Alaska Mechanical, Incorporated (ALJ decision, June 30, 2010)

Plain-English summary

MSHA cited Alaska Mechanical after a manlift tipped over at its Nome Operations and two miners died. The parties proposed reducing total penalties from $115,000 to $80,000, including a reduction from $55,000 to $20,000 for a training citation. Chief Judge Robert J. Lesnick found that the parties accepted the Secretary's allegations of serious gravity and moderate or high negligence but supplied no particular facts supporting the 64 percent reduction. He explained that Commission review of settlements protects the public interest and cannot be reduced to accepting unexplained conclusions that a penalty is fair or reasonable. The Judge denied settlement approval because the record did not allow him to determine whether the reduced penalty would serve the Mine Act's deterrent purpose.

Decision snapshot

• Cited standards: 30 C.F.R. §§ 48.27(a) and 56.14205
• Outcome: The joint motion to approve an $80,000 settlement was denied.
• Key point: A large penalty reduction requires concrete factual support tied to the statutory penalty criteria and the Mine Act's enforcement goals.

Full text (FMSHRC public release)

FMSRHC ALJ DECISION

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

OFFICE OF THE ADMINISTRATIVE LAW JUDGES

601 NEW JERSEY AVENUE, N.W., SUITE 9500

WASHINGTON, DC 20001-2021

TELEPHONE: 202-434-9958 / FAX: 202-434-9949

June 30, 2010

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA),

Petitioner

v.

ALASKA MECHANICAL,

INCORPORATED,

Repondent

ALASKA MECHANICAL,

INCORPORATED,

Contestant

v.

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA),

Petitioner

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CIVIL PENALTY PROCEEDING

Docket No. WEST 2008-1582-M

A.C. No. 50-01850-159018LWI

CONTEST PROCEEDINGS

Docket No. WEST 2008-152-RM

Citation No. 6398234; 10/04/2007

Docket No. WEST 2008-153-RM

Citation No. 6398235; 10/04/2007

Mine ID 50-01850 LWI

Nome Operations

ORDER DENYING MOTION TO APPROVE SETTLEMENT

Before:            Judge Lesnick

This case is before me upon a petition for assessment of civil penalty under section 105(d) of the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (the “Act” or “Mine Act”). The Secretary of Labor (“Secretary”) and Alaska Mechanical, Incorporated (“AMI”) filed a joint motion to approve settlement dated March 12, 2010. The case involves two violations issued by the Secretary under section 104 of the Act following an accident at AMI’s Nome Operations that, on July 19, 2007, claimed the lives of two miners when a manlift they were operating tipped over.

The Secretary proposed that a total penalty $115,000 be assessed against AMI. After entering into settlement negotiations, the parties now move for approval of their settlement agreement in which AMI agrees to pay a total penalty of $80,000. For Citation No. 6398235 alleging a violation of 30 C.F.R. § 56.14205, AMI agrees to pay the full proposed penalty of
$60,000. For Citation No. 6398234 alleging a violation of 30 C.F.R. § 48,27a, AMI agrees to pay a penalty of $20,000, which is $35,000 less than the Secretary’s initial proposed penalty of
$55,000, a decrease in amount of approximately 64 percent.

The authority of Commission judges to review settlement agreements filed by the Secretary and mine operators is found at section 110(k) of the Act, which provides in relevant part: “No proposed penalty which has been contested before the Commission under section 105(a) shall be compromised, mitigated, or settled except with the approval of the Commission.” 30 U.S.C. § 820(k). The Commission has held that section 110(k) “directs the Commission and its judges to protect the public interest by ensuring that all settlements of contested penalties are consistent with the Mine Act’s objectives.” Knox County Stone Co., 3 FMSHRC 2478, 2479 (Nov. 1981).

In Knox County, the Commission further explained the role of its judges in reviewing settlements:

The judges’ front line oversight of the settlement process is an adjudicative function that necessarily involves wide discretion. While the scope of this discretion may elude detailed description, it is not unlimited and at least some of its outer boundaries are clear.

. . . [We] reject the notion . . . that Commission judges are bound to endorse all proposed settlements of contested penalties. However, settlements are not in disfavor under the Mine Act, and a judge is not free to reject them arbitrarily. . . . Rejections, as well as approvals, should be based on principled reasons. Therefore, we [have] held that if a judge’s settlement approval or rejection is “fully supported” by the record before him, is consistent with the statutory penalty criteria,[

] and is not otherwise improper, it will not be disturbed.
In reviewing such cases, abuses of discretion or plain errors are not immune from reversal.

Id. at 2479-80. The Commission went on to vacate the judge’s rejection of the settlement motion in Knox County because it was not “fully supported” by the record and was inconsistent with the penalty criteria. Id. at 2481.

Here, the parties represent that the penalty amounts upon which they agreed “take into account those factors required to be considered by Section 110(i),” and that findings set forth by the Secretary in her petition for assessment of civil penalty as to gravity and negligence “are supportable.” Mot. at 2. The Secretary’s petition alleges that the violation cited in Citation No. 6398234 resulted from “moderate” negligence, and that the violation cited in Citation No. 6398235 resulted from “high” negligence. Pet. at [10]. The petition alleges the gravity of both violations was “serious,” and “contributed to the cause of a fatal machinery accident.” Id. The parties state that AMI’s history of previous violations “is as set forth in . . . the Petition.” Mot. at 2. Finally, the parties state that the company “exercised good faith in abating the cited conditions,” and that the agreed to penalty would not affect AMI’s ability to remain in business. Id. at 2-3. Neither of these representations is inconsistent with the Secretary’s petition. Aside from several other general representations, the parties fail to identify and explain any particular facts that would support a reduction of the penalty for Citation No. 6398234 by well more than half.

In other words, the parties have said that although the Secretary’s penalty petition is fully supportable, they have concluded that the significantly reduced penalty AMI has agreed to pay is “fair and reasonable and serve[s] the enforcement goals of the Act,” and is “in the public interest and will further the intent and purpose of the Act,” simply because they say so. Justice William O. Douglas once had occasion to cite Humpty Dumpty’s pronouncement to Alice in Through the Looking-Glass that “When I use a word . . ., it means just what I choose it to mean – neither more nor less.” Zschernig v. Miller, 389 U.S. 429, 435 n.6 (1968). Here, the Secretary has no such authority, and when she says that a penalty is “fair” and “reasonable” and “in the public interest,” the Mine Act and Commission precedent requires her and other parties to a settlement to provide more than mere empty words to justify their agreement. Otherwise, section 110(k) would be meaningless, and the authority of Commission judges to review settlements would be reduced to providing the proverbial rubber stamp.

I therefore conclude that the reduced penalty agreed to by the parties for Citation No. 6398234 lacks the factual basis necessary for me to determine whether the penalty would adequately effectuate the deterrent purpose underlying the Act’s penalty assessment scheme. Sellersburg Stone Co., 5 FMSHRC 287, 294 (Mar. 1983), aff’d, 736 F.2d 1147 (7th Cir. 1984). The motion to approve settlement is DENIED.

Robert J. Lesnick

Chief Administrative Law Judge

Distribution:

Bruce L. Brown, Esq., Office of the Solicitor, U.S. Department of Labor, 1111 Third Avenue, Suite 945, Seattle, WA 98101-3212

Cole A. Wist, Esq., Ogletree, Deakins, Nash, Smoak, & Stewart, P.C., 1600 Broadway, Suite 1940, Denver, CO 80202