Secretary of Labor v. Signal Peak Energy, LLC

Plain-English summary

An ALJ found that Signal Peak failed to notify MSHA within 15 minutes after a roof cave-in injured a miner and increased the proposed $51,400 penalty to $74,250. Both parties agreed that amount exceeded the $70,000 general maximum for a non-flagrant violation. The Commission identified a further question: whether the more specific $65,000 maximum for failure to provide immediate accident notification governed instead. It requested briefing on whether section 50.10(b) and section 50.10(d) violations were subject to the $65,000 or $70,000 cap and how the differing statutory inflation adjustments should be reconciled. The order did not decide the penalty and required the parties to respond within 30 days.

Decision snapshot

• Governing authority: 30 U.S.C. §§ 813(j), 820(a)(1), and 820(a)(2); 30 C.F.R. §§ 50.10 and 100.4(c)
• Outcome: The Commission requested supplemental briefing on the maximum penalty for the immediate-notification violation.
• Key point: The specific penalty range for 15-minute accident reporting may control over the general non-flagrant maximum, requiring analysis of the statutory provisions and inflation adjustments.

Full text (FMSHRC public release)

FEDERAL
MINE SAFETY AND HEALTH REVIEW COMMISSION

1331
PENNSYLVANIA AVENUE NW, SUITE 520N

WASHINGTON,
DC 20004-1710

September 25, 2014

SECRETARY OF LABOR,                           
 :                        

MINE SAFETY AND HEALTH                    :                  

ADMINISTRATION (MSHA)                       :       Docket
No. WEST 2010-1130         

:                         

v.                                                     :      

:                             

SIGNAL PEAK ENERGY, LLC                   
 :

BEFORE: Nakamura, Acting
Chairman; Cohen and Althen, Commissioners

ORDER

BY
THE COMMISSION:

This
case involves review of an Administrative Law Judge’s decision affirming two
citations issued to Signal Peak Energy in the wake of a roof cave-in which
injured a miner.      34 FMSHRC 1346 (June 2012) (ALJ).

With
regard to Citation No. 8463717, the Judge found that Signal Peak violated
section 50.10(b) and/or 50.10(d) of the Secretary of Labor’s reporting
requirements by failing to timely notify the Department of Labor’s Mine Safety
and Health Administration (“MSHA”) of the injury and/or roof cave-in.1 The Judge raised the
$51,400 special assessment proposed by    the Secretary to $74,250. 34 FMSHRC
at 1346 n.1.

Signal
Peak contends and the Secretary agrees that the Judge erred by imposing a
penalty in excess of the $70,000 maximum for non-flagrant violations of
mandatory standards provided by section 110(a)(1) of the Federal Mine Safety
and Health Act of 1977, 30 U.S.C. § 801 et seq. (2012) (“the Act”).2 Sec’y Br. at 35; SP Br.
at 27.

As
explained below, the Commission requests additional briefing on the
applicability   of the $65,000 maximum for immediate notification violations
provided by section 110(a)(2).3

Section 50.10 requires an
operator to contact MSHA within 15 minutes once it knows  or should know that
an accident, as defined in subsections (a) through (d), has occurred. See n.1.

Subsections (a), (b) and (c)
parallel section 103(j) of the Act, which states that an operator shall

notify the Secretary “within 15 minutes of the time at
which the operator realizes that the death of an individual at the mine, or an
injury or entrapment of an individual at the mine which has   a reasonable
potential to cause death, has occurred.” 30 U.S.C. § 813(j). Pursuant to
section 110(a)(2) of the Act (as adjusted for inflation), the failure to
provide timely notification as required by section 103(j) shall be assessed a
civil penalty by the Secretary of not less than

$5,000, and not more than $65,000. See
n.3. In contrast, section 110(a)(1) (as adjusted for inflation) provides
that an operator shall be assessed a penalty by the Secretary of not more than
$70,000 for a non-flagrant violation of a mandatory standard or provision of
the Act. See n.2.

Section 50.10 achieved its
current form in 2009, when reference to “accidents” generally was replaced with
subsections (a) through (d). The Secretary explained that the change would “make
it readily apparent when the violation is subject to the higher penalty,” as
subsections (a), (b) and (c) would automatically be subject to the Secretary’s
corresponding penalty provision for section 103(j) violations,4 while subsection (d) would not. 74
Fed. Reg. 68918, 68918-19 (Dec. 29, 2009). Also in 2009, the relevant penalty
provision was moved from 30 C.F.R. § 100.5, which otherwise addresses special
assessments, to section 100.4, which otherwise provides minimum proposed
penalties for unwarrantable failure violations. The Secretary noted,

however, that “MSHA [would] continue to
review these violations for a special assessment

when conditions warrant.” Id.

It is also notable that when
section 110(a)(2) was enacted under the Mine Improvement and New Emergency
Response Act of 2006 (“MINER Act”), sections 110(a)(1) and (a)(2) both provided
a maximum assessable penalty of $60,000. Pub. L. No. 109-236; 30 C.F.R. § 100.3
(2006). The legislative history of the MINER Act indicates that this
correlation was intentional. S. Rep. No. 109-365, at 13 (2006) (“fix[ing] a
minimum civil penalty of $5,000, up to $60,000 (which is the current maximum)”).
The Secretary subsequently adjusted both for inflation via rulemaking, pursuant
to the Federal Civil Penalties Inflation Adjustment Act of 1990 (Pub. L. No.
101-410, 104 Stat. 890 (28 U.S.C. § 2461 note)), as amended by the Debt
Collection Improvement Act of 1996 (Pub. L. No. 104-134, 110 Stat. 1321). The
general maximum was increased to $70,000 in 2008, and the maximum for section
103(j) violations was increased to $65,000 in 2012. 73 Fed. Reg. 7206, 7207-08
(Feb. 7, 2008); 77 Fed. Reg. 76406, 76406-07 (Dec. 28, 2012). The Secretary has
stated that the adjustments “are prescribed by the Inflation Adjustment Act and
are not within MSHA's discretion.” 77 Fed. Reg. at 76406-07. Both adjustments
are reflected in the Secretary’s current regulations addressing proposed
penalty assessments. 30 C.F.R. §§ 100.3(a), 100.4(c).                 

In light of this statutory framework, the
Commission requests further briefing from the parties regarding the maximum
assessable penalty for Citation No. 8463717 under each theory  of liability. Specifically,
the parties are requested to address the following questions:

1. Are violations of section 50.10(b) subject to a
   maximum penalty of $65,000 under section 110(a)(2) of the Act, or $70,000 under
   section 110(a)(1)? The parties should
   address the relevance of the initial correlation between the maximum assessable
   penalties. The parties should also discuss the relevance (if any) of the
   distinction between section 110(a)(2), which provides both minimum and maximum
   penalty amounts for violations of section 103(j), and section 110(a)(3), which
   provides only a minimum penalty for unwarrantable failure violations issued
   under section 104(d).

2. Are violations of section 50.10(d) subject to a
   maximum penalty of $65,000 under section 110(a)(2), or $70,000 under section
   110(a)(1)? The parties should address
   whether it conflicts with congressional intent to allow a higher penalty to be
   assessed for failing to report a general accident under section 50.10(d), than
   for failing to report a death, or injury or entrapment with the potential to
   cause death, under sections 50.10(a), (b) or (c).

The parties are requested to file briefs,
or alternatively, to notify the Commission that briefs will not be filed,
within 30 days of the date of this order.

/s/ Patrick K. Nakamura

Patrick K. Nakamura,
Acting Chairman

/s/ Robert
F. Cohen, Jr.

Robert F. Cohen,
Jr., Commissioner

/s/
William I. Althen

William I. Althen,
Commissioner

Distribution:

R. Henry Moore, Esq.

Jackson Kelly, PLLC

Three Gateway Center, Suite 1500

401 Liberty Avenue

Pittsburgh, PA 15222

Melanie Garris

Office of Civil Penalty Compliance

MSHA

U.S. Dept. Of Labor

1100 Wilson Blvd., 25th Floor

Arlington, VA 22209-3939

W. Christian Schumann, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., Room 2220

Arlington, VA  22209-2296

Administrative Law Judge William B. Moran

Federal Mine Safety & Health Review Commission

Office of Administrative Law Judges

1331 Pennsylvania Avenue, N. W., Suite 520N

Washington, D.C. 20004

1
Section 50.10 states that an “operator shall immediately contact MSHA at once
without delay and within 15 minutes . . . once the operator knows or should
know that an accident has occurred” involving:

(a) A
death of an individual at the mine;

(b) An
injury of an individual at the mine which has a reasonable potential to cause
death;

(c) An
entrapment of an individual at the mine which has a reasonable potential to
cause death; or

(d) Any
other accident.

30
C.F.R. § 50.10.

2 Section 110(a)(1) of the Act states that the “operator
of a coal or other mine in which a violation occurs of a mandatory health or
safety standard or who violates any other provision of this [Act], shall be
assessed a civil penalty by the Secretary which penalty shall not be more than
$50,000 for each such violation.” 30 U.S.C. § 820(a)(1). As discussed infra,
the maximum has been adjusted to $70,000 through rulemaking to account for
inflation. See 30 C.F.R. § 100.3(a).

3 Section 110(a)(2) of the Act states that the “operator
of a coal or other mine who fails to provide timely notification to the
Secretary as required under section 103(j) of this [Act] (relating to the 15
minute requirement) shall be assessed a civil penalty by the Secretary of not
less than $5,000 and not more than $60,000.” 30 U.S.C. § 820(a)(2). Similar to
section 110(a)(1), the maximum has been adjusted to $65,000 to account for
inflation. See 30 C.F.R. § 100.4(c).

4 The relevant regulatory provision is section
100.4(c), which, like section 110(a)(2) of the Act, states that “[t]he penalty
for failure to provide timely notification to the Secretary under section
103(j) of the Mine Act will be not less than $5,000 and not more than $65,000
for the following accidents: (1) The death of an individual at the mine, or (2)
An injury or entrapment of an individual at the mine, which has a reasonable
potential to cause death.” 30 C.F.R. § 100.4(c).