Secretary of Labor v. Oak Grove Resources, LLC

Plain-English summary

MSHA designated an extensive coal-accumulations order at Oak Grove Mine as a repeated flagrant violation carrying enhanced penalty exposure. Judge Jerold Feldman found that unresolved legal questions about the repeated-flagrant standard had to be addressed before the hearing. He ordered briefing on the required gravity and negligence, which prior violations may serve as predicates, the deference owed to the Secretary's interpretation, and whether notice-and-comment rulemaking was required. The Secretary received 30 days to respond, followed by Oak Grove's response and a Secretary reply. The underlying violation and penalty issues remained pending.

Decision snapshot

• Cited standard: 30 C.F.R. § 75.400
• Outcome: The parties were ordered to brief six legal questions governing the repeated-flagrant designation.
• Key point: A repeated-flagrant penalty theory requires a clear legal standard for gravity, negligence, predicate violations, deference, and rulemaking before merits adjudication.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY
AND HEALTH REVIEW COMMISSION

OFFICE OF
ADMINISTRATIVE LAW JUDGES

1331 Pennsylvania
Avenue NW, Suite 520N

Washington, D.C. 20004

March 19, 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 

ORDER SCHEDULING
BRIEFING

Before: Judge Feldman

The hearing in the captioned civil
penalty matters filed against Oak Grove Resources, LLC (“Oak Grove”) is currently
scheduled for September 16, 2014, in Birmingham, Alabama. Docket No. SE
2013-368 concerns 104(d)(2) Order No. 8520664,[1]
issued on October 3, 2012. The order alleges a repeated flagrant violation
under Section 110(b)(2) of the Federal Mine Safety and Health Act of 1977 (“the
Act”), 30 U.S.C. § 820(b)(2), of the mandatory safety standard in section
75.400, that is attributable to high negligence.[2]
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.[[3]]
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).  

Although the Commission addressed
questions concerning appropriate considerations for determining repeated
flagrant violations in Wolf Run Mining Co., 35 FMSHRC 536 (Mar. 2013),
many issues concerning the application of section 110(b)(2) essentially are
matters of first impression and remain unresolved. In Wolf Run, the
Commission concluded that the plain language of section 110(b)(2) supports that
past violative conduct may be considered in determining whether a cited
condition represents a “repeated failure to make reasonable efforts to
eliminate a known violation of a mandatory health or safety standard . . . .” 35
FMSHRC at 541, citing 30 U.S.C. § 820(b)(2). However, the Commission did
not address whether such previous violations must concern unwarrantable
violations of the same mandatory standard, as well as the time period for the
occurrence of such previous violations. The Commission had no basis for doing
so as the Secretary did not clearly articulate during oral argument the
required parameters concerning prior conduct.[4]

In Wolf Run, the Commission
noted the Secretary’s obfuscation. The Commission stated:

The Secretary’s interpretation [of a
repeated flagrant violation] has changed several times during the course of
this litigation . . . . [W]hile still before the judge, the Secretary broadened
the proposed standard to include previous non-S&S and non-unwarrantable failure
violations, and also seemingly narrowed the standard to require that at least
some of the previous violations be “substantially similar” . . . . His
interpretation before the Commission has evolved again . . . . [The Secretary’s
briefing now includes a] “fail[ure] to make reasonable efforts to eliminate at
least one previous violation prior to failing to make reasonable efforts to
eliminate the violation alleged to be flagrant.”

35 FMSHRC at 539 n. 5. The absence of a clearly articulated
proffered standard for determining a repeated flagrant violation based on prior
conduct precluded the Commission from addressing whether the Secretary’s
application of section 110(b)(2) was a reasonable interpretation of its
provisions, or whether the Secretary’s enforcement standard required a notice
and comment rulemaking.

The subject Order No. 8520664,
alleging a repeated flagrant violation, states:

Combustible material in the form of
float coal dust and dry hard packed coal fines were allowed to accumulate on
the roof, ribs, footwall, and belt structure of the Main North 3 belt entry. The
hard packed coal fines were in contact with moving roller[s] on the belt line
in multiple locations along the belt entry. The float coal dust existed on the
roof, ribs, footwall, and belt structure from the

Main North 3 Tail Pieces extending
outby to crosscut 27. This is an approximate distance of 2100 feet. Due to the
extensive amount of accumulations and that this belt is examined every shift
this

constitutes more than ordinary
negligence and is an unwarrantable failure to comply with a mandatory health
and safety standard.

Standard 75.400 was cited 92 times in
two years at mine 0100851 (91 to the operator, 1 to a contractor). This
violation is an unwarrantable failure to comply with a mandatory standard.

Even if the Secretary ultimately prevails with
respect to the issues of the fact of the violation and the significant and
substantial (“S&S”) and unwarrantable designations for the cited condition
in Order No. 8520664, the hearing in this matter cannot proceed without
determining the proper evidentiary requirements for demonstrating a repeated
flagrant violation under the statutory provisions of section 110(b)(2). Determining
the evidentiary requirements for a repeated flagrant violation will materially
advance the disposition of these matters. Accordingly, IT IS ORDERED that
the Secretary file a brief addressing in detail the following questions:

(1)   The degree of
gravity is determined by the seriousness of the violation. Consolidation
Coal Co., 18 FMSHRC 1541, 1549 (Sept. 1996) (citations omitted).

Is the degree of gravity
required for a flagrant designation under section 110(b)(2) of the Act, 30
U.S.C. § 820(b)(2), greater than the degree of gravity required for

an S&S designation under
section 104(d)(1) of the Act, 30 U.S.C. § 814(d)(1)?

The Commission long ago
noted that the “Act’s overall enforcement scheme . . . provides for the use of
increasingly severe sanctions for increasingly serious violations or operator
behavior.” Cement Div., Nat’l Gypsum Co., 3 FMSHRC 822, 828 (Apr. 1981).
Section 104(d)(1) provides, in pertinent part, that an S&S violation is any
violation that “could significantly and substantially contribute to the cause
and effect of a . . . mine safety or health hazard.” Section 110(b)(2)
provides, in pertinent part, that a flagrant violation is “a known violation .
. . that substantially and proximately caused, or reasonably could have been
expected to cause, death or serious bodily injury.”

The Secretary should
address the distinction, if any, between the statutory language in sections
110(b)(2) and 104(d)(1). In addressing this issue, the Secretary should be
mindful of the Commission’s S&S criteria in Mathies Coal Co., 6
FMSHRC 1, 3-4 (Jan. 1984). The Commission noted the proper analysis under its
third Mathies criterion concerning the likelihood of injury
“requires that the hazard contributed to [by the violation] will result
in an event in which there is an injury.” U.S. Steel Mining, 6 FMSHRC
1834, 1836 (Aug. 1984), citing 3 FMSHRC at 3-4 (emphasis added). This
analysis is based on a variety of changing conditions normally encountered
during continued mining operations in the presence of an unabated hazard. U.S.
Steel Mining, 7 FMSHRC 1125, 1130 (Aug. 1985), citing 6 FMSHRC 1573,
1574 (July 1984).  

In addressing the difference,
if any, between the degrees of gravity associated with S&S and flagrant
violations, the Secretary should address whether a flagrant violation must
constitute a clear and present danger that requires more than considerations
with respect to continued mining operations. In this regard, the Secretary
should be mindful

of the Commission’s holding in Musser
Eng’g, Inc., 32 FMSHRC 1257 (Oct. 2010), discussing the indicia for an
S&S designation:

The test under the third element [of
Mathies] is whether there is a reasonable likelihood that the
hazard contributed to by the violation . . . will cause injury. The Secretary
need not prove a reasonable likelihood that the violation itself will cause
injury . . . .

32 FMSHRC at 1280-81.

(2)   Is the degree of gravity
the same for both reckless designations and for repeated designations under
section 110(b)(2)?

The Secretary should
address whether his reliance on a history of previous violations as a predicate
for a repeated flagrant violation relieves the Secretary’s burden of demonstrating
that the subject violation was, or reasonably could have been expected to be,
the substantial and proximate cause of death or serious bodily injury.

(3)   Can a repeated flagrant
violation be attributed to less than a reckless degree of negligence in view of
the statutory language requiring that it be a known violation that will substantially
and proximately cause death or serious bodily harm?

In addressing this
question, the Secretary should consider whether the inexcusable failure (as
required for unwarrantability) to eliminate a known violation that can
reasonably be expected to cause death or serious bodily injury can be
attributable to less than a reckless disregard. See Emery Mining Corp.,
9 FMSHRC 1997, 2001 (Dec. 1987) (defining unwarrantable conduct as “not
justifiable” or “inexcusable”).

(4)   What parameters
does the Secretary propose for determining which violations serve as predicates
for a repeated flagrant designation?

In this matter, the
Secretary alleges that the subject flagrant violation is based on a history of
previous violations.[5]
The Secretary should address, with specificity, his proposed parameters for
previous violations with respect to: whether such violations must be
attributable to an unwarrantable failure; whether the violations must be of the
same mandatory standard; whether settled violations lacking an evidentiary
record with regard to their nature and extent are appropriate predicates; and
the operative time period during which these prior violations must have
occurred.

(5)   The provisions of
section 110(b)(2) of the Act are essentially repeated in section 100.5(e) of
the Secretary’s implementing regulations. 30 C.F.R. § 100.5(e). The
Commission traditionally resolves questions of deference by applying the two
step test in Chevron v. Natural Res. Def. Council, 467 U.S. 837, 842-44
(1984). Are
section 110(b)(2) of the Act and section 100.5(e) of the regulations ambiguous,
and if so, is the Secretary’s interpretation reasonable?

The “flagrant” penalty
assessment provision of section 110(b)(2) of the Mine Act was added by section
8(a) of the Mine Improvement and New Emergency Response Act of 2006 (“MINER
Act”). Section 8(b) of the MINER Act required the Secretary to promulgate rules
to implement the provision. Pub. L. No. 109-236, § 8, 120 Stat. 493 (2006). On
March 22, 2007, the Department of Labor’s Mine Safety and Health Administration
(“MSHA”) published a final rule revising its penalty regulations and
“implement[ing] the civil penalty provisions of the [MINER Act].” 72 Fed. Reg.
13592. Although the Secretary has been delegated with the authority to
promulgate a regulation implementing section 110(b)(2), section 100.5(e) of the
regulations simply reiterates the language of section 110(b)(2) of the Act. In
addressing the appropriate level of deference to be accorded to the Secretary’s
interpretation of section 100.5(e) given that it repeats the statutory language,
Commission ALJ McCarthy has noted:

An agency
deserves no deference for an interpretation of its own regulation when the
regulation merely parrots the language of the statute, without implementing it.
Gonzales, supra, 546 U.S. at 257 (2006). In such cases, the
agency is not using its expertise to interpret the law. It is merely copying or
paraphrasing the statutory language. Id. at 258.

American Coal Co., 35 FMSHRC
2208, 2257 (July 30, 2013) (ALJ), citing Gonzales v. Oregon, 546 U.S.
243 (2006). As previously noted, in Wolf Run the Commission did not
address the reasonableness of the Secretary’s criteria for considering prior
conduct. Assuming section 110(b)(2) is ambiguous with respect to the necessary
predicates for

a repeated flagrant violation, the
Secretary should address the reasonableness of his proffered interpretation.

(6) Does implementation
of the Secretary’s proffered criteria with respect to predicates for a repeated
flagrant violation require a notice and comment rulemaking?

It is well established
that a notice and comment rulemaking is required where a regulation is
substantive as opposed to procedural. See Drummond Co., 14 FMSHRC 661,
683-85 (May 1992) (noting that, pursuant to 5 U.S.C. § 553(b)(3)(A),
substantive or legislative rules require advance notice and public comment,
while interpretative rules, general statements of policy, or rules of agency
procedure or practice do not). The Secretary should address whether his
proffered basis for a repeated flagrant violation is substantive or procedural.

ORDER

IT IS ORDERED that the
Secretary shall provide a response to the above questions within 30 days from
the date of this Order. IT IS FURTHER ORDERED that Oak Grove

shall respond
to the Secretary’s submission within 21 days thereafter. IT IS FURTHER
ORDERED that the Secretary shall have leave to file a reply within 21 days
of Oak Grove’s response. The parties should provide case law, regulatory
provisions, and legislative history to support their respective positions. The
parties may provide any relevant additional arguments outside the parameters of
the above questions that they deem relevant.

As a final matter, the MINER Act was promulgated in June
2006. Despite having had more than seven years to do so, to my knowledge the
Secretary has yet to present a cogent and/or consistent interpretation of the
requisite factors contemplated by section 110(b)(2) to establish a repeated
flagrant violation. Consequently, requests for extension of this briefing
schedule may not be favorably entertained.

/s/
Jerold Feldman      

Jerold Feldman

Administrative
Law Judge    

Distribution:

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

/tmw   

[1]
Docket Nos. SE 2013-301, SE 2013-352 and SE 2013-399 have been consolidated
with Docket No. SE 2013-368 because they contain citations that are relevant to
Order No. 8520664.

[2]
Section 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.

30
C.F.R. § 75.400.

[3] The maximum civil penalty for a violation that is not
designated as flagrant is $70,000.00.

30
U.S.C. § 820(a)(1).

[4]
In Wolf Run, the Commission remanded the proceeding to Commission ALJ
Barbour. The parties now have advised Judge Barbour that they have reached a
settlement agreement.

[5]
Although the Secretary has identified three prior alleged generic unwarrantable
failure violations of section 75.400, two of which have settled, the Secretary
has not articulated why these violations were selected as predicates with
regard to the nature and extent of the violations and the time period for their
occurrence.