.
SOUTHERN MINERALS, INC.
December 4, 1996
WEVA 92-15-R
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
OFFICE OF ADMINISTRATIVE LAW JUDGES
2 SKYLINE, 10th FLOOR
5203 LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22041
December 4, 1996
SOUTHERN MINERALS, INC., : CONTEST PROCEEDINGS
TRUE ENERGY COAL SALES, INC., : Docket Nos. WEVA 92-15-R
and FIRE CREEK, INC. : through WEVA 92-116-R
Contestants :
v. : Fire Creek No. 1 Mine
: Mine ID 46-07512
SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
Respondent :
:
SECRETARY OF LABOR, : CIVIL PENALTY PROCEEDINGS
MINE AND SAFETY AND HEALTH :
ADMINISTRATION (MSHA) : Docket Nos. WEVA 92-786
Petitioner : through WEVA 92-791
v. :
: Fire Creek No. 1 Mine
SOUTHERN MINERALS, INC., :
TRUE ENERGY COAL SALES, INC., :
and FIRE CREEK, INC., :
Respondents :
DECISION
Appearances: Pamela S. Silverman, Esq., Ronald Gurka, Esq.,
Mark Malecki, Esq., U. S. Department of Labor,
Arlington, Virginia, for the Secretary;
Robert I. Cusick, Esq., Marco M. Rajkovich, Jr., Esq.,
Mindy G. Barfield, Esq., Jean Bird, Esq., Wyatt,
Tarrant & Combs, Lexington, Kentucky,
For Contestants/Respondents.
Before: Judge Barbour
These consolidated contest and civil penalty proceedings
arise under section 105 of the Federal Mine Safety and Health
Act of 1977 (30 U.S.C. � 801 et seq.). They involve 102 contests
of citations and orders. They also involve 101 alleged viola-
tions of mandatory safety standards for underground coal mines
for which aggregate civil penalties of $576,681 have been
proposed.
The cases are the result of a fatal explosion that occurred
at Fire Creek, Inc.'s (Fire Creek) No. 1 Mine. The mine is
located on land leased by Southern Minerals, Inc. (Southern
Minerals). Fire Creek, through a contract with Southern
Minerals, was the production contractor responsible for mining
coal at the mine. True Energy Coal Sales, Inc. (True Energy)
provided various administrative services to Fire Creek.
Following an investigation of the accident, the Secretary
of Labor, (Secretary) through his Mine Safety and Health
Administration (MSHA), issued the subject citations and
orders to Fire Creek, Southern Minerals, and True Energy.
The Secretary contended that the Companies were jointly and
severally liable as operators of the mine. Southern
Minerals and True Energy (Contestants) denied they were
operators and asserted that they were not liable under the
Act. Fire Creek did not dispute jurisdiction.
Counsels entered appearances on the record subject to a
duly noticed proceeding and expressed their positions regarding
how best to try the cases (see. Tr. I). As a result, the
proceedings were bifurcated so that the jurisdictional
status of Southern Minerals and True Energy could be
resolved, prior to addressing the individual merits of the
citations, orders, and alleged violations. After extensive
discovery, the Secretary, Southern Minerals, and True Energy
filed cross motions for summary decision. I denied the
motions (Southern Minerals, Inc., 17 FMSHRC 465 (March
1995)), and conducted a hearing of record regarding the
issue of operator status (See Tr. II).
Following the hearing, I issued a Partial Decision in
which I concluded that Southern Minerals was an operator of
the mine within the meaning of the Act and that True Energy was
not (Southern Minerals, Inc., 17 FMSHRC 2191, 2217 (December
1995). I dismissed the proceedings with regard to True
Energy and scheduled for hearing the contest and civil
penalty aspects of the cases as they related to Fire Creek
and Southern Minerals (17 FMSRHC at 2218).
The resulting hearing was rescheduled at counsels' request,
and counsels again appeared before me and expressed their
positions regarding how the trial should proceed (see
Tr. III). At the request of counsels, the hearing was
postponed to accommodate the parties need for further
discovery and to provide the opportunity to explore fully
the possibility of settlement.
Shortly before the hearing was to convene, counsels advised
me orally that the parties had agreed in principle to settle
all of the cases. Counsels orally and in writing explained
the broad outline of the proposed settlement, and they
requested a further delay while they negotiated the details
of the settlement.
Relying upon counsels assurance that their agreement
to settle was irrevocable, I continued the proceedings. I
ordered counsels to inform me on a periodic basis of their
progress in finalizing the settlement (See Orders of July
31, 1996; September 18, 1996).
THE SETTLEMENT
On November 1, 1996, the parties jointly moved to approve
the settlement and to dismiss the proceedings. The parties
attached to their motion lists of the specific citations and
orders issued to Southern Minerals, True Energy, and Fire
Creek and indicated the specific penalty proposed for each
violation (See Attachment A).
It is fair to describe the proposed settlement as
comprehensive. It is also fair to state that it may serve as
a landmark in effective enforcement. While the parties have
unresolved differences regarding the status of the Contestants
as operators under the Act and the negligence, if any, of
the companies in creating the allegedly violative conditions
(Motion 3), through mutual trust, diligence, and the
persistence of counsels, they have put aside these
differences in favor or an innovative, multifaceted
agreement. It is an agreement whose purpose is to raise the
level of safety not only in the Contestants' production
contractor operated mines, but in all such small mines in
southern West Virginia.
Under the settlement the parties have created obligations
and mechanisms that go beyond the requirements of the Act, while
remaining true to its spirit and overall goals. The parties and
their counsels are to be commended.
The terms of the settlement are:
1. Southern Minerals will pay civil penalties
totaling $50,000 to be apportioned among the
violations pro rata.
2. Southern Minerals through a cooperative
agreement with MSHA will institute a Production
Contractor Safety Promotion Program (Program) at
all current and prospective mines of Southern
Minerals operated by production contractors (See
Attachment B). (The program creates incentives
beyond those imposed by the Act for Southern
Minerals' production contractors to create and
maintain a safety culture at the mines they
operate or that they will operate.)
3. The Program contains specific provisions the
parties believe will create an environment to
prevent the recurrence of the violative conditions
and prac-tices found at the mine during MSHA's
investigation. It provides for an evaluation of
each prospective contract production operator's
ability to comply with the Act, requires periodic
audits by Southern Minerals to determine the
overall safety performance at each production
contractor operated mine, and establishes
procedures for effective communication of safety
and health concurs among MSHA, Southern Minerals,
and the contract production operators. Southern
Minerals' participation in these specific
activities exceeds the duties and obligations
imposed by the Act and its regulations. Southern
Minerals will spend $200,000 over a period of
5 years to meet the costs of the Program.
4. Southern Minerals will expeditiously enter
into a contact, the terms of which will be
approved by the Secretary, with the West Virginia
Small-Mines Assistance Center ("Center") to
develop mechanisms for the delivery of safety and
health expertise, training programs, and other
technical assistance tailored to small mine
operators. (The Center was established on July 1,
1994, with a grant from the West Virginia Board of
Coal Mine Health and Safety and is comprised of
Marshall University, West Virginia University and
other colleges and schools throughout West
Virginia.) Under the contract between Southern
Minerals and the Center, Southern Minerals will
pay to the Center $40,000 in 1996, and will make a
payment of an additional $40,000 during each
succeeding year through calendar year 2000, for a
total payment of $200,000.
5. The contract between Southern Minerals and the
Center, as supported by the annual payments, will
assist Southern Minerals in complying with the
Program. The contract will result in Southern
Minerals contract production operators receiving
assistance in the areas of technology transfer,
specialization of training materials, employee
assistance programs, training in conducting and
recording preshif, onshift, and other required
examinations, community outreach, programs
addressing smoking materials in the mining
environment, the development of safety audit
standards and proce-dures, ventilation, and mine-
specific safety workplace practices. (The parties
state that "[d]eficiencies in these areas directly
contributed to the occurrence of the explosion" at
the mine (Motion 5). They also state that the
nature and scope of assistance to contract
production operators under the contract exceed
that available under the Act and its regulations
and that the contract between Southern Minerals
and the Center is a "substantial inducement" to
the Secretary to enter into the proposed
settlement (Id. 5-6).)
6. Programs developed by the Center pursuant to
the contact will be made available to similar
small coal mines in southern West Virginia.
7. Except for proceedings under the Mine Act,
none of the settlement agreements and actions
taken by the Contestants and Fire Creek is an
admission of a violation of the Act or an
admission of the allegations contained in the
citations or orders or the proposals for penalty.
The findings and actions taken under the
settlement are solely for the purpose of
compromising and settling amicably the subject
administrative matters, and may not be used in any
judicial or administrative forum for any other
purpose, except for proceedings under the Act.
Moreover, the parties understand that the
settlement is not intended to and does not
constitute an admission of civil liability or
responsibility for any civil personal injury or
wrongful death action. Indeed, Contestants and
Fire Creek specifically deny such civil liability
or responsibility (Motion 2-7).
APPROVAL OF THE SETTLEMENT
The parties state, and I agree that "the settlement ...
reflects due consideration for the purposes of the Act" (Motion
7). Indeed, it does more. It provides ongoing obligations
and mechanisms that specifically address the chronic problem of
enhancing safety at small, contractor operated mines. In so
doing, it addresses both the immediate concerns raised by
the particular accident that triggered the settlement and the
general, more pervasive, concerns that all too often have been
endemic in facilities mined by some production contractors.
The settlement reflects the mutual recognition of the parties
that when it comes to such operators, more is needed from both
industry and government to meet the first and foremost priority
of the Act - "the health and safety of [the mining industry's]
most precious resource - the miner" (30 U.S.C. � 801(a)).
The foregoing having been considered, the parties' motion to
approve the settlement is GRANTED.
ORDER
It is ORDERED that:
1. Within 30 days of the date of this Decision and Order,
Southern Minerals will pay civil penalties of $50,000 for
the violations alleged in these matters. The sum will be
apportioned among the violations alleged on a pro rata basis
and as shown on Attachment A, which is incorporated by
reference.
2. Southern Minerals and the Secretary will implement the
Program, Attachment B, which is incorporated by reference.
3. Southern Minerals will provided the Secretary's
designated representatives with documentation demonstrating
the expenditure of at least $40,000 for costs directly
related to implementation of the Program during the
12 months following the date of this Decision and Order.
4. Southern Minerals will provide the Secretary's
designated representatives with documentation demonstrating
the expenditure of at least $40,000 per year for costs
directly related to the implementation of the Program during
each succeeding 12 months for a period of 5 years or until a
total expenditure of $200,000 is documented.
5. Southern Minerals will enter into a contract, the terms
of which are subject to the approval of the Secretary, with
the Center to develop mechanisms for the delivery of safety
and health expertise, including assistance in the areas of
technology transfer, specialization of training materials,
employee assis-tance programs, training in conducting and
recording preshift, onshift and other required examinations,
community outreach, programs addressing smoking materials in
the mining environment, the development of audit standards
and procedures, ventilation, mine-specific workplace
practices, and other technical assistance tailored to the
safety and health needs of small coal mine operators such as
Southern Minerals' contract production operators.
6. Southern Minerals will pay $40,000 to the Center in
calendar year 1996 and will make a payment of $40,000 during
each succeeding year through calendar year 2000 until such
payments total $200,000.
Upon payment of the civil penalty of $50,000, these
proceedings are DISMISSED WITH PREJUDICE.
David F. Barbour
Administrative Law Judge
2 Attachments a/s
Distribution:
Pamela S. Silverman, Esq., Ronald Gurka, Esq., Mark Malecki,
Esq., Office of the Solicitor, U. S. Department of Labor,
4015 Wilson Boulevard, Suite 516, Arlington, VA 22203
(Certified Mail)
Robert I. Cusick, Esq., Marco M. Rajkovich, Jr., Esq.,
Mindy G. Barfield, Esq., Jean Bird, Esq., Wyatt, Tarrant &
Combs, 1700 Lexington Financial Circle, Lexington, KY 40507
(Certified Mail)
David Burton, Esq., P. O. Box 5129, 1460 Main Street,
Princeton, WV 24740 (Certified Mail)
dcp