FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

               OFFICE OF ADMINISTRATIVE LAW JUDGES
             601 New Jersey Avenue, N.W., Suite 9500 
                       Washington, DC 20001

                        February 26, 2003
                                 
SECRETARY OF LABOR,             :  CIVIL PENALTY PROCEEDINGS
  MINE SAFETY AND HEALTH        :
  ADMINISTRATION (MSHA),        :  Docket No. CENT 2002-187-M    
          Petitioner            :  A.C. No. 41-03751-05516
                                :
                                :  Docket No. CENT 2002-188-M
                                :  A.C. No. 41-03751-05517
                                :  
          v.                    :  Docket No. CENT 2002-249-M
                                :  A.C. No. 41-03751-05518
                                :
                                :  Docket No. CENT 2002-266-M
BIG BUCK ASPHALT,               :  A.C. No. 41-03751-05519
          Respondent            :
                                :  Docket No. CENT 2003-18-M
                                :  A.C. No. 41-03751-05520
                                :
                                :  Docket No. CENT 2003-91-M
                                :  A.C. No. 41-03751-05522
                                :                                
                                :  Phelps Pit

            ORDER DENYING MOTION TO APPROVE SETTLEMENT

Before:  Judge Feldman

     These cases are before me upon petitions for assessment of civil penalty under section 105(d)
of the Federal Mine Safety and Health Act of 1977 (the Act).  The Secretary has filed a motion to
approve a settlement agreement and to dismiss these matters.  A reduction in civil penalty from
$48,262 to $12,065 is proposed.  The parties propose that the proposed $12,065 civil penalty will be
paid in an initial installment of $2,500, with the remaining $9,565 to be paid in nineteen monthly
installments. The proposed substantial reduction and extended payment schedule are based on Big
Buck Asphalt's reported financial condition that allegedly precludes its ability to pay a higher civil
penalty.

     In support of its assertion that payment of a higher penalty would impact on its ability to remain
in business, the parties rely on a financial statement for the year ending February 28, 2002, for Four G.
Asphalt, Inc.'s d/b/a Big Buck Asphalt prepared by a certified public accountant.  The financial
statement furnished by the Secretary lacks the Accountant's Review Report designated as page 1 in the
Table of Contents.  Consequently, the financial statement does not reflect whether the information
contained therein was audited.  In this regard, the financial statement notes that the reported amounts of
revenues and expenses are based on management "estimates and assumptions."  Unaudited financial
statements do not provide a basis for establishing payment of a civil penalty will adversely affect a mine
operator's ability to continue in business.  See Spurlock Mining Co., Inc., 16 FMSHRC 697, 700
(April 1994).  

     The financial statement reflects gross income of $1,276,154 and an unspecified  "cost of
revenue" of $1,304,010 resulting in a reported loss of $27,856.  The financial statement reflects Pete
Gallegos, Sr., is the President of Big Buck Asphalt.  The financial statement further reflects that Pete
Gallegos Paving, Inc., "is the parent owner" and "primary customer" of Big Buck Asphalt.  Javalina
Ready-Mix, Inc., also owned by Pete Gallegos Paving, Inc., also is a significant customer of Big Buck
Asphalt.     

     I am unable to approve the settlement terms without additional information concerning the
relationship between Big Buck Asphalt and Pete Gallegos Paving, Inc.  Specifically, 
IT IS ORDERED that the parties provide, within 21 days of this Order, additional information and
financial documentation concerning whether the financial condition of Pete Gallegos Paving, Inc., is a
relevant consideration in determining whether there is a financial hardship that justifies the structured
payment schedule and substantial reduction in the civil penalty proposed by the parties.  The
information should include a complete list of the corporate officers and management personnel of each
corporation and a description of their responsibilities and job duties.  The parties may provide any
additional information they deem relevant.  All financial documentation submitted should be audited. 
Accordingly, the Motion to Approve Settlement IS DENIED.  If  sufficient information to support the
proposed settlement is not provided within 21 days, these matters will be scheduled for hearing.  




                                   Jerold Feldman
                                   Administrative Law Judge

Distribution:                           

Thomas A. Paige, Esq., Office of the Solicitor, U.S. Department of Labor, 
525 South Griffin Street, Suite 501, Dallas, TX 75202

Pete Gallegos, Sr., President, Big Buck Asphalt, 4320 Trade Center Blvd., Laredo, TX 78041,  

Donato D. Ramos, Esq., Attorney At Law, Walker Plaza, Suite 100, 5810 San Bernardo Ave.,
Laredo, TX 78041