FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710

December 11, 2012

BEFORE: Jordan, Chairman; Young and Nakamura, Commissioners

ORDER

BY THE COMMISSION:

            This matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2006) (“Mine Act”). On November 28, 2011, the Commission received from Shelter Creek Capital, LLC (“Shelter Creek”) a motion 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 became a final order of the Commission on October 6, 2011. Shelter Creek asserts that it sent the proposed assessment to its counsel on September 7, 2011. Counsel submits that due to administrative confusion, her support staff placed the contest form in the client’s file instead of mailing it to MSHA.

            The Secretary opposes the request to reopen and asserts that the counsel’s conclusory statements of “administrative confusion” are insufficient to justify reopening. The Secretary maintains that under well-established case law, attributing the failure to timely contest to the counsel rather than the operator, is not an adequate basis for reopening. The Secretary further notes that the counsel’s office does not appear to have an internal tracking system to monitor and ensure that contests are timely filed.

            In response to the Secretary’s opposition, counsel for Shelter Creek maintains that the administrative confusion did not represent a pattern of inadequate office procedures. Counsel further avers that she has a long history of dealing adequately with proposed assessments. In addition, counsel submitted a motion to strike the Secretary’s opposition, due to the Secretary’s delay in filing beyond the required 8-day time frame. 29 C.F.R. § 2700.10(d).

            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. Oak Grove Res., LLC, 33 FMSHRC 103, 104 (Feb. 2011); Double Bonus Coal Co., 32 FMSHRC 1155, 1156 (Sept. 2010); Highland Mining Co., 31 FMSHRC 1313, 1315 (Nov. 2009); Pinnacle Mining Co., 30 FMSHRC 1066, 1067 (Dec. 2008); Pinnacle Mining Co., 30 FMSHRC 1061, 1062 (Dec. 2008). Moreover, as the Commission stated in M3 Energy Mining Co., 33 FMSHRC 1741, 1746 (Aug. 2011):

The fact that many of the inadequate and unreliable office procedures in these cases occurred at counsel’s office rather than the office of the operators does not affect our analysis. As the Commission noted in Keokee Mining, LLC, 32 FMSHRC 64, 66 n.1 (Jan. 2010), “[i]n requesting relief from a final order, a client may be held accountable for the acts and omissions of its attorney.” Keokee Mining relied on Pioneer Investment Services Co. v. Brunswick Associates Ltd. P’ship, 507 U.S. 380, 397 (1993), where the Supreme Court made clear that when a party’s failure to meet a deadline was caused by the actions of its counsel, and the issue is whether the party would be exonerated on the basis of “excusable neglect,” the party would “be held accountable for the acts and omissions of [its] chosen counsel.” This is because the party “‘voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequences of the acts or omissions of this freely selected agent.’” Id. (quoting Link v. Wabash R. Co., 370 U.S. 626, 633-34 (1962)).(Footnote omitted). In this case, we conclude that the lack of any procedure to confirm that the required paperwork was timely filed represents an inadequate or unreliable internal processing system.

            Despite taking the opportunity to submit a reply, Shelter Creek’s counsel failed to respond to the Secretary’s arguments and explain in detail what caused the administrative confusion, how counsel’s office procedures were ineffective in this instance due to unusual circumstances, and how new office procedures have been implemented as a result of this failure, so as to prevent future defaults.

            Having reviewed Shelter Creek’s requests and the Secretary’s response, we conclude that Shelter Creek has failed to establish good cause for reopening the proposed penalty assessment. Accordingly, we hereby deny Shelter Creek’s motion to reopen and deny its motion to strike the Secretary’s opposition.

                                                                                    /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:

Adele L. Abrams, Esq.

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

4740 Corridor Place, Suite D

Beltsville, MD 20705

safetylawyer@aol.com

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA 22209-2296

Schumann.Walter@dol.gov

Melanie Garris

Office of the Penalty Compliance

U.S. Department of Labor, MSHA

1100 Wilson Boulevard

Arlington, VA 22209

Garris.Melanie@dol.gov

Chief Administrative Law Judge Robert J. Lesnick

Federal Mine Safety and Health Review Commission

1331 Pennsylvania Ave., NW, Suite 520N

Washington, D.C. 20004-1710