Secretary of Labor v. Brody Mining, LLC

Read the official release (fmshrc.gov)

Plain-English summary

Brody Mining challenged MSHA's 2013 pattern-of-violations rule after receiving a notice based on numerous significant-and-substantial citations and resulting withdrawal orders. The Commission held that section 104(e) permits MSHA to consider citations and orders before they become final Commission decisions, and that the rule was not arbitrary or capricious for eliminating the earlier warning process and final-order limitation. It also held that the website screening criteria were policy statements rather than substantive rules requiring separate notice-and-comment rulemaking, and that available contest and temporary-relief procedures satisfied facial due-process requirements. Applying the rule to citations issued before its effective date was not impermissibly retroactive because the notice altered Brody's present enforcement status rather than the past legal consequences of the citations. The Commission affirmed the ALJ's interlocutory order and remanded for further proceedings, while Commissioner Althen dissented.

Decision snapshot

• Governing provisions: 30 U.S.C. § 814(e); 30 C.F.R. §§ 104.1 and 104.2
• Outcome: The Commission upheld the rule's facial validity and application to Brody, affirmed the interlocutory order, and remanded the contests.
• Key point: MSHA may base a pattern notice on nonfinal S&S citations under the 2013 rule, with post-notice contest procedures providing the required process.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW, SUITE 520N

WASHINGTON, D.C. 20004-1710August 28, 2014

SECRETARY OF LABOR,                            :                   

MINE SAFETY AND HEALTH                    : 

ADMINISTRATION (MSHA)                       :         

: 

v.                                               :        Docket Nos. WEVA 2014-82-R, et al.

:

:                    

BRODY MINING, LLC                                      :

BEFORE: Jordan, Chairman; Young, Cohen, Nakamura, and Althen, Commissioners

DECISION

BY: Jordan, Chairman; Young, Cohen, and Nakamura, Commissioners

These consolidated contest proceedings, which arise under the Federal Mine Safety and
Health Act of 1977, 30 U.S.C. § 801 et seq. (2012) (“Mine Act” or “Act”), are before us on
interlocutory review. At issue in this case of first impression is the validity of a pattern of
violations rule promulgated by the Department of Labor’s Mine Safety and Health
Administration (“MSHA”) at 30 C.F.R. Part 104, which implements section 104(e) of the Mine
Act, 30 U.S.C. § 814(e).

We conclude that the rule is facially valid, and that it was not applied in
an impermissibly retroactive manner to Brody Mining, LLC. For the reasons discussed below, we
affirm the Chief Administrative Law Judge’s interlocutory order upholding the rule, and remand
the case for further proceedings. 36 FMSHRC 284 (Jan. 2014) (ALJ).

I.

Statutory and Regulatory Background

Section 104(e) sets forth provisions regarding the issuance and termination of a pattern of
violations (“POV”) notice. Section 104(e)(1) provides that if an operator has a pattern of
violations of mandatory health or safety standards which are of such nature as could significantly
and substantially contribute to the cause and effect of health or safety hazards, it shall be given
written notice that such a pattern exists. If, within 90 days following issuance of the POV notice,
an inspector cites the operator for a significant and substantial (“S&S”) violation,

then MSHA
may issue a withdrawal order under section 104(e) of the Act. 30 U.S.C. § 814(e)(1).

The operator will thereafter be subject to additional withdrawal orders for each new S&S
violation subsequently discovered until a complete inspection of the mine has revealed no further
S&S violations. 30 U.S.C. § 814(e)(2). These withdrawal orders “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).

In enacting section 104(e), Congress explicitly recognized that the provision was
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.” S. Rep. No. 95-181, at 32 (1977), reprinted in Senate Subcomm. on Labor, Comm.
on Human Res., Legislative History of the Federal Mine Safety and Health Act of 1977 (Legis.
Hist.), at 620 (1978). Congress explained that MSHA’s then-existing enforcement scheme was
unable to address the problem of mines with an inspection history of recurrent violations, and
that some of the recurrent violations were tragically related to mining disasters:

The need for such a provision was forcefully demonstrated during
the investigation . . . 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.

Id. Congress stated its view that a POV notice indicates “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.” Id. at 621.

Despite its inclusion in the Mine Act from enactment, the pattern of violations sanction
has only recently been employed by the Secretary as an enforcement tool. Regulations
implementing section 104(e) were not promulgated until 1990 (“the 1990 rule”). See 55 Fed.
Reg. 31,128 (July 31, 1990). Under the 1990 rule, MSHA engaged in an annual initial screening
process, which included reviewing information regarding a “mine’s history of [S&S] violations.”
30 C.F.R. § 104.2(a)(1) (1990). Section 104.3 identified information that MSHA used to identify
mines with a “potential” POV (“PPOV”). Section 104.3(b) provided that only citations and
orders that had become final orders were used to identify a mine with a PPOV. 30 C.F.R.

§ 104.3(b) (1990). When notified of a PPOV, an operator had an opportunity to engage in
remedial measures, including the submission of a corrective action program. 30 C.F.R.

§ 104.4(a) (1990). If the MSHA District Manager continued to believe that a pattern of violations
existed at the mine, he submitted a report to the appropriate MSHA Administrator, who issued a
decision as to whether the mine was to be issued a POV notice. 30 C.F.R.

§ 104.4(b) (1990). The POV notice was terminated when an inspection of the entire mine
revealed no further S&S violations or if no section 104(e)(1) withdrawal order was issued within
90 days of the POV notice. 30 C.F.R. § 104.5 (1990).

It was not until after the disasters at the Sago, Darby, and Aracoma mines in early 2006
that MSHA developed a Pattern of Violations Screening Criteria and Scoring Model, which was
initiated in mid-2007. 76 Fed. Reg. 5719, 5720 (Feb. 2, 2011). The screening criteria and
procedures were later revised in 2010. Id. MSHA used the screening criteria and scoring model
to generate lists of mines with a PPOV. Id.

In 2010, the U.S. Department of Labor’s Office of the Inspector General (“OIG”) audited
MSHA’s POV program. See 78 Fed. Reg. 5056, 5058 (Jan. 23, 2013). On September 29, 2010,
the OIG published its audit report entitled, “In 32 Years MSHA Has Never Successfully
Exercised its Pattern of Violations Authority.” Id. 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. Rep.
No. 05-10-005-06-001 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.

MSHA adopted this recommendation in revisions to the 1990 Rule, which became
effective on March 25, 2013 (“current rule”). 78 Fed. Reg. 5056-74 (Jan. 23, 2013). The current
rule implemented two major changes from the 1990 rule: (1) it eliminated the PPOV notice and
review process; and (2) it eliminated the requirement that MSHA could consider only final orders
in its POV review. Id. at 5056. In addition, section 104.2(a) of the current rule provides that at
least once each year, MSHA will review the compliance and accident, injury and illness records
of mines to determine if any mines meet the POV screening criteria. The review to identify mines
with a pattern of S&S violations will include eight listed elements.

Section 104.2(b) provides
that “MSHA will post the specific pattern criteria on its Web site.” 30 C.F.R.

§ 104.2(b).

The 2013 POV screening criteria posted on MSHA’s website include two sets of criteria
that are used to perform the review under section 104.2. See App. B. The first set pertains to
numbers and rates of S&S citations and orders (some with considerations of negligence ratings of
high or reckless disregard), rate of issuance of “elevated citations and orders [issued under
sections 104(b); 104(d);104(g); or 107(a) of the Mine Act],” and a comparison of “injury severity
measure” (the number of lost workdays per 200,000 employee-hours). B. Mem. Supporting Appl.
for Temp. Relief, Ex. 10 at 1. The alternative set of criteria sets forth greater rates of issuance of
S&S citations and orders and elevated citations and orders. Id. The criteria provide that “[m]ines
must meet [all] the criteria in either set to be further considered for exhibiting a pattern of
violations.” Id.

The numerical criteria in the 2013 POV screening criteria are identical to the numerical
screening criteria that were in effect under the 1990 rule in 2012, prior to promulgation of the
current rule. See App. C; S. Mem. Supporting S. Mot. for Partial Summ. Dec. at 5-6 & Ex. 2.
However, consistent with section 104.3(b) of the prior rule, the 2012 screening criteria, unlike
the 2013 screening criteria, also provided, “For a pattern of violations review, mines identified
during the initial screening must have at least five S&S citations of the same standard that
became final orders of the Commission during the most recent 12 months OR at least two S&S
unwarrantable failure violations that became final orders of the commission during the most
recent 12 months.” S. Mem. Supporting Mot. for Partial Summ. Dec., Ex. 2 at 2 (emphasis in the
original); App. C.

MSHA has available on its website a Monthly Monitoring Tool for Pattern of Violations.
MSHA’s online Monthly Monitoring Tool provides mine operators with a statement of their
performance with respect to the screening criteria. 78 Fed. Reg. at 5057, 5059.

MSHA also provides a POV Procedures Summary on its website. See B. Mem.
Supporting Appl. for Temp. Relief, Ex. 11. Regarding the issuance of the POV notice, the
summary provides in part that at least once each year, MSHA will review the violation and injury
history of each mine to identify those that are exhibiting a pattern of violations. Id. at 1. The
MSHA District Manager of a mine meeting the POV screening criteria performs a review to
determine whether mitigating circumstances exist. Id. An MSHA POV panel subsequently
reviews information provided by the District Manager, obtains any additional necessary
information, and makes a recommendation regarding whether to postpone or not issue the POV
notice. Id. The panel provides a report to the appropriate MSHA Administrator, who determines
whether to issue the POV notice. Id. If so, the District Manager issues the POV notice. Id.

II.

Factual and Procedural Background

These consolidated proceedings arose from MSHA’s application of the POV procedures
to Brody’s Mine No. 1. On October 24, 2013, MSHA issued a POV notice to Brody. MSHA
made its POV determination based on a 12-month screening period extending from September 1,
2012, through August 31, 2013. S. Mem. Supporting Opp’n to Appl. for Temp. Relief, Ex. A at
9.

The POV notice issued to Brody states:

Pursuant to Section 104(e)(1) of the Federal Mine Safety and
Health Act of 1977 (Mine Act), you are hereby notified that a
pattern of violations exists at the Brody Mine No. 1 (ID 46-09086).
A review of the S&S violations cited at the mine demonstrates a
pattern of violations. As illustrative of this pattern of violations, the
following groups of violations are representative of violations
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[.]

Notice No. 7219154. The notice lists 54 citations and orders issued between October 9, 2012 and
October 8, 2013, in groups regarding conditions and or practices that contribute to:

(1) ventilation and/or methane hazards; (2) emergency preparedness and escapeway hazards; (3)
roof and rib hazards; and (4) inadequate examinations. The notice further states that, “These
groups of violations, taken alone or together, constitute a pattern of violations . . . .” Id. The
citations and orders listed in the POV notice were either contested or in the penalty assessment
process, but no citations or orders had become final Commission orders. 36 FMSHRC 284, 293
(Jan. 2014) (ALJ).

On October 30, 2013, Brody notified the Secretary that it was contesting the POV notice,
and the contest was docketed as WEVA 2014-81-R. Chief Administrative Law Judge Lesnick
dismissed the docket, holding that no provision of the Mine Act or the Commission’s Procedural
Rules authorized him to adjudicate a “notice.” 36 FMSHRC 284, 287 (Jan. 2014) (ALJ). Brody
has not sought review of the Judge’s dismissal of this contest.

After the issuance of the notice, MSHA issued four section 104(e) withdrawal orders to
Brody, and Brody contested those orders. B. Mem. Supporting Appl. for Temp. Relief at 8. Since
that time, MSHA has issued numerous additional section 104(e) withdrawal orders, which Brody
has also contested.

On November 4, 2013, Brody filed an application seeking temporary relief from the POV
notice and withdrawal orders. Appl. for Temp. Relief at 3 ¶ 7. Brody’s application was denied by
an Administrative Law Judge because Brody failed to establish that granting temporary relief
would not adversely affect the health and safety of miners. Unpublished Order dated Nov. 21,
2013, at 4-5. Brody has not sought review of that decision. See S. Br. at 5 n.7.

Brody subsequently filed a Motion for Summary Decision, and the Secretary filed a
Motion for Partial Summary Decision and Opposition to Brody’s motion. Among other issues,
the parties disputed whether in the current rule MSHA properly eliminated: (1) the 1990 rule’s
PPOV notice and review process and (2) the requirement that MSHA could only consider final
orders in its POV review.

On January 30, 2014, the Chief Judge issued an order denying Brody’s motion and
granting the Secretary’s motion. 36 FMSHRC at 286. In granting the Secretary’s motion, the
Judge upheld the facial validity of the current rule against three lines of attack made by the
operator. First, the Judge concluded that nothing in the Mine Act requires MSHA to rely on
issuances that have become final orders in determining whether a mine operator should be
considered for further evaluation and potentially issued a POV notice. Id. at 298-301. In so
holding, he concluded that the term “violation,” as used in section 104(e) of the Act, is
ambiguous, and that the Secretary’s interpretation of the term was reasonable and entitled to
deference. Id. at 301.

Second, the Judge concluded that the Secretary’s promulgation of the POV rule was not
arbitrary, capricious, or an abuse of discretion in violation of section 706(2)(A) of the
Administrative Procedures Act (“APA”). Id. at 301-04.

Third, the Judge concluded that the POV rule does not violate the Due Process Clause of
the Fifth Amendment. Id. at 304-08. The Judge reasoned that the government’s significant
interest in the timely protection of public health and safety, particularly in light of an operator’s
opportunity for expedited post-deprivation review, justified the deprivation of the property
interest associated with uninterrupted mine production, which Brody had “overstated.” Id. at 305.

The Judge further concluded that the POV screening criteria are a valid statement of
agency policy, and, as such, were not subject to notice-and-comment rulemaking requirements.
Id. at 308-12. He reasoned that the criteria were not legislative rules because they did not bind or
circumscribe MSHA’s discretion in determining whether a POV notice should be issued. Id. at
311-12. Finally, the Judge rejected Brody’s argument that MSHA applied the POV rule
retroactively. Id. at 312-15.

On the same day that he issued his order, the Judge certified the order for interlocutory
review. We granted interlocutory review of the following questions: (1) whether the POV rule is
valid; (2) whether MSHA’s screening criteria are invalid because notice-and-comment
rulemaking was required; and (3) whether MSHA impermissibly applied the POV rule
retroactively. We also instructed the parties to address whether the Commission has jurisdiction
to rule upon the validity of the current rule.

III.

Disposition

A.        The Commission’s jurisdiction to rule on the validity of the current rule

Section 101(d) of the Mine Act vests exclusive jurisdiction over challenges to the validity
of mandatory safety and health standards promulgated by the Secretary with the U.S. Courts of
Appeals.

Thus, if the POV rule were a “mandatory health or safety standard,” the Commission
would lack jurisdiction to consider its validity.

Section 3(l) of the Mine Act defines a “mandatory . . . safety standard” as “the interim
mandatory health or safety standards established by subchapters II and III of this chapter, and the
standards promulgated pursuant to subchapter I of this chapter.” 30 U.S.C. § 802(l). Subchapters
II and III set forth interim mandatory standards, while Subchapter I contains sections 101 through
116 of the Mine Act. Section 101 provides the procedures for the development, promulgation and
revision of mandatory safety and health standards by the Secretary. Section 101(d) explicitly
confers exclusive jurisdiction in the U.S. Courts of Appeals of challenges regarding “a
mandatory health or safety standard promulgated under this section.” 30 U.S.C.

§ 811(d).

The Commission and courts have generally distinguished mandatory health or safety
standards promulgated under section 101 from regulations promulgated under other sections of
the Mine Act. Drummond Co., 14 FMSHRC 661, 673 (May 1992); UMWA v. Dole, 870 F.2d
662, 668 (D.C. Cir. 1989) (“Regulations promulgated pursuant to § 508 alone do not establish
‘mandatory health or safety standards’ for the purposes of § 101(a)(9)’s no-less protection
rule.”); see also Cyprus Emerald Res. Corp. v. FMSHRC, 195 F.3d 42, 43-44 & n.2 (D.C. Cir.
1999) (holding that a violation of 30 C.F.R. § 50.11(b) could not be designated as S&S because
the regulation was promulgated under section 508 rather than section 101). Cf. Wolf Run Mining
Co. v. FMSHRC, 659 F.3d 1197, 1201-02 (D.C. Cir. 2011) (holding that a violation of a
safeguard notice could be S&S because section 314(b) constitutes an interim mandatory standard
and falls within section 3(l)’s definition).

The POV rule was not promulgated pursuant to section 101 of the Mine Act. Rather, the
POV rule was promulgated pursuant to section 104(e)(4) and section 508, 30 U.S.C. § 957,

of
the Mine Act. See 78 Fed. Reg. at 5073. Therefore, we conclude that the POV rule is not a
“mandatory safety and health standard” subject to exclusive court review.

We further conclude that we have the authority to consider the validity of the POV rule.
The Commission is authorized pursuant to section 105(d) of the Mine Act, 30 U.S.C. § 815(d), to
adjudicate contested orders, such as the section 104(e) withdrawal orders at issue in these
proceedings. In exercising our jurisdiction, we may address Brody’s challenge to the validity of
the POV rule underlying the withdrawal orders in order to fully dispose of the case. See
Drummond, 14 FMSHRC at 674 (“[W]here the statute creates Commission jurisdiction, it
endows the Commission with a plenary range of adjudicatory powers to consider issues . . . to
dispose fully of cases committed to Commission jurisdiction.”).

B.        Facial validity of the current rule

Section 104(e)(4) of the Mine Act grants the Secretary the authority to “make such rules
as he deems necessary to establish criteria for determining when a pattern of violations of
mandatory health or safety standards exists.” 30 U.S.C. § 814(e)(4). In the rules under review, the
Secretary explains that he will determine whether a pattern exists by considering cited violations
designated as S&S, regardless of whether a citation has been contested by the operator. Brody
challenges the Secretary’s reliance on these “non-final citations” which, according to Brody, are
merely unproven assertions or allegations of a violation.

In considering the validity of the Secretary’s approach, we bear in mind that, in cases
such as this one where “there is an express delegation of authority to the agency . . . [s]uch
legislative regulations are given controlling weight unless they are arbitrary, capricious, or
manifestly contrary to the statute.” Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467
U.S. 837, 843-44 (1984).

Brody submits that applying that standard here would require us to invalidate the current
rule. It argues that, by its ordinary usage, the term “violations” in section 104(e) must be
restricted to final orders, that is, violations cited by MSHA that were either unchallenged by the
operator or upheld by the Commission. Had Congress intended POV sanctions to apply to
“patterns of citations and orders,” Brody contends that it would have said so. Furthermore, Brody
notes that the Secretary, when considering an operator’s “history of previous violations” for
purposes of assessing a penalty under section 110(a), includes only those violations for which a
penalty has been paid or which have been upheld in final orders of the Commission. B. Br. at 11.
Finally, Brody relies on MSHA’s request to Congress to amend the Mine Act to permit it to issue
POV sanctions based on non-final citations, a request, which it argues would have been
unnecessary if such action was already permissible.

Where the plain meaning of statutory language indicates that Congress has directly
spoken to the precise question at issue, “‘that intention is the law and must be given effect’ in the
regulation.” Coal Employment Project v. Dole, 889 F.2d 1127, 1131 (D.C. Cir. 1989) (quoting
Chevron, 467 U.S. at 843, n.9) (other citations omitted). However, the Mine Act does not define
“violation” or “pattern of violations.” As such, Congress has not clearly addressed whether the

term “violations” in section 104(e) refers only to final orders, but has instead expressly delegated
to the Secretary responsibility for determining when a pattern of violations exists.

1.         Meaning of the term “violations”

When statutory language is silent or ambiguous, we generally defer to an interpretation
proffered by the Secretary “so long as it is reasonable, consistent with the statutory purpose, and
not in conflict with the statute’s plain language.” Coal Employment Project, 889 F.2d at 1131
(citations omitted); Chevron, 467 U.S. at 843 n.9. Thus, any ambiguity arising from the Act’s
omission of a definition for “violations” must be resolved in favor of a reasonable construction
adopted by the Secretary.

As the Secretary points out, various provisions of the Mine Act allow enforcement
actions based on the occurrence of a “violation” where the term can only reasonably refer to
conditions that, in the inspector’s determination, amount to a violation and warrant a citation,
whether or not that determination has been subjected to review by the Commission. See, e.g., 30
U.S.C. § 814(a) (providing that an operator must abate a “violation” within the time fixed in the
citation); 30 U.S.C. § 814(b) (stating that an operator who fails to abate a “violation” within the
time fixed in the citation for abatement can be issued an order requiring the withdrawal of miners
from the affected area of the mine until the violation is abated). The ability of MSHA to compel
immediate compliance and to issue such orders does not depend on the finality of MSHA’s
determination that a violation exists. 

The legislative history of the Mine Act indicates that the POV provisions of section
104(e) were intended to parallel the unwarrantable failure provisions contained in section
104(d).

That provision empowers an inspector to issue a withdrawal order if he or she
determines that a “violation” caused by an operator’s unwarrantable failure to comply with a
cited standard has occurred within ninety days of a prior violation determined to be both S&S
and unwarrantable. 30 U.S.C. § 814(d)(1). The predicate “violation” may occur during the same
inspection as the “violation” that is the basis for the withdrawal order. In such case, neither the
predicate citation nor the subsequent withdrawal order would be based on determinations of
violations that had been subjected to additional review.

Section 104(e), like subsections 104(a), (b), and (d), provides enforcement authority to
ensure compliance with the Act. It is intended to be applied to repeat violators who have been
undeterred by MSHA’s other enforcement tools. It would indeed be anomalous if withdrawal
orders directed to repeated serious violations were restricted to violations deemed “final” while
other section 104 withdrawal orders need only be based on prior cited conditions.

We further observe that Congress recognized that the POV sanction was necessary to
address mines with an “inspection history of recurrent violations.” Legis Hist. at 620 (emphasis
added). The use of the phrase “inspection history” demonstrates Congress’ expectation that POV
determinations would be based on violations found during inspections regardless of whether such
violations had achieved a final status.

The legislative history supporting the Secretary’s interpretation may be traced back to the
Mine Act’s antecedents, which clearly evince an intent to effectively address recurrent violations.
The issuance of a section 104(b) withdrawal order is derived from section 203 of the Federal
Coal Mine Safety Act of 1952, which authorized a representative of the Bureau of Mines to issue
a withdrawal order if an operator had failed to abate a non-imminent condition and an extension
of abatement time was not permitted. Pub. L. No. 82-552, 66 Stat. 692, 694-95. Section 203 of
the 1952 Act was amended in 1966 to add a provision that is the basis for section 104(d)
withdrawal orders. Pub. L. No. 89-376, 80 Stat. 85. The legislative history of the Federal Coal
Mine Safety Act Amendments of 1966 reveals that the purpose of the revision was to provide
inspectors “with increased powers to deal with recurrent or repeated violations.” H. Rep. No.

89-181, at 7 (1965).

When these provisions were “unable to address” the problem of recurrent violations,
Congress developed the POV sanction. Legis. Hist. at 620. Throughout this development,
Congress provided the enforcement tool of a withdrawal order without requiring finality for the
violation underlying that order. Thus, the Secretary’s interpretation of the term “violation” is
consistent with the language, structure and history of the Act.

Brody notes that section 110(i) of the Act – which sets forth criteria for the assessment of
civil penalties – includes “the operator’s history of previous violations” as one of the criteria to
be considered. 30 U.S.C. § 820(i). Brody further notes that the Secretary’s regulations
implementing this provision interprets the language to include “only assessed violations that have
been paid or finally adjudicated, or have become final orders of the Commission.” 30 C.F.R. §
100.3(c). Brody contends that this definition of “previous violations” is necessarily binding on
the Secretary in the context of section 104(e). B. Br. at 11. However, the statutory language of
section 110(i) differs from the language in section 104(e). Section 110(i) uses the phrase “history
of previous violations,” which suggests past actions, while section 104(e) addresses an operator
that “has a pattern of violations,” which, in addition to past actions, suggests present and
continuing actions. 30 U.S.C. § 814(e)(1) (emphasis added). The use of the word “violations” in
section 104(e) is much more closely related to its use in sections 104(a), (b) and (d) where,
unquestionably, “violations” does not require the administrative finality of the “previous
violations” referred to in section 110(i). The fact that the Secretary made a policy choice in his
penalty regulations to define “history of previous violations” to encompass only paid violations
and final orders does not change our view that the phrase “pattern of violations” in section 104(e)
may permissibly be interpreted to encompass non-final orders.

Brody also asserts that Congress and MSHA itself have agreed that the phrase “pattern of
violations” in section 104(e) is limited to violations that have become final after review by the
Commission. In support of this argument, Brody describes various bills relating to pattern of
violations that have been proposed in Congress, and cites testimony before Congress by Assistant
Secretary for Mine Safety and Health Joseph A. Main. According to Brody, Assistant Secretary
Main stated that MSHA’s POV authority was too limited in that MSHA “did not have the
authority to issue a POV notice based on non-final citations and orders.” B. Br. at 13-14. This
argument places undue weight on Congressional inaction, and grossly mischaracterizes Assistant
Secretary Main’s testimony. The fact that Congress did not amend section 104(e) does not
indicate Congressional intent. As the Supreme Court stated in Cent. Bank of Denver v. First
Interstate Bank of Denver, 511 U.S. 164, 187 (1994), “Congressional inaction lacks persuasive
significance because several equally tenable inferences may be drawn from such inaction.” As for
Assistant Secretary Main’s testimony, the statement relied on by Brody was a statement in which
the Assistant Secretary said that MSHA had been working on regulations to change the POV
system – the regulations at issue in this case – since his confirmation, and that the proposed
legislation “will expedite that needed reform.” House Comm.on Education and Labor, Hearing
on H.R. 5663, Miner Safety and Health Act of 2010, July 13, 2010, at 13, reprinted in Jt. App.,
Brody Ex. 7, at 218. This was in no way an admission that MSHA lacked authority to make this
change itself through notice-and-comment rulemaking, as Brody alleges.

2.         Determination of a “pattern of violations”

Brody next asserts that the Secretary’s promulgation of the POV regulations was
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” in
violation of section 706(2)(A) of the APA, 5 U.S.C. § 706(2)(A). Brody argues that, in adopting
a rule that bases a pattern determination on non-final S&S citations, MSHA failed to adequately
consider that S&S determinations are overturned at a significant rate upon review. The operator
also contends that the agency failed to consider the increased safety and compliance that had
been afforded by the prior PPOV process.

In determining whether the Secretary acted arbitrarily and capriciously in issuing the
current rule, we must consider whether the agency examined the relevant data and articulated a
satisfactory explanation for its action, including a rational connection between the facts found
and the choices made. Motor Vehicle Mfrs. Ass’n v. State Farm Automobile Ins. Co., 463 U.S.
29, 43 (1983). The Supreme Court has stated that an agency rule is arbitrary and capricious if

the agency has relied on factors which Congress has not intended it
to consider, entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs counter to
the evidence before the agency, or is so implausible that it could
not [possibly] be ascribed to a difference in view or the product of
agency expertise.

Id.

Brody’s argument is unpersuasive. MSHA expressly considered evidence that S&S
citations and orders may be subsequently changed to delete their S&S designations. 76 Fed. Reg.
5719, 5722 (Feb. 2, 2011). While the parties dispute the relevant figure regarding the rate at
which S&S designations are altered in adjudication, they appear to agree that approximately 19%
of contested S&S citations were vacated, dismissed, or modified to non-S&S in 2009-2010. See
B. Br. at 16 (“In fiscal 2009 and 2010, nearly 20% of contested S&S violations were vacated or
modified to non-S&S.”); S. Br. at 13 n.13 (“MSHA represents that the 2009-2010 data show that
just under 19% of contested S&S citations were vacated, dismissed, or modified to non-S&S.”).

Even assuming that approximately 19% of contested S&S citations were vacated,
dismissed, or modified to non-S&S in 2009-2010, the fact remains that more than 80% of S&S
designations remained unchanged after litigation. In this case, MSHA relies on 54 alleged S&S
violations in four different categories. If 20%, or even 33%, of those citations and orders lose
their S&S designation after litigation, it would still leave a significant number of S&S violations
on which a pattern of violations could be found. We are thus satisfied that MSHA did not
“entirely fail[] to consider an important aspect of the problem,” and we find no abuse in the
Agency’s decision to rely on non-final issuances even though some S&S designations may later
be changed in adjudication. Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. at 43.

Moreover, MSHA extensively addressed its decision to eliminate the final order
requirement in the current rule’s preamble, setting forth relevant data and articulating a
satisfactory reason for its action. 78 Fed. Reg. at 5059-61. MSHA explained that the final order
requirement had proven to be an impediment in MSHA’s use of section 104(e) as contemplated
by Congress. Id. at 5059. Because of delays that occur when citations and orders are litigated
before the Commission, by the time finality is reached, a passage of months or years may have
occurred, and conditions at the mine may no longer reflect the same conditions that existed when
a hazard was originally identified and cited. Id. In sum, the prior rule prevented MSHA from
basing POV determinations on an operator’s recent compliance history. Id. at 5060.

MSHA’s determination that POV status should be based on an operator’s recent
compliance history is consistent with Congress’ intent that the agency have an effective tool for
dealing with recurrent violations, “some of which were tragically related to . . . disasters,” such
as the one that occurred at the Scotia mine. Legis. Hist. at 620. In the preamble to the current
rule, MSHA observed that, despite having “an egregious record of noncompliance,” the Upper
Big Branch mine avoided being placed on a POV under the prior rule, and that the conditions at
the mine led to a disastrous explosion on April 5, 2010, in which 29 miners were killed and two
were injured. 78 Fed. Reg. at 5057; 36 FMSHRC at 307.

Turning to Brody’s argument that MSHA failed to consider the safety improvements
afforded by the prior PPOV process, MSHA explicitly acknowledged comments pointing out that
a majority of operators who received the PPOV notice reduced their S&S citations below the
national average for similar mines. 78 Fed. Reg. at 5058. However, MSHA explained that,
“Experience has shown that the existing PPOV provision created the unintended consequence of
encouraging some mine operators to achieve short-term improvements instead of adopting
systemic, long-term improvements in their health and safety management culture.” Id. at 5059.

As noted by commentators on the proposed rule who favored elimination of the PPOV
procedures, the PPOV process contained “the incentive for mine operators to make just enough
short-term improvements to get off the PPOV list, but then backslide and wait for MSHA to
issue the next PPOV notice.” 78 Fed. Reg. at 5058. MSHA statistics established that in the
period June 2007 through September 2009, a large majority of mines which received PPOV
letters significantly reduced their rate of S&S citations and orders. However, compliance at 21%
of the mines which received PPOV letters deteriorated enough over approximately a 24-month
period to warrant a second PPOV letter. Id.

Moreover, 39% of the mines which received a
PPOV letter experienced an increase in the number of injuries in the second year following
receipt of the PPOV letter compared to the first year. Id. at 5069.

In contrast, MSHA asserts that the changes implemented in the current rule will result in
more sustained improvements. Id. at 5058. Enforcement based on real time status creates an
incentive for operators to use the online Monthly Monitoring Tool, a program that allows them to
continually monitor their compliance to ensure they are not in jeopardy of a POV designation.
Operators are able to evaluate their performance and respond accordingly, including instituting
voluntary efforts to improve compliance. Id. at 5059, 5061. Such an approach appropriately
places responsibility on operators to ascertain whether they are at risk of a POV designation and,
if so, determine what action they will take to avoid that result. As MSHA found, this incentivizes
long-term compliance rather than short-term avoidance of POV. Id. at 5059.

In sum, we conclude that MSHA’s regulation is not arbitrary, capricious, or an abuse of
discretion, but rather is a reasonable approach consistent with the language and purpose of the
Mine Act.

3.         Procedural Due Process requirements

Compliance with the language of section 104(e) does not fully resolve Brody’s challenge
to the current rule. The Judge concluded that it is not until a withdrawal order is issued that an
operator has the opportunity for a hearing in which it may contest the 104(e) order and the
underlying POV notice.

36 FMSHRC at 305. Brody argues that this process resulting in
interruptions in its mining operations without a prior hearing violates the Fifth Amendment’s
provision that no person shall be deprived of property without due process of law.

As the Supreme Court has held, “some form of hearing is required before an individual is
finally deprived of a property interest.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976). The
“fundamental requirement of due process is the opportunity to be heard ‘at a meaningful time in a
meaningful manner.’” Id. (citations omitted).

Adequate post-deprivation procedures are sufficient to satisfy due process in some
circumstances. See Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 599 (1950) (“It is
sufficient, where only property rights are concerned, that there is at some stage an opportunity for
a hearing and a judicial determination.”). In considering whether due process requires an
evidentiary hearing prior to the deprivation of a property interest, even if such a hearing is
provided thereafter, we must balance three factors:

First, the private interest that will be affected by the official action;
second, the risk of an erroneous deprivation of such interest
through the procedures used, and the probable value, if any, of
additional or substitute procedural safeguards; and finally, the
Government’s interest, including the function involved and the

fiscal and administrative burdens that the additional or substitute
procedural requirement would entail.

Mathews v. Eldridge, 424 U.S. at 335.

Considering the first factor, we conclude that Brody has a significant property interest in
continuing its mining operations without withdrawing miners. See, e.g., United States v. James
Daniel Good Real Prop., 510 U.S. 43, 49 (1993). The POV sanction is one of the most severe
enforcement tools that MSHA may use, indicating a specific Congressional intent that “the
Secretary use the POV enforcement tool as a last resort when other enforcement

tools . . . fail to bring an operator into compliance.” 78 Fed. Reg. at 5060.

Thus, we do not agree with the Judge’s conclusion that Brody’s description of the impact
on its property interest is “overstated.” 36 FMSHRC at 305. A withdrawal order may affect only
a part of a mine or a piece of equipment until the S&S violation is abated. However, the
significant impact on Brody’s property interest comes from remaining on the “chain” of
withdrawal liability until the chain is broken by a clean inspection. See generally Naaco Mining
Co., 9 FMSHRC 1541, 1545-46 (Sept. 1987) (recognizing the “threat” of being placed on a
withdrawal order chain as an incentive for operator compliance).

The third factor is also readily apparent. MSHA has a compelling interest in considering
non-final S&S violations in making POV determinations. As the Supreme Court stated in Hodel
v. Va. Surface Mining & Reclamation Ass’n, “[p]rotection of the health and safety of the public is
a paramount governmental interest which justifies summary administrative action.” 452 U.S.
264, 300 (1981). The Court observed that, in fact, “deprivation of property to protect the public
health and safety is ‘[o]ne of the oldest examples’ of permissible summary action.” Id. (citations
omitted).

MSHA has asserted that the major changes in the current rule were necessary to protect
miner safety and health. The magnitude of the problem addressed by the current rule is fully
described in the OIG Report, which recommended elimination of the final order requirement and
the PPOV process, and was summarized there as follows:

In summary, during the 32 years that MSHA has had Pattern of
Violations authority, it has never successfully used it against a
mine operator. MSHA allowed the rulemaking to stall as
stakeholders argued differing views on implementation. Moreover,
for many years after the regulations were in place MSHA relied on
District personnel to interpret and carry out those regulations. Only
during the past few years had MSHA used a standardized method
based on quantitative data for identifying potential POV mines.
However, these analyses have proven to be complex and

unreliable. Moving forward, it is imperative for MSHA to ensure
that POV criteria and procedures are transparent and well reasoned.

Rep. No. 05-10-005-06-001, at 14. As discussed above, elimination of the PPOV process was
intended to prompt operators to adopt “systemic, long-term improvements in their health and
safety management culture” rather than just short-term improvements. 78 Fed. Reg. at 5059. The
elimination of the final order requirement in the current rule was designed to “protect[] miners
working in mines operated by habitual offenders whose chronic S&S violations have not been
deterred by the Secretary’s other enforcement tools.” Id. at 5060. This is a clear and paramount
governmental interest.

We disagree with our dissenting colleague’s assertion that “the balance between property
rights and an immediate public interest tilts very sharply toward the property rights affected by a
POV Notice” because the POV rule does not address a “situation of urgency.” Slip op. at 56. Just
as the Judge understates the impact of the POV rule on the operator’s property interest, our
dissenting colleague understates the public interest in mine safety embodied in the POV rule.

As recognized by Congress and evident in disasters since enactment of section 104(e), miners are
placed in a situation of urgency when working in mines where the operator has “demonstrate[d]
[a] disregard for the health and safety of miners through an established pattern of
violations.” Legis. Hist. at 620. Indeed, the legislative history establishes that Congress created
the pattern of violations provision because of the explosions at the Scotia Mine which took the
lives of 23 miners and three Federal inspectors:

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.

Id. at 592, 620. Thus, we disagree with our dissenting colleague that “section 104(e) is not
intended to deal with present or recently past hazards.” Slip op. at 52. Congress considered an
operator which has “demonstrate[d] [a] disregard for the health and safety of miners” to
constitute a present hazard. Legis. Hist. at 620.

Significantly, as described supra, at 11, Congress intended the pattern of violations
provision to parallel the provision for withdrawal of miners from an area of a mine based on
repeated unwarrantable failure violations contained in section 104(d) of the Mine Act. Id. at 621.
Neither section 104(e) nor (d) contains any provision for a hearing or other due process
protection prior to the withdrawal of miners from the area in question. Thus, Brody’s complaint
of due process deprivation is not with the Secretary’s POV rule but rather with Congress’s
enactment of section 104(e) itself.

Our holding thus turns on the second factor, the risk of erroneous deprivation under the
POV rule’s procedures. Weighing this risk with the other two factors, we conclude that the
current rule adequately addresses the potential for erroneous deprivation and satisfies procedural
due process. We reach this conclusion based on the pre-deprivation and post-deprivation
protections afforded operators. See Mackey v. Montrym, 443 U.S. 1, 13 (1979) (“And, when
prompt postdeprivation review is available for correction of administrative error, we have
generally required no more than that the predreprivation procedures used be designed to provide
a reasonably reliable basis for concluding that the facts justifying the official action are as a
reasonable governmental official warrants them to be.”).

Before an operator is formally notified that it is in a pattern of violations, MSHA’s on-line Monthly Monitoring Tool provides operators with an opportunity to monitor notice of their
status for the possibility that they might be subject to consideration for issuance of a POV notice.
78 Fed. Reg. at 5061. Operators can present information to support mitigating circumstances to
the MSHA District Manager at any time.

Id. at 5063. Operators also have the opportunity at any
time to implement a corrective action program to reduce S&S violations. Id. at 5063-64.

If MSHA’s Monthly Monitoring Tool reveals that an operator has satisfied the screening
criteria set forth on MSHA’s website, MSHA also conducts a review to determine whether a
POV notice should not be issued or should be postponed after considering any mitigating
circumstances and other information.

Id. at 5063. MSHA considers an operator’s effective
implementation of an MSHA-approved corrective action program as a mitigating circumstance in
its POV review. Id.

In addition, operators can discuss citations and orders with the inspector during the
inspection and at the closeout conference.

78 Fed. Reg. at 5061. At any time after the issuance
of an S&S citation or order, an operator may contest the citation or order and request an
expedited hearing, particularly if MSHA’s Monthly Monitoring Tool reveals that the operator
may be approaching consideration for a POV notice.

See 29 C.F.R. §§ 2700.20, 2700.52.

As for post-deprivation procedures, after a withdrawal order is issued under section
104(e), an operator may seek expedited temporary relief under section 105(b)(2) of the Act, 30
U.S.C. § 815(b)(2). See also 29 C.F.R. §§ 2700.46, 2700.47. See Hodel, 452 U.S. at 298-302
(holding that summary post-deprivation procedures satisfied due process). In addition, operators
may seek expedited proceedings on contests of section 104(e) withdrawal orders.

See 29 C.F.R.
§§ 2700.20, 2700.52.

Given these procedures, the relative cost of the alternative proposed by Brody is too high.
Requiring MSHA to wait to issue a POV notice until the notice can be based on final orders
would deprive MSHA of the ability to base POV determinations on an operator’s recent
compliance history. Moreover, elimination of the PPOV process does not deprive operators of
adequate notice given the ongoing notice provided by MSHA’s Monthly Monitoring Tool.

Brody’s due process argument is a facial attack on the pattern of violations regulations
contained in 30 C.F.R. Part 104. “To prevail in such a facial challenge, [Brody] ‘must establish
that no set of circumstances exists under which the regulation would be valid.’” Reno v. Flores,
507 U.S. 292, 301 (1993) (citations omitted). Brody has failed to establish such a basis for its due
process challenge to the current rule. In sum, we conclude that the term “violations” in section
104(e) of the Mine Act permits MSHA to include non-final citations/orders in a pattern of
violations. The Secretary’s interpretation of the term “violations” in section 104(e) reasonably
carries forth Congress’ intent and is consistent with the express delegation in section 104(e) of
the Act. We further hold that MSHA’s adoption of the current rule was not arbitrary, capricious
or an abuse of discretion. Finally, we conclude that the current rule satisfies procedural due
process. Accordingly, we uphold the facial validity of the current rule.

C.        Use of POV screening criteria not promulgated through notice-and-comment
rulemaking

Section 104.2 of the POV rule sets forth the criteria included in MSHA’s review to
identify mines with a pattern of S&S violations. In promulgating current section 104.2, MSHA
combined sections 104.2 and 104.3 of the 1990 rule. 78 Fed. Reg. at 5058. In so doing, the
current rule eliminated the PPOV process and the requirement that MSHA consider only final
orders when evaluating mines for a POV. Id. Current section 104.2(b) newly provides that
MSHA will post specific pattern criteria on its website, and section 104.2(a) lists eight factors
which include mitigating circumstances, that MSHA considers in making its POV determination. 

MSHA uses the specific numerical criteria posted on its website as an initial screening to
narrow the more than 14,000 mines within its jurisdiction to those mines that are suitable for
further consideration for a POV notice. S. Br. at 26; Oral Arg. Tr. 43, 90. After that initial
screening, MSHA applies the criteria set forth in section 104.2(a) in its determination of whether
to issue a POV notice to a mine. S. Br. at 26-27.

Brody argues that the specific pattern criteria posted on MSHA’s website are invalid
because they are, in effect, legislative rules and should have also been the subject of rulemaking.
We disagree.

Section 104(e)(4) of the Mine Act authorizes the Secretary to “make such rules as he
deems necessary to establish criteria for determining when a pattern of violations of mandatory
health or safety standards exists.” 30 U.S.C. § 814(e)(4). Congress stated its “intention to grant
the Secretary in Section 104(e) broad discretion in establishing criteria for determining when
a pattern of violations exists.” Legis. Hist. at 621. Section 104(e)(4) does not explicitly require
the Secretary to engage in rulemaking to establish POV criteria. Rather, the Secretary must
“make such rules as he deems necessary to establish criteria.”

Section 553 of the APA requires agencies to provide notice of proposed rulemaking and
an opportunity for public comment prior to a rule’s promulgation. 5 U.S.C. § 553. Under the
APA, a “rule” is defined as “the whole or a part of an agency statement of general or particular
applicability and future effect designed to implement, interpret, or prescribe law or policy or
describing the organization, procedure, or practice requirements of an agency. . . .” 5 U.S.C.

§ 551(4). Legislative rules are subject to notice-and-comment requirements, while general
statements of policy are not. 5 U.S.C. § 553(b)(3)(A); Nat’l Mining Ass’n v. Sec’y of Labor, 589
F.3d 1368, 1371 (11th Cir. 2009) (citations omitted). The Secretary asserts that the POV
screening criteria constitute a general statement of policy.

The Commission has recognized that the agency’s own label of its action is indicative but
not necessarily dispositive in classifying the type of action taken. Drummond Co., 14 FMSHRC
661, 683 (May 1992) (citations omitted). Rather, “it is the ‘substance of what the [agency] has
purported to do and has done which is decisive.’” Id. (citations omitted).

In delineating the difference between legislative rules and general statements of policy,
courts consider whether the agency action establishes a binding norm. Nat’l Mining Ass’n, 589
F.3d at 1371. The “key inquiry” is the “extent to which the challenged policy leaves the agency
free to exercise its discretion to follow or not follow that general policy. . . or whether the policy
so fills out the statutory scheme that upon application one need only determine whether a given
case is within the rule’s criterion.” Id. (internal quotations and citation omitted). Courts have
explained that “[a]s long as the agency remains free to consider individual facts in the various
cases that arise, then the agency in question has not established a binding norm.” Id.

In Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 534, 538 (D.C. Cir. 1986),
another case where the issue was whether MSHA’s enforcement documents required

notice-and-comment rulemaking, the Court held that MSHA’s “Enforcement Policy and
Guidelines for Independent Contractors” was a non-binding agency policy statement. The Court
emphasized that the policy pertained to the agency’s exercise of enforcement discretion “an area
in which the courts have traditionally been most reluctant to interfere.” Id. at 538. The Court
stated that an agency action is not deemed a binding norm “merely because it may have ‘some
substantive impact,’ as long as it ‘leave[s] the administrator free to exercise his informed
discretion.’” Id. at 537 (citation omitted). Moreover, courts look at the language of an agency’s
pronouncement for indications that the agency may exercise its discretion. See, e.g., id. at 537-38
(“We have, for example, given decisive weight to the agency’s choice between the words “may”
and “will”). 

In a subsequent case, the D.C. Circuit similarly ruled that Department of Health and
Human Services’ communications implementing peer review policies for hospitals did not
require notice and comment because they were procedural rules. Am. Hosp. Ass’n v. Bowen, 834
F.2d 1037, 1041 (D.C. Cir.1987). The Court declared that the directives “establish a frequency
and focus of [peer] review, urging . . . enforcement agents to concentrate their limited resources
on particular areas where HHS evidently believes . . . attention will prove most fruitful.” Id. at
1050. In finding that these procedures were exempt from notice-and-comment rulemaking, the
Court noted that “[f]ar from imposing a new substantive burden on hospitals, the agency’s
decision to focus its resources on such likely problem areas gives more full effect to the intent of
the congressional framers of the peer review amendments” (id. at 1052), and that “agency
decisions on where to concentrate enforcement efforts within a universe of valid targets need not
be prefaced by notice and comment procedures” (id. at 1056).

After considering the 2013 POV screening criteria posted on MSHA’s website, we
conclude that the screening criteria are a general statement of policy. As with the peer review
policy at issue in American Hospital Association, the screening criteria assist MSHA in
ascertaining how it will “concentrate enforcement efforts” regarding POV enforcement. Id.
Moreover, the screening criteria set forth language that indicates that even if a mine meets the
criteria, MSHA still exercises discretion in determining whether a POV notice should be issued
to the mine. For instance, the screening criteria provide, “All non-abandoned mines . . . are
reviewed to determine if a pattern of violations may exist.” B. Mem. Supporting Appl. for Temp.
Relief, Ex. 10 at 1 (emphasis added). The screening criteria also provide, “The following two sets
of screening criteria are used to perform the review required under 30 CFR § 104.2. Mines must
meet the criteria in either set to be further considered for exhibiting a pattern of violations.” Id.
(emphasis in original omitted and emphasis added).

Rather than automatic inclusion of all operators who meet the screening criteria, MSHA
has provided a process for further review. As described supra, slip op. at 5-6, 19-20 n.15, after
the screening criteria weed out the vast majority of mines,

an MSHA Pattern of Violations
Review Panel considers mitigating circumstances, and makes a recommendation to the
Administrator. Our dissenting colleague’s opinion gives the impression that MSHA’s hands are
tied when considering mitigating circumstances, because such circumstances are limited to three
conditions. Slip op. at 33-34 & n.5. This is wrong. As we noted earlier, slip op. at 19, n.14, the
preamble to the POV rule lists several types of mitigating circumstances that could justify a
decision not to issue a POV notice, but explicitly states that such circumstances are not limited to
those that were articulated. 78 Fed. Reg. at 5063. Appendix A of MSHA’s Pattern of Violations
Procedures Summary also states explicitly that the conditions in the mine that may justify such a
decision may include but are not limited to, the conditions cited in the Appendix. B. Mem.
Supporting Appl. for Temp. Relief, Ex. 11 at 3. Consequently, our colleague’s statement that
“[i]f an operator meets the specific pattern criteria, it is in POV status subject only to a separate
decision that it has recently mitigated its history of violations by change of ownership or adoption
of a previously-approved MSHA approved corrective action program” is incorrect. Slip op. at 49.
Thus, MSHA’s discretion in this regard is far broader than our colleague has acknowledged.

We also observe that section 104.2(a)(7) states that MSHA will consider whether there is
other information that demonstrates a serious safety or health problem at the mine which
warrants POV enforcement. The preamble states that under this rule, the information may
include, but is not limited to, the following:

•          Evidence of the mine operator’s lack of good faith in
correcting the problem that results in repeated S&S
violations;

•Repeated S&S violations of a particular standard or
standards related to the same hazard;

•Knowing and willful S&S violations;

•Citations and orders issued in conjunction with an accident,
including orders under sections 103(j) and (k) of the Mine
Act; and

•S&S violations of health and safety standards that
contribute to the cause of accidents and injuries.

78 Fed. Reg. at 5062 (emphasis added).

The application of section 104.2(a)(7) demonstrates an
exercise of discretion similar to that exercised under the prior rule. See 30 C.F.R. §§ 104.3(a)(1)
& (2) (1990). Thus, the dissent is incorrect in asserting that MSHA does not retain discretion in
its POV determination.

In this case, the Review Panel considered two potentially mitigating circumstances, a
change in ownership and a corrective action plan. The Panel noted that a change in Brody’s
controlling entity occurred on December 31, 2012, that there were subsequent “wholesale”
changes in company officers and mine management, and that Brody implemented a corrective
action plan in January 2013 and an updated and revised corrective action plan in March 2013.
The Panel further noted that the rate of S&S issuances had declined during the first part of 2013.
However, the rate of S&S issuances climbed back to its previous level in July and August 2013.
The Panel further noted an increase in unwarrantable failure issuances in June and July 2013, and
the issuance of training and imminent danger orders in August. Hence, the Panel concluded that
the changes in personnel and the corrective action plan did not achieve “measurable
improvements in compliance.” S. Mem. Supporting Opp’n to Appl. for Temp. Relief, Ex. A at 8.
The Panel also “considered the fact that Brody does not accurately report injury and employment
information.” Id. at 11. Based on this review, the Panel recommended issuance of a POV notice
to Brody Mine No. 1. Id. at 8-12. The process for further review in this case illustrates that the
Administrator is free to exercise his informed discretion in the issuance of a POV notice, despite
the existence of the numerical screening criteria.

Accordingly, we conclude that the screening criteria posted on MSHA’s website amount
to a general statement of policy and are not subject to notice-and-comment rulemaking
requirements.

D.        Application of the current rule to violations occurring before its effective date

Finally, Brody argues that the Secretary impermissibly included 24 citations in the POV
notice that had been issued prior to the March 25, 2013 effective date of the current rule, and that
such inclusion is improper because it gives retroactive effect to the rule. It asserts that if the 24
citations were not included, it would not have satisfied the initial screening criteria.

Agencies have the power to issue legislative rules only to the extent Congress has
conferred that power. Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). A statutory
grant of legislative rulemaking power will not be understood to encompass the power to
promulgate retroactive rules unless that power is conveyed by Congress in express terms. Id.; see
also Rock of Ages Corp. v. Sec’y of Labor, 170 F.3d 148, 158 (2d Cir. 1999).

It is recognized that “a law is not retroactive merely because it is applied to conduct
before the law was passed or upsets expectations based in prior law.” Durable Mfg. Co. v. DOL,
578 F.3d 497, 503 (7th Cir. 2009) (citing Landgraf v. USI Film Prods., 511 U.S. 244, 269
(1994)). “Rather, a law has retroactive effect if it ‘would impair rights a party possessed when he
acted, increase a party’s liability for past conduct, or impose new duties with respect to
transactions already completed.’” Id. To determine whether a rule is retroactive, a court must
consider “the nature and extent of the change in the law and the degree of connection between
the operation of the new rule and a relevant past event,” guided by “familiar considerations of
fair notice, reasonable reliance, and settled expectations.” Landgraf, 511 U.S. at 270.

We hold that the inclusion of the 24 citations that pre-dated the current rule’s effective
date in the POV notice issued to Brody was not a retroactive application of the rule. Application
of the rule to include those citations did not increase Brody’s liability for past conduct. As the
Secretary argues, section 104(e) may be analogized to “repeat offender” provisions under which
an enhanced penalty is not an “additional penalty for the earlier crimes,” but rather was a
“stiffened penalty for the latest crime, which is considered to be an aggravated offense because
[it is] a repetitive one.” Gryger v. Burke, 334 U.S. 728, 732 (1948). Inclusion of the citations in
the POV notice is not retroactive because it alters the present situation, not “‘the past legal
consequences of past actions.’” Nat’l Cable & Telecomm. Ass’n v. FCC, 567 F.3d 659, 670 (D.C.
Cir. 2009).

Nor does inclusion of the citations in the POV notice take away or impair vested rights
that Brody had under the prior rule. The current rule does not affect Brody’s right to contest the
24 citations after their issuance or affect any penalty assessed. By including the citations, MSHA
is considering Brody’s past inspection history without affecting Brody’s right to contest the
citations. Cf. Ass’n of Accredited Cosmetology Sch. v. Alexander, 979 F.2d 859, 864 (D.C. Cir.
1992) (holding rules not retroactive that permit past default rates to be basis for termination for
eligibility in student loan program where default rates were permissible under prior law).

Considerations of fair notice, reasonable reliance, and settled expectations do not alter our
conclusion. Brody has not alleged that if it had known that the 24 citations would be included in
the POV notice, it would have engaged in different conduct. Brody contested the 24 citations,
just as it would have if they had been issued after the effective date of the rule. Indeed, the
incentive for operators to contest S&S citations was, if anything, greater before the effective date
of the current rule because, under the prior rule, a contest of an S&S citation would delay the
time it would become final, and thus eligible for consideration toward a POV notice.

Even before the current rule took effect, Brody knew that certain conduct could constitute
an S&S violation and that, under section 104(e), a pattern of S&S violations could trigger POV
sanctions. In fact, MSHA had sent Brody a PPOV letter on March 1, 2013, prior to the effective
date of the current rule. S. Mem. Supporting Opp’n to Appl. for Temp. Relief, Ex. A at 10. As
discussed above, nothing in the Mine Act requires that the violations in a pattern notice be final
orders. See Tarver v. Shinseki, 557 F.3d 1371, 1375 (Fed. Cir. 2009) (considering whether
claimant could point to anything she would have done differently in analysis of retroactivity).

In addition, the numerical portion of the 2013 POV screening criteria applied to Brody
was the same as the numerical criteria posted by MSHA in 2012 under the prior rule, and both
used data collected over 12 months.

The proposed rule also referred to the screening criteria on
MSHA’s website and indicated that it would eliminate the final order requirement. 76 Fed. Reg.
at 5720, 5721; Nat’l Petrochemical & Refiners Ass’n v. EPA, 630 F.3d 145, 164 (D.C. Cir. 2010)
(concluding that notice of proposed rulemaking provided notice of agency’s likely approach).
Thus, Brody knew before the effective date of the rule that the numerical criteria would use data
that covered an entire year, based on the date that MSHA chose to run its screening criteria.

IV.

Conclusion

For the reasons discussed above, we conclude that the current rule is facially valid and
consistent with the requirements of procedural due process, that MSHA’s screening criteria were
not required to be the subject of notice-and-comment rulemaking, and that the current rule was
not applied in an impermissibly retroactive manner to Brody. Accordingly, we affirm the Judge’s
interlocutory order and remand for further proceedings.

/s/ Mary Lu Jordan

Mary Lu Jordan, Chairman

/s/ Michael G. Young

Michael G. Young, Commissioner

/s/ Robert F. Cohen, Jr.

Robert F. Cohen, Jr., Commissioner

/s/ Patrick K. Nakamura

Patrick K. Nakamura, Commissioner

Commissioner Althen, dissenting:

Part 104 of the regulations of the Mine Safety and Health Administration (MSHA)
governs “Pattern of Violations” (hereinafter “POV”), pursuant to section 104(e) of the Mine Act,
30 U.S.C. § 814(e). 30 C.F.R. § 104. Section 104.2, entitled “Pattern criteria,” establishes criteria
for determining the existence of a pattern of “significant and substantial,” or “S&S,” violations of
the Mine Act. 30 C.F.R. § 104.2. Subsection (a) of section 104.2 states that at least once each
year MSHA will determine if any mine meets the pattern of violations criteria and identifies a
number of criteria relevant to POV status. Subsection (b) of section 104.2 establishes use of
specific numerical pattern criteria and states that “MSHA will post the specific pattern criteria on
its Web site.” 30 C.F.R. § 104.2(b).

In upholding the regulations as validly issued, the majority here permits issuance of
specific binding pattern criteria without compliance with the notice-and-comment requirements
of the Administrative Procedure Act (APA). In so doing, it wholly disregards the binding effect
of the specific pattern criteria upon MSHA and accepts MSHA’s assurance that the specific
pattern criteria are only “screening criteria.”

The majority also accepts MSHA’s claim that it may enforce a POV Notice severely
impacting property rights of mine operators before rather than after any form of hearing even
though such issuance of a POV Notice requires more than a year of analysis and MSHA has
many other enforcement weapons to deal with current, recent, or ongoing violations of its
regulations. In light of MSHA’s enforcement tools, old and new, and MSHA’s official definition
of a POV as stated in this litigation, that decision is plainly wrong. MSHA can provide
meaningful due process procedures to operators before issuance of POV Notice. The
Commission should require it to do so.

I.

APPLICATION OF THE ADMINISTRATIVE PROCEDURE ACT

A.        The Determination of POV Status

1.         30 C.F.R. § 104

Although Section 104(e) of the Mine Act was enacted in 1977, MSHA did not adopt
regulations implementing Section 104(e) of the Mine Act until 1990. 55 Fed. Reg. 31,128-01
(July 31, 1990). Those regulations set forth a two-step process for issuance of POV Notice.
Original section 104.2, entitled “Initial screening,” identified criteria for selecting mines that
would then be further reviewed for possible issuance of a POV Notice under “pattern criteria” set
forth in original section 104.3 of the regulation. The screening criteria listed included the mines’
compliance records; enforcement measures taken by MSHA at the mine other than under section
104(e) of the Mine Act; the extent of a lack of good faith on the part of the operator in addressing
the conditions that were leading to repeated S&S violations; the mine’s history of accidents and
injuries; and any mitigating circumstances. 30 C.F.R. § 104.2 (1990).

Later, MSHA eventually posted two sets of “Initial Screening Criteria” on its website.
Under the prior regulations, if a mine met either set of these screening criteria, the mine was then
further reviewed under “Pattern Criteria” set forth in section 104.3 of the regulations. The pattern
criteria were used to determine if the operator “habitually” allowed the recurrence of S&S
violations, for the purpose of deciding whether there was a “pattern” to such violations. The
pattern criteria identified in original section 104.3(a) of the regulations were: (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 an
unwarrantable failure to comply. Under original section 104.3(b), these criteria were applied only
to citations/orders that had become final. 30 C.F.R. § 104.3 (1990).

MSHA adopted the revised regulations at issue here on January 23, 2013, with an
effective date of March 25, 2013. 78 Fed. Reg. 5056, 5073-74 (Jan. 23, 2013). The revised
regulations substantially changed the process for issuance of a POV Notice.

First, the former section 104.3 setting forth pattern criteria linking POV Notices to
“habitual” S&S violations related to particular standards or hazards or unwarrantable failures was
eliminated and not replaced.

Although not couched in terms of a “definition” of a POV, the
former section 104.3 essentially defined the “pattern” aspect of a POV by referring to habitual
S&S violations and based such habitual pattern on repeated violations of a particular standard or
standards related to the same hazard or to unwarrantable failures. Although the revised regulation
deleted section 104.3, it did not fashion a replacement definition of the “pattern” of conduct that
would result in POV status.

Second, the pre-deprivation procedures set forth in section 104.4 were eliminated and not
replaced. In responding to comments regarding the elimination of such procedures, MSHA stated
that it would allow operators to request a conference with the field office supervisor or district
manager regarding particular S&S citations, for the limited purpose of discussing discrepancies
and/or errors in data such as incorrectly entered citations. 78 Fed. Reg. at 5065-66.

In response to criticism by commenters that the deletion eliminated due process
protections, MSHA cited a new enforcement tool provided on its website that allows an operator
to undertake continuing evaluation of its performance against the specific pattern criteria referred
to in the regulation. 78 Fed. Reg. at 5066. In doing so, MSHA guaranteed operators that they
would not be subject to a POV Notice if they avoided coming within the limits of the specific
pattern criteria. MSHA stated that, because operators not falling within those specific criteria
would not be subject to receipt of a POV Notice, the enforcement tool, along with the possibility
for expedited post-deprivation hearings, provided due process. Thus, MSHA bound itself to the
specific pattern criteria — operators are assured that if they do not fall within the specific pattern
criteria they will not be issued a POV Notice. 78 Fed. Reg. at 5064.

A third change in the rules was the elimination of the limitation that POV Notices could
be issued only on the basis of final citations and orders. MSHA stated that it was not feasible to
issue POV Notices on the basis of final violations and that orders under other provisions of the
Mine Act could be issued on the basis of non-final citations and orders. 78 Fed. Reg. at 5060.

Fourth, section 104.2 was rewritten. As demonstrated in Table 1 below, the “Initial
Screening Criteria” in the prior regulation were converted into “Pattern Criteria” at section
104.2(a). Second, and more importantly for present purposes than the conversion of “screening
criteria” into “pattern criteria,” a new subsection (b) was added to the regulation. It provides:
“MSHA will post the specific pattern criteria on its Web site.” 30 C.F.R. § 104.2(b). Therefore,
subsection (b) plainly creates “specific pattern criteria” but provides for their posting on MSHA’s
Website.

Table 1

New Section 104.2 – “Pattern Criteria”

Prior Section 104.2 “Initial Screening”

At least once each year, the compliance and
accident, illness, and injury records of mines
are reviewed to determine if any mines meet
the pattern of violations criteria. MSHA’s
review to identify mines with a pattern of
S&S violations will include:

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

104.2(a)(1)

History of S&S citations

104.2(a)(1)

History of S&S citations

104.2(a)(2)

Closure orders under Mine Act section 104(b)

104.2(a)(2)

Closure orders under Mine Act section 104(b)

104.2(a)(3)

Citations and orders under Mine Act section
104(d)

104.2(b)(1) and (2)

Enforcement measures other than 104(e);
evidence of lack of good faith through
repeated S&S violations

104.2(a)(4)

Imminent danger orders

104.2(a)(3)

Imminent danger orders

104.2(a)(5)

Orders under Mine Act section 104(g)

104.2(b)(1) and (2)

Enforcement measures other than 104(e);
evidence of lack of good faith through
repeated S&S violations

104.2(a)(6)

Enforcement measures other than 104(e)

104.2(b)(2)

Enforcement measures other than 104(e)

104.2(a)(7)

History of accident, illnesses, injuries

104.2(b)(3)

History of accident, illnesses, and injuries

104.2(a)(8)

Mitigating circumstances

104.2(b)(4)

Mitigating circumstances

New Section104.2(b)

“MSHA will post the specific pattern
criteria on its Web site.”

No comparable provision

The screening criteria posted on MSHA’s website under the prior rule identified two sets
of criteria with numerical specifications for screening. The introduction to the criteria was
entitled Initial Screening Criteria and stated that “[t]he following two sets of screening criteria
are used to perform the initial screening required under 30 C.F.R. § 104.2. Mines must meet the
criteria in either set to be further considered for exhibiting a potential pattern of violations.”

S. Mem. Supporting Mot. for Partial Summ. Dec., Ex. 2 at 1 (emphasis omitted).

In promulgating the revised regulations, MSHA utilized the same specific numerical
criteria that had been on the website under the prior regulation. However, they were now issued
as “specific pattern criteria” in accordance with the establishment of specific pattern criteria in
the regulation in section 104.2(b). MSHA also modified the introductory language to confirm the
criteria as the specific pattern criteria referenced in the regulation itself. The outcome
determinative importance of the specific pattern criteria created in the regulation itself and then
posted on the website was emphasized in the preamble to the final POV: “Final § 104.2(b),
proposed as § 104.2(a), provides that MSHA will post, on its Web site at
http://www.msha.gov/POV/POVsinglesource.asp, the specific criteria, with numerical data, that
the Agency will use to identify mines with a pattern of S&S violations.” 78 Fed. Reg. at 5064.
The introduction to the specific criteria confirmed the numerical specific criteria as “Pattern
Criteria”

and provided: “The following two sets of screening criteria are used to perform the
review required under 30 C.F.R. § 104.2. Mines must meet the criteria in either set to be further
considered for exhibiting a potential pattern of violations.” B. Mem Supporting Appl. for Temp.
Relief, Ex. 10 at 1 (emphasis added).

The text of the introduction continues to use the term “screening criteria.” However, the
language no longer refers to use for an “initial screening” but rather for the “review required
under 30 C.F.R. § 104.2” – namely, the pattern criteria. More importantly, MSHA demonstrates
the actual use of the specific pattern criteria in its POV Procedures Summary. A mine satisfying
either set of specific pattern criteria is in POV status and will receive a POV Notice unless
MSHA separately decides that the mine has mitigated its tendency toward S&S
citations/orders/violations.

2.         Process for Designation of POV Status

MSHA provides a Pattern of Violations (POV) Procedures Summary on its website. B.
Mem. Supporting Appl. for Temp. Relief, Ex. 11. If a mine does not meet the specific pattern
criteria, it is not in POV status and no consideration of issuance a POV notice is given to it. On
the other hand, when an operator meets the specific pattern criteria MSHA considers it in POV
status and moves only to a consideration of possible mitigation.

At that point, MSHA headquarters seeks input from the appropriate District Manager, but
not with respect to any of the Pattern Criteria, but rather with regard to three described and
narrowly-drawn “mitigating circumstances” – namely, the mine has been deactivated, mine
ownership has changed to an operator less likely to incur S&S violations, or the operator has
adopted a corrective action plan approved by MSHA. B. Mem. Supporting Appl. for Temp.
Relief, Ex. 11 at 3. Upon receipt of the District Manager’s report on mitigating circumstances, an
“MSHA POV panel” is to review the mitigation information provided by the District Manager.

Id. at 1.

3.         Panel Recommendation Leading to POV Notice

The POV Panel recommendation related to Brody is dated October 22, 2013, and
comports with the Procedures Summary. S. Mem. Supporting Opp’n to Appl. for Temp. Relief,
Ex. A. After an introduction in which the specific numerical pattern criteria (and only the specific
numerical pattern criteria) are quoted, the Panel memorandum focuses exclusively on, and
rejects, possible mitigation. In Section 1, the Panel discusses and rejects a change of ownership
as a possible reason for mitigation. Id. at 8-10. In Section 2, the Panel discusses and rejects
Brody’s corrective action program as a possible reason for mitigation. Id. at 10-11. Finally, in
Section 3, the Panel discusses and rejects inactivation as a possible reason for mitigation. Id. at
12.

Thus, POV status was established to the satisfaction of MSHA by the specific pattern
criteria and was then subject to a separate review of narrow mitigation circumstances. No
discretionary consideration appears on the record to have been exercised by MSHA regarding the
POV status once the specific criteria were met; instead, the only discretionary element was the
determination whether MSHA should postpone issuance of a POV Notice on the basis of a
mitigating factor.

The process flowed from the specific pattern criteria, to an inquiry to the District
Manager regarding mitigation, to Panel review of mitigation, to issuance of a POV notice.
Although 253 unproven citations/orders were the basis for Brody’s POV status, the POV Notice
cited 54 citations/orders for S&S violations grouped in four categories of alleged violations in
categories of related hazards. S. Mem. Supporting Opp’n to Appl. for Temp. Relief, Ex. A at 9;
Notice No. 7219154. The groupings ranged from seven to 20 citations/orders.

Notice No.
7219154.

4.         Definition of Pattern of Violations

MSHA’s regulation does not define a pattern of violations. However, in this litigation, the
Secretary has now defined a “pattern of violations.” Citing Black’s Law Dictionary, the Secretary
defines the word “pattern” to mean “[a] mode of behavior or series of acts that are recognizably
consistent.” S. Br. at 19-20. MSHA does not elaborate upon the meaning of “recognizably
consistent.”

Then, the Secretary provides specificity as to the number of S&S violations that will
constitute a “series” or “pattern” stating that: “Courts interpreting the term ‘pattern’ as used in
other federal statutes have held that as few as two instances may suffice . . . The risk of an
erroneous POV determination should be measured against that low threshold. . . . [A]s discussed
above, a POV notice may lawfully be predicated on as few as two or three S&S violations.” S.
Br. at 19, 22 (citations omitted).

Therefore, the Secretary’s interpretation of a “pattern of violations” within the meaning of
Section 104(e) of the Mine Act effectively comes down to a “mode of behavior or series of acts
[meaning at least two or three S&S violations] that are recognizably consistent.” The definition
does not include any notion of elevated violations, high degree of negligence, or accident or
injury rate, etc.

The Secretary applies its definition to Brody. The POV Notice divides the 54 alleged
violations in Brody’s POV Notice into four categories. One of those categories consists of seven
citations/orders citing conditions and/or practices that allegedly contribute to inadequate
examinations. The Secretary asserts that, separate and apart from other citations identified in the
POV Notice, proof of those seven citations/orders (or some unidentified lesser number but
presumably diminishing to two or three) would suffice to prove a pattern of violations. S. Br. at
22.

The Secretary contends that the statement of specific pattern criteria which is provided for
at 30 C.F.R. § 104.2(b) and published on MSHA’s website is a statement of policy. Brody
characterizes them as substantive (also referred to as “legislative” rules) requiring notice and
comment. Therein rests the APA notice and comment dispute.

B.        The Distinction Between Statements of Policy and Substantive Rules

The importance of notice and comment to transparent and principled governance needs
no elaboration. Am. Hosp. Ass’n v. Bowen, 834 F.2d 1037, 1044 (D.C. Cir 1987); Batterton v.
Marshall, 648 F.2d 694, 700-02 (D.C. Cir. 1980); Pac. Gas & Elec. Co. v. FPC, 506 F.2d 33, 38
(D.C. Cir. 1974). Nor is it necessary to recite from the litany of cases noting the difficulty
encountered in distinguishing among substantive rules, interpretive rules, and statements of
policy. Am. Min. Congress v. MSHA, 995 F.2d 1106, 1109 (D.C. Cir. 1993); Cmty Nutrition Inst.
v. Young, 818 F.2d 943, 946 (D.C. Cir. 1987); Gen. Motors Corp. v. Ruckelshaus, 742 F.2d
1561, 1565 (D.C. Cir. 1984). Finally, by way of preamble, although the APA provides
exemptions from its notice-and-comment requirements, such exemptions must be narrowly
construed. Am. Hosp. Ass’n v. Bowen, 834 F.2d at 1044 (“In light of the obvious importance of
these policy goals of maximum participation and full information, we have consistently declined
to allow the exceptions itemized in [section] 553 to swallow the APA’s well-intentioned
directive.”).

Our recourse, of course, is to the case law that determines the fate of the parties’
arguments. Are the specific pattern criteria established at 30 C.F.R. § 104.2(b) and published on
MSHA’s website merely a statement of policy or are they a substantive rule? If the specific
pattern criteria are merely a statement of policy, then “[t]he agency retains the discretion and the
authority to change its position—even abruptly—in any specific case because a change in its
policy does not affect the legal norm.” Syncor Int’l Corp. v. Shalala, 127 F.3d 90, 94 (D.C. Cir.
1997).

If the specific pattern criteria constitute a substantive rule then MSHA may not
implement the specific pattern criteria without following the notice-and-comments requirements
of the APA. 5 U.S.C. § 553.

Citing Drummond Co., 14 FMSHRC 661, 686 (May 1992), the Secretary describes the
distinction between a statement of policy and a rule as based upon a two-fold test of whether the
agency’s action: (1) “acts prospectively, i.e., ‘does not impose any rights or obligations,’” and

(2) “leaves the agency and its decision-makers free to exercise discretion.” S. Br. at 25. Brody
takes only a longer route to reach the same test. It first recites in a more general fashion the
general distinction between substantive rules and statements of policy as set forth in Pacific Gas
& Electric Co. v. FPC, 506 F.2d at 38, and then urges the same test as MSHA, quoting from the
same page of the same case relied upon by the Commission in Drummond – namely, American
Bus Association v. United States, 627 F.2d 525, 529 (D.C. Cir. 1980). B. Br. at 31.

As an initial step in differentiating statements of policy from substantive rules, it is useful
to examine the agency’s basis for its promulgation. Is the agency exercising statutory authority to
supply substance for vague or open-ended statutory guidance? If so, the agency’s action is likely
to be viewed as legislative or substantive. See Paralyzed Veterans of Am. v. D.C. Arena L.P., 117
F.3d 579, 588 (D.C. Cir.1997) (“If the statute or rule to be interpreted is itself very general, using
terms like ‘equitable’ or ‘fair,’ and the ‘interpretation’ really provides all the guidance, then the
latter will more likely be a substantive regulation.”); see also United States v. Picciotto, 875 F.2d
345, 348 (D.C. Cir. 1989). Although Paralyzed Veterans involved an interpretive regulation, the
importance of its analysis applies equally well to a promulgation establishing binding
enforcement parameters for an open-ended statute such as section 104(e) that instructs MSHA to
develop, by rule, “criteria” for a wholly undefined “pattern of violations.” 30 U.S.C. § 814(e)(4).

Moreover, an agency’s creation of a numerical prescription by which it will exercise its
authority is especially needful of notice and comment. In Catholic Health Initiatives v. Sebelius,
617 F.3d 490 (D.C. Cir. 2010), the District of Columbia Circuit Court described the relationship
between an agency’s establishment of numerical targets and rulemaking:

We too have recognized that “numerical limits cannot readily be
derived by judicial reasoning, . . . .” Mo. Pub. Serv. Comm’n v.
FERC, 215 F.3d 1, 4 (D.C. Cir. 2000). Our statement in Missouri
Public Service relied on Hoctor v. USDA, 82 F.3d 165, 170 (7th
Cir. 1996). Hoctor held that an agency performs a legislative
function when it makes “reasonable but arbitrary (not in the
‘arbitrary or capricious’ sense) rules that are consistent with the
statute or regulation under which the rules are promulgated but not
derived from it, because they represent an arbitrary choice among
methods of implementation. A rule that turns on a number is likely
to be arbitrary in this sense.”

Id. at 495 (footnote omitted).

In Hoctor, 82 F.3d at 167-68, the Department of Agriculture established a minimum
height for fences enclosing dangerous animals. The minimum height requirement was established
through an interpretation of the agency’s valid regulation governing the structural strength of
enclosures for housing animals. The height requirement was arbitrary – again in the sense that a
different height could have easily been selected. Thus, not only was the interpretation binding,
but also public comment was especially useful and important. The Circuit Court found the
numerical requirement constituted a substantive rule that could be issued only after notice and
comment.

Id. at 171-72.

Indeed, in Hoctor, the Seventh Circuit effectively intertwined the likelihood that an
agency pronouncement effectuating a vague statutory instruction is legislative with a finding that
a numerically based rule binding the agency in the course of implementing a statute is almost
inevitably substantive: “[W]hen a statute does not impose a duty on the persons subject to it but
instead authorizes (or requires – it makes no difference) an agency to impose a duty, the
formulation of that duty becomes a legislative task entrusted to the agency.” Id. at 169; see also
Mission Grp. Ks., Inc. v. Riley, 146 F.3d 775, 782-84 (10th Cir. 1998).

Consequently, promulgation of arbitrary numerical criteria pursuant to a statutory
directive to implement vague statutory terms creates a strong appearance of legislative type
action. Nonetheless, it is still necessary to apply the acid test, the “rubber meets the road test,”
cited by the parties to determine whether the promulgation is a statement of policy or substantive
rule.

Although the test is described as two-fold, it may aptly be thought of as two sides of a
common coin. See McLouth Steel Prod. Corp. v. Thomas, 838 F.2d 1317, 1320 (D.C. Cir. 1988
(“In practice, there appears some overlap in the Community Nutrition criteria; the second
criterion may well swallow the first.”). If the agency binds itself or others to a set of criteria, then,
as the Hoctor Court expressed, it is vital for the public to have a right to comment.

The Commission recognized this principle in Drummond, when it cited Batterton v.
Marshall. In Batterton, the Circuit Court reviewed a new methodology for determining
unemployment statistics issued by the Department of Labor without following the

notice-and-comment procedures of the APA. The new methodology adversely affected payments
to the State of Maryland under the Comprehensive Employment and Training Act. Maryland
filed an action seeking to vacate the new methodology. Concluding that the new formula
constrained discretion, the Circuit Court found the methodology constituted a substantive rule
requiring notice and comment.

648 F.2d at 696-97, 711.

Voluminous precedent establishes that action by an agency that binds the agency, the
affected public, or both, is a substantive rule. Elec. Privacy Info. Ctr. v. DHS, 653 F.3d 1, 7 (D.C.
Cir. 2011) (“Our cases ‘make clear that an agency pronouncement will be considered binding as
a practical matter if it either appears on its face to be binding, or is applied by the agency in a
way that indicates it is binding.’”) (citation omitted); Natural Res. Def. Council v. EPA, 643 F.3d
311, 321 (D.C. Cir. 2011) (“[B]ecause the Guidance binds EPA regional directors, it cannot, as
EPA claims, be considered a mere statement of policy; it is a rule.”); CropLife Am. v. EPA, 329
F.3d 876, 882 (D.C. Cir. 2003) (“EPA has enacted a firm rule with legal consequences that are
binding on both petitioners and the agency. . . .”); Gen. Elec. v. EPA, 290 F.3d at 382 (“[T]he
court determines whether the agency action binds private parties or the agency itself”); Syncor v.
Shalala, 127 F.3d at 94 (“The primary distinction between a substantive rule . . . and a general
statement of policy, then, turns on whether an agency intends to bind itself to a particular legal
position.”); U.S. Tel. Ass’n v. FCC, 28 F.3d 1232, 1234-35 (D.C. Cir. 1994) (“[W]e have said
repeatedly that it turns on an agency’s intention to bind itself to a particular legal policy position.
. . . [T]he Commissioner has sought to accomplish the agency hat trick – avoid defense of its
policy at any stage.”); McLouth Steel Prod. Corp. v. Thomas, 838 F.2d 1317, 1322 (D.C. Cir.
1988) (Rule “substantially curtails EPA’s discretion in delisting decisions and accordingly has
present binding effect.”); Cmty. Nutrition v. Young, 818 F.2d at 948 (“[A]gency’s own words
strongly suggest that action levels are not musings about what the FDA might do in the future but
rather that they set a precise level of aflatoxin contamination that FDA has presently deemed
permissible.”).

The remaining task regarding the APA dispute, therefore, is to determine whether the
specific pattern criteria established in 30 C.F.R. § 104.2(b) and identified on the website are
binding on MSHA or are binding upon members of the public.

C.        Specific Pattern Criteria Established at 30 C.F.R. § 104.2(b) and Published on
MSHA’s Website Constitute a Substantive Rule Requiring Notice and Comment.

The problem for the Secretary here is that the specific pattern criteria are not actually
“screening” procedures; they are outcome determinative specific numerical standards for POV
status. Indeed, the Secretary relies upon the binding effect of the specific pattern criteria for its
due process defense. Further, although the Secretary claims MSHA exercises discretion in
deciding upon POV status after application of the specific pattern criteria, the procedures used by
MSHA and the facts of this case compellingly demonstrate otherwise.

With respect to the claimed exercise of discretion, review of the limited mitigation
circumstances occurs after an operator is in POV status under the specific pattern criteria. The
limited mitigation opportunities do not relate to whether the operator is in the POV status. There
is no further discretionary consideration of that issue. Only if an operator meets a separate
mitigation procedure may POV status be avoided. Finally, if the mine does not meet the specific
pattern criteria, it is assured by MSHA that it is not in POV status.

1.         The Specific Criteria Are Issued Pursuant to a Statutory Directive to Issue
Rules Implementing Section 104(e) of the Mine Act and Identify Specific
Numerical Criteria for the Determination of POV Status.

In Drummond, the Commission noted the limited significance of an agency’s
classification of its action, recognizing that the agency’s label might be “indicative” but certainly
is not “dispositive.” 14 FMSHRC at 683. “[I]t is the substance of what the [agency] has
purported to do and has done which is decisive.” Chamber of Commerce v. OSHA, 636 F.2d 464,
468 (D.C. Cir. 1980) (internal quotations and citation omitted); see also Brock v. Cathedral
Bluffs Shale Oil Co., 796 F.2d 533, 537-38 (D.C. Cir. 1986). In determining the substance of
what MSHA has done, we look not just at the wording of the promulgation but also its source
and purpose, the methodology used, and most importantly its binding effect upon MSHA and the
public.

Section 104(e) of the Mine Act provides for the issuance of POV Notices, but does not
define a pattern of violations. Instead, Congress gave MSHA the authority and duty to issue rules
determining when a pattern of violations exist. Indeed, the statute provides that “[t]he Secretary
shall make such rules as he deems necessary to establish criteria for determining when a pattern
of violations of mandatory health or safety standards exists.” 30 U.S.C. § 814(e)(4).

In issuing the rules defining and governing patterns of violations, MSHA performs
essentially a “legislative” function delegated to it by Congress. Paralyzed Veterans, 117 F.3d at

588. Further, MSHA has implemented numerical criteria as “specific pattern criteria.” Obviously,
     the criteria are “arbitrary” in the sense of being “impossible to give a reasoned distinction
     between numbers just a hair on the OK side of the line and ones just a hair on the not-OK side.”
     Mo. Pub. Serv. Comm’n v. FERC, 215 F.3d 1, 5 (D.C. Cir. 2000). The ratio of S&S
     citations/orders per 100 inspection hours could have been 7.0, 7.5, 8.5, 9, etc., but MSHA chose
     8.0. Perhaps that is a reasonable number but, regardless, it is arbitrary. MSHA, therefore, has
     identified with arbitrary numerical specificity the specific criteria to be used in establishing
     whether operators are, or are not, in the POV status broadly created by Congress – a classic
     legislative function.

Further, the use of the specific pattern criteria is established in the rule itself at 30 C.F.R.
§ 104.2(b). MSHA apparently recognized it was necessary to use substantive rulemaking to
establish specific pattern criteria. However, it then decided to place the enumeration of the
specific criteria on a website away from notice and comment by the public. It gave public notice
of, and right to comment upon, the ghost of specific pattern criteria but the substance remained
shielded from public comment.

It is oxymoronic to establish the use of specific pattern criteria in the rule itself but then
establish the specific pattern criteria that contain both numerical and durational specifications on
a website immune from public notice or comment. If MSHA may take such an approach here,
there is little to constrain MSHA from creating other standards in the body of the regulations
while placing the substantive terms on its website where they will be sheltered from the APA.

If
MSHA may create the existence of criteria by rule but shuffle off the actual substance of the
criteria to a website away from public notice and comment, little is left of the APA.

2.         The Specific Criteria of Section 104.2(b) and Published on the Website are
Binding upon MSHA. The Public Was Entitled to Comment Upon Specific
Criteria Eliminating Mines from POV Status.

The Secretary argues that “the screening [specific pattern] criteria do not narrowly
circumscribe MSHA’s discretion.” S. Br. at 26. That statement is clearly false with regard to a
determination that an operator is not in POV status. The specific criteria fully circumscribe
MSHA’s discretion regarding finding operators that are not POV violators.

Recall, while an agency’s characterization of its pronouncement should be given some
weight, the language of the agency pronouncement is far more important. In American Bus
Association v. United States, the District of Columbia Circuit gave decisive weight to the
Interstate Commerce Commission’s use of the word “will.” Use of “will” rather than “may”
demonstrated that the pronouncement was not a statement of policy. 627 F.2d at 532. In this case,
MSHA’s specific pattern criteria assures operators that “[m]ines must meet the criteria” to be
considered for POV status. B. Mem. Supporting Appl. for Temp. Relief, Ex. 10 at 1 (emphasis
added). Use of the imperative “must” demonstrates compellingly that the agency has bound itself
to not find an operator in POV status if it does not meet the specific criteria.

Indeed, in MSHA’s promulgation of the revised regulation and even in its defense of the
regulation, the Secretary has assured operators that the specific criteria will be the final
determinant that they are not in POV status if they stay below the numerical limits for POV
status established in the specific criteria. In the preamble to the final rule, MSHA stated that it
was posting the specific criteria on its website and that such posting constitutes the

specific criteria, with numerical data, that the Agency will use to
identify mines with a pattern of S&S violations. MSHA has
determined that posting the specific criteria on its Web site,
together with each mine’s compliance data, will allow mine

operators to monitor their compliance records to determine if they
are approaching POV status.

78 Fed. Reg. at 5064.

Thus, the agency reaffirms that an operator not meeting the specific criteria will not be
found in POV status. Without doubt, section 104.2(b) serves as a binding commitment by MSHA
that it will not assert POV status against any operator not meeting the specific pattern criteria
provided for in section 104.2(b) of the regulation and amplified upon on the website.

Because the Secretary has defined a POV as two or three S&S violations in a series that is
recognizably consistent, almost every mine in the mining industries could be issued a POV
Notice absent the assurance provided by MSHA through use of the specific criteria to limit the
number of mines reaching POV status.

Therefore, not only are the specific criteria binding on
MSHA but that binding status upon MSHA provides an important assurance to operators that
POV status will be used not as a typical “enforcement” tool but rather, as intended, only as an
severe weapon directed at those few operators that have demonstrated over a long period a
repeated disregard for the health and safety standards issued under the Mine Act. 78 Fed. Reg. at
5058. At the same time, it positively precludes MSHA from issuing a POV Notice to an operator
that has a pattern of recognizably consistent significant and substantial violations of even the
most important safety standards, if the entirety of the operator’s record remains within the “safe
zone” of the specific pattern criteria.

Perhaps the Secretary simply misperceived that only operators that might be designated
for POV status have an interest in, or right to comment upon, numerical specific pattern criteria
for establishing POV status. If so, MSHA forgets the far broader public that has an interest in
such standards. Those in the public, the many safe and responsible operators, miners, miners’
representatives, safety societies, and others were not given any chance to comment on the
specific pattern criteria positively eliminating operators from POV status.

The right to notice and opportunity to comment upon threshold levels for exclusion from
POV status is as important as the right to comment upon threshold levels for inclusion. Notice
and comment must be available not only to those who may claim the standards are too strict but
also to those who may believe the standards are too lenient. Self-evidently, broad public sectors
had a right to comment upon these substantive specific pattern criteria that exclude operators
from POV status.

3.         The Specific Criteria of Section 104.2(b) and Published on the Website
Effectively are Used by MSHA to Determine POV Status and, Therefore, are
Binding upon Mine Operators with Respect to POV Status.

Given the clarity of the APA that MSHA is required to grant the industry, miners, and
public an opportunity to comment upon specific criteria binding upon MSHA in finding an
operator is not in POV status, we could perhaps forego discussing whether the specific pattern
criteria also are the substantive bases for finding an operator is in POV status. However, the
desire for those with power to have “flexibility” in the exercise of that power is a common
affliction. It is a danger against which the APA is intended to safeguard.

It is vital, therefore, to constrain unlawful reaches for flexibility by Federal agencies. So,
we must also determine whether MSHA’s stretch for “flexibility” by setting the table for specific
pattern criteria by rule 104.2(b) but then putting all the food off the table without permitting
comment by the public is lawful or instead creates a template for an ever broadening host of
website criteria that “flexibly” impose duties and penalties without APA notice-and-comment
procedures. This case illustrates the phenomenon observed by the District of Columbia Circuit in
Appalachian Power Company v. EPA, 208 F.3d 1015 (D.C. Cir. 2000):

Congress passes a broadly worded statute. The agency follows with
regulations containing broad language, open-ended phrases,
ambiguous standards and the like. . . . Law is made, without notice
and comment, without public participation, and without
publication in the Federal Register or the Code of Federal
Regulations. With the advent of the Internet, the agency does not
need these official publications to ensure widespread circulation; it
can inform those affected simply by posting its new guidance or
memoranda or policy statement on its web site. An agency
operating in this way gains a large advantage. “It can issue or
amend its real rules, i.e., its interpretative rules and policy
statements, quickly and inexpensively without following any
statutorily prescribed procedures.” Richard J. Pierce, Jr., Seven
Ways to Deossify Agency Rulemaking, 48 Admin. L. Rev. 59, 85(1995). The agency may also think there is another advantage –
immunizing its lawmaking from judicial review.

Id. at 1020 (footnote omitted).

The decision as to whether a purported policy statement effectively circumscribes
discretion is not a mechanical test. Am. Bus Ass’n v. U.S., 627 F.2d at 529-30. A close
examination is required of the language of the pronouncement, its intended effect, and the effect
upon the regulated community.

a.         Comparison of 104.2(a) and 104.2(b)

Here, the only commonsense reading of section 104.2 is that operators failing the specific
criteria are in POV status. Thus, they will receive a POV Notice unless MSHA makes a separate,
later finding of mitigation under one of three narrow circumstances.

As demonstrated by the table set forth as Table 2 below, the criteria of section 104.2(a)
merely duplicate the specific criteria of section 104.2(b) except the section 104.2(a) criteria do
not identify numerical standards for POV status.

Table 2

POV Pattern Criteria Established and Listed
in 30 C.F.R. § 104.2(a)

POV Pattern Criteria Established in 30 C.F.R.
§ 104.2(b) and Listed on Website

(1) Citations for S&S violations;

(2) Orders under section 104(b) of the Mine
Act for not abating S&S violations;

(3) Citations and withdrawal orders under
section 104(d) of the Mine Act, resulting
from the mine operator’s unwarrantable
failure to comply;

(4) Imminent danger orders under section
107(a) of the Mine Act;

(5) Orders under section 104(g) of the Mine
Act requiring withdrawal of miners who have
not received training and who MSHA
declares to be a hazard to themselves and
others;

(6) Enforcement measures, other than section
104(e) of the Mine Act, that have been
applied at the mine;

(7) Other information that demonstrates a
serious safety or health management problem
at the mine, such as accident, injury, and
illness records; and

(1) At least 50 citations/orders for significant
and substantial (S&S) violations issued in the
most recent 12 months.

(2) A rate of eight or more S&S
citations/orders issued per 100 inspection
hours during the most recent 12 months OR
the degree of negligence for at least 25
percent of the S&S citations/orders issued
during the most recent 12 months is “‘high”
or “reckless disregard.”

(3) At least 0.5 elevated citations and orders
[issued under section 104(b); 104(d); 104(g);
or 107(a) of the Mine Act] issued per 100
inspection hours during the most recent 12
months.

(4) An Injury Severity Measure (SM) for the
mine that is greater than the overall Industry
SM for all mines in the same mine type and
classification over the most recent 12 months.

OR

(1) At least 100 S&S citations/orders issued
in the most recent 12 months.

(8) Mitigating circumstances.

(2) At least 40 elevated citations and orders
[issued under section 104(b); 104(d); 104(g);
or 107(a) of the Mine Act] issued during the
most recent 12 months.

Section 104.2(a)(1) duplicates section 104.2(b)(1) and (2) but with less specificity.
Sections 104.2(a)(2)-(6) duplicate sections 104.2(b) (2) and (3). Section 104.2(a)(7) essentially
duplicates section 104.2(b)(4) but again with less specificity.

The Secretary asserts the criteria are not duplicative relying entirely upon 104.2(a)(7) as
the basis for its purported exercise of discretion in deciding upon POV status. In doing so, he
cites the preamble to the regulation asserting “other factors listed” in the 104.2(a) criteria that are
supposedly not addressed in the specific pattern criteria. S. Br. at 26-27. The cited passage of the
preamble provides that these “other factors” are:

• Evidence of the mine operator’s lack of good faith in correcting
the problem that results in repeated S&S violations;

• Repeated S&S violations of a particular standard or standards
related to the same hazard;

• Knowing and willful S&S violations;

• Citations and orders issued in conjunction with an accident,
including orders under sections 103(j) and (k) of the Mine Act; and

• S&S violations of health and safety standards that contribute to
the cause of accidents and injuries.

78 Fed. Reg. at 5062.

Of course, a commonplace rule of construction is the “specific governs the general.” See
RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 132 S. Ct. 2065 (2012) (“When the conduct
at issue falls within the scope of both provisions, the specific presumptively governs, whether or
not the specific provision also applies to some conduct that falls outside the general.”). Although
not directly applicable here, the principle illuminates that the Secretary’s assertion that MSHA
exercises discretion based on generalized “other factors” fails to explain how MSHA could apply
section 104.2(a) criteria to find an operator not to be in POV status once an operator meets the
specific pattern criteria for POV status. Although MSHA lists “other factors” in the preamble, the
Secretary has not suggested how these factors are (1) not subsumed within the specific criteria;
(2) how or when, under MSHA’s procedures, MSHA reviews these factors to possibly find that
an operator that meets the specific pattern criteria for POV status actually is not in POV status; or
(3) when such criteria were examined with respect to Brody.

The first “other factor” suggested by MSHA is “lack of good faith.” Because the operator
has already met the specific criteria for POV status, it is impossible to see how a further
demonstration of the absence of good faith could cause MSHA to determine the operator is not in
POV status; it only adds fuel to the POV status fire. It cannot mean an exercise of “good faith”
because MSHA expressly limits a “good faith defense” to a request for mitigation under the
strictly limited basis of an MSHA-approved Corrective Action Program. MSHA’s intent not to
consider “good faith” is completely encompassed by the limited and specific mitigation
opportunities.

The second “other factor” is repeated S&S violations affecting the same standard or
hazard. Surely, the Secretary cannot be asserting seriously that it may find an operator that, under
the numerical specific criteria, must have exceeded the national average for S&S violations by at
least two hundred and fifty percent is not in POV status because the S&S violations are spread
over a wide variety of standards or hazards. This is especially true as MSHA states in the same
section of the preamble that its “data and experience show that violations of approval, training, or
recordkeeping regulations, for example, can significantly and substantially contribute to health or
safety hazards, and may be a contributing cause of an accident.” 78 Fed. Reg. at 5062-63. Thus,
MSHA expanded the range of citations/orders meriting POV status across the entire gamut of its
regulations to training and recordkeeping. Finally, the third, fourth, and fifth “other factors” are
duplicative of the specific criteria for elevated citations/orders and the Injury Severity Measure of
the specific pattern criteria.

It defies logic to credit the Secretary’s suggestion that a review of section 104.2(a)
factors, other than the separate and subsequent consideration of mitigation, could remove an
operator from POV status after a finding by MSHA that the operator meets the numerical specific
pattern. The case for POV status under section 104.2 can only be made stronger by the so-called
“other factors” because the specific criteria are minimum thresholds for POV status.

We must
apply here the District of Columbia Circuit Court’s caution related to another Federal agency:
“EPA’s claim to have been open to consideration of other factors does not make the VHS model
any less of a rule.” McLouth Steel Prod., 838 F.2d at 1322.

b.        MSHA’s Procedures and Panel Review Accept the Specific Pattern
Criteria as Outcome Determinative

The Pattern of Violations (POV) Procedures Summary states that a District Manager is
only to “report facts relevant to whether there are mitigating circumstances that justify
postponing or not issuing a POV notification.” B. Mem. Supporting Appl. for Temp. Relief, Ex.
11, at 1. Nowhere is there so much as a hint that the District Manager with the most direct
knowledge and information related to the operator is asked for advice or information related to
the 104.2(a) or 104.2(b) pattern criteria, except the narrow and separate possibility for mitigation
unrelated to determining POV status in the first instance.

Again, MSHA’s own statement of procedures circumscribes such review by requiring that
the POV panel’s task is only to make a recommendation whether the mine “should be excluded
from POV notification or have their POV notification postponed due to mitigating
circumstances.” Id. at 1. So, when the procedures call for the POV panel to consider the
information provided by the District Manager, the call is for a review only of information related
to possible mitigation rather than the already met specific criteria for POV status.

In sum, after Brody fell within the specific pattern criteria, MSHA asked the District
Manager for information about, and only about, possible mitigation. The Panel then considered
the information supplied by the District Manager, rejected mitigation, and recommended
issuance of the POV notice. Thus, the process flowed smoothly, as intended, from specific
pattern criteria, to District Manager notice, to Panel review, to issuance of a POV notice.

POV status was determined by Brody’s failure under the specific pattern criteria. There is
no inkling, let alone evidence, that MSHA considered in any meaningful way factors under 30
C.F.R. § 104.2(a) that could only have strengthened the case for POV status. Operators failing
under the specific criteria are for all practical and legal purposes in POV status thereby facing a
POV Notice, subject only to a consideration of mitigation.

c.         The Revised Regulation Converted “Screening” Criteria into “Pattern
Criteria Demonstrating Their Binding Effect.

The prior regulation contemplated and provided for a further actual review after
evaluation of what were then “Initial Screening Criteria” in section 104.2. Nothing in the present
regulation, procedures, or actions of MSHA demonstrates anything approaching a discretionary
analysis of pattern factors bearing on POV status after an operator meets the specific pattern
criteria. The prior regulation not only contemplated but also actually provided for a discretionary
review; the revised regulation does not. If an operator meets the specific pattern criteria, it is in
POV status subject only to a separate decision that it has recently mitigated its history of
violations by change of ownership or adoption of a previously MSHA-approved corrective action
program.

Without the notice-and-comment period required by the APA, MSHA in its discretion
may change the numerical or durational (e.g. review every three, four, five, etc. months)
requirements of the specific pattern criteria. The specific pattern criteria are substantive. They
deserve and require public notice and comment.

II.

DUE PROCESS PROCEDURES

The parties focus much of their attention upon MSHA’s use of non-final citations/orders
for issuance of a POV Notice. Brody contends that “violations” as used in Section 104(e) of the
Mine Act may only reasonably mean final actions. Thus, according to Brody, MSHA’s use of
non-final citations/orders to issue a POV Notice fails to reflect proper consideration of the
change from the prior rule and violates the Constitution by depriving Brody of a pre-deprivation
hearing.

The Secretary contends that other sections of the Mine Act use the term “violations” to
mean non-final citations/orders. He further argues that using final actions for issuance of a POV
Notice is impractical and would frustrate the very safety purpose of the statute.

While the Secretary agrees that a valid POV Notice requires the Secretary to prove a
pattern of significant and substantial violations, he asserts that proof of final violations may await
a contest by an operator of a subsequently issued withdrawal order. Consequently, the critical
issue considered below is the point at which MSHA must prove final violations to sustain a POV
Notice – before or after issuance of the POV Notice and the resultant deprivation of property
rights.

A.        Due Process

The first principle of due process is that “an individual be given an opportunity for a
hearing before he is deprived of any significant property interest, except for extraordinary
situations where some valid governmental interest is at stake that justifies postponing the hearing
until after the event.” Boddie v. Connecticut, 401 U.S. 371, 379 (1971) (emphasis in original);
United States v. James Daniel Good Real Prop., 510 U.S. 43, 53 (1993) (“The right to prior
notice and a hearing is central to the Constitution’s command of due process.”). Due process
ordinarily requires an opportunity for that hearing before the deprivation at issue takes effect.
E.g., Fuentes v. Shevin, 407 U.S. 67 (1972); Bell v. Burson, 402 U. S. 535 (1971); Wisconsin v.
Constantineau, 400 U.S. 433 (1971); Goldberg v. Kelly, 397 U.S. 254 (1970). This is the “root
requirement” of the due process clause. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542
(1985).

The Secretary concedes that Brody has a property interest in uninterrupted mining
activities. S. Br. at 15. That concession brings the due process clause into play. Boddie v.
Connecticut, 401 U.S. at 378-379. Of course, application of the due process clause is “intensely
practical.” Goss v. Lopez, 419 U.S. 565, 578 (1975). Whether a governmental interest justifies
postponing the hearing until after the deprivation is judged by application of the familiar three
factor test of Mathews v. Eldridge, 424 U.S. 319 (1976):

[I]dentification of the specific dictates of due process generally
requires consideration of three distinct factors: First, the private
interest that will be affected by the official action; second, the risk
of an erroneous deprivation of such interest through the procedures
used, and the probable value, if any, of additional or substitute
procedural safeguards; and, finally, the Government’s interest,
including the function involved and the fiscal and administrative
burdens that the additional or substitute procedural requirement
would entail.

Id. at 334-35.

B.        Private Interest that will be Affected

The parties diverge on the magnitude of effect a POV will have upon Brody. Brody
asserts that its right to operate its mine, including ownership rights and revenues constitute
significant property rights subject to due process protections. See James Daniel Good Real Prop.,
510 U.S. at 48-49. It further asserts that a POV Notice will cause a perpetual series of temporary
shut-downs of portions of its mines resulting in serious harm to its property interests. It cites
Commission cases in which the severe consequences of a POV notice were noted. Aracoma Coal
Co., 32 FMSHRC 1639, 1641 (Dec. 2010) (Opinion of Chairman Jordan affirming ALJ’s
decision); Rockhouse Energy Mining, 30 FMSHRC 1125, 1128 (Dec. 2008) (ALJ).

The Secretary concedes that an operator has a property interest in continuing its mining
operations without withdrawing miners and that such interest is adversely affected by the POV
rule “because a withdrawal order reduces an operator’s control over its property and imposes
costs on the operator to regain control.” S. Br. at 15-16. However, the Secretary asserts Brody’s
“property rights” are weak because of the large number of citations that have been issued to it
and that, in any event, Brody exaggerates the disruption caused by a withdrawal order.

MSHA’s position is undercut by its own preamble to the final POV. In its analysis of
compliance costs, MSHA states: “Withdrawal orders issued under the final rule can stop
production until the condition has been abated. The threat of a withdrawal order provides a
strong incentive for mine operators to ensure that S&S violations do not recur.” 78 Fed. Reg. at
5070.

For this reason, all Commissioners agree that Brody “has a significant property interest in
continuing its mining operations without withdrawing miners.” Slip op. at 16.

C.        The Safety Interest

Given the significant harm to property rights and the much preferred right to a pre-deprivation hearing, the constitutionality of MSHA’s failure to develop or utilize pre-deprivation
procedures for issuance of a POV notice rests in very large measure upon whether the Secretary
has identified circumstances that warrant bypassing the constitutionally-preferred pre-deprivation
hearing. In due process cases, the Supreme Court focuses upon whether the circumstance “falls
under this emergency situation exception to the normal rule that due process requires a hearing
prior to deprivation of a property right” and is one of those “situations in which swift action is
necessary to protect the public health and safety.” Hodel v. Va. Surface Mining & Reclamation
Ass’n, 452 U.S. 264, 300-01 (1981).

In their work lives, miners have a right to a safe and healthful life, not a life shortened or
diminished by carelessness or violations of law by their employer. When there is an imminent
danger to the safety or health of a miner, immediate governmental intervention is required and
constitutionally justified. The Secretary cites the events at Upper Big Branch (UBB) mine in
April 2010, a horrific tragedy claiming the lives of 29 miners. After such tragedy, there inevitably
arise a host of speculative “what if” questions. What if MSHA had issued UBB a final POV
notice rather than a Potential POV notice? What if MSHA’s computers had not failed to identify
UBB as a continuing violator that deserved a final POV Notice?

It does no disservice to these inevitable concerns to require a dispassionate review of
whether the POV rule is aimed at situations permitting MSHA to override the basic
constitutional right to pre-deprivation due process. Especially in the aftermath of tragedy, there is
a need for clear-eyed reflection lest we unnecessarily sacrifice basic rights to a spasm of pain and
fear. If section 104(e) were aimed at imminent safety and health hazards, then MSHA’s failure to
implement it for 37 years would be reason for a scathing rebuke of MSHA and a galling
monument to government ineptitude. In fact, an objective review demonstrates that section
104(e) of the Mine Act is not aimed at immediate, current, or even recent hazards; instead, it is a
vaguely worded direction for an extreme remedy taken after lengthy deliberation in order to
change the long-term culture at those few mines that habitually disregard health and safety
standards in a significant and substantial way.

MSHA has acknowledged:

[T]he majority of mine operators are conscientious about providing
a safe and healthful work environment for their miners. The POV
regulation is not directed at these mine operators. Consistent with
the legislative history, it is directed at those few operators who
have demonstrated a repeated disregard for the health and safety of
miners and the health and safety standards issued under the Mine
Act.

78 Fed. Reg. at 5058. 

MSHA, therefore, has found that section 104(e) is not intended to deal with present or
recently past hazards. Instead, its remedial purpose is to change the culture of operators that are
habitually significant and substantial violators of mandatory safety and health rules and to serve
as a warning to any operator that may become lax in adhering to those standards.

Pursuant to the binding specific pattern criteria, practically speaking, MSHA cannot issue
a POV Notice for at least 14 months from the beginning of the period during which a pattern of
violations is found to exist. It does not diminish the longer term importance of section 104(e) to
acknowledge that the POV rule does not deal with any recent mine hazard. A POV Notice is not
issued in response to day-to-day or even month-to-month violations.

A partial summary of MSHA’s more immediate enforcement powers under the Mine Act
includes:

1. Section 103(a) – Requires “frequent” inspections; underground mines must be completely
   inspected at least four times each year in their entirety and other mines must be inspected in their
   entirety at least twice each year.

2. Section 103(i) – Requires spot inspections of methane liberating mines every five, ten, or
   fifteen days depending upon amount of methane liberated.

3. Section 103(j) – Requires operators to notify MSHA of any accident and requires that such
   notice be provided within 15 minutes for fatal accidents or an injury or entrapment of an
   individual which has a reasonable potential to cause death. Section 110(a)(2) provides for a
   penalty for failure to provide a required 15 minute notice of up to $65,000.

4. Section 104(a) – MSHA may issue citations to operators for any violation of any mandatory
   health or safety standard, rule, order, or regulation and set a mandatory abatement period. Section
   110(a)(1) provides for penalties up to $70,000 for violations depending upon penalty criteria set
   forth in section 110(i) of the Mine Act.

5. Section 104(b) – MSHA may issue a withdrawal order requiring withdrawal of miners from
   areas in which a citation has not been abated within the time specified by MSHA. Section
   110(b)(1) provides for a penalty of up to $7,500 for each day of failed abatement.

6. Section 104(d)(1) – If, during an inspection, an inspector finds a S&S violation of a mandatory
   safety or health standard by an unwarrantable failure and during that same inspection or any other
   inspection within 90 days finds another unwarrantable failure, the inspector shall issue a
   withdrawal order for the area affected by the violation. Section 110(a)(3)(A) provides for a
   minimum penalty of $2,000 for a 104(d)(1) violation.

7. Section 104(d)(2) – If an inspector issues a withdrawal order under 104(d)(1), a withdrawal
   order shall promptly be issued upon a finding in any subsequent inspection of the existence in
   such mine of violations similar to those that resulted in the issuance of the withdrawal order
   under paragraph section 104(d)(1) until such time as an inspection of such mine discloses no
   similar violations. Section 110(a)(3)(B) provides for a minimum penalty of $4,000 for a
   104(d)(2) violation.

8. Section 107 – An inspector shall issue a withdrawal order if the inspector finds an imminent
   danger – that is, any condition or practice which could reasonably be expected to cause death or
   serious physical harm before such condition or practice can be abated results in a withdrawal
   order.

9. Section 108 – Provides for an injunction action in Federal court as a result of various actions
   by an operator, including a violation of, or failure to comply with, an order or decision.

10. Section 110(b)(2) – MSHA may seek a penalty of up to $242,000 for any “flagrant” violation
    of the Act.

11. Section 110(c), (d), (e), (f), (g), (h) – These sections provide circumstances under which civil
    and criminal penalties may be imposed upon officers, directors, agents of a corporate operator,
    and others for violations.

12. Higher penalties under the Mine Improvement and New Emergency Response Act of 2006
    (“MINER Act”) – The average penalty has increased substantially since passage of the MINER
    Act. Further, penalty points are assessed on the basis of both the history of violations and repeat
    violations. See 30 C.F.R. § 100.3. Therefore, the sort of conduct that may cause POV trouble for
    an operator far more quickly results in greatly enhanced penalties.

13. Impact Inspections – In April 2010, MSHA began to conduct especially intensive inspections,
    called “impact” inspections, at mines it determines merit increased attention due to such matters
    as numerous violations or withdrawal orders, failures in plan compliance, inadequate
    examinations, roof issues, and accidents, injuries, or illnesses. MSHA Press Release No. 14-1376-NAT, July 24, 2014.

Impact inspections deserve particular attention with respect to the interplay with the POV
rule. Because MSHA tracks violations by operators on a monthly basis, it flags operators with
actually recent disturbing violation trends for impact inspections. As of July 2014, MSHA had
conducted 780 intensive impact inspections resulting in 12,627 citations, 1,170 orders, and 54
safeguards. Id.

The enhanced penalty amounts together with the intensity of impact inspections, means
that MSHA can and does deal immediately with recalcitrant operators in a very real and targeted
manner. Indeed, the Assistant Secretary for Mine Safety and Health has stated recently that “[a]
review of mines receiving impact inspections between September, 2010 and September 30, 2013
that have had at least one follow-up inspection also shows that these inspections have made a real
difference.” Remarks of Joseph A. Main, Assistant Sec’y of Labor for MSHA, NSSGA Meeting,
March 5, 2014; https://www.msha.gov/MEDIA/SPEECHES/2014/NSSGAremarksfinal.pdf.

The working conditions at mines are by their very nature difficult and hazardous.
Tragically, fatalities and injuries continue to occur despite the best efforts of MSHA, operators,
and miners. However, there is a significant array of regulatory weapons at MSHA’s disposal to
deal with current and recent hazards. Section 104(e)’s purpose is different; it is a long-term
weapon aimed at culture rather than specific hazards.

D.        Risk of Erroneous Deprivation and Value of Additional Safeguards

Having recognized the “significant property interest” at stake for Brody and, realistically
knowing that the POV rule is not aimed at circumstances of immediate or even current harm, the
only conceivable ground upon which to base a denial of a fundamental constitutional right is that
there is no risk of erroneous deprivation so the due process rights are insignificant.

The Mathews v. Eldridge test is a balancing test of the three factors. However,
“balancing” does not mean assigning a 33.33% share to each of the three factors. The factors
must be balanced holistically. The potential for immediate severe harm to the public interest may
play a greater role than the other two factors. Conversely, the seriousness of the property rights
involved may affect the view taken of the other elements, especially if the contemplated
government action is not in response to immediate or recent circumstances.

That understanding is important here because the property rights of Brody and the
“safety” element are not in equipoise. While the Secretary now disputes the high value of
Brody’s property right to continued operation of its mine, as we have seen, even MSHA in the
preamble to the rule asserted that a POV Notice is “severe.” Indeed, there is little challenge to
Brody’s assertion that issuance of POV Notice may result in the demise of an operation.

Further, the POV rule does not address a situation of urgency or even recency.

The POV
rule deals with long-term conduct rather than any immediate, current, or even recent violation or
danger. As it takes more than a year to reach the point of considering a POV Notice, there is no
immediate safety concern counterbalancing the destruction of property interest. Therefore, the
balance between property rights and an immediate public interest tilts very sharply toward the
property rights affected by a POV Notice.

Because a pre-deprivation hearing is constitutionally preferred, cases in which only post-deprivation procedures are found sufficient generally involve a threat of an imminent or
immediate harm to an important public or governmental interest. This element of imminent harm
is found in the cases cited by the majority. In Ewing v. Mytinger & Casselbery, Inc., 339 U.S.
594 (1950), there was an immediate danger to public safety through the imminent distribution of
mislabeled drugs. In Mackey v. Montrym, 443 U.S. 1 (1979), the Court found an immediacy to
the danger posed by drunk drivers. Finally, Hodel, 452 U.S. 264, involved the likelihood of
significant, imminent mining disasters.

In Hodel, for example, the Court affirmed that “[o]ur cases have indicated that due
process ordinarily requires an opportunity for ‘some kind of hearing’ prior to the deprivation of a
significant property interest.” 452 U.S. at 299. However, the Court found the emergency situation
of an imminent mine disaster justified a post-deprivation hearing summary administrative action
stating: “[t]he question then, is whether the issuance of immediate cessation orders under §
521(a) falls under this emergency situation exception to the normal rule that due process requires
a hearing prior to deprivation of a property right.” Id. at 300. Citing Mytinger, the Court found an
immediate cessation order responded “to situations in which swift action is necessary to protect
the public health and safety. This is precisely the type of emergency situation in which this Court
has found summary administrative action justified.” Id. at 301.

Under the case law, therefore, the application of the factor of risk of erroneous
deprivation of property rights in this case arises in the context that (1) due process ordinarily
requiring a pre-deprivation hearing, (2) issuance of a POV Notice will be highly destructive of
property rights, and (3) the POV Rule applies after a lengthy analysis to long-term situations and,
thus, is not the type of situation justifying summary administrative procedures.

If the Secretary’s definition of “pattern of violations” is sustained, which has not yet
occurred, and if the Secretary is able to establish a “recognizable pattern” on the basis of two or
three violations, which also has not been confirmed, it would seem likely that MSHA could cull a
small number of provable S&S violations out of dozens or hundreds of unproven
citations/orders. However, allegations of violations and citations are not based upon objective
tests. They are issued by inspectors with all the possibilities for errors, misperceptions, and
human emotions. Further, the Secretary agrees that a substantial number (perhaps 19%) are set
aside in litigation.

Because the POV rule has been issued so long after passage of the Mine Act and the
remedy provided by it is so severe, there may be an inclination that it is so “important” that it
should benefit from some sort of special analysis or constitutional blessing. From a constitutional
law perspective, the POV rule does not deal with an imminent, current, or recent hazard but
rather longer term issues and, thus, does not justify deprivation of an owner’s vital property
interests without some kind of a pre-deprivation hearing.

Under the POV rule there simply are no pre-deprivation procedures. An operator may
contest individual S&S citations/order but it has no way of knowing whether those
citations/orders would fit into the vaguely-defined notion of a “pattern of violations.”

The
Secretary contends that operators may request a conference with a field office supervisor but fails
to mention that Brody requested five Part 100 conferences with District Managers involving 22
S&S citations/orders and a grand total of zero were granted. B. Br. at 3. Further, a meeting may
be held with a District Manager before issuance of a POV Notice but only “for the purpose of
correcting any discrepancies. 78 Fed. Reg. at 5061.

The on-line monitoring tool is a useful tracking tool for which MSHA deserves credit.
However, issuance of S&S citations/orders are entirely within the discretion of MSHA inspectors
and, especially in an era of targeted impact inspections based upon computerized tracking, it does
not satisfy due process to assert that an operator may have access to tool that, if used, may help
avoid receiving a POV Notice. The right to a hearing before imposition of a severe penalty in a
non-emergency context is not satisfied by an asserted opportunity to self-police oneself to foresee
and avoid violations of governmental regulations.

Finally, the extent of citations/orders/violations asserted in a POV Notice is totally within
the control of MSHA. The time it will take to make final determinations upon the citations/orders
that must be proven to sustain a POV Notice ultimately depends upon the type and number of
citations/orders upon which MSHA decides to base a POV Notice. MSHA has the same right to
seek expedited hearings as operators. The Commission’s procedural rules allow “any party” to
file a motion for expedition of proceedings. 29 C.F.R. § 2700.52(a). Further, once an expedited
hearing is requested, the length of time necessary to conduct such hearing does not depend upon
which party requested it.

MSHA uses computerized tracking capability of citations/orders for impact inspections.
Therefore, MSHA may determine to seek expedited hearings on citations/orders issued to an
operator approaching POV status under the specific pattern criteria.

Rather than filing a final
POV Notice approximately 14 months after the beginning of the analysis period without any pre-deprivation due process procedure, MSHA could have proceeded promptly to an expedited
hearing on citations/orders forming the basis for its POV Notice as it monitors its self-built
tracking software.

Here, Brody met the specific pattern criteria on the basis of 253 citations/orders. S. Mem.
Supporting Opp’n to Appl. for Temp. Relief, Ex. A at 9. The POV Notice asserted 54 violations
in four categories, the smallest of which was seven citations. Notice No. 7219154. The Secretary
asserts that under its definition of a POV, a hearing on those seven citations could suffice to
prove a pattern of violations. 

If MSHA had chosen to base the POV Notice on seven citations as it claims it could, it
could have also expeditiously obtained a decision from an Administrative Law Judge on those
seven citations. Even if MSHA concluded that it needed to cite more citations either for fear of
rejection of its definition of a POV or as a matter of litigation strategy, the decision was entirely
within MSHA’s hands. It is ironic for the Secretary to say with one breath that it may prove a
POV through proof of seven (or fewer) citations/order but in the next breath say that expedited
hearings would take too long to provide the constitutionally required hearing. By deciding upon

the number of citations/orders/violations necessary to prove the existence of a POV, MSHA
determines the amount of time that will be required to prove its case and MSHA may seek
expedited hearings at any time.

Even when the private party’s odds of prevailing are small, the due process clause
commands respect for constitutional rights. Observance of due process requirement for pre-deprivation hearings does not just protect property interests. In Joint Anti-Fascist Refugee
Committee v. McGrath, 341 U.S. 123 (1951), Justice Frankfurter reflected upon due process as
bedrock upon which our democracy is built:

“[D]ue process,” unlike some legal rules, is not a technical
conception addressed with a fixed content unrelated to time, place
and circumstances. Expressing, as it does in its ultimate analysis,
respect enforced by law for that feeling of just treatment which has
been evolved through centuries of Anglo-American constitutional
history and civilization, “due process” cannot be imprisoned within
the treacherous limits of any formula. Representing a profound
attitude of fairness between man and man, and more particularly
between the individual and government, “due process” is
compounded of history, reason, the past course of decisions, and
stout confidence in the strength of the democratic faith which we
profess.

Id. at 162-163.

Justice Frankfurter’s words have not been lost. The Supreme Court often restates the
principle that the due process clause not only protects the property interests of citizens, it also
supports the conveyance of a feeling that the government is fair and just; that it does not take
property at will; and that all the rights of citizens are respected. See Carey v. Piphus, 435 U.S.
247, 266-267 (1978); Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980); Nelson v. Adams, 529
U.S. 460, 468 & n.2 (2000).

From these considerations it is clear that: (1) 30 C.F.R. § 104 is an adjunct to a host of
other powerful and immediate enforcement provisions dealing with current or recent alleged
violations; (2) it minimally takes14 months to implement a POV Notice from the beginning of
the relevant time period; (3) the number of citations/orders/violations supporting prosecution is
controlled exclusively by MSHA; and (4) MSHA may initiate hearing processes, with expedited
consideration, even before the end of the 12-month review period. Thus MSHA, rather than the
operator, has virtually complete control over the timing of, and time required for, a hearing on
citations/orders/violations underlying a POV Notice.

Due process is a flexible concept and may be tailored to the circumstances of the specific
situation. Morrissey v. Brewer, 408 U.S. 471, 488-89 (1972). During rulemaking MSHA could
and should have considered differing possibilities for affording some form of pre-deprivation
impartial judicial type review of alleged violations upon which a POV Notice is to be based. This
is a matter upon which MSHA should have reflected and acted seriously before dispensing with
vital constitutional rights.

III.

CONCLUSION

Congress and Federal courts wisely have found that notice of and the opportunity to
comment upon rules binding a Federal agency or members of the public are the foundation of fair
and transparent government. In its rulemaking at issue here, MSHA bound itself and members of
the public to arbitrary numerical and specific pattern criteria. In the name of “flexibility” it has
deprived the public of any opportunity to comment upon such criteria. That is an unlawful failure
to obey the Administrative Procedure Act and should be rejected.

Separately, the Secretary defines a pattern of violations to mean a minimal number of
proven violations and, acting through MSHA, controls every aspect of the proceedings upon
which issuance of a POV Notice is based from initial inspection through monitoring of violations
to deciding upon the number and timing of prosecution of citations/orders. Further, MSHA has,
and aggressively uses, a broad and forceful array of enforcement weapons to deal with violations
likely to cause injury and operators that commit such violations. Under these circumstances, the
conditions necessary to warrant denial of some form of a pre-deprivation due process do not
exist.

I would vacate the judge’s decision and not permit the Secretary to proceed with POV
notices until he conducts a rulemaking consistent with this opinion.

/s/ William I. Althen

William I. Althen, Commissioner