313, 1316 n.3 (Nov. 2009).

The Commission has made it clear 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. Oak Grove Res., LLC, 33 FMSHRC 103, 104
(Feb. 2011); Double Bonus Coal Co., 32 FMSHRC 1155, 1156 (Sept. 2010); Highland Mining
Co., 31 FMSHRC at 1315; Pinnacle Mining Co., 30 FMSHRC 1066, 1067 (Dec. 2008); Pinnacle
Mining Co., 30 FMSHRC 1061, 1062 (Dec. 2008). In this case, we conclude that the lack of any
procedure to confirm that the required paperwork was timely filed represents an inadequate or
unreliable internal processing system.

Additionally, in considering whether an operator has unreasonably delayed in filing a
motion to reopen, we find relevant the amount of time that has passed between an operator’s
receipt of a delinquency notice and the operator’s filing of its motion to reopen. See, e.g., Left
Fork Mining Co., 31 FMSHRC 8, 11 (Jan. 2009); Highland Mining Co., 31 FMSHRC at 1316-17 (holding that motions to reopen filed more than 30 days after receipt of notice of delinquency
must explain the reasons why the operator waited to file a reopening request, and lack of
explanation is grounds for the Commission to deny the motion). Here, the unexplained delay in
responding to MSHA’s delinquency notice amounted to seven months. Riverton has not
provided an explanation for filing its motion to reopen more than 30 days after receiving the
delinquency notice.

Having reviewed Riverton’s request and the Secretary’s response, we conclude that
Riverton has failed to establish good cause for reopening the proposed penalty assessment.
Accordingly, we deny its motion with prejudice.

/s/ Mary Lu Jordan

Mary Lu Jordan, Commissioner

/s/ Michael G. Young

Michael G. Young, Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Distribution:

Henry Chajet, Esq.

Patton Boggs, LLP

2550 M Street NW

Washington, DC 20037-1350

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