FMSHRC Settlements: What’s the Law?

Settlement rejections from Commission ALJs is nothing new. However, it gets a little tiresome after awhile, not to say a huge waste of government resources, when the significant lowering of a penalty or finding has no explanation attached. As a reporter, and someone who has to “digest” the legal decisions, its a frustrating process.

So, for all of you attorneys out there, or interested parties, here are some summaries so you can get a clear picture of what’s required when you file a settlement motion with a Commission ALJ. And, by the way, step one is to go through all of the civil penalty criteria if you don’t want your settlment rejected.

CONSOL PENNSYLVANIA COAL CO., 7/12/10, Docket No. PENN 2009-803, 17 MSHN 342 (July 14, 2010) (unpublished) (ALJ Moran).
A settlement was rejected by an ALJ where a penalty assessed for $11,306 for a ventilation violation was reduced to $207. The ALJ said given the significant history of the ventilation problems at the mine and previous citations, a reduction of 98% could not be justified or accepted.

ALASKA MECHANICAL INC., 6/30/2010, 32 FMSHRC 738 (Chief ALJ Lesnick).
A settlement where an operator’s penalty was reduced by 64% was rejected because it lacked the factual basis necessary under the Mine Act. The Solicitor’s Office said the penalty was “fair” and “reasonable” and “in the public interest.” However, “the Mine Act and Commission precedent requires her and other parties to a settlement to provide more than mere empty words to justify their agreement. Otherwise, section 110(k) would be meaningless, and the authority of Commission judges to review settlements would be reduced to providing the proverbial rubber stamp.”

PC SAND & GRAVEL, Docket No. YORK 2008-104-M, 32 FMSHRC 235, (Chief ALJ Lesnick).
A settlement was approved where the Solicitor’s Office offered additional information on the withdrawal of 13 citations. The ALJ had initially rejected the settlement until the Secretary gave “legitimate reasons for vacating the citations, saying the record had been incomplete and did not provide adequate reasons upon which to base a settlement approval.

BLACK HAWK MINING, Docket Nos. WEVA 2006-22 etc., 28 FMSHRC 82 (Feb. 28, 2006), 13 MSHN 142 (March 6, 2006) (Chief ALJ Lesnick).
An operator and MSHA were ordered to submit additional information supporting a 74% reduction in penalties in a proposed settlement agreement. Judges must make sure that settlements are “consistent with Mine Act objectives,” and “the parties provided no evidence to suggest that the 74% reduction in assessed penalty supports the public’s interest.” The settlement proposed reducing the total penalty assessment for 11 violations – including one violation issued as a result of a serious injury – from $62,825 to $16,078. The motion stated that the reduction was based in part on the fact that the operator had filed for Chapter 11 bankruptcy and stopped doing business when its mine properties were sold. “At a minimum, the parties must provide evidence to support the assertion that the settlement penalty is justified under each of the six [penalty] criteria.”

MARC BOWERS, employed by PATERSON MATERIALS CORP., Docket No. YORK 99-11, 21 FMSHRC 409 (March 1, 1999), 6 MSHN 148 (March 19, 1999) (Chief ALJ Merlin)
A settlement motion proposing to reduce MSHA’s proposed fine for a mine manager’s violation of §56.6604 from $1,500 to $750 in a Sec. 110(c) case was denied. The settlement motion did not mention the six penalty criteria, and the mine manager promised to read materials, such as the pertinent standards and training manual, “that he should have already read.”

OHIO VALLEY COAL CO., Docket No. LAKE 98-237 (unpublished), 6 MSHN 60 (Jan. 22, 1999) (Chief ALJ Merlin).
A settlement agreement proposing to reduce MSHA’s civil penalty for a violation of §75.400 from $557 to $350 was denied, because the motion provided no explanation to support its recommendation.

ROHL LIMESTONE INC., Docket No. LAKE 95-323-M, 17 FMSHRC 2162 (Nov. 30, 1995) (Chief ALJ Merlin)
A settlement motion proposing to reduce MSHA’s proposed $1,000 penalty for a violation of § 56.9314 to $300 was disapproved. The operator was cited because a road base stockpile was not trimmed, resulting in an injury. In the motion, the Solicitor said the company’s negligence remained unchanged, but the operator did everything possible to avoid the hazard from causing injury. These representations are inadequate because no details of the alleged mitigating circumstances were provided. A 70% reduction in the penalty cannot be approved where the degree of negligence remains unchanged, especially where the violation caused an injury. The fact that the company is small and has no prior history of violations cannot alone justify the large penalty reduction.

BENNIE WAYNE CURTIS, employed by CANYON COUNTRY ENTERPRISES, Docket No. WEST 95-385-M, 17 FMSHRC 1810 (Oct. 23, 1995), 2 MSHN 609 (Nov. 3, 1995) (Chief ALJ Merlin)
A settlement agreement proposing to reduce penalties for two violations in a Sec. 110(c) case from $700 to $100 was rejected. The Solicitor’s Office offered “no basis” for the large penalty reductions and stated only that the number of workers exposed to the violations was very low. This statement contradicted the inspector’s findings. Also, a $50 penalty “is normally reserved for non-serious violations,” and the narrative findings attached to the penalty petitions stated that the violations of guarding standard, § 56.14107(a), and housekeeping standard, § 56.20003(a), were “serious.”

CEDAR CREEK QUARRIES INC., Docket No. WEST 94-637-M, 17 FMSHRC 830 (May 9, 1995), 2 MSHN 398 (July 14, 1995) (ALJ Hodgdon)
A settlement was rejected in which the Solicitor said he would withdraw a proposed $2,000 penalty for the operator’s violation of Sec. 103(a) of the Mine Act for interfering with an MSHA investigation. MSHA had charged that the operator’s president refused to be interviewed by an MSHA special investigator, refused to allow his foreman to be interviewed, and refused to provide the names of miners present when an earlier citation was issued. The settlement motion stated that the company president has cooperated with subsequent MSHA inspections. However, it was found that the facts in the parties’ motion were insufficient to support eliminating the penalty. Also, Sec. 110(a) of the Mine Act requires some civil penalty assessment for a violation.

KIEWIT MINING GROUP INC., Docket No. WEST 95-214-M, (not published), 2 MSHN 349 (June 16, 1995) (Chief ALJ Merlin).
A settlement agreement reducing MSHA’s proposed penalties totaling $15,000 for two violations to $6,000 was rejected. The settlement motion was found to be “woefully inadequate” and “particularly egregious” because the violations were related to a fatality. The Solicitor’s settlement motion sought a 60% reduction in the proposed penalties and failed to contain any analysis of the facts. The motion merely stated that preparation for the hearing revealed that the operator’s negligence was less than the original “moderate” charge. If the Solicitor thinks the company’s negligence is less than “moderate” for fatality violations, it must explain the circumstances leading to its conclusion. The Solicitor’s penalty proposal also failed to include a copy of the narrative findings” that the agency prepares for special assessment cases.

JERICOL MINING INC., Docket No. KENT 94-957, 17 FMSHRC 833 (May 16, 1995), 2 MSHN 319 (June 2, 1995) (Chief ALJ Merlin)
A settlement agreement reducing MSHA’s proposed penalties totaling $5,700 for a violation of § 75.342(a)(4) and a violation of § 75.202(a) to $2,298 was rejected for the second time. The parties stated they would present substantial evidence at the hearing to support their differing positions as to the level of negligence and the gravity of the violations, and said the settlement was a “compromise.” Under the proposed settlement, the S&S and high negligence findings would remain, but the proposed penalties would be greatly reduced. It was found that the parties “want it both ways” and failed to understand that the findings in the citation are the same as the penalty criteria in Sec. 110(i) of the Mine Act the commission and its judges are required to observe. The proposed settlement is “too low for the level of the charges made and provides no basis to reduce the original assessment.”

AMAX COAL CO., Docket No. LAKE 95-124, 17 FMSHRC 682 (April 13, 1995), 2 MSHN 239 (April 21, 1995) (Chief ALJ Merlin).
A settlement agreement reducing MSHA’s proposed $1,500 penalty for a violation of “new task” training regulation, §48.7(a), to $800 was rejected. The Solicitor must do more than say that the parties dispute the degree of gravity when it seeks to cut the original penalty almost in half.

HARBOR ROCK INC., Docket No. WEST 95-64-M, 17 FMSHRC 492 (March 16, 1995), 2 MSHN 174 (March 24, 1995) (ALJ Melick)
— A settlement agreement reducing MSHA’s proposed $1,000 penalty for a violation of Sec. 103(a) of the Mine Act to $320 was rejected in a case charging that the operator’s president and vice president threatened the inspector and ordered him off mine property. A settlement reducing MSHA’s proposed $2,000 penalty for a violation of travelways rule, §56.11012, to $639 also was also rejected. The parties “offered absolutely no explanation for the large reductions in the penalties, and the violations are egregious and serious.”

JERICOL MINING INC., Docket No. KENT 95-31, 17 FMSHRC 489 (March 16, 1995), 2 MSHN 175 (March 24, 1995) (Chief ALJ Merlin)
A settlement agreement reducing MSHA’s proposed penalties for two violations of roof support rules was disapproved because the motion “merely stated the operator’s position with respect to the violations” and the Solicitor did not indicate whether it agreed with the company’s assertions. The parties were ordered to explain the proposed penalty reductions in light of the six penalty criteria set forth in Sec. 110(i) of the Mine Act. The parties had sought a reduction in the proposed $431 penalty for a violation of §75.202(a) to $50, and also had sought a reduction in the proposed $595 penalty for a violation of §75.203(a) to $395.

JERICOL MINING INC., Docket No. KENT 95-32, 17 FMSHRC 486 (March 16, 1995), 2 MSHN 175 (March 24, 1995)(Chief ALJ Merlin)
A settlement agreement reducing MSHA’s proposed $1,779 penalty for a violation of the methane monitor standard, § 75.342(b)(2), to $50 was rejected. The settlement motion merely stated the company’s position with respect to the violation and did not state whether MSHA agreed with the company’s claims. A settlement must be justified under the six penalty criteria listed in Sec. 110(i) of the Mine Act.

JERICOL MINING INC., Docket No. KENT 94-957, 17 FMSHRC 244 (Feb. 7, 1995), 2 MSHN 125 (Feb. 24, 1995)(Chief ALJ Merlin)
A settlement agreement was rejected where penalties were lowered from $3,000 to $2,000 for two violations, but the citations remained as written. In one case, the methane monitor on a continuous miner would not deenergize the control circuit because the monitor module was disconnected from the control circuit. The inspector had also detected methane at seals deeper in the mine from where the miner was cutting coal. According to the joint motion filed by the Solicitor’s Office and company, the operator’s witnesses would challenge the inspector’s assessment of the presence of methane. In the second violation, there were loose ribs along the haulage roadway. According to the parties, the operator would present evidence that the ribs were more stable because they could not be pulled down single-handedly but required the use of a four foot bar used to pry down slate. The joint settlement motion merely set forth unresolved conflicts between the parties on the evidence and failed to justify the reduction in penalties based on the six penalty criteria listed in Sec. 110(i) of the Mine Act.

CHANDLER’S PALOS VERDES SAND & GRAVEL CO., Docket No. WEST 94-478-M, 16 FMSHRC 1926 (Aug. 29, 1994), 1 MSHN 466 (Sept. 9, 1994) (Chief ALJ Merlin).
A settlement agreement reducing MSHA’s proposed penalties totaling $7,000 for two violations of §56.16002 to $5,250 was rejected. The two violations in this case contributed to an accident which caused an injury to a miner where a work platform was not provided for the top of the two washed concrete sand storage silos, and a plant repairman entered a washed concrete sand bunker without wearing a safety belt and lifeline. The Solicitor gave no reason to support the proposed reductions in the penalties. The Solicitor must provide a basis to approve such a settlement, especially because an injury occurred. The fact that the suggested penalties remain substantial does not in and of itself, warrant approval.

COLUMBIA QUARRY CO., Docket No. LAKE 94-155-M, 16 FMSHRC 1924 (Aug. 29, 1994), 1 MSHN 466 (Sept. 9, 1994) (Chief ALJ Merlin)
A settlement agreement reducing MSHA’s proposed $400 penalty for a violation of reporting regulation §50.10 to $250 was disapproved because the Solicitor failed to refer to the six penalty criteria set forth in Sec. 110(i) of the Mine Act. The operator was initially charged with “high” negligence. The Solicitor’s settlement motion stated that the company’s negligence remained the same and proposed the reduction because the parties did not want to pursue further litigation. This is insufficient to support a penalty reduction.

KIEWIT WESTERN CO., Docket No. WEST 94-213-M, 16 FMSHRC 1401 (June 15, 1994), 1 MSHN 349 (July 1, 1994) (Chief ALJ Merlin).
A settlement agreement reducing MSHA’s proposed $4,000 penalty for a violation of electrical standard, §56.12016, to $1,000 was disapproved because the agency failed to provide sufficient information to justify the reduction. MSHA’s settlement motion attributed the miner’s accident to a communication mix-up” but did not explain what the mix-up was, who was involved and why it was not attributable to the operator.

FLETCHER GRANITE CO., Docket No. YORK 93-149-M, 16 FMSHRC 1203 (May 27, 1994), 1 MSHN 327 (June 17, 1994)(Chief ALJ Merlin)
A settlement was rejected where four violations were all designated as S&S and found to be a result of unwarrantable failure on the part of the operator. In addition, the violations were specially assessed. The Solicitor gave no reasons to support the proposed reductions in the penalties. Where the violations are serious and the operator’s conduct has been characterized as unwarrantable, the Solicitor must provide a basis to support the settlements for which the Secretary seeks approval. The fact that the suggested penalties remain substantial does not in and of itself, warrant approval.

CONCRETE MATERIALS, Docket No. CENT 92-358-M, 15 FMSHRC 337 (Feb. 18, 1993) (Chief ALJ Merlin)
A proposed settlement agreement submitted by the Solicitor that reduced MSHA’s original $690 penalty proposal for a violation of §56.12067 to $50 was rejected. The citation stated the fence surrounding an electrical substation was not six feet high as required by the standard, and the inspector found that contact with the exposed energized high-voltage components might result in a fatality. In its motion for settlement approval, MSHA alleged the operator’s negligence was lower than originally assessed and the violation was not S&S. However, the agency gave no reasons to support these conclusions and instead filed the usual form motion.”

CONSOLIDATION COAL CO., WEVA 91-43, 13 FMSHRC 748 (Apr. 30, 1991) (ALJ Fauver).
Where a power cable on a pump was not properly entered into the junction box of a motor and an inspector issued a citation for a S&S violation of §75.515, the Secy.’s motion to approve a settlement agreement which would have vacated the S&S designation was denied; the proper standard for determining whether an alleged violation is S&S is if it presents a substantial possibility of injury, and the Secy.’s settlement motion did not establish that the possibility of injury did not exist.

CONSOLIDATION COAL CO., WEVA 91-43, 13 FMSHRC 748 (Apr. 30, 1991) (ALJ Fauver)
Where a trailing cable to a continuous miner was not adequately insulated and an inspector issued a citation for a S&S violation of §75.517, the Secy.’s motion to approve a settlement agreement which would have vacated the S&S designation was denied; the proper standard for determining whether an alleged violation is S&S is if it presents a substantial possibility of injury, and the Secy.’s settlement motion did not show that the possibility did not exist.

EL PASO SAND PRODUCTS, INC., CENT 88-53-M, 88-65-M, 88-79-M, 88-83-M, 88-104-M, 88-141-M, 11 FMSHRC 265 (Feb. 9, 1989) (ALJ Koutras).
Three settlements were rejected where supported by “boilerplate language” regarding negligence and probability of harm that was contrary to pleadings and narrative findings of original citations and imminent danger orders, where a miner was injured in a conveyor belt accident, and unsafe highwalls were found. The settlement motion contained unexplained assertions by the parties that there “was little or no negligence,” and are totally without foundation. The inspectors found that the violations were the result of a high degree of negligence, and in one case, the inspector made a negligence finding of reckless disregard. If the parties believe that these defenses have merit, or should be considered by the judge in mitigation of the civil penalties, it is incumbent on the parties to place these arguments clearly and succinctly before the judge for consideration. Reliance on boilerplate contradictory language that bears no rational or reasonable relationship to the particular facts of a case is unacceptable.

COLUMBIA PORTLAND CEMENT CO., LAKE 88-54-M, 10 FMSHRC 1363 (Sept. 7, 1988) (ALJ Merlin)
Proposed settlements for 19 citations were rejected where the same language was used in each without facts or rationale to support the recommendation for each violation. Some violations could have resulted in permanent disability, lost workdays or restricted duty. The ALJ said he had “particular difficulty” in approving a penalty reduction when the projected injury is permanent disability, lost workdays or restricted duty.