Secretary of Labor v. Aracoma Coal Company, Inc.

Plain-English summary

Aracoma Coal agreed to accept 1,281 citations and orders and pay $1.7 million in civil penalties, down from $2.8 million proposed, after an Alma No. 1 Mine fire killed two miners. The Commission directed review only of provisions allowing the Alma and Hernshaw mines to use voluntary plans to reduce their S&S citation rates while MSHA withheld potential-pattern warning letters. Commissioners Duffy and Young found no abuse of discretion, and Chairman Jordan concluded that the agreement temporarily removed the mines from the normal pattern-of-violations process rather than permanently insulating them from later screening changes. Their votes affirmed the settlement. Commissioner Cohen dissented because he believed the 125-percent-of-national-average screening threshold conflicted with the broader factors required by MSHA's pattern-of-violations regulation.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 814(e), 820(k), and 823(d)(2)(B); 30 C.F.R. §§ 104.2 through 104.5
• Outcome: The Commission affirmed approval of the settlement, including the $1.7 million civil penalty and temporary voluntary S&S-reduction plans.
• Key point: A settlement may temporarily use an S&S-rate reduction plan within MSHA's pattern-of-violations process when it does not permanently shield the mines from ordinary future screening.

Full text (FMSHRC public release)

Federal Mine Safety and Health Review Commission

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

601 NEW JERSEY AVENUE, NW

SUITE 9500

WASHINGTON, DC 20001

December 16, 2010

SECRETARY OF LABOR,

MINE SAFETY AND HEALTH

ADMINISTRATION (MSHA)

v.

ARACOMA COAL COMPANY, INC.

:

:

:

:

:

:

:

Docket No. WEVA 2006-654, et al.

BEFORE: Jordan, Chairman; Duffy, Young, and Cohen Commissioners

AMENDED DECISION

This matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C.
§ 801 et seq. (2006) (“Mine Act”). On December 23, 2008, Chief Administrative Law Judge
Robert Lesnick approved a settlement agreement between the Secretary of Labor and Aracoma
Coal Company (“Aracoma”), which disposed of 102 penalty dockets that encompassed 1,281
citations and orders. 30 FMSHRC 1160 (Dec. 2008) (ALJ).

Some of the citations and orders
resulted from an investigation by the Department of Labor’s Mine Safety and Health
Administration (“MSHA”) into conditions at Aracoma’s Alma No. 1 Mine and the Hernshaw
Mine, following a fire at the Alma mine that resulted in two fatalities on January 19, 2006. Id.
at 1167. Others were alleged violations occurring at the two mines after the fire.

On January 22, 2009, pursuant to section 113(d)(2)(B) of the Mine Act, 30 U.S.C.
§ 823(d)(2)(B), Chairman Jordan and Commissioner Cohen voted to order sua sponte review of
the judge’s decision on the grounds that the decision may be contrary to law and presented a
novel question of policy. The Commission direction for review was limited to “the question of
whether the provisions of the settlement agreement . . . relating to the pattern of violations
procedures are consistent with the provisions and objectives of section 104(e) of the Mine Act,
30 U.S.C. § 814(e).” After receiving permission from the Commission, the Secretary and
Aracoma filed a joint brief on the question.

Having considered the judge’s decision and the settlement agreement in light of the joint
brief, Chairman Jordan and Commissioners Duffy and Young affirm the judge’s decision.
Commissioner Cohen would vacate and remand the judge’s decision approving the settlement.
Separate opinions of Commissioners follow.

Commissioners Duffy and Young, affirming the judge’s decision:

We did not join in ordering sua sponte review because nothing at that time led us to
believe that the judge had abused his discretion in approving the settlement. Nothing we have
seen since disturbs that conclusion, so we affirm his decision.

Michael F. Duffy, Commissioner

Michael G. Young, Commissioner

Chairman Jordan, affirming the judge’s decision:

I.         Introduction

In this civil penalty proceeding arising under the Federal Mine Safety and Health Act of
1977, 30 U.S.C. § 801 et seq. (2006) (“Mine Act”), the Commission granted review on its own
motion of a decision approving a settlement agreement between the Secretary of Labor and
Aracoma Coal Company, Inc. (“Aracoma”). In his decision, Chief Judge Robert Lesnick
approved the settlement of proceedings consisting of 102 penalty dockets and 1,281 citations and
orders. 30 FMSHRC 1160 (Dec. 2008) (ALJ). Twenty-five of these violations were designated
as contributing to the January 19, 2006 fire at Aracoma’s Alma Mine No. 1 that resulted in the
deaths of two miners. Id. at 1167. The proposed penalties totaled $2,803,293. In the settlement
agreement, Aracoma agreed to accept all the violations as written and to pay a penalty of
$1,700,000. Id.

In addition to the civil penalties, Aracoma agreed with the United States Attorney for the
Southern District of West Virginia to enter a guilty plea to a ten-count information related to the
accident, and to pay a criminal fine of $2,500,000. Id. at 1169. The court subsequently accepted
this plea agreement. Letter of April 21, 2009, from Jerald S. Feingold, Attorney, United States
Department of Labor.

As part of the settlement, the parties also reached an agreement, discussed in detail below,
providing Aracoma with an opportunity to voluntarily provide the Department of Labor’s Mine
Safety and Health Administration (“MSHA”) with plans to reduce the rate of significant and
substantial (“S&S”) violations at both its Alma No.1 Mine and its Hernshaw Mine. Pursuant to
the agreement, each mine could remain on the plan as long as it continued to maintain the goals
in its plan. MSHA would forego issuing a warning letter that would normally begin the process
of designating a mine as exhibiting a “pattern of violations” (or “POV”), pursuant to 30 C.F.R.
§ 104.4, 30 FMSHRC at 1168, which as explained below, has potentially severe consequences
for an operator.

It is this latter portion of the settlement that is the focus of my review. In the Direction
for Review, the Commission limited its consideration to “the question of whether the provisions
in the judge’s settlement order relating to the pattern of violations procedures are consistent with
the provisions and objectives of section 104(e) of the Mine Act, 30 U.S.C. § 814(e).” Direction
for Review at 8.

II. The Fire at the Alma No. 1 Mine

On January 19, 2006, a fire occurred at the Alma Mine No. 1 which resulted in the deaths
of two miners. Jt. Br. at 2. The fire resulted from frictional heating that occurred when the
longwall belt became misaligned in the 9 Headgate longwall belt takeup storage unit. Order
No. 7435539. This frictional heating ignited accumulations of combustible materials which
“were present in the form of grease, oil, coal dust, float coal dust, coal fines and loose coal
spillage at numerous locations along the approximate 2,000 feet (sic) length of the 9 Headgate
longwall belt conveyor.” Order No. 7435532. “[T]he need for additional cleaning and rock
dusting” along the 9 Headgate longwall belt conveyor was noted in the mine record books but not
corrected “for 38 of the 56 examinations” between January 2, 2006 and January 19, 2006.
Order No. 7435527. Once ignited, the accumulations “quickly grew into the strong flaming fire
needed to ignite the flame resistant belt.” Order No. 7435532. The resulting belt fire generated
“copious quantities of hot, dense, toxic smoke.” Id.

Immediately upon discovery of the fire, the belt examiner notified the responsible person
designated by the operator for that shift, but that individual failed to initiate an immediate mine
evacuation. Order No. 7435538. The Atmospheric Monitoring System (“AMS”) should have
provided a visual and audible signal to all affected working sections when the carbon monoxide
concentration reached alarm level. However, the miners at 2 Section did not receive an
automatic notification because “[n]o carbon monoxide alarm unit was installed at a location
where it could be seen or heard by miners on 2 Section.” Order No. 7435523. Adequate visual
examinations of the alarms and sensors, as required by 30 C.F.R. § 75.351(n)(1) would have
revealed the lack of an alarm unit on 2 Section, as would have adequate training in the
installation of the system components. Order Nos. 7435521 and 7435548. There was an AMS
operator who was on duty when the mine fire occurred, but that person “did not promptly notify
the appropriate personnel that an alarm signal had been generated.” Order No. 7435529.

During the preceding month, “[t]wo other fires occurred at this mine.” Order
No. 7435524. Alarm signals were activated in the dispatcher’s office on the surface but “[i]n
both cases, the miners in the affected areas of the mine were not notified of the alarms and were
not withdrawn to a safe location.” Order No. 7435524.

When the fire occurred on January 19, 2006, a breach in the separation between the belt
and escapeway “allowed smoke and carbon monoxide gas to inundate the primary escapeway
used by the miners during the evacuation from 2 Section.” Order No. 7435530. The breach
existed because “prior to November 2005 . . . one or more of the permanent stoppings that
provided separation between the No. 7 Belt conveyor entry and the primary escapeway in the
North East Mains were (sic) removed.” Id. This condition should have been detected during
preshift exams. Order No. 7435108. An “inaccurate map” also “resulted in the operator not
correcting the lack of separation between the primary escapeway and the belt entry.” Order
No. 7435537.

Efforts to fight the fire were hampered by several factors. The fire-fighting equipment
was inadequate in that “[t]he threads of the female coupling of the fire hose were not compatible
with the threads of the male pipe of the fire hose outlet valve.” Order No. 7435534. The
pertinent water supply line “was not capable of delivering 50 gallons of water per minute at a
nozzle pressure of 50 pounds per square inch.” Order No. 7435533. According to an eye
witness, “while attempting to fight the fire, the fire hose outlet valve located near the belt
conveyor takeup storage unit was opened and no water was produced.” Id. In addition, “[t]he
mine operator failed to install the water sprinkler system in accordance with 30 C.F.R.
§ 75.1101-8(a).” Order No. 7435535.

MSHA issued 25 citations and orders to Aracoma as a result of the fire and resulting
deaths of miners Don Bragg and Ellery Hatfield. All were denoted as significant and
substantial.

Of these, 21 were the result of “reckless disregard” which is defined in 30 C.F.R.
§ 100.3(d) as “conduct which exhibits the absence of the slightest degree of care.” The
remaining four orders were characterized by MSHA as resulting from “high negligence.”
MSHA assessed each of the 25 contributory violations the then-maximum penalty of $60,000.

Aracoma contested the assessments for these 25 citations and orders. In addition to these
proposed assessments, Aracoma contested 1,256 other proposed assessments. Indeed, it appears
that Aracoma contested every penalty for a citation or order that MSHA issued between January
19, 2006, and May 6, 2008, the inclusive dates of the citations and orders in this case. The
citations and orders appended to the In Camera Joint Motion to Approve Settlement
(“Settlement”) include 298 proposed assessments for $60 each and 162 proposed settlements for
$100 each.

III.       Overview of Commission Review of ALJ Decisions on Settlement Agreements

The Commission has recognized that oversight of proposed settlements of contested cases
is an important aspect of its adjudicative responsibilities under the Mine Act. Birchfield Mining
Co., 11 FMSHRC 1428, 1430 (Aug. 1989). Section 110(k) of the Mine Act, 30 U.S.C. § 821(k),
requires 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); see also Co-op Mining Co., 2 FMSHRC 3475,
3475-76 (Dec. 1980) (rejecting judge’s approval of a settlement after directing case for review
sua sponte). Our own procedural rules also require that all settlements be approved by the
Commission. Commission Procedural Rule 31, 29 C.F.R. § 2700.31.

The Commission has acknowledged that, although judges have wide discretion in their
oversight of the settlement process, “it is not unlimited and at least some of its outer boundaries
are clear.” Knox, 3 FMSHRC at 2479. As it has declared in Knox, if a judge’s approval or
rejection of a settlement is fully supported by the record, consistent with the statutory penalty
criteria and not otherwise improper, the Commission will not disturb it. Id. at 2480.

However, the Commission has at the same time cautioned that in reviewing such cases,
“abuses of discretion or plain errors are not immune from reversal.” Id. We have held that abuse
of discretion may be found when “there is no evidence to support the decision or if the decision
is based on an improper understanding of the law.” Akzo Nobel Salt, Inc., 19 FMSHRC 1254,
1258 n.3 (July 1997). Thus, “the abuse of discretion standard cannot be used as a rubber stamp
to approve all settlements.” United States v. City of Miami, 614 F.2d 1322, 1335 (5th Cir. 1980).

As stated above, the Commission’s review of the judge’s decision approving settlement
in this case is limited to the portion of the agreement regarding how notification of potential
pattern of violations would occur. In examining the non-financial aspect of the settlement, I take
into account the principle set forth in the separate opinion issued by Commissioner Marks and
me in Madison Branch Management, 17 FMSHRC 859, 867-68 (June 1995), that “[t]he
‘affirmative duty’ that section 110(k) places on the Commission and its judges to ‘oversee
settlements,’ . . . necessarily requires the judge to accord due consideration to the entirety of the
proposed settlement package, including both its monetary and non-monetary aspects.” Thus, the
judge properly took the POV section of the settlement into account in issuing his decision and
consequently, the Commission has the authority to review the POV issue in the parties’
settlement agreement.

IV.      MSHA Procedures for Enforcement of Section 104(e) of the Mine Act

Before proceeding with a discussion of the parties’ agreement relating to the POV
process, it is helpful to review the legal authority on which the implementation of this heretofore
seldom-used provision of the Mine Act rests.

Section 104(e) of the Mine Act states in relevant
part:

(1) If an operator has a pattern of violations of mandatory
health or safety standards in the coal or other mine which are of
such nature as could have significantly and substantially
contributed to the cause and effect of coal or other mine health or
safety hazards, he shall be given written notice that such pattern
exists. If, upon any inspection within 90 days after the issuance of
such notice, an authorized representative of the Secretary finds any
violation of a mandatory health or safety standard which could
significantly and substantially contribute to the cause and effect of
a coal or other mine safety or health hazard, the authorized
representative shall issue an order requiring the operator to cause
all persons in the area affected by such violation, except those
persons referred to in subsection (c), to be withdrawn from, and to
be prohibited from entering, such area until an authorized
representative of the Secretary determines that such violation has
been abated.

(2) If a withdrawal order with respect to any area in a coal
or other mine has been issued pursuant to paragraph (1), a
withdrawal order shall be issued by an authorized representative of
the Secretary who finds upon any subsequent inspection the
existence in such mine of any violation of a mandatory health or
safety standard which could significantly and substantially
contribute to the cause and effect of a coal or other mine health or
safety hazard. The withdrawal order shall remain in effect until an
authorized representative of the Secretary determines that such
violation has been abated.

(3) If, upon an inspection of the entire coal or other mine,
an authorized representative of the Secretary finds no violations of
mandatory health or safety standards that could significantly and
substantially contribute to the cause and effect of a coal or other
mine health and safety hazard, the pattern of violations that
resulted in the issuance of a notice under paragraph (1) shall be
deemed to be terminated and the provisions of paragraphs (1) and
(2) shall no longer apply. However, if as a result of subsequent
violations, the operator reestablishes a pattern of violations,
paragraphs (1) and (2) shall again be applicable to such operator.

30 U.S.C. § 814(e).

In enacting this provision, Congress explicitly recognized why such a sanction was
necessary:

The need for such a provision was forcefully demonstrated during
the investigation by the Subcommittee on Labor of the Scotia mine
disaster which occurred in March 1976 in Eastern Kentucky. That
investigation showed that the Scotia mine, as well as other mines,
had an inspection history of recurrent violations, some of which
were tragically related to the disasters, which the existing
enforcement scheme was unable to address. The Committee’s
intention is to provide an effective enforcement tool to protect
miners when the operator demonstrates his disregard for the health
and safety of miners through an established pattern of violations.

. . . .

. . . . The Committee believes that this additional sequence
and closure sanction is necessary to deal with continuing violations
of the Act's standards. The Committee views the [pattern of
violations] notice as indicating to both the mine operator and the
Secretary that there exists at that mine a serious safety and health
management problem, one which permits continued violations of
safety and health standards. The existence of such a pattern, should
signal to both the operator and the Secretary that there is a need to
restore the mine to effective safe and healthful conditions and that
the mere abatement of violations as they are cited is insufficient.
S. Rep. No. 95-181, at 32-33 (1977), reprinted in Senate Subcomm. On Labor, Comm. on
Human Res., Legislative History of the Federal Mine Safety and Health Act of 1977, at 620-21
(1978).

Despite the insistence of Congress on the need for this enforcement mechanism,
implementing regulations were not promulgated until 1990. See 55 Fed. Reg. 31,128 (July 31,
1990). The regulations describe MSHA’s procedures for determining whether an operator has
demonstrated a POV. 30 C.F.R. § 104.1 et seq. They establish a four-step process to designate a
POV and to terminate POV status: (1) initial screening (section 104.2); (2) identification by
MSHA of mines with a potential POV by applying the regulatory criteria (section 104.3);
(3) designation of POV status and issuance of the designation to the operator (section 104.4); and
(4) termination of POV status (section 104.5).

The first step includes an initial annual screening (which takes into account, among other
factors, the mine’s history of S&S violations). 30 C.F.R. § 104.2. If the initial screening
indicates that the operator “may habitually allow the recurrence of” S&S violations, the second
step, MSHA’s identification of mines with a potential POV, is triggered. 30 C.F.R. § 104.3.
The criteria used to make this determination include (1) a history of repeated S&S violations of a
particular standard, (2) a history of repeated S&S violations of standards related to the same
hazard, or (3) a history of repeated S&S violations caused by unwarrantable failure to comply.
30 C.F.R. § 104.3. By use of the word “or,” MSHA indicated that any one of these three
circumstances would trigger the next step. Significantly, pursuant to section 104.3(b), only
citations and orders which have become final shall be used to identify mines with a potential
POV.

Next, pursuant to section 104.4(a), if a potential pattern of violations is identified, MSHA
is to notify the operator in writing. The operator then has a variety of ways to respond, including
instituting a program to avoid repeated S&S violations at the mine. 30 C.F.R. § 104.4(a)(4).
However, if the district manager continues to believe that a potential POV exists at the mine, he
or she is to send a report to the appropriate MSHA Administrator, with a copy to the operator.
30 C.F.R. § 104.4(b). The operator has an opportunity to respond to the report. After all of these
procedures, the MSHA Administrator decides whether to issue a notice of POV, constituting the
third step in the process. 30 C.F.R. § 104.4(c). Finally, the regulations provide for the
termination of POV status. 30 C.F.R. § 104.5.

Even after these regulations were in place, however, for many years no enforcement
action was taken by MSHA under section 104(e). U.S. Steel Mining Co., 18 FMSHRC 862, 872
(June 1996) (Comm’r Marks, concurring). In fact, the agency only recently has begun to exercise
its authority under section 104(e) of the Act. Rockhouse, 30 FMSHRC at 1129.

MSHA issued a screening criteria and scoring model to determine if a potential POV
exists, and revised it in 2009. MSHA, Pattern of Violations Screening Criteria and Scoring
Model – 2009, previously available at http://www.msha.gov/POV/POVScreeningCriteria.pdf.
This document focuses on the initial screening criteria under 30 C.F.R. § 104.2, and lists a
number of initial screening factors. It lists a series of eight specific criteria,

five of which are
triggered by the issuance of citations or orders, while the other three are triggered by citations or
orders becoming final orders of the Commission. Significantly, the initial screening criteria
provides that unless a mine meets all of the criteria, it will not be considered under the next step
of the process, the pattern of violations criteria set forth in 30 C.F.R. § 104.3. One of the eight
initial screening factors is that “[t]he mines’ (sic) rate of S&S Citations/Orders issued per 100
inspection hours during the 24 month review period is equal to or greater than 125% of the
National rate of S&S Citations/Orders issued per 100 inspection hours for that mine type and
classification.” As described infra, this screening factor of 125% of the national average is at the
heart of the settlement agreement between MSHA and Aracoma in this case.

V.        The Settlement Agreement Between MSHA and Aracoma

With regard to pattern of violations, the Aracoma settlement agreement focuses entirely
on reducing the S&S violation issuance rate to 125% of the national average for underground
bituminous coal mines. (According to the agreement, the issuance rate for all underground
bituminous mines of S&S violations per 100 inspection hours during the 24 months ending
June 30, 2008, was 7.1. During the same period, the Aracoma Alma #1 Mine had an issuance
rate of 15.6, while the Hernshaw Mine had an issuance rate of 8.9). It provides that Aracoma
may submit a plan to reduce (for the Alma Mine, over two to three calendar quarters) and
maintain (for Hernshaw Mine) the rate to 125% of the national average. No other action is
required of Aracoma to avoid a POV Notice.

I granted review of the judge’s decision approving the settlement because the agreement
involved enforcement of section 104(e), the pattern of violations provision in the Mine Act that
the Secretary had not enforced against an operator to date. Although this statutory provision has
been in effect for over 30 years, the historic lack of enforcement means that both the practical
and legal implications of the Secretary’s recent decision to breathe life into this once moribund
provision are still untested.

The settlement agreement states that “[a]s long as the mine’s S&S issuance rate remains
at or below 125% of the national average for that quarter, the mine will not be considered as
exhibiting a potential pattern of violations. . . . As long as each mine continues to achieve and
maintain the goals described above, that mine will be able to remain on its S&S reduction plan
indefinitely and MSHA will forego issuing potential pattern warning letters.” Settlement at 6-7.
The “goals described above” refer to the reduction of overall S&S violations to 125% of the
national average. The language in this section suggests that MSHA is agreeing to permanently
forego issuing a POV warning letter to Aracoma as long as the mine’s S&S violation rate does
not exceed 125% of the national average.

However, the agreement also states that the reduction plan “will remain in effect only as
long as the mine remains in immediate jeopardy of receiving a potential pattern warning letter
after the plan’s adoption.” Settlement at 5 n.3. It goes on to state that upon the first POV review
in which it is determined that an Aracoma mine “is no longer in jeopardy of receiving a potential
POV warning letter because the mine does not meet the screening criteria set forth at
http://www.msha.gov/Pov/POVScreeningCriteria.pdf, that mine will no longer qualify for
participation in the voluntary S&S reduction plan described herein, and will thereafter be
evaluated, along with all other mines, under MSHA’s normal pattern of violations process.” Id.
This language suggests that the plan, with its reliance on the 125% S&S violation rate, is not
permanent, and that Aracoma will be treated just like other companies after it achieves a
violation rate of 125% of the national average. Thus, it appears that the language of the
settlement agreement is inconsistent with regard to the duration of the reduction plan.

One might ask why the duration of the reduction plan matters, since no mine can be
considered as having a potential pattern of violations if its overall S&S issuance rate is within
125% of the national average. My concern was that the Screening Criteria then published on the
internet could change in the future. MSHA could reconsider its Screening Criteria in the future,
and eliminate the 125% industry-wide norm as a sine qua non of POV consideration. In that
case, based on the language contained on page 7 of the Settlement, Aracoma might contend that
MSHA could never enforce section 104(e) of the Mine Act against it so long as its overall S&S
issuance rate was within 125% of the national average. (Indeed, MSHA recently did revise its
Screening Criteria and withdrew the criterion regarding the 125% industry-wide norm,
http://www.msha.gov/pov/povsinglesource.asp, but those revised criteria are not at issue in this
case).

The Commission now has the benefit of a joint brief from the parties.

The joint brief
does not directly address the ambiguity in the settlement agreement regarding its duration, but it
states that the agreement would “temporarily remove the Alma #1 Mine and the Hernshaw Mine
from the POV screening process and permit them to continue to operate under the voluntary S&S
reduction plan as long as the mines continued to achieve the goals set forth in the agreement or
until they were no longer in jeopardy of receiving a potential POV warning letter at the time of a
subsequent POV review by the Secretary. Thereafter, Aracoma’s mines would be treated
precisely like all other mines during a POV review.” (Jt. Br. at 4-5).

VI.      Conclusion 

Although I would have preferred more clarity on the question of the duration of the
settlement agreement, it does not appear that the parties intended to permanently insulate
Aracoma from any future changes in the screening criteria that may occur. Consequently, I find
that the judge did not abuse his discretion in approving the settlement agreement between the
parties. Therefore, I would affirm his decision.

Mary Lu Jordan, Chairman

Commissioner Cohen, dissenting:

It is a fundamental function of the Commission to ensure that the public interest is
adequately protected before a settlement is approved. Birchfield Mining Co., 11 FMSHRC 1428,
1430 (Aug. 1989). In this case, the Commission took review on its own motion to determine
whether this settlement of 1,281 citations and orders, including 24 section 104(d)(2) orders and
one section 104(a) citation resulting from the fatal fire at Aracoma’s Alma No. 1 Mine on
January 19, 2006, met that standard.

My dissent is based on the Secretary’s implementation of Section 104(e) of the Mine Act.
Section 104(e) is a provision under which Congress gave the Secretary strong powers to take
decisive action when an operator displays a “pattern of violations of mandatory health or safety
standards . . . which are of such nature as could have significantly and substantially contributed
to the cause and effect of coal or other mine health or safety hazards.” 30 U.S.C. § 814(e)(1).

At the onset, it is important to recognize that the tragic deaths of Don Bragg and Ellery
Hatfield should never have occurred. The Secretary issued 25 citations and orders for violations
which contributed to the fire and the deaths of Bragg and Hatfield. 30 FMSHRC 1160, 1167
(Dec. 2008) (ALJ). The Secretary determined that all of these citations and orders showed either
“reckless disregard” (defined in 30 C.F.R. § 100.3(d) as “conduct which exhibits the absence of
the slightest degree of care”) or “high negligence.” Aracoma has withdrawn its contests of these
citations and orders as part of the settlement agreement, In Camera Jt. Mot. to Approve
Settlement (“Settlement”) at 9-10,

and thus the Commission accepts these citations as being
accurate and true.

I.

As Chairman Jordan has described, the fire resulted from frictional heating caused by a
misaligned longwall belt. The inspector observed numerous conditions which were “indicative
of prolonged operation of the longwall belt conveyor while the belt was misaligned.” Order
No. 7435539. The frictional heating ignited accumulations of combustible material in the form
of grease, oil, coal dust, float dust, coal fines, and loose coal spillage at numerous locations along
the longwall belt conveyor. Order No. 7435532. The hazardous conditions of a misaligned belt
and accumulations of combustible material had not been identified in Aracoma’s on-shift
examinations, Order No. 7435526. Where hazardous conditions, such as the need for cleaning
and rock dusting, were recorded in mine record books, they had not been corrected. Order
No. 7435527.

The miners on the longwall section were unable to fight the fire effectively because

of a number of violations. The water supply line was not capable of delivering the required
volume of water. Indeed, when the fire hose outlet valve was opened, “no water was produced.”
Order No. 7435533. Moreover, the threads of the female coupling of the fire hose were not
compatible with the threads of the male pipe of the fire hose outlet valve. Order No. 7435534.
Additionally, the water sprinkler system was improperly installed, and failed to provide coverage
over the belt takeup storage unit where the fire began. Order No. 7435535. The water sprinkler
system, fire hydrants and fire hoses had not been properly examined and tested before the fire.
Order Nos. 7435536 and 7435522. 

Although the dispatcher was immediately notified of the fire by the mine examiner, mine
management failed to initiate and conduct an immediate evacuation despite imminent danger to
the miners. Order No. 7435538. Moreover, the Atmospheric Monitoring System (“AMS”)
operator who was on duty when the fire occurred did not promptly notify appropriate personnel
that an alarm signal had been generated. Order No. 7435529. Miners were not promptly
evacuated to a safe area in response to AMS alarm signals. Order No. 7435524.

The miners on 2 Section, where Bragg and Hatfield worked, were unaware that a fire
existed outby their location. The AMS, which was supposed to provide visual and audible
signals at all affected working sections when the carbon monoxide concentration at CO sensors
reached alarm level, failed because no carbon monoxide alarm unit had been installed at a
location where it could be seen or heard by miners on 2 Section. Order No. 7435523.

When the miners on 2 Section finally attempted to evacuate the mine, their ability to
escape was compromised by additional violations. Aracoma had removed permanent stoppings
which provided separation between the belt conveyor entry and the primary escapeway in the
North East Mains. This lack of separation “allowed smoke and carbon monoxide gas to inundate
the primary escapeway used by miners during the evacuation from 2 section.” Order
No. 7435530. Moreover, adequate escapeway drills had not been conducted as required, Order
No. 7435531, the location of personnel doors in stoppings were not clearly marked so that doors
could be easily identified to someone traveling in the escapeways, Order No. 7435109, and the
mine map did not accurately depict the location of permanent ventilation controls or the
designations of escapeways, Order No. 7435537. Preshift and weekly examinations of the entries
were inadequate in failing to identify and correct the lack of separation between the belt conveyor
entry and the primary escapeway, and the lack of a clearly marked primary escapeway and
location of personnel doors. Order Nos. 7435525, 7435110, 7435108, 6643276, and 7435528.
Because of reduced visibility caused by the thick smoke, Bragg and Hatfield were separated from
the section crew, and were unable to escape. Id.

This was not the first time that Aracoma had reacted to a fire in an improper manner.
Two fires had occurred at this mine within a month of this fire, on December 23, 2005, and
December 29, 2005, and on both occasions CO sensors had activated alarm signals in the
dispatcher’s office, but miners in affected areas were not notified of the alarms and were not
withdrawn to a safe location. On both previous occasions, MSHA had issued section 104(d)(2)
orders. MSHA determined that Aracoma’s “repeated lack of proper response to the carbon
monoxide alarm signals is an indication of an attitude of indifference” to the requirements of
response to AMS alarm signals. Order No. 7435524.

II.

Chairman Jordan’s opinion sets forth the text and legislative history of section 104(e) of
the Mine Act, the provision addressing a pattern of violations (“POV”). Slip op. at 6-8.
Chairman Jordan also notes that although Congress enacted this provision in 1977, the Secretary
did not promulgate implementing regulations until 1990. Her opinion describes the
implementing regulations set forth at 30 C.F.R. Part 104, the non-enforcement of those
regulations for many years, and the Secretary’s issuance several years ago of a Screening Criteria
and Scoring Model (hereinafter “Screening Criteria”) to determine if a POV exists. Id. at 8-9.

The purpose of the Screening Criteria appears to be to screen out all but the most
egregious mine operators from even being considered for POV designation. Thus, one of the
Screening Criteria provides:

The mines’ rate of S&S Citations/Orders issued per 100 inspection hours

during the 24 month review period is equal to or greater than 125% of

the National rate of S&S Citations/Orders issued per 100 inspection hours

for that mine type and classification.

In other words, a mine, during the 24 month review period, can not only have an S&S issuance
rate greater than the national average for such mines, but can be up to 25% worse than the
national average, and be excluded from consideration for POV, no matter what else is in the
mine’s violation or accident history.

The Screening Criteria provision that no mine can be considered for POV unless its S&S
issuance rate is at least 125% of the national average is contrary to the regulation it purports to
implement. Section 104.2 provides:

§ 104.2 Initial screening.

At least once each year, MSHA shall review the
compliance records of mines. MSHA’s review shall include an
examination of the following:

(a) The mine’s history of–

(1) Significant and substantial violations;

(2) Section 104(b) of the Act closure orders resulting from
significant and substantial violations; and

(3) Section 107(a) of the Act imminent danger orders.

(b) In addition to the compliance records listed in paragraph
(a) of this section, the following shall also be considered as part of
the initial screening:

(1) Enforcement measures, other than section 104(e) of the
Act, which have been applied at the mine.

(2) Evidence of the mine operator’s lack of good faith in
correcting the problem that results in repeated S&S violations.

(3) An accident, injury, or illness record that demonstrates a
serious safety or health management problem at the mine.

(4) Any mitigating circumstances.

(c) Only citations and orders issued after October 1, 1990,
shall be considered as part of the initial screening.

Screening criteria which prevent consideration for pattern of violations status if the operator has
an S&S issuance rate no more than 125% of the national average preclude consideration of
factors required to be considered under 30 C.F.R. § 104.2, such as a history of section 104(b)
closure orders and a history of section 107(a) imminent danger orders. It would not matter if, for
example, a mine had an egregious and dangerous history of imminent danger orders, as long as
the operator kept its S&S issuance rate within 125% of the national average. Thus, the Screening
Criteria are in conflict with 30 C.F.R. § 104.2.

In the preamble to the final rule on POV, MSHA stated that the regulations should focus
on the safety and health record of each mine rather than “strictly quantitative comparisons of
mines to industry-wide norms.” 55 Fed. Reg. 31,128, 31,129 (July 31, 1990). Significantly,
when 30 C.F.R. § 104.2 was initially published as a proposed rule, commenters – citing the need
for operators to receive adequate notice of the specific factors which would cause them to be
identified through initial screening as having a potential POV – suggested that MSHA utilize a
statistical comparison of a mine’s rate of violations with an industry-wide average, and the
agency rejected the suggestion:

A number of commenters stated that the initial screening
factors do not provide adequate notice to operators of the specific
number or combination of citations and orders which would cause
an operator to be identified through initial screening as having a
potential pattern of violations. Commenters suggested a variety of
specific statistical screening mechanisms, including comparison of
a mine's rate of violations with an industry-wide average.
Although the Agency has considered such a scheme, MSHA
believes that the initial screening criteria will allow identification
of those mines which are in a recurrent cycle of violation and
abatement with no correction of the underlying circumstances
giving rise to the violations. Additionally, the final rule is
consistent with the legislative history of section 104(e), which
stresses that a pattern of violations does not necessarily mean a
specific number of violations of any particular standard.

Id. at 31,131.

Although the preamble made clear that the POV screening criteria were not to be based
on “strictly quantitative comparisons of mines to industry-wide norms,” it appears that MSHA
did precisely that in providing that any mine within 125% of the industry average for S&S
violations will be excluded from further consideration as a mine on POV status. Thus, despite its
notice-and-comment rulemaking, MSHA has adopted a strictly quantitative sine qua non,
contrary to the language of the regulations.

III.

With respect to Aracoma’s POV status, the settlement agreement in this case focuses
entirely on whether Aracoma’s S&S issuance rate exceeds 125% of the national average. I
question the validity of the settlement agreement for that reason, and thus would find that the
judge erred in approving the settlement agreement.

The Commission has emphasized that a judge’s approval or rejection of a settlement
agreement must “be based on principled reasons.” Madison Branch Mgmt., 17 FMSHRC 859,
864 (June 1995) (quoting Knox County Stone Co., 3 FMSHRC 2478, 2480 (Nov. 1981)). Here,
the judge merely recited the terms of the section of the settlement agreement pertaining to the
POV provisions. However, the Screening Criteria, with the 125% issuance rate threshold for
POV consideration, are in contradiction of 30 C.F.R. § 104.2, which provides for consideration
of a variety of factors, and, as explained in the preamble, are not to be based on “strictly
quantitative comparisons of mines to industry-wide norms.” Clearly, a threshold of a 125% S&S
issuance rate is a quantitative comparison to an industry-wide norm. Mindful that a judge’s
abuse of discretion in approving a settlement is “not immune from reversal,” Madison Branch,
17 FMSHRC at 864, I conclude that the judge abused his discretion in approving the pattern of
violations aspect of this settlement agreement.

In voting to review the judge’s decision, I also sought to determine whether, in the
settlement agreement, the Secretary was enforcing the POV provision of the Mine Act more
leniently against Aracoma, as compared with other operators.

According to the Settlement, the
Alma Mine # 1 had a rate of 15.6 S&S citations and orders per 100 on-site inspection hours
during the baseline 24 month period ending on the last day of June 2008. Settlement at 5. The
Settlement further indicates that the National Average for All Underground Bituminous Mines
was 7.1 S&S citations and orders per 100 on-site inspection hours, so that 125% of the national
rate was 8.9 S&S citations and orders per 100 on-site inspection hours. Id. at 6. Presumably,
with an S&S issuance rate which was 220% of the national average, the Alma No.1 Mine was a
prime candidate for POV status, at least after the requisite violations had become final.

If MSHA had issued a notice of potential pattern of violations for the Alma No. 1 Mine
pursuant to 30 C.F.R. § 104.4(a), Aracoma would have had an opportunity to “[i]nstitute a
program to avoid repeated significant and substantial violations at the mine” pursuant to 30
C.F.R. § 104.4(a)(4). The record does not indicate what requirements MSHA typically imposes
on other operators in their section 104.4(a)(4) programs.

Specifically, assuming hypothetically that an operator has received a section 104.4(a)
warning letter because its section 104.3 analysis revealed a history of repeated S&S violations of
standards relating to respirable dust hazards, would MSHA require this operator to specifically
address respirable dust in its section 104.4(a)(4) program, or would MSHA be satisfied if the
operator simply reduced its overall rate of S&S violations to 125% of the national average or
less? If it is the latter, then Aracoma is not being treated differently. However, if MSHA
normally requires an operator to address specifically the problems which have been identified in
the section 104.3 analysis (e.g., respirable dust), then Aracoma is being treated differently from
other operators. One could pose similar hypothetical questions based on any of the pattern
criteria contained in 30 C.F.R. § 104.3 (i.e., repeated S&S violations of a particular standard,
repeated S&S violations relating to the same hazard, or repeated S&S violations caused by
unwarrantable failure to comply). The question is whether a section 104.4(a)(4) remediation
program requires an operator to focus on the particular issue which brought about the written
warning of a potential pattern of violations under section 104.4(a), or whether MSHA is satisfied
that an operator brings its S&S issuance rate down to 125% of the national average. There is no
information in the record to clarify this point.

Based on the record before us, I would hold that the Chief Administrative Law Judge
abused his discretion in approving a settlement agreement which, with respect to the pattern of
violations provisions, is based on a principle – that an operator cannot be found to have
committed a pattern of violations pursuant to section 104(e) of the Mine Act unless its S&S
issuance rate is at least 125% of the national average for similar mines – which is contrary to the
regulations, 30 C.F.R. § 104.2. Therefore, I respectfully dissent.

Robert F. Cohen, Jr., Commissioner

Distribution

Jerald Feingold, Esq.

Office of the Solicitor

U.S. Department of Labor

1100 Wilson Blvd., 22nd Floor

Arlington, VA 22209-2247

Mark E. Heath, Esq.

Spilman, Thomas & Battle, PLLC.

300 Kanawha Blvd., East

P.O. Box 273

Charleston, WV 25321

Myra James, Chief

Office of Civil Penalty Compliance

MSHA, U.S. Dept. Of Labor

1100 Wilson Blvd., 25th Floor

Arlington, VA 22209-3939

Chief Administrative Law Judge Robert J. Lesnick

Federal Mine Safety & Health Review Commission

601 New Jersey Avenue, N.W., Suite 9500

Washington, D.C. 20001-2021