Solicitor of Labor Patricia Smith has moved for reconsideration of a settlement that was rejected last year, arguing that the Mine Act does not offer “meaningful standards by which either the Commission or a court can review the Secretary’s settlement decisions.”
The brief filed in this case indicates the Secretary is willing to take the issue of settlement approval to the U.S. Court of Appeals in the hope of overturning 36 years of case law, and what appeared to be clear Congressional intent that the Commission was established, in part, for the purpose of overseeing contested citations and penalties for the violations found by MSHA inspectors, and for there to be a transparent civil penalty and settlement process.
The Secretary claims in his motion that the Commission owes deference to his interpretation of the Mine Act, and what information that should be considered in penalty settlements. In this case, the Secretary is offering far less information than the ALJ is demanding.
At issue is the settlement process, penalties, and which agency should have the final say in penalties assessed against an operator that have been contested before the Review Commission under an Act of Congress that called for split enforcement, and apparently leaving the penalty responsibility up to the Review Commission.
Case Involves American Coal’s New Era Mine
The case for reconsideration involves 32 citations at Murray Energy’s American Coal Co.’s New Era Mine in Saline County, Ill., where MSHA’s CLR submitted a motion to ALJ William Moran seeking an across-the-board 30% reduction with one reason offered: “The Secretary has determined that a reduced penalty is appropriate in light of the parties’ interest in settling this matter amicably without further litigation.”
The settlement did not change the gravity or negligence of any of the citations – only the penalties.
In denying the motion, Moran said, “The idea that every one of 32 citations could warrant a 30% reduction demonstrates, by that fact alone, that the reductions were more in the nature of yard sale, rather than any individualized review meriting, by some impossibly small odds, that each just happened to have earned such an implausibly uniform reduction” (20 MSHN 116).
Moran said in his February 2013 rejection that “there is no legitimate basis to reduce any of these citations. … Nor can it be said that the cited matters are all negligible violations.”
Violations Stemmed from 2009 Inspections
The violations in the New Era case occurred between July and August 2009 at the New Era Mine in Illinois. During this time period, the company had a policy of contesting “everything except for de minimis penalties” according to a letter that Murray Energy had sent to the House Labor Committee in October of that year. The company stated this policy was necessary due to changes made in the 2006 MINER Act. In a second, follow-up letter to the Labor Committee, Murray Energy stated that “Many operators (with MEC’s subsidiaries among them) can no longer justify just ‘taking’ whatever MSHA dishes out, regardless of its legitimacy” (emphasis added).
Several examples of the contested violations in this particular case were offered by Moran:
▸ On July 20, 2010, MSHA cited the company for coal accumulations up to 20 inches in depth, and 18 feet wide for a distance of 165 feet in violation of §75.400 with a proposed penalty of $1,944, and a similar violation of §75.400 in citation 8424502 with a penalty of $2,678. The mine had been cited 143 times for similar violations in the past 15 months before these violations were found.
▸ A fine of $3,405 was assessed for an S&S roof control violation under §75.202(a) where MSHA found inadequate roof and rib support, a problem which had been cited 74 times at this mine in the 15 month period before this citation (citation 7579878).
▸ A $425 penalty was issued for a violation of §75.370(a)(1) on Aug. 24, 2010. MSHA said it found up to 5 feet of water in a longwall bleeder (citation 8424511), and there had been 67 violations under this standard in the previous 15 month period.
▸ On July 28, 2010, MSHA found an outdated escapeway map – the 13th violation of §75.1505(b) in 15 months – and assessed a penalty of $946 (citation 8424509);
▸ Inspectors found an incompletely installed life line in the primary escapeway in violation of §75.380(d)(7)(I) with a $263 penalty (citation 8424508). The company had five previous violations of the escapeway standard in the previous 15 month period.
▸ On Aug. 16, 2010, MSHA fined the company $585 for an S&S violation of §77.404(a) where a haul truck seriously leaking oil with an engine that could not be shut down (citation 8424013). The company had three other previous violations of that standard in the previous 15 month period.
Harsh Words for Secretary
In chastising the CLR and Secretary, ALJ Moran said, “The only thing that the motion gets right is the math; each of the 32 alleged violations was reduced by 30 percent.
“Motions such as these serve to demonstrate the great wisdom of Congress. It knew that without the fail-safe it installed in the Mine Act, through Section 110(k) of that Act, settlements such as this could occur. … Submissions such as this lay bare the failures that would most certainly occur should the Secretary ever be able to have this protective provision removed from the Commission’s oversight…. The idea that there can be a wholesale, large, across the board reduction for a significant number of violations with no justification other than to achieve an amicable settlement and to avoid further litigation, demonstrates a lack of understanding about the operation of the Mine Act’s requirements where civil penalty reductions are sought.”
As pointed out in a 2007 GAO report, the federal government’s enforcement of mine safety and health is shared by MSHA and the Review Commission in a split-enforcement model that is “uncommon” in the federal government.
As GAO noted in 2007, “While MSHA proposes (emphasis added) the initial penalty based on the findings of its inspectors, these proposed penalties are subject to review by the Commission. No proposed penalty that has been contested by a mine operator can be settled without the approval of the Commission.”
In fact, 105(a) of the Mine Act clearly speaks of “proposed assessments”, and that an operator has 30 days in which to pay or contest the proposed assessment.
In the previous enforcement agency – MESA – the operator had to pay the penalty assessed, or was given the opportunity to negotiate a settlement with the MESA assessment officer. If no compromise was reached, the Office of the Solicitor filed a Petition for Civil Penalty Assessment with the Office of Hearings and Appeals of the Dept. of the Interior, and the case was set for trial before an ALJ. Before 1977, the operator could, at any time prior to the final decision of the Administrative Law Judge, negotiate a settlement with the Solicitor.
Congress believed that the settlements reduced the effectiveness of the civil penalty as an enforcement tool under the 1969 Coal Act since the penalty reductions did not come under public scrutiny.
The Senate Report on the Legislative History of the Mine Act (S. Rep. 95-181, 95th Cong. 1st Session., 8 (1977)) said that changes in the settlement process were necessary because “amounts paid by operators for violations, which are quite serious in many cases, are a mere slap on the wrist – too little to effectively induce meaningful compliance by operators with the safety and health requirements of the law.”
According to the joint majority and minority report, “Negotiations between operators and Conference Officers of MESA are not on the record. Even after a Petition for Civil Penalty Assessment has been filed by the Solicitor with the Office of Hearings and Appeals, settlement efforts between the operator and the Solicitor are not on the record, and a settlement need not be approved by the Administrative Law Judge.”
The Senate report went on to explain:
“While the reduction of litigation and collection expenses may be a reason for the compromise of assessed penalties, the Committee strongly feels that since the penalty system is not for the purpose of raising revenues for the Government, and is indeed for the purpose of encouraging operator compliance with the Act’s requirements, the need to save litigation and collection expenses should play no role in determining settlement amounts (emphasis added). The Committee strongly feels that the purpose of civil penalties, convincing operators to comply with the Act’s requirements, is best served when the process by which these penalties are assessed and collected is carried out in public, where miners and their representatives, as well as the Congress and other interested parties, can fully observe the process.
“To remedy this situation, Section 111(1) [now 110(k)] provides that a penalty once proposed and contested before the Commission may not be compromised except with the approval of the Commission (emphasis added). Similarly, under Section 111(1) a penalty assessment which has become the final order of the Commission may not be compromised except with the approval of the Court. By imposing these requirements, the Committee intends to assure that the abuses involved in the unwarranted lowering of penalties as a result of off the record negotiations are avoided. It is intended that the Commission and the Courts will assure that the public interest is adequately protected before approval of any reduction in penalties.”
Thus, Congress created an independent Commission, insulated from MSHA and the Labor Secretary, whose members cannot be removed by the President except for cause.
Legislative History and Repeated Violations
On the issue of repeated violations, such as in the case of the New Era Mine, the legislative history was clear in that repeat violations of the same standard should have a higher penalty.
“In evaluating the history of the operator’s violations in assessing penalties, it is the intent of the Committee that repeated violations of the same standard, particularly within a matter of a few inspections, should result in the substantial increase in the amount of the penalty to be assessed. Seven or eight violations of the same standard within a period of only a few months should result, under the statutory criteria, in an assessment of a penalty several times greater than the penalty assessed for the first such violation.”
In upholding this enforcement scheme, the D.C. Circuit ruled in 1989 that Congress was intent on assuming that the civil penalties provide an effective deterrent against all offenders, and particularly against offenders with records of past violations. Coal Employment Project v. Dole, 889 F. 2nd 1127 (DC Cir 1989).
The legislative history is silent as to the considerations that should be taken on settlements, but it is worth noting that settled citations are still part of an operator’s history in MSHA’s data base, and used for enforcement purposes.
Settlements Were Some of the First Decisions
Commission case law shows that shortly after the Commission was formed, as early as November 1978, in Republic Steel (Docket No. PITT 78-156-P et al., 1 MSHC 1709) the full Commission insisted that ALJs state reasons for approval of settlements. The Republic Steel case was the first test case for settlements, and set the policy for de novo review.
The Commission’s authority over settlements was never challenged.
The Commission at that time was chaired by former Congressman Jerome Waldie, with Richard Backley, Frank Jestrab, A.E. Lawson, and Marian Pearlman Nease. Those first Commissioners stressed that Republic Steel was a novel question of policy, and claimed the ALJ settlement approval did not provide enough facts for then-ALJ William Fauver to approve the settlement.
The case was remanded back to Judge Fauver for him to make a statement of reasons for approving the settlement, and a statement of the facts in the record that supported his determination.
The attorney presenting the case on behalf of the Secretary was present Commission Judge David Barbour, who has also served as the Commission’s Chief Judge from 2000 – 2003.
One of the first ALJ decisions concerning settlements found after Republic Steel, was on Feb. 13, 1979. Judge Joseph Kennedy wrote a scathing rejection of the joint settlement, and chastised then- DOL attorney Edward Fitch where Pomerleau Bros. Inc. (1 MSHC 1770; Docket No. WILK 79-4-PM) and the Secretary wanted to withdraw a case because the operator agreed to the violations as written, and agreed to pay all of the penalties.
Judge Kennedy said the Solicitor’s office could not withdraw the case without filing a settlement containing all of the citation information for him to review. Kennedy stressed that the company had contested the violations, and those were now squarely before the Commission.
In addition to citing the legislative history that was fresh in everyone’s mind since the Mine Act had only just passed into law, Judge Kennedy said “the plain language of section 110(k) and the legislative history of the Act convincingly establish that the Presiding Judge is charged with responsibility for making just such an independent evaluation and de novo review of proposed settlements. To approve settlements merely on the basis of unsubstantiated representations of counsel with respect to gravity, negligence and the adequacy of the penalties imposed bv the Assessment Office would be violative of the Commission’s duty ‘for reviewing the enforcement activities of the Secretary of Labor.’ I am fully aware, of course, that Congress was not against settlements of charged violations per se, but Congress was deeply disturbed over the lack of deterrent effect of settlements under the 1969 Act.”
First Blue Book Cases
The Commission’s first “Blue Book” in March 1979 has two settlement rejections – both by then-ALJ Paul Merlin, who went onto become the Chief ALJ. He continued the practice of rejecting settlements not justified by detailed analysis until he retired. In those first Blue Book cases dated March 5, 1979, Merlin said that the Commission ALJs are to carry out “a de novo review of all aspects” of a settlement.
In the case of Gateway Coal Co., (PITT 78-368-P), Merlin was particularly harsh with then-Solicitor Attorney David Barbour, who now is a Commission ALJ. The company was represented by attorney Hank Moore.
In stressing the split enforcement that the Mine Act called for, Judge Merlin told attorneys Barbour and Moore: “I determine the existence of a violation in a hearing such as this based solely upon the record, documentary and testimonial, which is made before me. I conclude a penalty exists. I determine the amount of penalty in accordance with the statutory criteria, based once again, solely upon the record made before me. I note that section 2700.24 requires that the petition for civil penalties include the proposed penalties. This obviously, has to do with the settlement process concerning which, as both counsel well know, Congress expressed serious concern,” Merlin wrote.
On the same day, Merlin wrote another “Disapproval of Settlement” involving a company called Hallmark & Son Coal Co. Similar to the case before ALJ Kennedy, this also involved a company willing to pay the originally assessed amounts. Here, Merlin again chastised the Solicitor’s Office for giving “no reasons beyond the bare statement that the proposed settlement is reasonable in light of the alleged gravity and negligence of each violation.” Merlin wanted more information within 10 days, and said he would issue a “Show Cause Order” if the Solicitor failed to do so.
Throughout the years Judge Merlin rejected a settlement from time-to-time, and noted in one case in May 1987, “Most Solicitors routinely submit satisfactory settlement motions, while a few do not” (9 FMSHRC 926).
The full Commission, on three more occasions after Republic Steel, reaffirmed the authority of its Judges to review and, where necessary, disapprove settlements (Knox County Stone, 3 FMSHRC 2478, Pontiki Coal Corp., 8 FMSHRC 668, and Wilmot Mining, 9 FMSHRC 684).
In Wilmot, decided in April 1987 under a panel of commissioners all appointed under President Ronald Reagan with Ford B. Ford as Chairman and Commissioners Richard Backley, Joyce Doyle, James Lastowka and L. Clair Nelson as members, the Commission held:
“Settlement of contested issues and Commission oversight of that process are integral parts of dispute resolution under the Mine Act. 30 U.S.C. § 820(k); see Pontiki Coal Corp., 8 FMSHRC 668, 674 (May 1986). The Commission has held repeatedly that if a judge disagrees with a penalty proposed in a settlement he is free to reject the settlement and direct the matter for hearing. See. e.g., Knox County Stone Co., 3 FMSHRC 2478, 2480-81 (November 1981).
Penalty System, Settlements Addressed in 2010
On Feb. 3, 2010, MSHA-head Joe Main was asked about back-logs in cases, penalties and the settlement system in a hearing before the House Committee on Education and Labor.
Main told Congress he was troubled by the current settlement process, which he said favored operators who could send a letter of contest with 40¢ postage, wait two years, and get a 47% penalty reduction in a settlement.
Main said he sought to create a conference process that “is not a Monty Hall [Let’s Make A Deal] process….” Main said he wanted to see a process where there was “one opportunity to look at that one set of facts. And if you don’t get them resolved then, you go to the litigation process.”
In his testimony Main said that in most contested cases, there is no dispute a violation occurred, but the disputes were generally focused on gravity, negligence or the number of miners that might be affected.
To solve the problem, Main said the best solution was for MSHA and mine operators to review citations and hold conferences prior to the operators contesting the citation. Main called that “the best approach to resolve disputes over violations early in the process and keep those citations out of the backlog.”
He also told the Committee: “Another possible reform would ‘incentivize’ operators not to contest. Operators currently receive a 10 percent reduction in proposed penalties for prompt good faith abatement of citations. We are reviewing whether or not additional financial incentives would be of value or not.”
Main did not say if that would include a 30% across-the-board reduction, as is seen in this case, but he did say that “consideration should be given to
expanding the use of settlement conferences over which a judge presides.”
Black Beauty – 2012
The issue of an ALJ’s role in settlements came to the forefront in Black Beauty Coal Co. (34 FMSHRC 1856, 19 MSHN 489). ALJ Margaret Miller issued an unpublished order rejecting a proposed settlement between the Solicitor’s Office and Peabody’s Black Beauty Coal that would have reduced MSHA’s proposed penalties by more than 80%.
Miller, a former Solicitor’s Office attorney and well-versed in the Mine Act, said the information provided by the Secretary did not provide a sufficient explanation for the extreme reductions, and the reduced penalties ”would not adequately effectuate ‘the deterrent’ purpose underlying the Act’s penalty assessment scheme.” Miller said that such extreme reductions “would encourage operators to contest the penalties in the hope of receiving such a reduction.”
Miller also stated that ALJs are required by Commission precedent to provide a sufficient explanation when a penalty assessment diverges substantially from a proposed penalty, and in the case of Black Beauty, the Secretary did not provide a sufficient explanation for the penalty reductions.
The Solicitor’s Office filed for interlocutory review, claiming that a Commission ALJ may not consider deterrent effects of penalty amounts.
In ruling against the Solicitor, the Commission said the Mine Act’s legislative history, and numerous Commission and federal cases identify deterrence as a central tenet of the Mine Act and its penalty provisions.
In addition, the Commission said that Congress intended that the settlement of a penalty be open to scrutiny in order to better serve the purpose of civil penalties, that is, to encourage operators’ compliance with mandatory standards. Black Beauty Coal Co., 8/20/2012, Docket No. LAKE 2008-327 et al., 34 FMSHRC 1856, 19 MSHN 489.
Debate Continues After Black Beauty
Following Black Beauty, in a separate opinion, ALJ Thomas McCarthy sent a stern warning to the Solicitor’s Office on Oct. 15, 2012, saying that the Secretary of Labor may not “continue to act in blatant disregard of the Mine Act,” in refusing to provide information required for settlements. Judge McCarthy threatened disciplinary proceedings.
ALJ Priscilla Rae wrote an equally harsh opinion, two days after Judge McCarthy, although she stopped short of threatening disciplinary action against the Solicitor involved in the case before her (19 MSHN 590).
In a Nov. 1, 2012, conference call regarding the settlement of a penalty case involving Dickenson- Russell Coal Co. before Judge McCarthy, more information was sought by the ALJ where the Solicitor agreed to a 49% penalty reduction. In addition, the Secretary sought to remove an S&S finding. The Secretary argued he could find that a hazard was reasonably likely to cause a fatal injury, but under the Secretary’s prosecutorial discretion, could also remove the S&S finding in a settlement.
The judge had difficulty with this, and later wrote that “such action contravenes the intent of Congress set forth in the foregoing legislative history concerning Commission oversight of the settlement approval process, as sanctioned by Sect. 110(k) of the Mine Act…”
According to the transcript, Solicitor’s Office attorney Doug White told McCarthy’s counsel, “We accept that the Commission and these judges have authority to approve settlements of the penalty – there’s no question. This is long settled law,” White said. But, White did not believe that the judge had the authority “whatsoever” to review MSHA’s modification of a citation once it was contested, because the citation is not a penalty. White asserted that the reasons to modify a citation should not be included in a penalty settlement proposal, even though the two are intertwined.
White was questioned about this. “110(k) was not proposed in a vacuum,” McCarthy’s counsel told White. “It was something that was contemplated by the Senate committee … there was a history with the Secretary settling cases and diluting the enforcement scheme by settling for a fraction of the original proposed penalty and they wanted judges to review those settlements so that it be open and transparent and that kind of abuse would not take place.”
White said he accepted the fact that the Mine Act was different, and the legislative history set a different standard.
“What I don’t accept,” White said, ” is the fact that anybody can say that the abuses that the legislative history 35 years ago pointed to are occurring today. What I won’t accept is the fact that those abuses that were supposedly committed by the Dept. of the Interior are being committed by the Dept. of Labor. I think recitation of that legislative history is misguided.”
Of course it could also be argued that because of the ALJ oversight, abuses have not occurred.
In an order for certification for interlocutory review before the Commission, Judge McCarthy wrote: “After an MSHA inspector issues a citation, the Secretary is afforded ample time to exercise prosecutorial discretion and modify a citation to correct for error or to more accurately reflect the conditions or practices at the mine. In accordance with MSHA policy, the Secretary may choose to pursue good-faith settlement efforts prior to contest or the formal filing of a civil penalty petition…. Once the operator contests the Secretary’s proposed assessment of penalty, however, Commission jurisdiction attaches.”
Motion for Reconsideration of New Era Case
In his motion for reconsideration of the New Era case, the Secretary argues that the Excel Mining case of 2003, and the Mutual Mining case of 1996, give the Secretary the right to interpret the Mine Act. Cited in the Excel case, although not by the Secretary, is the Cannelton case of 1989.
While all cases state that the Secretary is entitled to deference, the cases speak to the Secretary’s right to interpret its own standards – not the Commission’s Congressional and Mine Act mandate to determine final penalties, and approve settlements.
In addition, clearly under the Mine Act’s split enforcement scheme, it’s the Commission that is charged with administering the Mine Act’s Sect. 110(k).
Excel Mining dealt with multiple dust samples taken over a single shift, and Cannelton dealt with the transfer of a Part 90 miner without loss of pay. Also cited by the Secretary was a discrimination case involving Mutual Mining, and whether unemployment benefits should be deducted from a miner’s back pay in a reinstatement case.
The Secretary claims in the New Era brief that these cases give the Secretary the exclusive authority to enforce and interpret the Mine Act.
“The Commission is the equivalent of a court – it is responsible for adjudication and has no policy role,” the Secretary wrote in quoting from Excel.
Cannelton notes that the Mine Act directs the Secretary to “develop, promulgate, and revise as may be appropriate, improved mandatory health or safety standards for the protection of life and prevention of injuries in coal or other mines.”
Here the court said, “We hold that when the Secretary and the Commission disagree on the interpretation of ambiguous (emphasis added) provisions of the Mine Act, and both present plausible readings of the legislative text, this court owes deference to the Secretary’s interpretation.”
Both cases cite Chevron U.S.A. Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 842 (1984), also cited by the Secretary in the New Era motion. The issue in Chevron was what standard of review should be applied by a court to a government agency’s own reading of a statute that it is charged with administering.
Chevron, however, doesn’t address the question of which agency is owed deference when there is split enforcement.
The first inquiry or step in Chevron is “whether Congress has directly spoken to the precise question at issue.” If a statute is clear and unambiguous, effect must be given to its language. Moreover, “in ascertaining the plain meaning of the statute, the court must look to the particular statutory language at issue, as well as the language and design of the statute as a whole.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988) (citations omitted).
As noted in Coal Employment Project v. Dole, 889 F.2d 1127, 1131 (D.C. Cir. 1989), traditional tools of construction, including examination of a statute’s text and legislative history, may be employed to determine whether “Congress had an intention on the precise question at issue,” which must be given effect.
The Secretary does not address the fact that the Commission is charged with overseeing the Mine Act’s 110(k) provisions. It could be argued, logically, that the Secretary may in fact have to give deference to the Commission because of the Commission’s Congressional mandate under 110(k). Obviously, a key issue will be whether the Congressional intent on the Commission’s role in settlement oversight is ambiguous, or if the Mine Act’s language in Section 110(k) is ambiguous where it states: “ No proposed penalty which has been contested before the Commission under section 105(a) shall be compromised, mitigated, or settled except with the approval of the Commission.”
The Mutual Mining case of 1996, cited by the Secretary, dealt with a discrimination case – specifically the entitlements of miners and if unemployment should be deducted from back pay. In this decision, the court ruled that the Secretary was owed deference on the deductibility of unemployment benefits. The court noted that the deductibility/ entitlement issue, unlike the settlement issue, was not dealt with in the legislative history or final language of the 1977 Act.
“The Secretary and the Commission thus flatly disagree on the question before us [deducting unemployment benefits from a backpay award]. Determining which interpretation is owed deference requires a close examination of the Act. Under the ‘split-enforcement’ arrangement envisioned by the Act, the Secretary and the Commission perform distinct regulatory responsibilities…. The Act charges the Secretary with the development and enforcement of health and safety standards ‘for the protection of life and prevention of injuries in coal or other mines.’ 30 U.S.C. § 811(a). The Secretary develops these standards by rulemaking, id., and enforces them by conducting inspections, issuing citations and proposing civil penalties for violations, 30 U.S.C. §§ 813, 814(a), 815(a), 820(a). If a party contests the Secretary’s actions, the Commission adjudicates the claims and “issue[s] an order, based on findings of fact, affirming, modifying, or vacating the Secretary’s citation, order, or proposed (emphasis added) penalty, or directing other appropriate relief.” 30 U.S.C. § 815(d).
The court said in this case, “when the Secretary and the Commission disagree on the interpretation of ambiguous (emphasis added) provisions of the Mine Act, and both present plausible readings of the legislative text, this court owes deference to the Secretary’s interpretation. … As the Senate Report observed: ‘Since the Secretary of Labor is charged with responsibility for implementing this Act … the Secretary’s interpretations of the law and regulations shall be given weight by both the Commission and the courts.”
Interestingly in Mutual Mining, the Secretary also argued “that civil fines are often so nominal that they fail to deter violations of the Act.”
New Era, Agency Resources
In the New Era case now under reconsideration, the Secretary says the attorney assigned to the case exercised “her professional judgment as a representative of the Secretary, she considered the value of the proposed compromise; the prospects of coming out better, or worse, after a full trial; and the resources that the Secretary would need to expend in going through a trial,” and that the “proposed settlement is in the public interest and is compatible with MSHA’s enforcement goals.”
Although it has been recognized for years that the split enforcement scheme is unique under the Mine Act, the Secretary said “in other statutory schemes, agencies decisions to settle enforcement actions are not reviewable by the courts.”
As an example, the Secretary cited a case involving the use of lethal injection drugs, Heckler v. Chaney, where death row inmates said the use of lethal injection drugs violated the Federal Food, Drug, and Cosmetic Act (FDCA), and requested that the FDA take various enforcement actions to prevent those violations. The FDA refused the request. The inmates then brought an action in Federal District Court against the Secretary of Health and Human Services, making the same claim and seeking the same enforcement actions, but HHS also refused to take any action.
The U.S. Supreme Court ruled in this case that an agency’s decision not to take enforcement action is presumed immune from judicial review under §701(a)(2). Such a decision has traditionally been “committed to agency discretion,” and it does not appear that Congress, in enacting the APA, intended to alter that tradition. Accordingly, such a decision is unreviewable unless Congress has indicated an intent to circumscribe agency enforcement discretion, and has provided meaningful standards for defining the limits of that discretion.
However, in the case of New Era, MSHA was required by law to take action, and did in fact take action, and New Era did in fact contest the cases before the Commission, which could then only be compromised, mitigated, or settled with the approval of the Commission, according to Sec. 110(k) of the Mine Act.
The Secretary also argues that he must have the “unreviewable authority to withdraw citations and settle cases under the analogous Occupational Safety and Health Act to avoid a commingling of [prosecutorial and adjudicatory] roles that Congress did not intend.” The Secretary of course can withdraw citations before a contest is filed with the Commission.
Six Penalty Criteria
In the New Era case, the Secretary also argues that judicial review by an ALJ is impossible because there are no meaningful standards to apply to settlements. The Secretary argues there are “no legal norms to apply,” and the Mine Act “provides no meaningful standards by which either the Commission or a court can review the Secretary’s settlement decisions.”
The Secretary also argues that a settlement is not the time for an ALJ to engage in fact-finding.
The Secretary compares settlements to consent decrees where there are no findings that a company has engaged in illegal practices.
In this case, American Coal’s New Era mine has neither admitted nor denied that the citations were valid or that the MSHA inspector’s allegations of gravity and negligence were proper, the Secretary said, adding that allegations, such as those in the settlement, “cannot be treated as if they were findings of fact and conclusions of law after trial.”
However, the Secretary does not address the fact that settled citations remain on the DRS, and are used as part of an operator’s history.
While the Secretary acknowledges that Congress adopted Sect. 110(k) in response to the unsatisfactory settlement processes under MESA, the Secretary said, “Today, however – more than 30 years later – an assumption that MSHA is acting like MESA did when settling penalty contests would be improper. Absent contemporary evidence of bad faith, 30 year old legislative history does not justify an inquiry into the mental processes of the Secretary’s representatives during settlement negotiations.”
“Instead, the legislative history stresses transparency and public scrutiny as the principal reasons for the Commission’s review – purposes that can be achieved even if the Commission does not engage in judicial review … the Senate Report suggests that Congress wanted settlements to be ‘on the record’ and ‘carried out in public.’ … Even if a settlement agreement is not made public until it is approved, the mere publishing of it will alert the regulated community (industry, labor, and public interest groups) – and indeed Congress itself – to any possibility that the Secretary’s settlement practices present cause for concern and warrant comment and correction by the political branches,” the Secretary argues, adding in a later paragraph that the Commission’s role is not to “evaluate the wisdom of the compromise.”
Twisted Sentence On the Legislative History
Oddly, in his brief, the Secretary actually reversed clauses within one sentence in the legislative history, which changes the meaning of the section cited by the Secretary.
The Secretary states, “…the legislative history’s statements about the consideration of litigation and collection expenses contradict each other, and therefore do not provide any meaningful guidance about what factors the Secretary or the Commission should consider when evaluating settlements.
“On the one hand, the legislative history states that ‘the need to save litigation and collection expenses should play no role in determining settlement amounts.’ Legislative History at 632 (emphasis added). In the same sentence, however, the history states the exact opposite: ‘[T]he reduction of litigation and collection expenses may be a reason for the compromise of assessed penalties.’ Id. (emphasis added). Even assuming that legislative history can supply a missing standard, an expression of legislative intent as internally inconsistent as this one would not suffice – particularly in light of the reality that reducing litigation expenses for both parties has traditionally been recognized as a legitimate reason for parties to enter into settlement agreements and for courts to approve them.”
In fact, however, as noted in the beginning of the story, the legislative history actually states:
“While the reduction of litigation and collection expenses may be a reason for the compromise of assessed penalties, the Committee strongly feels that since the penalty system is not for the purpose of raising revenues for the Government, and is indeed for the purpose of encouraging operator compliance with the Act’s requirements, the need to save litigation and collection expenses should play no role in determining settlement amounts.”
A very different meaning emerges when the clauses are read in proper order.
Thirty-six years of Commission trials and hearings on settlement case law combined with the Commission’s rules still don’t offer “a meaningful standard for limiting the Secretary’s prosecutorial discretion to settle,” the Secretary claims, “because the Commission was not statutorily authorized to promulgate rules that displace the Secretary’s reasonable interpretation.”
The Secretary also stated that the Commission has a history of approving percentage reduction settlements in the past, citing cases beginning in 2011 when the Commission had an 18,000-case backlog.
The Secretary said that in these global settlements, “When the operator accepts the violations as issued, and all agency findings are affirmed, the operator is on notice of expected future compliance, and a history of violations is established for future enforcement actions,” the Secretary wrote.
Typically “global settlements” deal with larger controllers, multiple fines, with high contest rates, and multiple operators of one controller. In addition, the penalty reductions are not “across-the-board” as in this current case, but any decrease in the citation’s penalty amount has been determined individually.
Lastly, the Secretary brought to ALJ Moran’s attention the Labor Dept. and Review Commission’s Case Backlog Reduction Project Joint Operating Plan, as further “proof” of the legitimacy of this settlement. This Joint Plan calls for ALJ’s “playing a more activist role in assisting the parties to reach mutually agreeable settlements.”
However, an across-the-board penalty reduction, with little to no explanation, may violation the Joint Operating Plan, which states that written decisions approving the global settlements “will reference detailed transcripts (emphasis added) of the settlements. “In this way, the written decisions can accommodate the requirements of Commission Rule 69 (requiring a decision approving a settlement to be in writing and to contain reasons or bases for approving the settlement).”
The Secretary’s Motion for Reconsideration and his Supporting Brief are currently before the judge.
SEC. OF LABOR V. THE AMERICAN COAL CO., Docket No. LAKE 2011-13 (motion for reconsideration and supporting brief).
Attorneys for the Secretary: Patricia Smith, Solicitor of Labor, Washington, D.C., with Christine Heri and Suzanne Dunne, DOL Office of the Solicitor, 8th Fl., 230 Dearborn St., Chicago, IL 60604