Secretary of Labor v. Spartan Mining Company, Inc. (Commission decision, July 22, 2013)

Plain-English summary

Spartan Mining had timely contested three citations but later mistakenly paid the related proposed penalties. The Secretary opposed reopening because this was Spartan's second similar request, its internal system appeared unreliable, and it waited months after related settlement activity to seek relief. Spartan said counsel did not discover the problem until October 2012. The Commission stressed that inadequate internal processing ordinarily does not justify reopening. Even so, because Spartan had contested the underlying citations, it reopened the final assessment in the interest of justice and remanded the case.

Decision snapshot

• Governing provisions: 30 U.S.C. § 815(a); 29 C.F.R. §§ 2700.1(b) and 2700.28
• Outcome: The final penalty assessment was reopened and the matter was remanded for proceedings on the merits.
• Key point: A prior citation contest can support reopening after an inadvertent payment, but repeated internal processing failures weigh strongly against relief.

Full text (FMSHRC public release)



FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE
520N

WASHINGTON, D.C. 20004-1710

July 22, 2013

SECRETARY OF LABOR,
MINE SAFETY AND
HEALTH
ADMINISTRATION (MSHA)

v.

SPARTAN MINING COMPANY,
INC.
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Docket No. WEVA
2013-109
A.C. No. 46-01544-285119-02

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 October 25, 2012, the Commission received from Spartan Mining Company (“Spartan”) 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).

Spartan asserted that it received
the proposed assessment on April 11, 2012 and mistakenly paid for Citation Nos. 8120978, 8148652, and 8151811. Spartan had earlier filed notices of contest for each of these citations.

The
Secretary opposed the request to reopen, noting that this is the operator’s second motion to reopen asserting the same mistake for its failure to contest the penalties (WEVA 2013-41). The Secretary stated that the operator timely contested seven other citations included in this proposed assessment, docketed as WEVA 2012-1026, and timely paid for the remaining 20 proposed penalties. The penalties for the seven other contested citations were approved for settlement on July 11, 2012, and were paid by check dated August 9, 2012. The Secretary maintained that Spartan and its counsel should have been aware of the inadvertently paid citations during negotiations in July, yet they did not request reopening until three months after the settlement decision.

On December 21, 2012, the
Commission sent Spartan a letter asking it to identify when it discovered that the penalties were not timely contested and to explain the three-month delay in requesting reopening. In response, Spartan asserted that it was not aware of the inadvertently paid citations until October 2012, when its counsel determined that the citations were not contested.

The Commission has made it clear
that where a failure 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 1313, 1315 (Nov. 2009); Pinnacle Mining Co., 30 FMSHRC 1066, 1067 (Dec. 2008); Pinnacle Mining Co., 30 FMSHRC 1061, 1062 (Dec. 2008). We urge the operator to take all steps necessary to ensure that future penalty contests are properly marked and timely filed.

Having
reviewed Spartan’s requests and the
Secretary’s response, and considering that Spartan had contested the underlying citations, 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, Commissioner

/s/
Michael G. Young

Michael G. Young, Commissioner

/s/
Patrick K. Nakamura

Patrick K. Nakamura, 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

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