Secretary of Labor v. Gordon Sand Co.

Plain-English summary

Gordon Sand sought reopening after MSHA issued a separate citation for failure to pay more than $25,000 in outstanding penalties. The company attributed its difficulties to the 2020 death of the person who had handled mining matters but did not describe a replacement process for assessments. The record showed at least 24 unpaid assessments accumulated from 2006 through 2022, many predating that death. Gordon also waited seven months after a delinquency notice and two months after another unpaid-penalty notice before seeking relief. The Commission found a lack of good faith and unreasonable delay and denied reopening.

Decision snapshot

• Cited authority: 30 U.S.C. §§ 815(a) and 820(j)
• Outcome: The motion to reopen the final penalty assessment was denied.
• Key point: A lengthy pattern of unpaid assessments and action only after a failure-to-pay citation weigh strongly against good faith and extraordinary relief.

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.
GORDON SAND CO. |
|
|
Docket No. WEST 2023-0055 A.C. No. 04-01787-548493
|

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

ORDER

BY: Rajkovich, Chair; Jordan, and Baker, Commissioners

This
matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2024) (“Mine
Act”). On December 2, 2022, the Commission received from Gordon Sand Co. (“Gordon”)
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 U.S. Postal Service
attempted delivery of the proposed assessment, on January 27, 2022, and left a
reminder for final pick up before February 5, 2022. On March 15, 2022, the
proposed assessment was deemed a final order of the Commission.[1]

On May 2, 2022, MSHA mailed a delinquency
notice to the operator. On June 28, 2022, MSHA referred the delinquency to the
U.S. Department of the Treasury. On October 6, 2022, MSHA delivered a notice to
the operator that it had unpaid civil penalties and costs totaling $25,368.69. Sec’s
Opp. at 4; Att. B to Sec’s Opp.[2]
On November 8, 2022, MSHA cited the operator under 110(j) of the Mine Act, 30
U.S.C. § 820(j), for failure to pay the outstanding amount of $25,368.69. Att.
B to Sec’s Opp (“Scofflaw” Citation No. 9681831).

The operator claims that the individual who dealt with all the mining related issues at the mine passed away in 2020, a couple of years before the operator filed its motion to reopen. The operator alleges that since this individual passed away, it has been struggling to get up to speed with operating the mine, and all outstanding MSHA issues. However, the operator does not provide details regarding its processing system for contesting assessments, or paying assessments that have become final orders.

The Secretary opposes the motion to
reopen citing the operator’s extensive delinquency history, and the delay in
the operator’s filing of the motion to reopen after receiving the delinquency
notice from MSHA. Sec’s Opp. at 9-10. At the time the request to reopen was
filed, the operator had 7 unpaid assessments between the years 2018 and 2022,
with six of them predating the last—the assessment at issue. Id. at 4,
10; Att. C to Sec’s Opp. The Secretary further notes that the operator had 17
unpaid assessments between 2006 and 2017. Id. at 10; Att. C to Sec’s Opp.
The Secretary also notes that although she mailed a delinquency notice on May
2, 2022, the operator did not file its motion to reopen until December 2022. Id.
at 8. Indeed, the Secretary asserts that the operator “filed [its] motion
to reopen [in December 2022] only after receiving the scofflaw citation” in
November 2022. Sec’s Opp. at 9.

It is well recognized in federal
jurisprudence that the issue of whether the movant acted in good faith is an
important factor in determining the existence of excusable neglect. Pioneer
Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993); FG
Hemisphere Assocs., LLC v. Democratic Republic of Congo, 447 F.3d 835, 838
(D.C. Cir. 2006). Likewise, the Commission has recognized that a movant’s good
faith, or lack thereof, is relevant to a determination of whether the movant
has demonstrated mistake, inadvertence, surprise or excusable neglect within
the meaning of Rule 60(b)(1) of the Federal Rules of Civil Procedure. Lone Mountain
Processing, Inc., 35 FMSHRC 3342, 3346 (Nov. 2013); M.M. Sundt Constr.
Co., 8 FMSHRC 1269, 1271 (Sept. 1986); Easton Constr. Co., 3
FMSHRC 314, 315 (Feb. 1981). In Stone Zone, 41 FMSHRC 272, 274 (June
2019), the Commission explicitly clarified that some of the factors relevant to
the good faith analysis are the number of outstanding delinquent penalties, and
the time period over which such penalties accrued. See also Kentucky Fuel
Corp., 38 FMSHRC 632 (April 2016). In addition, the Commission has noted
that an operator’s filing of a motion to reopen only after MSHA issued a
citation for failure to pay penalties is not consistent with an operator acting
in good faith. Stone Zone, 41 FMSHRC at 274.

The operator, when it filed the motion to
reopen, had at least 24 unpaid penalty assessments from 2006 to 2022:(1) 7
unpaid penalty assessments between 2018 and 2022 (including this assessment)
and (2) 17 additional unpaid penalty assessments between 2006 and 2017. The
operator’s record indicates that it has repeatedly disregarded a large number
of penalty assessments over a lengthy time frame of sixteen years. The numerous
unpaid assessments, “which had accumulated in the years preceding the request
to reopen, should have informed the operator of the need to be more attentive
to proposed assessments from MSHA.” Stone Zone, 41 FMSHRC at 275. Indeed,
at least 17 of these assessments had accrued before 2018, several years before
the death of the individual who was responsible for contacting MSHA, and many
years before the Secretary proposed the assessment at issue.

Moreover, 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). Here, the motion to reopen was filed in December 2022, 7
months after MSHA mailed the delinquency notice (in May), and two months after
MSHA delivered a notice (in October) that the operator had unpaid civil
penalties. Therefore, the motion to reopen was not filed within a reasonable
amount of time.

Accordingly, we find that the operator has failed to demonstrate an entitlement to extraordinary relief. Therefore, we deny Gordon’s motion.

.

/s/
Marco M. Rajkovich, Jr.

Marco M. Rajkovich, Jr., Chair

/s/ Mary Lu Jordan

Mary Lu Jordan, Commissioner

/s/ Timothy J.
Baker

Timothy J. Baker, Commissioner

Commissioner Marvit, concurring:

I write to agree with the Majority in this case for the reasons set forth below.

Explosive
Contractors, 46 FMSHRC 965 (Dec. 2024), I dissented and explained that
Congress did not grant the Commission the authority to reopen final orders
under section 105(a) of the Mine Act. The Commission’s repeated invocation of
Federal Rule of Civil Procedure 60(b) cannot overcome the statutory language. However,
in Belt Tech, I explained in my concurrence that “the Act clearly states
that to become a final order of the Commission, the operator must have received
the notification from the Secretary.” 46 FMSHRC 975 (citing Hancock
Materials, Inc., 31 FMSHRC 537 (May 2009)). Taken together, these opinions
stand for the proposition that the Commission may not reopen final orders under
its statutory grant, but an operator may proceed if it has not properly
received a proposed order.

In the instant case, as the Majority recounts, the Commission’s order became final under the language of section 105(a). The Majority denies reopening in its opinion because the operator has not alleged good cause or provided a factual accounting for its failure to timely contest the penalties. Though I believe the Commission lacks the authority to consider motions to reopen, I concur with the Majority in denying reopening in this matter.

/s/ Moshe Z.
Marvit

Moshe Z. Marvit, Commissioner

Distribution:

Salud Gordon, CEO

Gordon Sand Company

28310 Industrial Blvd. Suite F

Hayward, CA 94545

Alexandra J. Gilewicz, Esq.

Office of the Solicitor

U.S. Department of Labor

Division of Mine Safety and Health

200 Constitution Avenue NW, Suite N4428

Washington, DC 20210

[email protected]

Thomas A. Paige, Esq.

Office of the Solicitor

U.S. Department of Labor

Division of Mine Safety and Health

200 Constitution Avenue NW, Suite N4428

Washington, DC 20210

[email protected]

Melanie
Garris

US
Department of Labor/MSHA

Office of Assessments, Room N3454

200 Constitution Ave NW

Washington, DC 20210

[email protected]

Acting Chief Judge Michael G. Young

Office of the Chief Administrative Law Judge

Federal
Mine Safety Health Review Commission

1331 Pennsylvania Avenue, NW Suite 520N

Washington, DC 20004-1710

[1] Despite the final
order date, neither party provides any evidence of when the assessment was
picked up by the operator.

[2] The Secretary
states that the scofflaw citation penalty of $25,368.69 was based on penalties
assessed for “21 citations/orders in 7 different statements ranging from June
2018 to January 2022 (including the [statement at issue]).” Sec’s Opp. at 4;
Att. B to Sec’s Opp. However, later the Secretary states that “the scofflaw citation
is for 21 unpaid assessments dating back to 2018.” Sec’s Opp. at 10. Attachment
C to the Secretary’s Opposition clarifies that aside from the assessment at
issue, there are only 6 open (i.e. unpaid) assessments dating back to
2018.