Secretary of Labor v. Apogee Coal Company, LLC, et al (Commission decision, June 30, 2016)

Plain-English summary

The Commission considered a joint motion to reopen 56 penalty assessments issued to subsidiaries of Patriot Coal Corporation after its Chapter 11 bankruptcy and asset sales. The parties said bankruptcy-related ownership changes and settlement discussions caused missed contests, and the Secretary agreed that the cases should be reopened. Two docket matters were moot because one had already been reopened and another had been timely contested. The Commission reopened the remaining specified penalties and remanded them to the Chief Administrative Law Judge for further proceedings, directing the Secretary to file penalty petitions within 45 days.

Decision snapshot

• Governing provisions: 30 U.S.C. § 815(a); 29 C.F.R. §§ 2700.1(b), 2700.12, 2700.28, and 2700.31
• Outcome: The specified final penalty assessments were reopened and remanded for further proceedings.
• Key point: The Commission may reopen uncontested penalty assessments in appropriate circumstances, including a bankruptcy-related failure to timely contest, and may remand them for merits proceedings.

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.

APOGEE
COAL COMPANY, LLC, et

al.[1]

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

ORDER

BY THE
COMMISSION:

These

matters arise under the Federal Mine Safety and Health Act of 1977, 30 U.S.C.
§ 801 et seq. (2012) (“Mine Act”). On March 23, 2016, the Commission received a joint motion seeking to reopen 56[2] penalty assessments issued to subsidiaries of Patriot Coal Corporation (“Patriot”) that had become final orders 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).

On

or about May 12, 2015, Patriot filed for Chapter 11 bankruptcy in the U.S. District Court for the Eastern District of Virginia. Pursuant to the court-confirmed reorganization plan, Patriot was required to sell substantively all of its assets. For the vast majority of cases, Patriot contends that, due to the issues surrounding the bankruptcy and change in ownership, it was unable to timely contest penalties issued between the time that it declared bankruptcy and when it was able to transfer ownership of its mines. For other cases, Patriot claims that ongoing settlement negotiations made it unclear which penalties needed to be contested. The Secretary agrees that these cases should be reopened. [3]

Since the parties filed the joint motion
to reopen, events have transpired that affect our consideration of the joint motion. Eastern Associated Coal, LLC, a subsidiary of Patriot, had a motion to reopen Case No. 000389549 (Docket No. WEVA 2016-61) pending before the Commission prior the filing of the joint motion. However, the joint motion also requested that this case be reopened. On April 5, 2016, the Commission granted Eastern Associated Coal’s motion and reopened the case, rendering the joint motion to reopen Docket No. WEVA 2016-308 moot.

Additionally, in an email dated April
12, 2016, the parties informed the Commission that Case No. 000402707 was not a final order at the time the joint motion was filed and that Midland Trail Energy subsequently filed a timely contest. The contest has since been docketed by the Commission as WEVA 2016-390. As the penalties in this case never became final orders of the Commission, the joint motion to reopen Docket No. WEVA 2016-339 is moot.

Having

reviewed the joint motion, we conclude that the motion to reopen Docket Nos. WEVA 2016-308 and WEVA 2016-339 are moot. As for the remaining cases, we hereby reopen these matters[4] and remand them 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, the Secretary shall file petitions for assessment of penalty in each case within 45 days of the date of this order. See 29 C.F.R. § 2700.28.

/s/ Mary Lu Jordan

Mary Lu Jordan, Chairman

/s/ Michael G. Young

Michael G. Young, Commissioner

/s/ Robert F. Cohen, Jr.

Robert F. Cohen Jr., Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

/s/ William I. Althen

William I. Althen, Commissioner

Distribution:

Michael
T. Cimino, Esq.

Jackson
Kelly PLLC

P.O.
Box 553

Charleston,
WV 25322

W.
Christian Schumann, Esq.

Office
of the Solicitor

U.S.
Department of Labor

201
12th St. South, Suite 401

Arlington,
VA 22202-5450

Robert
S. Wilson, Esq.

Regional
Solicitor’s Office

U.S.
Department of Labor

102
12th Street South, Suite 401

Arlington,
VA 22202-5450

Chief
Administrative Law Judge Robert J. Lesnick

Federal
Mine Safety & Health Review Commission

1331
Pennsylvania Ave. N.W., Suite 520N

Washington,
DC 20004-1710

Melanie
Garris

Office
of Civil Penalty Compliance

Mine
Safety and Health Administration

U.S.
Department of Labor

201
12th St. South, Suite 401

Arlington,
VA 22202-5450

Exhibit 1

Operator

Docket
Number

A.C.
Number

Apogee
Coal Company, LLC

WEVA
2016-324

46-01368-393525

Apogee
Coal Company, LLC

WEVA
2016-325

46-01368-395956

Apogee
Coal Company, LLC

WEVA
2016-326

46-08939-400382

Apogee
Coal Company, LLC

WEVA
2016-327

46-08939-398390

Brody
Mining, LLC

WEVA
2015-343

46-09086-398610

Brody
Mining, LLC

WEVA
2016-344

46-09086-396167

Catenary
Coal Company, LLC

WEVA
2016-322

46-07178-394670

Catenary
Coal Company, LLC

WEVA
2016-323

46-07178-392504

Eastern
Associated Coal, LLC

WEVA
2016-303

46-01456-392345

Eastern
Associated Coal, LLC

WEVA
2016-304

46-01456-401466

Eastern
Associated Coal, LLC

WEVA
2016-305

46-01456-394895

Eastern
Associated Coal, LLC

WEVA
2016-306

46-03135-394896

Eastern
Associated Coal, LLC

WEVA
2016-307

46-03135-397257

Eastern
Associated Coal, LLC

WEVA
2016-308

46-06448-389549

Eastern
Associated Coal, LLC

WEVA
2016-309

46-09152-389555

Eastern
Associated Coal, LLC

WEVA
2016-310

46-09152-392353

Eastern
Associated Coal, LLC

WEVA
2016-311

46-09152-394901

Eastern
Associated Coal, LLC

WEVA
2016-312

46-09152-397265

Eastern
Associated Coal, LLC

WEVA
2016-313

46-09152-397265

Eastern
Associated Coal, LLC

WEVA
2016-315

46-08610-397263

Emerald
Processing, LLC

WEVA
2016-316

46-08759-393297

Emerald
Processing, LLC

WEVA
2016-317

46-08759-398125

Emerald
Processing, LLC

WEVA
2016-318

46-08993-398129

Emerald
Processing, LLC

WEVA
2016-319

46-09258-393310

Emerald
Processing, LLC

WEVA
2016-320

46-08759-398137

Emerald
Processing, LLC

WEVA
2016-321

46-03085-398118

Gateway
Eagle Coal Company, LLC

WEVA
2016-328

46-06618-390824

Gateway
Eagle Coal Company, LLC

WEVA
2016-329

46-06618-393529

Gateway
Eagle Coal Company, LLC

WEVA
2016-330

46-06618-398383

Gateway
Eagle Coal Company, LLC

WEVA
2016-332

46-08637-393531

Gateway
Eagle Coal Company, LLC

WEVA
2016-333

46-08637-390827

Gateway
Eagle Coal Company, LLC

WEVA
2016-334

46-08637-400380

Gateway
Eagle Coal Company, LLC

WEVA
2016-335

46-08637-398386

Grand
Eagle Mining, LLC

KENT
2016-288

15-16231-393377

Hobet
Mining, LLC

WEVA
2016-340

46-04670-393291

Hobet
Mining, LLC

WEVA
2016-341

46-05398-393292

Hobet
Mining, LLC

WEVA
2016-342

46-05398-398120

Midland
Trail Energy, LLC

WEVA
2016-336

46-09297-393779

Midland
Trail Energy, LLC

WEVA
2016-337

46-09297-396169

Midland
Trail Energy, LLC

WEVA
2016-338

46-09297-398612

Midland
Trail Energy, LLC

WEVA
2016-339

46-09297-402707

Remington,
LLC

WEVA
2016-348

46-09230-396828

Remington,
LLC

WEVA
2016-351

46-09230-394461

Speed
Mining, LLC

WEVA
2016-282

46-05437-398121

Speed
Mining, LLC

WEVA
2016-295

46-05437-402270

Speed
Mining, LLC

WEVA
2016-296

46-05437-393293

Speed
Mining, LLC

WEVA
2016-476

46-05437-406785

Speed
Mining, LLC

WEVA
2016-297

46-09099-390556

Speed
Mining, LLC

WEVA
2016-298

46-09099-393305

Speed
Mining, LLC

WEVA
2016-299

46-09099-398132

Speed
Mining, LLC

WEVA
2016-300

46-08571-393296

Speed
Mining, LLC

WEVA
2016-301

46-08571-398124

Thunderhill
Coal Company

WEVA
2016-302

46-08818-393301

Wildcat
Energy, LLC

WEVA
2016-345

46-09427-398396

Wildcat
Energy, LLC

WEVA
2016-346

46-09427-390835

Wildcat
Energy, LLC

WEVA
2016-347

46-09427-393540

Exhibit 2

Eastern
Associated Coal, LLC

WEVA
2016-305

46-01456-394895

Citation/
Order Nos.:

9084090

9084135

9084100

9084130

9084097

9084139

9084092

9084098

9084101

9084131

9084136

9084102

9084093

9084137

9084140

9084133

9084138

9084143

9084134

Gateway
Eagle Coal Company, LLC

WEVA
2016-332

46-08637-393531

Citation/
Order Nos.:

9055817

9059323

9059325

9055819

9009770

9059327

9059321

9009771

Remington,
LLC

WEVA
2016-351

46-09230-394461

Citation/
Order Nos.:

9008107

9008112

9008116

9008108

9008113

9008117

9008109

9008115

9052207

9008110

9054964

9052208

9008111

9053404

Speed
Mining, LLC

WEVA
2016-296

46-05437-393293

Citation/
Order Nos.:

9052040

9055592

9056072

9052044

9007911

9055595

9052045

9055593

9056073

9052046

9059120

9052327

9055591

9059121

9055596

[1] For the limited
purpose of addressing these motions to reopen, we hereby consolidate docket numbers WEVA 2016-324, WEVA 2016-325, WEVA 2016-326, WEVA 2016-327, WEVA 2015-343, WEVA 2016-344, WEVA 2016-322, WEVA 2016-323, WEVA 2016-303, WEVA 2016-304, WEVA 2016-305, WEVA 2016-306, WEVA 2016-307, WEVA 2016-308, WEVA 2016-309, WEVA 2016-310, WEVA 2016-311, WEVA 2016-312, WEVA 2016-313, WEVA 2016-315, WEVA 2016-316, WEVA 2016-317, WEVA 2016-318, WEVA 2016-319, WEVA 2016-320, WEVA 2016-321, WEVA 2016-328, WEVA 2016-329, WEVA 2016-330, WEVA 2016-332, WEVA 2016-333, WEVA 2016-334, WEVA 2016-335, KENT 2016-288, WEVA 2016-340, WEVA 2016-341, WEVA 2016-342, WEVA 2016-336, WEVA 2016-337, WEVA 2016-338, WEVA 2016-339, WEVA 2016-348, WEVA 2016-351, WEVA 2016-282, WEVA 2016-295, WEVA 2016-296, WEVA 2016-297, WEVA 2016-298, WEVA 2016-299, WEVA 2016-300, WEVA 2016-301, WEVA 2016-302, WEVA 2016-345, WEVA 2016-346, WEVA 2016-476, and WEVA 2016-347 involving similar procedural issues. 29 C.F.R. § 2700.12. For the sake of brevity, the relevant operator’s names, A.C. numbers, and associated docket numbers have been listed in Exhibit 1, attached to this order.

[2] On June 16, 2016, the parties
filed a joint motion to reopen an additional penalty assessment in addition to the 55 penalty assessments in their original motion.

[3] While it does
not affect our consideration of the joint motion, we note that the parties have reached a proposed global settlement as to the all of the proposed penalties. In exchange for the Secretary accepting lower penalty amounts, Patriot has agreed that the Secretary will not be treated as a general unsecured creditor under the reorganization plan. Pursuant to 29 C.F.R.

§ 2700.31, approval of the proposed settlement will be subject to Commission review on remand.

[4] Subsequent to
the filing of the joint motion, the parties informed the Commission that they only sought to reopen certain penalties associated with Case Nos. 000393531 (WEVA 2016-332), 000394461 (WEVA 2016-351), 000393293 (WEVA 2016-296), and 000394895 (WEVA 2016-305). Accordingly, we reopen those penalties specified in Exhibit 2, attached to this order.