Secretary of Labor on behalf of Reuben Shemwell v. Armstrong Coal Company, Inc. and Armstrong Fabricators, Inc.

Plain-English summary

Armstrong filed a Kentucky civil lawsuit against miner Reuben Shemwell after he exercised Mine Act discrimination rights. An ALJ found that the lawsuit unlawfully interfered with those rights but later rejected a proposed settlement. The Commission majority vacated that denial and approved an agreement requiring a $35,000 penalty, dismissal of the lawsuit with prejudice, miners' rights training, publications, and postings. It held that the judge retained jurisdiction before assessing a penalty and had to evaluate the monetary and non-monetary settlement terms as a complete package. Commissioners Michael G. Young and Robert F. Cohen Jr. dissented, describing the lawsuit as a retaliatory SLAPP and the settlement as inadequate.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 815(c)(1), 815(c)(2), and 820(k)
• Outcome: The settlement denial was vacated, and the $35,000 settlement with training, posting, and dismissal requirements was approved.
• Key point: Settlement review must consider the entire package, including non-monetary deterrence, and outside-litigation exculpatory language may be acceptable if Mine Act consequences remain intact.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH
REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON,
D.C. 20004-1710

May 13, 2014

SECRETARY OF LABOR,             

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

on behalf of REUBEN SHEMWELL

v.

ARMSTRONG COAL COMPANY, INC.

and ARMSTRONG FABRICATORS, INC.

Docket No. KENT 2013-362-D

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

DECISION

BY: Jordan, Chairman; Nakamura and Althen, Commissioners

This discrimination proceeding, arising under
section 105(c)(2) of the Federal Mine Safety and Health Act of 1977, 30 U.S.C.
§ 815(c)(2) (2012),[1]
involves a Commission Administrative Law Judge’s denial of a motion to approve
settlement filed by Armstrong Coal Company, Inc. and Armstrong Fabricators,
Inc. (collectively referred to as “Armstrong”), the Secretary of Labor, and
Reuben Shemwell. For the reasons that follow, we vacate the Judge’s decision
and approve the parties’ proposed settlement.

I.

Factual and
Procedural Background

Reuben Shemwell’s employment as a welder with
Armstrong was terminated on September 14, 2011. 35 FMSHRC 1865, 1865 (June
2013) (ALJ). On January 23, 2012, Mr. Shemwell filed a discrimination complaint
with the Department of Labor’s Mine Safety and Health Administration (“MSHA”). Id.
Shemwell subsequently was temporarily reinstated based upon the Commission’s
determination that a non-frivolous issue existed as to whether Shemwell had
been terminated for engaging in protected activity. 34 FMSHRC 1580, 1582-83
(July 2012). After MSHA’s investigation into the matter, the Secretary declined
to pursue a discrimination proceeding on Shemwell’s behalf. Shemwell
subsequently filed a section 105(c)(3)[2]
proceeding in Docket No. KENT 2012-1497-D against Armstrong on his own behalf. On
September 4, 2013, the Judge issued a decision approving settlement in KENT
2012-1497-D.

In August 2012, following the Secretary’s
decision not to pursue Shemwell’s discrimination complaint, Armstrong filed a
civil suit in a Kentucky state court alleging that Shemwell’s discrimination
complaint constituted a wrongful use of proceedings (referred to as the
“Muhlenberg suit”).

The Secretary subsequently filed a
discrimination complaint in this proceeding pursuant to section 105(c)(2) of
the Mine Act, alleging that the Muhlenberg suit interfered with Shemwell’s
right to file a discrimination complaint in violation of section 105(c)(1) of
the Act. The Secretary proposed a civil penalty of $70,000 against Armstrong.

On June 19, 2013, the Judge issued in this
proceeding a Decision on Liability and Cease and Desist Order. In the decision,
the Judge concluded that the Muhlenberg suit violated section 105(c)(1) because
it interfered with Shemwell’s right to file a discrimination complaint. The
Judge ordered Armstrong to cease and desist prosecution of the Muhlenberg suit
“by filing an appropriate motion to dismiss” within 40 days of the decision (by
July 29, 2013). 35 FMSHRC at 1886. The Judge noted that “withdrawal of
Armstrong’s suit can be without prejudice,

permitting Armstrong to once again bring its civil
proceeding in the unlikely event Armstrong is ultimately successful on appeal.”
Id.

On July 29, 2013, Armstrong took three actions. First,
it filed with the Commission a petition for interlocutory review. In the
petition, Armstrong stated that on July 25, 2013, the parties verbally agreed
to the terms of a settlement agreement that will resolve the case, including a
term requiring Armstrong to dismiss the Muhlenberg suit. Second, Armstrong
filed with the Commission an application for a temporary stay pending the
Commission’s review of the petition. Third, Armstrong dismissed, with
prejudice, the Muhlenberg suit.

On that same day, the Commission issued an order
granting a temporary stay.       

On August 8, 2013, the Secretary, Shemwell, and
Armstrong filed a joint motion to approve settlement with the Judge.[3]
Under the terms of the proposed settlement, Armstrong would: (1) pay MSHA a
civil penalty of $35,000; (2) provide a copy of the MSHA publication entitled
“A Guide to Miners’ Rights and Responsibilities” to all employees; (3) post a
copy of the Joint Motion to Approve Settlement at each mine that is operated by
Armstrong for 60 days; (4) provide two hours of training on miners’ rights at
each mine operated by Armstrong and, following the training, employees would
watch the MSHA video entitled “A Voice in the Workplace: Miners’ Rights and
Responsibilities;” and (5) post a miners’ rights poster about section 105(c) at
each mine that is operated by Armstrong for a period of two years.

The motion further stated that Armstrong had
dismissed with prejudice the Muhlenberg suit. In addition, the motion included
the following exculpatory language:

Respondents assert that except for
proceedings under the Act, nothing contained herein shall be deemed to
constitute an admission of a violation of the Act or its regulations. Further,
Respondents assert that except for proceedings under the Act, nothing contained
herein is intended to constitute an admission of civil liability under any
local, state or federal statute or any principle of common law.

Jt. Mot. at 3.               

On August 19, 2013, the Judge issued an Order
Denying Joint Motion to Approve Settlement Decision on Civil Penalty and
Supplemental Decision on Relief. 35 FMSHRC 2680 (Aug. 2013) (ALJ). The Judge
concluded that he lacked jurisdiction to consider the settlement motion after
he had issued his decision on liability. Id. at 2682-83. He reasoned
that his decision on liability was a final decision on the merits as
contemplated by Commission Procedural Rule 69, 29 C.F.R § 2700.69. Id.
at 2682. The Judge determined, as such, that his decision on liability was the
binding law of the case and is not subject to modification through a settlement
agreement of the parties. Id.

The Judge further concluded that even if the
proposed settlement agreement were not procedurally defective, he would dismiss
it on a substantive basis as contrary to the public interest. Id. at
2683. He stated that the exculpatory language would not dissuade Armstrong or
other operators from filing similar civil actions in violation of section
105(c)(1). Id. at 2686. The Judge also determined that there were no
mitigating circumstances to justify the reduction in penalty. Id. He
noted that Armstrong was required to dismiss the action under the terms of his
prior decision and that the other settlement remedies, such as postings and
training, are “routine” actions required of operators as a consequence of
discriminatory conduct. Id. The Judge noted that the legality of civil
suits such as the Muhlenberg suit, which are capable of repetition, must not
evade review. Id. at 2687-88.

Finally, in determining appropriate remedial
measures, the Judge required Armstrong to take the remedial actions specified
in the settlement motion. Id. at 2689. The Judge further assessed a
civil penalty of $70,000 against Armstrong, taking into account the “deterrent
role civil penalties play in discouraging mine operators from engaging in
future similar violative conduct.” Id. at 2690-92.

The Secretary and Armstrong each filed petitions
for discretionary review challenging the Judge’s denial of the motion to
approve settlement. The parties request that the Commission vacate the Judge’s
decision and approve the proposed settlement agreement. The Commission granted
both petitions.

II.

Disposition

A. The Judge’s Procedural Dismissal

We conclude that the Judge erred in holding that
his June 19 decision on liability was a final decision on the merits as
contemplated by Commission Procedural Rule 69[4]
and that he lacked jurisdiction to consider the settlement motion. In an order
dated July 26, 2013, we held that the Judge’s June 19 decision on liability was
“not a final decision ending the judge’s jurisdiction over this matter.” 35
FMSHRC 2056, 2057 (July 2013). We explained that “a Judge’s decision finding a
violation under the Mine Act is not final until the judge issues a penalty
against the operator.” Id. Thus, the Judge clearly had jurisdiction to
consider the parties’ settlement motion, which was submitted after the June 19
decision on liability but before the Judge’s August 19 decision assessing a
penalty.

B. The Judge’s Substantive Denial of the Proposed
Settlement

Section 110(k) of the Mine Act, 30 U.S.C. §
820(k), “directs the Commission and its judges to protect the public interest
by ensuring that all settlements of contested penalties are consistent with the
Mine Act’s objectives.” Knox County Stone Co., 3 FMSHRC 2478, 2479 (Nov.
1981). As the Commission has previously observed, “‘[t]he judges’ front line
oversight of the settlement process is an adjudicative function that
necessarily involves wide discretion.’” Black Beauty Coal Co., 34 FMSHRC
1856, 1864 (Aug. 2012) (quoting Knox, 3 FMSHRC at 2479).

A Judge’s approval or rejection of a proposed
settlement must be based on principled reasons. Black Beauty, 34 FMSHRC
at 1864. If a “Judge’s approval or rejection of a settlement is ‘fully
supported’ by the record, consistent with the statutory penalty criteria, and
not otherwise improper, it will not be disturbed, but . . . abuses of
discretion or plain errors are subject to reversal.” Id. (quoting Knox,
3 FMSHRC at 2480). An abuse of discretion may be found when “there is no
evidence to support the decision or if the decision is based on an improper
understanding of the law.” Akzo Nobel Salt, Inc., 19 FMSHRC 1254, 1258
n.3 (July 1997).

As explained below, we conclude in this case
that the key legal rulings of the Judge were erroneous and that certain
assertions he made were not supported in the record. Accordingly, his denial of
the proposed settlement under such circumstances constituted an abuse of
discretion.

1. The exculpatory language

The Judge in part rejected the settlement
because he believed that the exculpatory language would not dissuade Armstrong
or other operators from filing similar civil actions in violation of section
105(c)(1). We conclude that the Judge’s rejection of the exculpatory language
set forth in the proposed settlement agreement was “based on an improper
understanding of the law.” Id.

The Commission has recognized that the Mine Act
requires the Commission “to oversee penalty settlements as a means of
encouraging compliance.” Sewell Coal Co., 5 FMSHRC 2026, 2030 (Dec.
1983). Recognizing that “[i]nherent in the concept of settlement is that
parties find and agree upon a mutually acceptable position that resolves the
dispute and that obviates the need for further proceedings,” the Commission has
held that parties are free to admit or deny the fact of violation in settlement
agreements. Amax Lead Co., 4 FMSHRC 975, 977-78 (June 1982). The
Commission has explained, however, that the goal of encouraging compliance is
not met when a settlement agreement requires the payment of a penalty although
the parties have stipulated facts that do not show a violation. Sewell,
5 FMSHRC at 2030 (citing Co-op Mining Co., 2 FMSHRC 3475, 3475-76
(Dec.1980) (other citations omitted)).

Commission case law establishes that the type of
exculpatory language contained in the proposed settlement here – language which
would not apply to Mine Act proceedings – is acceptable in settlement
agreements. The Commission has rejected a settlement agreement where it contained
extremely broad exculpatory language that factual admissions by the operator
would not be deemed an admission for any subsequent proceeding brought in any
judicial or administrative forum by any party. Amax, 4 FMSHRC at 975. The
Commission explained that, because the operator could attempt to use that
language to shield future key enforcement provisions of the Mine Act, such
language was inconsistent with the enforcement scheme of the Mine Act. Id.
at 978. The Commission noted, however, that it had “no difficulty with the
exculpatory language as it relates to proceedings arising outside the scope of
the Mine Act’s coverage,” and that the “effect of such exculpatory language is
properly left to the appropriate forum.” Id. at n.4. The Commission
found acceptable amended exculpatory language offered by the operator that the
citations would not be used against the operator in forums other than in
actions under the Mine Act. Id. at 978-79. The Commission reasoned that
for purposes of any proceedings under the Mine Act, the violations were to be
treated as if established. Id.

The exculpatory language at issue concedes
Armstrong’s violation of the Act for purposes of Mine Act proceedings. See
S. PDR at 10 n.2; A. Br. at 21; Jt. Mot. at 3. The exculpatory language denies
civil liability under “any local, state or federal statute or any principle of
common law” other than Mine Act proceedings. Jt. Mot. at 3. Thus, the subject
exculpatory language falls within the type of exculpatory language that the Commission
has found to be within the public interest. See Amax, 4 FMSHRC at
977-78 & n.4. Moreover, we find no record support for the Judge’s
conclusion that the exculpatory language will not dissuade other operators from
filing actions similar to the Muhlenberg suit.

2. Consideration of the non-monetary
portions of the proposed settlement

The Judge’s conclusion that “there are no
mitigating circumstances” to justify the penalty reduction from $70,000 to
$35,000 is not “fully supported by the record.” See Black Beauty, 34
FMSHRC at 1864. Contrary to the Judge’s finding that Armstrong was required to
dismiss the Muhlenberg suit under the terms of the Judge’s June 19 decision,
Armstrong dismissed the Muhlenberg suit with prejudice, rather than without
prejudice as permitted by the Judge. In addition, there is no support in the
record for the Judge’s statement that “[t]he other settlement remedies [besides
payment], such as relevant postings and training, are routine actions required
of mine operators as a consequence of discriminatory conduct.” 35 FMSHRC at
2686. Indeed, the Secretary represents that such actions are not routine. S.
PDR at 11.

3. The question of mootness

The Judge also erred in his application of
mootness principles. The Commission has recognized that a case is moot when the
issues presented no longer exist or the parties no longer have a legally
cognizable interest in the outcome. North American Drillers, LLC, 34
FMSHRC 352, 358 (Feb. 2012) (citations omitted).

The Judge stated that “[b]y submitting their
settlement agreement for approval, the parties, in essence, rely on the
dismissal of the [Muhlenberg suit] to support the proposition that all matters
in issue have been resolved, and that further proceedings have essentially been
rendered moot.” 35 FMSHRC at 2687. We see no contention by the parties that
further proceedings have essentially been rendered moot, or any other basis for
applying mootness principles in reviewing the parties’ proposed settlement
agreement.

4. Consideration of the proposed
settlement as a whole

Finally, we conclude that the Judge erred by
considering the proposed settlement in a piecemeal fashion, focusing on the
monetary aspects of the settlement. “The ‘affirmative duty’ that section 110(k)
places on the Commission and its judges to ‘oversee settlements,’ . . . necessarily
requires the judge to accord due consideration to the entirety of the proposed
settlement package, including both its monetary and non-monetary aspects.” Madison
Branch Mgmt, 17 FMSHRC 859, 867-68 (June 1995) (Chairman Jordan and Comm’r
Marks) (citations omitted); see also Aracoma Coal Co., 32 FMSHRC 1639,
1644 (Dec. 2010) (separate opinion of Chairman Jordan). The Judge was required
to consider the settlement agreement as a whole, giving due consideration to
the non-monetary aspects of the decision as well as to the monetary aspects. The
payment of a reduced penalty was balanced by other non-monetary aspects of the
settlement, such as the dismissal of the Muhlenberg suit with prejudice, and
the posting and training requirements. We observe that the Secretary’s action
in filing the instant section 105(c)(2) proceeding can be expected to have a
deterrent effect against the filing of Muhlenberg-type suits.[5]

Although it is possible, as the Judge stated,
that payment of a higher penalty could achieve greater deterrence, our role in
reviewing a settlement agreement is to ensure that the public interest is
adequately protected before a penalty is reduced. In considering the public
interest standard applied by the Antitrust Procedures and Penalties Act, courts
have stated:

The court should . . . bear in mind
the flexibility of the public interest inquiry: the court’s function is
not to determine whether the resulting array of rights and liabilities “is the
one that will best serve society,” but only to confirm that the
resulting “settlement is ‘within the reaches of public interest.’”

United States v. Western Elec. Co., 900 F.2d 283, 309
(D.C. Cir. 1990) (citations omitted) (emphasis in the original).

Here the Judge did not consider the different
elements of the proposed settlement as a whole in determining whether the
proposed settlement fell “within the reaches of public interest.” Indeed,
because of his erroneous rulings with regard to the non-monetary elements of
the proposed settlement, an appropriate analysis of the proposed settlement as
a whole was not possible.

We conclude that the settlement agreement
proposed by the Secretary, Shemwell, and Armstrong contains sufficient
consideration and deterrent effect to protect the public interest. Accordingly,
we vacate the Judge’s denial of the motion to approve settlement and approve
the settlement agreement.

III.

Conclusion

For the reasons discussed above, we vacate the
Judge’s decision denying the Joint Motion to Approve Settlement submitted by
the Secretary, Shemwell, and Armstrong, and we approve the settlement.

/s/
Mary Lu Jordan     

Mary
Lu Jordan, Chairman

/s/
Patrick K. Nakamura   

Patrick
K. Nakamura, Commissioner

/s/
William I. Althen   

William
I. Althen, Commissioner

Commissioners Young and Cohen, dissenting:         

We dissent from the majority and conclude that
the Judge did not abuse his discretion when he denied the parties’ motion to
approve settlement. On the contrary, substantial evidence supports the Judge’s
determination that the proposed settlement terms are inadequate to address the
nature of the violation at issue: the filing of a baseless civil action with
the intent to retaliate against Shemwell’s exercise of his rights under the
Mine Act and to chill other miners’ exercise of those rights at Armstrong’s
mines.                                                                     

Rueben Shemwell filed a complaint with MSHA
alleging that he was unlawfully discharged from his position as a welder with
Armstrong Coal. Thereafter, the Secretary of Labor filed an application for
temporary reinstatement on his behalf. After a temporary reinstatement hearing,
a Commission Judge concluded that Shemwell’s complaint was not frivolously
brought. 34 FMSHRC 1464, 1475 (June 2012) (ALJ), aff’d, 34 FMSHRC 1580,
1582-83 (July 2012). Thus, the Judge ordered Armstrong to temporarily reinstate
Shemwell. Id. at 75-76. Before a hearing on the merits of the unlawful
discharge complaint occurred, the Secretary dropped his representation of
Shemwell. Shemwell then filed a complaint with the Commission on his own behalf
pursuant to section 105(c)(3) of the Mine Act.

After the Secretary discontinued his
representation of Shemwell, Armstrong filed a civil action in Kentucky’s
Muhlenberg Circuit Court, alleging that Shemwell’s original filing of a
discrimination complaint with MSHA amounted to “Wrongful Use of Civil
Proceedings.” Circuit Court Complaint at 7-8, No. 12-CI-00897 (hereinafter
“Muhlenberg suit”). Armstrong sought an award of punitive damages as well as
alleged compensatory damages from Shemwell. Id. at 9.

The matter currently before us concerns a second
complaint of discrimination that was filed with the Commission by the Secretary
on behalf of Shemwell under section 105(c)(2) of the Mine Act. In bringing this
complaint, the Secretary alleged that Armstrong filed the Muhlenberg suit as
retaliation for Shemwell’s previous exercise of his statutory right to file a
discrimination complaint. Complaint of Discrimination at 5 (Jan. 8, 2013). The
Secretary further alleged that the lawsuit was an attempt by Armstrong to
intimidate its workforce and discourage participation by other miners in
enforcement proceedings under the Mine Act. Id.

Remarkably, at the time the Secretary filed the
second complaint on behalf of Shemwell, there were discrimination cases pending
before an Administrative Law Judge that involved ten other miners who were
discharged by Armstrong in February 2012. Mot to Exp. at 2 (Jan. 8, 2013); Sec’y,
et al. v. Armstrong Coal Co., Docket Nos. Kent 2012-1370/1371/1372/1373-D. Three
of the miners had been temporarily reinstated to their former positions with
Armstrong.

34 FMSHRC 1658, 1667 (July 2012) (ALJ). These miners were
laid off following MSHA’s attempted inspection of Armstrong’s fabrication shop
(which Armstrong resisted), and the filing of an anonymous complaint to MSHA
about a safety issue.[6]
Id. at 1660-62, 1664, 1667. In fact, Armstrong closed its shop and laid
off a total of eleven miners following the anonymous safety complaint. Id.
at 1664-67. Armstrong, as shown by these actions, obviously has a problem with
the requirements of the Mine Act and specifically the requirements of section
105(c).[7]

On June 19, 2013, the Judge issued a decision on
the Secretary’s second complaint on behalf of Shemwell, ruling consistent with
the Secretary’s allegations, that by filing the Muhlenberg suit Armstrong
violated section 105(c)(1) of the Act “with impunity” and intentionally
interfered with Shemwell’s statutory rights. 35 FMSHRC 1865, 1883 (June 2013)
(ALJ). The Judge concluded that the First Amendment did not protect Armstrong’s
filing of the retaliatory civil action, as the operator contended.[8]
Id. He ordered Armstrong to dismiss the civil action and further ordered
the parties to attempt to reach an agreement on the specific relief to be
awarded. Id. at 1886-87.

Shortly thereafter, the parties filed a joint
motion for approval of settlement with the Judge. 35 FMSHRC 2680, 2682 (Aug.
2013) (ALJ). The Judge rejected the motion. In a decision issued on August 19,
2013, he concluded that he lacked jurisdiction at this stage in the
proceedings. Id. at 2682-83. He also stated that regardless of the
jurisdiction issue, he would deny the motion because the terms of the
settlement were contrary to the public interest and inconsistent with the
enforcement scheme of the Mine Act. Id. at 2683-88. The Judge was
concerned that the parties’ agreement contained exculpatory language that
limited the finding of a violation exclusively to proceedings under the Mine
Act. Id. at 2685. Specifically, the Judge stated that he was
“unconvinced that [the] broad exculpatory language that seeks to shield
Armstrong from responsibility for discriminatory conduct in virtually any
statutory or common law matter that may arise outside of a Mine Act proceeding,
can reasonably be construed as a means of dissuading Armstrong . . . from
filing similar civil actions.” Id. at 2686. Furthermore, he concluded
that the joint motion failed to articulate mitigating circumstances that
justified reducing the proposed penalty from $70,000 to $35,000. Id. The
Judge stated that neither the cited posting and training requirements, nor
Armstrong’s filing of a motion to dismiss the

Muhlenberg suit subsequent to the July 19, 2013 decision,
represented mitigating circumstances to justify the proposed reduction in
penalty. Id.

Analysis

A.        The
Judge did not abuse his discretion when he denied the joint motion to approve
settlement.                                               

The Mine Act and its Procedural Rules require an
Administrative Law Judge to approve the settlement of a contested civil
penalty.[9]
30 U.S.C. § 820(k); 29 C.F.R. § 2700.31. A Judge is afforded discretion when
considering whether to approve a settlement agreement. See Black Beauty,
34 FMSHRC 1856, 1864-69 (Aug. 2012) (holding that the Mine Act and its
procedural rules provide Judges the discretion to consider whether a proposed
settlement of a civil penalty constitutes a sufficient deterrent); see also
Knox County Stone Co., 3 FMSHRC 2478, 2479 (Nov. 1981) (stating that “[t]he
Judges’ front line oversight of the settlement process is an adjudicative
function that necessarily involves wide discretion.”).

For the reasons that follow, we dissent from our
colleagues and conclude that the Judge did not abuse his discretion when he
denied the parties’ motion to approve settlement.[10]

1.         The
Muhlenberg suit is a SLAPP.  

The safety of miners is directly dependent on
their ability to voice relevant concerns to management as well as to the
representatives of MSHA. We agree with the Judge that the filing of the
Muhlenberg suit was an assault on the fundamental operation of the Mine Act. Any
action that serves to intimidate miners with potential legal or financial
consequences because of their exercise of statutory rights is anathema to the
cooperative culture of safety and the Mine Act. See 30 U.S.C. § 801(e)
(declaring that “the operators of [] mines with the assistance of the miners
have the primary responsibility to prevent the existence of [unsafe and
unhealthful] conditions and practices”) (emphasis added).

When enacting the Mine Act, the Senate
recognized that if miners are to be encouraged to take an active role in
voicing safety concerns, they must be assured that they will be
protected from any form of discrimination that they may face as a consequence
for their protected activities. See S. Rep. No. 95-181, at 35-36, reprinted
in Senate Subcomm. on Labor, Comm. on Human Res., Legislative History of the
Federal Mine Safety and Health Act of 1977, at 623-624 (1978). “[M]ining
often takes place in remote sections of the country, and in places where work
in the mines offers the only real employment opportunity” and as a result the
loss of employment is a particularly devastating repercussion for a miner. See
id. at 623.

The Muhlenberg suit objectively lacked a legal
basis. The basic elements of a cause of action for “Wrongful Use of Civil
Proceedings”[11]
were plainly missing because there had yet to be a final decision issued on the
merits of Shemwell’s complaint. See 35 FMSHRC at 1868; See n.6,
supra. Armstrong filed the suit regardless.      

Armstrong, by virtue of its resources and access
to representation, attempted to use state law as a weapon to discourage miners
from exercising statutory rights. Similar abuses of the legal process are
commonly referred to as SLAPPs (“Strategic Lawsuit Against Public
Participation”). SLAPPs like the Muhlenberg suit function by

. . . forcing the target into the
judicial arena where the SLAPP filer foists upon the target the expenses of a
defense. The longer the litigation can be stretched out, the more litigation
that can be churned, the greater the expense that is inflicted and the closer
the SLAPP filer moves to success. The purpose of such gamesmanship ranges from
simple retribution for past activism to discouraging future activism. Needless
to say, an ultimate disposition in favor of the target often amounts merely to
a pyrrhic victory. Those who lack the financial resources and emotional stamina
to play out the “game” face the difficult choice of defaulting despite
meritorious defenses or being brought to their knees to settle. The ripple
effect of such suits in our society is enormous. Persons who have been
outspoken on issues of public importance targeted in such suits or who have
witnessed such suits will often choose in the future to stay silent.                                                                          

Gordon v. Marone, 590 N.Y.S.2d 649, 656 (N.Y. 1992).

It is thus not surprising that 28 states as well
as the District of Columbia and Guam have responded to the SLAPP threat with
either legislative or judicial proscription. Bruce E. H. Johnson, Sarah K.
Duran, A View from the First Amendment Trenches: Washington State’s New Protections
for Public Discourse and Democracy, 87 Wash. L. Rev. 495 (2012); see,
e.g.,

Cal CCP Code § 425.16(b)(1) (providing for a special motion
to strike a complaint that involves a cause of action against a person that
arises from any act of that person in furtherance of the person’s right to
petition the government).

The West Virginia Supreme Court recognized the
need for a judicial proscription in the absence of relevant legislation. In Webb
v. Fury, 167 W.Va 434, 460 (W.Va. 1981), the court granted a petitioner’s
request for a writ of prohibition to prevent a coal company from proceeding
with a defamation action filed in a Circuit Court. The defamation suit was
filed in response to a series of communications made by Webb and his non-profit
corporation to the Environmental Protection Agency and the Office of Surface
Mining regarding the effects of coal mining on water quality. Id. at

437. The court stated that communications regarding matters of public concern
     are protected by the First Amendment to the U.S. Constitution and Article III,
     § 16 of the West Virginia Constitution. In so ruling, the court stated that
     “[o]ur democratic system is designed to do the will of the people, and when the
     people cannot express their will, the system fails.”[12]
     Id. at 460.

2.         The
exculpatory language is not consistent with the Mine Act.

Our colleagues contend that the exculpatory
language included in the motion is consistent with the Mine Act, slip op. at
5-6 (citing Amax Lead Co., 4 FMSHRC 975, 977-78 (June 1982)), and that
the Judge erred when he rejected the inclusion of the language. Id. at
6.

We believe that the majority’s reliance on Amax
Lead is misplaced. Amax Lead did not involve a violation of
section 105(c)(1). The Commission concluded that in settling an alleged
violation of a mandatory safety standard an operator may limit its admission of
liability to proceedings under the Mine Act. Amax Lead, 4 FMSHRC at
978-79. The Commission stated that limiting liability is consistent with the
Act’s enforcement scheme when it does not affect the implementation of some of
the strongest compliance incentives, namely the sanction of an “unwarrantable
failure” or a “pattern of violations.” Id.

Unlike the situation with mandatory safety standards,
the Mine Act does not contemplate progressive enforcement mechanisms for
violations of the anti-discrimination provisions. Accordingly, we don’t
consider the reasoning or rationale used in Amax Lead to be applicable
to the facts and circumstances before us.

We are further troubled by the majority’s
reliance on Amax Lead because the subject settlement agreement’s terms
require it to be posted at each of Armstrong’s mines. In Amax Lead, the
Commission did not consider how language limiting liability may impair
effective communications to a mining workforce of the Secretary’s position on
and the Commission’s resolution of violations of section 105(c)(1). As
discussed more fully below, the exculpatory language contained in the
settlement agreement here eviscerates any educational and deterrent effect of
the posting requirement.

We conclude that the Judge correctly recognized
that the settlement of a violation of section 105(c)(1) is not directly
analogous to the settlement of a citation issued for a violation of a safety
standard. See 35 FMSHRC at 2685-86. Therefore, the Judge did not abuse
his discretion in rejecting the subject exculpatory language.

3.         The Judge considered
all the terms in the motion for settlement.

Our colleagues have also held that the record
does not support the Judge’s conclusion that the settlement agreement lacks
mitigating circumstances to justify a reduction in penalty from $70,000 to
$35,000. Slip op. at 6. We again disagree.

First, the Judge correctly excluded Armstrong’s
withdrawal of the Muhlenberg suit as a mitigating circumstance. The Judge had
already ruled that by filing the civil action Armstrong violated the Act. 35
FMSHRC at 1886-87. A fundamental principle of the Mine Act is that operators
are required to abate violations of the Act. See section 104(a), 30
U.S.C.

§ 814(a) (“[i]f, upon inspection or investigation,
the Secretary or his authorized representative believes that an operator of a
coal or other mine subject to this Act has violated this Act . . . he
shall, with reasonable promptness, issue a citation to the operator. [T]he
citation shall fix a reasonable time for the abatement of the violation”)[13]
(emphasis added). Because Armstrong was required by the terms of the Act
to dismiss the objectively baseless Muhlenberg suit, its abatement of the
violative condition cannot be considered a mitigating circumstance.[14]
The violative condition should have been abated as soon as the Secretary’s
investigator concluded that the Act had been violated and issued the complaint.
Furthermore, Armstrong did not demonstrate good faith in its compliance. See
30 U.S.C. § 820(i) (“good faith” efforts to achieve compliance may be a
mitigating circumstance justifying a reduction in civil penalty). It didn’t
dismiss the suit after both the Secretary and a Commission ALJ found it to be
in breach of the Act. Rather, Armstrong flouted the law by refusing to dismiss
the Muhlenberg suit without a settlement.                                                                  

Second, the Judge was correct in stating that
posting and training requirements are routinely included in motions for
settlement in section 105(c) cases. In fact, the Secretary has recently
authored several press releases announcing the inclusion of posting and
training requirements in agreements to settle discrimination cases. See
Press Release, Mine Safety and Health Administration, “MSHA settles two
discrimination cases with Tennessee mine operator” (Jan. 9, 2014); Press
Release, MSHA, “MSHA, New Elk Coal reach settlement” (May 8, 2013); Press
Release, MSHA, “MSHA and Pennsylvania coal operator reach settlement in
discrimination case” (Jan. 4, 2012). Our colleagues quote the Secretary’s
representation that the posting and training requirements were not routine. However,
the Secretary’s bare assertion is not supported by any evidence. The
Secretary’s lawyers are apparently unaware of the Secretary’s actual practices
as described by the press releases. Accordingly, the Judge did not abuse his
discretion in concluding that the settlement terms before him were routinely
included in motions to approve settlement of discrimination cases.

For the foregoing reasons, the Judge’s
conclusion that the parties failed to present mitigating remedies to offset the
proposed $35,000 reduction in penalty is fully supported. His analysis in light
of these facts reflects that he thoroughly considered each aspect of the
settlement and then concluded that, on balance, the remedies were not
proportionate to the insidiousness of the violation or consistent with the
enforcement scheme of the Mine Act. See 35 FMSHRC at 2686-87. We
disagree with the majority’s assertion that the Judge’s analysis reflects that
he somehow failed to consider the effect of the settlement as a whole. See
slip op. at 7-8 (citing Madison Branch Management, 17 FMSHRC 859, 867-68
(June 1995)). The Judge correctly concluded that the reasons advanced by the
Secretary to justify reducing the penalty were baseless: “There are no
mitigating circumstances to justify the proposed reduction.” 35 FMSHRC at 2686.
Perhaps the Secretary had some other reason for reducing the $70,000 penalty
that his Office of Assessments proposed. We don’t know. But there is nothing in
the record to justify a reduction.[15]

B.        The
settlement agreement is not in the public interest because the terms are
inadequate to address the nature of the violation and contrary to the public
policy of the Mine Act.

1.         The
posting requirement in the settlement agreement is inadequate.

As a SLAPP, the Muhlenberg suit is contrary to
the public policy of a majority of U.S. jurisdictions, and the Judge correctly
condemned it as contrary to the federal policy goals of the Mine Act. Miners
working at Armstrong’s mines must be informed in unambiguous terms that
in filing the civil action against Shemwell, Armstrong violated the Mine Act. We
would require the mine operator to post a notice with language that is clear
and direct.[16]
See S. Rep. 95-181, 95th Cong., 1st Sess. 37 (1977), reprinted in
Senate Subcommittee on Labor, Committee on Human Resources, Legislative History
of the Federal Mine Safety and Health Act of 1977, at 625 (1978) (the Mine
Act’s legislative history states that the Commission should require “all relief
that is necessary to make the complaining party whole and to remove the
deleterious effects of the discriminatory conduct including . . .
requirements for the posting of notices by the operator.”) (emphasis added).

Instead of posting the Judge’s decision, under
the proposed agreement Armstrong is required merely to post a copy of the
settlement motion complete with the clause that states: “except for proceedings
under the Act, nothing contained herein shall be deemed to constitute an
admission of a violation of the Act or its regulations.” Jt. Mot. at 3 (Aug. 8,
2013). The inclusion of this limiting language creates an equivocacy about the
unlawfulness of the Muhlenberg suit that undermines the effectiveness of the
posting requirement and the Act’s anti-discriminatory provisions. See
Pottsville Bleaching Co., 301 NLRB 1095, 1095 (Feb. 1991) (rejecting the
inclusion of a nonadmissions clause in a Board notice and stating that “the
inclusion of a nonadmissions clause in the Board’s notice could be confusing to
those reading the notice and could undermine its effectiveness”); see also
Independent Shoe Workers of Cincinnati, Ohio, 203 NLRB 783, 783 (May
1973) (rejecting a recommended official Board notice because it contained a
nonadmissions clause that would “undermine the effectiveness intended to be had
by the Board notice and, accordingly, would fail to effectuate the policies of
the Act”). We cannot comprehend why the Secretary agreed to a posting
requirement which does not state, in unambiguous terms, that Armstrong’s
lawsuit seeking punitive damages for Shemwell’s filing of a safety complaint
with MSHA was a gross violation of the Mine Act.

We conclude that the posting requirement in its
current form is not in the public interest and represents ineffective
enforcement of the Mine Act. In view of Armstrong’s conduct, its miners need to
be informed that they may assert statutory rights without the threat of reprisal
by oppressive litigation. This is especially important given the pattern of
Mine Act discrimination complaints against Armstrong.

2.         The reduction in
penalty is not adequately justified.

The Secretary’s motion
does not adequately justify the proposed 50 percent reduction in the civil
penalty. We agree with the Judge that the posting and training requirements
that Armstrong agreed to are unremarkable and not proportionate to the
violation.  The Judge was well within his rights to insist that the filing of
the Muhlenberg SLAPP is the type of violation

that warrants the imposition of
the statutory maximum penalty of $70,000 originally proposed by the Secretary.

In an attempt to
justify the proposed terms of the settlement, the Secretary contends that he
alone has “the historical expertise to determine whether the proposed relief
will best protect miners.” S. PDR at 11. However, Congress empowered the Commission
to determine whether or not to approve a settlement. 30 U.S.C. § 820(k). In
this case, the Judge found that a 50 percent reduction of the maximum penalty,
for what he properly characterized as an egregious transgression against the
Act, was inadequate. The record before us stands in support of his decision.

Conclusion

In summary, we dissent
from our colleagues because we believe that the Judge did not abuse his
discretion when he denied the motion to approve settlement. In addition, we
independently consider the proposed settlement terms to be inadequate to
address the violation. We would affirm the Judge’s denial of the joint motion
to approve settlement.

/s/
Michael G. Young             

Michael
G. Young, Commissioner

/s/
Robert F. Cohen, Jr.   

Robert
F. Cohen, Jr., Commissioner

Distribution

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., 22nd
Floor

Arlington, VA  22209-2296

Mason L. Miller, Esq.

Daniel Z. Zaluski, Esq.

Adam K. Spease, Esq.

Miller & Wells, PLLC

300 E. Main Street, Suite 360

Lexington, KY 40507

Tony Oppegard, Esq.

P.O. Box 22446

Lexington, KY 40522

Wes Addington, Esq.

Appalachian Citizens Law Center

317 Main Street

Whitesburg, KY 41858

Administrative Law Judge Jerold
Feldman

Federal Mine Safety & Health
Review Commission

Office of Administrative Law
Judges

1331 Pennsylvania Avenue, N.W.,
Suite 520N

Washington, D.C. 20004

[1]
30 U.S.C. § 815(c)(2) provides in pertinent part:

Any miner . . . who
believes that he has been discharged, interfered with, or otherwise
discriminated against by any person in violation of this subsection may, within
60 days after such violation occurs, file a complaint with the Secretary
alleging such discrimination. Upon receipt of such complaint, the Secretary
shall forward a copy of the complaint to the respondent and shall cause such
investigation to be made as he deems appropriate. Such investigation shall
commence within 15 days of the Secretary’s receipt of the complaint, and if the
Secretary finds that such complaint was not frivolously brought, the
Commission, on an expedited basis upon application of the Secretary, shall
order the immediate reinstatement of the miner pending final order on the
complaint.

[2]
30 U.S.C. § 815(c)(3) provides in part:

Within 90 days of the
receipt of a complaint filed under paragraph (2), the Secretary shall notify,
in writing, the

miner . . . of his determination
whether a violation has occurred. If the Secretary, upon investigation,
determines that the provisions of this subsection have not been violated, the
complainant shall have the right, within 30 days notice of the Secretary’s
determination, to file an action in his own behalf before the Commission,
charging discrimination. . . .

[3]
Shemwell was represented by private counsel. Jt. Mot. at 4.

[4]
Commission Procedural Rule 69(b) provides, “Except to the extend otherwise
provided herein, the jurisdiction of the Judge terminates when his decision has
been issued.” 29 C.F.R.

§ 2700.69(b).

[5]
We note that Shemwell was reinstated and Armstrong paid monetary remedial
relief in settlement of Docket No. KENT 2012-1497-D. See slip op. at 2, supra;
Unpublished Order at 2 (Sept. 4, 2013).

[6]
Special MSHA Investigator Kirby Smith testified in the temporary reinstatement
proceeding that MSHA’s attempt to inspect the facility was prompted by
Shemwell’s health and safety complaint. Id. at 1664. Armstrong’s
reaction to the attempted inspection was to shut off the power and send the
employees home for the day. Id.

[7]
Indeed, in the Decision and Order of Temporary Reinstatement, the Judge
observed, “I can think of nothing more chilling on an employee’s inclination to
report possible health and safety issues than the threat imposed by
[Armstrong’s vice president of operations] Allen at that meeting . . . .” 34
FMSHRC at 1664.

[8]
We agree with the Judge. It is well established that objectively baseless
retaliatory lawsuits fall outside of the protection of the First Amendment. See
BE & K Const. Co. v. NLRB, 536 U.S. 516, 530-31 (2002).

[9]
The Secretary’s contention that its settlement agreements are essentially
unreviewable by the Commission is contradicted by the plain language of the
Mine Act. See S. PDR at 11. The Mine Act states that “[n]o proposed
penalty which has been contested before the Commission shall be compromised,
mitigated, or settled except with the approval of the Commission.” 30 U.S.C. §
820(k).

[10]
The Judge’s We agree with the majority that the Judge erred errorsregarding his
lack of jurisdiction to consider the motion, as well as errorsin his
application of mootness principles. principals However, since these matters are
not essential to the Judge’s decision, they are irrelevanta distraction from
tothe pertinent question before the Commission: Did the Judge abuse his
discretion when he denied the motion to approve settlement?

[11]
The elements of this cause of action are: (1) the institution or continuation
of original

. . . administrative . . . proceedings, (2) by, or at the
instance, of the plaintiff, (3) the termination of such proceedings in
defendant’s favor, (4) malice in the institution of such proceeding, (5) want
or lack of probable cause for the proceeding, and (6) the suffering of damage
as a result of the proceeding. D’Angelo v. Mussler, 290 S.W.3d 75, 79
(KY App. 2009).

[12]
 The Commonwealth of Kentucky does not have a similar precedent or procedure
and, accordingly, Shemwell was left without recourse under state law.

[13]
Under the terms of the Act, the Secretary should have fixed a reasonable time
for abatement and required the suit to be dismissed within that time frame.

[14]
Armstrong’s ultimate dismissal of the Muhlenberg suit with prejudice as
opposed to the Judge’s minimum requirement of dismissal without prejudice
lacks any real significance. The Judge explained that in his Decision on
Liability and Cease and Desist Order, he permitted the dismissal of the
Muhlenberg suit to be without prejudice so as to “permit[] Armstrong to once
again bring its civil proceeding in the unlikely event Armstrong is ultimately
successful on appeal.” 35 FMSHRC at 1886. Our holding should make clear that
baseless retaliatory lawsuits violate the Mine Act and therefore, if filed,
must be dismissed.

[15]
The fact that Shemwell was represented by private counsel, as noted by the
majority, slip op. at 3 n.3, is irrelevant to the Commission’s
consideration of the settlement agreement.

[16]
The Judge, in his August 19, 2013 Order and Supplemental Decision on Relief,
properly ordered Armstrong to post both the June 19th Decision on Liability and
the August 19th Supplemental Decision at suitable locations at each of
Armstrong’s facilities for a period of 90 days. 35 FMSHRC at 2692.