Secretary of Labor v. Pocahontas Coal Company, LLC (Commission decision, August 28, 2018)

Read the official release (fmshrc.gov)

Plain-English summary

Pocahontas Coal petitioned for discretionary review of an ALJ summary decision involving a pattern-of-violations notice and related withdrawal orders at its Affinity Mine. After the Commission granted review, Pocahontas moved to withdraw its appeal and dismiss the proceedings. The Commission majority vacated the direction for review and dismissed the appeal, stating that the ALJ’s summary decision was final and unappealable. Commissioner Cohen dissented, arguing that the parties’ proposed arrangement would improperly terminate the pattern-of-violations notice without the S&S-free inspection required by the Mine Act.

Decision snapshot

• Governing provisions: 30 U.S.C. §§ 801(a), 814(d)(1), 814(e)(1), 814(e)(2), and 814(e)(3); 30 C.F.R. § 104.4(a)
• Outcome: The Commission vacated its direction for review and dismissed Pocahontas Coal’s appeal.
• Key point: The majority dismissed the appeal, while the dissent argued that the related pattern-of-violations arrangement conflicted with the Mine Act’s statutory exit requirements.

Full text (FMSHRC public release)

FEDERAL

MINE SAFETY AND HEALTH REVIEW COMMISSION

1331

PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON,

D.C. 20004-1710

SECRETARY OF

LABOR, :

MINE

SAFETY AND HEALTH :

ADMINISTRATION

(MSHA) : Docket Nos. WEVA 2014-395-R

: WEVA 2014-1028

v.

: WEVA 2015-854

:

POCAHONTAS

COAL COMPANY, LLC :

BEFORE:

Althen, Acting Chairman; Jordan, Young, and Cohen, Commissioners

ORDER

BY: Althen, Acting Chairman; Jordan and Young,

Commissioners

These cases involve

a notice of contest and two civil penalty proceedings arising under the Federal

Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (2012). On December

31, 2015, Pocahontas Coal Company, LLC (“Pocahontas”) filed a petition for

discretionary review (“PDR”), which the Commission granted. On July 10, 2018, Pocahontas

filed a motion to dismiss its PDR. On July 17, 2018, the Secretary of Labor

filed a response in support of Pocahontas’ motion.

Upon

consideration of Pocahontas’ motion and the Secretary of Labor’s response, the direction

for review issued by the Commission is hereby VACATED and Pocahontas’ appeal is

DISMISSED. The Administrative Law Judge’s summary decision is final and

unappealable.[1]

/s/ William I.

Althen

William I.

Althen,

Acting Chairman

/s/ Mary Lu

Jordan

Mary Lu Jordan, Commissioner

/s/ Michael G.

Young

Michael G.

Young, Commissioner

Commissioner

Cohen, dissenting:

Although

Pocahontas Coal Company’s motion to the Commission nominally seeks merely to

withdraw the operator’s appeal of this matter and gain dismissal of the

proceedings, the parties’ filings make clear that Pocahontas’s request is part

of a broader agreement in which the Secretary of Labor (“Secretary”) seeks to

unilaterally relieve Pocahontas’s Affinity Mine of its pattern of violations

designation. Such a settlement is directly contrary to the express language of

the Mine Act and the Secretary’s own regulations, and approving the settlement

only provides cover for an unlawful agreement by the current administration. I

dissent.

I.

Section 104(e) of the Mine

Act, 30 U.S.C. § 814(e), sets forth the provisions for the Mine Safety and

Health Administration’s (“MSHA’s”) issuance and termination of a notice of

pattern of violations (“POV”).1 Pocahontas Coal Co., 38 FMSHRC

176, 177 (Feb. 2016). Under those provisions, if an operator has demonstrated a

pattern of violating mandatory health or safety standards, MSHA inspectors

“shall issue an order” withdrawing miners from the area affected by any

discovered significant and substantial (“S&S”) violation.[2] 30 U.S.C.

§ 814(e)(1). Section 104(e)(3) provides the method by which a mine may

exit from the POV provisions:

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.

30 U.S.C. § 814(e)(3). The Secretary’s

regulations on termination of a pattern of violations notice effectively

repeats the statute. See 30 C.F.R. § 104.4(a); Pattern of Violations, 78

Fed. Reg. 5,056 (Jan. 23, 2013) (“The final POV rule . . . [m]irrors the

provision in the Mine Act for termination of a POV.”).

II.

In this case MSHA notified

Pocahontas that a pattern of violations existed at its Affinity Mine pursuant

to section 104(e) of the Mine Act, and issued Written Notice No. 7219153 on

October 24, 2013. The Notice charged two separate patterns. One of the alleged

patterns included 24 separate S&S roof and rib support citations and orders

issued within the preceding 12-month period. The other alleged pattern included

16 separate S&S citations and orders involving emergency preparedness and

escapeway hazards issued within the preceding 12-month period. Sec’y Memo of

Point & Auth. in Support of Mot. for Part. S.D. at 14-15, 24.

MSHA began issuing

withdrawal orders pursuant to section 104(e) of the Mine Act, and these were

contested by Pocahontas.[3]

Pocahontas filed a motion for summary decision and the Secretary filed a

motion for partial summary decision. On November 3, 2015, a Commission Judge

issued an “Order Denying Pocahontas’ Motion for Summary Decision and Granting

the Secretary’s Motion for Partial Summary Decision.” 37 FMSHRC 2654 (Nov.

2015) (ALJ). The Judge found that the Secretary had proven the existence of a

pattern of violations at the Affinity Mine, and upheld the validity of POV

Written Notice No. 7219153. Id. at 2673. After the Judge issued a

subsequent Summary Decision affirming two section 104(e) orders predicated on

the POV notice, the Commission granted Pocahontas’s petition for discretionary

review. Then, after the case was fully briefed, Pocahontas submitted its

“Motion to Withdraw Petition for Discretionary Review”, which included – and

was expressly dependent on the approval of – a proposed settlement agreement

between Pocahontas and the Secretary.

The parties’ settlement

agreement in this matter provides:

4. In exchange for Pocahontas filing a Motion to

Withdraw Appeal in the Proceeding, and the Commission’s issuance of a full,

clear, and unambiguous dismissal of the Proceeding, MSHA agrees to immediately

terminate Notice of Pattern of Violations Number 7219153 issued at the Affinity

Mine on October 24, 2013, and provide prompt written acknowledgement of the

same to Pocahontas.

Pocahontas Mot. at Ex. 1. The motion

makes no mention of the statutory provision for obtaining relief from a POV

notice. The Secretary’s response in support of Pocahontas’s motion is similarly

silent toward the law’s plain requirement that Pocahontas pass an inspection

free of any S&S citations before it can be relieved of the POV designation.

There is no indication that Pocahontas’s Affinity Mine has received such a

clean inspection.[4]

Rather than providing a clear indication to the Commission that the parties are

proceeding within the framework of the Mine Act, the parties attempted to

shield their actions from the public by initially filing pleadings before us in

secret (i.e., “under seal”).[5]

III.

Lacking any evidence that

Pocahontas’s Affinity Mine has passed an entire inspection without receiving

any S&S citations, the parties’ settlement agreement is legally

unsupportable. Congress directed that when a mine is in POV status, “a

withdrawal order shall be issued” for “any violation of a

mandatory health or safety standard” that is S&S. 30 U.S.C. § 814(e)(2)

(emphasis added). The plain meaning of this language, combined with the express

enumeration of the method by which an operator may exit from the POV

provisions, forecloses other avenues of relief.

The legislative history

supports this plain reading of the language. The Senate Report on the Mine Act

explains that an operator that has received its first withdrawal order from the

POV provisions “is subject to the issuance of further [POV] withdrawal orders

until an inspection of the mine in its entirety discloses no violations of any

safety and health standards which could significantly and substantially

contribute to the cause and effect of a mine health or safety hazard.” 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) (“Legis. Hist.”).[6] The report

further elaborates that section 104(e)(3) requires “an inspection of the mine

in its entirety in order to break the sequence of the issuance of orders.” Id.

at 622.

Congress limited

the method for ending POV status for good reason. In enacting the pattern of

violations provisions, Congress provided the Secretary with its most powerful

tool for protecting the lives of the nation’s miners. Congress explicitly

recognized that the POV provisions were necessary to “provide an effective

enforcement tool to protect miners when the operator demonstrates [its]

disregard for the health and safety of miners through an established pattern of

violations.” Id. at 620. Congress thus recognized that the POV

designation was necessary to ensure compliance with safety regulations at those

mines where the other tools in the Mine Act’s graduated enforcement scheme

proved insufficient to curb an operator’s dangerous behavior. The POV

designation signals to an operator that “the mere abatement of violations as they

are cited is insufficient.” Id. at 621.

Congress

determined such a powerful enforcement tool was necessary after the

investigation of the 1976 Scotia mine disaster revealed that the mine had a

recurring history of violations that the existing enforcement scheme had failed

to address. Id. at 620. But for 35 years, MSHA utterly failed to

successfully exercise its authority under the POV provisions. See 78

Fed. Reg. at 5,058 (Jan. 23, 2013). The Secretary did not even issue

regulations implementing the POV provisions until 1990. See Pattern of

Violations, 55 Fed. Reg. 31,128 (July 31, 1990). The 1990 rule contained gaping

holes. It counted only citations that had become final orders of the

Commission. 30 C.F.R. § 104.3(b) (1990). And when screening of the final orders

identified mines that had a pattern of disregarding safety regulations, MSHA

first provided those chronically unsafe operators with warning letters of their

“potential” POV (“PPOV”) and an opportunity to improve prior to receiving a POV

notice. 30 C.F.R. § 104(a) (1990); 78 Fed. Reg. at 5,058. As described below,

unscrupulous operators such as Massey Energy manipulated the system, putting

profit above the safety of their miners.

Following the disasters at

the Sago, Darby, and Aracoma mines in 2006, MSHA began to develop new screening

criteria to better identify mines with recurring safety issues. Even then, however,

enforcement of the POV provisions was completely ineffective. After the

catastrophic explosion at the Upper Big Branch Mine in April 2010, the

Secretary’s Office of Inspector General (“OIG”) conducted a performance audit

to evaluate MSHA’s implementation of the pattern of violations authority

conferred under section 104(e) of the Mine Act. The results of the audit were

distinctly summarized in its title: “In 32 Years MSHA Has Never Successfully Exercised

Its Pattern of Violations Authority.” U.S. Dep’t of Labor, O.I.G. Report No.

05-10-005-06-001. The OIG Report stated that during the 32 years since passage

of the Mine Act, MSHA had only once issued a POV notice to an operator. Id.

at 2. In that one instance, the Commission subsequently modified some of the

citations and orders on which the POV notice was based, and as a result, MSHA

did not enforce the order. Id. at 4. The report included several

recommendations, the first of which was: “Evaluate the appropriateness of

eliminating or modifying limitations in the current regulations, including the

use of only final orders in determining a pattern of violations and the

issuance of a warning notice prior to exercising POV authority.” Id. at

24; see also Brody Mining, Inc., 36 FMSHRC 2027, 2030 (Aug.

2014).

The cogency of

the OIG Report is illustrated by the Mine Act enforcement history leading up to

the deadly explosion at Massey Energy’s Upper Big Branch Mine. As noted by

Commissioner Young and me in Brody Mining, 36 FMSHRC at 2040-41

n. 11, in 2007 MSHA put Upper Big Branch on a PPOV because its S&S rate was

11.6 per 100 inspection hours. The mine then got an improvement plan, and

lowered its S&S rate to 5.6 per 100 inspection hours. Since this was a

greater than 30% reduction, MSHA withdrew the POV threat pursuant to the

then-existing regulations. With the threat gone, the mine’s S&S rate went

back up.[7]

Thus, Upper Big Branch management evaded a pattern of violations notice by

bringing down its rate of S&S violations after receiving a PPOV and

achieved removal from that status. It then reverted to its prior behavior,

incurring an excessive number of S&S violations after the POV threat was

lifted. If management had the ability to dramatically reduce the rate of

S&S violations, it obviously had the ability to maintain a reduced level. It

chose not to do so, and thus endangered the lives of miners.[8] The deaths

of 29 miners would probably have been avoided if the Secretary had enforced the

pattern of violations provisions of the Mine Act as Congress intended.

The Upper Big

Branch disaster and the subsequent OIG Report compelled the Secretary to amend

its POV regulations to close the loophole operators had relied upon to evade a

POV notice. With the changes in 2013, MSHA finally established an effective

implementation of the POV regulations, screening mines on an open database and

considering all of an operator’s pending S&S citations.[9]

IV.

The POV

screening criteria are extremely restrictive, and capture only a handful of

mines. But, because of their deterrent effect, the positive impact on mine

industry safety has been much broader, with a sharp reduction in the number of

total violations and S&S violations and an even sharper drop in the number

of operators that chronically violate safety standards. News Release, Mine

Safety and Health Administration, MSHA Chief: Pattern of Violations Reforms

Have made Mines Safer (Oct. 2, 2014), https://www.dol.gov/newsroom/releases/msha/ msha20141867.

At last, vigorous enforcement of the POV provisions as Congress intended has

had the intended effect of reducing the number of the violations that are most

dangerous to miners.

In releasing the

Affinity Mine from its POV notice without Pocahontas first satisfying the

statutory requirement of an S&S-free inspection, the Secretary threatens to

undermine the positive impact of these now-effective POV regulations. Abandoning

the POV regulation’s strict application sends the dangerous message that an

operator who has chronically disregarded safety, thus gaining an unfair

advantage over safer competitors in the process, may nevertheless obtain

reprieve from the Mine Act’s heaviest sanctions by the grace of a friendly

administration no longer committed to enforcing those sanctions. That message

endangers miners. Already in 2017, we witnessed deaths among coal miners nearly

double from 2016 despite sagging activity in the mining industry. See

U.S. Dep’t of Labor, MSHA, 2018 Comparison of Year-to-Date and Total Fatalities

for M/NM & Coal (Jun. 5, 2018),

https://arlweb.msha.gov/stats/daily-bar-chart.pdf.

The Secretary’s

illicit reconsideration of Pocahontas’s POV status is not the only threat to

undermine the current POV regulations. For over a year, the administration has

engaged in settlement negotiations with mining industry groups challenging the

Secretary’s POV rulemaking. See Ohio Coal Ass’n v. Perez, No.

2:14-cv-2646 (S.D. Ohio May 9, 2017) (order granting stay of proceedings for

parties to engage in settlement negotiations). Any settlement that alters the

key elements of the current POV regulations could again relegate those critical

provisions of the Mine Act to dormant status.

I recognize that

the POV notice has been in effect at Pocahontas’s Affinity Mine for five years.

Reasonable minds may disagree over whether the enhanced enforcement for such a

period of time is sufficient and withdrawal of the POV notice appropriate. But

that is a question of policy, which is a matter for Congress to determine. In enacting

the Mine Act, Congress did not allow for such a discretionary reprieve.[10] If the

Secretary wishes to alter the terms of the Mine Act, he may propose such

changes to Congress where the issue may be debated and considered in the public

eye. Such dramatic deviations from the plain meaning of the law should not be

attempted in discrete filings made “under seal” before the Commission.

In passing the Mine Act,

Congress declared that “the first priority and concern of all in the coal or

other mining industry must be the health and safety of its most precious

resource—the miner.” 30 U.S.C. § 801(a). In seeking to abandon the POV

provisions at the Affinity Mine, this administration threatens to subvert the

first principle of the Mine Act.

The

de facto settlement of this matter directly conflicts with the plain language

of section 104(e) of the Mine Act. As an independent agency charged with

reviewing enforcement actions brought by the Secretary, this Commission should

not assent to such an illegal act. To the extent that the Commission’s

dismissal of these proceedings provides cover to the administration’s corrupted

reading of the law, I dissent.

/s/ Robert F.

Cohen, Jr.

Robert F. Cohen,

Jr., Commissioner

[1] These pleadings were initially labeled “under seal.” In

an Order issued on July 19, 2018, the Commission directed the parties to

explain why the documents had been designated as such. The Secretary’s response

explained that he had been unaware that Pocahontas was going to file its motion

under seal and did not believe there was any reason for such designation. Pocahontas

agreed to lift its request to seal its prior filing.

1 Section 104(e)(1) provides:

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 . . . 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.

30

U.S.C. § 814(e)(1).

[2] An “S&S” violation is a serious violation which

is “of such nature as could significantly and substantially contribute to the

cause and effect of a coal or other mine safety or health hazard.” 30 U.S.C. §

814(d)(1).

[3] Pocahontas also directly contested the issuance of

the POV notice itself, but the Commission ruled that it does not have

jurisdiction to review a direct challenge to a POV notice independent of a

section 104(e) withdrawal order. Pocahontas, 38 FMSHRC at 185.

[4] Indeed, MSHA’s Mine Data Retrieval System indicates

that federal mine inspectors issued section 104(e)(2) withdrawal orders for

S&S violations at the Affinity Mine in August 2018. See MSHA, Mine

Data Retrieval System: Mine Citations, Orders, and Safeguards, https://arlweb.msha.gov/drs/ASP/MineAction.asp (searchable by mine name).

[5] Although courts may place documents filed with them

under seal to protect sensitive information, federal courts have recognized the

common law right of public access to public records and documents, including

judicial records. See Nixon v. Warner Communications, Inc., 435 U.S.

589, 597–98 (1978). Such access is critical to allow the public and the press

to keep a watchful eye on the workings of public agencies. Here, Pocahontas

filed its Motion to Withdraw Petition for Discretionary Review publicly, but

the motion stated, “[a] copy of the Settlement Agreement is filed separately

under seal to this motion as Exhibit 1.” Mot. at 2. A week later the Commission

received the “Secretary’s Response in Support of Pocahontas’ Motion to Withdraw

Petition for Discretionary Review”, on which was imprinted “*FILED UNDER

SEAL*”. Upon receipt of the parties’ filings in this matter, the Commission

issued an order directing the parties to “explain how sealing these pleadings

is consistent with Congressional intent that settlements under the Federal Mine

Safety and Health Act of 1977 take place with sufficient transparency so that

the public will be aware of the process.” July 19, 2018 Ord. at 1. In response,

the Secretary and Pocahontas filed pleadings removing the “under seal”

designation from their previous filings. Neither Pocahontas nor the Secretary

have ever explained or attempted to provide justification for their attempt to

shield the Settlement Agreement from the public in a cloak of secrecy.

[6] In contrast, the legislative history makes clear that

Congress intended to give the Secretary “broad discretion in establishing

criteria for determining when a pattern of violations exists.” Legis. Hist.

at 621.

[7] In the next screening cycle, Upper Big Branch would

have received another PPOV notice except for an MSHA computer error. U.S. Dep’t

of Labor, Internal Review of MSHA’s Actions at the Upper Big Branch Mine-South,

Performance Coal Co., at 56-57 (Mar. 6, 2012), https://www.msha.gov/PerformanceCoal/UBBInternalReview/UBBInternalReviewReport.pdf.

[8] The mine’s former superintendent pled guilty to

conspiring to hide safety violations from MSHA inspectors, and Massey Energy’s

chief executive ultimately was convicted of conspiring to willfully violate

mine safety regulations. U.S. v. Blankenship, 846 F.3d 663, 666-67 (4th

Cir. 2017).

[9] The Commission has affirmed the key aspects of the

Secretary’s updated POV regulations. Brody Mining, 36 FMSHRC at 2054 (holding

that POV regulations are facially valid), appeal dismissed, No. 14-1171

(D.C. Cir. Nov. 2, 2015); Brody Mining, LLC, 37 FMSHRC 1914, 1924

(Sep. 2015) (finding the Secretary’s implementing regulations and definition of

“pattern” consistent with section 104(e) of the Mine Act).

[10] The Secretary suggests that the termination of a POV

notice is committed to his discretion, and therefore not subject to review. Sec’y

Resp. to Mot. to Withdraw PDR at 1-2. However, this matter is within the

jurisdiction of the Commission by virtue of the pending appeal from the Judge’s

Decision. Moreover, although an agency’s decision not to take enforcement

action may be presumed immune from judicial review, “presumptively

unreviewable” expressions of prosecutorial discretion nonetheless “may be

rebutted where the substantive statute has provided guidelines for the agency

to follow in exercising its enforcement powers.” Heckler v. Chaney, 470

U.S. 821, 831–33 (1985). The plain language and statutory history of the Mine

Act make clear that the Secretary here cannot refuse to issue withdrawal orders

for S&S violations at a mine that has been placed on a POV notice and has

not yet passed a full inspection without the issuance of an S&S citation.