COALEX State Inquiry Report - 234
December, 1992
Mark Secrest, Esquire
Oklahoma Department of Mines
4040 N. Lincoln Blvd.
Suite 107
Oklahoma City, Oklahoma 73105
TOPIC: PROPER SERVICE
INQUIRY: A Cessation Order (CO) was sent to an operator by certified mail. The letter was
returned as "unclaimed". The operator claims there was "no service" of the CO. Please locate any
case law that addresses the question of what constitutes "service" for COs and similar documents.
SEARCH RESULTS: Using COALEX and LEXIS, a number of relevant decisions addressing the issue
of "proper service" were identified. These are listed below. Copies are attached.
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OSM DIRECTIVE
Subject No. INE-8, Transmittal No. 173, "Service of Notices of Violation and Cessation Orders"
(Issued May 19, 1983).
"3. Policy/Procedure
. . .
c. Certified Mail 'Unclaimed'. When the NOV or CO has been sent by certified mail and has been
returned marked 'unclaimed' or 'addressee unknown' or 'left not forwarding address,' the
inspector must make every reasonable effort to determine whether or not the mail was truly
undeliverable or was refused. In some cases, mail marked 'unclaimed' may actually have been
refused. The inspector or his or her appropriate representative, e.g., secretary, must contact the
post office to determine the true circumstances of the undelivered NOV or CO. If indeed, the mail
was unclaimed, an attempt must be made to find the correct address of the permittee and
to resend the NOV or CO. Sometimes it may be necessary to make repeated efforts to find the
correct address of the permittee. A record of each attempt must be made. The inspector or his or
her supervisor must make the decision when to cease further attempts."
INTERIOR ALJ DECISIONS
L & J COAL CO. v OSM, Docket No. NX 5-88-R (1986).
The NOV issued for failure to secure the required annual design certification of L & J's
sedimentation pond was upheld. Proper service was not at issue, though the hearing notice sent
by certified mail was not claimed and was returned. "However, the hearing notice sent by regular
mail to applicant's current address was not returned and was presumably delivered to applicant at
its current address since it was not also returned as having been undeliverable."
VERNON CUMENS - MACO RESOURCES, INC. v OSM, Docket No. NX 4-41-R (1986).
The Order of Dismissal was issued in response to the applicants' request for a withdrawal of
their appeal of the NOVs. The ALJ stated that the two Cos had been properly served: one was
personally delivered to Cumens; the second was served on Maco Resources by certified mail.
"The cessation order was returned unclaimed by Maco, but, it was mailed to Maco's address and
under the Act this would constitute proper service."
DAVID THORNSBERRY v OSM, Docket No. NX 7-9-R (1987).
Mr. Thornsberry's attorney requested an application for review of the CO by phone. The notice
of the hearing was sent by certified mail to the attorney's post box. After the postal service left
several notices with the attorney, the envelope, marked "unclaimed", was returned. Neither the
applicant nor his attorney appeared at the hearing. The ALJ found that the "applicant was
properly served with the notice of hearing."
TURNER BROS. INC. (TBI) v OSM, Docket Nos. TU 6-22-R, TU 6-65-R (1987).
At issue was the question of whether the violation was abated at the time the CO was issued.
TBI "argued that it had abated the violation prior to service of the cessation order, so the
cessation order was not validly issued and should be vacated." The ALJ ruled that the NOV and
the CO were validly issued but that the CO "was served on TBI after it had abated the violation."
The record indicated that the CO was mailed five days after it was issued. "The regulation
provides that service is complete upon tender of the mail, not upon mailing."
CLARK COAL CO., INC. v OSM, Docket No. NX 6-60-R (1987), aff'd CLARK COAL CO., INC. v
OSM, 102 IBLA 93, IBLA 86-627, IBLA 87-348 1988).
Clark Coal refused service of the first NOV sent by certified mail and referred service of the CO
to its attorney's office.
"At the hearing, the Applicant also argued that [the CO] must be dismissed, because service upon
the Applicant was defective. However, once again the Applicant's argument is mistaken. It is clear
the '[service] shall be complete upon tender of the notice [of violation] or [cessation] order and
shall not be deemed incomplete because of refusal to accept.' 30 C.F.R. Sec. 722.14(a)(1)(1986);
Ben Collins v OSM, 92 IBLA 371, 375 (1986). In the present case, the Applicant's refusal of
service does not invalidate its propriety regardless of the Applicant's reason for refusal. Service
was completed upon Inspector Goodin's tender through certified mail to the Applicant's
permanent address".
JAMES B. RUNGE/GREGORY CO., INC. v OSM, Docket No. NX 6-61-P (1987).
"[T]he Respondent failed to follow their own regulations about service of enforcement actions and
there is no proof that Mr. Runge received the subject CO. In the absence of proper service of the
underlying CO, the undersigned concludes that the jurisdictional requirement of proper notice has
not been met."
Also see LEROY SEXTON v OSM, Docket No. 88-16-R (1988).
INTERIOR IBLA DECISIONS - OSM
BEN COLLINS v OSM; DARYL G. HALE v OSM, 92 IBLA 371, IBLA 85-466, IBLA 85-467 (1986).
The Board did not accept Collins' and Hale's assertions that service of the proposed assessment
was their "first notice of OSM action". According to the record, the inspector had discussed the
NOV with Collins who then refused to sign it; the record contained a return receipt for the CO
signed by Hale; and service of copies of the documents had been made on their common counsel
as part of OSM's request for production of documents.
AMERICAN RESOURCES INSURANCE CO., INC. 99 IBLA 242, IBLA 87-424 (1987).
HEADNOTES: "Where the record is unclear whether the surety of a performance bond was served
by certified mail with OSMRE's notice of determination to forfeit the bond and the surety on
appeal expresses its intention to reclaim the permit area, OSMRE should properly re-serve its
notice of determination in accordance with 30 CFR 800.50."
C & N COAL CO., INC. v OSM, 103 IBLA 48, IBLA 86-166 (1988).
In a footnote to its conclusion that C&N could not raise the issue of service of the NOV at the
Board hearing because "there was no indication in the case record that C&N raised lack of service
of the NOV at any time prior to the date of the hearing", the Board stated:
"As a practical matter, OSMRE should maintain a case record for each NOV and CO it issues
which would show that such documents have, in fact, been served on the operator or that service
has been refused. See 30 CFR 843.14. Clearly, the signature of the operator on the NOV or CO or
signed and dated certified mail return receipt cards included in such records would constitute the
best evidence of service of those documents."
INTERIOR IBLA DECISIONS - NON-OSM
NABESNA NATIVE CORP., INC. (ON RECONSIDERATION), 83 IBLA 82, IBLA 84-258 (1984).
HEADNOTES: "Where the record in a case established that the person authorized by a Native
group to act as its agent had actual notice of a certificate of ineligibility for such group, and that
the notice of appeal was not transmitted within 30 days of such notice, the notice of appeal must
be dismissed."
Also see MOBIL OIL EXPLORATION AND PRODUCING SOUTHEAST, INC., 90 IBLA 173, IBLA 86-63 (1986).
REBECCA S. KNOTT-GRAY, 112 IBLA 148, IBLA 88-115 (1989).
"Under 43 CFR 1810.2(b), an offer of delivery by mail which cannot be consummated because
delivery is refused meets the requirements for communication by mail where the attempt to
deliver is substantiated by post office authorities."
HUMANE SOCIETY OF SOUTHERN NEVADA, 119 IBLA 216, IBLA 90-517 (1991).
HEADNOTES: "Refusal to accept personal delivery of a BLM decision does not vitiate service of
the decision."
Also see UNION OIL CO. OF CALIFORNIA, 98 IBLA 37, IBLA 84-824 (1987).
STATE DECISIONS
U.S. v PETROSKY, 20 ERC (BNA) 1984 (W.D. Pa 1983).
The court found that the failure to adequately notify the petitioner of the violation before the
penalty assessment could be raised as an issue in a civil penalty review proceeding.
STEVE BINGHAM v COMMONWEALTH OF KY, NATURAL RESOURCES AND ENVIRONMENTAL
PROTECTION CABINET, 761 SW 2d 627 (Ct App Ky 1988).
Bingham argued that he was denied due process of law because:
"the Cabinet proceeded initially under the alternative service provision of 405 KAR 7:090 [service
by certified mail].... [T]he alternative of constructive service provided by the regulation is only to
be used when other service methods, including personal service by a sheriff, have failed. We
disagree.
"Although the Cabinet never attempted personal service of the hearing notice, the Cabinet is not
required to exhaust other service methods before it may use constructive service. Due process of
law is afforded in state administrative proceedings by constructive service of notice or process on
parties residing within the state."
STEVE BINGHAM v COMMONWEALTH OF KY, NATURAL RESOURCES AND ENVIRONMENTAL
PROTECTION CABINET, 766 SW 2d 77 (Ct App Ky 1989).
Bingham claimed that he had no notice of the Cabinet's administrative proceedings. The court
concluded that:
"notice by certified mail...does not offend due process. However, the record does not show under
what circumstances the certified mail failed to reach Bingham. Bingham alleges that the notice
was simply not claimed....
"If Bingham can show that the notice and subsequent report were improperly addressed or can
articulate some other legitimate reason for not responding to the notice, Bingham should then be
allowed a formal hearing to contest the charges. But, if the notice and report were properly
addressed and Bingham can show no legitimate reason for not receiving them, Bingham was
afforded all rights of due process and the fines should stand."
The judgment was affirmed in part and remanded in part for the trial court to consider the
issues above.
COMMONWEALTH OF KY, NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET
v LARRY COOK, 812 SW 2d 507 (Ct App Ky 1991).
The Kentucky court of appeals reversed the lower court's finding that notice of a formal hearing
was not perfected.
"A review of the record in this case reveals that the appellee, Cook, was served notice of the
formal hearing in accordance with the methods set forth in the regulations. Not only did the
cabinet send notice to him via certified mail, return receipt requested at the address he himself
provided, it also sent notice to his attorney of record. The regulation provides that service is
effective upon failure to claim the document prior to its return to the cabinet by the United States
Postal Service. Further the regulation provides that the return receipt shall be proof of the
acceptance, refusal, inability to deliver, or failure to claim the document."
SURFACE MINING, INC. v WILLIAM HORVATH, slip op., No. 81-CA-6 (Ct App Ohio 1981).
The court found that Horvath "rather than acting promptly and responsibly, first refused the
mail service, and then, upon receipt of the envelope bearing all the characteristic court markings,
refused to open it."
FEDERAL DECISIONS
MULLANE v CENTRAL HANOVER BANK & TRUST CO., 339 U.S. 306 (1950).
"An elementary and fundamental requirement of due process in any proceeding which is to be
accorded finality is notice reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an opportunity to present their
objections."
NORTH ALABAMA EXPRESS, INC. v U.S., 585 F 2d 783 (5th Cir 1978).
Failure to provide adequate notice is jurisdictional defect that invalidates administrative action
until defect is cured.
U.S. v PRYOR BOLTON AND GLENN MCCULLAH, 781 F 2d 528 (6th Cir 1985).
In affirming the district court's ruling, the circuit court stated:
"Defendants raise several legal challenges to the collection action, specifically challenging the
constitutionality of the service of the citations in question by certified mail. In its order of May 24,
1984, the district court found that notice by certified mail, as provided by 30 C.F.R. Secs.
722.14(a) and 723.17(b) (1984), was constitutionally adequate. Determining that 'it is reasonable
to assume that if persons refuse to accept delivery or collect their mail, the mail has in fact
reached them', the court upheld the provisions of the regulations which find adequate service
where there is refusal to accept delivery."
ATTACHMENTS
A. OSM DIRECTIVE, Subject No. INE-8, Transmittal No. 173, "Service of Notices of Violation
and Cessation Orders" (Issued May 19, 1983).
B. L & J COAL CO. v OSM, Docket No. NX 5-88-R (1986).
C. VERNON CUMENS - MACO RESOURCES, INC. v OSM, Docket No. NX 4-41-R (1986).
D. DAVID THORNSBERRY v OSM, Docket No. NX 7-9-R (1987).
E. TURNER BROS. INC. (TBI) v OSM, Docket Nos. TU 6-22-R, TU 6-65-R (1987).
F. CLARK COAL CO., INC. v OSM, Docket No. NX 6-60-R (1987).
G. CLARK COAL CO., INC. v OSM, 102 IBLA 93, IBLA 86-627, IBLA 87-348 1988). [Excerpts]
H. JAMES B. RUNGE/GREGORY CO., INC. v OSM, Docket No. NX 6-61-P (1987).
I. LEROY SEXTON v OSM, Docket No. 88-16-R (1988).
J. BEN COLLINS v OSM; Daryl G. Hale v OSM, 92 IBLA 371, IBLA 85-466, IBLA 85-467
(1986).
K. AMERICAN RESOURCES INSURANCE CO., INC. 99 IBLA 242, IBLA 87-424 (1987).
L. C & N COAL CO., INC. v OSM, 103 IBLA 48, IBLA 86-166 (1988).
M. NABESNA NATIVE CORP., INC. (ON RECONSIDERATION), 83 IBLA 82, IBLA 84-258
(1984).
N. MOBIL OIL EXPLORATION AND PRODUCING SOUTHEAST, INC., 90 IBLA 173, IBLA 86-63
(1986).
O. REBECCA S. KNOTT-GRAY, 112 IBLA 148, IBLA 88-115 (1989).
P. HUMANE SOCIETY OF SOUTHERN NEVADA, 119 IBLA 216, IBLA 90-517 (1991).
Q. UNION OIL CO. OF CALIFORNIA, 98 IBLA 37, IBLA 84-824 (1987).
R. U.S. v PETROSKY, 20 ERC (BNA) 1984 (W.D. Pa 1983).
S. STEVE BINGHAM v COMMONWEALTH OF KY, NATURAL RESOURCES AND
ENVIRONMENTAL PROTECTION CABINET, 761 SW 2d 627 (Ct App Ky 1988).
T. STEVE BINGHAM v COMMONWEALTH OF KY, NATURAL RESOURCES AND
ENVIRONMENTAL PROTECTION CABINET, 766 SW 2d 77 (Ct App Ky 1989).
U. COMMONWEALTH OF KY, NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION
CABINET v LARRY COOK, 812 SW 2d 507 (Ct App Ky 1991).
V. SURFACE MINING, INC. v WILLIAM HORVATH, slip op., No. 81-CA-6 (Ct App Ohio 1981).
W. MULLANE v CENTRAL HANOVER BANK & TRUST CO., 339 U.S. 306 (1950).
X. NORTH ALABAMA EXPRESS, INC. v U.S., 585 F 2d 783 (5th Cir 1978).
Y. U.S. v PRYOR BOLTON AND GLENN MCCULLAH, 781 F 2d 528 (6th Cir 1985).
Research conducted by: Joyce Zweben Scall
