Secretary of Labor v. Panther Creek Mining, LLC

Plain-English summary

Panther Creek missed the contest deadline for 49 citations carrying $75,601 in proposed penalties. It said only that an administrative error delayed routing the assessment to its corporate safety director, without identifying dates or describing the failure. The Commission majority also noted an earlier Panther Creek reopening case and found that the corrective address change had not prevented another mishandling. Although the company filed shortly after delinquency and scofflaw notices, the majority found inadequate detail and insufficient evidence of good faith, and denied reopening with prejudice. Commissioner Althen dissented because the two-step processing system appeared ordinarily reliable and the company should at least have been allowed to provide more information.

Decision snapshot

• Cited authority: 30 U.S.C. § 815(a)
• Outcome: The motion to reopen 49 citations was denied with prejudice.
• Key point: A general routing-error claim does not support extraordinary relief when an earlier corrective measure also failed.

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.

PANTHER
CREEK MINING, LLC

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Docket
No. WEVA 2023-0297

A.C.
No. 46-05437-569447

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

ORDER

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

        This

case arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
801 et seq. (2018) (“Mine Act”). On April 25, 2023, the Commission received
from Panther Creek Mining, LLC (“Panther Creek”) a motion to reopen a final
order of the Commission pursuant to section 105(a) of the 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
     17, 2023, and became a final order of the Commission on February 16, 2023,
     after Panther Creek did not contest the penalties. In the assessment, MSHA had proposed
     a total civil penalty of $75,601 for the 49 citations at issue.

On April 3, 2023, after failing to receive
payment, the Secretary sent the operator a delinquency notice. On approximately
April 17, 2023, MSHA delivered a scofflaw letter to the mine, which stated that
if the operator did not pay the delinquent penalties within 30 days MSHA may
take further action. The operator filed the subject motion to reopen on April
25, 2023. On May 17, 2023, MSHA issued a citation to Panther Creek alleging a
failure to pay.

In the subject motion to reopen, Panther
Creek maintains, without further explanation, that an internal “administrative
error” delayed routing of the assessment to its Corporate Safety Director and
thus its ability to timely file. The Secretary opposes reopening. She asserts
that the operator has failed to establish that its failure to timely file was
the result of an atypical mistake and not the result of an inadequate
processing system. Furthermore, the operator has failed to establish that it
has been acting in good faith.

When filing a motion to reopen before the
Commission the operator bears the burden of showing exceptional circumstances. Lone
Mountain Processing, Inc ., 35 FMSHRC 3342, 3345 (Nov. 2013). Relief under
Rule 60(b) requires more than “general assertions or conclusory statements as
to why an operator failed to timely contest.” Sw. Rock Prods. , 45 FMSHRC
__ (August 30, 2023) ( citing Atlanta Sand & Supply Co ., 30 FMSHRC
605, 608 (July 2008).

Although the Commission may consider
motions to reopen filed within 30 days of the operator’s receipt of its first
notice of delinquency to be filed within a reasonable amount of time; the
motion must also “set forth an adequate explanation for its reasons for its
delinquency.” See Highland Mining Company , 31 FMSHRC 1313, 1316-17 (Nov.
2009). “At a minimum, the applicant for such relief must provide all known
details, including relevant dates and persons involved, and a clear explanation
that accounts, to the best of the operator's knowledge, for the failure to
submit a timely response and for any delays in seeking relief once the operator
became aware of the delinquency or failure. . . .” Lone Mountain, 35
FMSHRC at 3345 ( citing Higgins Stone Co ., 32 FMSHRC 33, 34 (Jan. 2010)).

Panther Creek’s motion lacks these required
details. Its motion does not include relevant dates or a description of the
processing error. [1]
Accordingly, it has failed to demonstrate that its “administrative error” was
excusable and not the foreseeable result of its own unreliable internal
processing system. It is well established that an inadequate or unreliable
internal processing system does not constitute inadvertence, mistake or
excusable neglect so as to justify the reopening of an assessment which has
become final under section 105(c) of the Mine Act. 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). [2]

Furthermore, Panther Creek has not
demonstrated good faith efforts to comply with the Commission’s filing deadlines.
The operator received 49 citations over 18 days and thus should have been aware
that it would be receiving a sizable proposed penalty assessment. Nevertheless,
it does not cite to any efforts it took to either contest or reopen the
penalties until after it received both a delinquency letter and a scofflaw
letter. It is well recognized that a movant’s good faith or lack thereof is an
important factor in determining whether good cause exists to reopen a final
order. See, e.g., Stone Zone , 41 FMSHRC 272, 274 (June 2019) (citations
omitted).

For these reasons, Panther Creek’s motion
is DENIED with prejudice. [3]

/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.

The pleadings
demonstrate that MSHA provided a notice of a delinquency to Panther Creek
through a letter mailed on April 3, 2023. In turn, Panther Creek filed its
motion to reopen on April 25, 2023—a short period after receiving the notice
from MSHA.

        Binding Commission precedent holds, “Motions 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). Indeed, the Commission
reaffirmed, or at least restated, this principle a few days ago. Heidelberg
Materials, US Cement, LLC , 45 FMSHRC ___ (Dec. 6, 2023).

Because Panther Creek’s motion
fits within this timeline, the majority cannot find unreasonableness in the
delay in filing. Ignoring the reasonableness of the operator’s timing of its
motion, the majority complains that the employee’s affidavit swearing to an
administrative error was insufficient to warrant reopening or even an
opportunity for further explanation.

Panther Creek’s contest system failed in
this instance, but there is no evidence of a systematic failure. Instead,
Panther Creek described a straightforward and simple system for contesting
penalties. According to Panther Creek’s affidavit, the system involves an
administrative employee scanning proposed assessments when they are received
and then directing them to the corporate safety director. The corporate safety
director then reviews the citations and files timely notices on those Panther
Creek wishes to contest. This appears to be a sensible two-step and an
ordinarily reliable system for dealing with citations. If every singular failure
to file on a timely basis is taken as a per se demonstration of an
unreliable processing system, operators may look forward to few, if any,
approvals of reopening.

The occurrence of a mistake is
self-evident. The administrative staff tasked with scanning and forwarding the
proposed assessment failed to follow normal procedure in this instance. Panther
Creek filed a proper affidavit attesting to the error. Nonetheless, the
majority forecloses a contest of more than $75,000 in assessed penalties because
they find Panther Creek did not explain adequately the exact minutiae that lead
to the administrative error. The Commission has not required a detailed
explanation of an “administrative error” to reopen a case. U.S. Silver –
Idaho, Inc. , 33 FMSHRC 1044, 1045 (May 2011).

Having avowed they recognize
that default is a harsh remedy, the majority should have granted the motion or,
minimally, should have provided Panther Creek an opportunity to provide any
desired information. Such inquiries have been made in the past and are
consistent with recognition of harsh result rather than the back of the hand
rejection in this case. See, e.g., Callender Constr. Co ., 44 FMSHRC 536
(Aug. 3, 2022), Lafarge Aggregates Southeast, Inc., 31

FMSHRC 555 (May 2009) (granting the motion to reopen after the
Commission initially denied without prejudice to allow the operator to refile
and explain the “administrative error”).

/s/
William I. Althen

William
I. Althen, Commissioner

Distribution:

Jonathan
R. Ellis, Esq.

Justin
K. Chandler, Esq.

Steptoe
& Johnson PLLC

707
Virginia Street, East, Seventeenth Floor

P.O.
Box 1588

Charleston,
WV 25326-1588

[email protected]

[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]
Cf . Heidelberg
Materials, US Cement, LLC , 45 FMSHRC ___ (Dec. 6, 2023) (finding that the
operator established that its failure to timely file to contest three citations
was the result of a good cause). In Heidelberg Materials , the operator’s
motion described the error with particularity, i.e ., an employee
neglected to transmit a single page of the contest form when timely filing to
contest penalties listed on the proposed assessment.

[2]
This is not the
first instance where Panther Creek sought reopening of a final order of the
Commission after an alleged error prevented timely filing of the contest form. See
Panther Creek Mining, LLC , 40 FMSHRC 1158 (Aug. 2018) (reopening a final
order after the assessment was not timely contested because the assessment was “mishandled”
at the mine). Notably, the operator thereafter changed its address of record
from a P.O. Box to the corporate office in an attempt to prevent further
mishandlings of penalty assessments. Id . at 1159. Clearly, the
operator’s efforts were ineffective.

[3] In its reply to
the Secretary’s response, the operator contends that the Secretary failed to
demonstrate prejudice or that the default was warranted. However, we have long
held that it is the operator, not the Secretary, who has the burden of showing that it is entitled to such
extraordinary relief. See, e.g., Noranda Alumina , 39
FMSHRC 441, 443 (Mar. 2017).