Secretary of Labor v. Oak Grove Resources, LLC

Plain-English summary

Oak Grove faced a proposed flagrant designation for coal-dust accumulations under 30 C.F.R. § 75.400. Judge Jerold Feldman required the Secretary to explain how the cited condition itself could substantially and proximately cause death or serious bodily injury, rather than relying on possible ignition sources that might develop during continued mining. He concluded that the Secretary's response used the ordinary significant-and-substantial analysis and risked treating most unwarrantable accumulation violations as flagrant. The judge certified that legal question for immediate Commission review and stayed the hearing. Three days later he issued an amended certification correcting the enforcement order number from 850664 to 8520664, and the Commission later denied interlocutory review.

Decision snapshot

• Governing provisions: 30 U.S.C. § 820(b)(2); 29 C.F.R. § 2700.76(a)(1)(i)
• Outcome: The ALJ certified the flagrant-violation proof question for Commission review and stayed the hearing.
• Subsequent history: This certification was replaced by se-2013-301-alj-5, and the Commission denied review in se-2013-301-commission.
• Key point: The certification asked whether a flagrant violation requires proof tied to existing, conspicuously dangerous conditions rather than possible future ignition events.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW
COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

1331 Pennsylvania Avenue, NW, Suite 520N

Washington, DC 20004

August 22, 2014

SECRETARY
OF LABOR

MINE SAFETY AND HEALTH  

ADMINISTRATION (MSHA),

Petitioner

v.

OAK
GROVE RESOURCES, LLC
,

Respondent

CIVIL
PENALTY PROCEEDINGS

Docket
No. SE 2013-301

A.C.
No. 01-00851-315187-01

Docket
No. SE 2013-352

A.C.
No. 01-00851-317727

Docket
No. SE 2013-368

A.C.
No. 01-00851-319550

Docket
No. SE 2013-399

A.C.
No. 01-00851-320606-01

Mine:
Oak Grove Mine

CERTIFICATION
FOR INTERLOCUTORY REVIEW

Before:
Judge Feldman

This matter concerns certification for
interlocutory review, pursuant to Commission Rule 76(a)(1)(i), of an Order
Requiring Secretary’s Pre-Hearing Statement (“Oak Grove Order”),     36 FMSHRC
__, slip op. (June 12, 2014) (ALJ), in the above-captioned proceedings involving
Oak Grove Resources, LLC.  29 C.F.R. § 2700.76(a)(1)(i).  The Oak Grove Order
concerns the long-standing and controlling question of law regarding the
requisite evidentiary parameters for imposing enhanced civil penalties under
the flagrant violation provisions of section 110(b)(2) of the Federal Mine
Safety and Health Act of 1977, as amended by the Mine Improvement and New
Emergency Response Act of 2006 (“Mine Act” or “the Act”).[1]  30 U.S.C.
§ 820(b)(2).

The Oak Grove Order addresses an alleged
flagrant violation of section 75.400[2]
cited in 104(d)(2) Order No. 850664 in Docket No. SE 2013-368.  The cited
condition concerns float coal dust on the roof, ribs, footwall, and belt
structure, and hard packed coal fines in contact with moving belt rollers, in
the Main North 3 belt entry.  Order No. 850664 does not identify any ignition
sources, such as defective rollers or misaligned belts, in proximity to the
cited accumulations.  The Oak Grove Order is incorporated by reference.  The Oak
Grove Order noted that the Secretary has acknowledged that a violation that
does not otherwise satisfy the gravity requirements in section 110(b)(2) cannot
be elevated to a flagrant violation solely based on prior predicate violations.[3]  Oak
Grove Order, 36 FMSHRC __, slip op. at 5 (citing Sec’y of Labor’s
Resp. to Order Scheduling Briefing at 5-6 (Apr. 22, 2014)).

With respect to gravity, in preparation
for a hearing, to avoid unnecessary proof and to advance rulings on the
admissibility of evidence, the Oak Grove Order required the Secretary to
present a pre-hearing statement that was consistent with the flagrant provisions
of section 110(b)(2).  29 C.F.R. § 2700.53(a)(1),(a)(2).  Namely, the Oak Grove
Order required the Secretary to explain why he believed the cited violative
condition could not reasonably escape notice because it was conspicuously
dangerous, and whether the cited condition could reasonably be expected to be
the “substantial and proximate cause” of “death or serious bodily injury,”
rather than a contributing cause of an injury of a reasonably serious nature.  Oak
Grove Order, 36 FMSHRC __, slip op. at 13-14.

As noted, a flagrant violation is one
“that substantially and proximately caused, or reasonably could have
been expected to cause, death or serious bodily injury.”  30 U.S.C.           §
820(b)(2) (emphasis added).  In contrast, it is well-settled that a violation
is significant and substantial (“S&S”) when there is a “reasonable
likelihood that the hazard contributed to by the violation will result
in an event in which there is an injury [of a reasonably serious
nature].”  U.S. Steele Mining, 6 FMSHRC 1834, 1836 (Aug. 1984); Mathies
Coal Co., 6 FMSHRC 1, 3-4 (Jan. 1984).  Obviously, all violations properly
designated as flagrant are S&S in nature.  As flagrant violations are
reserved for only the most serious conditions that are both obvious and
extremely dangerous, clearly most violations designated as S&S cannot
properly be designated as flagrant.

In response to the Oak Grove Order, the
Secretary submitted his Pre-Hearing Statement on August 7, 2014.  However, the
Secretary’s Pre-Hearing statement failed to differentiate the criteria for
demonstrating a S&S violation from the evidentiary requirements necessary
to support a section 110(b)(2) flagrant violation.  The Secretary’s Pre-Hearing
Statement provided the following justification for his alleged flagrant
designation:

Because the accumulations included float
coal dust and coal dust, they constituted a significant and immediate source of
fuel for a mine fire or an immediate source of fuel for a coal dust explosion. 
An operating conveyor belt system in an underground coal mine is an obvious and
significant source of sparking and burning hazards because of the presence of
the belt conveyor, belt rollers and other proximate sources of friction heat
and ignition.  In the present case, hard packed coal fines were in contact with
moving rollers on the belt line in multiple locations along the belt entry. 
Given these ignition sources, it is reasonably expected that, as normal
operations continued, serious and/or deadly injures from burns and smoke
inhalation would result from a fire or explosion.  These injuries would be the
proximate and direct result of the fire or explosion because the accumulations
would be the necessary fuel source that, when combined with oxygen and an
ignition source, would cause the fire or explosion.  Because the accumulations
existed over a number of shifts and were known to multiple agents of the
operator, this violation standing alone constitutes a repeated flagrant
violation.

Sec’y
Pre-Hearing Statement
at 2 (Aug. 7, 2014). 

The
Secretary’s position is problematic in that it obfuscates rather than clarifies
the controlling question of law in this matter.  Section 75.400, which
prohibits combustible coal dust accumulations, is the most frequently cited
mandatory standard in underground coal mines.[4]

Furthermore, the terms “sources of
ignition” and “potential sources of ignition” are not synonymous.  It is the
ignition, rather than the fuel, that is the proximate cause of a fire or
explosion.  Thus, the Oak Grove Order stands for the proposition that it is the
presence of an ignition source that supports a reasonable expectation that
death or serious bodily injury will occur.  While presuming the presence of an
ignition source based on a future malfunction that may occur during the course
of continued mining operations may support an S&S designation, it is not an
adequate basis for demonstrating a flagrant violation.  To assume ignition
sources, such as defective heat-producing rollers, misaligned
friction-producing belts, or defective methane monitors that may proximately
cause an explosion that can be propagated by the subject cited coal dust
accumulations, would render the vast majority of section 75.400 violations as
flagrant under section 110(b)(2).  

It is not uncommon for coal dust to
accumulate on the mine floor along conveyors and in proximity to belt rollers. 
Significantly, although a portion of the subject coal dust accumulations was
allegedly touching rollers, the Secretary does not allege any relevant defects
in the rollers or belt alignment.  Surely, the Secretary would be reticent to
concede that accumulations in proximity to, or that are touching, properly-functioning
rollers constitute per se flagrant violations.  However, when reduced to its
core, the Secretary, in essence, is masking a per se approach by utilizing a
traditional Mathies S&S analysis that would permit the vast majority
of unwarrantable section 75.400 violations to be designated as flagrant.  For
it is axiomatic that an S&S designation requires consideration of both the
time frame that a violative condition existed prior to the issuance of a
citation, and the time that it would have existed if normal mining operations
had continued.  Bellefonte Lime Co., 20 FMSHRC 1250 (Nov. 1998). 
Indistinguishable from this traditional S&S analysis, the Secretary avers
that to support a flagrant designation potential ignition sources should be viewed
in the context of continued normal mining operations.  Sec’y Pre-Hearing
Statement at 2 (Aug. 7, 2014).

Commission Rule 76(a)(1)(i) provides
that a Judge may certify, upon his own motion, that his interlocutory ruling
involves a controlling question of law and immediate review will materially
advance the final disposition of the proceeding.  29 C.F.R. §
2700.76(a)(1)(i).  The issue presented in the Oak Grove Order is whether the
traditional S&S analysis under Mathies can be used to support a flagrant
designation under section 110(b)(2), and, if not, what the proper analysis
should be.  Resolution of this issue will materially advance the final
disposition of these proceedings, as well as other flagrant cases.  Resolution
of this long-standing unresolved question may result in the settlement of this
case, as well as other cases that have been stayed pending a determination of
the relevant evidentiary criteria for a flagrant designation.

In certifying this issue for
interlocutory review, I am not alone in seeking clarity from the Commission on
this issue.  In this regard, both Judge Barbour and I have certified similar
issues to the Commission that ultimately eluded Commission disposition because
the Secretary withdrew the subject flagrant designations.  Wolf Run Mining
Co., 35 FMSHRC 536 (Mar. 2013); Conshor Mining, LLC, 34 FMSHRC 571
(Mar. 2012).  The Administrative Law Judge’s collective need for Commission
guidance on this issue is emphasized by Judge Zielinski’s recent opinion in American
Coal Co., 36 FMSHRC 1311 (May 2014) (ALJ), which deleted flagrant
designations alleged by the Secretary.[5]
 In his opinion, Judge Zielinski thoughtfully summarized his consternation, as
well as that of several other Judges, with the Secretary’s unreasonable
attempts to broaden the scope of the flagrant provisions of section 110(b)(2):

As noted in Wolf
Run, section 110(b)(2) should be interpreted consistent with the Mine Act's
graduated enforcement scheme. 35 FMSHRC at 541. The Commission held in Emery
Mining Corp., 9 FMSHRC 1997 (Dec. 1987), the Mine Act's enforcement scheme,
provides for “increasingly severe sanctions for increasingly serious violations
or operator behavior.” 9 FMSHRC at 2000 (quoting Cement Div. Nat'l. Gypsum
Co., 3 FMSHRC 822, 828 (Apr. 1981). In Stillhouse, Judge Paez noted
that “[i]n Emory Mining, the Commission interpreted the unwarrantable
failure language of section 104(d) citations and orders in light of th[e
graduated enforcement] scheme of escalating sanctions. Here, if a violation is
determined to be flagrant, then the Commission is authorized to impose the
highest amount of civil penalties available under the Mine Act, up to $220,000
per violation.” 33 FMSHRC at 802.

The substantial
civil penalties that can be imposed for flagrant violations are several rungs
up the graduated enforcement ladder from even more serious violations charged
under section 104(d). Accordingly, flagrant violations should denote
conspicuously bad, offensive, or outrageous conduct. As Judge Paez noted in Stillhouse,
“[t]he only thing that is apparent from the [limited] legislative history is
that Congress and the President intended flagrant violations to target
particularly severe violations of the mine safety and health regulations in
order to promote regulatory compliance and miner safety.” 33 FMSHRC at 799. In
that regard, I agree, in principle, with Judge Feldman's analysis in Conshor
Mining, LLC, 33 FMSHRC 2917, (Nov. 2011), that a flagrant violation must be
conspicuous and egregious, and the fact that Congress did not simply amend
section 110(a) of the Act to raise the general statutory penalty ceiling
evidences something considerably more than an intent to deter repeated
unwarrantable failure violations.

The cases
brought by the Secretary and that have been decided by ALJs thus far, at least
under the “reckless” prong of the statute, have involved truly outrageous
conduct. Stillhouse involved egregious conduct by several mine
management personnel who ignored prior warnings from MSHA and deliberately
violated the mine's approved ventilation plan on more than one occasion. Their
actions created a serious risk of a mine disaster and threatened the lives of
the entire mining crew, which was left underground to produce coal while the
main mine fan was turned off, and then restarted. Three mine managers plead
guilty to criminal felony charges for their conduct. In Roxcoal, Inc.,
35 FMSHRC 625 (Mar. 2013), a flagrant violation was affirmed under the
“reckless” prong of the statute where an operator's chief electrician
deliberately circumvented safety measures by taping down a switch that could
deenergize power, and then assigned miners to work on the equipment in close
proximity to 7,200 volts of electric power. He also failed to take any steps to
eliminate the violation and the extremely hazardous condition. As a result, a
miner suffered an injury resulting in permanent disability.

The Secretary's
ventures into the “repeated failure” prong of the flagrant statute have often
strayed from the egregious conduct principle and have met with less success. As
noted above, the Secretary voluntarily withdrew the ““repeated failure” flagrant
allegations in Wolf Run and Conshore Mining. Alleged repeated
failure flagrant violations were rejected in Bowie Resources and Blue
Diamond. The “screening factors,” now broadened considerably by the
Secretary's evolving interpretation of the statute, appear to sweep within
their ambit a substantial portion, if not a vast majority, of [S&S]
violations cited under section 104(d) of the Act. The result is that
substantial penalties have been assessed under section 110(b)(2) for violations
that are very similar, if not identical, to violations for which penalties have
been assessed under section 110(a)(1) that have not even reached the maximum
amount allowed under that section.

The Secretary's
lone success was the American Coal case, in which two repeated failure
violations were held to be flagrant under a narrow reading of the statute.
Order No. 7490584, charged an S&S and unwarrantable failure violation of
the accumulations standard, 30 C.F.R. 75.400, that was found to have been the
result of the operator's high negligence, and was reasonably likely to have
resulted in lost work days or restricted duty injuries to more than 10 persons.
The conditions were found to have existed for at least three shifts, and were
known to the operator because they had been noted on reports of required
examinations during those shifts, but had not been corrected. The operator's
failure to eliminate the known violation during each of the three shifts was
held to satisfy the repeated failure element, and the violation was found to be
flagrant.

Order No.
7490599, also charged an S&S and unwarrantable violation of the
accumulations standard. It was found to have been the result of the operator's
moderate negligence, and was reasonably likely to have resulted in serious or
fatal injuries to 6 persons. It was found that the accumulations likely “began
building up about two shifts before the violation was cited” and the violation
was found to have existed “for two shifts.” 35 FMSHRC at 2236. The conditions
had not been noted on reports of examinations. However, it was found that the
operator knew or should have known of the violation because the conditions were
obvious and should have been discovered during required examinations. Its
failure to eliminate the violation during either of the two shifts was held to
satisfy the repeated failure element.

While I agree
with much of Judge McCarthy's analysis in American Coal, I am concerned
that it could be read to include a large number of violations that were never
intended to be addressed by the statute. Can constructive knowledge of a
violation that existed for the better part of two shifts, resulting in a
finding that the operator was moderately negligent, be squared with the concept
that the statute was intended to address egregious conduct, or particularly
severe violations? Are those valid conclusions regarding the intent of
Congress? Similarly, can a violation that was reasonably expected to result in
lost work days or restricted duty injuries, and that would not have passed the
Secretary's screening device requirement for at least a permanently disabling
injury, be said to be expected to result in death or serious bodily injury
within the meaning of the statute? Hopefully, these and other questions will
soon be answered by the Commission.

Even in the absence of a review of all
reported decisions involving accumulations violations cited under section
104(d), I am confident that it would be difficult to identify more than a
handful that did not involve an opinion by the issuing inspector that the
conditions had existed for two shifts or longer, and that injuries at least as
severe as lost work days were reasonably expected.41 Could all such
violations be classified as repeated failure flagrant violations, and assessed
penalties nearly four times higher than the most serious non-flagrant
violations?

American
Coal Co.,
36 FMSHRC at 1356-58.

ORDER

In view of the above, the June 12, 2014,
Order Requiring Secretary’s Pre-Hearing Statement setting forth the evidentiary
criteria for a flagrant designation under section 110(b)(2) of the Act is
certified for interlocutory review pursuant to Commission Rule 76(a)(1)(i).[6] [7]

/s/
Jerold Feldman

Jerold
Feldman

Administrative
Law Judge

Distribution:
(Electronic and Certified Mail)

Thomas
A. Grooms, Esq., U.S. Department of Labor, Office of the Solicitor, 618 Church
Street, Suite 230, Nashville, TN 37219

R.
Henry Moore, Esq., Jackson Kelly PLLC, Three Gateway Center, Suite 1500, 401
Liberty Avenue, Pittsburgh, PA 15222

/acp

[1] Section
110(b)(2) provides:

Violations under this section that are
deemed to be flagrant may be assessed a civil penalty of not more than $220,000
[adjusted for inflation]. For purposes of the preceding sentence, the term
“flagrant” with respect to a violation means a reckless or repeated failure to
make reasonable efforts to eliminate a known violation of a mandatory health or
safety standard that substantially and proximately caused, or reasonably
could have been expected to cause, death or serious bodily injury.

30
U.S.C. § 820(b)(2) (emphasis added).

[2] 30 C.F.R §
75.400 provides:

Coal dust, including float coal dust
deposited on rock-dusted surfaces, loose coal, and other combustible materials,
shall be cleaned up and not be permitted to accumulate in active workings, or
on diesel- powered and electric equipment therein.

[3] Although the
Secretary acknowledges that a violation, that does not otherwise satisfy the
gravity requirements in section 110(b)(2), cannot be elevated to a flagrant
violation solely based on prior predicate violations, the Commission has
determined that a history of prior violations is a relevant consideration.  See
Wolf Run Mining Co., 35 FMSHRC 536 (Mar. 2013).  Consequently, the
Secretary relies on two violations in the present consolidated cases to serve
as predicates for Order No. 850664: namely, Order Nos. 4694424 in Docket No. SE
2013-399 and 8524255 in Docket No. SE 2013-301, with proposed penalties of
$32,800.00 and $9,800.00, respectively. Sec’y’s Pre-Hearing Statement at
3-4 (Aug. 7, 2014).  These proposed penalties are significantly less than the
maximum civil penalty of $70,000, adjusted for inflation, available under
section 110(b)(1).   

[4] For example,
citations concerning section 75.400 violations constituted 10.47 percent of all
citations issued in 2013, and currently constitute 10.61 percent of all
citations issued in 2014.  MSHA, Most Frequently Cited Standards,
www.msha.gov/stats/top20viols/top20viols.asp (accessed June 12, 2014).

[5] The Secretary
filed Petition for Discretionary Review (PDR) of Judge Zielinski’s American
Coal Co. decision on June 17, 2014.  However, the PDR was limited to Judge
Zielinski’s deletion of the unwarrantable failure designations concerning the
subject violations.  Thus, the Secretary has once again eluded Commission
review of the criteria for a flagrant violation by declining to appeal Judge
Zielinski’s deletion of the subject flagrant designations.

[6] My
certification for interlocutory review under Commission Rule 76(a)(1)(i) was
held in abeyance to provide an opportunity for the Secretary to seek
interlocutory review of the Oak Grove Order.  After the Secretary was granted a
30-day extension to respond to the Oak Grove Order, the Secretary filed the
required pre-hearing statement on August 7, 2014.  My certification was further
delayed by the parties’ representation that they were engaging in settlement
negotiations, which have not been fruitful.

[7] The hearing in
these matters, scheduled for September 16, 2014, has been stayed pending the
disposition of this Certification for Interlocutory Review.