FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

601 NEW JERSEY AVENUE, NW

SUITE 9500

WASHINGTON, DC 20001

November 22, 2011

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

ORDER

BY: Young, Cohen, 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 26, 2011, the Commission received from H&K Materials, Inc. (“H&K”) 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 September 23, 2010, and became a final order of the Commission on October 25, 2010. A delinquency letter was sent on January 14, 2011, and the case was referred to the U.S. Treasury for collection on March 31, 2011. H&K asserts that it faxed the proposed assessment to its counsel on September 27, 2010, but due to clerical and filing errors the counsel did not return it to MSHA. Counsel asserts it first became aware of the error when it received a letter from the U.S. Treasury, and the motion to reopen was filed on April 22, 2011.

            The Secretary opposes the request to reopen and notes that such conclusory statements are insufficient to justify reopening. The Secretary alleges that H&K appears to have no internal tracking system to ensure that counsel timely files a notice of contest when directed to do so, and that attributing the failure to counsel is not an adequate basis for reopening. The Secretary further questions why H&K failed to respond to the delinquency notice and waited until the case was referred to Treasury for collection, almost six months after the proposed assessment became a final order.

            Counsel for H&K submitted a reply to the Secretary’s opposition claiming that his law firm maintains adequate and reliable internal procedures for the docketing and tracking of litigation matters. Specifically, counsel’s firm maintains a fax center which distributes two copies of each received fax via interoffice mail and email. In this case, however, counsel claims neither the hard copy nor the electronic version of the faxed assessment were forwarded to a paralegal for docketing.

            H&K makes no showing of exceptional circumstances that warrant reopening. 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 therefore conclude that the operator’s failure to follow up on the proposed assessment and the delinquency notice to see that they would be properly processed and timely addressed by counsel represents an inadequate or unreliable internal processing system.

            While counsel for H&K has explained in detail how the firm processes matters brought to its attention, the Secretary challenged the operator’s internal procedures, not its counsel’s. Nothing in the response addresses those deficiencies. In particular, there is no explanation for the failure to respond to the January 14, 2011 delinquency notice, despite the Secretary’s specific objection to that omission.

            In considering whether an operator has unreasonably delayed in filing a motion to reopen a final Commission order, 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, 10-11 (Jan. 2009); Highland Mining Co., 31 FMSHRC 1313, 1316 (Nov. 2009) (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 fact that H&K failed to respond to the delinquency notice and waited more than three months to request reopening without providing an explanation, supports our conclusion that H&K has not met its burden of establishing entitlement to extraordinary relief.             

            Having reviewed H&K’s request and the Secretary’s response, we conclude that H&K has failed to establish good cause for reopening the proposed penalty assessment and deny its motion with prejudice.

/s/Michael G. Young

Michael G. Young, Commissioner

/s/ Robert F. Cohen, Jr.

Robert F. Cohen, Jr., Commissioner

/s/ Patrick K. Nakamura                                                                               

 Patrick K. Nakamura, Commissioner

Chairman Jordan, and Commissioner Duffy, dissenting:

            Our colleagues deny relief in this case primarily because H&K did not, in their view, institute adequate internal procedures to ensure timely penalty contests and because it waited approximately three months after the delinquency letter was sent before it filed a motion to reopen with the Commission. However, based on H&K’s detailed submission, we would grant relief in this case.

            Counsel for the operator’s affidavit explained in detail the procedures generally used by the law firm to timely contest penalty assessments received from H&K. The firm maintains an electronic docketing and litigation management system programmed to ensure that once a document is entered into the system, all deadlines are subsequently met. Counsel emphasizes that this software is specifically keyed to the Commission’s procedural rules to ensure compliance with dockets pending before the Commission. He states that in this case, because of the absence of a hard fax copy, the proposed assessment was not forwarded to a paralegal for docketing. It thus appears that, despite a specified internal procedure, the assessment in this case was not timely contested. This type of aberration falls squarely under Rule 60(b)(1), which provides that relief may be granted due to mistake, inadvertence or excusable neglect.

            Regarding the majority’s view that relief must be denied because of the operator’s failure to timely file a motion to reopen once MSHA sent a delinquency notice to the operator, counsel for H&K states in his declaration that the operator and its counsel first became aware that the assessment was not timely filed in April 2011 when the Department of the Treasury contacted H&K via letter to let it know about the delinquency. (The motion to reopen was then filed on April 27, 2011). This implies that neither of them received a delinquency notice from

MSHA, and nothing in the record indicates a proof of service of that notice on the operator. Although the Secretary includes a copy of the delinquency notice with her opposition, there is no proof of service on the operator or its counsel, and thus there is no countervailing evidence in the record to cause us to question counsel’s assertion. Accordingly, a denial of relief based on the operator’s failure to timely file a motion to reopen after the delinquency notice was sent is not warranted in this case.

            For the foregoing reasons, we would grant relief in this matter.

/s/ Mary Lu Jordan

Mary Lu Jordan, Chairman

/s/ Michael F. Duffy                                                             

Michael F. Duffy, Commissioner

Distribution:

R. Brian Hendrix, Esq.

Patton Boggs, LLP

2550 M Street NW

Washington, DC 20037

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