Cyprus-Plateau Mining Corporation

Plain-English summary

Cyprus-Plateau Mining Corporation challenged penalty proposals calculated under the Secretary's interim excessive-history program, which increased penalties based on prior violations. The Commission held that it had jurisdiction to review the program and that the program was an invalid substantive rule because it exceeded the court's interim mandate, had not gone through notice-and-comment rulemaking, and conflicted with the existing Part 100 penalty regulations. It affirmed the judge's decision and remanded the proposed penalties for recalculation under Part 100 without using the excessive-history provisions. The decision states that the Commission did not reach the separate question of whether the program operated retroactively.

Decision snapshot

• Governing provisions: 30 C.F.R. §§ 100.3, 100.4, and 100.5(h); 30 U.S.C. § 815(d)
• Outcome: The judge's decision was affirmed and the proposed penalties were remanded for recalculation under Part 100 without the excessive-history provisions.
• Key point: A binding penalty program cannot be applied as a substantive rule without required notice-and-comment procedures.

Full text (FMSHRC public release)

CCASE:
MSHA V. CYPRUS-PLATEAU MINING
DDATE:
19920528
TTEXT:
May 28, 1992
SECRETARY OF LABOR, Docket Nos. WEST 91-44
MINE SAFETY AND HEALTH WEST 91-45
ADMINISTRATION (MSHA) WEST 91-46
WEST 91-91
v. WEST 91-118

CYPRUS-PLATEAU MINING CORPORATION

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 Cyprus-Plateau Mining Corporation ("Cyprus"). 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 , Nos. SE 90-125, etc.;
Zeigler Coal Co., 14 FMSHRC , No. LAKE 91-2; Texas Utilities Mining Co.,
14 FMSHRC , No. CENT 91-26; Utah Power & Light Co., Mining Div., 14
FMSHRC , Nos. WEST 90-320, etc.; and Hobet Mining, Inc., 14 FMSHRC ,
No. WEVA 91-65.

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~703
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 three of the seven proceedings.
In the present case, Commission Administrative Law Judge John J. Morris
granted the motion for remand filed by Cyprus. 13 FMSHRC 719 (April 1991)
(ALJ). Relying on this Commission's decision in Youghiogheny & Ohio Coal
Company, 9 FMSHRC 673, 679 (April 1987)("Y&O"), the judge concluded that
the
Commission has jurisdiction to consider whether the Secretary acted outside
the Part 100 regulations when proposing penalties in this case. 13 FMSHRC at

726. The judge then determined that the PPL had been invalidly implemented
     and, further, that it had an impermissibly retroactive effect. 13 FMSHRC at
     725-27. Accordingly, he remanded the proposed civil penalties to the
     Secretary for recalculation without reference to the PPL.
     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
     issued in contravention of the APA. Accordingly, we affirm Judge Morris'
     decision herein 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. 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 15 citations to Cyprus alleging significant and substantial ("S&S")
     violations of mandatory safety or health standards and three citations
     alleging non-S&S violations between April 23, 1990, and September 4,
     1990.(Footnote 3) 13 FMSHRC at 724-25. The Secretary then filed penalty
     assessment petitions for the citations calculating the proposed penalties
     according to the

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3 The S&S terminology is taken from section 104(d) of the Act, which
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).
~704
provisions of the PPL and including, as part of Cyprus' history, single
penalty and other violations for the previous two years. The penalty
proposals for the citations alleging S&S violations were derived from the
regular penalty formula in 30 C.F.R. § 100.3, with a 20% increase in that
amount for excessive history. The penalty proposals for the citations
alleging non-S&S violations were calculated in accordance with the formula in
section 100.3, rather than in accordance with the single penalty formula in 30
C.F.R. § 100.4, based upon an alleged excessive history of violations.
Cyprus objected to MSHA's use of the PPL in calculating the proposed
penalties and filed with the judge a "Motion to Strike or, in the Alternate to
Remand" to the Secretary for recalculation of the proposed penalties. Judge
Morris denied Cyprus' motion to strike because he determined that an order
"striking allegations" would not reach the crux of the issues presented in the
case and, instead, granted Cyprus' motion to remand. 13 FMSHRC at 728.
The judge reached this conclusion based on his interpretation of Y&O to
afford the Commission subject matter jurisdiction over the case. 13 FMSHRC at

726. In considering the validity of MSHA's penalty assessments, the judge
     first concluded that the PPL exceeded the D.C. Circuit's interim mandate in
     Coal Employment Project I. 13 FMSHRC at 725. The judge also concluded that
     the PPL was fatally defective under the APA in that the Secretary was required
     to undertake notice-and-comment procedures for its proper issuance. 13
     FMSHRC
     at 726-27. Finally, the judge found the excessive history provisions of the
     PPL to be impermissibly retroactive. 13 FMSHRC at 727. The judge explained
     that some of the citations for which disputed penalties were proposed had been
     issued prior to the PPL's effective date. Id. He stated that the "PPL adds
     considerably to the detriment an operator unknowingly incurred when it chose
     not to contest earlier single penalty assessments and other violations." 13
     FMSHRC at 727. The judge noted that the Supreme Court had held in Bowen v.
     Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988), that statutes and
     administrative rules cannot be construed to have a retroactive effect unless
     their language requires such a result. Id. The judge concluded that nothing
     in the Mine Act or Coal Employment Project I permitted the retroactive
     imposition of the disputed penalties. Id.
     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

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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, however, 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
~705
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 also 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.
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
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.
On the basis of our decision in Drummond I, we affirm Judge Morris'

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conclusion that the Commission has jurisdiction to review the validity of the
PPL in the context of these consolidated civil penalty proceedings. We also
affirm the judge's holding 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
~706
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 affirm the judge's holding here that, by requiring
consideration of an operator's S&S history and by imposing special history
assessments, the PPL exceeds the scope of the Court's interim mandate in Coal
Employment Project I.
In Drummond I, we 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
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.
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

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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.
In the present case, Cyprus argued that the excessive history provisions
of the PPL were improperly applied retroactively because nine of the eighteen
citations in question were issued before the PPL's May 29, 1990, effective
date, and because the history of violations includes violations that occurred
before issuance of the PPL. As noted, Judge Morris found that the PPL had
improper retroactive effect. 13 FMSHRC at 727.
In Drummond I, we noted the Supreme Court's admonition in Bowen that
retroactivity is not favored in the law. 14 FMSHRC at , slip. op. at 31-

32. We observed that the PPL considers violations that occurred before the
    issuance of the PPL and may include some that an operator chose not to
    challenge because the violations would not be considered as part of its
    history. 14 FMSHRC at , slip. op. at 32. We did not resolve whether the
    PPL is impermissibly retroactive, but expressed concern that justification for
    the retroactive nature of the PPL's excessive history procedures is not
    readily apparent. Id. We express that concern here as well, although, as in
    Drummond I, we do not reach the issue.
    ~707
    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 Cyprus 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 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 decision. The proposed
    penalties in this matter 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