Pit & Quarry, February 2012

MSHA mega penalties F ederal Mine Safety and Health Review Commission Judge Jerold Feldman entered an order November 2011 Conshor Mining in which he held that MSHAs published test for what constitutes a flagrant violation warranting a penalty of 220000 is invalid This intriguingly reasoned decision prompted me to reflect on the shortcomings of the whole system for high level penalty determinations The regular point system How does MSHA decide that a penalty should be 100 500 or 1500 There is no mystery It is all laid out in MSHAs detailed point schedule which was promulgated with notice and comment rulemaking The points are derived directly from inspector findings on citations This system is applied routinely to produce so called regular assessments of penalties The point schedule provides a basis for penalties as high as 70000 Special assessments In practice penalties at or approaching 70000 are not likely to be assessed by points Rather high dollar penalties are invariably produced as special assessments No points are assigned or calculated MSHAs regulations say All findings shall be in narrative form If special assessment penalty narratives provided useful information the penalty would not be a mystery However these so called narrative findings are simply repetitious boilerplate and provide no useful insight as to the rationale for the assessment Significance of criteria and findings Under the precepts of administrative law federal agencies are typically precluded from imposing sanctions such as civil penalties without making findings of fact The failure of the government to make findings of fact when civil penalties were first introduced BY MICHAEL T HEENAN under the Federal Coal Mine Health and Safety Act of 1969 generated litigation all the way to the U S Supreme Court That litigation precipitated the evolved point system used by MSHA today The lead case was National Independent Coal Operators v Morton By the time the case was heard by the Supreme Court the government had already begun using proper findings to assess penalties which the court noted with favor Ever since there has been a point system for generating findings on each of the Mine Acts six criteria that must be considered in assessing penalties namely 1 history of violations 2 appropriateness to the size of the business 3 negligence 4 effect of penalty on business continuation 5 gravity of the violation and 6 good faith in correcting the violation Lacking though is a genuine system for explaining and justifying special assessments There has never been notice and comment rulemaking addressing this deficiency Such rulemaking always very important is the appropriate vehicle for developing fair and workable procedures for civil penalty assessments consistent with law Flagrant violations the law In the MINER Act of 2006 Congress provided Violations deemed to be flagrant may be assessed a civil penalty of not more than 220000 Congress provided the term flagrant means a reckless or repeated failure to make The gross malfeasance that Congress addressed in terms of reckless or repeated failure to correct a known life threatening violation has been converted by MSHA policy into something that could be almost commonplace under the system that has existed long before the MINER Act reasonable efforts to eliminate a known violation that substantially caused or could reasonably have been expected to cause death or serious bodily injury Thus the basic elements for penalties up to 220000 are 1 a reckless or repeated failure to eliminate 2 a known violation 3 that could or did cause death or serious injury MSHA could have utilized notice and comment to promulgate rules for interpreting and applying the congressional mandate but MSHA simply reiterated verbatim in its civil penalty regulations the description of flagrant provided by Congress There was no rulemaking to elaborate or clarify what MSHA was going to do to assess flagrant violations What MSHA did do however was issue procedural instruction letters These unilateral and informal pronouncements convert flagrant violations into something much different from what Congress described Flagrant violations MSHA policy Dividing flagrant violations into two categories 1 reckless and 2 repeated MSHA specified separately for each what it would rely upon to assess Continued on page 55 50 PIT QUARRY February 2012 www pitandquarry com