Secretary of Labor v. Active Resources, Inc.

Plain-English summary

Active Resources intentionally paid a citation while rehabilitating a nonproducing mine because it believed payment meant the citation had been abated. MSHA later issued a section 104(b) order for failure to abate, prompting Active to argue that it would have contested the assessment if it had understood that consequence. The Commission found that the missed contest was deliberate rather than caused by mistake, inadvertence, or excusable neglect. It held that ignorance of the law does not support relief under Rule 60(b), even though the Secretary did not oppose reopening. The Commission denied the motion with prejudice.

Decision snapshot

• Cited authority: 30 U.S.C. § 815(a)
• Outcome: The motion to reopen was denied with prejudice.
• Key point: An operator cannot reopen an intentionally paid assessment merely because it misunderstood the legal effect of payment on abatement.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON,
D.C. 20004‑1710

SECRETARY OF LABOR, :

MINE SAFETY AND HEALTH
:

ADMINISTRATION (MSHA)
:

:

v.
: Docket No. WEVA 2024-0035

: A.C. No. 46-09018-580277

ACTIVE RESOURCES, INC. :

BEFORE: Jordan, Chair; Baker and Marvit, 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. (2018) (“Mine Act”). On October 24, 2023, the Commission received from
Active Resources, Inc. (“Active”) 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), 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).

The Department of Labor’s Mine Safety and Health Administration (“MSHA”)
indicates that the proposed assessment was delivered to the operator on July
10, 2023. The assessment became a final order of the Commission on August 9,
2023.

Active states that it became the operator of the No. 8 Mine in
October 2021. The Mine, which has not produced any coal since Active’s
acquisition, is currently in non-producing status with MSHA and in the process
of being rehabilitated. Active acquired the Mine with the understanding that
before production could start, rehabilitation work would be required including regarding
matters relating to the underlying citation. Since becoming operator of the
Mine, Active has worked with MSHA on submission and approval of various plans
and proposals to conduct rehabilitation work simultaneously with the ongoing
exploration of the mine. Active finally received MSHA’s approval to conduct
rehabilitation work at the Mine around August 2023.

The underlying citation was issued on May 25, 2023, while the mine
was undergoing exploration and prior to MSHA’s rehabilitation plan approval,
which included the cited area. Active asserts that it was unable to abate any
violations until the area was rehabilitated and rendered safe for miners to
work and travel. When the citation was issued, although Active had defenses to
the citation, it elected to pay the citation because it believed it had been
considered abated with the assessment of the penalty. A delinquency notice was
sent to the operator on September 25, 2023, and MSHA received full payment of
the assessment on September 26, 2023. MSHA
issued a section 104(b) order to Active on October 3, 2023, for its failure to
timely abate the citation, which the operator has contested.

Active maintains that had it known the citation was not abated and
that the operator was subject to a future section 104(b) order, it would have
contested the assessment and not paid the penalty. The Secretary does not
oppose the request to reopen but urges the operator to take steps to ensure
that future penalty contests are timely filed in accordance with MSHA’s regulations at 30 C.F.R. § 100.7 and the
Commission’s procedural rules.

Having
reviewed Active’s request and the Secretary’s response, we conclude that its
failure to timely file its contest was not due to mistake, inadvertence, or
excusable neglect as required by Rule 60(b). The operator’s failure to contest
was intentional and was instead due to its own self-proclaimed ignorance of the
law. However, Courts have held that “ignorance. . . on the part of the litigant
or his attorney [cannot] provide grounds for relief under Rule 60(b)(1).” Kagan
v. Caterpillar Tractor Co., 795 F.2d 601, 607 (7th Cir. 1986) cited by
Egleson v. Burington Northern R. Co., 972 F.2d 1038 (9th Cir. 1992). See
also § 2858 Mistake, Inadvertence, Surprise, or Excusable Neglect, 11 Fed.
Prac. & Proc. Civ. § 2858 (3d ed.) (“Ignorance of the rules is not enough
to support relief from a judgment, nor is ignorance of the law.”). The operator
has failed to establish good cause for reopening the above-referenced case. Accordingly,
Active’s motion to reopen is denied with prejudice.

/s/ Mary Lu Jordan

Mary Lu Jordan, Chair

/s/
Timothy J. Baker

Timothy J.
Baker, Commissioner

/s/ Moshe Z. Marvit

Moshe Z. Marvit, Commissioner

Distribution:

Christopher D. Pence, Esq.

Pence Law Firm LLC

10 Hale Street, 4th Floor

PO Box 2548

Charleston, WV 25329-2548

cpence@pencefirm

April Nelson, Esq.

Associate Solicitor

Office of the Solicitor

U.S. Department of Labor

Division of Mine Safety and
Health

201 12th Street South, Suite
401

Arlington, VA 22202

[email protected]

Emily Toler Scott, Esq.

Counsel for Appellate
Litigation

Office of the Solicitor

U.S. Department of Labor

Division of Mine Safety and
Health

201 12th Street South, Suite
401

Arlington, VA 22202

[email protected]

Melanie Garris

USDOL/MSHA, OAASEI/CPCO

201 12th Street South, Suite 401

Arlington, VA 22202

[email protected]

Chief Administrative Law
Judge Glynn F. Voisin

Federal Mine Safety Health Review Commission

1331 Pennsylvania Avenue, NW Suite 520N

Washington, DC 20004-1710

[email protected]