FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

601 NEW JERSEY AVENUE, NW

SUITE 9500

WASHINGTON, DC 20001

August 30, 2012

BEFORE: Jordan, Chairman; Duffy, Young, Cohen, and Nakamura, Commissioners

DECISION

BY: Jordan, Chairman; Young, Cohen, and Nakamura, Commissioners

            These contest and civil penalty proceedings arise under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2006) (“Mine Act” or “Act”). On August 22, 2011, Judge Thomas P. McCarthy granted the motions of Long Branch Energy (“Long Branch”) and dismissed seven civil penalty proceedings, along with two associated contest proceedings. He concluded that the Secretary of Labor and the Department of Labor’s Mine Safety and Health Administration (“MSHA”) had inexcusably delayed filing petitions for assessment of penalty in the penalty cases well beyond the 45-day deadline in Commission Procedural Rule 28(a), 29 C.F.R. § 2700.28(a), for filing such petitions. 33 FMSHRC 1960 (Aug. 2011) (ALJ). The Commission granted the Secretary’s Petition for Discretionary Review of the judge’s decision. The Commission also granted the subsequent motion of the United Mine Workers of America (“UMWA”) to participate as amicus curiae in support of the Secretary.

            For the following reasons we reverse the judge’s decision and remand these proceedings to him.

I.

Factual and Procedural Background

            At issue in these proceedings are 75 contested citations and orders for which the Secretary had proposed a total of $75,762 in penalties. 33 FMSHRC at 1979. The Long Branch mines were located in MSHA District 4, so that district office was originally responsible for preparing and filing the seven penalty petitions. Id. at 1962.

            Under Rule 28(a), the seven civil penalty petitions were originally due to be filed by the Secretary at various times between September 2009 and March 2010. However, none were filed within 45 days of MSHA’s receipt of the operator’s notice of contest as the rule requires. Id. at 1961. As summarized by the judge, three petitions were filed about 7-1/2 months late, two about 8-1/2 months late, one 9-1/2 months late, and one about 11 months late. Id. Six of the seven were not filed until November 5, 2010. Id. at 1961, 1978-79.

            In each of the seven cases, Long Branch filed with its answer to the petition an opposition to the Secretary’s motion for leave to file out of time which included a motion to dismiss the proceeding on the ground that the Secretary had failed to establish adequate cause for the late filing of the petition. 33 FMSHRC at 1961. The Secretary opposed the motions to dismiss, arguing that there was adequate cause for the late filings and that her failure to meet the deadlines was excusable due to the huge increase in the volume of work being handled in MSHA District 4. Id.

            The judge deemed the Secretary’s responses to the motions to dismiss to be insufficient, but resisted his initial inclination to grant the motions and instead held oral argument, during which limited testimony was permitted. Id. at 1961-63. The Secretary submitted such testimony by way of three declarations from representatives of the Secretary or MSHA. 33 FMSHRC at 1963.

            The judge subsequently granted all seven of Long Branch’s motions and dismissed the penalty proceedings. Id. at 1977. In so doing, he identified the Commission’s decision in Salt Lake County Road Department, 3 FMSHRC 1714 (July 1981) (“Salt Lake”), as the applicable precedent under Rule 28. 33 FMSHRC at 1964-66. The judge rejected the Secretary’s arguments that Supreme Court cases decided subsequent to Salt Lake should be read to nullify the “adequate cause” test the Commission fashioned in that case. Id. at 1962, 1964-69. Applying the Salt Lake test, the judge concluded that the Secretary had failed to establish adequate cause for the late penalty petition filings. Id at 1970-77. He found that her general statements about the nature of her case backlog before the Commission, high workload, and lack of personnel did not address the specific circumstances of the cases at issue. Id. at 1971-72. He noted that while the 45-day deadline in Rule 28(a) was not to be a procedural strait jacket and dismissal was a harsh outcome, the filing delays in the instant proceedings were significantly greater than those the Commission had previously excused under the Salt Lake standard. Id. at 1975-77. He further opined that there appeared to be nothing else that would spur the Secretary to more timely action on penalty petitions. Id. at 1976-77 & n.18.

II.

Disposition

            The Secretary submits that the Commission should modify the Salt Lake test by taking into account in all instances the extent to which an operator has shown that it has been prejudiced by a late filing. As a result, she contends that the factor of “adequate cause” should always be considered in conjunction with the factor of “prejudice” to the operator. For example, according to the Secretary, if the operator cannot establish any prejudice, a weak reason for the delay may be sufficient. The Secretary maintains that application of the modified test would require a remand in these cases. The Secretary further maintains that, even if the current Salt Lake test is applied, the judge’s dismissal order constituted an abuse of discretion, in that key factual findings underlying his decision were not supported by substantial evidence and he relied upon an improper understanding of applicable law.

            Amicus curiae UMWA takes the position that applicable Supreme Court precedent mandates reversal of the judge’s decision, because neither the Mine Act nor Rule 28(a) specifies a consequence for the late filing of a penalty petition or indicates an intention to deprive the Commission of the power to act. According to the UMWA, given the important public rights at stake, it is incumbent upon the Commission to use the less drastic remedies it has at its disposal in this instance. The UMWA also submits that the judge misread Salt Lake, and that if it is determined he did not, Supreme Court precedent requires that it be overturned.

            Long Branch responds to the Secretary by arguing that the Commission should not disturb Salt Lake. With regard to the judge’s ruling, Long Branch takes the position that it did not contain an error of law and was supported by substantial evidence, so consequently the Secretary’s view that it was an abuse of discretion should be rejected. Long Branch further contends that the judge correctly interpreted Rule 28(a) to be a “claims processing” rule, and therefore the burden had been properly placed upon the Secretary to show that enlargements of time were justified in these circumstances.

A.        Background of Rule 28

            Section 105 of the Mine Act sets forth the basic framework for the proposal and contesting of civil penalties. Section 105(a) of the Act states that the Secretary is to provide the operator notice of a proposed penalty “within a reasonable time” after the issuance of a citation or order. 30 U.S.C. § 815(a). Section 105(d) of the Act states that when an operator files a notice contesting a proposed penalty, “the Secretary shall immediately advise the Commission of such notification, and the Commission shall afford an opportunity for a hearing.” 30 U.S.C. § 815(d).

            The Commission, through its procedural rules, has implemented the statutory framework. Commission Rule 26 echoes the Mine Act, stating in pertinent part that “[t]he Secretary shall immediately transmit to the Commission any notice of contest of a proposed penalty assessment.” 29 C.F.R. § 2700.26. Commission Rule 28(a) provides the following regarding the timing of the next step in the penalty process:

§ 2700.28 Filing of petition for assessment of penalty with the Commission.

(a) Time to file. Within 45 days of receipt of a timely contest of a proposed penalty assessment, the Secretary shall file with the Commission a petition for assessment of penalty.

29 C.F.R. § 2700.28(a).

            The same or substantially similar procedures have been in effect since the Commission began hearing cases in 1978, and there is no indication in the regulatory history that the Secretary objected to the deadline as unrealistic. The Commission has stated that the 45-day time limit in Rule 28(a) “[i]n essence . . . implements the meaning of ‘immediately’ in section 105(d).” Salt Lake, 3 FMSHRC at 1715. In Medicine Bow Coal Co., 4 FMSHRC 882, 885 (May 1982), the Commission explained that the Secretary has two notification requirements arising from section 105(d): notification under Rule 26 for clerical purposes and notification under Rule 28 for pleading purposes.

B.        Standard of Review

            In Black Butte Coal Co., 25 FMSHRC 457, 459-60 (Aug. 2003), the Commission stated that “[w]hen reviewing a judge’s pre-trial rulings, . . . the appropriate standard of review to apply . . . is abuse of discretion, though any factual determinations he made in arriving at his conclusion are subject to substantial evidence review.” The Commission also acknowledged that it “‘cannot merely substitute its judgment for that of the administrative law judge . . . . The Commission is required, however, to determine whether the judge correctly interpreted the law or abused his discretion and whether substantial evidence supports his factual findings.’” Id. (emphasis added) (quoting Asarco, Inc., 12 FMSHRC 2548, 2555 (Dec. 1990)).

            This case involves the Commission’s interpretation and application of its own regulations. Consequently, we have “considerable legal leeway” to interpret our regulation, as long as that interpretation is not “plainly erroneous or inconsistent with the regulation.” Barnhart v. Walton, 535 U.S. 212, 217 (2002); Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945).

C.        Application of the Test Set Forth in Salt Lake

            The Secretary suggests that the Commission should revisit or modify the standard set forth in Salt Lake, arguing that the Commission recognized in the case that the “drastic course” of dismissal had the potential to frustrate the public interest embodied by the Mine Act. S. Br. at 9-10. Long Branch responds that disturbing the Salt Lake test now would violate the principle of stare decisis. LB Br. at 10-13.

            For the reasons set forth below, we do not believe that modification of the Salt Lake standard is necessary. However, it is appropriate for us to clarify our ruling in that decision, particularly in light of subsequent Commission cases, in order to determine whether the judge abused his discretion in this instance.

            Distilled to its essence, our opinion in Salt Lake identifies and prioritizes the interests implicated by the case before us and provides guidance for determining how judges should proceed when those interests collide. At its core, the decision reflects an “overriding concern with enforcement.” 3 FMSHRC at 1715. In support, Salt Lake cites the legislative history of the Mine Act, which noted that there may be rare circumstances where prompt proposal of a penalty would not be possible, but that the Senate Committee did “not expect that the failure to propose a penalty with promptness shall vitiate any proposed penalty proceeding.” S. Rep. No. 95-181, at 34 (1977), reprinted in Senate Subcomm. on Labor, Comm. on Human Res., Legislative History of the Federal Mine Safety and Health Act of 1977, at 622 (1978) (“Legis. Hist.”).

            While the Commission noted the paramount importance of penalties to the Act's enforcement scheme, Salt Lake also noted other considerations implicated by the language of section 105(d) of the Mine Act, which requires the Secretary to advise the Commission immediately when a penalty contest is received. 3 FMSHRC at 1715. This provision, we observed, “incidentally promotes ‘fair play’ by protecting operators from stale claims.” Id.

            Although we recognized the value of fairness inherent in the prompt filing of penalty petitions, we also clearly stated that Commission Rule 28(a)’s requirement that a penalty petition be filed within 45 days, while effectively ensuring the prompt filing of penalty petitions, is not a statute of limitations. Id. at 1715-16. The central tenet of the decision was that Rule 28 must be interpreted in light of section 105(d) of the Act: “Accordingly, the Secretary is not free to ignore the time constraints in Rule 2[8] for any mere caprice, as that would frustrate the enforcement purpose of section 105(d) and, in some cases, deny fair play to operators.” Id. at 1716.

            Thus, Salt Lake clearly established that Commission enforcement of the filing time limits is a secondary consideration to the primary purpose of section 105(d), i.e., ensuring prompt enforcement of the Act’s penalty scheme. Consistent with this purpose, we held that the rule establishing a time limit for penalty proposals could not be viewed as a “procedural strait jacket[].” Id.

            We further observed that strict compliance may not always be possible, and that “[n]onsuiting the Secretary . . . presents quite a different situation from defaulting the tardy private litigant.” Id. Thus, Salt Lake rests firmly on the principle that “considerations of procedural fairness to operators must be balanced against the severe impact of dismissal of the penalty proposed upon the substantive scheme of the statute, and, hence, the public interest itself.” Id.

            We then provided guidance for conducting the requisite balancing in subsequent cases: “In order to help strike a proper balance and to insure [sic] that the Secretary does not ignore section 105(d)’s injunction to act ‘immediately,’ we hold that if the Secretary does seek permission to file late, he must predicate his request upon adequate cause.” Id. (emphasis added).

            The requirement in Rule 28(a) to file a penalty petition within 45 days cannot be viewed as an avenue for an operator to seek dismissal on a mere technicality. Despite stern admonitions to the Secretary, the clear and express holding of Salt Lake is that cases should not be dismissed on mere procedural grounds, as this would frustrate section 105(d)’s overriding purpose of ensuring prompt and efficient enforcement. Rather, Salt Lake compels the Secretary to adequately explain any late filing. However, once a showing of adequate cause is made, a demonstration of prejudice by the operator is a predicate for dismissal, because agency proceedings “are not to be overturned because of a procedural error, absent a showing of prejudice.” Id. at 1716.

            In sum, pursuant to Salt Lake, the Secretary may not, on a “mere caprice,” ignore the Commission’s procedural rule regarding deadlines for filing penalty petitions. At the same time, we must adhere to the basic administrative law principle that, where the government can be said to have acted reasonably – i.e., not on a whim or in dereliction of its duties to uphold the law – an overarching interest in prompt and efficient enforcement precludes the dismissal of substantive proceedings on procedural grounds in the absence of prejudice. Id. Thus, regardless of how important procedural regularity may be, it is subservient to the substantive purpose of the Mine Act in protecting miners’ health and safety. As stated in Salt Lake, “[w]e do not mean to intimate that insuring procedural fairness is not an important concern under the Mine Act. However effectuation of the Mine Act’s substantive scheme, in furtherance of the public interest, is more crucial.” Id. We therefore must balance concerns for procedural regularity against the severe impact of a dismissal on the Mine Act’s penalty scheme.

            In order to achieve this balance, we clarify that “adequate cause” may be found to exist where the Secretary provides a non-frivolous explanation for the delay. The Secretary’s excuse may not be facially implausible, and should be supported by evidence sufficient to establish that the delay did not result from “mere caprice” or through willful delay, intentional misconduct, or bad faith. This ensures that the Secretary is upholding her commitment to the public interest, while recognizing that dedicated public servants may stumble in the performance of their duties.

            Once the Secretary meets her burden in this regard, an operator must show at least some actual prejudice arising from the delay in order to secure a dismissal of a penalty proceeding due to a late-filed petition. Mere allegations of potential prejudice or inherent prejudice should be rejected. Of course, occasions may arise where a judge will find that the Secretary has demonstrated adequate cause and that the operator has brought forth evidence of actual prejudice. The judge in such instances must weigh the interest of fairness to the operator against the public interest in upholding the enforcement purpose inherent in section 105(d).

            The Commission was not required to engage in such balancing in the two major cases analyzing this issue post-Salt Lake because the operator failed to establish prejudice in either case. In Medicine Bow, the Commission characterized the Salt Lake standard as a “two-part” test, requiring the Secretary to demonstrate adequate cause and, upon such showing, calling on the operator to demonstrate “prejudice,” such as “missing witnesses” or “lateness so great as to unduly delay a hearing.” 4 FMSHRC at 885. Despite the Commission’s rejection of the Secretary’s suggestion that “significant malfeasance” be demonstrated before dismissing a penalty, id. at 885 n.6, and implicit criticism of the “minimally adequate” excuse offered by the Secretary, id. at 885, the Commission affirmed the judge’s denial of the operator's motion to dismiss, where no actual prejudice was established. Id. at 885-86.

            Similarly, in Rhone-Poulenc of Wyoming Co., 15 FMSHRC 2089 (Oct. 1993), aff’d, 57 F.3d 982 (10th Cir. 1995), we reversed a judge’s dismissal of a penalty proceeding where prejudice was not established. Again, the Commission noted that adequate cause is required apart from any consideration of prejudice. 15 FMSHRC at 2093. In evaluating the Secretary’s excuse, we found compelling the “unusually heavy” caseload occasioned by the impact of a Commission decision on the Secretary’s penalty calculations in general, as well as a shortage of clerical personnel that could be assigned to reprocess the cases. Id. at 2093-94. The “rare” two-week delay, under the circumstances, was deemed justified. Id. at 2094.

            Similar to our precedent in Salt Lake and its progeny, we note that the cases before us may be decided solely on the adequacy of the cause proffered by the Secretary. In none of these cases has the operator provided evidence of any actual prejudice.

            We further note that although here the judge stated that he was not reaching the issue of prejudice, he suggested that it was enough to establish prejudice under Salt Lake “that Long Branch has raised a ‘danger of prejudice’ due to the Secretary’s untimely filings, and those filings are prejudicial to the interests of efficient adjudicatory administration.” 33 FMSHRC at 1976 n.17. Application of such a standard of prejudice would have been erroneous. The Commission in Salt Lake did not expand upon what it meant by “a showing of prejudice” to “the preparation and presentation of the operator’s case.” 3 FMSHRC at 1716. It is clear from the cases that it cited, however, that it meant more than “a danger of prejudice,” or a concern about prejudice to the efficiency of the Mine Act enforcement process. The cases the Commission cited stand for the proposition that the prejudice must be “real” or “substantial,” and demonstrated by a specific showing by the operator.

            Our holding today, in addition to conforming to our precedent, is in accord with that of several federal courts, which have demonstrated a similar reluctance to dismiss a case against a private litigant who has “merely seize[d] upon a procedural irregularity to justify the drastic remedy of dismissal.” Salt Lake, 3 FMSHRC at 1717. For example, in Nealy v. Transportacion Maritima Mexicana, S.A., 662 F.2d 1275 (9th Cir. 1980), the court approved a similar approach:

Where a plaintiff has come forth with an excuse for his delay that is anything but frivolous, the burden of production shifts to the defendant to show at least some actual prejudice. If he does so, the plaintiff must then persuade the court that such claims of prejudice are either illusory or relatively insignificant when compared to the force of his excuse. At that point, the court must exercise its discretion by weighing the relevant factors – time, excuse, and prejudice.

Id. at 1281.

D.        Whether the Judge Abused his Discretion in Dismissing the Proceedings

            Applying the Salt Lake standard to the cases before us requires a determination whether adequate cause exists for the late filings, considering the cause and length of the delay and the plausibility of the excuse. Consistent with Rhone-Poulenc, we take into account the unprecedented expansion of the Secretary’s workload following the 2006 and 2007 mine disasters at the Sago and Aracoma mines in West Virginia, and the sweeping policy changes that followed those events.

            Those accidents resulted in multiple miner fatalities in early 2006, after which it is clear that MSHA increased its enforcement efforts under the Mine Act. MSHA’s web site contains extensive statistics from calendar years 2002 to 2011 that illustrate what was occurring both in the field and at MSHA’s centralized assessment office. The number of citations and orders issued by the agency increased steadily in the first half of the decade, before increasing over 20 percent in 2008 and remaining nearly that high the next two years.

            In light of the fatal accidents, MSHA’s enforcement responsibilities under the Mine Act also were expanded with that statute’s amendment by the Mine Improvement and New Emergency Response Act of 2006 (known as the MINER Act). See Pub. L. 109-236, 120 Stat. 493. Moreover, effective as of April 2007, the agency amended its civil penalty regulations in light of the new law to provide for, among other things, higher penalty amounts. See 72 Fed. Reg. 13592 (Mar. 22, 2007) (amending 30 C.F.R. Part 100). Consequently, the total dollar amount of penalties proposed by MSHA increased nearly five-fold in the 2007 to 2011 time frame over the previous five-year period. Considering only coal mines, the increase in proposed penalties was even greater, from $17.4 million in 2005 to $29.9 million in 2006 and then $98.9 million in 2007 and $110.4 million in 2008.

            The results of these changes in the enforcement environment can be easily seen, particularly in District 4. The Secretary presented evidence that the number of cases there, measured both in terms of contested assessments and contested individual penalties, roughly tripled between 2008 and 2009, and then nearly doubled again the following year, resulting in District 4 having a workload that was approximately twice that of any other coal district in the country. See Gov’t Ex. 1, at 3-4 & attachments (declaration of Linda C. Weitershausen, Deputy Director, MSHA Office of Assessments).

            While the judge mentioned this evidence in his decision below, he did so prior to the clarification of the Salt Lake standard we are providing today. Consequently, although we can see how he came to the conclusions that he did, we are constrained to hold that he abused his discretion by not giving adequate weight to this evidence in his analysis of the issues.

            The Secretary argues that the influx of cases overwhelmed the responsible District 4 staff. Mr. Hosch, the District 4 CLR, stated in his declaration, and later expanded upon at his deposition, that the three CLRs and the one secretary assigned to assist them were unable to keep up with the sheer number of cases for which they were expected to prepare penalty petitions. See Hosch Decl., ¶ 13, Hosch Dep. Tr. at 48-53.

            Although the judge in his decision focused on what he found to be an inadequate response by MSHA and the Secretary to the sudden deluge of new cases experienced by District 4 (see 33 FMSHRC at 1972-73), we question whether any agency could have responded in a completely sufficient fashion, given the circumstances outlined above. While other district office staff members were in theory available (id. at 1973), the increase in mine safety enforcement and new MSHA responsibilities increased the duties of most if not all of those employees as well.

            Consequently, we conclude that the delays at issue here, while regrettable, were adequately explained by the unusual circumstances that existed during the relevant time period. Given the record evidence, the Secretary’s excuse for the late filings is plainly a plausible one, and adequate cause for the delay has been established. Consequently, we reverse the judge’s decision dismissing the seven penalty proceedings (and two associated contest proceedings).

            Our decision provides appropriate standards for a proper balancing of the public and private interests at stake. While we reaffirm our paramount concern with ensuring the preservation of the important substantive protections provided by the Mine Act, we also recognize, in proportion, the value of order and procedural regularity, the need for government agencies to be held accountable for inefficiencies which harm the public interest, and the commitment to ensuring that delays caused by the Secretary do not unfairly burden private litigants in their contests before the Commission.

III.

Conclusion

            For the foregoing reasons, we reverse the judge’s decision dismissing the seven penalty proceedings and two associated contest cases, and remand this matter to him for further proceedings consistent with this decision.

____________________________________

Mary Lu Jordan, Chairman

____________________________________

Michael G. Young, Commissioner

____________________________________

Robert F. Cohen, Jr., Commissioner

____________________________________

Patrick K. Nakamura, Commissioner

Commissioner Duffy, dissenting:

            I would affirm the decision below as a model of clarity, logic, persuasion, and adherence to Commission precedent. Moreover, the judge’s disposition of these matters, the dismissal of the civil penalty proceedings for lack of timely prosecution by the Secretary, is fully justified by the record and is a necessary and appropriate means for ensuring that the Commission’s processes and its pivotal role in the administration of the Mine Act are vindicated.

            The judge, applying his reading of the Commission’s decision in Salt Lake, concluded that the Secretary did not establish “adequate cause” for the late filing of the seven petitions, and dismissed the seven penalty proceedings on that basis alone. He made only a brief reference to the issue of prejudice on the grounds that once the Secretary is unable to establish adequate cause for her failure to comply with Rule 28(a), the issue of prejudice need not be decided. 33 FMSHRC at 1970, 1976-77 & n.17. I agree with both of those holdings.

            The Secretary argues that the judge abused his discretion in so holding and asks that the Commission reconsider the analytical approach in Salt Lake so as to hold that dismissal of a civil penalty due to the Secretary’s failure to timely file a petition, or adequately explain her reasons for not doing so, cannot be had without a showing of prejudice by the operator. Salt Lake, however, was just the first Commission case to rule on the standard to be applied when an operator moves to dismiss a proceeding on the ground that the Secretary has failed to comply with the 45-day deadline for filing a penalty petition. Subsequent Commission cases applying the principles adopted in Salt Lake make it abundantly clear that the correct analytical framework for determining whether dismissal is appropriate is a two-part test in which the question of adequate cause is first determined, and then, if necessary, the question of prejudice is addressed. In Medicine Bow, a case the Commission described as “basically involv[ing] a straightforward application of Salt Lake to the relevant facts,” the Commission stated:

            The judge correctly interpreted Salt Lake as creating a two-part test. Salt Lake first established that the Secretary must show adequate cause for any delayed filing. 3 FMSHRC at 1715-17. . . .

We also held in Salt Lake that adequate cause notwithstanding, dismissal could be required where an operator demonstrates prejudice cause by the delayed filing. 3 FMSHRC at 1715-18.

4 FMSHRC at 884, 885. Subsequently, in Rhone-Poulenc, the Commission further explained that

under Salt Lake and Medicine Bow, the Secretary must establish adequate cause for the delay in filing, apart from any consideration of whether the operator was prejudiced by the delay. In general, if the Secretary fails to establish adequate cause, the case may be subject to dismissal.

15 FMSHRC at 2093.

            Taking into consideration these later iterations of the principles underlying the Commission’s decision in Salt Lake, I find that the judge properly held that the Secretary, if challenged, is obligated to establish adequate cause for filing a penalty beyond the 45 days specified in Rule 28(a) notwithstanding whether the delay prejudices the mine operator. Accordingly, I agree with my colleagues that modification of the standards adopted in Salt Lake is neither necessary or appropriate.

            More importantly, reaffirming the standard the Commission established in Salt Lake reassures the regulated community that the Secretary does not have “carte blanche” to ignore the Commission’s rules, particularly with respect to those as important as Rules 9 and 28(a), without which, as the judge recognized, “the adjudicatory process languishes.” See 33 FMSHRC at 1973, 1976. I part company with the majority, however, on the application of Salt Lake’s principles to the circumstances presented in these proceedings.

            The Secretary takes issue with the judge’s finding that her evidence was not specific enough with regard to how the rising tide of District 4 penalty proceedings prevented the seven penalty petitions here from being prepared for several months beyond the 45-day deadline in Rule 28(a). According to the Secretary, it was sufficient that she presented evidence that the number of cases in the district, measured both in terms of contested assessments and contested individual penalties, roughly tripled between 2008 and 2009, and then nearly doubled again the following year, resulting in District 4 having a workload that was approximately twice that of any other coal district in the country. S. Br. at 13-14. The judge clearly acknowledged the evidence which the Secretary cites. See 33 FMSHRC at 1971 (citing an average 267-day delay in the filing of penalty petitions), 1974 n.14 (statistics on influx of cases in District 4).

            The judge was not presented, however, with the question of how the overall increase in penalty contests would affect the average time it would take to process a case. Rather, the judge was presented with a specific factual situation – the Secretary’s failure for months beyond the applicable deadlines to file seven specific penalty petitions, and he plainly found that the Secretary made no effort to explain how the seven cases, given their relative temporal position in the backlog, could not be acted upon relative to the cases for which District 4 was able to prepare petitions and instanter enlargement motions. Moreover, as Long Branch explains in detail, the Secretary’s evidence lacked the detail necessary to explain sufficiently whether District 4 was working at all to file penalty petitions. See LB Br. at 26. While it may be true that the extensive backlog of contested enforcement actions in District 4 was not frivolous, the central issue is whether the Secretary can show that her efforts to address that backlog constituted an adequate excuse for the severe delays in complying with Commission Rules 28(a) and 9. The judge found that the Secretary’s efforts constituted “inexcusable neglect,” 33 FMSHRC 1971, and I conclude that substantial evidence supports his conclusion.

            Because of the importance of the issue before him, the judge was not unreasonable in expecting more from the Secretary:

The Secretary’s responses contain only general statements about the nature of the backlog, high caseload, and lack of personnel, which allegedly caused the untimeliness of the petitions. The specific circumstances affecting the present cases are not addressed. If such a vague and general explanation was allowed to establish adequate cause then the Commission would be forced to accept nearly every late petition. The Commission’s properly promulgated filing deadlines and the Congressional desire for expeditious determination of civil penalty petitions would be rendered meaningless.

33 FMSHRC at 1971-72.

            Following at least three coal mining accidents resulting in multiple miner fatalities in early 2006, it is clear that MSHA stepped up enforcement of the Mine Act. While a detailed discussion of the issue is not necessary here, MSHA’s web site contains extensive statistics from the calendar year 2002 to 2011 time period that illustrate what was occurring in both the field and at MSHA’s centralized assessment office.

            Between 2004 and 2007, coal mines were cited for violations at a rate-per-inspection hour that increased nearly 50 percent, before the rate began gradually decreasing. The result was a large increase in the number of citations and violations, particularly after more inspections apparently started taking place in 2008.

            Not surprisingly, this increase in citations and orders resulted in a higher assessment of penalties. In just the two years immediately following 2005, the total dollar amount of coal mine penalties proposed by MSHA increased 569 percent, and then further increased in two of the following three years.

            The Secretary, however, discounted that the foregoing could be a cause of the increase in penalty contest cases. Rather, citing a 60 to 80 percent increase in the contest rate for penalties, the Secretary claimed that “[t]he increase in contested civil penalties was substantially caused by mine operators contesting civil penalties at a greatly increased rate, as opposed to MSHA issuing more violations.” S. Mem., Gov’t Ex. 1, at 3.

            The judge not only rejected this conclusion, but he also refused to draw the inference requested by the Secretary that operators were acting in bad faith in filing an increased number of contests. See 33 FMSHRC at 1974. He instead concluded that MSHA and District 4 were essentially asleep at the switch if they did not expect an increase in penalty contests. See id. (“To suggest that the District 4 office did not see or expect an increase in contested penalties is simply beyond reasonable belief. It has been long known and common sense dictates that heightened enforcement and increases in the penalty structure would cause operators to contest more citations.”).

            The Commission has held that “the substantial evidence standard may be met by reasonable inferences drawn from indirect evidence,” emphasizing that inferences drawn by the judge are “permissible provided they are inherently reasonable and there is a logical and rational connection between the evidentiary facts and the ultimate fact inferred.” Mid-Continent Resources, Inc., 6 FMSHRC 1132, 1138 (May 1984). The inferences drawn by the judge are inherently reasonable in this instance. It is only logical that changes in the “front end” of the mine safety enforcement process would eventually be felt in the “back end” of that process during the adjudication stage. Indeed, as the judge recognized, the history of this cause-and-effect relationship is reflected in the Commission’s Rule 28(a) decisions. 33 FMSHRC at 1974; see also Rhone-Poulenc, 57 F.3d at 985 (Commission could take its prior decisions that resulted in increased Secretarial caseload into account in reversing judge’s order of dismissal).

            Consequently, the judge had ample grounds on which to reject the notion that the large influx of penalty assessment cases could not be foreseen by the Secretary.

            The Secretary would have the Commission overturn the judge’s finding on the basis that Hosch’s secretary placed filing reminders on his calendar regarding case deadlines in the coming month. S. Br. at 15 (citing Hosch Dep. Tr. at 7-8). Because this appeared to be the extent of the system that Hosch used as a warning that Rule 28 (and Rule 9) filings were due under the 45-day period (and, perhaps even more importantly, past due for previous such periods), it is perfectly understandable that the judge was unimpressed.

            It was Hosch’s secretary who was primarily responsible for preparing the penalty petitions, and at some point she started occasionally receiving part-time assistance in the task. Hosch Dep. Tr. 33. The Secretary takes the position that the judge thus erred in concluding that MSHA and District 4 were not being “pro-active” in addressing the problem. S. Br. at 16.

            It is undisputed, however, that District 4 faced a significant increase in penalty contests, and it was quite reasonable for the judge, in determining whether the adequate cause standard of Salt Lake had been met, to look at the extent of the steps the District 4 office was taking in response. Substantial record evidence supports the judge’s implicit conclusion that those steps were “too little, too late,” given the nature of the problem. The judge correctly concluded that the District 4 office, with its three CLRs and 15 secretaries, could have done much more to address the problem of the mounting penalty petitions that were due, particularly after Hosch called District 4 management’s attention to the problem. See 33 FMSHRC at 1975; Hosch Dep. Tr. 32.

            The Secretary argues, in essence, that the solution to the problem was out of her control, because it is Congress, and not MSHA, that determines the level of investment with respect to such issues as the automation of penalty petition preparation. S. Reply Br. at 14. Without having to address in detail the issue of how MSHA may be able to more efficiently prepare penalty petitions, it is enough to find that the judge was correct in generally viewing the problem as one of a lack of proper MSHA and Secretarial oversight. See 33 FMSHRC at 1974-75.

            Penalties are proposed and contests thereof are received at a central MSHA location. In addition, the Secretary presented evidence below that she tracks the caseload at each of the MSHA districts on a monthly basis. See S. Memorandum, Gov’t Ex. 2. Moreover, her own web site presently details that multiple MSHA national offices are ultimately responsible for case tracking from cradle to grave and ensuring those cases are resolved:

The Civil Penalty Compliance Office (CPCO) is responsible for tracking all civil penalty cases, from the time they are generated through final payment or closure . . .

MSHA, Civil Penalty Compliance Office, http://www.msha.gov/PROGRAMS/ASSESS2.HTM

The Director’s Office develops and updates assessment policy; maintains the MSHA Standardized Information System (MSIS); coordinates assessment activities among the Coal Mine Safety and Health and Metal/Nonmetal Mine Safety and Health Offices/Districts, Arlington Headquarters, and the Assessments Center in Wilkes-Barre, Pennsylvania; and coordinates MSHA's enhanced enforcement, special investigations, and accountability program activities amoung (sic) the Coal Mine Safety and Health and Metal/Nonmetal Mine Safety and Health districts and headquarters offices.

MSHA, Director’s Office, http://www.msha.gov/programs/AssessmentDirector.asp

The Accountability Office is responsible for ensuring MSHA’s enforcement policies and procedures are carried out effectively and appropriately.

MSHA, Accountability Office, http://www.msha.gov/PROGRAMS/assess4.asp

            Despite the foregoing, the Secretary would have the Commission excuse her inability to file timely penalty petitions in District 4 due to the fact that she could do little more than assign one secretary to prepare the documents there. She argues that the reassignment of employees necessarily reorders an agency’s priorities and ensures that other tasks will go undone. S. Reply Br. at 9-10. That argument implicitly downgrades the importance of mine safety enforcement that is accomplished through timely adjudication of proposed penalties. At some point it became incumbent upon MSHA, acting through these national offices, to act upon the information that was clearly available and at least attempt to address all the contested assessments in District 4.

            Moreover, I reject in the strongest terms the Secretary’s argument, made both here and below, that the same circumstances that made it impossible for her to comply with Rule 28(a) should be viewed as also providing a sufficient excuse for failing to comply with Rule 9 until months later, when the overdue penalty petitions were eventually filed. S. Br. at 18. The Secretary is essentially stating that she considers compliance with Rule 9 as optional under her view of the circumstances. Given that Rule 9, working in conjunction with Rule 28(a), permits the Commission to manage its docket from the outset of a case, the Secretary’s treatment of her Rule 9 obligations is unacceptable, and it is entirely understandable why the judge took his dissatisfaction with the Secretary’s efforts at meeting those obligations into account. See 33 FMSHRC at 1973.

            While one could appreciate the Secretary’s inability to comply strictly with Rule 9(a) under the circumstances, I do not read the rule, taken as a whole, to grant the Secretary a pass that allows her to delay filing a motion for enlargement of time until she eventually gets around to filing the penalty petition months and months after it is due. The circumstances in these and other cases were clearly so drastic that the Commission and the contesting operators were owed, from the Secretary, an interim explanation and some projection of the amount of additional time it would take her to file overdue penalty petitions. As the judge here recognized, in Salt Lake the Commission admonished the Secretary that she is “to proceed by timely extension motion when additional time is legitimately needed.” Id. (quoting 3 FMSHRC at 1717).

            In short, the Commission, as the forum responsible for adjudicating rights under the Mine Act, should not accept the Secretary’s attempt to cite one overtaxed secretary as the reason she could not use Rule 9 to inform the Commission and the operators what was occurring in the increasingly delinquent District 4 cases. As explained in the Secretary’s brief, she eventually used a centralized approach to address the backlog of cases both in District 4 and elsewhere, and specifically allocated personnel from other offices to process delinquent District 4 penalty petitions. There was no reason why this could not have occurred earlier, at least with respect to the preparation of Rule 9 motions, which even in standardized form could have informed the Commission and operators of the status of these cases.

            The Secretary contends that the judge also abused his discretion by ignoring aspects of the legislative history which reads as follows:

To promote fairness to operators and miners and encourage improved mine safety and health generally, such penalty proposals must be forwarded to the operator and miner representative promptly. The Committee notes, however, that there may be circumstances, although rare, when prompt proposal of a penalty may not be possible, and the Committee does not expect that the failure to propose a penalty with promptness shall vitiate any proposed penalty proceeding.

S. Rep. No. 95-181, at 34 (1977), reprinted in Senate Subcomm. on Labor, Comm. on Human Res., Legislative History of the Federal Mine Safety and Health Act of 1977, at 622 (1978) (“Legis. Hist.”).

            The Secretary maintains that the backlog of cases in District 4 constituted just such a rare circumstance, and that the judge further erred in failing to recognize that Congress made clear that Secretarial tardiness does not necessarily prevent a civil penalty proceeding from going forward. S. Br. at 18-21. Long Branch responds that the Secretary is confusing the issue, in that she is not confronting the reason for delay in filing penalty petitions – her inability to devote sufficient resources to the preparation of them – and then relies on the resultant backlog to excuse the delays in the petition filings. LB Br. at 23-25.

            It needs to be stressed that the quoted legislative history addresses the issue of Secretarial tardiness in the context of the initial penalty proposal process of section 105(a), while the issue here is a separate one, having to do with the proceeding subsequent to the assessment governed by section 105(d). Furthermore, as the judge explained, section 105(a) affords the Secretary the relatively amorphous “reasonable time” to propose a penalty, which is a task that involves her taking into account a number of factors that provide support for the amount of civil penalty being sought. In contrast, Rule 28(a) requires her to act within 45 days to perform the relatively simpler task of preparing the penalty petition. See 33 FMSHRC at 1964-65 n.5.

            As explained in its legislative history, the Mine Act was intended to greatly improve upon the penalty assessment, adjudication, and collection procedures of the predecessor to the Mine Act, the Federal Coal Mine Health and Safety Act of 1969 (“Coal Act”). Those procedures were characterized as “lengthy, and often repetitive,” and ones which “encourage[d] delaying the ultimate payment of civil penalties. S. Rep. No. 95-181, at 44, Legis. Hist. at 632. “The small amount of penalty collections under the current Coal Act compared to the amount of penalties assessed, is the result of a number of deficiencies which have complicated the administration of the Act by the Department of the Interior and [the Mine Enforcement and Safety Administration].” Id.

            In drafting its version of the Mine Act, the Senate Committee on Human Resources stated that “[t]o be effective and to induce compliance, civil penalties, once proposed, must be assessed and collected with reasonable promptness and efficiency. To achieve this objective S. 717 contains a number of significant departures from the present practice under the Coal Act.” S. Rep. No. 95-181, at 43, Legis. Hist. at 631. Included in those departures, which were described as “means by which the method of collecting penalties is streamlined,” is that “civil penalties are to be assessed by the [Federal] Mine Safety and Health Review Commission rather than by the Secretary as prevails under the Coal Act . . . . Where a penalty is contested the normal proceedings for the hearing of cases by the Commission controls.” S. Rep. No. 95-181, at 45-46, Legis. Hist. at 633-34. Moreover, in creating the Commission, the Committee stated that it “strongly believes that it is imperative that the Commission strenuously avoid unnecessary delay in acting upon cases.” S. Rep. No. 95-181, at 48, Legis. Hist. at 630.

            Thus it falls to this Commission to ensure the swift and fair disposition of proceedings designed to effectuate the enforcement provisions of the Act. Indeed, the prerogatives of this Commission and the integrity of its processes are a valid consideration to be placed on the scale along with the deterrent effect of civil penalties and procedural fairness to the operator. For example, the independence and authority of the Commission are seriously undermined when a party fails to comply with our duly-promulgated procedural rules, and here I am specifically referring to the Secretary’s failure to comply with Rule 9 when she obviously knew she had a serious problem complying with Rule 28(a). That posture suggests a certain level of arrogance, particularly in light of the Secretary’s admission “that if the roles were reversed, and the operator had insufficient personnel or resources to file an answer in a timely manner, the Secretary would insist that the operator be held to the Commission’s filing deadlines.” 33 FMSHRC at 1962.

            Moreover, as the neutral arbiter in disputes arising under the Act, the Commission is responsible for seeing that due process is served in its proceedings. Prompt adjudication not only underscores the deterrent purposes of the Act’s enforcement scheme and the need to address systemic threats to miner safety, it also assures that the more severe sanctions available to the Secretary are administered in a context that is consonant with principles of due process.

            For example, MSHA’s current regulations governing the imposition of pattern of violations sanctions (POVs) for an excessive history of significant and substantial violations, 30 C.F.R. Part 104, specify that the agency will only consider citations and orders that have become final orders of this Commission. However, MSHA’s pending revision to Part 104 would allow the agency to consider all citations and orders that have been issued by its inspectors whether or not they have become final. Without addressing the merits of MSHA’s position that it can issue a POV finding on the basis of non-final enforcement actions, the proposed regulation, if it becomes final, coupled with inordinate delays in the institution of proceedings for adjudicating the citations and orders underlying the POV notice, raises serious due process issues. The proposed rule states that MSHA will audit the compliance history of each mine at least twice per year. Under that scenario, the significant and substantial violations in these dockets (59 out of 75 violations) could supply the rationale for a POV notice without their ever having been submitted to the Commission for a determination of their validity. Such an outcome could not have been contemplated by a Congress intent on ensuring that contested enforcement actions would be adjudicated by an independent Commission with the responsibility to “avoid unnecessary delay in acting upon cases.” S. Rep. No. 95-181, at 48, Legis. Hist. at 636.

            Accordingly, on the basis of the forgoing conclusions relating to the principles adopted in Salt Lake and its progeny, their applicability to the facts of this case, the need for prompt and fair resolution of disputes under the Mine Act, and the vindication of the Commission’s central role in the Mine Act’s enforcement scheme, I would affirm the judge’s decision. As I see it, his decision constitutes a judicious exercise of discretion that provides the necessary leverage to ensure that due process is rendered in Commission proceedings.

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Michael F. Duffy, Commissioner