FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

601 NEW JERSEY AVENUE, NW

SUITE 9500

WASHINGTON, DC 20001

November 18, 2011

BEFORE: Jordan, Chairman; Duffy, Young, Cohen, and Nakamura, Commissioners

ORDER

BY: Duffy, Young, and Nakamura, Commissioners

            This matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2006) (“Mine Act”). On April 5, 2011, the Commission received from White Buck Coal Company (“White Buck”) a motion made by counsel 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) 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 record indicates that the proposed assessment was delivered on January 28, 2011, and became a final order of the Commission on February 28, 2011. White Buck asserts that it followed its well-established and centralized internal process for handling proposed assessment forms received from MSHA. White Buck further asserts its Safety Director marked the form indicating its intent to contest this citation, and emailed a scanned copy of the form to the corporate legal department of its parent company, Massey Coal Service, Inc. (“Massey”), on February 1, 2011 for filing with MSHA. Massey’s Legal Analyst claims in his affidavit he either misplaced the proposed assessment form or overlooked it by mistake, due to being involved in preparing the company’s Dodd-Frank disclosures to the SEC and completing at least thirty three other proposed assessment forms during that time period. Upon realizing the assessment form had not been timely submitted, the Legal Analyst sent the completed form to MSHA on March 2, 2011. The motion to reopen was filed by counsel within 30 days of receiving MSHA’s delinquency letter.

            The Secretary does not oppose the request to reopen based solely on the fact that the contest was filed only two days late and the operator promptly discovered its own mistake. However, the Secretary also has gone to great lengths to explain that several of the grounds on which the reopening request is based do not support reopening. Contrary to White Buck’s assertion, it is apparent to the Secretary that Massey’s centralized internal procedures for processing proposed assessment forms were inadequate. Moreover, the Secretary notes she urged Massey in three previous delinquencies, when reopening was requested with essentially identical explanations, to take steps to ensure future proposed assessments are timely contested. White Buck’s violation history which has raised the specter of a pattern of violations enforcement action, the reckless disregard designation of the order subjecting it to a flagrant violation assessment, and the penalty amount of $53,800 militate against reopening. The citations and orders in this proceeding were of critical importance, yet despite ample warning about the need to ensure such matters are responsibly managed, White Buck and its parent failed to file a timely notice of contest.

            In her response, the Secretary suggests these factors should have made Massey more careful about timely processing and contesting proposed assessments. We encourage parties seeking reopening to provide further information in response to pertinent questions raised in the Secretary’s response. See, e.g., Climax Molybdenum Co., 30 FMSHRC 439, 440 n.1 (June 2008); Highland Mining Co., 31 FMSHRC 1313, 1316 n.3 (Nov. 2009). White Buck has failed to provide a response.

            Having reviewed White Buck’s request and the Secretary’s response, we find troubling the Secretary’s assertions that Massey’s centralized internal procedures for processing proposed assessment forms were inadequate, particularly in light of the large penalty at issue in this case, the seriousness of the allegations involved, and the previous history of untimely responses. However, we are concerned that Massey and its counsel may have elected not to respond to the points the Secretary has raised because she stated that, despite the deficiencies, she was not opposed to reopening. Accordingly, we deny White Buck’s request without prejudice, affording it the opportunity to establish good cause for reopening the proposed penalty assessment. White Buck may submit a reply to the Secretary’s response within 30 days of the date of this order. Failure to do so will result in dismissal of this matter with prejudice.

/s/ Michael F. Duffy                                                                        

Michael F. Duffy, Commissioner

/s/ Michael G. Young

Michael G. Young, Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Chairman Jordan, and Commissioner Cohen, dissenting:

            A critical factor in deciding whether to grant White Buck’s motion to reopen in this case is the number of prior requests for relief from a final order filed with the Commission by this operator and its parent company, Massey Coal Service, Inc. (“Massey”). This history, along with the operator’s failure to develop adequate internal procedures to ensure the filing of timely penalty contests, leads us to conclude that White Buck’s motion should be denied with prejudice.

            White Buck has repeatedly come to the Commission asking for relief from final orders. In February 2010, the Commission issued an order in response to the operator’s motion to reopen which claimed that, due to a turnover in safety directors, it did not become aware of a delinquent penalty assessment until nearly eleven months after the assessment became a final order of the Commission. White Buck Coal Co., 32 FMSHRC 112 (Feb. 2010). We remanded the case to the Chief Administrative Law Judge for a determination of whether good cause existed for the operator’s failure to timely contest the penalty proposal. Id. at 114.

            More recently, we granted White Buck’s motions to reopen in two cases (that we consolidated) in which the facts are very similar to the case currently before us. White Buck Coal Co., 33 FMSHRC ____, Nos. WEVA 2010-1696 and WEVA 2010-1720 (Oct. 27, 2011). In that matter, the legal analyst with Massey’s corporate legal department who failed to timely contest the penalty placed the penalty assessment form to be contested into the wrong stack of assessment forms and discovered his mistake too late to file a timely contest. We also granted a motion to reopen filed by another Massey company, Martin County Coal, wherein the same legal analyst sent the penalty contest form to the Massey accounting department and mistakenly assumed that the contest had been timely filed. Martin County Coal Co., 33 FMSHRC ___, No. KENT 2010-1549 (Oct. 27, 2011). Both of these recent cases involved the same legal analyst involved in the current proceeding.

            Given this history of late-filed contests, we consider it inappropriate to accede to yet another request from this operator to grant relief under Rule 60(b). As the Secretary notes in her response to White Buck’s motion, she has repeatedly urged the operator to take steps to make sure that future proposed penalty assessments would be timely contested. Its failure to do so has created a pattern of untimely contests, followed by requests to the Commission to reopen the final orders created by the operator’s carelessness. Under such circumstances, we are no longer willing to grant relief.

             The facts in this case indicate that Massey’s Legal Department has not taken steps to institute a reliable process for the timely processing of penalty contests. The Commission has made clear that where a failure to file a timely contest of a proposed penalty assessment results from an operator’s inadequate or unreliable internal procedures, the operator has not shown good cause for reopening a final order. 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); Elk Run Coal Co., 32 FMSHRC 1587, 1588 (Dec. 2010); Oak Grove Res. LLC, 33 FMSHRC 103, 104-05 (Feb. 2011); M3 Energy Mining Co. and Clean Energy Mining Co., 33 FMSHRC ___, slip op. at 5-6, No. KENT 2009-1101 and KENT 2009-1102 (Aug. 3, 2011); see Gibbs v. Air Canada, 810 F.2d 1529, 1537-38 (11th Cir. 1987). Here, the fact that Massey’s legal analyst failed to file a timely contest because he had to submit contests to MSHA in 33 other cases and had to prepare the operator’s Dodd-Frank disclosures to the SEC, in light of three similar recent failures, establishes only that Massey failed to devote sufficient manpower and resources to fulfill its legal responsibility under section 105 of the Mine Act. See Big Ridge, Inc.,          31 FMSHRC 362, 364 (Mar. 2009) (denying motion because operator’s excuse of “overwhelming business matters” did not provide an adequate basis to justify reopening).

            In her response, the Secretary states that the operator’s procedures for processing proposed penalty assessments were inadequate. As our colleagues note, she also identifies several factors that should have made the operator more careful about ensuring that timely contests were filed, including the fact that the order at issue could impact MSHA’s use of the “pattern of violations” enforcement scheme against it, and that the order could subject it to a potential flagrant violation charge in the future. The Secretary also argues the $53,800 proposed penalty should have motivated the operator to be more careful in contesting the proposed assessment. White Buck failed to provide a reply which indicates that the failure here resulted from circumstances beyond its control or that its actions and those of its parent company represent anything more than continuation of a pattern of neglect.  

            The majority’s denial of the motion without prejudice will permit the operator to file an additional pleading with the Commission to attempt to convince us that it treated proposed penalty assessments from MSHA with the appropriate degree of care. Given the detailed nature of the operator’s original submission (consisting of an 11-page motion and voluminous attachments, including two affidavits), we consider it unlikely that additional information needs to be brought to our attention.

            Consequently, having reviewed White Buck’s request and the Secretary’s response, we conclude that White Buck has failed to establish good cause for reopening the proposed penalty assessment and would deny its motion with prejudice.

                                                                                    /s/ Mary Lu Jordan

                                                                                    Mary Lu Jordan, Chairman

                                                                                    /s/ Robert F. Cohen, Jr.

                                                                                    Robert F. Cohen, Jr., Commissioner

Distribution:

Max L. Corley, III, Esq.

Dinsmore & Shohl, LLP

P.O. Box 11887

900 Lee Street, Suite 600

Charleston, WV 25339

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

US Department of Labor

1100 Wilson Blvd. 25^th Floor

Arlington, VA 22209

Chief Administrative Law Judge Robert J. Lesnick

Federal Mine Safety & Health Review Commission

601 New Jersey Avenue, N.W., Suite 9500

Washington, D.C. 20001-2021