Secretary of Labor v. American Aggregates of Michigan, Inc.

Plain-English summary

MSHA issued a withdrawal order after a driller's helper had not completed every topic required during the first four hours of new-miner training. The parties agreed to keep the violation but remove the significant-and-substantial designation, reduce negligence and gravity, and lower the proposed penalty from $2,007 to $132. An ALJ rejected the settlement, focusing on the missing training topics and the size of the reduction. The Commission majority reversed, holding that settlement review considers the parties' full factual presentation without making hearing-style findings, and approved the $132 settlement. Commissioners Mary Lu Jordan and Arthur Traynor dissented because they believed the Judge acted within his discretion in rejecting the large reduction.

Decision snapshot

• Cited standard: 30 C.F.R. § 46.5
• Outcome: The Judge's denial was vacated, the settlement was approved, and a $132 penalty was assessed.
• Key point: A settlement must be reviewed as a whole under the fair, reasonable, appropriate, and public-interest standard, without deciding disputed facts as though after a hearing.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004‑1710

SECRETARY
OF LABOR,                              :        

MINE
SAFETY AND HEALTH                    :                                

ADMINISTRATION
(MSHA)                       :        

:        

v.                                              
:         Docket No. LAKE 2018-0340

:                                                        

AMERICAN
AGGREGATES OF                    :

MICHIGAN,
INC.                                            :

BEFORE:
Rajkovich, Chairman; Jordan, Young, Althen, and Traynor, Commissioners

DECISION

BY: Rajkovich,
Chairman; Young and Althen, Commissioners

This proceeding arises under
the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2018)
(“Mine Act” or “Act”). It comes before us on interlocutory review of the
decision of an Administrative Law Judge denying the Secretary’s motion to
approve settlement of a withdrawal order issued pursuant to section 104(g)(1) of the Mine Act. [1]
The Order asserted that American Aggregates of Michigan, Inc. (“American
Aggregates”) failed to provide a miner “the MSHA-required 4-hours new miner
training prior to beginning work at the mine.” Ex. A at 11 (Order 8952500, May
17, 2018).

The Judge concluded that the
Secretary had not presented sufficient facts to support the proposed
settlement. 41 FMSHRC 382 (May 2019) (ALJ). Upon denying the settlement, the
Judge recused himself, requested that the case be reassigned to another Judge
for hearing, and certified his ruling for interlocutory review. The Commission
granted interlocutory review.

As set forth below, we find that
the Judge failed to apply the correct standard for consideration of settlement
proposals and that the proposed settlement is fair, reasonable, appropriate
under the facts, and in the public interest. Therefore, we reverse the Judge’s
denial of the settlement motion and approve the settlement.

I.

Factual and Procedural Background

MSHA’s regulations contain
detailed instructions for training new miners. 30 C.F.R.

§
46.5(a) requires that each new miner must be
provided “with no less than 24 hours of training as prescribed by paragraphs
(b), (c), and (d).” However, it permits miners to begin work before receiving
the full 24 hours of training provided they work “where an experienced miner
can observe that the new miner is performing his or her work in a safe and
healthful manner.” Id.

In turn, subsection
(b) permits miners to begin work with no less than 4 hours of training and sets
forth 7 general topics that must be covered during those 4 hours. 30 C.F.R.

§ 46.5(b). The 4-hour requirement of subsection 46.5(b) is at
issue in this case.

On May 17, 2018, an MSHA inspector
issued a section 104(g)(1) withdrawal order to American Aggregates, the
operator of the Ray Road Plant, a surface sand and gravel mine in Oakland
County, Michigan. Ex. A at 11 . The
order alleged that Matthew Weaver, a driller operator/helper, “had not received
the MSHA-required 4-hour new miner training prior to beginning work at the mine
. . . [and] had no previous mining experience.” 41 FMSHRC at 382; Ex. A at 11 (Pet.
for Civil Penalty). The order directed the operator to withdraw the miner from
the mine until he received the requisite training. The inspector designated the
violation as significant and substantial (“S&S”) and found the likelihood
of injury as “reasonably likely” and the expected injury to be “fatal.” He also
marked the negligence as “high.” 41 FMSHRC at 383; Ex. A at 11. MSHA applied the
penalty point schedule set forth in 30 C.F.R. § 100.3
and proposed a penalty of $2,007. [2]

American Aggregates contested
the order. It replied that Weaver was not a driller, but rather a driller
helper. It attached exhibits to its answer setting out factual details of
Weaver’s training, including classroom training under the Occupational Safety and
Health Administration’s (OSHA) regulations and on-the-job training performing
the same work at other non-mining sites. American Aggregates disputed the
Secretary’s allegations of the violation and asserted that the injury was
unlikely to occur, would only result in lost work days if it occurred, and that
there was no negligence. It also responded that the violation was not S&S.

A.    
Settlement Motion

On February 14, 2019, the
Secretary filed a motion to approve settlement. In that motion, American
Aggregates accepted the violation. The parties agreed to the removal of the
S&S designation; modification of the likelihood of occurrence of injury
from “reasonably likely” to “unlikely;” modification of the level of gravity
from “fatal” to “lost work days or restricted duty;” and reduction of
negligence from “high” to “moderate.” The Secretary modified the proposed penalty
from $2,007 to $132. In doing so, the Secretary applied his regulatory penalty
criteria and penalty point formulation to the terms of the violation as accepted
by American Aggregates. In other words, $132 would have been the prescribed
penalty under MSHA’s regulations if the violation had been cited as it was
proposed to be settled.

The motion stated that
American Aggregates offered the following facts to support its position:

Respondent asserts that Matthew Weaver was not a
driller but was a Driller’s Helper. Respondent contends that Weaver had
received, at the time the order was issued, 19.5 hours of OSHA related
classroom training, had received 4 hours of New Miner Training and had received
on-the-job training working directly with its driller. Respondent concedes that
on the day of the inspection Weaver had not received training on all seven
subject[s] required by 30 C.F.R. 46.5 including 46.5(b)(4) 46.5(b)(5),
46.5(b)(6) and 46.5(b)(7), and the MSHA training that Weaver had received had
not been properly documented. Respondent stated that although Weaver had no
previous mining experience, he did have approximately one month of experience
working with its driller as a Driller’s Helper taking core samples at a
non-mine property being considered for purchased [sic] for future mining. Respondent
avows that Weaver’s work off mine property was the exact same work conducted
with the same drill rig the day the withdrawal order was issued. Respondent
maintains that Weaver worked directly with and [sic] closely supervised by its
driller.

41
FMSHRC at 383; S. Settlement Mot. at 3-4.

For his part, the Secretary
asserted:

In reaching
this settlement, the Secretary has evaluated the value of the compromise, the
likelihood of obtaining a better settlement, and the prospects of coming out
better or worse after a trial. . . . The Secretary believes that maximizing his
prosecutorial impact in such a manner serves a valid enforcement purpose. Even
if the Secretary were to substantially prevail at trial, and to obtain a monetary
judgment similar to or even exceeding the amount of the settlement, it would
not necessarily be a better outcome from the enforcement perspective than the
settlement, in which all alleged violations are resolved and violations that
are accepted can be used as a basis for future enforcement actions. A
resolution of this matter in which all violations are resolved is of
significant value to the Secretary and advances the purposes of the Act. [3]

S. Settlement Mot. at 2.

After reviewing the settlement, the Judge requested
clarification from the parties on several points. The Secretary responded that
he relied on the settlement motion as filed, consistent with the standards
articulated by the Commission in The American Coal Co. , 38 FMSHRC 1972
(Aug. 2016) (“ AmCoal I ”).

B.     The Judge’s Decision

The Judge concluded that the
motion did not support settlement because the operator acknowledged that it did
not provide mandatory training on all topics set forth in 30 C.F.R.

§ 46.5(b)
such as section 46.5(b)(4) (hazard task training) and (b)(7) (rules and
procedures for reporting hazards), and that an injury resulting from the
violation was “likely to result in lost work days or restricted duty.” To a
great extent, the Judge focused on the removal of the S&S designation
finding that “the admitted facts do not support removal of the S&S
designation.” 41 FMSHRC at 386. The Judge further noted that the settlement
proposed a significant percentage reduction of the penalty—about 94%. [4]

The Judge rejected the
Secretary’s contention that the settlement served any future enforcement
benefit. He concluded that the settlement was not fair, reasonable, appropriate
or in the public interest and rejected the settlement. He certified, on his own
motion, his ruling for interlocutory review. Finally, having essentially taken
a position upon reviewing the settlement motion that the violation was S&S,
in an act of judicial statesmanship, the Judge recused himself from the case
and requested that it be assigned to an alternative Judge.

On June 6, 2019, the
Commission directed review of whether to uphold the Judge’s denial of the
settlement.

II.

Disposition

A.    
Parties’ Arguments

In concert, the parties argue
that the Judge erred by failing to apply the appropriate standard for reviewing
proposed settlements as articulated by the Commission in AmCoal I and The
American Coal Co. , 40 FMSHRC 983 (Aug. 2018) (“ AmCoal II ”). Specifically,
they assert that the Judge failed to consider the settlement holistically, and instead,
engaged in a piecemeal review of aspects of the settlement in isolation,
focused almost exclusively on the S&S designation that the operator
contested in its Answer.  

The Secretary also contends that
the Judge erred by discounting the future enforcement value of the modified
order. Further, the Secretary contends that the significant penalty reduction
in this case was a direct product of reassessing the penalty under the Part 100
standards for regular assessments based on the penalty criteria that fairly and
appropriately reflected the modified designations of negligence and gravity the
parties agreed to in the settlement motion. As re-evaluated by the Secretary,
the violation would result in penalty points significantly below the point
value that results in the minimum penalty. [5]

American Aggregates argues
that the terms of the settlement reflect a compromise the parties reached after
negotiation, with both parties making concessions. In particular, it contends
that it agreed to accept the violation despite providing documentary evidence
that the miner received more training than required under section 46.5,
including extensive OSHA training, 4 hours of new miner training, and
on-the-job training. Thus, American Aggregates argues that the violation is for
the failure to cover some of the seven expressly prescribed topics during the 4
hours of new miner training it did provide. It further argues that it covered
several of the required topics and had already provided 19.5 hours of training
in accordance with OSHA regulations. [6]

American Aggregates further contends
that the parties’ settlement was not an admission of adverse facts as asserted
by the Judge, and that the Judge erred by characterizing the parties’
settlement as an agreement to “fundamental, undisputed facts.” 41 FMSHRC at

388. American Aggregates asserts a continuing disagreement with certain factual
     allegations, as reported in the settlement agreement, but that it agreed to
     accept the violation and related designations in order to settle the
     proceeding.

American Aggregates also
argues that the Judge erred in mischaracterizing its position on several
matters in his order denying settlement. [7]
Specifically, it points to the Judge’s error in stating that American
Aggregates “acknowledge[d] that the injury would still potentially result in
lost work days or restricted duty,” noting that it disputed both in its Answer
and the settlement motion. Id. at 384. American Aggregates also agrees
with the Secretary that the Judge’s characterization of the penalty reduction
was exaggerated because he focused on a percentage but failed to take into
consideration that the reduced proposed penalty reflected a new assessment
amount based on calculations using the Secretary’s Part 100 regulations as
applied to the settled terms of the violation.

Both parties assert that the
settlement satisfies the standard set forth in AmCoal and ask the
Commission to vacate the Judge’s decision and approve the settlement.

B.     Commission Review

Under section 110(k) of the
Mine Act, Congress vested the Commission with authority to approve settlements
of contested assessments. 30 U.S.C. § 820(k); AmCoal I , 38 FMSHRC at 1975.
While such authority is internally delegated to the Commission Administrative
Law Judges in the first instance, the Commissioners retain full authority
regarding settlements. [8]

We
have held that in reviewing settlements, “the Commission and its Judges
consider whether the settlement of a proposed penalty is “fair, reasonable,
appropriate under the facts, and protects the public interest.” AmCoal I ,
38 FMSHRC at 1976. That is the legal standard governing settlements. [9]
In turn, the decision whether a settlement is fair, reasonable, appropriate
under the facts, and protects the public interest is made on the basis of a submission
by the Secretary to which the operator has agreed. See Hopedale Mining,
LLC , 42 FMSHRC ___, No. LAKE 2019-0149 (Aug. 28, 2020)

During
the review of a proposed settlement, the Judge is not to engage in fact finding
as he would post-hearing. See Solar Sources, LLC , 41 FMSHRC 594,
602 (Sept. 2019) (“At the pre-hearing settlement stage of a Commission
proceeding, no evidence has been adduced into the record and the Judge is not
required to engage in fact finding.”). Judges may not “assign[] probative value
to some facts without the benefit of an evidentiary hearing.” AmCoal II ,
40 FMSHRC at 991. Hence, the analysis of submitted facts in a settlement
proposal is markedly different from an analysis of admitted evidence in
a hearing. [10]

Whether a
violation is S&S is a matter in the first instance of prosecutorial
discretion. The Mine Act, therefore, recognizes the particular expertise of
MSHA in judging whether a violation is S&S. Indeed, if MSHA does not charge
an S&S violation, the Commission cannot make an S&S finding. Mechanicsville Concrete, Inc. , 18 FMSHRC 877, 879-80 (June 1996). Commission Judges do not have the discretion to make
such elevated finding unless it is asserted in the first instance by MSHA. The Judge
therefore should not have applied the Newtown Energy, Inc. , 38 FMSHRC 2033 (Aug. 2016),
test for S&S determinations to a
settlement.

C.    
The Judge Erred By
Denying the Settlement

As the Commission articulated
in AmCoal , the Commission and its Judges consider whether the
settlement of a proposed penalty is “fair, reasonable, appropriate under the
facts, and protects the public interest.” The Commission must review the
Judge’s determination to ensure that “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.” However, “abuses of discretion
or plain errors are subject to reversal.” Black Beauty , 34 FMSHRC at 1864
(citing Knox County Stone Co. , 3 FMSHRC 2478, 2480 (Nov. 1981)). Here,
the Judge plainly erred by denying the settlement on the basis of an
inappropriate legal determination on S&S on an undeveloped record and in
contravention to the facts presented by the parties in support of the
settlement.

In
denying the settlement, the Judge concluded that “the admitted facts do not
support removal of the S&S designation,” 41 FMSHRC at 386, focusing on the
lack of training and the “reasonable likelihood that the untrained-miner hazard
contributed to by the violation [would] result in an injury that would result
in lost workdays or restricted duty.” Id. at 388. Not only is the
Judge’s analysis not supported by the facts presented by the parties, but it is
an erroneous exercise of judicial decision making at this preliminary stage of
the proceeding.

It was undisputed that the
miner received 4 hours of new miner training, but that he did not receive all 7
modules that are to be covered during those 4 hours. The violation in this case
is, then, the absence of certain modules that an individual must have before
working as a miner. [11]

In
settling, the parties essentially agree on the following facts as provided by
American Aggregates in its Answer and as noted above. The miner received 4 hours
of new miner training, but missed certain modules. MSHA does not contest that
he previously received 19.5 hours of safety training. The miner worked as a
helper rather than a driller. During the prior month of work, he was doing the
same job, on the same remote terrain, and under the supervision of the same
driller. S. Settlement Mot. at 3. The parties further agree that this violation
involved moderate negligence with the unlikely possibility of a lost work day
injury. Given American Aggregates’ acceptance of the violation, and based upon the
foregoing, both parties agree that the settlement is justified. [12]

In
evaluating the settlement, the Judge misapprehended the correct standard for
reviewing settlements, opting instead to conduct a private, unsupported S&S
analysis under the Newtown test. At the pretrial settlement phase of litigation,
Judges may not “assign[] probative value to some facts without the benefit of
an evidentiary hearing.” AmCoal II , 40 FMSHRC at 991. Hence, any fact
finding or legal conclusions made based on the facts supplied by the parties in
support of their settlement motion is not appropriate in the Judge’s review of
a proposed settlement.

The Judge ignored most of the
information relevant to the reasonableness of the settlement under the AmCoal
I criteria. The Judge failed to take into consideration the many elements
of the agreement of the parties, specifically, those included in paragraph 6 of
the Secretary’s settlement motion cited above. These facts are directly
applicable to consideration of the proposed settlement under the proper
standard of review articulated in AmCoal I . In sum, the Secretary provided
significant factual information to support the proposed settlement. [13]

Of
course, even in a settlement, the parties may not be amenable to “admitting”
the correctness of the other party’s position on an issue of law or that a party
erred in its evaluation of the facts. Therefore, settlements must be read with
a realistic eye to the positions of the parties in moving toward settlement.

In
his S&S-focused analysis, the Judge disregarded a host of circumstances demonstrating
errors by the inspector and other factors supportive of acceptance of the
settlement: [14]

·       
Contrary to the inspector’s belief,
the miner was not a driller, but rather, was a helper. The significance is that
he was continuously under the control and direction of the driller.

·       
As a driller helper, the miner was
working in open virgin areas drilling ground samples to evaluate for possible
future mining. Thus, he did not work near a quarry or pit face or around such
mining equipment.

·       
The miner had 4 hours of new miner
training. The violation was for not covering all the modules set forth in
subsection 46.5(b). [15]

·       
With regard to topics bearing upon
safety, the driller was not “untrained.” In fact, the parties accepted that the
miner had received 19.5 hours of training that covered virtually all aspects
related to safe operations.

·       
Further, the miner had a full month
of on-the-job experience as a driller helper doing the same work at the mine
site during the preceding month.

·       
During that same preceding month
working as a driller helper, the miner worked on the same type of terrain as
when the drill moved onto a mine site.

·       
During that same preceding month
as a driller helper, the miner worked under the same driller who was
supervising him on the mine site.

·       
Section 46.5(e) provides “ Practice under the close observation of a competent
person may be used to fulfill the requirement for training on the health and
safety aspects of an assigned task in paragraph (b)(4) of this section, if
hazard recognition training specific to the assigned task is given before the
miner performs the task.” 30 C.F.R. § 46.5(e). Because the miner previously
performed the same tasks and worked for a month under the supervision of the
same driller, there is evidence the miner may have had experience with the
health and safety aspects of being a driller helper as described in subsection
46.5(b)(4). [16]

·       
Having reviewed
these facts, MSHA considered that the occurrence of an injury was “unlikely.” The motion expressly stated the contention that
“because of the training that Weaver had received, the experience Weaver had
obtained working as a Driller’s Helper and the close supervision by it[s]
driller, it was ‘unlikely’ that Weaver would incur an[] injury.’” S. Br. at 6,
n.2 (citation omitted). The parties’ agreement that an injury was “unlikely” (S.
Settlement Mot. at 4) is reasonable based on the
miner’s status as a helper, close supervision, prior significant training,
receipt of new miner training, prior on the job training, and remoteness of the
area from danger from proximity to a pit or other operational area. The
Secretary explained in his brief that “no reading of the settlement agreement
can support the judge’s view.” S. Br. at 6, n.2.

Instead of focusing on the above points,
the Judge concentrated on his finding, without a hearing, that the violation
was S&S. Again, it is not appropriate
to make such a finding during a settlement review.

In general, when the Commission’s review of the record
demonstrates a proper consideration by a Judge of a motion and legal standard
for settlements, the Commission sustains the Judge’s action. However, when a motion,
including admissions and concessions of the parties demonstrate the Judge
erroneously failed to accept a settlement that meets the legal standard for
approval, the denial of a settlement must be reversed. [17]

In reaching
our decision in this case, we emphasize the importance of all aspects of
training, and most definitely, the mandatory 4 hours of training before
commencing any work. This training is important for the avoidance of accidents
and injuries when a worker becomes a miner for the first time. It is for this
reason, of course, that the regulations require that such an employee must work
under the watchful eye of an experienced miner who can observe the new worker’s
performance for health and safety reasons. Our holding, here, is not a
diminution by us of the importance of training.  

In this case, American
Aggregates admits that the regulation was violated—but this is a settlement
case. The Secretary’s evaluation toward settlement apparently led him to accept
that the involved miner had received many more hours of training than the
necessary hours required by subsection 46.5(b) with a significant focus on
safety and health. The Secretary gave credence to the fact that the inspector
had misidentified the employee as a driller when, in fact, he had a lesser job
as a driller helper under supervision of a driller. The Secretary further gave
recognition to the month of experience by the new miner in performing the same
work, with the same driller/supervisor, on the same type of terrain as at the
mine—and removed from the danger of active mining equipment in his job.

In evaluating the
violation under the totality of these circumstances, which the Judge failed to
do, the Secretary acted reasonably in agreeing to acceptance of the violation
in return for a settlement entailing modification of gravity and negligence. It
is a fair compromise to hold the operator accountable for its actual failures
and to allow the Secretary to proceed with efficient use of his resources. In
addition, the Secretary benefits from reliance on this violation in the
operator’s violation history for future enforcement.

Regarding the Secretary’s use
of its penalty point system for purposes of settlement in this case, we
reiterate that it is the right and duty of the Commission to assess penalties,
irrespective of any system that the Secretary may use. That being said, we note
that in settlements, the Judge is not setting the penalty, but instead,
is evaluating whether the proposed penalty is part of a fair and
reasonable settlement.

Primary authority to approve
settlements of contested proposed assessments is vested by Congress to the
Commission. 30 U.S.C. § 820(k); AmCoal I , 38 FMSHRC at 1976. While such
authority may be delegated to the Judges, the Commissioners retain such full
authority to approve such settlements. Accordingly, we find the proffered
penalty to satisfy AmCoal .

III.

Conclusion

Based upon a careful review
of the settlement motion and entire record, we conclude that the settlement is
fair, reasonable, appropriate, and in the public interest. Therefore, we vacate the Judge’s decision, approve the settlement
motion, and assess a penalty of $132. [18]

/s/ Marco M. Rajkovich, Jr.

Marco M. Rajkovich, Jr., Chairman

/s/
Michael G. Young

Michael G. Young, Commissioner

/s/
William I. Althen

William
I. Althen, Commissioner

Commissioners Jordan and Traynor dissenting:

American Aggregates of
Michigan, Inc. (“American Aggregates”) was charged with failing to provide
required training to a miner. The parties agreed to settle the case for a $132
penalty (a reduction of more than 93%). The Judge denied the settlement motion.
Because we conclude that it was well within the Judge’s discretion to refuse to
approve such a significant penalty reduction, we would affirm his decision.           

We would affirm the decision
of the Judge under the abuse of discretion standard we have long applied to
review of our Judges’ exercise of discretionary authority to approve or deny
settlement pursuant to section 110(k) of the Act, 30 U.S.C. § 820(k). We have
long held “[t]he judge’s front line oversight of the settlement process is an
adjudicative function that necessarily involves wide discretion.” Knox
County Stone Co ., 3 FMSHRC 2478, 2479 (Nov. 1981). The Commission “has
stated repeatedly, if a Judge disagrees with a stipulated penalty amount or
believes that any questionable matters bearing on the violation or appropriate
penalty amount need to be clarified through trial, he is free to reject the
settlement and direct the matter for hearing.” Pontiki Coal Corp. , 8
FMSHRC 668, 675 (May 1986). Thus, 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.” Black
Beauty Coal Co. , 34 FMSHRC 1856, 1864 (Aug. 2012). An abuse of discretion may be found if there is no
evidence to support the decision or if the decision is based on an improper
understanding of the law. Id. at 1863 (citing
Utah Power & Light Co. , 13 FMSHRC 1617, 1623 n.6 (Oct. 1991)
(citations omitted)).

Our precedents governing our
proper review of our Judges’ discretion to approve or deny settlements is
reviewed at length in our dissent in Hopedale Mining, LLC , 42
FMSHRC ___, slip op. at 18-22, No. LAKE 2019-0149 (Aug. 28, 2020), issued on
the same day as our decision in this case. Though application of those
precedents in this case should result in affirmance of the Judge’s decision to
deny the parties’ settlement motion, his decision is nonetheless vacated by the
majority. The decision below should have been affirmed as a reasonable exercise
of the Judge’s discretion. When the government and an operator seek Commission
approval of their agreement to compromise a penalty, they have the burden of
persuading a Judge exercising reasonable discretionary judgment that the
proposed penalty reduction is “fair, reasonable, appropriate under the facts,
and in the public interest.” The American Coal Co. , 38 FMSHRC 1972, 1976
(Aug. 2016) (“ AmCoal I ”).

As a threshold matter, we are
obliged to address the majority’s decision to discard the abuse of discretion
standard, and its assertion that “[t]he standard of review of a Judge’s
settlement determination is not a deferential one.” Slip op. at 7-8, n.9. In
fact, the Commission has repeatedly used abuse of discretion review in
analyzing Judges’ decisions regarding settlement motions. See, e.g. ,
The American Coal Co., 40 FMSHRC 983, 987 (Aug. 2018) (“ AmCoal II ”);
Rockwell Mining, LLC , 40 FMSHRC 994, 996 (Aug. 2018); Black
Beauty , 34 FMSHRC at 1869. And abuse of discretion review is, at the core
of its essence, a highly deferential standard. See, e.g. , Gall v. U.S. ,   552 US 38, 56 (2017) (“The Court of Appeals gave
virtually no deference to the District Court’s decision . . . [and] [a]lthough
the Court of Appeals correctly stated that the appropriate standard of review
was abuse of discretion, it engaged in an analysis that more closely resembled de
novo review of the facts presented . . . .”); General Electric Co. v. Joiner , 522 U.S. 136, 143 (1997) (“In applying an
overly ‘stringent’ review to [a discretionary] ruling, [the Court of Appeals]
failed to give the trial court the deference that is the hallmark of
abuse-of-discretion review.”); In re Lupron Mktg. & Sales Practices
Litig. , 677 F.3d 21, 30-31 (1st Cir. 2012) (citations omitted) (“We review
a district court’s approval of a proposed class action settlement for abuse of
discretion. . . . The abuse of discretion standard is highly deferential and ‘not
appellant-friendly’”).

Our Judges have wide
discretion to reject the parties’ proposal to compromise a penalty, provided
the Judge has considered each of these American Coal factors, the
section 110(i) penalty criteria, and other factors we have held relevant to the
discretionary determination. 1 Here, the Judge did just that.

The training standard at
issue, 30 C.F.R. § 46.5, requires, in relevant part, that each new miner must be provided “with no less than 24
hours of training.” 30 C.F.R. § 46.5(a). 2 Subsection (b) sets
forth the general topics that must be covered in the 24 hours of new miner
training prior to a miner beginning work at the mine. The settlement motion
conceded that the operator failed to train the miner on the topics contained in
sections 46.5(b)(4)-(7), which mandate training on:

(4)
[i]nstruction on the health and safety aspects of the tasks to be
assigned, including the safe work procedures of such tasks, the mandatory
health and safety standards pertinent to such tasks, information about the physical
and health hazards of chemicals in the miner’s work area, the protective
measures a miner can take against these hazards, and the contents of the mine’s
HazCom program;

(5)
Instruction on the statutory rights of miners and their representatives
under the Act;

(6) A
review and description of the line of authority of supervisors and miners’
representatives and the responsibilities of such supervisors and miners’
representatives; and

(7) An
introduction to . . . rules and procedures for reporting hazards .

30
C.F.R. § 46.5(b)(4)-(7) (emphasis added).

The training requirements in
section 46.5 are based on the language of the Mine Act. Section 115(a) of the
Act requires operators to have a health and safety training program approved by
the Secretary. 30 U.S.C. § 825(a). The new miner training requirements in
section 115(a)(2) of the Act formed the basis for much of the specific training
mandates in 30 C.F.R.

§
46.5. The statutory training provision states that each training program shall
provide as a minimum that:

[n]ew
miners having no surface mining experience shall receive no less than 24 hours
of training if they are to work on the surface. Such training shall include
instruction in the statutory rights of miners and their representatives
under this Act, use of the self-rescue device where appropriate and use of
respiratory devices where appropriate, hazard recognition , emergency
procedures, electrical hazards, first aid, walk around training and the health
and safety aspects of the task to which he will be assigned.

The Mine Act also requires
each operator to verify that the miner has received the specified training in
each subject area of the approved training plan. 30 U.S.C. 825(c). In addition,
Congress was so emphatic about the importance of miner training that it
included in the Mine Act a provision that a miner who has not received the
requisite training must be deemed “a hazard to himself and to others” and
immediately withdrawn from the mine and prohibited from re-entering until the
miner has received the required training. 30 U.S.C. § 814(g)(1).

MSHA’s original proposed
assessment for this violation was $2,007. The Secretary’s settlement motion
proposed a reduction of the proposed penalty to $132. 3 It was
entirely within the Judge’s discretion to conclude that the parties had failed
to demonstrate that such a dramatic reduction of a penalty imposed for a
violation of the critical training requirements outlined above met the American
Coal standard. We fail to see how this slap-on-the-wrist penalty amount
could possibly serve to deter mine operators from future violations of safety
standards. We strongly suspect that paying this penalty (which is less than the
amount of some traffic tickets) would be less expensive for the operator than
the costs involved in properly training this miner. How the public interest in
ensuring miner safety is satisfied by this penalty is a mystery. And even if we
disagreed with the Judges’ conclusions that such a large penalty reduction was
not fair or reasonable, we cannot see (and the majority does not explain) how
and why these conclusions fall outside the boundaries of the Judge’s wide
discretion.

Our colleagues reverse the
Judge’s denial of the settlement and approve it. In so doing, they entirely
mischaracterize his decision. If one reviewed only their opinion and failed to
read the Judge’s, the reader would come away with the impression that the
Judge’s ruling was based almost entirely on his view that the S&S
designation should not have been deleted as part of the settlement. See slip
op. at 8, 9. This gives short shrift to the fact that this dramatic decrease in
the penalty – in addition to several other factors – motivated the Judge’s
denial. In his nine-page decision, he stated three times that the 93.5% reduction
in the penalty was troubling. See 41 FMSHRC 382, 386 (May 2019) (“While
a significant reduction in the proposed assessment amount is not impermissible
as part of a proposed settlement agreement, the steep reduction invites closer
scrutiny of the facts presented to ensure that the settlement is ‘fair,
reasonable, appropriate under the facts, and in the public interest,’
consistent with Commission precedent”); see also id. at 388, 389.

The majority claims that the
Judge failed to view the settlement as a whole, but the Judge’s own words belie
that charge:

In the
present settlement agreement . . . the parties seek to modify the likelihood of
occurrence, the severity of injury, the S&S designation, and the negligence
of the underlying Order. In addition, the parties seek to reduce the proposed
penalty by well-nigh 94%. Almost any future enforcement benefit . . . has been
almost completely eliminated. . . . The Secretary asks that I approve a 93.5%
penalty reduction, as well as modifications to nearly every portion of the
original Order issued for violation of a mandatory training standard, enshrined
in the text of the Mine Act, on the basis of admitted facts that bear no
interpretation other than the fact that [the operator] violated the Act.

Id.
at 388-89. 4

Abandoning all pretense of
“abuse of discretion” review, the majority attempts to persuade us that the
settlement deserves approval by convincing us of their own view that the admitted
lack of miner training was not really that bad. 5 Despite
the parties’ concession in the settlement motion that the miner “had not
received training on all seven subject[s] required by 30 C.F.R. § 46.5
including 46.5(b)(4)–(7) (S. Settlement Mot. at 3), 6 our
colleagues find solace in the fact that he was drilling ground samples in an
open area (slip op. at 9), “removed from the danger of active mining equipment”
( id. at 11), which, we suppose, leads them to conclude that the lack of
training would not be hazardous. In stating that “the parties accepted that the
miner had received 19.5 hours of training” ( id. at 10), they fail to
take into account that this was not training pursuant to the mine’s approved
training program, but instead was OSHA training. They appear to equate OSHA
training with mine safety training, despite the fact that the record does not
demonstrate that the two are the same. Did not the Judge have discretion to
come to a different conclusion?

They also make a legal
argument on behalf of the parties – one not included in the settlement motion
or in briefs to the Commission – that the operator actually was in
compliance pursuant to section 46.5(e) (“practice under the close observation
of a competent person”). 7 Slip op. at 10. They conclude – on the
basis of no record evidence – that his work under the supervision of a driller “appear[ed]”
to provide him with the precise health and safety aspects of being a driller
helper as described in subsection 46.5(b)(4). Id. 8 In
short, their vigorous arguments for approving the motion run counter to the
letter and the spirit of abuse of discretion review of settlements.

Moreover, the Secretary’s
argument that the Judge erred by discounting the future enforcement value of
the modified order barely passes the laugh test. S. Br. at 7. The future
enforcement value of an order modified from “fatal” to “lost workdays or
restricted duty,” from high negligence to moderate, with the likelihood of
occurrence changed from “reasonably likely” to “unlikely” and with a deleted
S&S designation, can hardly be viewed as a potent weapon of mine safety
enforcement. 9 More importantly, by what measure,
other than their own personal views to the contrary, do our colleagues determine
the Judge’s conclusion with respect to enforcement value of the modified order
is outside the bounds of the Judge’s discretion?

The majority reverses the
Judge’s denial of the settlement motion because it concludes that the
settlement is “fair, reasonable, appropriate, and in the public interest.” Slip
op. at 12. However, it fails to demonstrate that there is “no evidence” to
support the Judge’s decision or that it was based on a misunderstanding of the
law. 10 Black
Beauty , 34 FMSHRC at 1863 . Our colleagues reverse the Judge and
approve the settlement, not even attempting to comply with or distinguish black
letter case law providing our Judge’s wide discretion. These precedents mandate
an abuse of discretion review of our Judges’ application of the multi-factor
standard for approval of settlements, which is fundamentally inconsistent with
the majority’s use of de novo review to substitute its preferred
conclusions and outcome. The majority
decision erroneously forecloses the possibility that on remand, the Judge “(like
a new jury after a mistrial) might later, in the exercise of its lawful
discretion, reach the same result for a different reason.” Fed. Election
Com’n v. Akins , 524 U.S. 11, 25 (1998). Unfortunately, our colleagues have plainly lost
sight of the proper application of the deferential abuse of discretion
standard. See Piper Aircraft Co. v. Reyno , 454 U.S. 235, 266-67 (1981) (noting that the appellate court “expressly
acknowledged that the standard of review was one of abuse of discretion,” but
chastising it because “the Court of Appeals seems to have lost sight of this
rule, and substituted its own judgment for that of the District Court.”).

Although our colleagues
state that the Secretary “acted reasonably” in agreeing to the settlement and
that the settlement was a “fair compromise,” this is not dispositive. Slip op.
at 11. It is simply their personal view. A Judge may, within the Judge’s
discretion, deny a settlement motion that others might argue is reasonable or
fair. But for the Commission to reverse the Judge and approve the settlement,
the bar is high – there must be a demonstration that no reasonable Judge would
have any grounds for denial under the numerous criteria to be considered in
application of the AmCoal standard for settlement review. Such a showing
has not been made.

In conclusion, we would
affirm the Judge’s denial of the settlement and remand the case.

/s/
Mary Lu Jordan

Mary
Lu Jordan, Commissioner

/s/
Arthur R. Traynor, III

Arthur
R. Traynor, III, Commissioner

[1]
Section 104(g)(1) of the Mine Act states:

If, upon any inspection or investigation pursuant to
section 103 of this Act, the Secretary or an authorized representative shall
find employed at a coal or other mine a miner who has not received the
requisite safety training as determined under section 115 of this Act, the Secretary
or an authorized representative shall issue an order under this section which
declares such miner to be a hazard to himself and to others, and requiring that
such miner be immediately withdrawn from the coal or other mine, and be
prohibited from entering such mine until an authorized representative of the
Secretary determines that such miner has received the training required by
section 115 of this Act.

30 U.S.C. § 814(g)(1).

[2]
Upon first impression, a penalty of $2,007 seems remarkably low for an allegedly
high negligence, S&S, high gravity violation. However, we recognize that the
operator was small and had no prior violation history. While we are not bound
by 30 C.F.R. Part 100, we note that the MSHA penalty point criteria assigned the
operator only 8 penalty points before the addition of points for negligence and
gravity.

[3]
This is standard language used by the Secretary in many settlement agreements. It
states concerns for the Secretary in arriving at settlement—namely, the risk of
litigation and the importance of obtaining admission of alleged violations
without the necessity for a contentious hearing.

[4]
The Judge did not mention the conformance of the penalty with MSHA’s regulatory
penalty point system in light of the agreement of the parties.

[5]
The minimum penalty under the Secretary’s regulation for penalty point
assessments at 30 C.F.R. § 100.3 at the time of the violation was $132 for a violation
with 60 or fewer penalty points. As found in the Order, and under the
Secretary’s penalty point criteria, the violation parameters totaled 94 points
for the $2,007 assessment. As agreed upon in the settlement, the violation
parameter reductions would render a point value of 44 points, which is far
below the regulation’s 60 point threshold.

[6] The settlement motion
submitted by the parties states the operator’s assertion that it provided 19.5
hours of OSHA training whereas the operator’s Answer to the penalty petition
states it provided 19.25 hours of training on a long list of topics. The
operator further asserts, in its brief to us, that it provided over 30 hours of
OSHA and MSHA training. In the interest of consistency, and while not making a
fact-finding on this point, we use 19.5 hours as noted in the settlement motion
that was before the Judge.

[7]
In its brief to the Commission, American Aggregates points out that it
submitted documentary support of the extensive training it did provide the
miner, which included section 46.5(b)(4) topics. It also disputes the Judge’s
statement questioning the alleged contention that it was “‘unaware that the
training the miner received’ was not sufficient.” 41 FMSHRC at 384.

[8] Section 110(k) of the Mine Act provides: “No proposed
penalty which has been contested before the Commission under section 105(a)
shall be compromised, mitigated, or settled except with the approval of the
Commission.” 30 U.S.C. § 820(k). The Commission has explained that “Congress
authorized the Commission to approve the settlement of contested penalties ‘. .
. to ensure penalties serve as an effective enforcement tool, prevent abuse,
and preserve the public interest.’” AmCoal I , 38 FMSHRC at 1976
(quoting Black Beauty Coal Co. , 34 FMSHRC 1856, 1862 (Aug. 2012)).

[9]
The dissent eschews any review of the settlement in favor of advocating, thankfully
in a more temperate manner than in Hopedale , their focus upon granting
Judges carte blanche to deny settlements. We do not agree with the dissent’s
contention that the Judge has such “wide discretion” (slip op. at 13-15, 18) or
that “there must be a demonstration that no reasonable Judge would have any
grounds for denial [of the settlement] . . . in application of the AmCoal
standard” ( id. at 18) in order to vacate a Judge’s denial. The standard of
review of a Judge’s settlement determination is not a deferential one, but one of
whether the Judge has complied with the law and whether his determination is
supported by the record before him. See Black Beauty Coal Co. , 34
FMSHRC 1856, 1864 (Aug. 2012).

[10]
In this respect, the review of a settlement bears a resemblance to a ruling on
cross motions for summary judgment. The parties present a factual basis and ask
for a legal conclusion. Regarding settlements, the Judge ultimately reaches a legal
conclusion whether the joint position of the parties satisfies the established
legal basis for settlement. Thus, a settlement decision fundamentally is a
legal decision based upon an undisputed and joint submission. Of course, an
important difference is that for cross motions for summary judgment, the facts
must be uncontested whereas, in a settlement, differences regarding the facts and
the ability of each party to sustain its position may be a driving force for
settlement.

[11]
The order asserts that the miner “had not received the MSHA-required 4-hour new
miner training prior to beginning work at the mine.” Ex. A at 11. The issue in
this case is the 4 hours of new miner training before beginning work required
by 30 C.F.R. § 46.5(b) .

[12]
If, in undertaking a post-citation or order review, MSHA learns a violation was
over-cited, we do not consider it a failure for MSHA to reconsider the
appropriate designations for a violation. While a Judge may require a
satisfactory explanation for the reconsideration, we obviously would not
require MSHA to obstinately support cited conditions after it has determined,
in the proper exercise of its prosecutorial discretion, not to be appropriate.

[13]
Our dissenting colleagues make the same mistake that the Judge did below,
focusing almost exclusively on the percentage of the penalty reduction without
regard to the abundance of factual support provided by the parties to support
modification of the order and subsequent reduction of the penalty. Slip op. at 15-16
& n.3. These facts are significant not for establishing findings of fact in
the record, but for explaining the basis of the parties’ settlement. In evaluating
the settlement, the Judge and Commission must meaningfully consider and assess
the factual explanation provided by the parties without making credibility
determinations or resolving conflicts in the record. Neither the Judge below
nor the dissent engages in such evaluation of the facts pertaining to the
violation at issue in this settlement. We consider such facts for the limited
purpose of ascertaining whether the proposed settlement is “fair, reasonable, appropriate
under the facts, and protects the public interest.”  

[14]
In reciting these points, we do not make findings of fact. Instead, we recite
these points as those made by the operator, with supporting documentation, which
the Secretary validly could consider in reaching settlement and that, in turn,
the Commission must consider in reviewing the settlement.

[15] The Respondent claims 30 C.F.R. § 46.5(b)(4) training
was completed. AA Br. at 5; AA Answer at 4-5, Ex. B (attached). It admits subsections
(b)(5), (6), and (7) were not completed. These are: (b)(5) Instruction on the statutory rights of miners
and their representatives under the Act; (b)(6) A review and description of the
line of authority of supervisors and miners’ representatives and the
responsibilities of such supervisors and miners’ representatives; and (b)(7) An
introduction to rules and procedures for reporting hazards.

[16]
The dissent accuses us of making an argument not raised by the parties in
noting the potential applicability of section 46.5(e) to the circumstances of
this case. Slip op. at 17. However, we note this specific provision of the
Secretary’s training regulations because it is particularly relevant to the
circumstances of this case. We cannot and do not make a legal conclusion as to
whether the operator was in compliance with the Secretary’s training
requirements. However, we have the right and duty to consider the law in
determining whether the Judge’s decision was correct. In fact, the Judge should
have considered that part of the law in evaluating the true character of the
offense, but did not.  

[17] We disagree that reversal of a Judge’s denial of a
settlement may occur only when “ no reasonable Judge would have any grounds for
denial under the numerous criteria to be considered in application of the AmCoal
standard.” Slip op. at 18. The Commission
has recently, and unanimously, reversed a Judge’s denial of a settlement without
applying the standard suggested by the dissent. The Ohio County Coal Co. ,
40 FMSHRC 1096, 1098-1100 (Aug. 2018) (reversing a Judge’s denial of the
settlement based on his failure to apply the appropriate standard and because
his reasoning that “an internal inconsistency in the settlement terms that
undermines the parties’ agreement” was “unsound”).

[18] Commissioner Young believes that remand of improper
settlement rejections would ordinarily be more appropriate than approval by the
Commission, in light of our Judges’ experience in reviewing settlements. But we
have approved such settlement agreements here, when appropriate. See, e.g. ,
Solar Sources , 41 FMSHRC at 600; Ohio County , 40 FMSHRC at
1100. In this case, we would be required to remand to a different Judge, who
would need to begin the consideration process anew. That fact, and the marginal
likelihood that a significantly greater penalty would be assessed by a new
Judge on the facts provided by the parties here, compel him to agree with the
decision to approve the settlement.

1 These other factors for consideration
include the future enforcement value of accepting violations as written, AmCoal
II , 40 FMSHRC at 989; the possibility of criminal penalties, Aracoma
Coal Co ., 32 FMSHRC 1639, 1641 (Dec. 2010); settlement provisions requiring
operator implement personnel changes or training improvements, AmCoal I ,
38 FMSHRC at 1982; and deterrence, Black Beauty , 34 FMSHRC at 1864-65.

2 The order alleged a violation of this
provision – section 46.5(a). It specified that the miner had not received the
MSHA-required 4-hour new miner training prior to beginning work at the mine.

3 Under the Secretary’s penalty regulations in effect
at the time the settlement motion was filed, $132 was the minimum amount the
Secretary could assess for a violation. 30 C.F.R.

§ 100.3 (2018). Of course, Commission Judges are not bound by the Secretary’s penalty regulations
set forth at 30 C.F.R. Part 100. The American Coal Co. ,
40 FMSHRC 1011, 1015 (Aug. 2018).

4 In addition, the Judge explicitly
included in his written opinion the section of the Secretary’s settlement
motion (paragraph 6) setting forth the facts in support of settlement. 41
FMSHRC at 383.

5 They do not even attempt to explain
away the operator’s concession that it did not have the appropriate
documentation of the miner’s training. AA Br. at 6.

6 We note with interest our colleagues’
apparent acceptance of a claim made in the operator’s brief (AA Br. at 5) that section
(b)(4) training (instruction in the health and safety aspects of the job) was
completed (slip op. at 9 n.15) when the settlement motion clearly states
otherwise. This, despite the fact that they emphasize a Judge “is not to engage
in fact finding,” and must analyze the “ submitted facts in a settlement
proposal.” Id. at 7 (emphasis in original). We question, how, given
these constraints, our Judges and the Commission can heed the majority’s
mandate to “meaningfully consider and assess the factual explanation provided
by the parties.” Id. at 9, n.13.

7 The majority attempts to conjure a
non-existent distinction between the error in stating “a legal conclusion” in a
settlement case (slip op. at 8) as opposed to “the right and duty to consider
the law,” where it chastises the Judge for failing to consider this provision
“in evaluating the true character of the offense.” Id. at 10, n.16. Were
the majority decision susceptible to appellate review, such flawed reasoning
would not survive scrutiny.

8 We are at a loss to reconcile this
analysis with what our colleagues meant in their Hopedale opinion where
they claim principles of “party presentation” prohibit a Judge evaluating a
settlement motion from looking beyond the facts and explanations presented in
the parties’ motion. Hopedale Mining, LLC , 42 FMSHRC at ___, slip op. at
5-6, No. LAKE 2019-0149 (Aug. 28, 2020).

9 The Judge properly compared the
enforcement value of the modified order with those of the unmodified order and
the unmodified citations in AmCoal II. 41 FMSHRC at 388-89. The
Secretary’s argument that the Judge was suggesting that only citations
preserved as written have substantial enforcement value completely misreads the
Judge’s analysis. S. Br. at 7.

10 The majority states that the Judge’s
decision was based on a misunderstanding of the law because he found that the
admitted facts did not support the deletion of the S&S designation and
because he concluded that there was a reasonable likelihood of injury, which
goes to the ‘gravity’ of the violation for consideration under the penalty
factors in section 110(i) of the Mine Act, 30 U.S.C. § 820(i). Slip op. at 8. Even
if these rulings were deemed erroneous, it would constitute harmless error, as
the Judge’s decision sets forth other well supported grounds for his conclusion
the proposed settlement does not meet the American Coal standard. But
the majority’s approach is to reverse the decision below by identifying its
disagreement with the application of only one of the numerous criteria used to
evaluate a settlement, and then substituting its own judgement to reach its
favored result without regard for whether there are other grounds for denying
the motion.