FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

November 15, 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 March 2, 2012, the Commission received from Kuhlman Construction (“Kuhlman”) 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).

            The Department of Labor’s Mine Safety and Health Administration’s (“MSHA”) record indicates that proposed assessment No. 000247055 was delivered on February 24, 2011, and became a final order of the Commission on March 28, 2011. Proposed assessment No. 000249599 was delivered on March 23, 2011, and became a final order of the Commission on April 22, 2011. Kuhlman states that it had timely contested the underlying citations in July 2010. It asserts that it had inadvertently paid the penalties instead of sending the assessments to its counsel for contest. Kuhlman’s corporate secretary states in her affidavit that she has no recollection of receiving the assessments, but does not dispute that she likely signed the checks. Kuhlman’s secretary further states that in the future all MSHA checks will be accompanied by the corresponding paperwork to ensure that she knows which penalties the company is paying.

            The Secretary opposes the requests to reopen, noting that MSHA received payment for the proposed assessments, by checks dated March 2 and April 6, 2011. The Secretary contends that Kuhlman’s conclusory statements do not explain why it failed to timely contest the proposed assessments. The Secretary states that since Kuhlman’s secretary signed the checks one month apart without knowing which penalties she was paying, it is clear that Kuhlman did not have an adequate system for reviewing assessments. Moreover, the Secretary asserts that Kuhlman failed to explain why it waited almost a year to request reopening after the assessments became final Commission orders. The Secretary argues that this delay is particularly inexcusable considering that Kuhlman’s counsel received the Order of Assignment and Pre-Hearing Order, dated April 11, 2011, in the contest proceedings and participated in settlement negotiations during May through September 2011, for the remaining penalties issued during the same inspection.

            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 in reviewing proposed assessments and ensuring that they are timely contested, 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, Kuhlman’s counsel filed these motions to reopen eleven months after receiving the orders dated April 11, 2011.

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