Secretary of Labor v. United Taconite, LLC

Plain-English summary

Staffing changes left a new United Taconite safety specialist with a proposed assessment but no instructions for handling it. The company did not train the specialist on the assessment process for more than two months. After an April delinquency notice, United Taconite contacted outside counsel, but the formal reopening motion was not received until June, after MSHA also sent a demand letter. The Commission majority found both an inadequate internal process and an unreasonable filing delay, and denied reopening with prejudice. Commissioner Althen dissented because the company promptly expressed its intent to contest after discovering the problem and the later delay was attributable to counsel.

Decision snapshot

• Cited authority: 30 U.S.C. § 815(a)
• Outcome: The motion to reopen 20 penalties was denied with prejudice.
• Key point: A personnel transition does not excuse a missed contest when the replacement lacks training and the formal reopening request is delayed after notice.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVE., N.W., SUITE 520N

WASHINGTON,
DC 20004-1710

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH

ADMINISTRATION
(MSHA)

                    v.

UNITED
TACONITE, LLC,

:

:

:

:

:

:

:

Docket
No. LAKE 2023-0205

A.C.
No. 21-03404-570153

BEFORE:
Jordan, Chair; Althen, Rajkovich, and Baker, Commissioners

ORDER

BY: Jordan, Chair;
Rajkovich and Baker, Commissioners

        This

matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
801 et seq. (2018) (“Mine Act”). On June 23, 2023, the Commission received from
United Taconite, LLC (“United”), 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 orders, the Commission has found guidance
in Rule 60(b) of the Federal Rules of Civil Procedure, under which the
Commission may relieve a party from a final order of the Commission on the
basis of mistake, inadvertence, excusable neglect, or other reason justifying
relief. 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).

        Records

of the Department of Labor’s Mine Safety and Health Administration (“MSHA”)
indicate that the proposed assessment was delivered to the operator on January 24,
2023. On February 23, 2023, the assessment became a final order of the Commission.

        United

Taconite argues that staffing changes caused its failure to timely file a
contest of twenty civil penalties listed on the proposed assessment. It
explains that its Senior Safety Specialist, who makes the decisions about which
citations and penalties to contest, was working in another department at the
time of the issuance of the proposed assessment. In addition, the operator’s
safety manager, who managed the proposed assessment forms, was permanently
transferred to another department on February 16, 2023, and a new health and
safety specialist was hired on January 20, 2023. United Taconite states that
when its safety manager departed on February 16, he handed mail, which included
the proposed assessment, to the new safety specialist without providing any
instructions. No action was taken on the proposed assessment. After the Senior
Safety Specialist returned to the safety department, he received a delinquency
notice and contacted outside counsel. [1]
On April 24, 2023, he trained the newly hired safety specialist on procedures
for handling MSHA assessments. United Taconite explains that any further delay
after receiving the delinquency notice was the result of counsel’s
investigation, preparation of the motion to reopen, and counsel’s litigation
schedule. Mot. at 6.

        The

Secretary opposes the operator’s motion to reopen. The Secretary states that on
March 15, 2023, MSHA received partial payment for three citations. On April 10,
2023, MSHA sent United Taconite a delinquency notice. On May 1, 2023, MSHA
received another partial payment for 9 of the 59 citations. On June 2, 2023,
MSHA issued United Taconite a demand letter stating that the operator must pay
a total of $70,737 within 30 days or MSHA would take additional enforcement
action. On July 14, 2023, MSHA issued a citation alleging that United Taconite
had violated the Mine Act through its failure to pay.

        In

opposing United Taconite’s motion, the Secretary argues that the operator’s
explanation that no action had been taken on the proposed assessment because
there were personnel changes and that the newly hired safety specialist did not
know the payment or contest process “boils down to inadequate procedures for
responding to proposed penalties.” Sec’y Response at 7. The Secretary asserts
that the operator should have been more careful with the filing of the contests
in this case given the large penalties proposed. She submits that although the
new safety specialist was later trained, it did not address the inadequate
procedures in this case. The Secretary contends that United Taconite filed its
motion to reopen over 2 months after MSHA sent it a delinquency letter.

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. Shelter Creek Capital, LLC , 34 FMSHRC
3053, 3054 (Dec. 2012); 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). United Taconite did not provide the employee with training on
proposed assessments, or otherwise remedy the confusion resulting from the
staffing changes, for over two months. This amounts to an inadequate or
unreliable internal processing system.

In addition, United Taconite failed to
file the motion to reopen within a reasonable time. The
Commission has previously held that “[m]otions to reopen received within 30
days of an operator’s receipt of its first notice from MSHA that it has failed
to timely file a notice of contest will be presumptively considered as having
been filed within a reasonable amount of time.” Highland Mining Co., 31
FMSHRC 1313, 1316-17 (Nov. 2009). The operator’s June 23 motion to reopen was
filed months after it received the April 11 delinquency letter and weeks after
MSHA sent the operator a demand letter.

We find that United Taconite has not asserted
good cause for its failure to timely contest the proposed penalties. See Moose
Lake Aggregates, LLC , 34 FMSHRC 1, 2-3 (Jan. 2012) (denying a motion to
reopen when the operator had deficient internal procedures and failed to file
motion within a reasonable time). The motion is denied with prejudice.

/s/
Mary Lu Jordan

Mary Lu Jordan,
Chair

/s/ Marco M. Rajkovich, Jr.

Marco M. Rajkovich, Jr., Commissioner

/s/ Timothy J. Baker

Timothy J. Baker, Commissioner

Commissioner
Althen, dissenting:

I respectfully
dissent.

This motion to
reopen involves an attempt by United Taconite to challenge 20 citations
totaling nearly $70,000 in proposed penalties.

The facts are not
contested. A United Taconite Safety Specialist oversaw dealing with
assessments. When he temporarily left his department in June 2022, a safety
manager took over processing citations. However, that safety manager left that
position virtually simultaneously with the receipt of the subject assessments. A
new person replaced him but did not know the contents of the envelopes left
behind.

In March, the
Safety Specialist who had been on temporary reassignment returned and went over
outstanding issues with the new Safety Specialist who had been unaware of the
citations. At that point, the assessments were discovered.

When the Senior Safety
Specialist found the notice of delinquency, he immediately returned the penalty
assessment noting 20 challenged citations demonstrating its desire to contest
those citations. United Taconite also responsibly turned the filing of a formal
motion over to outside counsel. A paralegal for outside counsel affirmed via
affidavit that United Taconite contacted her on April 21, 2023, regarding the
delinquency notice that had been mailed by the Secretary on April 10, 2023. Writing
with great integrity, the law firm acknowledges in the motion it filed that:

Any further delay
beyond the initial discovery of the delinquent Assessment [mid-April] upon
receipt of the delinquency notice make April 3, was the result of counsel for
United Taconite’s investigation of this matter, preparation of the Motion to
Reopen and related documents, and counsel’s additional litigation schedule.

Mot. to Reopen at 6 (June 8, 2023).

United Taconite
proved that it recognized its error and acted to correct it virtually
immediately upon receiving first notice of delinquency. Within the last few
days, the Commission reaffirmed a long-established position regarding timely
recognition of an error.

The Commission has
held that quick action after recognizing an error militates in favor of
reopening. “Motions to reopen received within 30 days of an operator’s of its
first notice from MSHA that it has failed to timely file a notice of contest
will be presumptively considered as having been filed within a reasonable
amount of time.” Highland Mining Co ., 31 FMSHRC 1313, 1316-17 (Nov.
2009).

Heidelberg Materials, US Cement, LLC v. Sec’y , 45
FMSHRC ___ (Dec. 6, 2023).

        Undoubtedly, United Taconite’s immediate action upon

receipt of receiving notice of the error compels a finding of good faith. If
the operator had typed a note asking to reopen with the submission, it
unquestionably would be presumptively considered to have filed its motion
within a reasonable time. Ignoring the operator’s quick action, the majority
uses a technicality that United Taconite did not file a “motion” to reopen but
instead, acting reasonably, turned to its outside counsel.

The majority finds a reason to
find a default of 20 citations comprising a very large penalty amount because
United Taconite turned to its attorneys and the attorneys took two months to
file the formal motion. The Secretary does not assert any prejudice because of
the delay in filing a formal motion challenging the citations that the operator
quickly contested upon receiving a notice of delinquency. Cf. Long Branch
Energy , 34 FMSHRC 1984, 1991 (showing leniency to the Solicitor for failing
to file timely during a period of increased litigation when actual prejudice
could not be shown). Under these circumstances, United Taconite provided timely
notice of its desire to challenge and an explanation of reasons for its failure
to file within 30 days of receipt of the citations.

Apparently
recognizing that United Taconite acted with promptness to notify MSHA and the
Commission of its desire to contest citations, the majority also finds that
United Taconite had an unreliable internal processing system. That allegation
is false.

These facts do not
show an unreliable system. They show a sui generis situation in which turnover
of staff simultaneously with the temporary absence of a Safety Specialist led
to a brief delay in recognizing and dealing with the assessments. With the Safety
Specialist’s return and within 30 days of first notice, United Taconite served
notice of its desire to contest the 20 citations. In short, a reliable internal
system was temporarily disrupted by the simultaneous absence of the prior
safety manager and the temporarily reassigned Safety Specialist.

This case does not
reflect poor internal processing or lack of expedition by United Taconite. It
is a singular event caused by staff turnover. Yet, the majority reviews United
Taconite’s quick action and finds no difficulty in refusing it the opportunity
to contest penalties totaling a very high amount.

The majority’s
opening paragraph purports to recognize that default is a harsh remedy. Institutions are
known for the actions they take not the high-sounding words they write. The majority’s
decision belies their words.

/s/ William I. Althen

William I. Althen, Commissioner

Distribution:

Patrick
W. Dennison, Esq.

Fisher
& Phillips LLP

6
PPG Place

Suite
830

Pittsburgh,
PA 15222

[email protected]

April
Nelson, Esq.

Associate
Solicitor

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Emily
Toler Scott, Esq.

Counsel
for Appellate Litigation

Office
of the Solicitor

U.S.
Department of Labor

Division
of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Melanie
Garris

USDOL/MSHA, OAASEI/CPCO

201 12th Street South, Suite 401

Arlington, VA 22202

[email protected]

Chief
Administrative Law Judge Glynn F. Voisin

Federal Mine Safety Health Review Commission

Office
of the Chief Administrative Law Judge

1331 Pennsylvania Avenue, NW Suite 520N

Washington, DC 20004-1710

[email protected]

[1] We note that our
dissenting colleague states that when the Senior Safety Specialist received the
notice of delinquency, he immediately returned the penalty assessment noting 20
citations the operator wished to contest. Slip op. at 4. Although the proposed
penalty assessment form is signed and dated April 20, 2023, there are no
allegations in the record that the operator returned the contest form to MSHA
on or near that date. Rather, the contest form appears in the record as an
attachment to the operator’s June 23 motion to reopen. See, e.g., Ex. C
001 (affidavit of senior safety specialist stating that once he became aware of
the delinquency notice, he contacted the outside counsel’s paralegal who
informed him that it would be necessary to file a motion to reopen).