Secretary of Labor v. C.R. Briggs (ALJ decision, December 29, 2016)

Plain-English summary

MSHA and C.R. Briggs asked Judge William B. Moran to approve a settlement wiping out all penalties on 13 citations, dropping the originally assessed $29,691 to zero. The operator had filed for bankruptcy protection and its assets were being sold through a trustee, and the Secretary agreed to eliminate the penalties in exchange for the operator accepting the citations as written, so the violations would still show up in the mine's history if mining ever resumed. The judge held he could not approve it. Bankruptcy is relevant evidence of an operator's ability to continue in business, which is one of the six penalty factors, so it can justify reducing a penalty. But section 110(a) says an operator that violates the Act shall be assessed a civil penalty, and the judge read that as leaving him no authority to set the amount at zero for over a dozen violations. He noted that assessing a penalty is a separate question from whether it ever gets collected. The motion was denied and the parties were ordered to report within 30 days whether they would submit a revised settlement.

Decision snapshot

• Cited authority: 30 U.S.C. § 820(a)(1), with sections 105(d), 110(i), and 110(k) of the Mine Act discussed
• Outcome: The joint motion for approval of settlement was denied, and the parties were ordered to provide a status update within 30 days.
• Key point: An operator's bankruptcy can support reducing a penalty, but a judge has no authority to approve a settlement that assesses no penalty at all.

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
20004-1710

Phone: (202) 434-9933
| Fax: (202) 434-9949

December 29, 2016

SECRETARY
OF LABOR,    :  CIVIL PENALTY PROCEEDING

MINE
SAFETY AND HEALTH   :

ADMINISTRATION
(MSHA),   :  Docket No. WEST 2015-0082

Petitioner,   :  A.C.
No. 04-05275-356398

v.   : 

: 

C.R.
BRIGGS,   :  Mine: CR
Briggs

Respondent.   :

DECISION DENYING MOTION

FOR APPROVAL OF SETTLEMENT

Before: Judge
Moran

This
case is before the Court upon a petition for assessment of a civil penalty under section 105(d) of the Federal Mine Safety and Health Act of 1977 (“the Act”). The Court has consid­ered the repre­sen­ta­tions submit­ted in this case under Section 110(k) of the Act. For the reasons which follow, the settlement is rejected because the Court may not approve a penalty of zero dollars.

The
parties have filed a joint motion to approve settlement. The originally assessed amount was $29,691.00, and the proposed settlement is for $0 (zero dollars.) The parties propose that the penalty amounts for the 13 citations at issue in this case be reduced to zero dollars, apparently because the Respondent is in bankruptcy proceedings. [1] The parties reason that by doing so, a record of the violations will be preserved in the mine’s violation history.

It
has long been established that separate bankruptcy proceedings do not alter the Commission’s power to fix the amount of liability in Mine Act cases, barring judgments on the enforceability of those judgments in other fora. [2] However, Section 110(i) permits consideration of bankruptcy as relevant evidence of an operator’s “ability to continue in business;” one of the six penalty factors named in the Act. [3] Therefore this Court may recognize and consider an ongoing bankruptcy when the Secretary determines that it is appropriate to reduce proposed penalties in part because of a respondent’s bankruptcy status.

Yet,
while the Court may authorize a reduction of penalty amounts, it does not have the option to authorize a settlement amount of zero dollars. As Section 110(a) of the Act states, “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...” 30 U.S.C. § 820(a)(1) (emphasis added). The imposition of civil penalties should not be conflated with the separate issue of whether such penalties are, in fact, ultimately collected.

Approving
a settlement that imposes no penalty for over a dozen violations of the Act would run contrary to the purposes of the Act, and the Court has no authority to do so. Therefore, the motion for approval of settlement is DENIED .

The
parties are ORDERED to provide a status update on this matter within 30 days of this order regarding whether they intend to submit a revised settlement motion.

SO
ORDERED.

/s/ William B. Moran

William B. Moran

Administrative
Law Judge

Distribution:

James
Hesketh, President, CR Briggs, PO Box 668, Trona, CA 93562

Patricia
Drummond, Esq., U.S. Department of Labor, 300 Fifth Ave., Suite 1120, Seattle, WA 98104

[1] The motion
states in relevant part, “The basis for the agreement between the parties is the evidence provided by the Respondent, and attached hereto as Exhibits 1 through 3, that the Respondent is in dire financial circumstances, having filed for the protection of the U.S. Bankruptcy Court. Respondent has indicated that the assets of the CR Briggs mining operation are in the process of being disposed of through the Trustee. The Secretary, in an effort to preserve the record of the violations as mine violation history in case of even the remote possibility that there could be a resumption of mining, has agreed to eliminate the proposed penalties in exchange for the Respondent’s acceptance of the citations as written.”

[2] Sec’y of
Labor on behalf of Price v. Jim Walter Res., Inc. , 12 FMSHRC 1521, 1530 (Aug. 1990); see also Big Laurel Mining Co. , 37 FMSHRC 1997 (Sept. 2015) (finding that civil penalty proceedings by the Secretary fall within the 11 U.S.C. § 362(b)(4) exemption from the bankruptcy code’s automatic stay provision).

[3] Georges
Colliers, Inc. ,
23 FMSHRC 822, 825 (Aug. 2001); see also Green Coal Co. , 18 FMSHRC 1594 (Sept. 1996) (finding that bankruptcy does not justify failure to timely contest penalty, but suggesting it may be relevant to penalty amount).