Cannelton Industries, Inc.

Plain-English summary

Cannelton Industries intended to contest a proposed penalty for a citation but accidentally filed the penalty notice instead of paying or contesting it while the company was undergoing a sale and staff duties were shifting. The Commission found that the misfiling qualified as inadvertence or mistake under Rule 60(b)(1), granted relief, and reopened the penalty assessment. It remanded the matter for assignment to a judge to decide whether it should be consolidated with the related contest proceeding, WEVA 98-99-R. Commissioner Beatty dissented, preferring a factual determination of the Rule 60(b) criteria before relief was granted.

Decision snapshot

• Governing authority: 30 U.S.C. § 815(a); 29 C.F.R. § 2700.1(b)
• Outcome: The final penalty assessment was reopened and the matter was remanded for a consolidation determination.
• Key point: An operator's documented filing mistake may support reopening a penalty assessment that became final under Mine Act section 105(a).

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

               1730 K STREET NW, 6TH FLOOR

                 WASHINGTON, D.C.  20006


                      July 29, 1999

SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket No. WEVA 99-102
: A.C. No. 46-06051-03747
CANNELTON INDUSTRIES, INC. :

BEFORE: Jordan, Chairman; Marks, Riley, Verheggen, and Beatty,
Commissioners

                          ORDER

BY: Jordan, Chairman; Marks, Riley, and Verheggen,
Commissioners

 This matter arises under the Federal  Mine  Safety  and

Health Act of 1977, 30 U.S.C. § 801 et seq. (1994) ("Mine
Act"). On June 3, 1999, the Commission received from
Cannelton Industries, Inc. ("Cannelton") a request 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).[1] The Secretary of Labor did not file an
opposition to Cannelton's motion.

 Under section 105(a) of the Mine Act, an operator has 30

days following receipt of the Secretary of Labor's proposed
penalty assessment within which to notify the Secretary that
it wishes to contest the proposed penalty. 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).

 In its request, Cannelton asserts that its failure to

file a hearing request to contest the proposed penalty for
the violation alleged in Citation No. 7160486 was due to
circumstances related to its impending sale. Mot. at 3.
Cannelton states that it timely filed a notice of contest of
the underlying citation. Id. at 2. Cannelton alleges that its
impending sale had been known for several months and that
numerous people left Cannelton's employment and, as a result,
job duties shifted among the remaining employees. Id. at 3.
Cannelton submits that the duties of Joyce Alderson, the
employee who normally handled safety matters, were assigned
to another employee. Id. The operator maintains that it did
not learn until it received a delinquency notice that the
notice of proposed penalty had been inadvertently filed rather
than paid or contested. Id. Cannelton also requests that this
matter and the related contest proceeding, Docket No. WEVA
98-99-R, be consolidated. Id. at 2. Attached to the motion
are a copy of Cannelton's request for hearing, a news article
discussing Cannelton's sale, and an affidavit by Alderson.
Exs. A, B, C.

 We have held that, in appropriate circumstances and

pursuant to Fed. R. Civ. P. 60(b), we possess jurisdiction to
reopen uncontested assessments that have become final by
operation of section 105(a). See, e.g., Rocky Hollow Coal
Co., 16 FMSHRC 1931, 1932 (Sept. 1994); Jim Walter Resources,
Inc., 15 FMSHRC 782, 786-89 (May 1993). We have also observed
that default is a harsh remedy and that, if the defaulting
party can make a showing of adequate or good cause for the
failure to timely respond, the case may be reopened and
appropriate proceedings on the merits permitted. See Coal
Preparation Servs., Inc., 17 FMSHRC 1529, 1530 (Sept. 1995).
In accordance with Rule 60(b)(1), we have previously afforded
a party relief from a final order of the Commission on the
basis of inadvertence or mistake. See Unique Mining, Inc.,
21 FMSHRC 602, 602-04 (June 1999) (granting operator's motion
to reopen where operator timely filed notice of contest, but
operator's accounting firm misfiled and failed to timely
contest the related proposed penalties); Kenamerican
Resources, Inc., 20 FMSHRC 199, 200-01 (Mar. 1998) (reopening
proceedings when green card not timely filed due to operator's
internal processing error).

 Here, the record indicates that Cannelton intended to

contest the penalties associated with Citation No. 7160486,
and that, but for the misfiling, it would have timely
submitted the hearing request. In these circumstances,
Cannelton's failure to timely file a hearing request
reasonably may be found to qualify as "inadvertence" or
"mistake" within the meaning of Rule 60(b)(1). See
Kenamerican, 20 FMSHRC at 200-01.

FOOTNOTES

 [1]:   The Commission originally received Cannelton's

motion in November, 1998. However, because the operator
placed on its motion the docket number of the related
contest proceeding already assigned to Administrative Law
Judge Jacqueline Bulluck, the motion was forwarded to Judge
Bulluck. Cannelton's motion again came to the Commission's
attention when MSHA faxed a copy of the motion to the
Commission after attempting to collect the civil penalty
from Cannelton.

 Accordingly, the interest of justice, we grant Cannelton's

unopposed request for relief and reopen the penalty assessment
that became a final order with respect to Citation No. 7160486.
We also remand this matter for assignment to a judge to
determine whether its consolidation with the underlying contest
proceeding pending before Judge Bulluck, Docket No. WEVA
98-99-R, is appropriate. This case shall proceed pursuant to
the Mine Act and the Commission's Procedural Rules, 29 C.F.R.
Part 2700.

                          Mary Lu Jordan, Chairman

                          Marc Lincoln Marks, Commissioner

                          James C. Riley, Commissioner

                          Theodore F. Verheggen, 
                            Commissioner

 Commissioner Beatty, dissenting:

 On the basis of the present record, I am unable to

evaluate the merits of Cannelton's position and would remand
the matter for assignment to a judge to determine whether
Cannelton has met the criteria for relief under Rule 60(b).
See Benton County Stone, Inc., 21 FMSHRC 5, 7 (Jan. 1999)
(remanding final order when operator misfiled green card).

                          Robert H. Beatty, Jr., 
                            Commissioner

Distribution

William C. Miller, II, Esq.
Jackson & Kelly
P.O. Box 553
Charleston, WV 25322

W. Christian Schumann, Esq.
Office of the Solicitor
U.S. Department of Labor
4015 Wilson Blvd., Suite 400
Arlington, VA 22203

Chief Administrative Law Judge Paul Merlin
Federal Mine Safety & Health Review Commission
1730 K Street, N.W., Suite 600
Washington, D.C. 20006\n