Jewell Smokeless Coal Corporation

Plain-English summary

Jewell Smokeless Coal Corporation reported an employee’s alleged black-lung illness to MSHA about two years after the company received medical reports diagnosing pneumoconiosis. Judge George A. Koutras found that the company violated 30 C.F.R. § 50.20(a), which required the occupational illness to be reported within 10 working days after diagnosis. He rejected the company’s position that it could wait for a state compensation settlement before reporting the illness and affirmed the citation. He found ordinary rather than high negligence because the reporting policy was ambiguous and there was no evidence of deliberate concealment. The judge assessed a $20 civil penalty.

Decision snapshot

• Cited standards: 30 C.F.R. § 50.20(a); 30 C.F.R. § 50.2(f); 30 C.F.R. § 50.20-6(b)(7)
• Outcome: The citation was affirmed, negligence was reduced to ordinary, and a $20 civil penalty was assessed.
• Key point: An operator may need to report a diagnosed occupational illness when it becomes aware of the diagnosis, without waiting for a workers’ compensation award or settlement.

Full text (FMSHRC public release)

Page 2

~1408

           Federal Mine Safety and Health Review Commission
                 Office of Administrative Law Judges

SECRETARY OF LABOR, CIVIL PENALTY PROCEEDING
MINE SAFETY AND HEALTH
ADMINISTRATION (MSHA), Docket No. VA 91-596
PETITIONER A.C. No. 44-00649-03537

      v.                                  Coronet Jewell Prep Plant #2

JEWELL SMOKELESS COAL
CORPORATION,
RESPONDENT

                               DECISION

Appearances: Caryl L. Casden, Esq., Office of the Solicitor,
U.S. Department of Labor, Arlington, Virginia,
for the Petitioner;
Joseph W. Bowman, Esq., Street, Street, Scott &
Bowman, Grundy, Virginia, for the Respondent.

Before: Judge Koutras

                        Statement of the Case

 This is a civil penalty proceeding initiated by the

petitioner against the respondent pursuant to section 110(a) of
the Federal Mine Safety and Health Act of 1977, 30 U.S.C.
820(a). Petitioner seeks a civil penalty assessment in the amount
of $50 for an alleged violation of mandatory reporting standard
30 C.F.R. 50.20(a). The respondent filed a timely answer
contesting the alleged violation, and a hearing was held in
Grundy, Virginia. The parties filed posthearing arguments, and I
have considered them in my adjudication of this matter.

                                Issues

 The issues presented in this proceeding are (1) whether the

respondent has violated the cited standard as alleged in the
proposal for assessment of civil penalty, and (2) the appropriate
civil penalty that should be assessed for the violation based
upon the civil penalty assessment criteria found in section
110(i) of the Act. Additional issues raised by the parties are
identified and disposed of in the course of this decision.

            Applicable Statutory and Regulatory Provisions

    1. The Federal Mine Safety and Health Act of 1977; Pub.
    L. 95-164, 30 U.S.C.   801 et seq.

    2. Section 110(i) of the 1977 Act, 30 U.S.C.          820(i).

    3. 30 C.F.R.     50.20(a).

    4. Commission Rules, 29 C.F.R.       2700.1 et seq.

                                 Stipulations

    The parties stipulated to the following (Tr. 5):

    1. The respondent is the owner and operator of the
    Coronet Jewell Preparation Plant #2, and is subject to
    the jurisdiction of the Act.

    2. The Commission has jurisdiction in this matter and
    the presiding judge has jurisdiction to hear and decide
    this case.

    3. A copy of the contested citation was duly served on
    the respondent or its agent.

    4. The payment of the proposed civil penalty assessment
    will not adversely affect the respondent's ability to
    continue in business.

                                  Discussion

 The contested section 104(a) non "S&S" Citation No. 3509275,

March 20, 1991, cites an alleged violation of mandatory reporting
regulation 30 C.F.R. 50.20(a), and the cited condition or
practice states as follows:

    The operator did not report to MSHA on Form 7000-1 an
    occupational illness within ten working days after
    being notified of the illness. The operator was
    notified in September 1986 and did not report it until
    9-6-88. This citation was issued as the result of a
    Part 50 audit.

                   Petitioner's Testimony and Evidence

 MSHA Surface Mine Inspector James R. Smith testified that he

has inspected the respondent's mining operations for several
years, including the No. 2 Preparation plant. He confirmed that
he conducted an "audit type of inspection" of the respondent's
accident, medical, and compensation reports in March 1991.

Safety Director Gerald Kendrick made the records available, and
Mr. Smith found a copy of an accident report Form 7000-1,
pertaining to mine employee Woodrow Stacy which reflected that
the company had been notified of an accident on November 11,
1985, and that Mr. Kendrick did not report it to MSHA until
September 6, 1988. (Exhibit P-1; Tr. 11-18).

 Mr. Smith confirmed that he issued the contested citation in

question (Exhibit P-3), citing a violation of section 50.20(a),
because Mr. Stacy's pneumoconiosis condition was diagnosed on
November 2, 1985, and it was not reported to MSHA until the form
was submitted on September 6, 1988. The regulation required it to
be reported within 10 days of the diagnosis. Mr. Smith stated
that he discussed the matter with Mr. Kendrick, and that Mr.
Kendrick acknowledged that he was aware of the need to report the
matter in 1986 but that company management told him to wait until
the case went to court and was settled. Mr. Smith confirmed that
he based his "high negligence" finding on the fact that 2 years
had past from the time the company was first notified and the
time it was reported to MSHA (Tr. 19-22).

 On cross-examination, Mr. Smith confirmed that he received

instructions on Part 50 audits from his supervisor Larry Worrell
"several years ago", and that he was also instructed "on all
parts of Part 50" (Tr. 23). Mr. Smith confirmed that he first saw
the form submitted by Mr. Kendrick during the audit, and he had
no doubt that it was submitted on September 6, 1988. Based on his
construction of the regulation, the report should have been
submitted within 10 days of November 2, 1985. Mr. Smith confirmed
that the citation he issued states that the respondent failed to
report Mr. Stacy's alleged black lung condition within ten days
of being notified of the illness, and he believed that the cited
regulation uses that term. He further confirmed that he
interpreted the November 2, 1985, notification date to be the
date of diagnosis of the illness (Tr. 24-28).

 MSHA Supervisory Mine Inspector Larry J. Worrell testified

that a mine operator must retain accident and illness reporting
records for a 5-year period, and he explained the purpose of an
audit of these records and the procedures followed in conducting
an audit (Tr. 31-37). He confirmed that he was present for part
of the time during Mr. Smith's audit for the purpose of
monitoring his inspection, and he reviewed some of the report
forms to insure that Mr. Smith was making the correct decision
with respect to the reporting requirements. Mr. Worrrell stated
that Mr. Smith showed him the report form submitted by Mr.
Kendrick and he concurred in Mr. Smith's decision to issue a
citation (Tr. 40).

 Based on his review of the report form in question, Mr.

Worrell agreed with Mr. Smith's finding of a violation of section
50.20(a). Mr. Worrell explained that the form reflects

that the respondent was notified on November 2, 1985, that a
diagnosis of black lung was delivered to the company on that
date, and it was not reported until September 6, 1988, more than
the 10 working days required by the regulation (Tr. 41). Mr.
Worrell agreed with Mr. Smith's high negligence finding and he
believed that the respondent knew or should have known about the
reporting requirement and there were no mitigating circumstances
(Tr. 43).

 Mr. Worrell stated that based on his interpretation of the

regulation, the time frame within which a mine operator must
report an illness such as black lung begins to run on the day the
employee notifies the operator that he has been diagnosed as
having black lung. He explained further as follows at (Tr.
44-45):

 Q. And why do you interpret it that way?

 A. Well, you can't hold a company responsible---. A guy
 . . . a person can make a . . . go to a doctor and have
 a x-ray and become diagnosed, he may not let the
 company know for two (2) months, or three (3) months,
 or whatever. So they're really not, in my opinion
 required to report until they become aware of this
 condition. Now after they become aware of this
 condition, then that's when they have to meet the ten
 (10) day reporting requirements.

 On cross-examination, Mr. Worrell confirmed that regulatory

section 50.20 does not contain the term "notification", and
simply states that an illness must be reported within 10 working
days of the diagnosis (Tr. 48). He confirmed that the only
circumstances he was aware of to support the high negligence
finding was the "accident" date of November 2, 1985, the fact
that it was not reported until approximately 2 years later, and
that the respondent knew or should have known about the reporting
requirement found in section 50.20(a) (Tr. 50).

 In response to several hypothetical questions concerning

multiple x-rays and x-ray interpretations, Mr. Worrell stated
that a mine operator is obliged to file a report with MSHA "when
the company was notified. . . the first notified, the first
diagnosis of pneumoconiosis. . . . " or "whenever the company is
notified in however manner they want to be . . they are notified,
when it comes that they have a diagnosis of pneumoconiosis, they
are required to report it" (Tr. 54, 56). He confirmed that he had
no knowledge that the respondent ever received a diagnosis of
pneumoconiosis and stated that "I'm going with this 7000-1 that
was submitted to our office" (Tr. 56).

 In response to further questions, Mr. Worrell stated that

most mine operators will state on the MSHA form that an employee

"alleges" an injury or illness until the claim is either settled
or a compensation award is made. He agreed that section 50.20(a)
does not require an operator to submit a report within 10 days of
notification of an illness or injury, and that the regulation
only uses the term "diagnosis". He confirmed that he did not know
whether or not Mr. Stacy presented the respondent with any x-rays
or any diagnosis of his alleged black lung condition.

 Mr. Worrell believed that Inspector Smith interpreted Mr.

Stacy's allegation that he had black lung to be a diagnosis. Mr.
Worrell identified a copy of a report which was sent to the
Virginia Industrial Commission and which was in the mine file
reviewed by Mr. Smith during his audit (Exhibit P-4). Mr. Worrell
stated that he was with Mr. Smith when he reviewed the file and
that the respondent made a copy of the report for him. Mr.
Worrell explained that this form is filed by the company with the
state compensation commission and that it was in the company file
with the MSHA 7000-1 form (Tr. 62-63). The report reflects that
it was submitted on February 23, 1987, and it states that Mr.
Stacy alleged that he contacted pneumoconiosis (Tr. 64).

              Respondent's Testimony and Evidence

 Michael G. Prater testified that he is employed by the

respondent and serves as the manager of workers' compensation,
compliance and assessment officer, and personnel officer. He
confirmed that he was aware of Mr. Stacy's compensation claim
filed against the respondent alleging that he had received a
diagnosis of an occupational disease (Tr. 82). He confirmed that
he received a copy of a hearing application (Exhibit P-5) filed
by Mr. Stacy with the Industrial Commission of Virginia in
connection with his black lung claim. The document was mailed on
April 25, 1986. He obtained the November 2, 1985, date from that
document and used it when he filed reports with MSHA and the
state agency (Exhibits P-1 and P-4; 83-84).

 Mr. Prater confirmed that the letter he received from the

Virginia Industrial Commission, dated April 25, 1986, was the
first notice he received that Mr. Stacy was alleging that he had
received a diagnosis of an occupational lung disease (Tr. 85).
Mr. Prater stated that he never received the x-ray film upon
which Mr. Stacy's claim was based, but he did receive copies of
two interpretation reports from two doctors which were included
with the copy of the hearing application and letter received from
the Virginia Industrial Commission (Exhibits P-5 through P-7; Tr.
86-87). Mr. Prater further confirmed that he requested Mr.
Stacy's chest x-ray from his attorney, but was advised that the
film had been lost and he was never able to obtain it (Tr. 88).

 Mr. Prater stated that he received another x-ray film of Mr.

Stacy in September, 1986, and he identified a copy of the
radiology report dated September 30, 1986, interpreting that film
(Exhibit R-1; Tr. 90). He confirmed that he had requested the
doctor to read the x-ray and give him a report. He further
confirmed that 10 additional doctors were asked to review the
film and to give the respondent their reports, and he produced
copies of those reports from his files (Exhibit R-3; Tr. 92-93).
Mr. Prater stated that Mr. Stacy's claim was scheduled for a
hearing on August 31, 1988, before the Virginia Industrial
Commission, but a settlement was reached with Mr. Stacy on August
31, 1988, and it was ultimately approved by the Commission on
September 19, 1988 (Exhibit P-8; Tr. 94-95).

 Mr. Prater stated that after Mr. Stacy's claim was settled,

he sent a Form 7000-1 and the state "First Report of Accident"
form to safety director Gerald Kendrick and told him that since
Mr. Stacy's claim had been settled a report needed to be filed
with MSHA (Exhibits P-1, P-4, Tr. 96). Mr. Prater confirmed that
he always handled the reporting of alleged diagnoses of
occupational illnesses to MSHA in this same way in the past, and
he explained his usual practice in this regard (Tr. 96-98). He
stated that the respondent has never considered a disease or
illness to be reportable to MSHA until such time that a decision
is received from the Industrial Commission of Virginia, and this
is what was done in Mr. Stacy's case (Tr. 99).

 Mr. Prater stated that he receives approximately twenty to

forty state occupational disease claims a year. He confirmed that
there were 20 interpretations or readings made of the x-ray film
actually received in Mr. Stacy's case, and three of them were
lost (Tr. 100).

 On cross-examination, Mr. Prater confirmed that respondent's

practice has been to wait for the state disposition of a
compensation claim before reporting an occupational incident to
MSHA (Tr. 100). He further explained his position as follows at
(Tr. 101-102):

    Q. And you have a background in health?

    A. Yes, ma'am.

    Q. In your opinion, do you think that a judicial
    decision or settlement agreement could ever be
    considered a diagnosis?

    A. Well, I think that a judicial . . . well,
    considering the difference in opinion as to black lung
    diagnosis, I think it's as good as any.


    Q. You think that you could call a judicial decision or
    settlement a diagnosis?

    A. I could say that the judge that. . . that rules on
    these claims has an understanding and has a knowledge
    of black lung as good as anybody and he could take
    before him readings, x-ray readings, from so called, or
    whatever, B-readers, and he could make a determination
    as to where the preponderance of that evidence lies,
    and that's exactly what we rely on.

    Q. Are you saying that you think a judge can make a
    diagnosis?

    A. I . . . I . . . they do in the State of Virginia. I
    mean, not a diagnosis, but they make a decision as to
    whether or not a man has black lung.

    Q. So the judge is not making a diagnosis, is he?

    A. No. No, he's not.

 Mr. Prater conceded that regulatory section 50.20, refers to

a diagnosis of occupational injury or illness and does not refer
to any judicial decisions or settlements (Tr. 102). He also
confirmed that the regulation does not further define the term
"diagnosis" (Tr. 103). He believed that he was following the
correct procedure in this case, and he stated that "the way we
interpreted it to mean was when you got a decisive decision as to
whether or not a man had a disease or diagnosis was when we
reported it" (Tr. 104). Mr. Prater confirmed that as of the
latter part of April, 1986, he was aware of Mr. Stacy's state
application for a hearing and the x-ray interpretations made by
two doctors (Tr. 110).

 Gerald E. Kendrick, respondent's coordinator of health and

safety, stated that one of his responsibilities is to file MSHA
report Form 7000-1. He stated that he prepared the MSHA Form
7000-1 (Exhibit P-1), from the information provided on the state
First Report of Accident (Exhibit P-4). He confirmed that these
forms were sent to him by Mr. Prater, with a note attached, on
August 31, 1988, and that prior to this time he was not aware of
any allegation or diagnosis that Mr. Stacy had an occupational
lung disease (Tr. 115-116).

 Mr. Kendrick stated that he gave Mr. Stacy's file to

Inspector Smith during the audit in question and he explained his
discussion with Mr. Smith as follows at (Tr. 117-118):

    A. With this, he asked me if I was aware of what the
    regulations required, that pneumoconiosis be reported,
    claims . . . not claims, but people with pneumoconiosis
    be


    reported, and I told him that I did. And if in fact that
    this gentlemen had pneumoconiosis in 1986, then it
    probably should have been reported. So then I said,
    "But in the meantime, Gary Prater handles all the
    compensation claims and I'll let him come down and
    explain that to you." So Gary came to our office and
    explained the compensation case with him and Mr. Worrell.

    Q. Okay. Let me ask you . . . there's been . . . did
    you ever indicate to Mr. Smith that you . . . uh . . .
    were aware, or that it was your interpretation of that
    regulation that you had to report this injury . . . or
    this within ten (10) days of learning of the man's
    claim, or within ten (10) days of the diagnosis, but
    that you had been instructed to do otherwise by
    management?

    A. That's a good question. I don't remember
    specifically what was said. I don't recall . . . I
    don't recall discussing that with him, no. The only
    thing I do recall is that we were talking about this
    black lung claim and . . . uh . . . I what I referred
    to him was that I thought that all confirmed black lung
    cases should be reported. And in those cases, when they
    were confirmed was when Gary and them took them to
    court, or settled them, or whatever the case may be
    with the Commission.

 On cross-examination, Mr. Kendrick stated that his purported

statement to Inspector Smith that he was aware of the need to
report Mr. Stacy's alleged black lung condition in 1986 was taken
out of context. Mr. Kendrick explained that "I did make a
statement that I was aware that black lung case are to be
reported . . . confirmed. That was my understanding with what the
regulations say, or aware of compensation had been made" (Tr.
119). He stated that he would not have known about Mr. Stacy's
conditions in 1986 because he did not receive the report from Mr.
Prater until 1988, which was the first time he saw a report on a
black lung case. He believed that the "date of injury" date of
November 2, 1985, shown on the report form, was inappropriate,
and that the date on which an illness or injury is totally
confirmed should be used because "about any doctor in this county
will, and in most cases have diagnosed people with black lung and
they never had it" (Tr. 121). Mr. Kendrick agreed that the
November 2, 1985, x-ray report would be the date of diagnosis
(Tr. 121).

                        Petitioner's Arguments

 Petitioner states that in the course of an audit conducted

on March 20, 1991, MSHA Inspector Smith and his supervisor,
Inspector Worrell, met with the respondent's safety coordinator
Kendrick who provided them with the necessary mine reporting
files. The inspectors began checking the respondent's records

against MSHA's records, to confirm that it had reported all
reportable injuries and illnesses of which the respondent was
aware during the audit period. While examing these records,
Inspector Smith discovered an MSHA 7000-1 report form that had
been completed by Mr. Kendrick (Exhibit P-1). The subject of this
form was mine employee Woodrow Stacy who had filed a state
workers compensation claim for pneumoconiosis. The form caught
the inspector's attention because the "date of accident"
(illness) indicated was November 2, 1985, the date of the first
x-ray report that stated that Mr. Stacy had pneumoconiosis, and
Mr. Kendrick had not completed the form until nearly three years
later, on September 6, 1988. The inspector was aware that section
50.20(a), required the form to be filed with MSHA within 10
working days after an operator has been notified that an
occupational illness has been diagnosed. MSHA points out that
although section 50.20(a) appears to require reporting within 10
days of a diagnosis, the inspectors testified that MSHA requires
that an operator report an occupational illness within 10 days of
becoming aware of such a diagnosis, and that Inspector Worrell
testified that it would be unreasonable to attempt to hold an
operator liable for not reporting a diagnosis of which it is
unaware.

 The petitioner asserts that Mr. Kendrick confirmed that the

required report form had not been filed with MSHA within ten days
after the company became aware of Mr. Stacy's diagnosis, and that
it was the company's practice to wait until an employee had filed
a state worker's compensation claim for pneumoconiosis, and the
company either had lost or settled the case, before the company
would file a report with MSHA. In addition, petitioner points out
that the inspectors also found in the company's files a note
attached to an Industrial Commission report regarding Mr. Stacy
from Mr. Prater to Mr. Kendrick directing him to "please file
accident report on this O.D. claim as it was settled on 8/31/88"
(Exhibit P-4). Petitioner concludes that this confirmed for the
inspectors the company's practice to wait more than 10 days after
being notified of an occupational disease diagnosis before filing
a report with MSHA. Under all of these circumstances, the
inspectors concluded that a violation of section 50.20 had
occurred, and although they did not know the exact date on which
the respondent had been notified of the diagnosis, it was obvious
to the inspectors that more than 10 days had elapsed between the
date on which the company was notified of the diagnosis, and the
date on which it filled out the form.

 The petitioner cites the hearing testimony of the

respondent's worker's compensation specialist Prater verifying
that the respondent was aware, well before September 6, 1988,
that a doctor had determined that Mr. Stacy had pneumoconiosis,
Petitioner states that Mr. Prater confirmed that the respondent
received a letter dated April 25, 1986, from the Virginia
Industrial Commission notifying the respondent that Mr. Stacy had

filed a claim for worker's compensation and had requested a
hearing, and that included with the letter were two x-ray reading
reports from two doctors (Ermaz and Fisher), of Mr. Stacy's x-ray
film. The reading by Dr. Ermaz was of the film dated November 2,
1985, and the reading by Dr. Fisher was a March 13, 1986,
rereading of the November 2, 1985, film. In both instances, the
doctor's reported that Mr. Stacy had pneumoconiosis. Under these
circumstances, the petitioner concludes that there is no question
that the respondent was notified in April 1986, that Mr. Stacy
had pneumoconiosis.

 The petitioner asserts that after proceeding to defend

against Mr. Stacy's compensation claim, a settlement was reached
on August 31, 1988, (Exhibit P-8), and Mr. Prater instructed Mr.
Kendrick to report the diagnosis of pneumoconiosis to MSHA. Mr.
Prater filled out the form on September 6, 1988, and filled in
the date of November 2, 1985, in the space provided as the "date
of accident", which is the date of the first x-ray report
concluding that Mr. Stacy had pneumoconiosis.

 The petitioner points out that section 50.20 provides that

if an occupational illness is diagnosed as one of those listed in
section 50.20-6(b)(7), it must be reported to MSHA. Since
pneumoconiosis is listed as an occupational disease, it must be
reported. The petitioner argues that the definition of
"occupational illness" found in section 50.2(f), does not help
the respondent's case. "Occupational illness" is defined as "an
illness or disease of a miner which may have resulted from work
at a mine or for which an award of compensation is made". The
petitioner concludes that it is clear that whenever either of
these factors occurs--an employee has an illness which may have
resulted from work at a mine, or, an award of compensation is
made--an operator must report the existence of a diagnosis to
MSHA. The petitioner points out that if the regulations had
defined occupational illness as "an illness or disease of a miner
which may have resulted from work at a mine and for which an
award of compensation is made", then the respondent would be
justified in waiting for the outcome of a state claim before
reporting. However, on the facts of this case, once the
respondent was aware that Mr. Stacy had been diagnosed with
pneumoconiosis, a disease that clearly may have arisen from work
in a mine, it did not have the option of waiting for several
years for Mr. Stacy's compensation claim to be resolved before
reporting to MSHA.

 Citing a dictionary definition of the term "diagnosis", the

petitioner maintains that there is no doubt that each of the
x-ray reports that the respondent received in April 1986,
constitutes a diagnosis of pneumoconiosis. The petitioner points
out that a diagnosis is not necessarily a declaration that has
been proven definitively, but rather, a diagnosis is a statement
made in the process of determining the nature of a disorder.

Petitioner concludes that the possibility that another doctor
subsequently could conclude that a patient does not in fact have
pneumoconiosis does not negate the fact that an earlier statement
concluding that the patient does have the disease is a diagnosis.
In any event, petitioner points out that the respondent's
witnesses have not denied that the x-ray reports received in
April 1986 are diagnoses of pneumoconiosis, and that Mr. Prater
made it clear in his request for a civil penalty conference that
he views the two x-ray reports as diagnoses of pneumoconiosis,
and stated that "Jewell Smokeless does not feel that this
citation is justified because a diagnosis of an illness without
an award of compensation from the Industrial Commission, is not
proof of illness." (Exhibit P-10). Petitioner concludes that it
appears that the respondent does not dispute that the x-ray
reports are diagnoses of pneumoconiosis; but rather, the
respondent does not feel that it should be required to report a
diagnosis.

 The petitioner maintains that section 50.20(a) specifically

provides that operators must report each occupational illness
that is diagnosed, and that there is no regulatory basis for the
respondent's practice of waiting for the outcome of a state
worker's compensation case before deciding whether or not to
report such an illness to MSHA. The petitioner points out that
Mr. Prather testified that he is aware that a judge does not make
a diagnosis, and that the regulations say nothing about reporting
to MSHA each time that a state worker's compensation board
decides that a claimant is entitled to an award of compensation,
or each time that a company decides to settle a case with an
employee.

 Finally, the petitioner maintains that the respondent's

stated reporting practice fails to advance MSHA's interest in
collecting full and current information on the occurrence of
pneumoconiosis. In response to the respondent's argument that it
should be presented with more proof of pneumoconiosis before it
should be required to file a report with MSHA, the petitioner
points out that the respondent delayed reporting until after Mr.
Stacy obtained a worker's compensation settlement, which is not a
definitive statement that an employee has an occupational
disease, and thus delayed reporting a diagnosis of pneumoconiosis
for approximately 2 years, in violation of the regulations, for
no valid reason. In response to Mr. Prater's testimony that the
respondent would not report a diagnosis of pneumoconiosis unless
an employee had filed a state claim, the petitioner points out
that in practice, not every miner who obtains an X-ray reading
diagnosing pneumoconiosis files a claim for compensation. Under
the circumstances, the respondent's reporting method, if allowed
to continue, would result in underreporting of pneumoconiosis.

                     Respondent's Arguments

 In support of its case, the respondent states that this

proceeding began when Woodrow Stacy, one of its employees,
alleged that he had been given a diagnosis of an occupational
lung disease on November 2, 1985, and in April of 1986, filed a
claim with the Industrial Commission of Virginia alleging
occupational lung disease. The chest X-ray upon which Mr. Stacy's
alleged diagnosis was based was lost, and Mr. Stacy allegedly had
another chest X-ray made on September 12, 1986, which was
initially read as showing no evidence of an occupational lung
disease (R-1). The September 12, 1986, chest X-ray was
interpreted by numerous physicians, most of whom were of the
opinion that the X-ray showed no evidence of an occupational lung
disease (R-3). Nevertheless, the respondent settled the claim in
which Mr. Stacy was alleging that he had contracted an
occupational lung disease in order to avoid further litigation,
and following that settlement reported to MSHA on September 6,
1988, the fact that Mr. Stacy had alleged that he had contracted
coal worker's pneumoconiosis. Two and one-half years later, while
performing an audit, Inspector Smith found a copy of the Form
7000-1 in the respondent's mine records and issued the contested
violation on the ground that the respondent had failed to report
an occupational illness within 10 working days after being
notified of the illness.

 The respondent asserts that according to its interpretation

of the reporting requirements of sections 50.20 and 50.20-6, in a
situation where an employee has filed a claim for monetary
benefits under the Worker's Compensation Act based on an
allegation of a diagnosis of an occupational lung disease, its
obligation and past practice has been to report the claim to MSHA
after it is either settled by the claimant and the operator or
the State Industrial Commission finds that the evidence supports
the claim of an occupational disease. Consistent with this
interpretation, the respondent maintains that Mr. Stacy's
allegation of an occupational lung disease was reported to MSHA
on September 6, 1988, in a timely fashion within 10 days of the
compromise settlement reached on August 31, 1988, and the Order
of the Commission approving the settlement.

 The respondent argues that since the cited reporting

regulation is penal in nature, it should be strictly construed
against MSHA, and that the issuance of the citation two and 1-1/2
years following the filing of its September 6, 1988, report makes
it almost impossible to determine the construction MSHA placed on
the regulations at the time the violation was issued. The
respondent points out that the violation was issued because it
allegedly was notified of Mr. Stacy's occupational illness in
September, 1986, and did not report it until September of 1988.
The respondent further points to the testimony of Inspector Smith

that based of his interpretation of section 50.20(a), the
respondent was required to report to MSHA on or before November
12, 1985, 10 days after the November 2, 1985, date of the
"Accident" (Illness), shown in item #6 of the MSHA reporting form
submitted by safety director Kendrick (Exhibit P-1).

 The respondent concludes that MSHA does not rely on a

literal interpretation of section 50.20(a). The respondent points
out that Mr. Stacy alleged that he had received a diagnosis of an
occupational disease on November 2, 1985. Since it is
uncontradicted that the respondent was unaware of the alleged
diagnosis until late April or early May, 1986, respondent
concludes that a literal application of the regulation would make
it impossible for it to have reported the occupational illness
within 10 days of the alleged diagnosis.

 The respondent further concludes that the only way for a

violation to materialize out of the regulations and circumstances
of this case is for MSHA to read into the regulation a notice
requirement. In support of this conclusion, the respondent
asserts that even though the regulation does not require it to
take any reporting action based on notification, Inspectors Smith
and Worrell have interpreted it that way, but the respondent has
not.

 In response to Inspector Worrell's suggestion that the

purpose of the cited reporting requirement is "to give MSHA a
handle on how many illnesses and injuries are happening in the
coal industry", the respondent asserts that no explanation is
offered as to how an interpretation that requires the reporting
of a notification of alleged diagnoses of occupational lung
diseases helps in attaining that goal. Respondent concludes that
the reporting of diagnoses of alleged occupational lung diseases
could result in nothing but badly skewed "factual" data, and it
submits that the information that is actually sought by the
regulation is how many injuries or illnesses occur, and not how
many employees allege that a doctor has given them a diagnosis of
an occupational lung disease or how many doctors have allegedly
given employees diagnoses of occupational lung diseases, without
regard to the actual existence or non-existence of the disease
process.

 Finally, the respondent maintains that there is no

reportable occupational illness under the circumstances of a
claim such as Mr. Stacy's (where an employee is seeking monetary
benefits based upon allegations that he has an occupational lung
disease) until the conclusion of the compensation claim either by
settlement or the entry of an award finding that the claimant
does have an occupational disease. The respondent suggests that
there is no reportable occurrence if an employee has no
occupational disease, or it is found that he has no occupational
disease. Further, if as suggested by MSHA, the alleged diagnosis

of an occupational disease by virtue of an alleged interpretation
of a chest X-ray consistent with an occupational disease is all
that is required to trigger the reporting requirements, then on
he facts of Mr. Stacy's claim, respondent concludes that it was
impossible for it to comply with the regulatory reporting time
requirements, and in either event, the violation should be
vacated.

                    Findings and Conclusions

 The respondent is charged with an alleged violation of the

reporting requirements found in 30 C.F.R. 50.20(a), which
states in relevant part as follows:

 Each operator shall maintain at the mine office a
 supply of MSHA Mine Accident, Injury, and Illness
 Report Form 7000-1 . . . . Each operator shall report
 each . . . occupational illness at the mine. The
 principal officer in charge of health and safety at the
 mine or the supervisor of the mine area in which . . .
 an occupational illness may have originated, shall
 complete or review the form in accordance with the
 instructions and criteria in sections 50.20-1 through
 50.20-7. If an occupational illness is diagnosed as
 being one of those listed in section 50.20-6(b)(7), the
 operator must report it under this part. The operator
 shall mail completed forms to MSHA within 10 workings
 days after . . . an occupational illness is diagnosed .
 . . (Emphasis added).

 Section 50.20-6(b)(7)(ii) states the criteria and

instructions for completing MSHA Form 7000-1, and reporting an
occupational illness, and it states in relevant part as follows:

 (7) Item 23. Occupational Illness. Circle the code from
 the list below which most accurately describes the
 illness. These are typical examples and are not to be
 considered the complete listing of the types of
 illnesses and disorders that should be included under
 each category. In cases where the time of onset of
 illness is in doubt, the day of diagnosis of illness
 will be considered as the first day of illness.

 *   *   *   *

 (ii) Code 22-Dust Disease of the Lungs
 (Pneumoconioses). Examples: Silicosis, asbestosis, coal
 worker's pneumoconiosis, and other pneumoconioses.

 In the course of pretrial discovery in this matter, the

petitioner provided the respondent with a copy of an MSHA Policy

Letter No. P92-III-2, effective May 6, 1992, after the date of
the issuance of the contested citation, clarifying the Part 50
"silicosis or other pneumoconioses" reporting policy. The letter
states in relevant part as follows:

 Diagnosis of an occupational illness or disease under
 Part 50 does not automatically mean a disability or
 impairment for which the miner is eligible for
 compensation, nor does the Agency intend for an
 operator's compliance with Part 50 to be equated with
 an admission of liability for the reported illness or
 disease. MSHA views a disability as distinguishable
 from a diagnosis of silicosis or other pneumoconioses
 in that a diagnosis would be reportable to MSHA if
 there is evidence of exposure coupled with an X-ray
 reading of 1/0 or above, using the International Labor
 Office (ILO) classification system . . . (Emphasis
 added)

 MSHA's position is that any medical diagnosis of a dust
 disease or illness must be reported under 30 C.F.R.
 part 50 reporting procedures. A medical diagnosis may
 be made by a miner's personal physician, employer's
 physician, or a medical expert.

 If a chest x-ray for a miner with a history of exposure
 to silica or other pneumoconioses causing dusts is
 rated at 1/0 of above, utilizing the ILO classification
 system, it is MSHA's policy that such a finding is a
 diagnosis of an occupational illness, in the nature of
 silicosis or other pneumoconioses within the meaning of
 30 C.F.R. Part 50 and, consequently, reportable to
 MSHA.

 MSHA Program Policy Information Bulletin No. 87-4C and

87-2M, also produced during pretrial discovery, dated August 31,
1987, states in relevant part as follows:

 Title 30, Code of Federal Regulations, Part 50 requires
 mine operators to report occupational illnesses of
 miners. A miner is defined as "any individual working
 in a mine," and occupational illness is defined as "an
 illness or disease which may have resulted from work at
 a mine or for which an award of compensation is made."
 Illnesses that are reportable include . . . coal
 worker's pneumoconiosis (black lung), . . . Part 50
 further requires that the operator mail a completed
 Form 7000-1 to the Mine Safety and Health
 Administration (MSHA) within 10 working days after a
 miner is diagnosed as having an occupational illness.


    Industry reporting activity for occupational illness
    suggests there is operator uncertainty about the
    relationship between Part 50 reporting obligations
    and the information provided to the operator through
    Federal and State occupational illness compensation
    programs.

    In order to ensure that data reported by mine operators
    reflects the incidence of occupational illnesses
    associated with the mining industry, the reporting
    requirements of Part 50 apply when compensation
    programs provide an operator notice that an individual
    has been awarded compensation for or is diagnosed as
    having an occupational illness resulting from
    employment in a mine, regardless of whether the
    individual is currently working as a miner. Thus within
    10 days of becoming aware of any such compensation
    award or diagnosis, the operator must report the
    occurrence by completing and mailing a Form 7000-1 to
    MSHA. (Emphasis added)

 Section 50.20(a) requires the reporting of an "occupational

illness". As defined by section 50.2(f), an "occupational
illness" is an illness or disease (1) which may have resulted
from work at a mine, or (2) for which an award of compensation is
made. If such an occupational illness or disease is diagnosed as
one of those listed in 50.20-6(b)(7), section 50.20(a) requires
that it be reported to MSHA on Report Form 7000-1. Coal worker's
pneumoconiosis (black lung) is among those listed illnesses or
diseases which must be reported. The time frame for reporting a
diagnosed case of black lung is within 10 days of the diagnosis.

 On the facts of this case, the respondent apparently views

its compromise settlement of Mr. Stacy's black lung compensation
claim as an "award of compensation", and it relies on the "award
of compensation" definition found in section 50.2(f), to support
its belief that it was only obliged to file a report with MSHA
after that award (compromise settlement) was approved and made.
However, section 50.20(a) provides no time frame for the
reporting of black lung compensation awards, nor does it contain
any language which directly, or by reasonable inference, permits
a mine operator to wait until such an award is made before
reporting to MSHA.

 The regulatory time frame for reporting a diagnosed black

lung illness or disease is within 10 working days after such a
condition is diagnosed. Although it is true that it would have
been impossible for the respondent to have reported Mr. Stacy's
black lung diagnosis of November 5, 1985, within 10 working days
because it did not become aware of it until 1986, I take note of
the fact that the respondent is charged with a violation for its
failure to report Mr. Stacy's illness when it received

notification of a black lung diagnosis in September, 1986, and
not when the initial diagnosis was made on November 2, 1985.

 The respondent is correct in its assertion that the

inspectors read a notification requirement into the reporting
language found in section 50.20(a). The inspectors both confirmed
that they had always construed the 10 days reporting time frame
to begin when a mine operator is notified that an employee has
black lung or has been diagnosed as having that disease (Tr. 26,
28, 41). The inspectors' interpretation and application of the
reporting time frame is consistent with MSHA's Part 50 Policy
Letter of August 31, 1987, which states that an operator must
report to MSHA within 10 days of becoming aware of a compensation
award for black lung or a diagnosis of black lung.

 The fact that section 50.20(a) does not, on its face, impose

a reporting requirement based on notification to a mine operator
that an employee has been diagnosed as having black lung does not
in my view warrant vacation of the contested citation in this
case. I find MSHA's policy application, as stated in its August
31, 1987, policy bulletin, requiring an operator to report an
occupational illness diagnosis within 10 days of becoming aware
of such a diagnosis, and the inspector's similar interpretation
and practice, to be reasonable. If it were otherwise, a mine
operator would be placed in the rather arbitrary and untenable
position of being held accountable for a reportable illness
diagnosis which may never have been brought to its attention.

 The respondent's suggestion that it is only required to

report a proven case of black lung disease is rejected. I also
reject the respondent's assertion that since Mr. Stacy was
seeking monetary benefits based on his allegation that he was
diagnosed as having black lung disease, its reporting obligation
pursuant to section 50.20(a) would only begin when Mr. Stacy's
compensation claim is either concluded by a settlement of his
claim or he is awarded compensation based on a finding that he in
fact had black lung.

 I conclude and find that Mr. Stacy's diagnosis of black lung

was in connection with a disease which one may reasonably
conclude may have resulted from his work at a mine. The
respondent does not dispute the fact that Mr. Stacy was one of
its mine employees, and Mr. Prater the respondent's manager of
worker's compensation, acknowledged that he filed a report with
the State of Virginia on February 23, 1987, which states that Mr.
Stacy "alleges to have contracted coal workers pneumoconiosis
while employed at Jewell Smokeless Coal Corp." (Tr. 83; exhibit
P-4). Mr. Prater also confirmed that he was aware at the time
that report was filed that Mr. Stacy had supplied some evidence
that he had black lung disease (Tr. 85).

 Mr. Prater confirmed that in late April, 1986, he was made aware

of Mr. Stacy's black lung claim, and the supporting x-ray reports
of his doctors (Eryilmaz and Fisher) (Tr. 85-87; 110; Exhibits
P-5 through P-7). Mr. Prater further confirmed that after
learning from Mr. Stacy's attorney that the original x-ray film
of November 2, 1985, had been lost, another x-ray film was sent
to him or to the respondent's attorney on September 12, 1986.
That film was reviewed by several doctors for the respondent, as
well as Mr. Stacy's doctors, and following the submission of all
of this evidence Mr. Stacy's claim was scheduled for a state
hearing on August 31, 1988. However, the claim was settled, and
the matter never proceeded to hearing (Tr. 89-92; 94-95; Exhibits
R-1 and R-3). Notwithstanding the conflicting doctor's
interpretations of Mr. Stacy's x-rays, I conclude and find that
the readings made by Mr. Stacy's doctors in support of his claim
constituted diagnoses of pneumoconiosis within the meaning of
section 50.20(a).

 I am not convinced that the respondent was ignorant or

confused about its reporting obligations pursuant to section
50.20(a). Mr. Prater, the respondent's manager of worker's
compensation, was aware of Mr. Stacy's compensation claim filed
against the respondent alleging that he had received a diagnosis
of an occupational disease (Tr. 82). Mr. Prater did not assert
that he was unaware of the regulatory language of section
50.20(a) requiring a report to MSHA within 10 working days of a
diagnosis of an occupational illness. His contention is that he
was not aware of Mr. Stacy's diagnosis until it came to his
attention in 1986, and he relied on his practice of not reporting
an alleged diagnosis of an occupational illness until such time
that a definitive decision is forthcoming from the state
industrial commission upholding a compensation award.

 Mr. Kendrick, the company official responsible for filing

the MSHA Report Form 7000-1, acknowledged that the November 2,
1985, "date of injury" shown on the state workers compensation
report, and on the MSHA report which he submitted, would be
considered the date of diagnosis (Tr. 121; Exhibits P-1 and P-4).

 Inspector Smith's testimony that Mr. Kendrick acknowledged

at the time of the audit that he was aware of the need to report
Mr. Stacy's alleged black lung diagnosis in 1986, but was told by
company management to wait until the matter went to court and was
settled before reporting it to MSHA, is memorialized in his
inspection notes made at the time of his audit.

 Mr. Kendrick made no notes of his conversation with Mr.

Smith at the time of the audit. Mr. Kendrick testified on direct
examination that he had no specific recollection of what was said
during the conversation, and that he could not recall discussing
the need to report within 10 days of learning about Mr. Stacy's
black lung claim or within 10 days of the diagnosis.

Mr. Kendrick recalled that he told Mr. Smith that he thought that
all confirmed cases of black lung which went to court, were
settled, or were filed with the state commission, should be
reported. He further contended that his purported statement that
he was aware that a report was required to be made in 1986, was
taken out of context, and that it was his understanding that
MSHA's regulations required the reporting of confirmed cases of
black lung or black lung cases in which compensation awards have
been made. Mr. Kendrick also testified that he told Mr. Smith
that if Mr. Stacy had pneumoconiosis in 1986, "it probably should
have been reported" (Tr. 115-116).

 Mr. Kendrick did not contend that he was ignorant of the

regulatory requirement found in section 50.20(a) requiring the
reporting of a black lung diagnosis to MSHA within 10 working
days. His defense, like Mr. Prater's, is that only proven cases
of black lung need be reported to MSHA. Even though Mr. Kendrick
agreed that the initial November 2, 1985, x-ray reports
concerning Mr. Stacy would be considered the date of diagnosis,
he took a contrary position when he contended that this date was
"inappropriate", and that only the date on which an illness is
"totally confirmed" should be used for reporting purposes.

 Having viewed the witnesses in the course of the hearing,

and after careful scrutiny of the testimony of Mr. Smith and Mr.
Kendrick, I find Mr. Smith's testimony to be more credible, and I
find Mr. Kendrick's testimony to be rather equivocal and
unconvincing. As the responsible reporting company official, Mr.
Kendrick is charged with the responsibility of familiarizing
himself with the language found in section 50.20(a), particularly
the requirement for reporting diagnosed cases of occupational
illnesses to MSHA within 10 working days. I cannot conclude that
Mr. Kendrick was oblivious of this requirement. I believe that
he, like Mr. Parater, erroneously interpreted section 50.20(a),
to require only the reporting of proven cases of black lung.

 In view of the foregoing findings and conclusions, and after

careful consideration of all of the evidence in this case,
including the arguments advanced by the parties with respect to
the interpretation and application of the reporting requirement
of section 50.20(a), I conclude and find that the petitioner's
position is correct. I also conclude and find that the petitioner
has established by a preponderance of all of the credible and
probative evidence in this case that the respondent failed to
timely report Mr. Stacy's diagnosed case of black lung within 10
working days after being notified of that diagnosis in September
1986. Under the circumstances, I further conclude and find that
the petitioner has established a violation of the cited reporting
standard found at 30 C.F.R. 50.20(a). Accordingly, the contested
citation IS AFFIRMED.

Size of Business and Effect of Civil Penalty Assessment on the
Respondent's Ability to Continue in Business

 The petitioner presented no additional evidence with respect

to the size of the respondent's mining operation. However, a copy
of the proposed assessment pleading (MSHA Form 1000-179) reflects
that the respondent's total 1990 coal production was 23,317,212
tons, and that the subject preparation plant had no coal
production. I conclude and find that the respondent is a large
mine operator, and the parties have stipulated that the payment
of the proposed civil penalty assessment for the violation in
question will not adversely affect the respondent's ability to
continue in business.

History of Prior Violations

 An MSHA computer print-out (Exhibit P-9), reflects that for

the period March 20, 1989 to March 19, 1991, the respondent paid
civil penalty assessments for fifteen (15) violations issued at
the subject preparation plant. None of these prior violations
concerned reporting violations. The petitioner's assertion at
page 12 of its brief that the respondent's history of prior
violations is "moderately high" IS REJECTED. For an operation of
its size, I cannot conclude that the evidence presented by the
petitioner supports any conclusion of a "moderately high" history
of prior violations. In any event, I conclude and find that the
respondent has a good compliance record and I have taken this
into consideration in assessing the civil penalty for the
violation which has been affirmed.

Gravity

 The inspector found that the violation was non-"S&S", and in

the absence of any evidence to the contrary, I conclude and find
that it was non-serious,

Good Faith Compliance

 The petitioner concedes that the respondent demonstrated

good faith in abating the violation within the time constraints
set by the inspector (Posthearing brief, pg. 12). I agree, and I,
have taken this into consideration in this case.

Negligence

 Inspector Smith's "high negligence" finding was based on his

belief that the respondent was aware of the reporting
requirements found in section 50.20(a), but waited approximately
2 years after being notified of Mr. Stacy's black lung diagnosis
before reporting it to MSHA (Tr. 21-22). Supervisory Inspector
Worrell concurred with Mr. Smith's finding, and he stated that
the respondent knew or should have known about the reporting

requirements, and in the absence of any mitigating circumstances,
Mr. Smith was required to find "high negligence" (Tr. 43, 50).

 In a recently decided case, Consolidation Coal Company, 14

FMSHRC 956 (June 1992), the Commission affirmed Chief Judge
Merlin's decision affirming several reporting violations issued
pursuant to 30 C.F.R. 50.30-1(g)(3). The Commission also
affirmed Judge Merlin's "high" negligence findings,
notwithstanding its recognition of the ambiguous language of the
cited standard, and it quoted with approval the following
conclusion by Judge Merlin at 12 FMSHRC 1146, of his decision:

 Whatever difficulties may be presented by the
 Secretary's interpretation of the Act and regulations,
 no operator is free to take the law into its own hands
 by deciding for itself what the law means and how it
 can best be applied.

 I take note of the fact that Judge Merlin based his "high"

negligence finding on his belief that the mine operator engaged
in "egregious and clandestine conduct" and "chose to act in
secret until the Secretary found out", 12 FMSHRC 1146. In the
instant case, I find no evidence of such conduct on the part of
the respondent. Although I have concluded that Mr. Prater and Mr.
Kendrick's interpretation of the cited standard was erroneous, I
find no evidence that they deliberately sought to avoid
compliance. I take note of the fact that MSHA's August 31, 1987,
policy bulletin acknowledges that it was issued in response to
mine operator uncertainty concerning the reporting of an
occupational illness. I also note that subsequent MSHA Part 50
reporting policy letters, which became effective on September 6,
1991, and May 6, 1992, do not contain any statements informing
mine operators to report to MSHA within 10 days of becoming aware
of a diagnosis of pneumoconisis. Under all of these
circumstances, I conclude and find that the violation in this
case was the result of the respondent's failure to exercise
reasonable care to insure compliance and that this constitutes
ordinary negligence.

                    Civil Penalty Assessment

 Taking into consideration all of the civil penalty

assessment criteria found in section 110(i) of the Act, I
conclude and find that a civil penalty assessment of $20 is
reasonable and appropriate for the violation which I have
affirmed.

                             ORDER

 The respondent IS ORDERED to pay a civil penalty assessment

in the amount of $20, for the section 104(a) non-"S&S" Citation
No. 3509275, March 20, 1991, 30 C.F.R. 50.20(a). Payment is to

be made to MSHA within thirty (30) days of this decision and
order, and upon receipt of payment, this matter is dismissed.

                      George A. Koutras
                      Administrative Law Judge