FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

November 5, 2012

BEFORE: Jordan, Chairman; Young and Nakamura, 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. (2006) (“Mine Act”). On August 17, 2010, the Commission received from Byholt, Inc. (“Byholt”) two motions seeking to reopen two penalty assessments 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 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).

            MSHA’s record indicates that proposed assessment No. 000208139 was delivered on or about January 13, 2010, signed for by M. Cindrena, and became a final order of the Commission on February 12, 2010. A notice of delinquency was mailed on March 31, 2010, and the case was referred to the U.S. Department of Treasury for collection on July 29, 2010. Proposed assessment No. 000211111 was delivered on February 19, 2010, signed for by M. Andrews, and became a final order of the Commission on March 22, 2010. A notice of delinquency was mailed on May 6, 2010, and the case was referred to the U.S. Department of Treasury for collection.

            Byholt asserted that although it routinely paid the penalties, it had been advised that it should contest 104(d) orders if it had a legitimate defense. Byholt stated that upon receiving assessment No. 000208139 it mistakenly believed it had to wait to contest all the orders together, and upon receiving assessment No. 000211111 it was unsure how to proceed. Byholt further contended that by the time it was able to retain counsel the contest deadline had passed.

            The Secretary opposed the requests to reopen, noting that the operator identified no exceptional circumstances warranting reopening. The Secretary stated that the operator’s professed misunderstanding of MSHA’s contest procedures was particularly inexcusable because the contest instructions are on the proposed assessment. Moreover, the Secretary asserted that Byholt failed to explain why it waited over four and three months, respectively, to request reopening after it received the delinquency notices.

            On September 9, 2011 the Commission issued an order denying without prejudice Byholt’s motions to reopen, since they lacked sufficient detail and did not provide adequate grounds for reopening. The Commission found it significant that Byholt also failed to explain why it delayed over four and three months in responding to the delinquency notices. We encouraged Byholt to include a full description of the facts supporting its claim, and provide documents detailing the problem preventing it from timely contesting the proposed assessment. Moreover, we emphasized that we would specifically expect Byholt to provide verified and detailed affidavits and documentation substantiating what it did after receiving the delinquency notices and why it delayed in seeking reopening.

            In its amended motion to reopen, counsel for Byholt submitted an identical copy of its original motion, adding only one new paragraph. In the new paragraph, Byholt admits it received the delinquency notices, but avers that they did not provide instructions to file motions to reopen. Byholt further states that after receiving the delinquency notices it delayed paying the debt while searching for counsel. As additional documentation, the amended motion included the affidavit of Byholt’s president, who added – beyond his original affidavit – that after receiving the delinquency notices he hesitated to pay, since he did not know whether there were any other steps he could take. The Secretary notified the Commission that she stands by her opposition.

            Despite being given a second chance, Byholt and its counsel failed to answer the Commission’s specific questions. It remains unclear why Byholt did not contest the proposed assessments once it received all the section 104(d) orders, i.e. after receiving proposed assessment No. 000211111 on February 19, 2010. Byholt asserted that it had been advised that it should contest section 104(d) orders if it had a legitimate defense, and as the Secretary notes, the contest procedures are included in the proposed assessments. If Byholt was still unsure how to proceed, it should have begun searching for a counsel as soon as it received proposed assessment No. 000208139 in January 2010. Byholt’s amended motions fail to explain why it waited an additional three to four months after receiving the proposed assessments before it began searching for counsel. Therefore, it appears that Byholt took six to seven months to search for counsel.

            The Commission has made it clear that where a failure to contest a proposed assessment results from an inadequate or unreliable internal processing system, the operator has not established grounds for reopening the assessment. Pinnacle Mining Co., 30 FMSHRC 1061, 1062 (Dec. 2008); Pinnacle Mining Co., 30 FMSHRC 1066, 1067 (Dec. 2008); Highland Mining Co., 31 FMSHRC 1313, 1315 (Nov. 2009); Double Bonus Coal Co., 32 FMSHRC 1155, 1156 (Sept. 2010); Oak Grove Res., LLC, 33 FMSHRC 103, 104 (Feb. 2011). In this case, we conclude that the lack of any procedure to properly assess MSHA correspondence and communicate with MSHA in a timely manner, represents an inadequate or unreliable internal processing system.

            Additionally, in considering whether an operator has unreasonably delayed in filing a motion to reopen, we find relevant the amount of time that has passed between an operator’s receipt of a delinquency notice and the operator’s filing of its motion to reopen. See, e.g., Left Fork Mining Co., 31 FMSHRC 8, 11 (Jan. 2009); Highland Mining Co., 31 FMSHRC at 1316-17 (holding that motions to reopen filed more than 30 days after receipt of notice of delinquency must explain the reasons why the operator waited to file a reopening request, and lack of explanation is grounds for the Commission to deny the motion). Here, the delays in responding to MSHA’s delinquency notices amounted to over three and four months. Byholt’s contention that it was searching for counsel does not provide adequate grounds for reopening, especially considering that the delay amounted to six or seven months after receiving the proposed assessments.

            Having reviewed Byholt’s requests and the Secretary’s responses, we conclude that Byholt has failed to establish good cause for reopening the proposed penalty assessments. Accordingly, we deny its motions with prejudice.

                                                                                    /s/ Mary Lu Jordan

                                                                                    Mary Lu Jordan, Chair

                                                                                    /s/Michael G. Young

                                                                                    Michael G. Young, Commissioner

                                                                                    /s/ Patrick K. Nakamura                                                                                

                                                                                    Patrick K. Nakamura, Commissioner

Distribution:

Nichelle Young, Esq.

Law Office of Adele L. Abrams, P.C.

4740 Corridor Place, Suite D

Beltsville, MD 20705

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., 25^th 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