Working Alone, Metal/Nonmetal Mine Exams Are Subjects of MSHA Outreach

MSHA personnel will reach out next month to mine management and miners during inspections and other visits about best practices to follow while working alone, agency officials advised during a Tuesday conference call for training specialists and other stakeholders.
Meanwhile, prospects appeared likely for at least a 2-month delay in enforcement of MSHA’s new final rule on safety examinations in metal and nonmetal mines.

Enforcement of Examination Rule May Be Postponed
The agency last month proposed delay of the effective date of its final rule on workplace examinations in metal and nonmetal mines that was issued Jan. 23. A postponement from May 23 to July 24 was proposed, based on an Executive Order from the White House, “Regulatory Freeze Pending Review.”
A comment period on the proposed extension closes Wednesday.
MSHA Deputy Assistant Secretary for Operations and acting agency chief Patricia Silvey could not predict on the agency’s pending decision. “We got a lot of comments, trust me,” Silvey said, however, in response to a question.
No enforcement will take place before the final effective date, whatever the date turns out to be, Silvey emphasized.
The docket at the website Regulations.gov displayed more than 90 comments on the MSHA delay proposal, some of them filed anonymously. A number of commenters addressed the content of the standard rather than limiting their input to the proposed time extension.
The executive order created a freeze on new regulations “[i]n order to ensure that the President’s appointees or designees have the opportunity to review and new or pending regulations.” It was signed on Jan. 20 by Reince Priebus, White House chief of staff and assistant to the President. The order was filed with the Federal Register on Jan. 23 and published Jan. 24.
Among other provisions, the executive order directed that agencies to suspend effective dates of recently published rules for at least 60 days from the date of the order. “Where appropriate and as permitted by applicable law, you should consider proposing for notice and comment a rule to delay the effective date…beyond that 60-day period,” it stated.
The order also told agencies, “[Y]ou should consider potentially proposing further notice-and-comment rulemaking” in cases where “the effective date has been delayed in order to review questions of law, fact or policy.”
MSHA’s proposal to extend the effective date did not mention any issues of law, fact or policy but referenced the agency’s intention to “develop and distribute additional compliance assistance materials.”
Beside posting them on its website, the agency “would make these compliance assistance materials available at a number of information stakeholder meetings at various locations around the country,” the proposal stated. “MSHA also understands that mine operators may need time to adjust schedules, develop additional recordkeeping capacity, and in other ways modify the way they currently do business do comply with the rule.”
The proposal for delay also suggested that a longer postponement could be possible.
“As part of the outreach and compliance assistance process, MSHA would consider issues raised by stakeholders and consider further extending the effective date in order to determine is these issues can be reasonably addressed though compliance assistance and training,” the document stated.
Metal and nonmetal mine operators currently, under §56/57.180002, are required to have a competent person conduct a safety examination in each workplace at least once per shift. The new rule requires that these exams be done in each workplace before the start of work there, requires action to correct any hazards found, stipulates that miners must be informed about hazardous conditions affecting them, and requires more detailed recordkeeping. The rule was proposed in June 2016, with four public hearings held and a period for written comments extending through September.

Five Miners Working Alone Have Been Killed in 2017
Of eight miners fatally injured so far this year, five were at work out of sight and hearing of others, MSHA reported.
Accidents while working alone accounted for all three of the fatal injuries so far this year in metal and nonmetal mines.
Ronald Trich Jr., who worked in the underground Linwood limestone mine in Scott County, Iowa, was missed only when he failed to return home on the evening of Jan. 25 and his wife contacted mine officials. He was found early the next morning in an abandoned area beyond a barrier, where material had fallen in on him. Two employees who would normally have been monitoring the mine’s check-in and check-out system were both away from work that day, accident investigation program manager Larry Trainor revealed during the conference call.
Julio Flores, he independent owner-operator of an over-the-road transport, was fatally engulfed in sand as he raised the truck bed while standing at the rear of his vehicle on March 14 at the Trinity Materials Inc. Cottonwood #1204 sand and gravel pit in Kaufman County, Texas. Flores had previously approached the mine scales in the loaded truck. He was told to go back and dump the material so that the scale operator could determine the weight for the empty vehicle first. Flores was uncovered about an hour after being discovered missing.
Steve Justice died on a Friday evening, March 24, but his death was discovered only the next Monday morning. Justice, a crusher operator, lived on the property of the Black Rock Services Bonito Pit, a sand and gravel operation in Valencia County, N.M. Pinned by his own truck against a diesel generator, he was not immediately missed due to a gap in communication with a guard at the site, officials revealed. Apparently he had left the truck in gear when exiting he vehicle to shut off the generator.
Two of the five coal miners dying of on-the-job injuries so far in 2017 also were working in isolation.
Ray Hatfield Jr. became fatally entangled in a moving underground conveyor while working alone in an area won January Jan. 26 at the R & C Coal LLC #2 Mine in Pike County, Ky. Mine height in the area measured 2 feet 6 inches, according to a preliminary report. He was positioned between a guard and the belt drive when a roller caught him.
On Feb. 27, preparation plant attendant Jason Matthews reportedly was trying to repair a plate press used to squeeze water out of coal slurry when he slipped through a gap in a guard at the Chestnut Land Holdings Bishop Impoundment Area in McDowell County, W.Va. Matthews fell more than 18 feet and landed on a moving belt that held coal refuse. He was carried 55 feet and found lodged in a transfer chute, said Marcus Smith, chief of the coal mine accident investigation program.
Additional serious injuries have involved miners working out of sight and hearing of others. A welder, jumping off a ladder, fell and was impaled on a pry bar that someone else had left standing upright, Trainor said. At a coal mine, bulldozer operator sustained broken ribs when his machine rolled off a highwall edge, Smith reported.
Starting May 1, MSHA personnel will discuss safe practices for working alone as they visit mines for regular inspections and training purposes, said Marvin Lichtenfels, deputy administrator for metal and nonmetal mine safety and health. No extra inspections are planned and no changes are being made in existing MSHA rules that govern working alone, officials indicated.
In underground metal and nonmetal mines, §57.18025 specifies, “No employee shall be assigned, or allowed, or be required to perform work alone in any area where hazardous conditions exist that would endanger his safety unless his cries for help can be heard or he can be seen.” Governing surface mines and surface areas in the metal and nonmetal mining sector, §56/57.18020 states, “No employee shall be assigned, or allowed, or be required to perform work alone in any area where hazardous conditions exist that would endanger his safety unless he can communicate with others, can be heard, or can be seen.”
Coal mines do not have similar standards.
MSHA officials could not say to why the mining industry has seen this cluster of accidents that involved working alone, nor did they take issue with the practice itself.
Kevin Stricklin – currently acting MSHA administrator for metal and nonmetal mines as well as the regular MSHA administrator for the coal sector – said that whether miners need to work alone is “up to the operator. We just want everyone to be as safe as they can when they’re doing it.”

Best Practices Recommended By MSHA

For Mine Operators
• Make an assessment to determine if the task can be safely completed by a miner working alone.
• Provide training to assure the miner can safely complete the task while working alone.
• Provide the miner with clear direction regarding any limits to work that can be completed while working alone.
• Train miners to conduct risk assessments and encourage them to always conduct a risk assessment before work begins (SLAM RISKS). [“SLAM” stands for Stop, Look, Analyze, Manage.]
• Know where the miner will be at all times.
• Establish and follow routine communication procedures [for example, by radio].
• Account for miners working alone at intervals appropriate for the job assignment.
• Account for all miners at the end of each job assignment and at the end of each work shift.

For Miners Working Alone
• Think about the task: Do you have adequate training, knowledge, skills and equipment to do the job safely? Do you need help?
• Always inform a responsible person where you will be working and traveling in he mine
• Before beginning any task, identify hazards (SLAM RISKS).
• Can you correct or otherwise isolate the hazard(s)? If not, report the hazards to your supervisor.
• Always use the proper tools or equipment to do the job.
• Don’t take shortcuts, do the job safely.
• Follow established communication procedures.
• Use established check-in/check-out procedures to assure you are accounted for.
• Remember, it’s your safety! Protect it!

Vol. 24, No. 1

In this issue …

Accidents: Worker severely hurt by falling material at Apex Quarry and Cement Plant… pg.1
Two seriously hurt in conveyor incident at Patriot Mining No. 2…pg. 3
Supervisor seriously injured among other incidents at Powellton #1…pg. 4
Driller loses two fingers at Tate Marble Quarry…pg. 5
— Criminal Proceedings: Reckless disregard of Mine Act can lead to criminal charges…pg. 5
— Discrimination: EEOC, Cline companies settle sex discrimination lawsuits…pg. 7
Newmont found to have fired employee for making hazard complaints to MSHA….pg. 8
Judge upholds fine for failing to promptly reinstate fired miner…pg.10
CalPortland sale brings up successorship issues, questions of privilege in discrimination case… pg.11
Veris Gold discrimination case reassigned to second judge…pg. 14
— Fatalities: MSHA informed 13 days after fatal accident at Buckhorn Gold Mine…pg. 5
Miner killed at Linwood Mine apparently sought crystals…pg. 17
R & C Coal, with over $85,000 in overdue fines, has fatality at #2 mine …pg. 17
Five unwarrantable failures found in double fatality at Harmony Mine & Mill…pg. 18
Machine operator died after proximity component was dropped in Dotiki Mine…pg. 21
Mining industry sets new low fatality record in 2016… pg. 24
— Part 50 Reporting: Eye injury reportable where miner could not return to work for remaining shift…pg. 27
— Review Commission Orders and ALJ Decisions…pg. 29

Mine Safety Appears Low-Profile Issue With Administration, Committee

The safety and health of miners received no specific mention at the March 22 confirmation hearing held by the Senate Committee on Health Education, Labor and Pensions with Alexander Acosta, nominee for Secretary of Labor.
In his prepared testimony, Acosta highlighted the issue of unemployment, specifically job exports, U.S. jobs filled by workers from abroad, and a “skills gap,” between U.S. workers’ qualifications and available U.S. jobs. During his presidential campaign, Donald Trump promised to fight job exports.
“Helping Americans find good jobs, safe jobs, should not be a partisan issue,” Acosta said in prepared testimony. “…Congress has enacted workplace safety laws…[I]f confirmed, I will work to enforce the laws under the Department’s jurisdiction fully and fairly. As a former prosecutor, I will always be on the side of the law and not any particular constituency.”
A 21% cut in overall Department of Labor funding for fiscal 2018 has been proposed by the Trump Administration in a summary document, which also made no specific mention of miner safety and health. The “skinny budget” indicated that a portion of the Labor cut would come from job training grants but left the greater portion unspecified.
A more detailed White House budget proposal is expected later this spring.
Acosta currently is Dean of the College of Law at Florida International University in Miami, Fla. From 2005 through 2009, he served as U.S. Attorney for the Southern District of Florida. Also as part of the George W. Bush administration, he headed the Civil Rights Division in the U.S. Department of Justice and before that, was a member of the National Labor Relations Board.
Also a clerk for Samuel Alito, when the Supreme Court justice was a judge with the U.S. Court of Appeals, Acosta has been described by Sen. Mike Lee (R-Utah) as “a good strong conservative.” Among other endorsements, his nomination has been praised by Leonard Leo, executive vice president of the Federalist Society, according to materials distributed by staff at the committee hearing.
Acosta was the child of immigrant parents who struggled to earn a living in the U.S. after they “fled Cuba in search of freedom,” he stated in his remarks. “…I am here today because of them. My success is their success.”
Committee Chairman Lamar Alexander (R-Tenn.), in his opening remarks said that the
Secretary of Labor should properly be titled “Secretary of the Workforce” because of the small percentage of U.S. workers currently represented by labor unions. He listed automation, globalization and terrorism among the causes of employment shrinkage. He also complained of a “regulatory avalanche.”
Ranking Member Patty Murray (D-Wash.) Wanted to know if Acosta would “withstand inappropriate political pressure.” The Secretary of Labor “must be an independent voice,” and should “stand up for workers,” she emphasized.
Under questioning by Sen. Elizabeth Warren (D-Mass.), Acosta repeatedly declined to commit to enforcement of a new OSHA silica standard that was finalized last summer, noting that the White House has ordered a review of all regulations. On Feb. 24 the White House issued a “presidential Executive Order on Enforcing the Regulatory Reform Agenda” that calls for each executive agency to designate a Regulatory Reform Officer to “evaluate existing regulations…and make recommendations…regarding their repeal, replacement, or modification.”
The silica rule’s requirements were due to be phased-in over a 5-year period, starting this June. Besides the silica standard, other recent Labor Department rules concerning overtime pay and the duties of investment advisors were discussed in the hearing.
When the White House has dictated to the Department how to re-evaluate a final rule, “that criteria really regulates…the Department of Labor’s approach to the rule,” he said. To Sen. Chris Murphy (D-Conn.), who questioned enforcement of rules generally during review, he said, “We will enforce all rules…I believe…assuming there is no stay.”
“I believe in a unitary executive,” Acosta also told Murray. “Ultimately we have a boss.” He also stated, “I’ve seen pressure, and I don’t foresee” any occasion to “bow to inappropriate pressure,” he stated. If “we feel that we can’t” obey a directive from above, he said, then “we resign.”
Concerning an issue when Acosta headed the Civil Rights Division, and one deputy was found to be applying political criteria in civil service personnel actions, Acosta disavowed this kind of discrimination. “It should never have occurred, and I deeply regret it,” Acosta said.
“I do not have any confidence that you are the right person for the job,” Warren concluded after pressing him further about his commitment to the new regulations in a second round of questioning.
Senators of both parties wanted input on how Acosta would handle the prospective draconian budget cuts. Acosta indicated that, to the extent given latitude, he was leaning against across-the-board cuts or zeroing-out of entire program areas but might look to support statistically proven activities on a case-by-case basis. For example, some Job Corps centers that are proven effective might be maintained and others closed that have a record of problems.
He expressed support in a general way for maintaining OSHA inspector presence in what might be underserved areas, and for the work of the Women’s Bureau. He also voiced support for maintaining uniform Bureau of Labor Statistics procedures.
He also said, however, when pressed to say that maintaining the Women’s Bureau would be a priority, “If everything becomes a priority, then things are no longer priorities.”
Among other interchanges, several Senators praised Job Corps centers and other successful programs in their states and hoped that they could be maintained. Sen. Mike Enzi (R-Wyo.) suggested that the voluntary VPP program administered by OSHA be expanded to include smaller businesses. Sen. Lisa Murkowski (R-Alaska) expressed hope that a fix could be found to smooth out the visa program that provides foreign workers for seasonal fisheries in the state. Sen. Al Franken (D-Minn.) brought up future pension plan defaults, which Acosta called “an issue that has not yet been solved.” Sen. Susan Collins (R-Me.) praised the Training Adjustment Assistance Program and noted that “older workers…are in many ways the forgotten story.” Senators of both parties agreed that corrective action is needed on the “sub-minimum wage” paid to some disabled workers. Sen. Pat Roberts (R-Kans.) said that he hears from constituents “who feel that they’re being ruled and not governed” and asked concerning regulations, “Can we get a cost-benefits yardstick that makes sense?” Sen. Todd Young (R-Ind.) brought up the difficulties of working couples finding adequate child care, especially in the new “gig economy. ” No questions came up concerning Mine Safety and Health Administration programs.
Sen. Tim Kaine (D-Va.) pressed Acosta, based upon a Washington Post article, about a non-prosecution agreement Acosta’s office arranged while he was a U.S. Attorney, involving a billionaire sex offender. Acosta explained that federal involvement had yielded stronger consequences for the offender than state action would have done alone. He disavowed any support for unusually lenient sentencing arrangements ultimately entered into by the state.
Kaine wanted to know why the non-prosecution agreement was concealed from the public at the time. Acosta said that there was a “time when keeping something confidential” was regarded as normal, but said he recognizes today, “By something not looking public it is looked at with suspicion.”
The fact that miner safety and health took a back seat might be due to the absence of recent front-page news. The last major mine disaster in the U.S. was the Upper Big Branch mine explosion, which took 29 lives on Apr. 10, 2010. That tragedy resulted in the unprecedented criminal conviction and prison time for a company CEO, Donald Blankenship, over his role in the willful violation of mine safety requirements. Last year, for the third year in a row, the U.S. mining industry achieved its safest year on record, in terms of fatality numbers. In all, 26 U.S. miners died from workplace accidents in 2016.
Immediately after the confirmation hearing, Acosta walked away without responding to a question from MS&HN about the potential impact of proposed budget cuts on mandatory Department activities, which would include MSHA “four and two” inspections.
A committee vote on Acosta’s nomination was not yet scheduled. The hearing record was to remain open for 10 days.
An earlier nominee for the Secretary of Labor job, Andrew Puzder, withdrew from consideration after more than one hearing postponement.

4th Circuit Upholds Blankenship’s Conviction

In shooting down an appeal by criminal defendant and ex-coal company executive Donald Blankenship, the U.S. Court of Appeals for the 4th Circuit ruled that there were no reversible errors committed by the U.S. District Court Judge Irene Berger and the jury that properly convicted him of criminally violating the Mine Act for violations leading up to the April 2010 explosion that killed 29 miners in Montcoal, W.Va.

In several instances throughout the 34-page decision, the court cited the Mine Act’s legislative history, and determined that reckless disregard of the Mine Act’s provisions can amount to criminal behavior such as in this case.

The court agreed that Blankenship was aware of the violations at the Upper Big Branch Mine, and received daily reports showing the numerous safety violations. The court said he received warnings from a senior Massey Official about the risks posed by the violations, but pressed for more production as the miners struggled to keep up with the mandatory mine safety regulations. Despite this, the court also noted that staff was cut “less than two months before the explosion, a decision that Blankenship would have had to approve given his close supervision of mine operations and staff.”

Blankenship, along with the Illinois, Ohio and Virginia Coal associations first argued to the court that the indictment against Blankenship was insufficient, and should have been dismissed because it did not cite specific mine safety regulations that he conspired to violate. Although the indictment did not cite specific regulations, it did include a 35-page background that identified violations of mine ventilation regulations, examination violations, roof and rib support violations, and recurring accumulations of explosive coal dust. In addition, “it tracked the statutory language verbatim.”

Blankenship also argued that his attorneys should have been able to recross-examine UBB Coal Group President Chris Blanchard, after Blanchard claimed that Blankenship said it was “cheaper to break the safety laws and pay the fines than to comply.” Blankenship said this statement amounted to “new evidence.” However, this issue was “effectively dealt with on cross-examination or cumulative of other evidence introduced at trial,” the 4th Circuit said. Blankenship’s cross examination of Blanchard lasted almost five days, and there was extensive opportunity during this time to examine Blanchard. There were also other witnesses that made similar statements, and also memoranda introduced telling Blanchard to reopen a section of the mine and “run coal,” despite the section lacking mandatory ventilation controls.

A large portion of the decision focused on what is meant by a “willful” violation, and “reckless,” and whether someone’s reckless conduct can lead to a criminal charge. “Reckless disregard” or “plain indifference toward” a known legal obligation can constitute “criminal willfulness” the court said.

“A single, or even a few, inadvertent errors… may not amount to “willful” failures… Yet at some point, when such errors continue or even increase in the face of repeated warnings given by enforcement officials, accompanied by explanations of the severity of the failures, one may infer as a matter of law that the [person] does not care about the legal requirements. At that point, the failures show the [person’s] plain indifference, and therefore becomes willful….Not caring about adherence to legal requirements amounts to criminal willfulness,” the court said. In this case, Blankenship was repeatedly informed of safety violations at Upper Big Branch, and nothwithstanding that knowledge, Blankenship chose to prioritize production and pay fines rather than to take steps necessary to prevent the violations from continuing.”

For purposes of the Mine Act’s criminal provisions, “willfullness encompasses “reckless disregard,” the court said, in citing previous 1969 Coal Act case law from the 6th Circuit in Consolidation Coal, 504 F.2d 1330(6th Cir. 1974).

The court also focused on the legislative history, and the problems of bringing “habitual and chronic violators of the law into compliance.” For purposes of the Mine Act’s criminal provisions, “a long history of repeated failures, warning, and explanations of the significance of the failures, combined with knowledge of the legal obligations, readily amounts to willfullness,” the court said.

Blankenship and the coal associations had argued that Congress could not have intended to hold mine operators criminally liable for making budgeting and business decisions about how to allocate resources between production and safety compliance.

The court disagreed noting the legislative history of the Mine Act contradicts this argument. “Congress repeatedly stated that the Mine Act’s enforcement provisions were designed to deter mine operators from choosing to prioritize production over safety compliance on the ground that it was cheaper to pay the penalties than strive for a violation-free mine…. To that end Congress said that operators should not balance the financial returns to increasing output against the cost of safety compliance.”

The court stressed that penalties should be imposed on corporate officers like Blankenship “because it is often impossible to impose monetary penalties on corporations large enough to deter misconduct… corporate officers who do not face personal liability will treat criminal penalties as a liscense fee for the conduct of an illegitimate business as the government’s evidence showed defendant did here….[A] mine operator cannot immunize himself from criminal liability under [The Mine Act] Sect. 820(d) by characterizing his mine’s repeated failure to comply with safety laws as a consequence of ‘tough decisions’ he had to make weighing ‘production, safety and regulatory compliance.'”

Blankenship also argued that violations inexorably result from mining production, and that it is essentially impossible to mine without a violation. But the court shot back with a strong statement: “Even though inadvertent violations may not amount to willfulness, continuing violations in the face of repeated warning allows a jury to infer criminal intent…. Just as the law holds criminally liable an individual who drives a car with brakes he knows are inoperable, even though he does not intend to harm anyone, so too Sect. 820(d) holds criminally liable a mine operator who fails to take actions necessary to remedy safety violations in the face of repeated warnings of such violations, regardless of whether the operator subjectively wanted the violations to continue.”

The third argument in the defense was that charging a CEO with criminal behavior, where “reckless disregard” amounts to “willfulness,” would lead to a result of operators being less likely to engage oversight over important aspects of safety and regulatory compliance.

This “should not deter mine operators,” the court said. “The Mine Safety Act declares that operators — like [Blankenship] have primary responsibility to prevent unsafe and unhealthful conditions and practices…. ‘Reckless disregard’ means the closing of the eyes to, or deliberate indifference toward the requirements of a mandatory safety standard, which standard [Blankenship] should have known and had reason to know at the time of the violation. Because mine operators have the primary responsibility for safety and regulatory compliance and because an operator acts with reckless disregard if he closes his eyes to safety compliance, or ‘should have known’ that an action or omission would lead to a safety violation, a mine operator cannot avoid liability under Section 820(d) by failing to engage in close oversight over safety and regulatory compliance.”

The bottom line for the court? Blankenship “failed to take actions he knew were necessary to comply with federal mine safety laws. He knew that his actions and omissions would lead to violations of mine safety laws and regulations.”

U.S. v. Donald L. Blankenship, 1/19/2017, CA 4 No. 164193

Kosmos Cement Contractor Worker Dies in Accident

A 33 year old contract worker at Kosmos Cement in Louisville, KY., was killed on Aug. 9, according to MSHA records.

The worker, Richard Snyder, was attempting to replace the lift cable pulleys on the chute located at the barge loadout. The lower portion of the chute unexpectedly fell, and the lift cable pinned the victim against the chute causing fatal injuries.

The contractor’s death comes only months after Kosmos Cement  voluntarily pled guilty April 20 in U.S. District Court in Kentucky for willfully violating MSHA’s metal/nonmetal safety standard, §56.14100(b). The company was sentenced by Magistrate Judge Colin Lindsay to pay a $400,000 fine related to the accident of contract employee Filipe M. Fiscalla (see 23 MSHN 183).

Fiscalla, 34, died Feb. 21, 2014, from a 51-ft fall into an elevator shaft at the Cemex Inc. Kosmos Cement Co. plant in Jefferson County, Ky. A criminal charge was filed against the company on March 25, 2016.

In that case, United States Attorney John Kuhn said,  “This is one of the worst cases of negligence on the part of a company. Improper maintenance resulted in an employee’s death. This agreement will ensure the proper maintenance of the cement facility and safety for the employees through mandatory on-sight inspections and a written Maintenance Control Program.” The government also agreed in the criminal proceeding to forego prosecution of agents and employees of the company.

Records show for this most recent fatality, Snyder had worked three years at the cement facility for the contractor Huelsman & Sweeney. Fiscalla, who died 30 months ago, had worked for another independent contractor at the plant when he fell to his death.

“I’m More Powerful Than Congress.”

The Bankruptcy Court in Nevada today has told miners Matt Varady and Daniel Lowe that they may not pursue their discrimination claims against Jerritt Canyon Gold, and controller Eric Sprott. The judge said he was issuing an injunction forbidding the two miners from pursuing their discrimination claims, and to prevent their case from proceeding before the Federal Mine Safety and Health Review Commission. When the miners tried to explain their rights under the Mine Act and the legislative history, they claimed the judge told them “I’m more powerful than Congress.” We will get the transcripts as soon as possible.

Commissioners Appear to Reject Secretary’s Challenge to FMSHRC Settlement Authority

Special report by Kathy Snyder
 All five Presidentially-appointed members of the Federal Mine Safety and Health Review Commission indicated this morning that Judge William Moran did not abuse his discretion when he rejected a proposed settlement between MSHA and Murray Energy Corp.’s American Coal Co. when the Secretary declined to provide further specific justification beyond a statement that the parties wished to settle amicably, referencing the “nature of the citations” and “uncertainties of litigation.”
 Preparation of a formal decision is pending, and the Commissioners are free to change their opinion in the written decision.
 The Secretary’s counsel, Sara Johnson, had argued on July 12 before Chairman Mary Lu Jordan, and Commissioners Patrick Nakamura, Michael Young, Robert Cohen and William Althen, that the Commission judges should take a sharply limited role in settlements compared with practice during the past 38 years.
 According to the Secretary, language in Section 110(k) in the Mine Act specifically requiring settlements to be approved by the Commission should be interpreted in the context of a “greater scheme,” and that legislative history referencing past abuses of the former penalty settlement process should be discounted. Johnson, on behalf of the Secretary, used similar arguments that have been rejected by the Commission, and its judges, since 1979.
 Some Commissioners in their discussion today noted that the Secretary had chosen to create a test case challenging some 35 years of practice, in that providing more information to the ALJ – as traditionally done for other initially rejected settlements –  would almost certainly have resulted in a settlement being achieved.
 “[T]his case may go beyond us,” Commissioner Althen observed. In fact, Associate Solicitor of Labor, Heidi Strassler, said in a May 2, 2014, memo, obtained by Mine Safety and Health News, that the Labor Dept. anticipated “interlocutory appeal to the Commission and likely to the Court of Appeals. The legal issues raised in the test case will therefore take several years to resolve,” Strassler told the Labor Dept. attorneys  in 2014.
 On Tuesday, Chairman Jordan asked Johnson to frame the Secretary’s argument and problems after the Commission’s 2012 decision in Black Beauty Coal Co.
 “Counsel, you said you were asking the Commission to revisit the standard…in Black Beauty. How would you describe that standard? And explain what standard you’re proposing,” Jordan asked Johnson.
 “So in Black Beauty,” responded Johnson, “the Commission said that judges have very wide discretion to reject the Secretary’s proposed settlements, and that Section 110(k) doesn’t set any limits on their ability to do that, other than the Secretary’s prosecutorial discretion to vacate a citation. And the Secretary is suggesting that the standard of review should be more limited than that. … So Black Beauty basically allows for sort of unbounded review of proposed settlements, and the Secretary is arguing that some of the factors that judges have been considering are improper after you look at the Secretary’s prosecutorial role under the Mine Act and the Commission’s review role.”
 Jordan responded back that she was concerned over the Secretary’s “boilerplate” language in the settlements, language, which has been sharply rejected in previous decisions, and for years.
 Johnson said that the Commission’s role was to ensure that a settlement did not present any conflict with Constitutional or statutory provisions outside of 110(k).
 Johnson also told the Commissioners on Tuesday that a “settlement can be used as a tool to change operators’ behavior. An ultimate goal of MSHA’s enforcement program is operator compliance with the Mine Act and the standards so that miners can return home safely to their families after every shift. And through settlement, the Secretary can negotiate proactive terms with operators to promote compliance,” Johnson said.
Johnson said the settlement process “allows agencies to self-correct. When MSHA inspectors issue citations and orders, they make the best on-the spot decisions they can with the information they have. And through the process of contest and litigation, additional considerations, whether legal or factual, can be brought to bear. Settlement allows for a dialogue between MSHA and operators so that adjustments to citations orders and penalties can be made that reflect both the law and the facts as supported by the evidence.”
 Commissioner Robert Cohen noted on Tuesday that this particular case did not involve any dispute as to whether the violations existed, or the degree of negligence, and Johnson admitted during the oral argument that, “In this case, the settlement terms were to maintain the paper as written, with a 30% reduction in…penalties, so this case does not make changes to the paper.”
 Johnson also did not address the fact that in this particular case the Secretary sought an across-the-board 30% reduction in the penalties, some of which were repeat violations of the same standard. For instance, the mine had violated §75.202(a) 106 times in the previous two year period; violated three specific safeguards issued under §75.1403  – 67 times, 72 times, and 56 times; or that in a ventilation violation, there was water up to 5 feet deep in a bleeder that took almost a month to pump out.
 In refusing to approve the settlement, Judge Moran issued a scathing rejection. “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… There is no legitimate basis to reduce any of these citations. … Nor can it be said that the cited matters are all negligible violations.”
 During Tuesday’s argument Commissioner Young said “everyone seems to acknowledge” that the case before the Commission “is an exceptional case.” MSHA professes a high degree of confidence in its penalty assessment procedure. If no additional facts are presented, “and all of a sudden there’s a 30% discount on that, how is the judge supposed to view that?  I mean, how is it an abuse of discretion” to want additional information?
 Johnson said the Secretary “would urge the Commission to articulate some boundaries.”
 In Tuesday’s argument there was a debate on whether an ALJ should factor in deterrence to try and prevent similar violation, Johnson was adamant that “deterrence” should not be considered by the ALJ when approving or disproving a settlement. “Deterrence is actually a factor that is more appropriate for [MSHA] to consider rather than [a judge].”
 Johnson also repeated several times that the Labor Dept. has limited resources. And while the legislative history of the Mine Act may indicated that the Commission judge’s have discretion to reject settlements, she said the Secretary doesn’t view the legislative history of the Mine Act “as controlling.”
 During Thursday’s meeting, Commissioner Robert Cohen stated, “The issue is really quite simple. The Secretary’s claim amounts to [chanting] the mantra of uncertainty of litigation,’ while the grand theoretic structure of the Secretary’s brief ignored the nature of the Commission as a special entity created by Congress, purposely with explicit authority over settlement agreements.” Cohen said he would be concerned if an ALJ tried to impose his or her own settlement agreement upon the two parties, and said if that were to happen it should be brought to the Commission’s attention, but there has not been any indication this is occurring.
 Johnson also claimed on Tuesday that the number of settlements have gone up dramatically in the past five years, while in fact, commission judges have rejected only .04% – or 18 of 35,501 settlement cases over the last five years.
 But even if the percentage of rejected settlements has not risen, “there are still systemic costs,” Johnson said.
 “They all get approved eventually, right?” Althen asked.
 “Except for this one,” Johnson said, adding, “Not exactly, because in some cases…sometimes the Secretary goes to trial, and then in other cases, the Secretary vacates a citation.
 Althen then asked if the Secretary “would vacate a legitimate violation because they don’t want to try the case?” Would that “have to based on a principled decision that the case should be vacated?…They wouldn’t vacate a citation just because they didn’t feel like trying it?..”
 “If there are weaknesses in the case, and we’re not getting a settlement through and we don’t think we can prevail at trial, that might encourage the Secretary to vacate rather than go to trial,” Johnson said.
 Commissioner Althen also asked Johnson if an ALJ should determine if a settlement is fair, adequate or reasonable given the facts of a case, but Johnson said, “The Secretary has taken the position that adequacy is not an appropriate factor.”
Heckler v. Chaney and Secretary’s Comparisons
 The Secretary in his brief and in the oral argument before the Commission, said that the case Heckler v. Chaney supports the Secretary’s contention that the Secretary’s decision to settle a case is not reviewable by the Commission.
 In Heckler v. Chaney, 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 this case before the Commission, MSHA was required by law to take action when inspectors saw violations, and did in fact take action, and the company did in fact contest the cases before the Commission. Parties supporting Commission ALJs’ roles in the settlement procedures, point out that under Sect 110(k), those penalties for those violations can only be compromised, mitigated, or settled with the approval of the Commission, according to Sec. 110(k) of the Mine Act.
 Referring to Heckler v. Cheney, and how it fits into this case,  Commissioner Cohen asked Johnson, “So, your reliance on Heckler v. Cheney assumes no reviewing role. And then you say, ‘Well, there’s some reviewing role because of 110(k),’ and doesn’t that kind of bastardize Heckler v. Cheney, and take it out of its roots, and the specific context that it rose in?”
 Johnson said the Secretary disagreed.
 “When Congress also established the split enforcement scheme in the Mine Act, in addition to 110(k) we have the overall structure of the Mine Act, and the courts have been very clear in that, under that structure, that enforcement authority resides with the Secretary, policy making and enforcement authority is the exclusive provenance of the Secretary, and that the Commission’s role is adjudicatory, fact-finding, a neutral arbiter. And so the kinds of considerations that go into the decision to reach a settlement rather than proceed with an enforcement action are better suited in the Secretary’s enforcement role. And so even though Section 110(k) provides for [Commission] approval, that approval has to be interpreted in the context of that greater scheme, which allocates those distinct and both important responsibilities, but they’re different.”
 Cohen then asked Johnson during the oral argument, “Your entire argument is predicated on the notion that the Commission is analogous to a generalist court, correct?”
 “Yes,” Johnson said, but then Cohen shot back, “You use the phrase ‘generalist court’ repeatedly in your brief. Now how does that square with Section 113(a) of the Act, which provides that the Commission ‘shall consist of five members, appointed by the President by and with the advice and consent of the Senate from among persons who by reason of training, education or experience are qualified to carry out the functions of the Commission under this Act’? The five of us who are up here are not generalist judges. We were appointed because of the qualifications that are set forth in Section 113(a).  Doesn’t that change the equation totally?”
 Johnson answered, “I certainly respect that all of you and the administrative law judges bring expertise about mining to your jobs, and that’s why you’re here…” But Cohen cut in again, “…we bring expertise, we are required by statute, the Senate would not confirm, the President would not appoint us but for this experience.”
Johnson said she was trying to compare the role of the Commission to that of a court.
 “Section 110(k) speaks in the same terms as it does about the Commission’s approval role as it does about the courts’ approval role in settlements,” Johnson said. “So the first sentence of Section 110(k) says that no penalty shall be compromised, mitigated or settled except with the approval of the Commission, but the second sentence goes on to say that final penalties of the Commission shall not be compromised, mitigated or settled except with the approval of the court. And Congress, in speaking of the approval role, gave the Commission and the courts of appeal the very same – it is parallel language, right? And so that strongly suggests that the two roles should be considered similarly.”
 “Okay. But stop there for a second and look at what Congress did” Cohen said. “Your brief contains  10 pages…discussing the legislative history. And it quotes sections of the legislative history. But nowhere in that 10 pages does it mention Congress’s finding that the abuses involved in the unwarranted lowering of penalties as a result of off-the-record negotiations, is why Section 110(k) was created. You never mention in there that Congress found that there were abuses in the settlement of penalties.”
 Johnson finally did acknowledge “there were abuses under MESA…” but Cohen said, “You never mentioned that in your brief. You never acknowledged that there were abuses. Correct?”
 Johnson responded back, “If you’re telling me that we didn’t, I will recognize that.”
 Cohen then continued, “All right. Now, so the same Congress that acted because there were abuses, you’re saying, because of the language in the section, which you analogize to the language in other sections of other acts, you’re saying that Congress did not want any more oversight than what was in those other acts. And it seems to me that what you are in effect saying was that Congress was totally incompetent in passing the Mine Act for one reason, and then writing language which went a totally different direction.”
 “I would submit that Congress did not, in passing the Mine Act and in writing 110(k), did not adopt a policy that disfavored settlements. It says that it recognizes that settlements often serve a valid enforcement purpose,” Johnson answered.
 “And the Commission recognizes that, and approves settlements, thousands of them, correct?” Cohen asked Johnson, who said “the standard in Black Beauty goes beyond the Commission’s adjudicatory role.
 Chairman Jordan then asked of Johnson, “How exactly does it do that?” and Johnson said it was because the judges were “asking the Secretary to show why the original paper should have been lowered…”
 Commissioner Althen then said, “Tens of thousands of settlements have been approved…. So it seems to be what you’re saying is the real problem is not that we can’t settle cases, but the judges are being a pain in the neck about doing it… And so – you’re getting settlements, right? What’s the problem?”
 Johnson said, “there’s three problems with this basis of the compromise requirement. The first is that the basis of the compromise might be bigger than an individual citation. So, in a global settlement, the basis for the compromise might be across multiple citations and not adjusting the gravity or negligence for each individual citation.
 “The second is that the basis of the compromise might be something that’s inappropriate for the Secretary to share with opposing counsel and the judge, so something that implicates attorney-client privilege, or  deliberative process, or government informer privilege. One example might be would be if MSHA has an inspector that retired so we don’t have an available witness. That doesn’t reflect poorly on MSHA, but it does affect our case, and that might increase our likelihood of pursuing a settlement. But to reveal that to operator’s counsel and to the judge means that for all of the other citations out there issued by that same retired inspector, we might be compromised in our ability to get the same deal.
 “And the third problem with this basis of the compromise requirement is that what it really asks the Secretary to do is to polish up the operator’s defenses to make them sound persuasive to the judge…. If the judge denies the settlement, and orders a hearing, then we reveal the weaknesses in our case to the judge, lend credibility, lend legitimacy to what the operator has said, right? And it also means that we’re putting resources into justifying these self-corrections on lower-priority matters rather than aggressively pursuing the higher-priority matters. So for all of those reasons, this basis of the compromise on each individual citation creates problems in individual cases and overall.”
 Some Commissioners indicated at the meeting that they understood the Secretary’s factoring-in practical realities including resource considerations in a decision to settle. However, Commissioner Young also said, “there is a distinction between the public interest and the government’s interest” in some things, including convenience. Young said he was concerned “about the miners who work at the mines, whose interests have to be considered in approving a settlement…. don’t our judges have the duty to ensure that the absent miners who may or may not be party to the case that’s being settled have their interests represented, just as a check-off on the Secretary’s authority – not as a rubber stamp, which is kind of what the class action cases would suggest?”
 “Our position is that the determination, which involves the allocation of resources, the assessment of the strength of the evidence, the decision to proceed with one case over another, and sort of weighing all of those factors together, and figuring out what is most protective for miners, which is MSHA’s interest. That determination is better made by the enforcement agency rather than the Commission, because the Commission is just looking at the individual … reviewing the settlement reached in the individual action,” Johnson said.
 Chairman Jordan asked Johnson, “Congress, don’t you think, put 110(k) in, and we definitely have a role?”
 Johnson said the Secretary is not arguing that the settlements are unreviewable entirely.
 “The courts have been very clear in that, under that structure, that enforcement authority resides with the Secretary, policy making and enforcement authority is the exclusive provenance of the Secretary, and that the Commission’s role is adjudicatory, fact-finding, a neutral arbiter. And so the kinds of considerations that go into the decision to reach a settlement rather than proceed with an enforcement action are better suited in the Secretary’s enforcement role. And so even though Section 110(k) provides for approval, that approval has to be interpreted in the context of that greater scheme, which allocates those distinct and both important responsibilities, but they’re different…. The standard of review that the Secretary’s advancing – it’s not a rubber stamp, there are some teeth in there but they are objective factors to review the settlement rather than putting the Commission in the Secretary’s enforcement bailiwick.”
 That answer, however, was unconvincing to Commissioner Nakamura, who stated at Thursday’s meeting that “the Secretary “has drawn a line in the sand” and that his argument amounted to a “suggestion that we read Section 110(k) out of the statute.”
 Nakamura said the Mine Act “places determination of final penalties with the Commission, even in uncontested cases, while MSHA can only propose a fine.  Even without that section, the Commission would possess inherent authority including the “authority of any tribunal to determine if any settlement is tainted by corruption or collusion,” Nakamura asserted. Section 110(k) has to mean something more than that,” he stated. As to the question of whether the Secretary is the final arbiter of deciding whether a settlement is in the public interest, Nakamura also noted that the Mine Act “equates” the public interest with the interest of the miner and specifically allows miners to question actions by the Secretary.
UWMA Argues in Support of Commission’s Role
 Laura Karr, presenting on behalf of the United Mine Workers, stressed during Tuesday’s meeting that “one of the issues that Congress wanted to solve when they passed the Act was a history of secretive, off-the-record negotiations about settlements…that sometimes gave the appearance of improper collusion between the government and mine operators. So Congress’s response was to create…in the Act a split enforcement scheme under which the Secretary has the power to file charges against operators, withdraw charges and decide to settle charges, but the Commission has the power to do a meaningful evaluation of the settlement proposals and ultimately to approve or reject them. In this case the Secretary’s decided to challenge the system after it being in place and workable for 35 years and argue that they’re not required to give the Commission any of the factual information that is necessary to do that settlement review. In fact according to the Secretary, the Commission can [make?] only the most cursory review of settlement proposals.”
 Commissioner Nakamura asked Karr, “How do you respond to Ms. Johnson’s arguments … [that] sometimes there’s practical problems in telling the judge, publicly saying why it is the agency is settling the case? I mean a lot of us have practiced law before, and we’ve had settlements. Sometimes the reason is, my client lied to me…our case is going to crumble, so let’s get the best settlement we can. And I wouldn’t want to stand in open court and say that. So … how does the Solicitor respond?”
 Karr stressed that over the years, and the numbers indicate that “the Secretary has not had a problem getting around issues like that. … [C]learly in a majority of cases they are able to satisfy the judge’s curiosity, and give the judge enough to feel like he or she can make a reasoned decision on the settlement.” Kar pointed out that in a settlement the Secretary can in fact explain concerns about the case or witnesses, and the judges don’t take “issue with that sort of explanation.”
 Commissioner Althen asked Karr if she thought, in the “real world,” it was fair to assume that the Secretary had “an unlimited budget to try hundreds and hundreds and hundreds of cases?” Althen stressed that the Secretary had to deal with “real world” budget issues. Karr said it wasn’t an issue addressed in their brief.
 Althen asked Karr if the union would accept a “standard of fair, adequate, reasonable and appropriate under the particular facts,” but Karr stressed that the union doesn’t think there needs to be “any single standard,” for the settlements.
 Karr stressed that the union supports the policy and standards used for the last 35 years. Karr said the union was not there to argue for a defined standard on settlements. “What we’re here to do is to defend the right of the Commission to make these decision on and not have the Secretary take over the responsibility of telling the Commission what standard they should apply.”
 Young asked Karr about the possibility of a judge over stepping his or her role.
 “That’s certainly a possibility that’s out there, but the unions would assert that the way to correct that is a case-by-case basis. No one is arguing that the Secretary can’t challenge individual ALJ decisions, to reject settlements, and argument about judge overstepping his bounds and his discretion, we see the Commission is more than capable of resolving those,” Karr stressed. “We know that since the time the Act was passed, the Commission has had a plan in place – its procedural rules – to approve settlements. It’s followed that plan successfully in thousands of cases over the years…. And we know that the legislative history, that Congress had two main reasons for giving the Commission this active role… one being to avoid those secretive, off-the-record, sometimes collusive negotiations that happened under the predecessor statute, and the other to ensure that no settlement occurred without somebody making a reasoned decision that it promotes the public interest in operator compliance.”
 Commissioner Young asked Karr how the Commission was to “ensure without a standard or some kind of recognition of the boundaries of the judge’s discretion that the settlement is appropriate while respecting the Secretary’s policy and prosecutorial prerogative?”
 “Because of the text of 110(k) and the legislative history,” Karr said. “We know that the content of that settlement…that’s not solely a prosecutorial thing. That is an adjudicative process that’s assigned to the Commission.” In terms of individual cases, Karr said the records shows that the “ALJs [are] doing this just fine and it’s worked out for miner safety and health since the Act’s inception.” Karr also stressed that the union wants to see flexibility, and for the ALJs to use “reasoned analysis” as they have done over the last 38 years.
 Karr said the union was concerned that “The Secretary really is trying to take over the Commission’s responsibility of deciding how it is going to approve settlements, how it is going to evaluate them,” and the Secretary has not given any reason as to why his interpretation is better than “the interpretation that the Commission has developed over 35-plus years of practice.”
 In a response to a comment by Commissioner Young regarding Heidi Strasseler’s memo of May 2, 2014, on language that should be placed in each settlement, Karr said, “It clearly was not tailored to the facts at hand, it wasn’t tailored to the citations they were dealing with, and really was not responsive at all to what the judge would ask for…What really happened here?  What was the Secretary’s thought process? How did the Secretary think that this course of action satisfies the purposes of the Act?..A response from the Secretary that ‘I don’t have to give you any factual information at all’ really is not appropriate.”
 Karr also stressed that since the beginning of the Commission, “ALJs have been successfully engaging in dialogue with the Secretary since the Act began successfully getting – even post Black Beauty –  successfully getting information that satisfies judges enough to approve these settlements.”
 “No one [is] challenging [the] Secretary’s discretion to file charges, withdraw or decide to settle, Karr said. “What we are doing is underlining and protecting the Commission’s role…to evaluate and approve those settlements.” Karr said, the Secretary has not given any good argument for upending 38 years of successful settlement practice, and all five Commissioners appeared to agree.
 
Secretary of Labor, MSHA v. The American Coal Co., Docket No. LAKE 2011-13

 

Case Law on MSHA/Operator Settlements

For the public record, here is case law on settlements under the Mine Act as digested in the Mine Safety and Health News Cumulative Digest. The very first case on the issue was back in 1979 — 37 years ago — and involved Pomerleau Bros., Inc. [ALJ (1979) WILK 79-4-PM] (see: 1 MSHC 1770). We have not included all settlement cases, since many do not involve the topic of ALJ approval.

35.40 Settlements

FMSHRC

  • An ALJ improperly rejected a settlement in a discrimination case where he refused to accept the Secretary’s penalty reduction of 50% and certain settlement language. The judge said the Secretary’s $35,000 penalty in the settlement, reduced from MSHA’s $70,000 proposed penalty, was inadequate where the company had filed a private lawsuit in state court against a miner who had filed a discrimination complaint against the companies. The Judge was required to consider the settlement agreement as a whole, giving due consideration to the non-monetary aspects of the decision as well as to the monetary aspects. The payment of a reduced penalty was balanced by other non-monetary aspects of the settlement, such as the dismissal of the suit with prejudice, and the posting and training requirements.” SECRETARY OF LABOR o/b/o REUBEN SHEMWELL v. ARMSTRONG COAL CO. INC., and ARMSTRONG FABRICATORS INC., 5/13/2014, Docket No. KENT 2013-362-D, 36 FMSHRC 1097; 20 MSHN D-1360 (ALJ Feldman). (For previous decisions on the Shemwell case see: 20 MSHN D-599, 20 MSHN D-1024, 20 MSHN D-2256, 20 MSHN D-2561, 20 MSHN D-2566, 20 MSHN D-2941).
  • 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. Black Beauty Coal Co., 8/20/2012, Docket No. LAKE 2008-327 et al., 34 FMSHRC 1856, 19 MSHN 489.
  • The plain language of section 110(k) of the Mine Act explicitly authorizes the Commission to review a proffered settlement of a contested penalty. Section 110(k) provides that “[n]o 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.” Black Beauty Coal Co., 8/20/2012, Docket No. LAKE 2008-327 et al., 34 FMSHRC 1856, 19 MSHN 489.
  • 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.
  • In order to ensure penalties serve as an effective enforcement tool, prevent abuse, and preserve the public interest, Congress authorized the Commission to approve the settlement of civil penalties. To remedy past abuses under the 1969 Act, Congress intended 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. Black Beauty Coal Co., 8/20/2012, Docket No. LAKE 2008-327 et al., 34 FMSHRC 1856, 19 MSHN 489.
  • The Secretary’s argument that a settlement offer is a revised proposed penalty was rejected. The Secretary argued that she cannot be required to submit additional information to a Judge because the last sentence of section 110(i) provides, “In proposing civil penalties under this Act, the Secretary may rely upon a summary review of the information available to him and shall not be required to make findings of fact concerning the [statutory penalty] factors.” 30 U.S.C. § 820(i). Such language unambiguously applies only to the proposal of penalties, i.e., the Secretary’s duty under section 105(a) to propose penalties. The penalty proposal process ends when the proposed penalty assessment is sent to the operator. Once such a proposed penalty is contested, Commission jurisdiction attaches, the Secretary is no longer proposing a penalty, and the last sentence of section 110(i) does not apply. Black Beauty Coal Co., 8/20/2012, Docket No. LAKE 2008-327 et al., 34 FMSHRC 1856, 19 MSHN 489.
  • Commission Procedural Rule 31 provides that a “proposed penalty that has been contested before the Commission may be settled only with the approval of the Commission upon motion,” and expressly requires a party seeking the approval of a settlement to submit “[f]acts in support of the penalty agreed to by the parties.” 29 C.F.R. § 2700.31(b)(3). Rule 31 further provides that any “order by the Judge approving a settlement shall set forth the reasons for approval and shall be supported by the record.” 29 C.F.R. § 2700.31(c). Rule 65 provides in part that a “Judge may require the submission of proposed findings of fact.” 29 C.F.R. § 2700.65. Thus, a Judge’s authority to reasonably request additional information to justify a proposed settlement is fully supported by both the Act and the Commission’s procedural rules. Black Beauty Coal Co., 8/20/2012, Docket No. LAKE 2008-327 et al., 34 FMSHRC 1856, 19 MSHN 489.
  • The procedural rule promulgated by the Commission to implement section 110(k) is devoid of any limitations regarding what a Judge may or may not consider in approving a settlement. Commission Procedural Rule 31(g), simply states that “[a]ny order by the Judge approving a settlement shall set forth the reasons for approval and shall be supported by the record.” 29 C.F.R. § 2700.31(g). Notably, the Commission amended this rule in 1980, as a prior version had required Judges to include in decisions approving penalty settlements a discussion of the six statutory criteria for penalty assessments set forth in section 110(i) of the Act. In deleting this requirement, the Commission stated the amendment was “intended to enhance the flexibility of the Judges to approve settlements.” 45 Fed. Reg. 44301, 44302 (1980). Such flexibility should also include the option of explicitly taking into account the deterrent effect of the penalty when reviewing a settlement proposal. Black Beauty Coal Co., 8/20/2012, Docket No. LAKE 2008-327 et al., 34 FMSHRC 1856, 19 MSHN 489.
  • A settlement was in violation of interim Commission procedural Rule 31 where the operator did not approve the settlement motion submitted by the CLR, and said the settlement agreement did not reflect what it had agreed to in settling the citations. The company’s motion to vacate the two decisions constituted a timely filed petition for review, the ALJ’s July 28, 2010 decision was vacated and remanded back to her for further proceedings. NELSON QUARRIES, 9/3/2010, Docket No. CENT 2009-663-M and CENT 2009-664-M; 32 FMSHRC 1098.
  • An ALJ’s approval of a settlement agreement in a discrimination case was vacated, and it was found that the settlement motion was “prematurely filed” because the miner had not agreed to the settlement provisions. A settlement motion must represent “a genuine agreement between the parties, a true meeting of the minds as to its provisions.” Also, under the commission’s rules, a miner in a discrimination case who is represented by the Secretary of Labor is a “party.” The case was reopened and remanded for additional proceedings. Sec’y of Labor on behalf of Pendley v. Highland Mining Co., Docket No. KENT 2006-506-D, 29 FMSHRC 164 (April 3, 2007), 14 MSHN 170 (April 29, 2007).
  • An operator’s unopposed request to reinstate a case dismissed by an ALJ under the terms of a settlement agreement was granted. The operator asserted that it received a copy of the settlement motion on the same day that the ALJ dismissed the case, and did not have an opportunity to verify whether the settlement terms correctly reflected the parties’ agreement. The operator negotiated the terms of the agreement over the telephone, and disputed the terms of the agreement that was sent by the Solicitor to the ALJ. RBS Inc., Docket No. WEVA 2004-136-M, 26 FMSHRC 751 (Sept. 9, 2004), 11 MSHN 339 (Sept. 20, 2004
  • An ALJ’s rejection of a settlement agreement between the Solicitor and an operator and its security company based on his concerns about whether there was adequate abatement of the violations which contributed to a security guard’s death from carbon monoxide poisoning was vacated and the case was remanded for reconsideration. The adequacy of the vehicle inspection program proposed in the settlement was irrelevant to the issue of whether the companies had abated the violations of § 77.404(a) and § 48.31(a) in good faith, and the ALJ was wrong to reject the settlement on this ground. The citations were “narrowly drawn,” did not allege a practice of shoddy vehicle maintenance or a general failure to provide hazard training, and “did not trigger a broad duty of abatement.” Madison Branch Management, Docket Nos. WEVA 93-218-R et al., 17 FMSHRC 859 (June 12, 1995), 2 MSHN 366, D-167 (June 30, 1995).
  •  MSHA has the authority to vacate citations without the approval of the Commission and its judges, and an ALJ’s order refusing MSHA’s request to dismiss civil penalty proceedings was vacated. In 1985, the U.S. Supreme Court ruled in Cuyahoga Valley Ry. Co. v. United Transp. Union that the Sec’y of Labor has unreviewable discretion to withdraw a citation charging an employer with a violation of the OSH Act. The commission’s 1985 holding in Youghiogheny & Ohio Coal Co. that the agency must show “adequate reasons” to support dismissal of a case was overruled based on the Cuyahoga Valley Ry. case. RBK Construction Inc., Docket Nos. WEST 93-154-M, 15 FMSHRC 2099 (Oct. 25, 1993).
  • 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. Consolidation Coal Co., WEVA 91-43, 13 FMSHRC 748 (Apr. 30, 1991) (ALJ Fauver).
  • — Judge’s approval of settlement is vacated where operator raised questions regarding parties’ agreement as to statutory penalty criteria of gravity and negligence; despite operator’s acquiescence in ultimate approval of Secy.’s settlement motion, there is some disagreement between parties whether precise terms and further proceedings before judge are necessary. Peabody Coal Co. [ALJ (1986) LAKE 83-73] 4 MSHC 1119; 8 FMSHRC 1265
  • Once ALJ jurisdiction attaches, Comm. will not grant automatically motions to dismiss, modify, or vacate pending action; however, Labor Secy. cannot be forced to pursue discrimination complaint after convinced filing in error, and may withdraw case, provided withdrawal request supported with statement or reasons. Roland, Robert K. [ALJ (1985) WEST 84-46-DM(A)] 3 MSHC 1770.
  • The 1977 Mine Act makes very clear that penalty proceedings before the Commission are de novo. The Commission is not bound by penalty assessment regulations adopted by the Secretary but rather that in a proceeding before the Commission the amount of the penalty to be assessed is a de novo determination based upon the six statutory criteria specified in section 110(i) of the Act, and the information relevant thereto developed in the course of the adjudicative proceeding. Sellersburg Stone Co., 5 FMSHRC 287 (March 1983).
  • Judge lawfully disapproved parties’ joint proposed settlement agreement containing exculpatory language that could have prevented consideration of alleged violations involved in future proceedings under Act. Amax Lead Co. of Missouri [ (1982) CENT 81-63-M] 2 MSHC 1716.
  •  ALJ properly approved settlement agreement containing exculpatory clause stating that there was no admission of violation of FMSHA because parties are free to admit or deny fact of violation in settlement agreements. Central Ohio Coal Co. [(1982) LAKE 81-78] 2 MSHC 1766.
  • ALJ erred in approving proposed penalty settlement of parties where parties’ stipulation shows that alleged violation did not occur. Co-op Mining Co. [ (1980) DENV 79-1-P] 2 MSHC 1067.
  • Judge’s failure to state reasons for approval of settlement requires remand of case to judge for entry into record of settlement agreement, statement of reasons for approval of agreement, and statement of facts of record supporting judge’s determination. Republic Steel Corp. [PITT 78-156-P et al.(Nov. 27, 1978)] 1 MSHC 1709.
  • Judge’s decision approving settlements in which operator was ordered to pay 10% of originally proposed penalties are affirmed; motions to approve settlements set forth information relevant to criteria, and discussed detrimental effect that originally proposed penalties would have no effect on the operator’s ability to remain in business. Davis Coal Co. [(1980) HOPE 78-627-P et al.] 1 MSHC 2305.

IBMA

  • Operator’s past payments of proposed orders of penalty assessment is admissible as evidence of its history of violations, since such payments is not satisfaction of offer of compromise or settlement and does not remove from operator’s record notices of violation upon which penalties were based. Valley Camp Coal Co. [IBMA (1972) 72-22] 1 MSHC 1043.

ALJ

  • A settlement motion was rejected where none of the MSHA inspector’s concerns in the citation were addressed in the settlement motion. The Secretary did not disclose whether discovery had taken place, and only offered the “claim” of the company that negligence and unwarrantable failure findings, and mitigating factors. However, the Secretary’s reasoning was not supported by the evidence that had been offered by the MSHA inspector in the language of the citations and orders. It was noted that the inspector had addressed mitigating factors in the closeout conference, as evidences in the language of the citations and orders. The Secretary’s motion of a 40% reduction in the fines did not comport with the statutory aims of the Mine Act. REMINGTON LLC, 2/26/2015, FMSHRC(J) No. WEVA 2014-315; 22 MSHN D-397 (ALJ Moran).
  •  A settlement motion was rejected where the Secretary did not offer any explanation for a change in the negligence of the violation from moderate to low. “Low negligence involves considerable mitigating circumstances.” While the amount of the fine of each citation is low, and the fine remained the same, there was absolutely no reasoning offered for the compromise on the negligence. The Secretary stated in the settlement, “in light of the fact that the Secretary has unreviewable authority to modify or to vacate citations or orders, [the Commission has] no discretion to reject the proposed disposition of these cases.” While the Mine Act does not prevent the Secretary from vacating citations and orders, the modification of those enforcement tools is subject to the Commission’s review. The Secretary needs to identify the mitigating circumstances originally listed, and then identify the “ considerable mitigating circumstances” that brought about the proposed change in the settlement. JANNEY PAINTING, 2/9/2015, FMSHRC(J) No. VA 2014-28-M; 22 MSHN D-318
  •  Two settlement motions submitted one year apart for one case were rejected twice where the Secretary proposed a 30% across-the-board reduction of 32 citations and orders without any changes in gravity or negligence of the citations. Some of the citations were for repeat violations of the same standard – for instance 106 repeat violations of §75.202(a), and three repeat violations for coal accumulations under §75.400 in this case alone. The judge said there was no legitimate basis to reduce any of these citations, and the cited matters were not negligible violations. The ALJ rejected the Secretary’s reasoning that a reduced penalty was appropriate in light of the Secretary and operator’s interest in settling the case amicably without further litigation. The judge found the Secretary’s motion contained “gross re-wording” of the Mine Act, and crossed an ethical line for proper advocacy – containing not a single word about the health and safety of the miners. The American Coal Co., 5/13/2014, Docket No. LAKE 2011-13, 36 FMSHRC 1349; 21 MSHN 344 (order denying settlement motion) (ALJ Moran).
  • Under Sect. 110(k), when the Secretary and operator seek to reduce a penalty or findings, a judge must understand the basis for a compromise so that the judge can fulfill his or her statutory obligation under the Mine Act. Settlements should not be based on the need to save litigation and collection expenses, and those factors should play no role in determining settlement amounts. The American Coal Co., 5/13/2014, Docket No. LAKE 2011-13, 21 MSHN 344 (order denying settlement motion) (ALJ Moran).
  •  A settlement must not weaken MSHA’s enforcement capabilities and jeopardize the health and safety of miners. The American Coal Co., 5/13/2014, Docket No. LAKE 2011-13, 21 MSHN 344 (order denying settlement motion) (ALJ Moran).
  • An ALJ’s authority to reasonably request additional information to justify a proposed settlement is fully supported by the Mine Act, Commission rules, and legislative history. The American Coal Co., 5/13/2014, Docket No. LAKE 2011-13, 21 MSHN 344 (order denying settlement motion) (ALJ Moran).
  • An ALJ rejected a settlement for violations where the CLR’s motion lacked adequate justifications for reductions in the penalties. There were instances where 25% to 40% reductions were proposed for damaged cables with exposed copper wires, ventilation controls not working properly, excessive methane, improper rock-dusting and float coal dust, lifelines entangled with other cables, and a number of miners affected by the violations. CONSOLIDATION COAL CO., 8/19/2013, order denying settlement motion, Docket No. VA 2010-564; 20 MSHN D-2972 (ALJ Moran).
  • An order denying a CLR’s appearance and order denying a proposed settlement was issued after the CLR sought a reductions ranging from 30% – 35% in two dockets, and offered similar reasons as were given in previous motions for other cases with other mines. The CLR claimed that due to a large workload, there was no longer time to hold health and safety conferences where citation findings could be changed. The settlement would have changed negligence, S&S and the number of miners affected by the violations, without any adequate justification. The ALJ was equally critical of the fact that the CLR would require the use of a heat gun in order to determine if a violative condition involving accumulations of combustible materials was S&S. A second settlement was submitted by a DOL attorney, and accepted by Judge, where the settlement outlined specific reasons for changes in findings, and other citations were accepted as written. In the final approved agreement, total penalties were reduced between 28% and 31%. Coal River Mining, 4/4/2013, Docket No. WEVA 2012-853 and WEVA 2012-1697 (unpublished).
  •  A settlement motion was rejected where the Secretary and operator filed a motion to lower total penalties by 69%. Violations included fire sensors that were not working on the belt line, CO detectors did not work, there was a lack of ventilation as required in the ventilation plan, there were accumulations of combustible materials, the roof bolter was not in permissible condition, and there were escapeway violations. In one case of an accumulation violation where there were rollers turning in coal and the inspector found the area “hot to the touch,” the CLF proposed to re-designate the violation as non-S&S because the inspector did not use a heat gun to measure the temperature. The CLR modified a majority of the citations by eliminating the S&S finding, reducing the negligence to low, and changing the number of miner affected by the violation. The CLR also stated that management was not aware of the violations, that violations were due to the “rigors of mining,” or there were other safety measures in place. In rejecting the settlement, the ALJ said the CLR did not consider the appropriate facts that related to the gravity of the violations, and the information provided for the settlement did not meet the penalty criteria of 110(i). MARFORK COAL CO., INC., 3/22/2014, Docket No. WEVA 2012-941, 35 FMSHRC 738 (ALJ Miller).
  •  A CLR was denied permission to practice before the Commission where the ALJ said it was apparent that the CLR did not understand what constitutes S&S, as well as the meaning of negligence, based on the CLR’s settlement motions. After the first rejection, the ALJ offered the CLR and opportunity to study cases of S&S findings for guidance, and it was suggested that she review the MSHA regulations regarding the meaning of “negligence.” The CLR responded by stating that MSHA inspectors were “over-writing” citations. In addition, because of the high caseload, CLR said there was no longer have time for health and safety conferences where operators are afforded the opportunity to get incorrectly cited citations modified prior to the assessment and litigation process. She stated that in making the modifications, she “had to be fair to both sides.” Accordingly, she was treating the contest proceedings as if they were a pre-penalty contest. Once the penalties are contested, the ALJ stressed they are no longer in the prehearing penalty and safety conference phase, and the criteria the CLR was using was not appropriate under the criteria set forth under 110(I) of the Mine Act. Marfork Coal Co., 3/22/2013, Docket No. WEVA 2012-941 et al., 35 FMSHRC 738 (ALJ Miller).
  • A settlement motion was denied where the CLR sought to change the citations to reflect that the contractor was responsible for the violation, and not the operator. It is well settled case law that the ALJ does not have the authority to make this change, and the settlement motion was denied. SUNOL AGGREGATES, 11/21/12, Docket No. WEST 2012-473-M, 34 FMSHRC 3012 (Chief ALJ Lesnick).
  •  A settlement motion was rejected where the DOL attorney did not provide any facts to support overturning the MSHA inspector’s S&S finding, and a reduction in the penalty from $971 to $500 for a violation of the mine’s Emergency Response Plan. Commission Rule 29 C.F.R. § 2700.31(b)(1), mandates that for each violation, the “motion to approve a penalty settlement” must include “facts in support of the penalty agreed to by the parties.” The Secretary argued it was within her discretion to authority to change the S&S status of a contested citation at any time prior to hearing. However, 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, and the Commission lacks jurisdiction to review such pre-contest settlements. However, once the operator contests the Secretary’s proposed assessment of penalty, Commission jurisdiction attaches. The Mine Act’s Section 110(k) provides for Commission oversight of settlements where the Secretary has agreed to compromise or mitigate a proposed penalty. The Act provides for this independent review to guard against possible abuses of the Secretary in proposing settlements that are inconsistent with the public interest or the Act’s objectives. Dickenson-Russell Coal Co. , 10/15/2012, Docket No. VA 2012-397; 34 FMSHRC 2868; 19 MSHN 590 (ALJ McCarthy) .
  •  A global settlement was approved by two ALJ’s where a new corporate owner withdrew contest to thousands of citations and orders of the previous corporation, and agreed to pay the penalties in full for all citations and orders related to the explosion at the Upper Big Branch Mine. The global settlement of civil penalties was also part of a criminal settlement, in which the new parent corporation agreed to pay a total of approximately $209 million as part of the overall settlement, that included $19.8 million in MSHA penalties, $46.5 million in restitution to the families of the 29 victims and another $48 million to fund mining research. Although a “global settlement,” the Secretary stated she accurately evaluated the gravity and negligence in proposing a penalty for each docket included in the motion. While approving the global settlement, the ALJs stated they did so “with great caution,” with assurances that the former Massey mines are taking the necessary steps to assure compliance with MSHA regulations, thereby providing a safer working environment for all of their miners. PERFORMANCE COAL CO. and NUMEROUS FORMER MASSEY MINES; 3/7/2012, Docket No. WEVA 2011-1934 et al., 34 FMSHRC 587 (Chief ALJ Lesnick with ALJ Miller).
  • A settlement was rejected where there was a violation of the rock dusting standards under§75.403.The Secretary requested that the citation be modified to change the classification of the citation from a 104(d)(1) citation to a 104(a) citation and to reduce the level of negligence from “high” to “moderate.” The modification was accompanied by a reduction in the penalty from $13,609 to $3,690. No factual basis, or mitigating circumstances was provided to justify the proposed modification to the citation or the resulting change in penalty. ROCK N ROLL COAL CO., 1/10/2012, Docket No. WEVA 2011-862; 34 FMSHRC 319 (ALJ McCarthy).
  • The an attorney for the Secretary was issued a stern warning and reminded of Commission rules where he failed to submit requested information for a settlement. The Secretary’s argument that requiring a factual basis would compromise the Secretary’s thought processes, legal theories, or work product privilege. The factual basis for a settlement does not need to include the thought processes, legal theories, or work product of the Secretary to provide sufficient guidance as to whether the settlement effectuates the purposes of the Act. It needs to include a proffer of facts sufficient to justify the settlement. Such facts generally are not encompassed by the work product privilege, which applies to documents prepared in anticipation of litigation, not settlement. See, e.g. ASARCO, Inc., 12 FMSHRC 2548, 2557-58 (December 1990). The privilege is intended to prevent an unfair advantage to the opposing party. There is no such advantage to be gained in settling a case in the public interest. And if, for example, the Secretary agrees in a settlement that there is some validity to the respondent’s arguments, such an admission is not admissible if the settlement is rejected and the case heard. ROCK N ROLL COAL CO., 1/10/2012, Docket No. WEVA 2011-862; 34 FMSHRC 319 (ALJ McCarthy).
  •  A settlement motion reducing a proposed penalty from $5,000 to $100 was rejected where a company failed to report to MSHA for 6.5 hours a power outage that affected two hoists at an underground salt mine. In support of the settlement motion, the CLR stated that the “Secretary has determined that the violation was not subject to penalties defined in SECTION 5 of the MINER ACT of 2006,” and the power outage was not subject to the immediate notification requirement of §50.10(a), but subject to §50.10(d). Here, the accident at issue was that the mine “experienced a power outage affecting both hoists.” In rejecting the settlement motion, the judge said the CLR provided no facts upon which he could assess the likelihood of whether the power outage and hoist problems could have potentially led to an injury or entrapment with “a reasonable potential to cause death,” and in the absence of any such facts, it was impossible for him to conclude that the Secretary had a reasonable basis for her determination. MORTON SALT DIVISION, 1/18/2012, Docket No. LAKE 2010-968-M, 34 FMSHRC 327 (Chief ALJ Lesnick).
  •  A settlement was rejected where a company failed to timely report “a roof fall of mammoth and potentially lethal dimensions.” The unplanned fall measured 200 feet long, 40 feet wide, and 8 feet thick, and found at 6:40 a.m. and not reported until 8:00 a.m. A $5,000 penalty had been proposed by MSHA, and the CLR sought a $100 fine stating that the violation was not subject to penalties defined in SECTION 5 of the MINER ACT of 2006.” However, the massive roof fall might have been immediately reportable under §50.10(d), which includes the reporting of “any other accident,” and nothing in the regulation exempts subsection (d) from the 15 minute requirement. The CLR was ordered to submit additional information so the ALJ could assess the likelihood of whether the roof fall could have potentially caused or led to an injury or entrapment with “a reasonable potential to cause death.” ARCH MATERIALS LLC, 1/18/2012, Docket No. LAKE 2011-189-M, 34 FMSHRC 330 (Chief ALJ Lesnick).
  • An ALJ deferred to the Secretary’s reading of her own regulation that “Any other accident” referred to in section §50.10, that does not involve the death of an individual, or an injury or entrapment with “a reasonable potential to cause death,” is exempt from the 15 minute requirement. ARCH MATERIALS LLC, 1/18/2012, Docket No. LAKE 2011-189-M, 34 FMSHRC 330 (Chief ALJ Lesnick).
  • An ALJ rejected a settlement where the Solicitor’s Office would have modified the citation so that the language reflected that an injury would be permanently disabling,” and not fatal, and the settlement would have reduced the penalty from $1,111 to $777. MSHA inspectors found no wireless communication system in areas of the alternate escapeway. According to the citation, “in the event of an emergency the lack of communications in this area could be fatal, therefore all miners inby this location would be affected by this condition.” The motion failed to predicate the modifications upon any factual support. The Arlington Solicitor’s Office has been on notice of the Commission’s clear instructions to provide a factual basis for each and every settlement.” The Solicitor’s Office filed documents, and was immediately sent an email informing him that a revised Motion and Order were needed including a factual basis for the modifications. No revision was received, and the ALJ said the Secretary acted in a direct contravention of her order as well as recently issued Commission decisions and obstructing the judge’s authority and responsibility to enforce the intent and purpose of the Mine Act. Dominion Coal Corp. 10/17/2012, Docket No. VA 2012-227; 19 MSHN 590 (ALJ Rae).
  •  An ALJ found “no rational explanation” justifying a modification of a citation from moderate to low negligence, and the accompanying reduction in penalty by 55%” where a dozer operator was trapped and suffered severe burns when his machinery fell into a void on a large coal stockpile, and an ignition had occurred. The Secretary accepted the company’s argument that it could not have foreseen that the dozer operator would attempt to exit the dozer onto the raw coal pile “and, therefore, the negligence should be less than was cited” and proposed the civil penalty should be reduced from $7,578 to $3,405. In rejecting the settlement motion, the ALJ said the injury was serious, and the severe burns could have turned fatal. The proposed settlement was unreasonable and inappropriate under the criteria set forth in section 110(i) of the Act, and would not effectuate the deterrent purpose underlying the Act’s penalty assessment scheme. American Coal Co., 4/18/2011, Docket No. LAKE 2010-315; 33 FMSHRC 1033 (ALJ McCarthy).
  •  A settlement motion was rejected where the Secretary did not fully explain penalty reductions between 76% and 97% for several 104(d)(2) orders that were modified to 104(a) citations. The motion lacked supporting rationale, including a reduction where visible smoke was emanating from a conveyor belt, and areas in the mine of significant coal accumulations. The Secretary offered unsupported assertions, such as “[m]odify to reasonably likely,” and “change number of persons affected from 6 to 1, ” which did not illuminate any underlying basis for support of those changes, especially when the assertions conflict with the details offered in the citation. EMERALD COAL CO., 2/28/2011, Docket No. PENN 2009-564, 33 FMSHRC 535 (ALJ Moran).
  •  Settlements should reflect proportionality. That is, as the amount of a given reduction grows from the initial assessment, generally the amount of information to justify the reduction should be proportionally greater as well. Restated, a proposed reduction of 50% will generally require more information to support it than a reduction proposing a 10% reduction. EMERALD COAL CO., 2/28/2011, Docket No. PENN 2009-564, 33 FMSHRC 535 (ALJ Moran).
  •  When presenting a settlement motion, the Secretary must offer an averment that the Secretary consulted with the issuing inspector upon receiving contentions made by the mine operator. The Secretary must at least include a statement that there has been such consultation, so that the ALJ can be assured that the Secretary’s averments are grounded in fact. If the Secretary fails to consult with the inspectors who are diligently performing their safety and health inspection responsibilities in the Nation’s mines, it is obvious this will have a demoralizing effect upon those front-line enforcement personnel. EMERALD COAL CO., 2/28/2011, Docket No. PENN 2009-564, 33 FMSHRC 535 (ALJ Moran)
  •  A settlement submitted by the Secretary for a violation of the respirable dust standard, §70.101, was rejected. The operator was cited after five valid respirable samples exceeded the maximum limit for quartz dust by nearly three times that level. The MSHA inspector had listed the violation as S&S, highly likely to result in lost workdays or restricted duty, of moderate negligence and affecting ten persons. The settlement motion submitted by the Secretary stated that: only four persons would have been exposed; negligence should be viewed as “low;” and that the company took reasonable steps to “prevent or limit exposure to excess dust or gases.” The motion also included the operator’s assertion that “the continuous miner operator moved out of proper operating position unbeknownst to mine management, among other unpredictable reasons.” The settlement also cited “geological conditions” as a reason for the high, nonpermissible quartz levels. The ALJ said there was “absolutely no basis” for the claim in the proposed settlement that the number of exposed miners would be four. The settlement did not identify the ‘reasonable steps’ the operator took to prevent or limit exposure. The company also admitted that it was exceeding the quartz limit by nearly three times the upper limit of allowable exposure, but at the same time stating that “dust conditions are transitory in nature and not entirely preventable.” In rejecting the settlement, the ALJ noted that [q]uartz particles are 20 times more toxic to the lungs than coal dust alone, and a miner exposed to high levels of quartz can develop silicosis in as little as *three years. (* Editor’s note: As of 10/24/14, seven miners have been diagnosed with “occupational disease of the lungs” since this decision). MARFORK COAL CO., INC., 11/24/2010, Docket No. WEVA 2009-1421; 32 FMSHRC 1919 (ALJ Moran)
  • The Secretary and an operator were ordered to renegotiate a settlement where the joint motion was denied by an ALJ. The company was cited under §56.14107(a), with a special assessment of $52,500 after a miner was seriously injured when he became entangled in the drive shaft and the stub on the main feed conveyor in a screen unit. The citation stated that no guards were provided for the head pulley, the head pulley drive shaft, and the stub shaft of the main feed conveyor. The Secretary sought an 80% reduction in the penalty, down to $10,000 stating that the miner accessed the area contrary to all mine rules and procedures, and the miner’s actions were “completely unreasonable, unexpected, and without prior incident at this mine.” The company was also cited under §56.15005 with a proposed fine of $1,026, because the injured miner was not wearing fall protection when he climbed onto the I-beam to access the area, and a fine of $1,026 for a lock-out-tag-out violation under §56.14105. The secretary sought a 50% reduction in these two penalties, offering the same reasoning as the guarding violation – that the behavior of the injured miner was idiosyncratic. The motion submitted by the Secretary stated the lowered penalties were “sufficient to ensure further compliance with the Act,” but the Secretary failed to offer sufficient information for the judge to determine whether the proposed settlement is in the public interest or is consistent with the Mine Act’s objectives. The citations allege that a miner was seriously injured because the operator violated three different safety standards, yet the motion fails to explain why the penalties were compromised to such an extent. Section 110(i) of the Mine Act sets forth the criteria to be used in assessing penalties, and the Secretary should outline these criteria when proposing to reduce a penalties by 50% to 80%. NORTHERN FILTER MEDIA, INC., 11/10/2011, Docket No. CENT 2010-1270-M, 33 FMSHRC 2895 (ALJ Manning).
  •  A joint motion was dismissed with prejudice where the Secretary agreed to vacate the citation. A motion seeking an ALJ’s approval to dismiss a matter should not be denominated as a settlement since the Secretary has the authority to vacate citations and that such actions are not reviewable. LEHIGH CEMENT CO INC., 9/3/2010, Docket No. SE 2009-991-M, 32 FMSHRC 1304 (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. CONSOL PENNSYLVANIA COAL CO., 7/12/10, Docket No. PENN 2009-803, 17 MSHN 342 (July 14, 2010) (unpublished) (ALJ Moran).
  •  A settlement where an operator’s penalty was reduced by 64% lacked the factual basis necessary under the Mine Act. The Secretary said the penalty is “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.” ALASKA MECHANICAL INC., 6/30/2010, Docket No. WEST 2008-152-RM, 32 FMSHRC 738 (Chief ALJ Lesnick).
  •  An 80% reduction in penalties as part of a settlement was rejected. Given the extreme reductions in the amount of penalties, there was insufficient information to determine what penalty would be appropriate in each case, and the reduced penalties “would not adequately effectuate ‘the deterrent’ purpose underlying the Act’s penalty assessment scheme.” Judges are required by Commission precedent to provide a sufficient explanation when a penalty assessment diverges substantially from a proposed penalty, and the information provided by the Secretary did not allow the judge to provide a sufficient explanation for the penalty reduction. Black Beauty Coal Co., 3/16/2010, Docket Nos. LAKE 2008-327, 32 FMSHRC 714 (ALJ Miller).
  • A settlement case was certified for interlocutory review on the issue of whether or not the Secretary must provide sufficient facts and information to justify the proposed penalty in the context of a settlement and in terms of the six statutory criteria found at section 110(i) of the Act. Since the Mine Act requires the Commission to assess all penalties and in doing so, consider the six criteria, it follows that the Commission must have the information needed to make the assessment. The Secretary argues that she is not required to submit such information to the Commission and therefore appeals the order issued requiring the submission of facts that relate to the penalty criteria. Whether the Secretary must provide information is a controlling question of law in resolving the many cases that are proposed for settlement and is an important matter to resolve. Black Beauty Coal Co., 3/16/2010, Docket Nos. LAKE 2008-327, 32 FMSHRC 714 (ALJ Miller).
  • An 80% reduction in penalties as part of a settlement was rejected. Given the extreme reductions in the amount of penalties, there was insufficient information to determine what penalty would be appropriate in each case, and the reduced penalties “would not adequately effectuate ‘the deterrent’ purpose underlying the Act’s penalty assessment scheme.” Judges are required by Commission precedent to provide a sufficient explanation when a penalty assessment diverges substantially from a proposed penalty, and the information provided by the Secretary did not allow the judge to provide a sufficient explanation for the penalty reduction. Black Beauty Coal Co., 3/16/2010, Docket Nos. LAKE 2008-327, 32 FMSHRC 714 (ALJ Miller).
  •  A settlement was approved after the Secretary offered additional information. The Secretary sought to vacate 13 citations in a civil penalty proceeding. 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. While the Secretary has “unreviewable prosecutorial discretion to vacate citations after issuance,” the ALJ noted that in RBK Construction, the Secretary argued before the Commission “that 110(k) applies only to settlements of penalties, not to vacations of citations or orders.” 15 FMSHRC at 2101. The Secretary complied with the ALJ order by proffering legitimate reasons for vacating the citations in the August 31, 2009 letter. PC SAND & GRAVEL, Docket No. YORK 2008-104-M, 2/25/2010, 32 FMSHRC 235, (Chief ALJ Lesnick).
  •  An operator and MSHA were ordered to submit additional information supporting a 74 percent 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 percent 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.” Black Hawk Mining, Docket Nos. WEVA 2006-22 etc., 28 FMSHRC 82 (Feb. 28, 2006), 13 MSHN 142 (March 6, 2006) (Chief ALJ Lesnick).
  •  A settlement agreement was rejected because it was signed by an agency “law clerk” and not by an attorney in the Solicitor’s office. The settlement also was defective because the representations in the motion, that the operator was unaware of the violation, conflicted with statements in the citation. The motion also contained “generalized and unsupported statements” which did not justify an 85 percent penalty reduction. Bowen Industries Inc., Docket No. CENT 98-268-M, 21 FMSHRC 468 (April 26, 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.” 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 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.” Ohio Valley Coal Co., Docket No. LAKE 98-237 (unpublished), 6 MSHN 60 (Jan. 22, 1999) (Chief ALJ Merlin).
  • A judge rejected a 50% reduction in a penalty where the Secretary and operator’s joint motion stated the settlement was “fair and equitable,” but offered no reason for the reduction. Under Commission rules, the moving party must explain the reasons for the proposed settlement, and in this case no reasons were given. WEBSTER DUDLEY SAND AND GRAVEL, INC., 2/18/98, Docket No. YORK 97-29-M (ALJ Barbour).
  •  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 agency 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 percent 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. Rohl Limestone Inc., Docket No. LAKE 95-323-M, 17 FMSHRC 2162 (Nov. 30, 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. MSHA 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.” 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).
  •  MSHA’s motion to hold an operator in default after it refused to sign a settlement agreement it had reached with the agency was granted. The company was found to have been “recalcitrant at all stages” of the proceeding, and MSHA’s proposed penalties totaling $35,000 for seven violations were assessed. Two “show cause” orders were issued before the operator responded to MSHA’s penalty assessment. Also, the operator failed to respond to MSHA’s request for a default judgment and refused post office delivery of another “show cause” order. D&E Coal Co., Docket No. KENT 94-1242, 17 FMSHRC 1736 (Oct. 19, 1995), 2 MSHN 609 (Nov. 3, 1995)(ALJ Hodgdon).
  •  A settlement motion in which the Solicitor’s Office said it 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 was rejected. 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. 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 motion in which the Solicitor’s Office agreed to delete MSHA’s “unwarrantable failure” charges for violations of the combustible materials standard and the operator’s ventilation plan was approved. The agency agreed to modify the two Sec. 104(d)(1) orders to Sec. 104(a) S&S citations after it was pointed out that the violations were found during the shift immediately following their notation in the preshift examination book. Operators must be given “a reasonable period of time” to correct conditions before they can be charged with “unwarrantable failure.” In this case, it was noted that the operator began cleaning up the coal dust accumulations about two and one-half hours after they were noted in the preshift examination book. MSHA agreed to reduce the penalty from $6,500 to $2,072 for each violation. Consolidation Coal Co., Docket Nos. WEVA 94-216 et al., 17 FMSHRC 1068 (June 22, 1995), 2 MSHN 375 (June 30, 1995) (ALJ Feldman).
  •  A settlement agreement reducing MSHA’s proposed penalties totaling $15,000 for two violations to $6,000 was rejected, and 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. 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 $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.” 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 $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. 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 $1,000 penalty for a violation of Sec. 103(a) of the Mine Act to $320 was disapproved 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 disapproved. The parties “offered absolutely no explanation for the large reductions” in the penalties, and the violations are “egregious and serious.” Harbor Rock Inc., Docket No. WEST 95-64-M, 17 FMSHRC 492 (March 16, 1995), 2 MSHN 174 (March 24, 1995) (Chief ALJ Melick).
  •  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 95-31, 17 FMSHRC 489 (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 disapproved. 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 95-32, 17 FMSHRC 486 (March 16, 1995), 2 MSHN 175 (March 24, 1995)(Chief ALJ Merlin).
  •  A settlement agreement was rejected where penalties were lowered from $3,000 to $2,000 for two violations. The penalties would have been lowered, but the citations remain 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 continuous miner had been operating for four hours. 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 parties, the operator’s witnesses would challenge the inspector’s assessment of the presence of methane. The operator would present testimony that a repairman was working on the monitor at the time the citation was issued and that parts for the repair were delivered while the inspector was on the section. In addition, the foreman was taking regular methane readings with a hand-held methane detector during the time the monitor was being repaired. 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. Jericol Mining Inc., Docket No. KENT 94-957, 17 FMSHRC 244 (Feb. 7, 1995), 2 MSHN 125 (Feb. 24, 1995)(Chief ALJ Merlin).
  • An operator’s request for declaratory relief was rejected. The operator objected when the Solicitor sought to withdraw MSHA’s penalty petition on the basis that there was insufficient evidence to establish the violation. In its 1993 decision in RBK Construction Inc. (15 FMSHRC 2099), the Commission held that MSHA has the authority to vacate its citations without the Commission’s approval. Also, it was found that this was not an appropriate case in which the commission should exercise its discretionary authority to issue declaratory relief. FMC Wyoming Corp., Docket No. 94-302-M, (unpublished) (Jan. 18, 1995), 2 MSHN 69 (Jan. 27, 1995) (ALJ Cetti).
  •  A settlement was rejected for a violation where a longwall foreman was crushed to death when manually collapsing longwall shields that had been set up on the surface for demonstration and training purposes. The foreman attempted to block one of the canopies with a forklift, and then positioned himself under the canopy between the linkage bars and hydraulicjacks. He then removed the hydraulic staple lock and pressure relief valve capsule from the rear canopy tilt jack. The rear of the canopy collapsed on him, crushing him to death. The company was cited for an S&S and unwarrantable failure violation under §77.405(b), and all longwall miners had to be retrained in safe methods for operating and handling longwall shields. The Secretary and company sought to settle this violation by converting the 104(d)(2) order to a 104(a) Citation, modifying the allegation to charge moderate negligence instead of a high degree of negligence, and reducing the civil penalty from $35,000 to $10,000. The motion lacked facts sufficient to conclude that the attempted use of a forklift to block a longwall canopy was only ordinary negligence. The forklift did not hold, and the foreman was killed as a result of his misjudgment that it would hold. Because of the extreme safety risk involved in substituting a forklift for proper blocking devices, the facts point to gross negligence and an unwarrantable violation. MINGO LOGAN COAL CO., Docket No. WEVA 93-36-R, 16 FMSHRC 2194 (Oct. 10, 1994)(ALJ Fauver).
  •  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 violations in this case were serious and contributed to an accident resulting in an injury. 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. 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 $400 penalty for a violation of reporting regulation § 50.10 to $250 was disapproved because the agency 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. MSHA’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. Columbia Quarry Co., Docket No. LAKE 94-155-M, 16 FMSHRC 1924 (Aug. 29, 1994), 1 MSHN 466 (Sept. 9, 1994) (Chief ALJ Merlin).
  • MSHA’s motion to withdraw a citation for an alleged violation of § 57.3360 and its proposed $8,000 penalty was granted. MSHA decided to withdraw its citation after the operator presented testimony that, prior to a fatal ground fall accident at its underground potash mine, there were no detectable ground conditions or mining experience that indicated that ground support was necessary. Mississippi Potash Inc., Docket No. CENT 92-212-M, 16 FMSHRC 1330 (June 29, 1994), 1 MSHN 381 (July 15, 1994) (ALJ Cetti).
  •  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. 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 was disapproved where the Solicitor gave no reasons to support the proposed reductions in MSHA’s penalties. The Solicitor sought to reduce MSHA penalties for four S&S and “unwarrantable” violations from $7,500 to $5,250. The violations were specially assessed and were serious, and the fact that the suggested penalties remain substantial is not enough to warrant approval. 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 agreement reducing MSHA’s proposed penalties totaling $1,100 for two violations of seat belt standard, Sec. 56.14131(a), to penalties totaling $256 was approved. An MSHA inspector issued a Sec. 104(d)(1) citation and order because two haulage truck drivers failed to wear provided seat belts. However, after the hearing MSHA agreed that the operator’s negligence was not “unwarrantable” and the citation and order were amended to Sec. 104(a) S&S citations. Delaware Valley Landscape Inc., 15 FMSHRC 674 (April 7, 1993) (ALJ Koutras).
  •  A settlement agreement in which the operator agreed to pay MSHA’s proposed $15,000 civil penalty for a violation of Sec. 75.1725(a) was approved. MSHA’s investigation of a fatal accident revealed that a closed flow control valve disabled the remote operation of a scoop’s service braking system and caused the accident. Peabody Coal Co., 15 FMSHRC 581 (March 31, 1993) (ALJ Feldman).
  • A settlement agreement reducing MSHA’s proposed $12,000 penalty for each of two violations of training regulation Sec. 48.7(a)(3) to $200 for each violation was approved. MSHA issued the citation after its investigation of a fatal accident revealed that a closed flow control valve disabled the remote operation of a scoop’s service braking system. However, the MSHA conference officer said that even extensive training would not have prevented the accident because the operator had no advance knowledge from the manufacturer of the significance or existence of the flow control valve. Ibid.
  •  A proposed settlement agreement submitted by the Solicitor’s Office that reduced MSHA’s original $690 penalty proposal for a violation of Sec. 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, the Solicitor 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.” Concrete Materials, (Feb. 18, 1993) Docket No. CENT 92-358-M, 15 FMSHRC 337 (order denying settlement)(Chief ALJ Merlin).
  •  A settlement was denied where a company conceded a violation of §77.205, but the settlement would have removed the S&S finding. The MSHA inspector observed that the travelway to the electrical switch box was obstructed by a wooden pallet and old desks, creating a tripping hazard. The motion states that, “while the pallet lay horizontal under the switch box, thus creating a possible tripping hazard, the desks were not directly in front of the box, and less likely to create a tripping hazard. Thus, the likelihood of being injured is less that originally assessed.” The motion does not state or indicate that the pallet and desks did not present a substantial possibility of causing a tripping accident. Accordingly, the proposal to reduce the charge to a non-S&S violation was denied. CONSOLIDATION COAL CO., March 26, 1992, Docket No. PENN 91-1375 (ALJ Fauver).
  • A settlement motion was denied where the motion sought to reduce the alleged violation from a “significant and substantial” violation to a “non-significant and substantial” violation. The company violated §75.604(b) where the trailing cable to a roof bolter was not “effectively insulated, and [did] not effectively exclude moisture” because there was “an opening measuring 1/2 inch by 1 1/2 inches through the outer insulated jacket, and the inner insulated conductors [were] exposed.” The settlement motion states that the exposed inner insulation of the cable was intact and, therefore, injury was “unlikely to occur.” However, it does state or indicate that the opening in the cable did not present a substantial possibility of injury, e.g., the exposure of the inner insulation rendering it vulnerable to cutting or breaking, with moisture reaching live conductors, by forces that would not penetrate the inner insulation if the outer jacket were intact, or the possibility of moisture entering the outer jacket reaching an existing but unseen nick in the inner insulation. The parties must show sufficient facts to warrant such a change to non-S&S. TUNNELTON MINING CO., 3/11/1992, Docket No. PENN 91-1456 (order denying settlement) (ALJ Fauver).
  • A settlement was rejected that would have removed an S&S finding for a violation of §77.1606(c) on a truck used to haul explosives where the steering section was loose and moving sideways about one-half inch. The motion stated that the company performed regular maintenance, and a reasonable likelihood of serious injury did not exist if normal mining operations had continued, because the driver may have been able to feel the steering coming loose prior to any effect on the actual steering of the truck, and the violation would have been corrected. The motion misconstrues the term “normal mining conditions.” The settlement if approved would render the Act and safety and health regulations a hollow mechanism if violations were to be redesignated as non-S&S violations on the ground that the operator might detect and correct the violation before an accident occurs. EL DORADO CHEMICAL CO., Docket No. WEVA 91-1988, Nov. 18, 1991, 13 FMSHRC 1850 (ALJ Fauver).
  • A settlement was denied where there was no documentation that a violation of §56.14104 had occurred, and MSHA’s accident report clearly stated that a violation of §56.14104 had occurred. S.L. PETERS CONSTRUCTION, 5/9/1990, 12 FMSHRC 1154 (ALJ Melick).
  • Where a miner’s representative is a party in a civil penalty proceeding, a settlement of the proceeding is only valid if the miner’s representative has agreed to it. FMC Wyoming Corp., WEST 86-43-RM, et al., 12 FMSHRC 1478 (July 27, 1990) (ALJ Cetti) (on remand).
  • A settlement was rejected where the Secretary sought to remove an S&S designation on several citations where there had been a possibility of injury. MOBERLY STONE CO., 10/3/89, Docket No. CENT 89-81-M; 12 FMSHRC 2111 (ALJ Broderick).
  • 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. 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) (Order).
  • A settlement was rejected where there was a violation of a miner standing on a conveyor belt, shoveling material and not wearing a safety belt. No handrails were on the belt. It was originally assessed at $227 and the parties proposed to settle for $151 because “Defendant states this was an isolated incident . . . there was little or no negligence involved since the violation could not have been reasonably predicted.” The proposed reduction was not justified by the motion. D. P. FROST CONSTRUCTION CO., Aug. 5, 1986, Docket No. CENT 86-64-M; 8 FMSHRC 1162 (ALJ Broderick).
  • Where the language of a settlement agreement is plain, complete and unambiguous, a hearing to determine the parties’ “actual or secret intention” is not necessary. UMWA, Local Union 1769, Dist. 22 v. Utah Power & Light Co., WEST 87-86-C, 12 FMSHRC 1548 (Aug. 23, 1990) aff’g 11 FMSHRC 1641 (Sept. 1 , 1989) (ALJ Morris).
  • Where operator and the Secy., the real parties in interest, state their mutual desire to terminate litigation and the operator agrees to pay in full the penalty originally proposed by the Secy., and no other interested party objects, the Commission has the authority to vacate its direction for review, its prior decision in the case and the ALJ decision in the case. Birchfield Mining Co., WEVA 87-272, 11 FMSHRC 1428 (Aug. 21) (Order), vacating per settlement 11 FMSHRC 31 (Jan. 27, 1989).
  •  A settlement motion may not contain language that is contrary to the Mine Act. The operator agreed to pay the penalty in full, but the motion contained a disclaimer that the settlement was not an admission by the operator. The disclaimer stated that: “No party other than the parties to this agreement may use this settlement agreement for any purpose. Without restricting the generality of the foregoing, it is specifically understood that respondent enters into this stipulation in reliance on its sole and exclusive purpose being to expeditiously and inexpensively resolve a single item of administrative litigation without affecting in any way any other cause, claim or litigation, of either a private or governmental nature, that may now be pending or that may be initiated in the future. Moreover, it is not intended that this stipulation or the settlement resulting therefrom establish a standard of care or adjudge compliance therewith. By this settlement, the parties do not intend to be collaterally estopped from raising any issue or defense in any civil proceeding.” The judge found the disclaimer to be so contradictory and ambiguous, that it was in violation of the principles set forth by the Commission in Amax Lead Company of Missouri, 4 FMSHRC 975 (1982). (Decision denying settlement motion KENTUCKY MOUNTAIN RESERVE, INC., 1/12/89, Docket No. KENT 88-157, 11 FMSHRC 259 (ALJ Melick).
  • A 25% reduction in a proposed $4,000 penalty where a miner was electrocuted was rejected. The Secretary stated the company demonstrated extraordinary good faith in achieving rapid compliance; did not have a lengthy history of prior violations; was a small business; the company said it would comply with the Mine Act, and agreed to pay a $3,000 fine. In rejecting the settlement, the ALJ said the information provided by the Motion was totally inadequate for an independent and proper evaluation of the alleged violation under the criteria set forth in Section 110(i) of the Federal Mine Safety and Health Act of 1977. DEVELOPERS INTERNATIONAL SERVICE CORP., 2/8/89, Docket No. CENT 88-132-M, 11 FMSHRC 263 (Chief ALJ Merlin).
  • Absent objection or prejudice to operator, Secy.’s motion to vacate citation and dismiss proceeding will be granted if adequate reasons are shown. Southern Ohio Coal Co., LAKE 87-95-R, 10 FMSHRC 1669 (Dec. 13, 1988).
  • A settlement motion was rejected for a violation of §56.9054 where a haul truck driver was killed when his truck went over the edge of a stockpile. No berms, bumper blocks, safety locks, or similar means to prevent overtravel and overturning was provided at this dumping location at the time the incident occurred. The reduction in the proposed penalty – from $8,000 to $5,000 – was sought in part, because during the afternoon prior to the date of the accident a berm had been constructed at the cited location. However, at the time of the accident material was removed from the berm, and had not been totally replaced leaving a berm that was not adequate to prevent an accident. It was also noted the operator had no assessed violation in the preceding 24 month period, and the Secretary sought a reduction in negligence. The settlement was rejected since the citation at bar set forth a serious regulatory violation leading to a fatality. The settlement motion confirmed that the fatality was the result of a “high degree” of negligence, and the purported excuse or justification for reducing the level of negligence was incomprehensible. Material Service Corp., 10/4/88, Docket No. LAKE 88-122-M, 10 FMSHRC 1666 (ALJ Melick).
  • Where motion for approval of settlement for numerous violations used the same language without facts or rationale to support the recommendation for each violation, the motion was denied because of insufficient information to evaluate the appropriateness of each penalty. Columbia Portland Cement Co., LAKE 88-54-M, 10 FMSHRC 1363 (Sept. 7, 1988) (ALJ Merlin) (Order).
  • A proposed settlement was rejected for a violation of §56.9073 where a backhoe was found with bad brakes and a broken tie rod broken away from the frame on the left side of the vehicle, parked at the shop area of the mine. The vehicle had not been tagged to prevent anyone from operating it, as required by the cited standard. The Secretary proposed lowering MSHA’s fine from $276 to $20, and modifying the likelihood of injury from “reasonably likely,” with permanently disabling results to “unlikely.” In rejecting the settlement, the ALJ said he failed to understand the reasoning offered by the parties – that the probability of injury was over-evaluated and few employees were exposed to the risk. Boorhem-Fields Inc., 8/29/1988, Docket No. CENT 88-56-M, 10 FMSHRC 1121 (Aug. 29, 1988) (ALJ Koutras).
  • A settlement was rejected for a violation of §75.1720 where six miners were not wearing distinctively colored hard hats. The penalty was originally assessed at $311 and the proposed settlement was for $250. In her motion, the Solicitor asserts that, among other things, the reduction is warranted because gravity was less than originally thought. The motion states that the employees involved were maintenance personnel who were temporarily assigned to the mine to repair equipment. The motion further states that at all times these employees were accompanied by a superintendent who “was aware of their lack of experience and certification.” According to the Solicitor’s motion, there was little likelihood that these miners would be confused with experienced miners. The Chief ALJ said he could not conclude that the recommended reduction in the penalty was warranted. If anything, the facts as set forth by the Solicitor make the violation appear more serious and highlight the operators negligence. The operator should have taken particular care because the miners were inexperienced. In addition, their inexperience and lack of certification put them at greater peril and therefore, increased gravity. Consolidation Coal Co., 6/22/88, Docket No. WEVA 88-90, 10 FMSHRC 779 (Chief ALJ Merlin).
  • A settlement for a violation of §56.9040(a) was rejected where two miners had been riding in the front bucket of a Case 580D loader and back-hoe. The penalty was originally assessed at $300 and the proposed settlement was for $150. The parties claimed the 50% reduction in the originally assessed amount was justified because “negligence is less than was originally assessed.” However, no reasons were given to support this representation. EMKO CORP., 5/6/87, Docket No. WEST 87-42-M, 9 FMSHRC 926 (Chief ALJ Merlin).
  • Secy.’s motion to withdraw petition for penalty assessment to preserve integrity of compliance assistance visit procedure is denied because violation was proven, Secy. did not show basis why §110(a) requirement that penalties be assessed for violations should be waived, and there is no inequity from continuing action; civil penalty assessed for violation need not be lowered due to misstatements made by mine inspector. C.D. LIVINGSTON [ALJ (1986) WEST 85-55-M] 4 MSHC 1088.
  • A hearing was ordered and settlement rejected where MSHA and the operator agreed to the originally assessed penalty of $192 for a violation of §56.16001, and the Secretary and company had agreed to lower the negligence finding to “no negligence.” A miner was killed and another seriously injured when pipes, being moved by an independent contractor, slid from a stack and pinned the victims between pipe on the ground. MSHA’s accident report stated the direct cause of the accident was the failure to recognize the instability of the irregularly stacked pipe bundles. Possibly contributing to this accident was the fact that the crew members were not accustomed to working with pipe piled higher than 2 or 3 bundles. The fact that the pipes gave no indication of instability until they were touched, does not as the settlement motion suggests, warrant a finding of no negligence, or even low negligence. The motion further asserts the employees were adequately, trained, instructed and supervised and were experienced, but does not indicate whether it is referring to the operator’s employees who stacked the pipes or the independent contractor’s employees who removed them. The accident could have had one cause or multiple causes. The settlement motion was not “well reasoned,” and raised many questions which must be answered at a hearing on the record. Phelps Dodge Corp.- Tyrone Branch, 5/6/87, Docket No. CENT 87-2-M, 9 FMSHRC 920 (Chief ALJ Merlin).
  • A settlement was rejected that would have reduced penalties for several roof control and electric equipment permissibility violations. The reason listed for a reduction in the roof control violation was because the area of unsupported roof was not as large as charged by the MSHA inspector. Regarding the permissibility violation, the settlement stated the operator “did not intentionally operate its machine in violation of the Act …” The motion did not show justification for the reduction in the penalty, based on the criteria in section 110(i) of the Act. TURRIS COAL CO., 1/15/87, Docket No. LAKE 85-12-R, 8 FMSHRC 77 (ALJ Broderick)
  • Secy.’s motion to dismiss proceeding and to vacate citation issued for §75.308 (methane accumulations) violations is granted where Secy. stated that violation could not be proved since administrative law judge found foreman had checked methane concentration in affected area only 20 minutes before inspector performed his test; no true adversarial contest remains suitable for judicial resolution since Secy. declines to participate actively as party, operator acquiesced in Secy.’s motion, and public interest does not require decision on merits. Youghiogheny & Ohio Coal Co. [ALJ (1985) LAKE 83-36] 3 MSHC 1683.
  • A settlement was rejected where MSHA cited a company for accumulation of combustible materials, creating fire hazards. The second citation was issued for an unguarded drive chain and sprockets on a wall drill. The inspector indicated that negligence in both cases was moderate and that occurrence was reasonably likely. The $20 nominal penalty sought in the settlement indicates a lack of gravity. From the face of the two citations, and based upon the inspector’s statements, it appears that the violations 0were serious and that the operator was negligent. Under such circumstances, a nominal penalty would not be warranted. Energy Coal Corp., 7/18/83, Docket No. WEVA 83-63, 5 FMSHRC 718 (Chief ALJ Merlin).
  • — The fact that MSHA may have determined that a violation was not “significant and substantial” as that term presently is defined by the Commission, is not determinative or even relevant in settlement proceedings. Once Commission jurisdiction attaches, ALJ’s have their own statutory responsibilities to fulfill and discharge in overseeing settlements. This can only be done on the basis of an adequate record. Energy Coal Corp., 7/18/83, Docket No. WEVA 83-63, 5 FMSHRC 718 (Chief ALJ Merlin).
  • In case where operator had paid proposed penalties in full, Secy.’s filing of motion to withdraw its proposals for assessment of civil penalty not sufficient to dispose of case because Chief ALJ had ordered Secy. to file motion for approval of settlement; since Secy. failed to follow proper procedure, files may be examined by ALJ to determine whether penalties were properly proposed. Scotts Branch Co. [ALJ (1984) KENT 83-46 et al.] 3 MSHC 1478.
  • Operator’s withdrawal of its request for hearing has technical effect of leaving matter before ALJ for approval because §110(k) of FMSHA provides that proposed penalty contested before Comm. cannot be compromised, mitigated, or settled without Comm. approval. Pyro Mining Co. [ALJ (1984) KENT 83-248 et al.] 3 MSHC 1487.
  • A settlement was rejected for a violation of §75.316 for having a metal stopping separating the belt conveyor entry and the intake escapeway in violation of the approved ventilation plan; and, a violation of §75.400 because of an accumulation of loose dry coal and float coal dust under and around the tailpiece. The accumulations were up to 24 inches deep, 14 feet long and 6 feet wide. The mine was idle and the belt was not in operation. Twelve miners including a foreman were working in the area. The Secretary sought to remove the inspector’s negligence findings, and lower the penalties from $158 and $112 to a “regular assessment” of $20 each. While the violations were not S&S, there was still moderate negligence on the part of the mine operator, who was negligent in permitting each of the violations to occur. The Commission is not bound by the Secretary’s regulations setting out how he proposes to assess penalties. United States Steel Mining Co., Inc., 5/17/83, Docket No. PENN 82-328, 5 FMSHRC 934 (ALJ Broderick).
  • A 20% reduction in a civil penalty was denied for a serious roof control violation where the operator took immediate disciplinary procedures, and fired a miner who refused to comply with the roof control plan. The ALJ ordered a reduced $400 penalty, with payment to be suspended. The ALJ said this was the first case in which a small nonunion operator undertook to impose the most severe of disciplinary sanctions for a miner’s grossly negligent refusal to comply with a mandatory safety standard, namely summary discharge for cause, and stated “If more operators could be persuaded to follow this course of action, there would be far fewer deaths and disabling injuries in the mines.” TAZCO, INC., 11/17/1980, Docket No. VA 80-121, 2 FMSHRC 3299 (ALJ Kennedy).
  • Operator’s denial that coal spillage constituted “accumulation” after ALJ’s disapproval of settlement entitled operator to hearing. Peabody Coal Co. [ALJ (1980) LAKE 80-25 et al.] 1 MSHC 2369.
  • After an independent evaluation and de novo review of circumstances, a settlement was approved reducing MSHA’s proposed penalties of $10,000 to $7,000 where the penalties are in accord with the Mine Act. Valley Camp Coal Co. [MORG 78-46-P] 1 FMSHRC 1011.
  • Legislative History of the Mine Act convincingly establishes that the presiding ALJ is charged with responsibility for making independent evaluations and de novo reviews of proposed settlements. It is the Commission’s duty to review enforcement activities of the Secretary of Labor. Valley Camp Coal Co. [MORG 78-46-P] 1 FMSHRC 1012.
  • Coal company’s untimely attempt to withdraw its contest of alleged violation at hearing and its offer to pay initial assessment is offer of settlement which must be concurred in by MSHA and approved by ALJ in civil penalty proceeding pursuant to Interim Comm. Rule. Western States Coal Corp. [ALJ (1979) DENV 78-521-P et al.] 1 MSHC 2059.
  • A settlement motion submitted by the Regional Solicitor’s Office was denied where the lack of a back-up alarm on a truck in violation of §77.1710(g) created a serious risk of death or injuries to men working on the site. The penalty proposed as the basis of the settlement was insufficient to deter future violations and ensure voluntary compliance. The ALJ rejected the Solicitor’s suggestion that the only function of the ALJ or the Commission is to “rubber stamp his settlement agreement.” Kaiser Steel Corp. [ALJ (May 25, 1979) DENV 79-340-P] 1 FMSHRC 422.
  • Specific information must be provided to an ALJ in a settlement where the parties sought to withdraw the petition for assessment of a civil penalty, and file a motion for a settlement: 1) Why the settlement would effectuate the purposes of the Act. 2.) Correspondence between the MSHA Assessment office and the company as to the violations involved including any narrative for a special assessment. 3.) The amount of the proposed settlement. 4.) A statements as to the operator’s 24 month inspection and violation history. 5.) Size of business. 6.) Negligence and gravity, demonstrated good faith in rapid compliance. 7.) Ability of the operator to stay in business. Arch Mineral Corp., [ ALJ (May 11, 1979) DENV 79-151-P, 1 FMSHRC 380 (ALJ Cook).
  • ALJ has responsibility to make independent evaluation of facts relating to six statutory criteria set out in §110(k) of FMSH Act of 1977 before approving or denying proposed settlement for violations of standards promulgated under Act. Pomerleau Bros., Inc. [ALJ (1979) WILK 79-4-PM] 1 MSHC 1770.
  • The plain language of section 110(k) and the legislative history of the Act convincingly establish that the Commission’s ALJs are charged with responsibility for making just 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 MSHA’s Assessment Office would be violative of the Commission’s duty “for reviewing the enforcement activities of the Secretary of Labor.” Pomerleau Bros., Inc. [ALJ (1979) WILK 79-4-PM] 1 MSHC 1770.
  • To remedy what was felt to be an abdication of enforcement responsibility, the 1977 Mine Act decreed that all settlements of violations, once contested, be made a matter of public record subject to approval by the Commission and public scrutiny by Congress, the miners, and the people. Thus, the Commission was given responsibility to approve settlements to “assure that the public interest is adequately protected.” It is evident that Congress imposed upon the Commission an obligation to eschew the role of rubber stamp and to exercise an independent and reasoned judgment in evaluating settlements with respect to both the six statutory criteria and the impact of payment of the proposed amounts upon future operator conduct and compliance. Pomerleau Bros., Inc. [ALJ (1979) WILK 79-4-PM] 1 MSHC 1770.
  • Congress has decreed that the need to save litigation expenses must play “no role” in determining settlement amounts. Pomerleau Bros., Inc. [ALJ (1979) WILK 79-4-PM] 1 MSHC 1770.

Logical Next Step After Secretary’s Argument on Settlements

Today is one of the most important recent cases before the FMSHRC. Oral arguments are being presented in Secretary of Labor v. The American Coal Co., on whether or not the Mine Act grants an ALJ the power to reject and demand additional information when approving a settlement under the Mine Act. Mine Safety and Health News is there, and will report on the case.

Unbeknownst to FMSHRC judges or the mining community, the Secretary issued a secret memo in 2014, written by Heidi Strassler, the Associate Solicitor for Mine Safety and Health, stating that the Solicitor was seeking to overturn 36 years of precedent, and was willing to go to court to change existing settlement procedures. (For the full text of the memo see: 21 MSHN 446).

The Mine Act’s legislative history seems compelling to uphold the role that the ALJs have played since the very first cases before the Commission when the Mine Act and mine disasters were fresh in everyone’s minds. Some of the very first cases were settlement rejections. The Secretary refuses to acknowledge this fact in his briefs filed before the Commission.

The Secretary claims that settlement agreements “cannot be treated as if they were findings of fact and conclusions of law after trial.” If the Secretary is willing to argue this point, is the Secretary also willing to pull every single settled citation off of the DRS? Is the Secretary willing to pull every single citation out of the equation for Pattern of Violations or when determining Violations Per Inspection Day? Afterall, the Secretary is arguing that we should not accept these citations and orders as if they are “findings of fact and conclusions of law.” So therefore, it must be taken to the next step, and remove these thousands up thousands of citations and orders from the DRS — because they don’t count.

The Secretary says so.

For previous stories on the case see: “Solicitor questions congressional intent, past 36 years of case law on settlements” (21 MSHN 319)
“Judge issues scathing rejection of Secretary’s motion to reconsider reduced fines” (21 MSHN 365)
“Labor Dept. refuses to release memo on standard settlement language* (21 MSHN 446) (full text of memo is in this issue)
“Commission upholds settlement where Secretary failed to address ALJ’s orders” (21 MSHN 563)
“Unions, Congressman Miller will weigh-in on ALJ approval of settlements” (21 MSHN 647)

Primer on Settlement Case Law

Solicitor Challenges Congressional Intent, 38 Years of Case Law on Settlements

Solicitor of Labor Thomas Perez is going forward on Tuesday with a legal challenge regarding an administrative law judge’s role in the settlement process. The challenge to an ALJ’s authority, was started by former Labor Secretary Patricia Smith, who claimed 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 briefs 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 38 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 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, involving a coal mine controlled by Robert E. Murray, the Secretary is offered far less information than the ALJ was 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. (Oct. 5, 2009 letter to House Committee on Education and Labor; re: Murray Energy Corp. Notices of Contests of MSHA Citations, Orders and Proposed Civil Penalties.) 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). (Feb. 3, 2010 follow-up letter to House Committee on Education and Labor re: Follow-up to letter of Oct. 5, 2009 and meeting of Nov. 6, 2009).

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.”

Legislative History

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. (“Better Oversight and Coordination by MSHA and Other Federal Agencies Could Improve Safety for Underground Coal Miners; GAO-07-622 Mine Safety.”)

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. 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 Commission 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 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.”

Mutual Mining

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 Regarding 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-eight 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.” In addition, the Secretary said, it is not the ALJ’s role to evaluate “the wisdom of the compromise.”

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).”

Compare and Contrast.

What the Solicitor wrote regarding the Mine Act’s legislative history on settlements:

“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.”

What the Senate’s Legislative History Actually States:

“In addition to the delay in assessing and collecting penalties, another factor which reduces the effectiveness of the civil penalty as an enforcement tool under the Coal Act is the compromising of the amounts of penalties actually paid. In its investigation of the penalty collection system under the Coal Act, the Committee learned that to a great extent the compromising of assessed penalties does not come under public scrutiny. 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. Similarly, there is considerable opportunity for off the record settlement negotiations with representatives of the Department of Justice while cases are pending in the district courts.

“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. 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(l) provides that a penalty once proposed and contested before the Commission may not be compromised except with the approval of the Commission. 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.”

***
Section 111(j) provides that the civil penalties are to be assessed by the Mine Safety and Health Review Commission rather than by the Secretary as prevails under the Coal Act (Sec. 109(a)(3)).

1977 Mine Act Language on Penalties:

Sec. 110(a): The operator of a coal or other mine in which a violation occurs of a mandatory health or safety standard or who violates any other provision of this Act, shall be assessed a civil penalty by the Secretary…

Sec. 110(i): The Commission shall have authority to assess all civil penalties provided in this Act. In assessing civil monetary penalties, the Commission shall consider the operator’s history of previous violations, the appropriateness of such penalty to the size of the business of the operator charged, whether the operator was negligent, the effect on the operator’s ability to continue in business, the gravity of the violation, and the demonstrated good faith of the person charged in attempting to achieve rapid compliance after notification of a violation. In proposing civil penalties under this Act, the Secretary may rely upon a summary review of the information available to him and shall not be required to make findings of fact concerning the above factors.

Sec. 110(k): 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. No penalty assessment which has become a final order of the Commission shall be compromised, mitigated, or settled except with the approval of the court.

Split Enforcement as explained by the Government Accountability Office in the GAO report:
Better Oversight and Coordination by MSHA and Other Federal Agencies Could Improve Safety for Underground Coal Miners (GAO-07-622)

The federal government’s enforcement of mine safety and health is shared by two independent agencies—MSHA and the Commission — in a split-enforcement model that is relatively uncommon in the federal government. While MSHA is responsible for inspecting mines for safety and health violations, the Mine Act grants authority to the Commission to assess all civil penalties for violations found by MSHA. In practical terms, MSHA proposes the initial penalty based on the findings of its inspectors. However, these proposals are subject to review by the Commission, and no proposed penalty that has been contested by a mine operator can be settled without the approval of the Commission. The Commission includes five members appointed by the President and confirmed by the Senate. ALJs assist in carrying out the responsibilities of the Commission and are authorized by the Administrative Procedures Act (APA) and the Mine Act to independently review MSHA’s enforcement actions.

In assessing penalties, the Mine Act requires both the Commission and MSHA to consider six statutory factors:
1. the mine operator’s history of previous violations,
2. the appropriateness of the penalty to the size of the mine,
3. whether the mine operator was negligent,
4. the effect on the operator’s ability to continue in business,
5. the gravity of the violation, and
6. the demonstrated good faith of the mine operator charged in quickly remedying the situation after being notified of a violation.