<DOC>
[DOCID: f:ct200065c.wais]
GEORGES COLLIERS, INCORPORATED
August 23, 2001
CENT 2000-65
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
1730 K STREET NW, 6TH FLOOR
WASHINGTON, D.C. 20006
August 23, 2001
SECRETARY OF LABOR, :
MINE SAFETY AND HEALTH :
ADMINISTRATION (MSHA) :
:
v. : Docket Nos. CENT 2000-65
: CENT 2000-80
GEORGES COLLIERS, INCORPORATED :
BEFORE: Verheggen, Chairman; Jordan, Riley, and Beatty,
Commissioners
DECISION
BY THE COMMISSION:
In this consolidated civil penalty proceeding arising
under the Federal Mine Safety and Health Act, 30 U.S.C. � 801
et seq. ("Mine Act"), Administrative Law Judge Gary Melick
assessed penalties in the amount of $3713 against Georges
Colliers, Inc. ("GCI"). 22 FMSHRC 1091, 1093-94 (Sept. 2000)
(ALJ). GCI filed a petition for discretionary review ("PDR")
challenging the judge's penalty assessments, which was granted.
For the reasons set forth below, we vacate the judge's penalty
assessments and remand for reassessment.
I.
Factual and Procedural Background
On September 10, 1999, the Secretary proposed penalties in
the amount of $4896 for 18 citations and one section 104(b)
order in Docket No. CENT 2000-65, and on September 16, she
proposed penalties in the amount of $1255 for 10 citations in
Docket No. CENT 2000-80. GCI contested each of the proposed
assessments, which together totaled $6151. The Secretary then
filed with the Commission petitions for assessment of penalties.
Subsequently, the proceedings were consolidated. The parties
agreed that the only issue in dispute was the effect of the
penalties on GCI's ability to continue in business. A hearing
was held on this issue on April 13, 2000.
At the hearing, GCI presented evidence of its financial
condition, including audits, signed tax returns, letters from
contract purchasers of coal indicating that GCI was unable to
meet production, letters from the holder of a secured note that
GCI was in default, a list of outstanding delinquent unsecured
debtors, and detailed testimony of an expert witness in support
of its position that the penalties would affect its ability to
continue in business. In addition, the judge instructed the
parties to submit joint stipulated facts on the remaining
penalty criteria.
While the parties were negotiating a joint stipulation of
facts, they discovered that the Secretary had incorrectly
determined GCI's history of violations. On August 14, 2000, the
Secretary submitted to the judge amended proposed stipulations
stating that GCI's violations history included 277 violations.
S. Am. Proposed Stips. of Fact at 1. GCI disputed this
calculation and the parties subsequently stipulated to a lower
number of violations (218). Jt. Stips. of Fact at 1. As a
result, the Secretary reduced the total proposed assessments.
Letter dated Sept. 15, 2000 from Sec'y of Labor. On September
11, 2000, the parties submitted the joint stipulations, which
included a reduction of the proposed penalty assessments from
$4896 to $2819 in Docket No. CENT 2000-65, and from $1255 to
$894 in Docket No. CENT 2000-80, for a total of $3713.[1]
The judge issued his decision on September 20, 2000. In
his decision, he declined to consider "numerous financial
records and extensive unrebutted factual and expert testimony"
submitted by GCI at the hearing, stating that the evidence was
"no longer relevant" due to the reduced proposed assessments.
22 FMSHRC at 1092. The judge also relied on the passage of
time between April 2000, when the evidence was submitted at
the hearing, and September 2000, when the parties submitted
the joint stipulations to the judge, and the fact that GCI
no longer operated the mine which was the subject of the
violations. Id. at 1092-93. The judge assessed penalties
totaling $3713. Id. at 1093-94. To minimize the financial
impact of the penalty assessments, the judge directed GCI to
make an initial payment of $113 on November 1, 2000, followed
by equal payments of $150 on the first of each month for the
succeeding 24 months. Id. at 1093.
II.
Disposition
GCI argues that the judge abused his discretion when he
declined to consider evidence of GCI's financial condition.
PDR at 8-13.[2] GCI maintains that substantial evidence
establishes that it was "insolvent" and, therefore, that the
penalties would affect its ability to continue in business.
PDR at 9, 12; G. Reply Br. at 5. GCI asserts that the judge
committed a prejudicial procedural error by not allowing it an
opportunity to demonstrate that the Secretary's reduced
penalties would still affect its ability to continue in
business, or to supplement or update evidence of its financial
condition. PDR at 14-15; G. Reply Br. at 6-7. GCI clarifies
that although its expert witness testified that it could pay
the penalty, he indicated that it would have to forego payment
to another debtor which would affect its operations at the mine.
G. Reply Br. at 5. GCI requests the Commission to vacate the
judge's penalty assessments and remand for consideration of its
financial evidence. PDR at 16-17; G. Reply Br. at 9.
The Secretary responds that the judge did not abuse his
discretion by assessing penalties in the amount of $3713. S.
Br. at 10. The Secretary contends that GCI was not prejudiced
by the judge's decision, because GCI's evidence did not
establish that the proposed assessment of $6151 would affect
its ability to continue in business and, thus, could not have
satisfied its burden of proof for an even lower proposed
assessment amount ($3713). Id. at 6-7. The Secretary asserts
that the judge did not err by failing to provide GCI an
opportunity to respond, because it was aware of the reduced
proposed assessments in the joint stipulations, and could have
filed a motion for leave to submit additional evidence before
the judge issued his decision. Id. at 8-9. The Secretary
points out that, in any event, GCI conceded at the hearing
that a penalty in the amount of $3600 paid by amortized
payments would not affect its ability to continue in business.
Id. at 9-10. The Secretary requests that the Commission affirm
the judge's decision. Id. at 10.
The Commission's judges are accorded considerable
discretion in assessing civil penalties under the Mine Act.
Westmoreland Coal Co., 8 FMSHRC 491, 492 (Apr. 1986). Such
discretion is not unbounded, however, and must reflect proper
consideration of the penalty criteria set forth in section
110(i) and the deterrent purpose of the Act.[3] Id. (citing
Sellersburg Stone Co., 5 FMSHRC 287, 290-94 (Mar. 1983), aff'd,
736 F.2d 1147 (7th Cir. 1984)). The judge must make "[f]indings
of fact on each of the statutory criteria [that] not only
provide the operator with the required notice as to the basis
upon which it is being assessed a particular penalty, but also
provide the Commission and the courts . . . with the necessary
foundation upon which to base a determination as to whether the
penalties assessed by the judge are appropriate, excessive, or
insufficient." Sellersburg, 5 FMSHRC at 292-93. Assessments
"lacking record support, infected by plain error, or otherwise
constituting an abuse of discretion are not immune from
reversal." U.S. Steel Corp., 6 FMSHRC 1423, 1432 (June 1984).
In reviewing a judge's penalty assessment, the Commission must
determine whether the judge's findings with regard to the
penalty criteria are in accord with these principles and
supported by substantial evidence.[4]
Evidence of an operator's financial condition is relevant
to the ability to continue in business criterion. See Unique
Electric, 20 FMSHRC 1119, 1122-23 (Oct. 1998) (considering
evidence of an operator's financial condition to determine
whether the penalty would have an effect on the operator's
ability to continue in business); Spurlock Mining Co.,
16 FMSHRC 697 (Apr. 1994) (same); Broken Hill Mining Co.,
19 FMSHRC 673,677-78 (Apr. 1997) (same).
One basis for the judge's refusal to consider GCI's
financial evidence was his conclusion that the evidence was no
longer relevant due to the passage of time. The evidence
submitted by GCI covered its financial condition from 1996 up
to the first quarter of 2000. The judge issued his decision on
September 20, 2000, five months after the hearing. Notably,
the Secretary does not attempt to defend the judge's refusal to
consider the financial evidence submitted by GCI at the hearing
or contend that the evidence is irrelevant. In fact, the
Secretary appears to concede the relevance of GCI's financial
evidence by arguing that even if the judge considered the
evidence, it could not successfully prove that the penalties
would affect GCI's ability to continue in business. We conclude
that the passage of time did not make GCI's evidence of its
financial condition irrelevant. It is not uncommon to have a
gap in time between the hearing and the issuance of the judge's
decision. However, this does not render irrelevant financial
evidence introduced to support (or refute) an argument that the
proposed penalty would affect the operator's ability to continue
in business.[5]
We also reject the judge's reliance on the Secretary's
post-hearing reduction of the proposed penalty assessments as
support for his refusal to consider the evidence of GCI's
financial condition. We find that the evidence of GCI's
financial condition as of the time of the hearing consists of
factual data which is unaffected by the Secretary's reduced
proposed assessment. For example, GCI's expert witness, Paul
Matlock, in summarizing the import of the financial documents
it submitted, including audits and tax returns, testified that
GCI was not "solvent." Tr. 39. Matlock stated that "[GCI]
would be [insolvent] if the forbearance [on its debt payments]
was not given," and that GCI has "no guarantee" that the
forbearance will continue. Tr. 12-13, 39. He further testified
that GCI was "behind on . . . production taxes, . . . royalties,
. . . [and] utilities," and asserted that "anything we pay
outside that are not considered critical production items, we
would have to trade out for production items, which basically
would cause us to have to shut down production." Tr. 25, 27-29.
Under this view, it appears that a penalty assessed at $6000
would have the same impact on GCI as a penalty of $3000.
On the other hand, Matlock also testified, in response to
the judge's questioning, that GCI could pay $100 per month over
three years, but that GCI "would have to take $100 out of our
production," which would affect "operations." Tr. 41. The
Secretary characterizes Matlock's equivocal testimony as a
concession that GCI could pay penalties totaling $3600. While
we take no position on the Secretary's characterization, the
financial evidence of record is clearly relevant to the reduced
proposed assessments. Although it was appropriate for the judge
to consider the reduced penalty when evaluating the ability to
continue in business criterion, we conclude that the financial
data submitted at the hearing is still relevant to consider in
relation to the reduced proposed assessments.
Commission Procedural Rule 69(a) requires that a Commission
judge's decision "shall include all findings of fact and
conclusions of law, and the reasons or bases for them, on all
the material issues of fact, law or discretion presented by the
record." 29 C.F.R. � 2700.69(a). The Commission thus has held
that a judge must analyze and weigh all probative record
evidence, make appropriate findings, and explain the reasons for
his or her decision. Mid-Continent Res., Inc., 16 FMSHRC 1218,
1222 (June 1994). Here, the judge failed to evaluate evidence
of GCI's financial condition in making findings as to whether
the proposed penalty would adversely affect its ability to
continue in business.[6]
Accordingly, we conclude that the judge abused his
discretion when he declined to consider GCI's evidence. We
vacate the judge's penalty assessment and remand this proceeding
to the judge for consideration of all relevant evidence of GCI's
financial condition, including any evidence with which the judge
may, in his discretion, allow the parties to supplement the
record. See Sec'y of Labor on behalf of Hannah v. Consolidation
Coal Co., 20 FMSHRC 1293, 1302 (Dec. 1998) ("it is within the
province of the judge to ensure that the record contains
sufficient information on all the statutory criteria").
III.
Conclusion
For the foregoing reasons, we vacate the judge's penalty
assessments and remand this proceeding to the judge to reassess
penalties consistent with this decision.
Theodore F. Verheggen, Chairman
Mary Lu Jordan, Commissioner
James C. Riley, Commissioner
Robert H. Beatty, Jr., Commissioner
Distribution
Elizabeth M. Christian, Esq.
7940 Pipers Creek Rd., #1812
San Antonio, TX 78251
Tina Peruzzi, Esq.
Office of the Solicitor
U.S. Department of Labor
4015 Wilson Blvd., Suite 400
Arlington, VA 22203
Administrative Law Judge Gary Melick
Federal Mine Safety & Health Review Commission
Office of Administrative Law Judges
5203 Leesburg Pike, Suite 1000
Falls Church, VA 22041
**FOOTNOTES**
[1]: While the judge stated in his decision that the
Secretary's total reduced proposed assessment in both dockets
was $3767, he assessed penalties totaling only $3713 without
explaining his reduced assessment. 22 FMSHRC at 1091 & n.1,
1093-94. It appears that the discrepancy arises from
inconsistent figures provided by the Secretary. The joint
stipulations provided that the proposed assessment in Docket No.
CENT 2000-80 was $948.
Jt. Stip. of Facts at 1. However, in a letter from the
Secretary's counsel to the judge, the Secretary listed the
revised, along with the original, proposed assessments for
each violation, indicating that the total revised proposed
assessment in Docket No. CENT 2000-80 was $894. Letter dated
Sept. 15, 2000 from Sec'y of Labor. This amount is consistent
with the judge's assessment. 22 FMSHRC at 1093-94.
[2]: GCI designated its PDR as its opening brief.
[3]: Section 110(i) sets forth six criteria to be
considered in the assessment of penalties under the Act:
[1] the operator's history of previous
violations, [2] the appropriateness of such
penalty to the size of the business of the
operator charged, [3] whether the operator
was negligent, [4] the effect on the
operator's ability to continue in business,
[5] the gravity of the violation, and [6] the
demonstrated good faith of the person charged
in attempting to achieve rapid compliance
after notification of a violation.
30 U.S.C. � 820(i).
[4]: When reviewing an administrative law judge's factual
determinations, the Commission is bound by the terms of the
Mine Act to apply the substantial evidence test. 30 U.S.C.
� 823(d)(2)(A)(ii)(I). "Substantial evidence" means "`such
relevant evidence as a reasonable mind might accept as
adequate to support [the judge's] conclusion.'" Rochester
& Pittsburgh Coal Co., 11 FMSHRC 2159, 2163 (Nov. 1989)
(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
[5]: The fact that the operator no longer operates the
mine in question does not render the "ability to continue in
business" criterion irrelevant. Even if the operator no longer
operates the mine that is the subject of this proceeding, it
will remain subject to a penalty if it is still in business,
has not dissolved, and has assets. See Spurlock Mining,
16 FMSHRC at 699-700 (holding that the operator was still in
business because it had not dissolved and planned to resume
operations). Thus, the judge erred when he declined to
consider GCI's evidence on this basis.
[6]: We reject the Secretary's suggestion that the
Commission consider the merits of whether GCI's financial
evidence satisfies its claim that the penalty affects its
ability to continue in business. That issue is for the
judge, as the trier of fact, to consider in the first
instance.