FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

1331 PENNSYLVANIA AVE., N.W., SUITE 520N

WASHINGTON, DC 20004-1710

TELEPHONE: 202-434-9958 / FAX: 202-434-9949

February 21, 2013

ORDER REJECTING AMENDED SETTLEMENT MOTION

ORDER FOR CERTIFICATION FOR INTERLOCUTORY REVIEW

Before: Judge McCarthy

            This case is before me upon a Petition for Assessment of Civil Penalty under section 105(d) of the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 815(d). On August 23, 2012, the Secretary of Labor, through its Solicitor’s Office, filed a motion seeking approval of a proposed settlement pursuant to Commission Rule 31, 29 C.F.R. § 2700.31. The Solicitor requested that Citation No. 8190957 be modified to delete the significant and substantial designation and to reduce the proposed penalty from $971.00 to $500.00. The settlement, however, did not proffer any factual justification for the proposed modifications.

            On October 9, 2012, my office requested that the parties provide an amended settlement consistent with Commission Rule 31(b)(1), 29 C.F.R. § 2700.31(b)(1), which provides, inter alia, “[t]hat a motion to approve a penalty settlement shall include . . .  facts in support of the penalty agreed to by the parties.” The Secretary declined to do so and expressed preference that the proposed settlement be rejected.

            On October 15, 2012, I issued an Order rejecting the proposed settlement, which admonished the Secretary’s Arlington counsel for a repeated refusal to comply with clear instructions from the Commission and the Office of Administrative Law Judges requiring factual support for proposed settlement submissions. This case was set for hearing on November 15, 2012, under separate cover.

            On October 23, 2012, the Secretary filed an Amended Motion to Approve Settlement and Motion to Cancel Hearing. In the amended motion, the Secretary provided the following factual basis for the penalty reduction:

. . . [t]he Secretary submits the fact that the Respondent contends that its practice is for every miner or group of miners to have a multi-gas detector accessible at all times. This practice, the Respondent contends, suggests that anyone going to the shelter would have a detector or be with a group that has one. The Secretary has determined that the violation was less likely to result in a serious injury. The Secretary also acknowledges that the number of people affected may have been lower than originally determined by the inspector because at least some of the miners the inspector observed near the refuge alternative may have been carrying multi-gas detectors in accordance with the company’s practice.

            Despite the Secretary’s determination that less that three people may have been affected, the settlement did not propose that the citation be modified to reflect the Secretary’s determination. Similarly, the Secretary determined that the violation was “less likely to result in a serious injury,” but did not request that the citation be modified accordingly. Instead, the Secretary unilaterally withdrew the S&S designation without seeking approval from the undersigned.

            On November 1, 2012, my law clerk, Jason Riley, convened a conference call with counsel for the Secretary, Scott Hecker; Associate Regional Solicitor, Douglas White; and Respondent’s counsel, Cameron Bell. At the discretion of the Court, the transcript of the call was incorporated into the record. During the call, the Secretary was asked to expound upon the argument that the Secretary retained authority to modify citations and remove S&S designations in the context of a settlement, without leave of the Commission.

            Mr. Riley:        . . . . Mr. Hecker, concerning the S&S designation, in the settlement you state that the Secretary has determined to delete the S&S designation but do not request that the S&S designation be removed by the judge. I believe you assert that it was within the prosecutorial discretion of the Secretary to do so. Can you please elaborate on the Secretary’s position on this matter?

            Mr. Hecker:    Yes. Our motion contains case law in paragraph eight addressing the unreviewable discretion of designation of S&S. Mechanicsville is cited there, also RBK Construction. We believe those cases, these Commission cases, point to the fact that it’s the Secretary’s discretion to designate in the first instance an S&S finding on a violation and that it’s our right to do so and that the Commission’s purview is over the approval of the assessment on that violation. That’s the Secretary’s position and I believe has been the Secretary’s position. Those cases are from 1993 and 1996 so it’s a consistent position for an extended period of time.

                                    . . . .

            Mr. White:      It’s long been our position that the judge has authority - and there’s no question about this - has authority to make ultimate determinations of S&S and unwarrantable findings after a hearing, but prior to the hearing, it is solely within the Secretary’s discretion to charge or to designate or un-designate S&S and unwarrantable findings . . . our position is that the judge’s discretion is to approve penalty settlements and if for example Dickenson and Russell had filed a pre-penalty contest here and we negotiated with them and settled with them before there had ever been a penalty proposed and we’d agreed to remove the S&S, the Commission would have clearly no authority over that. It’s only in the context of a penalty that the authority to review the settlement arises and it is the penalty, that our position it’s the penalty that they have the authority to review, not the designation of S&S or unwarrantable.

Conference Call Tr. at 1-2 (emphasis added).

            Citing the Commission’s decision in Mechanicsville, the Secretary claims authority to change the S&S status of a contested citation at any time prior to hearing. Id., citing Mechanicsville Concrete, Inc., 18 FMSHRC 877 (June 1996). Such authority, the Secretary argues, is consistent with the enforcement role delegated in the Mine Act and is analogous to the unreviewable prosecutorial discretion afforded when determining that a citation be vacated. As such, the Secretary claims that no factual basis is necessary for modification of the S&S designation prior to hearing.

            In Mechanicsville, MSHA issued a citation for the operator’s failure to install a windshield wiper on a front-end loader, and designated the citation as non-S&S. 18 FMSHRC at 878. After hearing, however, the judge determined that the danger posed by the violative condition warranted that the citation be designated as S&S. Id. On appeal, the Commission found that the S&S designation was an enforcement responsibility granted exclusively to the Secretary under the Mine Act, and that the judge erred in determining, on his own initiative, that the violation was S&S. Id. at 789. The Commission reasoned that, while section 104(d) gives the Commission authority to affirm, modify, or vacate a citation, a judge may not make additional findings and conclusions that are absent from the original pleading. Id.

            The Secretary’s reliance on Mechanicsville is misplaced. The question here is not whether the Secretary has the unreviewable discretion to designate a citation as S&S – it is clear that the Secretary is granted such exclusive authority. Rather, the issue presented is whether the Secretary can modify a citation offered in consideration for Respondent’s acceptance of a contested civil penalty proposal without seeking approval from the Commission.

            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. Press Release, Mine Safety & Health Admin., US Dep’t of Labor, MSHA to Start Using Pre-Assessment Conferencing Procedures, 11-1703-NAT (Dec. 1, 2011), available at http://www.dol.gov/opa/media/press/msha/MSHA20111703.htm. The Commission lacks jurisdiction to review such pre-contest settlements.

            Once the operator contests the Secretary’s proposed assessment of penalty, however, Commission jurisdiction attaches. 30 U.S.C. 815(d).

. . . . When a proposed penalty is contested, the Commission affords an opportunity for a hearing, “and thereafter . . . issue[s] an order, based on findings of fact, affirming, modifying, or vacating the Secretary’s citation, order, or proposed penalty, or directing other appropriate relief.” Id. (Emphasis added). See also 30 U.S.C. § 810(i)(“The Commission shall have authority to assess all civil penalties provided in this Act”). Thus, it is clear that under the Act the Secretary of Labor's and the Commission's roles regarding the assessment of penalties are separate and independent. The Secretary proposes penalties before a hearing based on information then available to him and, if the proposed penalty is contested, the Commission affords the opportunity for a hearing and assesses a penalty based on record information developed in the course of an adjudicative proceeding. See Senate Subcommittee on Labor, Committee on Human Resources, 95th Cong., 2d Sess., Legislative History of the Federal Mine Safety and Health Act of 1977, at 89, 632-635, 656-657, 666-662, 906-907, 910-911, 1107, 1316, 1328-29, 1336, 1348, 1360.

The respective governing regulations adopted by the Commission and the Secretary regarding penalty assessments clearly reflect the Act’s bifurcated penalty assessment procedure. Commission Rule of Procedure 29(b) provides:

In determining the amount of the penalty neither the judge nor the Commission shall be bound by a penalty recommended by the Secretary. . . .

29 C.F.R. § 2700.29(b). The Secretary's regulations in 30 C.F.R. Part 100 expressly apply only to the Secretary's proposed assessment of penalties. See also 47 Fed. Reg. 22287 (May 1982) (“If the proposed penalty is contested, the [Federal] Mine Safety and Health Review Commission exercises independent review and applies the six statutory criteria without consideration of these [MSHA penalty assessment] regulations.”)

See Sellersberg Stone Co., 5 FMSHRC 287, 291 (Mar. 11, 1983) (emphasis in original).

            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. Knox County Stone Co., 3 FMSHRC 2478, 2479 (Nov. 1981). In proposing a settlement, the Secretary historically has moved the Commission to amend the penalty and modify the citation itself. See, e.g., Energy Fuels Coal, Inc., 11 FMSHRC 78 (Jan. 1989) (ALJ) (approving Secretary’s request that S&S designation be removed); Consolidation Coal Co., 13 FMSHRC 473 (Mar. 1991) (ALJ) (approving Secretary’s request that S&S designation be removed); Jim Walter Resources, Inc., 1992 WL 534707 (Aug. 1992) (ALJ) (approving parties’ joint motion to remove the S&S designation); Harvey W. Buche Road Building, Inc., 27 FMSHRC 395 (Apr. 2005) (ALJ) (approving settlement modifying citation’s negligence designation). Such motions make eminent sense as the penalty and the citation allegations are inextricably linked.

            In assessing the appropriateness of a proposed settlement, the Commission and its judges must consider the operator’s history of prior violations, the size of the operator’s business, the operator’s negligence, the effect of the operator’s ability to continue business, the good faith of the operator to achieve rapid abatement of the violation, the penalty’s deterrent effect, and the gravity of the violation. 30 U.S.C § 820(i)(emphasis added); See Black Beauty Coal Co., 34 FMSHRC ___, slip op. at 10, Docket No. LAKE 2008-327 (Aug. 20, 2012). The S&S designation is an important indicator of gravity. While the S&S designation itself does not directly affect the proposed penalty under the Part 100.3 criteria that the Secretary uses to formulate proposed civil penalties, the Commission has held that S&S determination must be premised on findings that the violation contributed to a discrete safety hazard that was reasonably likely to result in an injury of a reasonably serious nature. See Mathies Coal Co., 6 FMSHRC 1, 3-4 (Jan. 1984). By agreeing to remove the S&S designation in a proposed penalty settlement, the Secretary essentially concedes, for purposes of settlement, that injury was unlikely. Such a concession has direct implications on the appropriateness of the Secretary’s proposed penalty and is subject to the same judicial review afforded proposed penalty revisions.

            In light of the foregoing, I reject the proposed settlement agreement in which the Secretary seeks to unilaterally remove the S&S designation after the proposed assessment of penalty has been contested before the Commission. I find 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 the language in Section 110(k) of the Mine Act, which provides that no proposed penalty which has been contested shall be settled, except with the approval of the Commission. Accordingly, I conclude under Black Beauty, supra, that the Secretary may not modify a contested citation, including the S&S designation, in the settlement of a civil penalty proceeding, without Commission approval. Furthermore, as I found in Rock N Roll Coal, supra, I find that any such modifications offered in consideration for Respondent’s acceptance of a contested civil penalty proposal should be supported by adequate factual foundation, as set forth in Commission Rule 31(b).

            The Secretary has shown an unwillingness to accept this case law and the rationale supporting prior settlement rejections by Commission Administrative Law Judges. See Black Beauty Coal Co., 34 FMSHRC ___, slip op., Docket No. LAKE 2008-327 (Aug. 20, 2012); Rock N Roll Coal, Inc., 33 FMSHRC 3253 (Dec. 2011) (ALJ); Dominion Coal Corp., 34 FMSHRC ___, slip op., Docket No. VA 2012-227 (October 17, 2012) (ALJ); Dickenson-Russell Coal Company, LLC, 2012 WL 6494599 (Oct. 2012) (ALJ); The American Coal Co. 35 FMSHRC ___, slip op., Docket No. LAKE 2011-13 (February 11, 2013). Absent a ruling from the Commission on this matter, I do not expect the Secretary to abandon this position.

            Commission Rule 76(a), 29 C.F.R. § 2700.76(a), provides that, upon the motion of the judge or a party, the Commission may grant interlocutory review where the judge's interlocutory ruling involves a controlling question of law and immediate review will materially advance the final disposition of the proceeding. Although the parties have not moved that the issue presented by this case be certified for interlocutory review, the large number of settlement motions filed for approval with the Commission warrants further clarity as to the Commission’s role in reviewing proposed settlements. Further, the scope of the Commission’s authority to review non-pecuniary settlement provisions is obscured by a split decision in Madison Branch Management, 17 FMSHRC 859 (June 1995).

            I find that it will materially advance the final disposition of the present case (and many others like it) by certifying for interlocutory review the issue of whether the Secretary can remove the contested S&S designation without leave of the Commission. If the Commission were to reverse my rejection of the settlement motion, it would be unnecessary to reschedule this case for hearing. Further, there would be no need for the Secretary to seek Commission approval when proposing to modify a citation that has been contested. Under the Secretary’s theory, which I reject, Commission approval would merely extend to a proposed penalty settlement. Accordingly, I conclude that review by the Commission will materially advance resolution of this proceeding and possibly hundreds of other settlements pending before Commission judges.

            WHEREFORE, the Secretary’s Amended Settlement Motion is DENIED and it is ORDERED that the following questions are CERTIFIED for review: (1) Whether the Secretary can remove the S&S designation without leave of the Commission in settlement of a proposed assessment of civil penalty that has been contested? (2) Whether the Act authorizes Commission review of non-pecuniary settlement provisions?

/s/ Thomas P. McCarthy

Thomas P. McCarthy

Administrative Law Judge

Distribution:

A. Scott Hecker, Esq., Office of the Solicitor, U.S. Department of Labor, 1100 Wilson Blvd., 22^nd Floor West, Arlington, VA 22209-2247

Douglas N White, Esq., Office of the Solicitor, U.S. Department of Labor, 1100 Wilson Blvd., 22^nd Floor West, Arlington, VA 22209-2247

Robert S. Wilson, Esq., Office of the Solicitor, U.S. Department of Labor, 1100 Wilson Blvd., 22^nd Floor West, Arlington, VA 22209-2247

Cameron S. Bell, Esq., Penn Stuart, P.O. Box 2288, Abingdon, VA 24212

/tjr