Secretary of Labor (MSHA) v. CRD Coal Company, Inc. (ALJ decision, August 14, 1980)

Plain-English summary

CRD Coal Company operated two small Kentucky coal mines. Judge Richard C. Steffey found that seven cited violations occurred and were serious or moderately serious. He credited the inspectors' testimony that the company corrected them promptly, and he focused on the operator's inability to pay penalties after going out of business and selling assets to cover debts. The Secretary had proposed $1,260 for four violations in PIKE 79-58-P and $272 for three in PIKE 79-59-P. The judge assessed $1 for each violation, totaling $7, and ordered payment within 30 days.

Decision snapshot

• Cited standards: 30 C.F.R. §§ 75.200, 75.400, 75.603, 75.1713, and 77.1605(k).
• Outcome: Seven violations sustained; proposed penalties totaling $1,532 reduced to $7.
• Key point: The operator's demonstrated inability to pay controlled the penalty assessment even though the judge found all seven violations occurred.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION OFFICE OF ADMINISTRATIVE LAW JUDGES
SKYLINE TOWERS NO. 2. 10TH FLOOR
5203 LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22041

14 AUG 1980

SECRETARY OF LABOR,
: Civil Penalty Proceeding
MINE SAFETY AND HEALTH
:
ADMINISTRATION (MSHA),
: Docket Nos. Assessment Control Nos.
Petitioner :
V . : PIKE 79-58-P 15-10352-03001
:
CRD COAL COMPANY, INC.,
: Mine No. C-11
Respondent :
: PIKE 79-59-P 15-11031-03001
:
: Mine No. C-12

DECISION
Appearances: Stephen P. Kramer, Esq., Office of the Solicitor, U.S. Department of Labor, for Petitioner;
No one entered an appearance for Respondent. 1/

Before: Administrative Law Judge Steffey

Pursuant to a notice of hearing issued April 21, 1980, a hearing in the above-entitled proceeding was held on June 11, 1980, in Pikeville, Kentucky, under section 105(d) of the Federal Mine Safety and Health Act of 1977.

Upon completion of introduction of evidence by the parties, I rendered the bench decision which is reproduced below (Tr. 13-19).

This proceeding involves two Petitions for Assessment of Civil Penalty filed by the Mine Safety and Health Administra- tion. The Petitions in Docket Nos. PIKE 79-58-P and PIKE 79-59-P were both filed on January 9, 1979, and seek assess- ment of civil penalties for four and three alleged violations, respectively, of the mandatory health and safety standards by CRD Coal Company, Inc.

The issues in a civil penalty case are whether violations occurred and, if so, what civil penalties should be assessed based on the six criteria set forth in section 110(i) of the Federal Mine Safety and Health Act of 1977.

1/ Respondent's president did appear at the hearing after the record had been closed, but since the inspectors had already given testimony about the oper- ator's lack of ability to pay penalties, I did not reopen the record to show that respondent's president had made a tardy appearance in the hearing room.

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 The criteria, in most cases, are applicable individually to each of the alleged violations and, in most instances, the judge makes a finding as to whether the violations occurred and then, on the basis of those findings, he assesses penal- ties which are appropriate based on all six criteria.

In this instance, the respondent has not appeared at the hearing 2/ but, because of the inspector’s knowledge of the respondent’s financial condition, I have decided to dispose of this case on the basis of the evidence received at the hearing, rather than to follow the procedures and regulations for dis- position of cases based on the fact that a default judgment might be appropriate, after a show-cause order has been issued.

Exhibits 1 through 9 show that seven violations have been found by the inspectors in respondent’s Nos. C-11 and C-12 mines. The various violations need not be discussed in detail in view of the primary consideration to one criterion which I expect to give in assessing penalties. The exhibits on their face show that violations occurred and, therefore, we have not taken detailed evidence from the inspectors in order to save their time and to avoid the expense of a long hearing and a large number of pages of transcript.

Exhibits 4 and 5 in this proceeding show that the opera- tor has seven alleged violations for which penalties have previously been paid. Only one of those violations was for any of the same sections of the regulations which are involved in this proceeding.
because of the very insignificant history of previous violations and because this proceeding is being disposed of primarily on the basis of the criterion of the operator’s inability to pay penalties, it is unnecessary to give further consideration to the criterion of history of previous violations.

I find that all seven violations alleged by the Petitions for Assessment of Civil Penalty occurred. All of them were either serious or moderately serious. Most of them were the result of ordinary negligence, although with respect to one of them, the inspector was of the opinion that a heavy rainstorm had caused some bad roof conditions to occur within a period of approximately 1 day, so that in that instance, there was a low degree of negligence. According to the inspectors’ testimony, all of the violations were abated rapidly and the operator was cooperative. The inspectors believed that he u showed good faith in trying to abate all of the alleged
violations.
.
2/ See footnote 1 above.

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 In some instances, the criterion of whether the penalties would cause an operator to discontinue business is given primary consideration. It appears to me on the basis of the testimony, in this case, that this proceeding is one in which that should be the primary basis for disposing of the Petition.

Before I get to the primary question of the operator’s financial condition, I should emphasize that the operator was producing a very small amount of coal because both of the mines combined, in this case, produced from 50 to 75 tons per day and the operator was subcontracting the sale of the coal to the same company from whom the mine was leased. The result was that the operator was unable to sell his coal for true market value and could not make a profit even on the small production that was available. The operator’s answers to the show-cause orders issued in each of these cases state that the operator is out of business and that his assets had to be sold to pay his debts and that even after that was done, he still is several thousand dollars in debt. The operator states that he sees no way that he would be able to pay the proposed penalties in this case.

In Docket No. PIKE 79-58-P, the Assessment Office pro- posed total penalties of $1,260.00 for four alleged viola- tions, all of which were alleged in one order. In Docket No. PIKE 79-59-P, the Assessment Office proposed total pen- alties of $272.00 for three alleged violations. The inspec- tors’ testimony in this case indicates that respondent is no longer in business as he stated in his answers. The equipment that the operator was using in his mine was purchased and the operator was making payments on that equipment. When his economic condition forced him to discontinue in business, the equipment was sold to discharge his obligations.

Additionally, the inspector has indicated that the opera- tor’s home was sold to help pay his debts. At the present time, the operator is working for a bank as a collector and is not in the mining business either as an operator of a mine or as a miner working for another company.

Since the evidence shows that the operator is out of business and cannot pay the penalty, I find that this pro- ceeding should be disposed of on the basis that the operator is unable to pay penalties. Therefore, a penalty of $1.00 will be assessed for each of the seven violations. If the cases had been the subject of a full evidentiary presenta- tion, based on the detailed consideration of the criteria of gravity and negligence, I feel confident that the proposed assessments indicated in the file would be appropriate, but

2249 since penalties would have no deterrent effect for an opera- tor who is no longer in the coal business and who does not contemplate reentry into the coal business, I think that no purpose of the Act would be served by further increasing the debts which the operator already owes and which would prob- ably be uncollectible even if they were to be imposed.

Summary of Assessments and Conclusions

(1) On the basis of the evidence in this proceeding, the following assessments are made:

Docket No. PIKE 79-58-P

Order No. 1 TJ (7-8), 9-28-77, § 75.200 ..................... $ 1.00 Order No. 1 TJ (7-8), 9-28-77, § 75.400 ..................... 1.00 Order No. 1 TJ (7-8), 9-28-77, § 75.603 ..................... 1.00 Order No. 1 TJ (7-8), 9-28-77, § 75.200 ..................... 1.00 Total Penalties in Docket No. PIKE 79-58-P ............. $ 4.00

Docket No. PIKE 79-59-P

Notice No. 1 WNS (8-1), 3-8-78, § 75.200 . . . . . . . . . . . . . . . . . . . . $ 1.00 Citation No. 673217, 4-3-78, § 75.1713 . . . . . . . . . . . . . . . . . . . . . . 1.00 Citation No. 673227, 4-3-78, § 77.1605(k) .................. 1.00 Total Penalties in Docket No. PIKE 79-59-P ................. $ 3.00 Total Penalties in This Proceeding ...................... $ 7.00

(2) Respondent, as the operator of the Nos. C-11 and C-12 Mines, is subject to the provisions of the Act and to the regulations promulgated thereunder.

WHEREFORE, it is ordered:

Respondent, within 30 days from the date of this decision, shall pay civil penalties totaling $7.00 for the violations described in paragraph (1) above.

Richard C. Steffey
Administrative Law Judge
(Phone: 703-756-6225)

Distribution:

Stephen P. Kramer, Trial Attorney, Office of the Solicitor, U.S.
Department of Labor, 4015 Wilson Boulevard, Arlington, VA 22203 (Certified Mail)

CRD Coal Company, Inc., Attention: Claude E. Bentley, President, P.O. Box 822, Pikeville, KY 41501 (Certified Mail)

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