Judge Rejects Settlement and Appearance of CLR in American Coal Case

Review Commission ALJ William Moran rejected a settlement today involving The American Coal Co., and violations found at its New Era Mine, and has taken the unprecedented step of refusing to accept the appearance of MSHA’s Conference and Litigation Representative in the case.

The settlement motion raised the proverbial “red flag” when the CLR in the case sought a 30% “across-the-board” reduction of 32 citations, 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 penalty.

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.”

Moran said “there is no legitimate basis to reduce any of these citations. … Nor can it be said that the cited matters are all negligible violations.”

The violations occurred at the New Era Mine, controlled by Robert E. Murray.

Several examples of the violations were offered by Moran:

    LI>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);
  • A $425 penalty was issued for a violation of §75.370(a)(1) on Aug. 24, 2010 where MSHA said it found up to 5 feet ofwater in a longwall bleeder (Citation 8424511 );
  • A fine of $3,405.00 was assessed for an S&S violation of §75.202(a) where MSHA found inadequate roof and rib support, a problem which had been cited some 107 times at this mine in the past 2 years, (Citation 7579878).
  • On July 28, 2010, MSHA found an outdated escapeway map in violation of §75.1505(b) and assessed a penalty of $946.00 (Citation 8424509); and found an incompletely installed life line in the primary escapeway in violation of §75.380(d)(7)(I) with a $263.00 penalty (Citation 8424508).
  • 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 citations 8424502 with a penalty of $2,678.

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.”

In refusing to allow the CLR in this case to practice before him, Moran said competence is an essential part of the CLR process. “Regrettably, here that competence has not been demonstrated. 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.”

This is not the first time that settlements have been rejected.

On Oct. 15, 2012, ALJ Thomas McCarthy sent a stern warning to the Solicitor’s Office, 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, and threatened disciplinary proceedings. ALJ Priscilla Rae wrote an equally harsh opinion, two days after Judge McCarthy, although stopped short of threatening disciplinary action against the Solicitor involved in the case before her (19 MSHN 590).

All of the recent rejected settlements cite the Commission’s Black Beauty decision upholding a decision by ALJ Margaret Miller—a former attorney for the Solicitor’s Office—rejecting a settlement involving Black Beauty Coal Co. The Commission majority ruled that an ALJ is permitted to consider the deterrent effect of a proposed penalty when deciding whether or not to approve a settlement. In addition to ruling on whether a penalty could be increased as a deterrent, the majority also ruled that Judge Miller did not abuse her discretion by requesting additional information before she approved a settlement between the Solicitor’s Office and Black Beauty Coal Co. (19 MSHN 489).

The American Coal Co., 2/11/2013, Docket No. LAKE 2011-12.
CLR for MSHA: Jeffrey Williams, CLR, MSHA, 2300 Willow Street, Suite 200 Vincennes, Ind., 47591
Representative for The American Coal Co.:Kathy Bartek, Paralegal, Murray Energy Corp., 46226 National Rd., St. Clairsville, OH 43950