Utah Power and Light Company

Plain-English summary

Utah Power and Light challenged civil penalty proposals calculated under the Secretary's excessive-history program, which added increases based on prior violations. The Commission held that the program was an invalid substantive rule because it had not gone through notice-and-comment rulemaking and conflicted with the existing penalty regulations in 30 C.F.R. Part 100. It affirmed that the Commission had jurisdiction, reversed the rest of the judge's order, and remanded the proposed penalties for recalculation under the existing Part 100 rules without using the excessive-history provisions. The Secretary remained required to follow the D.C. Circuit's interim mandates discussed in the decision.

Decision snapshot

• Governing provisions: 30 C.F.R. §§ 100.3, 100.4, and 100.5(h); 30 U.S.C. § 815(d)
• Outcome: The excessive-history penalty proposals were remanded for recalculation under Part 100 without the challenged provisions.
• Key point: An agency cannot apply a binding penalty formula as a substantive rule without required notice-and-comment procedures.

Full text (FMSHRC public release)

CCASE:
MSHA V. UTAH POWER & LIGHT
DDATE:
19920428
TTEXT:
May 28, 1992
SECRETARY OF LABOR, Docket Nos. WEST 90-320
MINE SAFETY AND HEALTH WEST 90-321
ADMINISTRATION (MSHA) WEST 90-322
WEST 90-323
v. WEST 90-324

UTAH POWER AND LIGHT COMPANY,
MINING DIVISION

BEFORE: Backley, Doyle, Holen and Nelson, Commissioners(Footnote 1)
DECISION
BY THE COMMISSION:
This consolidated civil penalty proceeding arising under the Federal
Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (1988)("Mine Act"
or "Act"), involves the validity of the Secretary of Labor's interim
"excessive history" program as applied to the proposal of civil penalties
under the Mine Act against Utah Power and Light Company, Mining Division
("UP&L"). This decision is one of seven decisions issued by the Commission
with respect to the Secretary's excessive history program.(Footnote 2)
In all seven proceedings, the mine operators filed motions with the
presiding Commission administrative law judges requesting that the proposed
penalties be remanded to the Secretary of Labor for recalculation. The
operators contended that the proposed penalties were improper because they
were not based on the Secretary's civil penalty regulations set forth at
30 C.F.R. Part 100 ("Part 100") but, instead, were computed in accordance with
the interim excessive history program set forth in the Secretary's Program
Policy Letter No. P90-III-4 (May 29, 1990)(the "PPL"), which, the operators
asserted, had been unlawfully implemented outside the notice-and-comment
process required by the Administrative Procedure Act, 5 U.S.C. § 551 et seq.
(1988)("APA"). Following hearings on the motions, the judges reached

1 Chairman Ford did not participate in the consideration or disposition of
this matter.

2 The other excessive history decisions are: Drummond Co., Inc., 14 FMSHRC
, No. SE 90-126; Drummond Co., Inc., 14 FMSHRC , No. SE 90-125, etc.;
Zeigler Coal Co., 14 FMSHRC , No. LAKE 91-2; Texas Utilities Mining Co.,
14 FMSHRC , No. CENT 91-26; Hobet Mining, Inc., 14 FMSHRC , No. WEVA
91-65; and Cyprus Plateau Mining Corp., 14 FMSHRC , Nos. WEST 91-44, etc.
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conflicting decisions as to Commission jurisdiction, the validity of the PPL
and whether the proposed civil penalties should be remanded to the Secretary.
The aggrieved parties filed petitions for interlocutory or discretionary
review seeking review of the same general issues: (A) whether the Commission
has subject matter jurisdiction to consider the validity of the PPL; (B)
whether the Secretary acted arbitrarily in proposing civil penalties on the
basis of the PPL, an issue that involves an examination of whether the PPL
exceeds the interim mandate of the United States Court of Appeals for the
District of Columbia Circuit in Coal Employment Project v. Dole, 889 F.2d 1127
(1989)("Coal Employment Project I"); and whether the PPL was adopted in
contravention of the APA's notice-and-comment requirements; and (C) whether
the excessive history provisions of the PPL are impermissibly retroactive.
The Commission granted the petitions for review and heard consolidated oral
argument in this and two other proceedings.
In the present case, Commission Administrative Law Judge Michael Lasher
denied the motion for remand filed by UP&L. 13 FMSHRC 511 (March 1991)
(ALJ).
The judge based his holding upon a determination that the PPL had been validly
implemented, and that the Secretary had not acted arbitrarily in proposing
penalties in accordance with the PPL. 13 FMSHRC at 517-19.
For the reasons fully set forth in our lead decision in Drummond Co.,
Inc., 14 FMSHRC , No. SE 90-126 ("Drummond I"), we conclude that the
Commission has jurisdiction under the Mine Act to review the validity of the
PPL in the context of these civil penalty proceedings. We conclude that the
PPL exceeded the Court's interim mandate in Coal Employment Project I and was
adopted in contravention of the APA. Accordingly, we affirm Judge Lasher's
determination that the Commission possesses jurisdiction, but reverse the
remainder of his order and remand to the Secretary for recalculation of the
civil penalty proposals.
I.
Drummond I summarizes the general legal and regulatory background common
to all seven cases, focusing on the evolution of the Secretary's excessive
history program. See 14 FMSHRC at , slip op. at 2-8. In the present
case, the Department of Labor's Mine Safety and Health Administration
("MSHA")
issued 22 citations to UP&L alleging significant and substantial ("S&S")
violations of various mandatory safety or health standards, and eight
citations alleging non-S&S violations from January through May 1990.(Footnote
3) The Secretary then filed penalty assessment petitions for the citations,
calculating the proposed penalties according to the provisions of the PPL and
including, as part of UP&L's history, single penalty and other violations
occurring during the previous two years. The penalty proposals for the 22
citations alleging S&S violations were derived from the regular penalty

3 The S&S terminology is taken from section 104(d) of the Act, which

Page 3

distinguishes as more serious in nature any violation that "could
significantly and substantially contribute to the cause and effect of a ...
mine safety or health hazard...." 30 U.S.C. § 814(d)(1).
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formula in 30 C.F.R. § 100.3, with a percentage increase in that amount for
excessive history. The penalty proposals for the eight non-S&S violations
were derived from the regular formula set forth in section 100.3, rather than
under the single penalty assessment set forth in 30 C.F.R. § 100.4, based upon
an alleged history of violations.
UP&L objected to MSHA's reliance on the provisions of the PPL in
proposing the penalties, and filed a motion with the judge to remand the
proposed penalties to the Secretary for recalculation. Judge Lasher denied
the motion. The judge rejected the Secretary's argument that the Commission
lacked jurisdiction to review UP&L's challenge. 13 FMSHRC at 513. The judge
determined that such jurisdiction attached pursuant to Youghiogheny & Ohio
Coal Company, 9 FMSHRC 673, 679-80 (April 1987)("Y&O"), in which the
Commission held that, in certain circumstances, it could require the Secretary
to repropose penalties in a manner consistent with the Part 100 regulations.
13 FMSHRC at 514.
The judge concluded, however, that, in this case, the Secretary's
proposal of penalties according to the PPL was not arbitrary within the
meaning of Y&O. Id. The judge stated:
There is no reason to conclude that MSHA's promulgation
and application of the PPL was instigated by
any consideration other than the [D.C.] Circuit
Court's mandate [in Coal Employment Project I]. The
increases in UPL's 30 assessments here result from the
Court's instructions to MSHA.
13 FMSHRC at 516. (emphasis in original). The judge accepted the Secretary's
argument that anomalous results would obtain if only mines with excessive
histories of non-S&S violations received higher civil penalties, while mines
with excessive histories of S&S violations did not receive higher penalties.
13 FMSHRC at 517. The judge further found the Secretary's conduct consistent
with the Court's general concern in Coal Employment Project I that proper
weight must be given to an operator's history of violations, and that civil
penalties serve a deterrent purpose. Id.
The judge rejected UP&L's argument that the special history assessments
did not fall within the special penalty assessment provisions of 30 C.F.R.
§ 100.5. 13 FMSHRC at 518. He determined that, as provided by section 100.5
the Secretary had elected to waive the regular assessment formula of section
100.3 and the single penalty assessment formula of section 100.4, and that the
violations for which the disputed penalties were proposed fell within the
category described in section 100.5(h) as "other unique aggravating
circumstances." 13 FMSHRC at 518-19.
Finally, the judge concluded that, even assuming that the notice-andcomment

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provisions of the APA applied to the PPL, the PPL fell within the
"good cause exception" of section 553(b)(3)(B) of the APA. The judge found
good cause for the Secretary not to follow notice-and-comment procedures
because the Secretary was attempting to fulfill the D.C. Circuit's mandate
when she issued the PPL. 13 FMSHRC at 519.
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II.
The Secretary's principal contention is that the Commission lacks
subject matter jurisdiction to consider the operators' challenge to the PPL.
The Secretary argues that section 101(d) of the Mine Act confers exclusive
jurisdiction over the operators' challenge to her regulatory methods upon
United States Courts of Appeals. In Drummond I, we concluded that section
101(d) does not prohibit the Commission's consideration of the operators'
challenge to the PPL in these contest proceedings. 14 FMSHRC at , slip
op. at 13-16. We recognized that section 101(d) "clearly vests jurisdiction
over challenges to the validity of mandatory safety and health standards
exclusively with the United States Courts of Appeals." 14 FMSHRC at , slip
op. at 13. We observed that neither the PPL nor the Secretary's Part 100
penalty regulations are mandatory standards promulgated under section 101 of
the Mine Act. Id. The Secretary characterizes the PPL as a "non-binding"
agency pronouncement issued as an extension of her Part 100 regulatory scheme,
which was promulgated pursuant to section 508 of the Act, 30 U.S.C. § 957. In
Drummond I, we concluded that section 101(d) neither states nor implies that
its provision for exclusive judicial review extends to regulations adopted
pursuant to section 508 of the Act, or to challenges to non-binding agency
pronouncements. Id.
In Drummond I, we explained that the present proceedings are contests of
the Secretary's proposed civil penalties brought under section 105(d) of the
Act, 30 U.S.C. § 815(d). 14 FMSHRC at , slip op. at 14. In such contest
proceedings, the Secretary's less formal, "non-binding" regulatory
pronouncements would fall within the Commission's jurisdictional purview. Id.
We noted that the Mine Act expressly empowers the Commission to grant review
of "question[s] of law, policy or discretion," and to direct review sua sponte
of matters that are "contrary to ... Commission policy" or that present a
"novel question of policy...." 14 FMSHRC at , slip op. at 14-15, citing
30 U.S.C. § 823(d)(2)(A)(ii)(IV) & (B). We stated that "the reason the
Commission was created by Congress and equipped with broad remedial powers
and
policy jurisdiction was to assure due process protection under the statute
and, hence, to enhance public confidence in the mine safety and health
program." 14 FMSHRC at , slip op. at 15 (citation omitted). We pointed
out that our analysis of the Commission's jurisdiction in such penalty
proceedings accords with Bituminous Coal Operators' Ass'n. Inc. v. Marshall,
82 F.R.D. 350 (D.D.C. 1979), the one extensive judicial discussion of this
issue to date. 14 FMSHRC at , slip op. at 15-16.

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On the basis of our decision in Drummond I, we hold that the Commission
has subject matter jurisdiction to review the validity of the PPL in the
context of this consolidated civil penalty proceeding. In his order, Judge
Lasher noted that the D.C. Circuit has retained jurisdiction over the
Secretary's compliance with its remand directives in the Coal Employment
Project case. 13 FMSHRC at 515. In Drummond I, we stated:
Our decisions in these seven excessive history cases
do not purport to, nor, in our opinion, do they
intrude upon the Court's jurisdiction in the Coal
Employment Project case. These cases have been
~713
instituted as civil penalty proceedings within the
Commission's delineated statutory authority....
14 FMSHRC at , slip op. at 12 n. 10. We consider only whether the
proposed penalties in these civil penalty proceedings were inconsistent with,
or a departure from, the existing Part 100 regulations and, therefore,
constituted arbitrary enforcement action within the meaning of Y&O.
The Secretary additionally contends that our decision in Y&O does not
reach the issue presented in these cases. In Y&O the Commission held that, in
certain circumstances, the Commission may require the Secretary to repropose
her penalties in a manner consistent with the Part 100 penalty regulations.
9 FMSHRC at 679-80. In the present cases, the mine operators are asserting
that the Secretary has failed to operate within, and to abide by, those
regulations. In Drummond I, we agreed with the operators and the judge that a
failure by the Secretary to comply with Part 100, by reliance upon an invalid
PPL, would be within the scope of Y&O. 14 FMSHRC at , slip op. at 17. We
accordingly affirm the judge's holding here that our decision in Y&O is
applicable to the present case.
The Secretary maintains that the PPL was issued to comply with the
Court's order in Coal Employment Project I as well as to address a concern of
the Department's Inspector General that repeat violations receive a higher
penalty assessment. As discussed in Drummond I, the Court's interim mandate
required the Secretary to consider an operator's history of non-S&S violations
in assessing single penalties and in assessing regular penalties for S&S
violations. 14 FMSHRC at , slip op. at 19. The Secretary's PPL, however,
takes account of S&S violations as well as non-S&S violations when determining
whether the operator's history is "excessive." In Drummond I, we concluded
that the PPL goes beyond the Court's interim mandate because it requires
consideration of an operator's history of S&S as well as non-S&S violations
and because it establishes a new schedule of penalties based on that history.
14 FMSHRC at , slip op. at 19-20. We determined that the PPL addresses not
only the Court's immediate, interim concerns, but also broader concerns
including those that the Court ordered the Secretary to address through
notice-and-comment rulemaking. 14 FMSHRC at , slip op. at 19.
Accordingly, we reverse the judge's conclusion in this case that the Court's

Page 6

directive to the Secretary in Coal Employment Project I validated the
Secretary's proposal of penalties against UP&L in accordance with the PPL's
excessive history provisions.
In Drummond I, we also rejected the Secretary's attempt to justify the
PPL under any of the APA's exceptions to notice-and-comment rulemaking. 14
FMSHRC at , slip op. at 21-30. We held that the PPL is a binding norm of
present effect and that it constrains the Secretary's discretion and infringes
upon substantial private interests. Id. We concluded that the PPL is not an
interpretative rule, general statement of policy, or a rule of agency
organization, procedure or practice. 14 FMSHRC at , slip op. at 24-28. We
also determined that the PPL cannot be justified on the basis of the good
cause exception of the APA. 14 FMSHRC at , slip op. at 29. Accordingly,
we affirmed the judge's holding that the Secretary was required to promulgate
the PPL through notice-and-comment rulemaking and concluded that the PPL, as
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an invalidly issued substantive rule, can be accorded no legal weight or
effect in these proceedings. 14 FMSHRC at , slip op. at 30. We also
rejected the Secretary's contention that penalty proposals under the PPL fall
within the special assessment provisions of section 100.5(h). 14 FMSHRC
at , slip op. at 29-30. Consequently, we reverse the judge's conclusions
that the PPL may be justified by application of the APA's good cause exception
and that the enforcement actions taken by the Secretary were a valid form of
special assessment under section 100.5. In Drummond I, we concluded that the
"PPL creates a rigid formula for the proposed assessment of all excessive
history cases." 14 FMSHRC at , slip op. at 30. Accordingly, we held that
the "PPL is not a valid form of special assessment under existing regulations,
and the Secretary's interpretation of section 100.5 to that effect is
unreasonable." Id. (citation omitted).
In Drummond I, we further concluded that the civil penalties at issue
were inconsistent with the existing Part 100 regulations and constituted
arbitrary enforcement action. 14 FMSHRC at , slip op. at 31. We remanded
the invalidly proposed penalties to the Secretary for recalculation pursuant
to the Part 100 regulations, in accordance with the Commission's decision in
Y&O. Id. We concluded that such a remand qualified as "other appropriate
relief" under 30 U.S.C. § 815(d). Id.
Finally, given our other dispositions in Drummond I, we did not resolve
retroactivity issues raised by the operators. However, we noted the
retroactive nature of the PPL's excessive history procedures and signalled our
concern. 14 FMSHRC at , slip op. at 32.
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For the reasons set forth in Drummond I, we conclude that the PPL, as an
invalidly issued substantive rule, can be accorded no legal effect. The
penalties proposed against UP&L pursuant to the PPL conflict with the Part 100
regulatory scheme and constitute arbitrary agency action. Based on section
105(d) of the Mine Act and in consideration of the Commission's decision in

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Y&O, we conclude that these proposed penalties should be remanded to the
Secretary for recomputation according to the Part 100 regulations and the
Court's interim mandate as explained in Drummond I.
III.
For the foregoing reasons, we affirm the judge's determination that the
Commission possesses jurisdiction in this matter, but reverse the remainder of
his order. The proposed penalties are remanded to the Secretary for
recalculation in accordance with the existing Part 100 regulations without
reference to or use of the PPL's "excessive history" provisions. The
Secretary remains obligated to comply with the D.C. Circuit's Coal Employment
Project mandates as discussed in Drummond I.
Richard V. Backley, Commissioner
Joyce A. Doyle, Commissioner
Arlene Holen, Commissioner
L. Clair Nelson, Commissioner