Secretary of Labor v. The American Coal Company

Plain-English summary

On remand, Judge Richard W. Manning set penalties for an accumulation order under 30 C.F.R. § 75.400 and an on-shift examination order under 30 C.F.R. § 75.363(b). The Commission had reversed an earlier judge and found that both violations involved unwarrantable failure, high negligence, and a reasonable likelihood of serious or fatal injuries to multiple miners. The Secretary had originally proposed $188,000 for the accumulation order as a flagrant violation and $60,000 for the examination order, but the earlier ruling that the first violation was not flagrant had not been appealed. Giving substantial weight to gravity, negligence, unwarrantable failure, and American Coal's large size, Judge Manning independently assessed $40,000 for each order. American Coal was ordered to pay a total of $80,000 within 30 days.

Decision snapshot

• Cited standards: 30 C.F.R. §§ 75.400 and 75.363(b)
• Outcome: Penalties of $40,000 per order were assessed, for a total of $80,000.
• Key point: On remand, a judge independently assesses penalties under the Mine Act's six criteria and is not bound by the Secretary's special-assessment amounts.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH
REVIEW COMMISSION

Office of
Administrative Law Judges

721 19th Street, Suite
443

Denver, CO 80202-2536

303-844-3577 FAX
303-844-5268

September
14, 2017

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH

ADMINISTRATION,
MSHA,

Petitioner

v.

THE
AMERICAN COAL COMPANY,

Respondent

CIVIL
PENALTY PROCEEDINGS

Docket
No. LAKE 2008-666

A.C.
No. 11-02752-161958

Docket
No. LAKE 2009-006A

A.C.
No. 11-02752-162890-05

New
Era Mine

DECISION ASSESSING
PENALTIES UPON REMAND

Before:
Judge Manning         

On January
24, 2017, the Commission issued
its decision in the above-captioned cases. The American Coal Company,
39 FMSHRC 8 (Jan. 2017). In
that decision, the Commission
reversed the findings of former Commission Administrative Law Judge Michael
Zielinski with respect to Order No. 6673874 in LAKE 2008-666
and Order No. 6673876 in LAKE 2009-006A. Both orders were issued under
section 104(d)(2) of the Federal Mine Safety and Health Act of 1977
(“Mine Act”). 30 U.S.C. § 814(d)(2). The ordering
paragraph of the Commission’s decision
provides, in pertinent
part:

We reverse the Judge's
decision with regard
to the accumulations and on-shift examination violations, Order Nos. 6673874 and 6673876 respectively, and conclude
that they resulted
from an unwarrantable failure to comply,
with high negligence and gravity as set forth above. We
remand Order Nos. 6673874 and 6673876
for the imposition of penalties
consistent with this opinion.

39
FMSHRC at 23. Thus, the only issue on remand
is the amount of the penalty that should be assessed for each order.
These cases were assigned
to me on June 27, 2017.
By order dated June 29, 2017, I directed the parties to enter into negotiations
in an attempt to agree upon appropriate penalties for the two orders. I twice
granted requests for extensions of time, but the parties were unable to reach
agreement on appropriate penalties.

The Secretary originally proposed a penalty of $188,000 for Order No. 6673874 as a flagrant violation
using his special assessment
procedure. See 30
C.F.R. § 100.5. Judge Zielinski determined that the violation was not flagrant
and the Secretary did not appeal
his finding in that regard to the Commission. 39 FMSHRC at 9 n. 3. The Secretary originally proposed a penalty of $60,000 for Order No. 6673876 using
his special assessment procedure.

Because
the parties were unable to agree upon an appropriate penalty for the two orders
upon remand, I am assessing a penalty based upon the record in the cases and
the decisions of Judge Zielinski and the Commission.

Order
No. 6673874

With
respect to Order No. 6673874, Judge Zielinski determined that The American Coal
Company (“AmCoal”) violated section 75.400, that the violation was significant
and substantial (“S&S”), and AmCoal’s negligence was “moderate to high,”
but was not the result of its unwarrantable failure to comply with the safety
standard.   The American Coal Company , 36 FMSHRC 1311, 1340-52 (May 2014).
He reduced the gravity from “fatal” to “reasonably likely to result in lost
work days injuries to two miners.” Id. at 1345, 1368.  He also
determined that the violation was not flagrant, which finding was not appealed
by the Secretary. Id. at 1362-63; 39 FMSHRC at 9, n. 9. Judge Zielinski
assessed a penalty of $7,500 for this violation.

The
Commission reversed the judge’s “findings of no unwarrantable failure and his
negligence and gravity determinations.” 39 FMSHRC at 17. With respect to
negligence, the Commission determined that AmCoal’s negligence was high. Id.
at 20. With respect to gravity, the Commission concluded that “the level of
gravity from the occurrence of a fire in the [applicable] section of the mine
is a reasonable likelihood of serious or fatal smoke inhalation or burn
injuries to a number of miners.” Id. at 21.

Order
No. 6673876

With
respect to Order No. 6673876, Judge Zielinski determined that AmCoal violated
section 75.363(b), the violation was S&S, and AmCoal’s negligence was
“moderate to high,” but was not the result of its unwarrantable failure to
comply with the safety standard.  36 FMSHRC at 1352-54, 1369. As with the
previous order, he reduced the gravity from “fatal” to “reasonably likely to
result in lost work days or restricted duty injuries to two miners.” Id. at
1353. Judge Zielinski assessed a penalty of $4,000 for this violation.

The
Commission reversed the judge’s finding that the violation was not the result
of AmCoal’s unwarrantable failure. 39 FMSHRC at 21-22. The Commission also
reinstated the Secretary’s high negligence designation. Id. at 23. Finally,
the Commission determined that the gravity for the violation was “a reasonable
likelihood of serious or fatal smoke inhalation or burn injuries to a number of
miners.” Id.

Appropriate
Civil Penalties

Under
section 110(i) of the Mine Act, I must consider six criteria in assessing a
civil penalty: (1) the operator’s history of previous violations; (2) the
appropriateness of the penalty relative to the size of the operator’s business;
(3) the operator’s negligence; (4) the penalty’s effect on the operator’s
ability to continue in business; (5) the violation’s gravity; and (6) the
demonstrated food faith of the operator in attempting to achieve rapid
compliance after notification of a violation. 30 U.S.C. § 820(i).

The
parties stipulated that AmCoal demonstrated good faith in abating the
violations in a timely manner and that the proposed penalties would not affect
its ability to remain in business. Stips. 8 &10; 36 FMSHRC 1364. Judge
Zielinski determined that “AmCoal is a very large operator, as is its
controlling entity[.]” 36 FMSHRC 1364. Based on his review of the record, the
parties’ briefs, and the Secretary’s Part 100 regulations, Judge Zielinski
concluded that AmCoal’s history of previous violations should be characterized
as “a moderate overall violation history.” 36 FMSHRC at 1364-65. The findings
with respect to these four elements are not in dispute at this stage of the
proceeding.

Penalty
for Order No. 6673874

This
order was issued because, in part, the MSHA inspector found float coal dust,
loose coal, paper, cardboard, wood and plastic under and along an energized
conveyor belt and adjoining crosscuts. Taking into consideration the four
penalty criteria discussed above plus the Commission’s determination that the
violation was the result of AmCoal’s unwarrantable failure to comply with the
safety standard, AmCoal’s high level of negligence and the violation’s high
level of gravity, I conclude that a penalty of $40,000 is appropriate.

As
stated above, the Commission held that there was a “reasonable likelihood of
serious or fatal smoke inhalation or burn injuries to a number of miners .”
39 FMSHRC at 21 (emphasis added). The Secretary alleged that ten miners were
exposed to the hazard but Judge Zielinski found that two miners were affected. 36
FMSHRC at 1345 n. 36. In using the phrase “a number of miners,” the Commission
did not specifically address this dispute. Under the Secretary’s penalty point
system, the number of persons potentially affected can significantly influence
the amount of the proposed penalty. The penalty point system is not binding on
the Commission. [1]
The Commission has “consistently considered gravity holistically, considering ‘factors
such as the likelihood of injury, the severity of an injury if it occurs, and
the number of miners potentially affected.’” 39 FMSHRC at 20, quoting
Newtown Energy Inc ., 38 FMSHRC 2033, 2049 (Aug. 2016) (emphasis added). The
crucial point is that the Commission determined that in the event of a fire it
was reasonably likely that at least some of the miners working inby the
ignition point would have been seriously or fatally injured. The penalty
initially proposed by the Secretary was quite high because the Secretary deemed
the violation to be flagrant, but Judge Zielinski rejected that determination and
his finding was not appealed. 30 U.S.C. § 820(b)(2). In assessing the penalty,
I placed considerable weight on the gravity of the violation, the negligence of
AmCoal, and the fact that AmCoal is a very large mine operator.

Penalty
for Order No. 6673876

This order was issued
because hazardous conditions, including those described in Order No. 6673874,
were not recorded in the examiners’ on-shift book, as required. Taking into
consideration the four penalty criteria discussed above plus the Commission’s
determination that the violation was the result of AmCoal’s unwarrantable
failure to comply with the safety standard, AmCoal’s high level of negligence
and the violation’s high level of gravity, I conclude that a penalty of $40,000
is appropriate.

As discussed above with respect
to Order No. 6673874, the Commission took a holistic approach in determining
that the gravity of this violation was serious. The Commission determined that
“the dangers described in our analysis of the accumulations violation apply to
this violation as well, and the dangers affected additional crews.” 39 FMSHRC
at 23. The penalty differs from that initially proposed by the Secretary
because he used his special assessment procedure in calculating the proposal
and Commission judges are not bound by that regulation. 30 C.F.R. § 100.5. In
assessing the penalty, I placed considerable weight on the gravity of the
violation, the negligence of AmCoal, and the fact that AmCoal is a very large
mine operator.

ORDER

For the reasons set forth
above, The American Coal Company is ORDERED TO PAY the Secretary of
Labor the sum of $80,000 within 30 days of the date of this decision. [2]

/s/ Richard W.
Manning

Richard
W. Manning

Administrative
Law Judge

Distribution:

Barbara Villalobos, Office of the Solicitor, U.S. Department of Labor, 230 S. Dearborn St., 8th Floor, Chicago, IL 60604-1502
(Certified Mail)

Jason
W. Hardin, Esq.,
Fabian VanCott, 215 South State Street, Suite 1200, Salt Lake City, UT
84111-2323 (Certified Mail)

RWM

[1]
The
Commission is responsible for assessing final penalties. The Commission has
held that:

Commission Judges are not bound by the
Secretary’s penalty regulations set forth at 30 C.F.R. Part 100 or his special
assessments. Their duty is to make a de novo assessment based upon their review
of the record. The Commission does require an explanation of any substantial
divergence from the penalty proposal of the Secretary. However, the Judge’s
assessment must be independent, and the Secretary’s proposal is not a baseline
or starting point that the Judge should use a guidepost for his/her assessment.

The
American Coal Company ,
38 FMSHRC 1987, 1990 (Aug. 2016).

[2]
Payment
should be sent to the Mine Safety and Health Administration, U.S. Department of
Labor, Payment Office, P.O. Box 790390, St. Louis, MO 63179-0390