FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
601 New Jersey Avenue, N.W., Suite 9500
Washington, D.C. 20001-2021
Telephone: (202) 434-9958
Fax: (202) 434-9949
March 7, 2012
|
SECRETARY OF LABOR, MINE SAFETY AND HEALTH ADMINISTRATION (MSHA), Petitioner
v.
PERFORMANCE COAL COMPANY, Respondent
SECRETARY OF LABOR, MINE SAFETY AND HEALTH ADMINISTRATION (MSHA), Petitioner
v.
NUMEROUS FORMER MASSEY MINES And their successors |
CIVIL PENALTY PROCEEDINGS
Docket No. WEVA 2011-1934 et al A.C. No. 46-08436-255115-02
Mine: Upper Big Branch Mine-South
CIVIL PENALTY PROCEDINGS
Docket No. A.C. No.
Mine: |
ORDER LIFTING STAY
ORDER GRANTING MOTION FOR WITHDRAWAL OF CONTESTS
ORDER TO PAY
Appearances: Derek Baxter, Dana Ferguson, Office of the Solicitor, U.S. Department of Labor, for the Secretary of Labor.
David Hardy, Christopher Pence, Eric Silkwood, Guthrie & Thomas, PLLC, for the Respondent.
Before: Judge Margaret A. Miller and Chief Judge Robert J. Lesnick
These cases are before the Federal Mine Safety and Health Review Commission (the “Commission”) on petitions for assessment of civil penalties filed by the Secretary of Labor, acting through the Mine Safety and Health Administration (“MSHA”), against multiple mine operators, pursuant to sections 105 and 110 of the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §§ 815 and 820 (the “Mine Act”). The cases include, among other things, 48 penalty dockets, and approximately 928 citations and orders issued at the Upper Big Branch Mine
(“UBB,” or the “mine”) both before and after the April 5, 2010 explosion that resulted in the deaths of 29 miners. In addition, this order addresses more than one thousand other dockets that include citations and orders issued at other former Massey Energy Company (“Massey”) controlled mines. The total proposed penalty for the relevant citations and orders is $19,855,483.00. The parties have reached an agreement and Respondent has filed a motion to withdraw the contests of the relevant citations and orders included in the above captioned dockets. A telephone hearing was held on the motion on Wednesday, February 29, 2012. Subsequently, the Secretary of Labor filed a response to the motion and the Respondent filed an amended motion with Exhibit 5 attached.
On April 5, 2010, at approximately 3:00 p.m., an explosion occurred at Performance Coal Company’s (“Performance”) Upper Big Branch Mine - South, resulting in the deadliest US mine disaster in 40 years. The disaster resulted in the tragic deaths of 29 miners: Carl Acord, Jason Atkins, Christopher Bell, Gregory Steven Brock, Kenneth Allan Chapman, Robert Clark, Charles Timothy Davis, Cory Davis, Michael Lee Elswick, William I. Griffith, Steven Harrah, Edward Dean Jones, Richard K. Lane, William Roosevelt Lynch, Nicholas Darrell McCroskey, Joe Marcum, Ronald Lee Maynor, James E. Mooney, Adam Keith Morgan, Rex L. Mullins, Joshua S. Napper, Howard D. Payne, Dillard Earl Persinger, Joel R. Price, Deward Scott, Gary Quarles, Grover Dale Skeens, Benny Willingham, and Ricky Workman.
The explosion occurred at the longwall section, due to an ignition of methane that was propagated by coal dust. The explosion occurred at the time of a shift change and resulted in the deaths of the above-listed miners who, for the most part, were either at the working face or traveling on mantrips in the mine. Following the retrieval of all 29 victims, MSHA began an investigation of the explosion and its causes. The investigation was conducted jointly by MSHA and the State of West Virginia. At the time of the deadly explosion, Massey was the controlling entity of Performance Coal. However, in June, 2011, Performance, along with other Massey mines, was purchased by Alpha Natural Resources (“Alpha”).
In the wake of the explosion, MSHA issued hundreds of citations and orders at UBB, including citations and orders that cited Performance for interfering with the accident investigation. The citations that were issued as a result of the explosion in April, 2010, contributory to the accident, are not the subject of this proceeding. Performance has agreed to accept those citations and orders as issued and pay the penalties proposed by the Secretary. As a result, the Commission does not have jurisdiction over those citations and orders. However, there are roughly one thousand citations before us that were issued to Performance prior to and after the April explosion, and thousands more issued to other Massey mines.
A disproportionate number of the citations and orders that are pending in this matter are characterized by MSHA as resulting from “high negligence” and are designated as “significant and substantial,” “unwarrantable failure” and even “flagrant” violations. There were more than 43 open petitions for assessment of penalty for Performance prior to the devastating explosion, with citations dating as far back as June of 2006. A number of the Performance cases were stayed based upon a joint request by the parties and a letter, dated May 14, 2010, from the United States Attorney for the Southern District of West Virginia requesting such a stay. The stay on all of the subject cases is hereby LIFTED.
It is important to note that Massey, the parent company of Performance at the time of the explosion, is the same company that owned and operated Aracoma Coal’s Alma #1 Mine, which experienced a deadly fire in 2006. Following the Aracoma fire, Massey contested every single piece of paper issued by MSHA. The Aracoma fire eventually resulted in a settlement that included criminal charges against agents of the mine and an assurance from the mine operator that it would reduce its violations over the years to come. Aracoma Coal Co., 30 FMSHRC 1160 (Dec. 2008) (ALJ). Chief Judge Robert J. Lesnick questioned whether the agreed upon “penalty of $1.7 million was adequate in light of Aracoma’s enormous size.” Specifically, he noted the compensation of the Chairman, Chief Executive Officer, and President of Massey Energy Company, Aracoma’s parent company, who “received in 2007 a compensation package that probably exceeded $23 million.” That same CEO received a package from Massey prior to the buy-out by Alpha that included, among other things, a “$12 million golden parachute,” potential performance bonuses, and deferred compensation. Howard Berkes, Former Massey CEO Gets Golden Parachute … And A Blue Truck, NPR, Dec. 7, 2012, http://www.npr.org/blogs/thetwo-way/2010/12/08/131891377/former-massey-ceo-gets-golden-parachute-and-a-blue-pickup-truck. Since its purchase of Massey, Alpha has grown significantly larger, and is able to pay a total amount of over $200 million for fines, programs, and restitution, while at the same time continue in business.
In a subsequent Commission decision addressing the Aracoma fire, Commissioner Cohen decried Massey’s apparent strategy of contesting every citation and order issued by MSHA as an “outrageous” intentional burdening of the administrative judicial system. Aracoma Coal Co., 32 FMSHRC 1639, 1665 n. 4 (Dec. 2010) (Dissent of Commissioner Cohen). Here, Performance has continued the Massey practice with its contest of every citation and order written by MSHA at the mine after April 5, 2010, by filing a separate notice of contest for each. It would appear to be a strategy enlisted by the mine to overwork an already overloaded system. Notably, this intentional burdening of the administrative judicial system to avoid responsibility for mine safety was a major finding in the McAteer Report, discussed infra. GOVERNOR’S INDEPENDENT INVESTIGATION PANEL, REPORT TO THE GOVERNOR, UPPER BIG BRANCH – THE APRIL 5, 2010, EXPLOSION: A FAILURE OF BASIC COAL MINE SAFETY PRACTICES 99-100, 112. (2011) (hereinafter “McAteer Report”). While Massey contested far more citations and orders after the explosion, it can be said that, given the number of citations and orders pending before the Commission prior to the explosion at the Upper Big Branch mine, the burdening of the judicial system was one of the means Massey employed to avoid responsibility for its actions. Given that the former Massey mines are now owned by Alpha, we are hopeful that such a strategy will be abandoned.
Following the explosion at Upper Big Branch, former West Virginia Governor, Joe Manchin, commissioned an independent investigation into the explosion. In May of 2011, the Investigation Panel’s report, referred to as the McAteer Report, was submitted to the current governor, Earl Ray Tomblin. Among other things, the report explored the effect of earlier settlements and consequences in relation to current mine practices and stated that the purpose of the inspections and investigations into disasters such as that which occurred at Upper Big Branch is to ensure “that such tragedies don’t happen again.” Id. at 107. The report expresses “genuine hope,” albeit with reservations, that disasters such as the one at the Upper Big Branch can be eliminated. Id. Further, the report states that “[t]he disaster at Upper Big Branch was man-made and could have been prevented had Massey Energy followed basic, well-tested and historically proven safety procedures.” Id. at 109. The purpose of the agreement reached between the Secretary and the mines formerly operated by Massey is to take the next step toward preventing future mine disasters such as the one at UBB.
Here, Alpha has filed a motion on behalf of Performance, as well as the former Massey operators and mines captioned above, to withdraw its contest of all citations and orders contained in Exhibits 2 and 4. Alpha has agreed to pay the penalties in full for each of the dockets contained in Exhibit 2, and to pay the penalties in full for the specific citations and orders included in Exhibit 4. Further, as noted above, as a part of the overall settlement, Performance has agreed to pay the penalties in full for all citations and orders related to the explosion at the Upper Big Branch Mine, more than ten million dollars, and pay a total of approximately $209 million as part of the overall settlement. Alpha will pay $46.5 million in restitution to the families of the 29 victims and another $48 million to fund mining research. According to the parties, the restitution and research fund, in conjunction with the civil penalties, serves as an additional deterrent and will encourage future compliance with the Mine Act and its mandatory standards. Furthermore, as a part of the overall settlement, the former Massey controlled mines, now under the ownership of Alpha, will make a renewed effort to go forward with an improved safety record at each mine and, to that end, they have dedicated $80 million dollars to implement new programs in conjunction with the Mine Safety and Health Administration. Finally, the agreement does not remove the possibility that criminal charges may be filed against Massey management.
In support of the proposed agreement, and with regard to the penalty criteria set forth at 30 U.S.C. § 110(i), the Respondent acknowledges that the Secretary accurately evaluated the gravity and negligence in proposing a penalty for each docket included in the motion. The mines that are the subject of this order are of the size and have the history as designated in the file for each. Massey was not only large, but it was the parent company of many large mine operators. Many of those operators under the former Massey umbrella have an extensive history of violations. Performance is a large operator on its own, which, even prior to the explosion in April 2010, had an unusually high number of violations, including serious ventilation and roof control violations. See Ex. A attached to all penalty petitions. The history of Performance demonstrates that a number of the citations and orders at issue were not abated and the mine was issued a significant number of “failure to abate” orders prior to the citations and orders actually being abated. Respondent asserts that the Secretary considered the unprecedented number of failure to abate orders issued in assessing the penalties in each case. Finally, Respondent agrees that the payment of the proposed penalty amount will not adversely affect any of the above-captioned operators’ ability to continue in business.
Based upon a review of the facts and the Secretary’s proposed assessment procedures at 30 C.F.R. § 100, the Respondent represents that the agreed upon total civil penalty of $19,855,483.00 for the citations and orders set forth in Exhibits 2 and 4 is reasonable, and that payment of this amount will serve to affect the intent and purpose of the Act. In considering the parties’ proposal, we have looked at the penalty criteria in broad terms and considered all of the representations made by the parties, including the payments to the U.S. Attorney and the funds marked for future improvements in safety and health at the former Massey mines. The Commission currently has no jurisdiction over the citations and orders issued as contributing to the explosion of April 2010, but we do consider the penalty payment amount for those citations and orders in addressing the parties’ agreement as a whole. We also consider that, by deciding to pay the penalties for the contributory violations, Performance has accepted the violations as established and takes responsibility for those violations.
While we grant the motion proffered by the Respondent, we do so with great caution. We note that Alpha, on behalf of its former Massey mines, seeks to withdraw the notices of contest of all of the subject citations and orders, with few conditions. The Commission has noted that “[i]n determining whether to approve a proposed settlement a judge must consider, inter alia, whether the amount proposed will accomplish the underlying purpose of a civil penalty - to encourage and induce compliance with the Mine Act and its standards.” Madison Branch Management, 17 FMSHRC 859, 867 (June 1995) (citations omitted). In Wilmot Mining Co., the Commission stated that “[s]ettlement 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) . . . . A judge’s oversight of the settlement process ‘is an adjudicative function that necessarily involves wide discretion.’” 9 FMSHRC 684, 686 (1987) (citations omitted). Moreover, in reviewing settlement agreements, Commission judges must “accord due consideration to the entirety of the proposed settlement package, including both its monetary and non-monetary aspects . . . [to] determine whether it is ‘fair, adequate and reasonable’ . . . [and] ‘adequately protects the public interest.’” 17 FMSHRC at 868 (citations omitted). The Commission has emphasized that a judge’s approval or rejection of a settlement agreement must “be based on principled reasons.” Id. at 864 (June 1995) (quoting Knox County Stone Co., 3 FMSHRC 2478, 2480 (Nov. 1981)). The Commission looks to the penalty assessed in determining the appropriateness of the settlement, and the fact that the Secretary has proposed an assessment based upon the statutory penalty criteria.
The operators associated with the mines captioned above have agreed to pay all of the proposed penalties in full and to withdraw their contests of the subject citations and orders. Under Commission Rule 11 “[a] party may withdraw a pleading at any stage of a proceeding with the approval of the Judge or the Commission.” 29 C.F.R. § 2700.11. The Secretary does not object to the payment of proposed penalties and withdrawal of contests and agrees that she has considered all of the penalty criteria in determining the proposed assessment for each citation and order. Based upon all of the facts and information presented by the parties, we agree that the Respondent’s request to withdraw its contest of all penalties is appropriate for all of the subject citations and orders contained in these dockets.
The Federal Mine Safety and Health Review Commission exists to provide due process of law to the parties that practice before it. Here, the parties have reached a mutual agreement that, based on the information before us, adequately protects the public interest. Going forward, it is essential that the April 5, 2010 events at the Upper Big Branch Mine not be forgotten. We are sorely aware of the fact that no civil or criminal monetary or other penalty can come close to righting the wrong that those miners suffered, and that the families and friends of those miners continue to suffer. We are hopeful that, by agreeing to pay the proposed penalties in full and withdrawing its notices of contests of the subject citations and orders, Performance Coal Company has taken one step towards holding itself accountable for this terrible tragedy and 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. Based on the information before us, the Respondents’ motion is granted.
For the foregoing reasons, the Respondents’ request for withdrawal of the subject contests is GRANTED, and Alpha Natural Resources Inc., on behalf of the former Massey mines named on the attached exhibits, is ORDERED TO PAY the Secretary of Labor the total proposed penalty for all subject citations and orders within 30 days of this order. Upon receipt of payment, the contest proceedings listed in Exhibits 1 and 3 are DISMISSED.
/s/ Robert J. Lesnick /s/ Margaret A. Miller
Robert J. Lesnick Margaret A. Miller
Chief Administrative Law Judge Administrative Law Judge
Distribution:
Derek Baxter, Dana Ferguson, Office of the Solicitor, U.S. Department of Labor, for the Secretary of Labor, 1100 Wilson Blvd., 22nd Floor West, Arlington, VA 22209-2247
David Hardy, Christopher Pence, Guthrie & Thomas, PLLC, for the Respondent, 500 Lee St., East, Suite 800, Charleston, WV 25301