Secretary of Labor v. KenAmerican Resources, Inc.

Plain-English summary

During an MSHA complaint inspection, an underground miner asked a dispatcher whether “company” was outside, and the dispatcher confirmed that inspectors were present. The Commission had already held on review that this exchange violated the Mine Act's ban on advance notice and remanded only for a penalty. Judge Margaret Miller retained the significant-and-substantial and high-negligence findings. She emphasized the serious enforcement risk created when advance notice allows conditions to be changed before inspectors arrive. The judge assessed the Secretary's proposed $18,742 penalty.

Decision snapshot

• Cited authority: 30 U.S.C. § 813(a)
• Outcome: The advance-notice citation remained affirmed as S&S and highly negligent, with an $18,742 penalty.
• Key point: Confirming MSHA's presence to underground personnel after inspectors expressly prohibited advance notice warranted a substantial penalty.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH
REVIEW COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

721 19 th ST. SUITE 443

DENVER, CO 80202-2500

TELEPHONE: 303-844-5266 FAX: 303-844-5268

August 7, 2020

SECRETARY
OF LABOR

MINE
SAFETY AND HEALTH     

ADMINISTRATION
(MSHA),

Petitioner

v.

KENAMERICAN
RESOURCES, INC.,

Respondent

CIVIL
PENALTY PROCEEDING

Docket
No. KENT 2013-0211

A.C.
No. 15-17741-305075

Mine:
Paradise #9

DECISION ON
REMAND

Before: 
 Judge Miller

This case is before me upon petition
for assessment of a civil penalty filed by the Secretary of Labor pursuant to
Section 105(d) of the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
815(d) (“the Act”). This case was remanded by the Commission to determine an
appropriate civil penalty for Citation No. 8502992, issued pursuant to Section
103(a), with a total proposed penalty of $18,742.00.

I.       HISTORY OF THE
CASE

This case was originally assigned to
Administrative Law Judge L. Zane Gill. On July 24, 2015, KenAmerican Resources
(“KenAmerican”) filed a motion for summary judgment, alleging that the
Secretary’s claims were unsubstantiated and that there was no violation of section
103(a) of the Mine Act. That section of the act, states in pertinent part that
“no advance notice of an inspection shall be provided to any person,” 30 U.S.C.
§ 813. KenAmerican’s motion was granted and the citation was vacated. Sec’y of Labor v. KenAmerican Resources, Inc., 37
FMSHRC 1809 (Aug. 2015) (ALJ).  On August 25, 2016, following a petition for discretionary
review, the Commission found that the summary decision was improper and
reversed and remanded the case with instructions to hold a hearing. Sec’y of Labor v. KenAmerican Resources, Inc., 38
FMSRC 1943 (Aug. 2016). After an evidentiary hearing of the case, Judge Gill
issued a decision on December 14, 2018, finding that the Secretary failed to
establish a violation. Sec’y of Labor v.
KenAmerican Resources, Inc., 40 FMSHRC 1544 (Dec. 2018) (ALJ).

Following Judge Gill’s decision, the
Commission granted the Secretary a second petition for discretionary review. After
briefing and argument, the Commission determined that a violation had occurred
as set forth in the citation issued by the Secretary and determined that the
case should be remanded for the assessment of a penalty consistent with section
110(i) of the Act. 30 U.S.C. § 821(i) . The
Commission decision constitutes the law of the case. See Pepper

v. United States , 131 S. Ct.
1229, 1250 (2011). Following the unexpected passing
of Judge Gill on June 23, 2020, this case was reassigned to determine
the appropriate penalty.  For the reasons set forth below, I assess the penalty
in the amount proposed by the Secretary.

II.     ISSUE ON REMAND

On
April 20, 2012, MSHA Inspector Doyle Sparks and six other inspectors traveled
to KenAmerican’s Paradise #9 mine to conduct an investigation in response to a
complaint of an alleged hazardous condition. Before the inspectors traveled
into the mine to begin their investigation, MSHA inspectors instructed the
miners on the surface not to warn underground personnel that MSHA inspectors
were present. While inspector Sparks monitored the mine’s communication system,
he heard an exchange between two miners that appeared to be providing advance
notice to the miners underground. Sparks overheard a call from the #4 unit in which
a miner asked the dispatcher if there was “company outside,” to which the
dispatcher responded, “yeah, I think there is.” Tr. 23-24, 163-164. Sparks
asked the underground miner to identify himself, but received no response. Once
underground, Sparks made a second attempt to identify the miner, but again
received no response. The Commission found that Holz, the dispatcher, agreed
that a miner asked him if “company” was outside and that he understood the
unidentified miner’s question to be an inquiry into the presence of MSHA
inspectors. “Therefore, he knew the question presented a request for advance
notice.” Sec’y of Labor v. KenAmerican Resources, Inc., 42
FMSHRC 1, slip op. at 2, No. KENT 2013-0211 (Jan. 16, 2020).  

Sparks
issued Citation No. 8502992 to Respondent pursuant to Section 103(a) of the
Mine Act alleging that mine personnel provided advance notice to underground
miners that MSHA inspectors were on site during a hazard complaint inspection. Tr.10.
Section 103(a) of the Mine Act authorizes the mine inspectors to conduct
inspections and investigations of coal and other mines. This section also
requires that “In carrying out the requirements of this subsection, no advance
notice of an inspection shall be provided to any person….”  Similarly, a person
who provides advance notice of an inspection may face the possibility of a
criminal prosecution. 30 U.S.C 820(3). The citation, after amendment, was
issued as a significant and substantial violation and the result of high
negligence. The Commission upheld the citation as issued and remanded the case solely
for the assessment of civil penalty. The penalty assessment is based upon the
Commission’s decision on remand and the record in its entirety, including the
hearing transcript and the briefs filed by the parties in the case.

III.    PENALTY

The principles governing the authority of Commission
Administrative Law Judges to assess civil penalties de novo for violations of
the Mine Act are well established. Section 110(i) of the Mine Act delegates to
the Commission and its judges “authority to assess all civil penalties provided
in [the] Act.” 30 U.S.C. § 820(i). Commission Judges are not bound by the
Secretary’s penalty regulations. Am. Coal Co. , 38 FMSHRC 1987, 1990
(Aug. 2016). Rather, the Act requires that in assessing civil monetary
penalties, the judge must consider six statutory penalty criteria: the
operator’s history of violations, its size, whether the operator was negligent,
the effect on the operator’s ability to continue in business, the gravity of
the violation, and whether the violation was abated in good faith. 30 U.S.C. §
820(i).

The Secretary has
proposed a penalty of $18,742.00 for the violation. I have considered and
applied the six penalty criteria found in Section 110(i) of the Act. I have
reviewed the history of this operator and taken note of the fact that two mine
superintendents and a foreman were previously convicted of the crime of
providing advance notice at this mine. [1]
I have also considered that this is a large-sized operator, and that the
parties have stipulated to the ability to pay. No issue was raised by either
party about a lack of good faith abatement.

The violation was assessed
as significant and substantial and was the result of high negligence. The Commission
made no change to these findings in its decision and I accept the findings in
determining a penalty. The violation was significant and substantial, given the
importance placed on the notice requirement in the Act and that providing
notice could result in a criminal prosecution. In addition, giving advance
notice allows a mine operator the opportunity to alter violative conditions prior
to the arrival of an MSHA inspector and allows the continuation of operations under
violative conditions after an inspector departs.   Therefore,
the gravity of the violation is serious, and the penalty is intended to reflect
that it is serious.

The Commission has
recognized that “[e]ach mandatory standard … carries with it an accompanying
duty of care to avoid violations of the standard, and an operator’s failure to
meet the appropriate duty can lead to a finding of negligence if a violation of
the standard occurs.” A.H. Smith Stone Co. , 5 FMSHRC 13, 15 (Jan. 1983).
In determining whether an operator met its duty of care, the judge must
consider “what actions would have been taken under the same circumstances by a
reasonably prudent person familiar with the mining industry, the relevant
facts, and the protective purpose of the regulation.” Newtown , 38 FMSHRC
at 2047; Brody Mining, LLC , 37 FMSHRC 1687, 1702 (Aug. 2015); U.S.
Steel Corp. , 6 FMSHRC 1908, 1910 (Aug. 1984). While the Secretary’s Part
100 regulations evaluate negligence based on the presence of mitigating
factors, Commission judges are not limited to that analysis. Brody , 37
FMSHRC at 1702-03. Rather, Commission judges consider “the totality of the
circumstances holistically” and may find high negligence in spite of mitigating
circumstances. Id. at 1702. The Commission has recognized that “the
gravamen of high negligence is that it ‘suggests an aggravated lack of care
that is more than ordinary negligence.’” Id. at 1703 (quoting Topper
Coal Co. , 20 FMSHRC 344, 350 (Apr. 1998)).

In reviewing the record
as a whole and the Commission decision, I find that the designation of high
negligence is well supported. The record clearly indicates that an affirmative
response was provided to a request for advance notice from an underground miner,
even after the inspectors warned the miners at the surface not to engage in
that conduct.  Management’s failure to instruct or ensure that no advance
notice was given prior to inspections constitutes more than ordinary
negligence. See Ky. Fuel Corp. , 40 FMSHRC 28 (Feb.
2018) (in which the Commission approved a judge’s decision that similarly concluded
that high negligence was appropriate due largely to an operator’s failure to
provide adequate training and materials to prevent a violation). A finding of
high negligence is further supported by the circumstances surrounding the
violation, in particular the unidentified miner’s refusal to identify himself
on the phone or in person when Sparks arrived underground and Holz’s admission
that he knew he was prohibited from providing advance notice of MSHA’s presence
to underground miners.

IV.    ORDER

I
have reviewed the record in its entirety and find that the Secretary’s proposed
penalty is appropriate in this case. Accordingly, Respondent is hereby ORDERED
to pay the Secretary of Labor the sum of $18,742.00 within 30 days of the date
of this decision.

/s/
Margaret A. Miller

Margaret
A. Miller

Administrative
Law Judge

Distribution:
(Electronic Mail with Appeal cover sheet)

Emily
Toler Scott, Ali A. Beydoun, April Nelson, U.S. Department of Labor, Office of
the Solicitor, 201 12 th Street South, Suite 401, Arlington, VA 22202-5450

[email protected] ,
[email protected] , [email protected]

Melanie
Garris, U.S. Department of Labor, MSHA, Office of Civil Penalty Compliance, 201
12 th Street South, Suite 401, Arlington, VA 22202-5450, [email protected]

Jason
Hardin, Artmeis Vamianakis, Fabian VanCott, 215 South State Street, Suite 1200,

Salt
Lake City, UT 84111-2323, [email protected] , [email protected]

[1] See KenAmerican
Resources ,
slip op. at 5 (Jan. 16, 2020)(noting that “two mine superintendents and a
foreman working at the Paradise No. 9 mine were previously convicted of the crime
of providing advance notice.” (citing United States v. Gibson, 409 F.3d
325, 333 (6 th Cir. 2005)).