Secretary of Labor v. Bundy Auger Mining, Inc.

Plain-English summary

Bundy Auger Mining faced two specially assessed section 104(d)(1) actions involving unsafe highwall ground and inadequate working-shift examinations. The parties proposed reducing each penalty by 30 percent, for a total settlement of $4,410 instead of $6,300. Their explanation said Bundy relied on the mine owner's instruction that moving the highwall miner back 20 feet complied with the ground-control plan. Judge William B. Moran found that the motion did not identify the owner, explain the parties' responsibilities, or connect that instruction to standards requiring prompt correction of unsafe ground and examinations for hazardous conditions. He denied the settlement and directed the case toward a prompt hearing.

Decision snapshot

• Cited standards: 30 C.F.R. §§ 77.1004(b) and 77.1713(a)
• Outcome: The proposed $4,410 settlement was denied, and the case was set to proceed toward hearing.
• Key point: Reliance on another operator's instructions does not support a penalty reduction unless the settlement explains how that reliance relates to the cited duties and the contractor's responsibilities.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH REVIEW
COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

1331 Pennsylvania
Avenue, NW, Suite 520N

Washington, DC
20004-1710

Phone: (202) 434-9933
| Fax: (202) 434-9949

May 25, 2017

SECRETARY
OF LABOR,                                :     CIVIL PENALTY PROCEEDING

MINE
SAFETY AND HEALTH                      :

ADMINISTRATION
(MSHA),                        :     Docket No. WEVA 2015-1036

Petitioner,                          :     A.C.
No. 46-09415-391343

v.                                                   :    

:    

BUNDY
AUGER MINING, INC.,                    :     Mine: Lost Flats Highwall Miner

Respondent.                      :

DECISION DENY ING
SETTLEMENT MOTION

Before: Judge
Moran

This
matter arises under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. §
801 et seq. (2012) (“Mine Act”) and is before the Court upon a petition for
assessment of a civil penalty under section 105(d) of the Federal Mine Safety
and Health Act of 1977. The Secretary has filed a Motion for Decision and Order
Approving Settlement (“Secretary’s Motion,” or “Motion”). The originally
assessed amount was $6,300.00, and the proposed settlement is for $4,410.00. Upon
review, as explained below, the Court concludes that the proffered settlement does not meet the criteria set forth in section
110(i) of the Act, because the Secretary has not provided sufficient facts to
justify its sought-after penalty reduction. Accordingly, the Motion is DENIED
and this case will be set for hearing.

Involved
are 2 (two) specially assessed alleged violations of the Mine Act. One is a
section 104(d)(1) citation, No. 9082933, and the other is a section 104(d)(1)
order, No. 9082935. While the proposed penalty amounts differ, $2,900 in the
case of No. 9082933, with a settlement figure of $2,030, and $3,400 in the case
of 9082935, with a settlement figure of $2,380, both reductions amount to the
ubiquitous 30% penalty reduction that has appeared in other cases. See The
American Coal Company et al. , 38 FMSHRC 1972, 1981 (2016).

Understanding the
deficiency in the Motion begins with an appreciation of the standards alleged
to have been violated. The section 104(d)(1) citation, No. 9082933, involves 30
C.F.R.

§ 77.1004(b),
titled “Ground control; inspection and maintenance; general,” which provides at
subsection (b) that “Overhanging highwalls and banks shall be taken down and
other unsafe ground conditions shall be corrected promptly, or the area shall
be posted.” [1]
30 C.F.R.

§
77.1104(b).

The
(d)(1) citation states,

The operator failed to take down,
correct or post an unsafe ground conditions [sic] located along the measured
[sic] the measured 60 to >80 vertical spoil low-wall for a horizontal
distance of approximately 231 feet in the active Pit #0001. Oversteepend [sic]
spoil slopes and loose rocks/soil measuring several inches in diameter were
observed laying on the pit floor 3 to 4 feet from the unprotected low-wall toe
area and in the middle of the active haul road to the active pit end. Large
rocks 2 to 4 feet in diameter were observed on top of the > 60 foot spoil
pile. The approximately 20 foot wide pit access and haul road traveled along
the unprotected toe of the low-wall/spoil pile toe and immediately behind the
Highwall Miner (SHM #06). Fallen loose rocks approximately 3 to 4 inches in
diameter were observed laying along the toe of the oversteepened [sic] spoil
pile. An excavator and loader was [sic] observed loading coal below the
unprotected low-wall and oversteepened [sic] spoil slope. Loader tire tracks
were observed from 1 to 5 feet from areas of the low-wall /spoil pile. 1
Excavator, 3 loaders, 1 pick-up, multiple coal dump trucks and the 3 person
Highwall Miner crew were observed actively traveling to and from the pit. Continued
mining will require the miners to continue pit and highwall development to
remove at least two more highwall miner holes. Measurements were taken with the
Laser Technology Impulse electronic measuring device (EDM). The mine operator’s
haul trucks, loader, and highwall miner crew have traveled the area at least
day shifts for the last seven months and would continue pit work for at least a
[sic] 2 or 3 shifts of mining. Miner’s, [sic] including agents of the operator,
have traveled the area at least 2 dayshifts since the condition was recorded,
but not corrected, in the daily onshift examination dates March 31, 2015 to
April 2, 2015. The mine operator allowed and directed miners to work and travel
with a [sic] unsafe condition not corrected or posted in the active pit. The
mine operator has engaged in aggravated conduct constituting more than ordinary
negligence. This violation is an unwarrantable failure to comply with a
mandatory standard.

Citation No. 9082933.

As
noted, this matter was specially assessed. That special assessment stated,

the vertical spoil low-wall and over-steepened
slopes in active Pit #001 created hazards and were not corrected nor barricaded
off before work or travel was permitted in the area. The gravity of the
violation was considered serious. Over-steepened slopes and loose rocks were
laying on the pit floor near the unprotected low wall and in the middle of the
haul road to the active pit . Large rocks were on top of the 60-foot
spoil pile . This condition could have contributed to the cause of a serious
injury or fatality, from the fall-of -materials, to the equipment operators
that worked at the active pit. The violation resulted from the operator’s high
degree of negligence. The over-steepened slopes and unprotected low-wall
area conditions were extensive and had existed for an extended period of time .
The operator was aware of the conditions – they had just been cited,
for the same conditions, earlier during the week . No efforts were made
to correct the obvious hazards and miners were allowed to continue normal
mining operations .

Narrative
Findings for a Special Assessment at 1 (emphasis added).

Thus,
the section 104(d)(1) citation, No. 9082933, which appears to be both detailed
and well documented, alleges, at its heart, patently unsafe ground conditions
involving a significant distance over a tall spoil wall. It is also troublesome
that the Motion touts that the settlement involves “Penalty reduction[s] only ,” as if the reduction in the
penalty amount sought is not a major concern. Motion at 1-2 (emphasis added).

Congress expressed otherwise, noting that penalties are important.
As the D.C. Circuit found upon a review of the Mine Act’s legislative history,
“Congress was intent on assuring that the civil penalties provide an
effective deterrent against all offenders, and particularly against offenders
with records of past violations.” Coal Employment Project v. Dole , 889
F.2d 1127, 1133 (D.C. Cir. 1989). The
Supreme Court also found that civil penalties serve an important role in
deterring future violations: “the deterrence provided by monetary sanctions is
essential to [the] objective [of obtaining compliance with health and safety
standards.]” Nat’l Independent Coal Operators’ Ass’n. , 423 U.S. 388, 401
(1976). The Commission likewise found that

the Act's legislative
history, and numerous Commission and federal cases identify deterrence as a
central tenet of the Mine Act and its penalty provisions. This leads to the
inexorable conclusion that, in approving or rejecting a proposed settlement, a
Commission Judge may take into account the deterrent effect of the penalty. Our decision in  Ambrosia  acknowledged
the importance of the deterrent effect of  penalties , citing to the
pertinent  legislative   history  and to the statement in  Consolidation Coal  recognizing
the importance of civil  penalties  as deterrence. While acknowledging that “deterring future
violations is an important purpose of civil penalties,” we held in that case
that deterrence could not be used as a separate component to adjust a penalty
amount after the statutory criteria have been considered. To the extent that
the case suggests that a Judge may not explicitly consider deterrence in the
analysis of the six statutory factors and the overall penalty, we overrule it,
as it is not consistent with the principles set forth above. Moreover, it
forces our Judges to perform the unenviable - and perhaps impossible - task of
attempting to distinguish between the supposedly permissible goal of achieving
deterrence via a penalty based on the six statutory penalty criteria, and the
supposedly impermissible utilization of the concept as a factor separate from
the six criteria set forth in section 110(i). Our Judges should not be asked to
perform such analytical hair-splitting. Simply put, we refuse to require our Judges to apply blinders
when reviewing settlement proposals, and to ignore the central and most obvious
purpose of civil penalties — to ensure operator compliance with safety measures

• when deciding whether such penalties are appropriate. Deterrence is a principl e basic to and
  underlying the entire statutory scheme of imposing civil penalties. Thus,
  deterrence can and should infuse the Judge's consideration of whether or not to
  approve a settlement.

Black
Beauty Coal Co. ,
34 FMSHRC 1856, (Aug. 2012 ) (internal citations
omitted).

The
entire text of the 57 words offered as “justification” for the 30% reduction regarding
the (d)(1) Citation, No. 9082933 states,

Respondent presented evidence
that it relied upon the representations of the owner Operator that it was only
required to set the miner back 20 feet in order to be in compliance with the
ground control plan. In consideration of this evidence and the risks inherent
in proceeding to trial, the Secretary agreed to the reduction in penalty.

Motion at 3.

Upon
subtracting the 21 words of boilerplate offered by the Secretary, “In
consideration of this evidence and the risks inherent in proceeding to trial,
the Secretary agreed to the reduction in penalty,” which add nothing to explain
the 30% reduction, one is actually left with 32 words. Reduced to its core, the
proffered mitigation from the operator, advanced by the Secretary of Labor, is
that “ the Respondent relied upon the representations of the owner Operator
that it was only required to set the miner back 20 feet in order to be in
compliance with the ground control plan. ” Id. (emphasis added).

Of
course the standard speaks not at all in such terms. It deals only with unsafe
ground conditions, requiring that they “shall be corrected promptly, or the
area shall be posted.” 30 C.F.R. § 77.1004(b). The standard makes no mention of
ground control plans. Further, the Motion offers nothing to explain how the
claim that Bundy Auger Mining was allegedly told by the “owner Operator,” that “it
was only required to set the miner back 20 feet in order to be in compliance
with the ground control plan,” applies to the requirements of the standard. Motion
at 3.

The
Motion is deficient in other ways too, as there is no explanation of the
relationship between Bundy Auger and the unnamed “owner Operator,” nor how that
relationship would absolve Bundy from compliance with the standard or reduce the
amount of its penalty liability. Further, the asserted relevance of the claim that,
if the miner was set back 20 feet, the mine would be in compliance with the
ground control plan vis-à-vis the standard, is not explained. The absence of
such an explanation does not strike the Court as a mystery, because the
standard plainly speaks in terms of the prompt correction of unsafe ground
conditions .

For
T\the section 104(d)(1) order, No. 9082935, involved is 30 C.F.R. § 77.1713(a),
titled, “Daily inspection of surface coal mine; certified person; reports of
inspection.”

The standard provides at
subsection (a) that

At least once during each
working shift, or more often if necessary for safety, each active working area
and each active surface installation shall be examined by a certified person
designated by the operator to conduct such examinations for hazardous
conditions and any hazardous conditions noted during such examinations shall be
reported to the operator and shall be corrected by the operator. [2]

30 C.F.R
for § 77.1713(a).

Order
No. 9082935 alleges,  

The operator failed to conduct an
adequate on-shift examination to identify hazardous conditions in the active
working area at the Taylor Highwall Mine, Pit #001, see Citations # 9082933 and

9082934, that were issued for failure to correct or post an unsafe ground

condition. The hazardous conditions existed at least two shifts when examinations
were to occur and was [sic] not adequately reported or corrected in
examinations recorded for March 31 to April 2, 2015. At least five miners (1
loader operator, 1 excavator operator and 3 person highwall miner crew) were
observed working and traveling approximately 1 to 5 feet from the toe of the
oversteepened [sic] and unstable low wall/spoil. The hazardous conditions were
obvious, extensive and easily identifiable to a person trained to recognize
hazards with highwalls and spoil banks. The mine operator has engaged in
aggravated conduct constituting more than ordinary negligence. This violation
is an unwarrantable failure to comply with a mandatory standard. The operator
immediately removed miners from the active pit and highwall area. Standard
77.1713(a) was cited 1 time in two years at mine 4609415 (1 to the operator, 0
to a contractor).

Section
104(d)(1) Order No. 9082935.

The
Special Assessment for this Order notes that the cited standard is one of the
“Rules to Live By,” and, as such, the standard has been identified as among
those “that most commonly contribute to fatalities in the mining industry.” For
such standards, about which the mining industry has been made aware, MSHA
expects mine operators to have “heightened awareness” of the hazards associated
with them. The Special Assessment continues, in line with the inspector’s
assertions in his Order, that the conditions were “obvious, extensive and
easily identified to a trained examiner.” Special Assessment at 2. Further,
that Special Assessment asserts that members of management had been in the work
areas and that such management failed to exercise “ the slightest
degree of care for miner safety .” Id . (emphasis added).

For
this matter, 69 words were presented by the Secretary of Labor to justify the
settlement. Removing, the same rubric as for the other matter, the 21 words of
boilerplate from the Secretary regarding “consideration of this evidence and
the risks inherent in proceeding to trial…” 48 words remain. [3]
Those words advise, “Respondent presented evidence that the required
examinations had been conducted by its agents and that Respondent reasonably
believed it was in compliance with the ground control plan and safety
procedures because it had set the miner back 20 feet from the highwall as
instructed by the owner operator.” Motion at 3-4. Translated fairly, 17 words
remain to justify the 30% reduction and they constitute the same mitigating
reason that was presented for Citation No. 9082933, to wit: the Respondent
“reasonably believed” it was in compliance with the ground control plan and
safety procedures because “it had set the miner back 20 feet from the highwall
as instructed by the owner operator.” Id .

Thus,
the Secretary merely parrots the Respondent’s same claim that was offered up
for the other matter – someone else, the unidentified owner operator, allegedly
told Bundy Auger that, if the miner was set back 20 feet from the highwall, the
working shift examination requirement for hazardous conditions for each active
working area would be met.

This
defense is inadequate because it sidesteps the requirements of the cited
standard, and implies that the unidentified ground control plan can supersede
those requirements. Plain and simple, the standard, as noted above, requires that,

[a]t least once during each
working shift, or more often if necessary for safety , each active
working area and each active surface installation shall be examined by a
certified person . . . for hazardous conditions and any hazardous conditions
noted during such examinations shall be reported to the operator and shall be
corrected by the operator.

30
C.F.R. § 77.1713(a).

As discussed
above with regard to Citation No. 9082933, the standard at issue in Order No. 9082935
(30 C.F.R. § 77.1713(a)) also makes no mention of ground control plans .

Conclusion

The
“justifications” for both of these matters – the (d)(1) citation, No. 9082933,
and the (d)(1) order, No. 9082935 – suggest that the blame rests to some degree
upon the “owner Operator.” However, the Motion does not identify that owner
Operator, nor does it inform how long Bundy Auger Mining has been operating the
mine, the “Lost Flats Highwall Miner.” Further, the Motion fails to explain how
the claimed representations from the “owner Operator” insulate or excuse Bundy
from compliance with the cited standards. Beyond that, neither standard allows
exceptions for compliance with promptly correcting or posting unsafe ground
conditions and the duty to have a certified person examine for hazardous
conditions at least once during each working shift and to report any such
hazards found to the operator and to have such hazards corrected by the
operator. Importantly, neither of the cited standards infers that how far the
miner is set back is the test or a factor for compliance – instead, hazardous
conditions are the trigger.

Thus,
neither of the cited standards allows for, or makes an exception to, compliance
with their requirements. The parties have utterly failed to explain how shifting
the blame to the “owner Operator” justifies the 30% penalty reduction. Yet, in
stating that the Respondent relied upon representations of the owner Operator, the
Secretary seems to be suggesting in his “Rationale” that the Respondent had no
duty to do more than to rely upon such claimed representations, or at least
that pointing to another entity justifies the 1/3rd reduction. This is in the
face of the inspector’s statement that the cited conditions existed since they
were recorded on March 31, some 3 days before the citation and order were issued.
Therefore, the inspector asserted that the conditions were known and the Court again
notes that the cited standard speaks in terms of the presence of hazardous conditions
– unsafe ground – not how far a miner is to be set back.

The
motion does not inform if the Respondent’s contention was brought to the
attention of the issuing inspector for his reaction. The Court has commented
previously that settlement motions should advise whether the assertions
advanced by a respondent were brought to the attention of the issuing
inspector, as such individual is MSHA’s only eyewitness to the alleged violations.

With
submissions such as this, it is not surprising that Congress wisely determined
that the Secretary could not have unbridled authority for settlements and that
it included section 110(k) in the 1977 Mine Act for that reason. The
legislative history for the origin of the provision and Congress’ intention for
the provision’s inclusion have already by repeatedly cited by the Commission.  

Accordingly,
for the reasons stated, the Secretary’s Motion for Decision and Order Approving
Settlement is DENIED. This matter is now to be set for a prompt hearing. The
parties are directed to participate in a conference call with the Court on Thursday,
June 1, 2017 at noon EDT. The call-in number will be separately provided to
the parties.

/s/
William B. Moran

William B. Moran

Administrative
Law Judge

Distribution:

Joseph
G. Jacobs, Bundy Auger Mining, Inc., PO BOX 249, Stanville, KY 41569

Helga
P. Spencer, Esq., U.S. Department of Labor, Office of the Regional Solicitor,
170 S. Independence Mall West, Suite 700 East, Philadelphia, PA 19106-3306

[1] Subsection (a)
of 30 C.F.R. § 77.1004 provides “Highwalls, banks, benches, and terrain sloping
into the working areas shall be examined after every rain, freeze, or thaw
before men work in such areas . . .” and it ties into the other standard cited
in this matter by referencing that “such examination shall be made and recorded
in accordance with § 77.1713.” 30 C.F.R. § 77.1004(a).

[2] Although the
importance of subsection (a) is plain, subsections (c) and (d) underscore this
by providing at (c) that “After each examination conducted in accordance with the
provisions of paragraph (a) of this section, each certified person who
conducted all or any part of the examination required shall enter with ink or
indelible pencil in a book approved by the Secretary the date and a report of
the condition of the mine or any area of the mine which he has inspected
together with a report of the nature and location of any hazardous condition
found to be present at the mine. The book in which such entries are made shall
be kept in an area at the mine designated by the operator to minimize the
danger of destruction by fire or other hazard,” and at (d) that “All
examination reports recorded in accordance with the provisions of paragraph (c)
of this section shall include a report of the action taken to abate hazardous
conditions and shall be signed or countersigned each day by at least one of the
following persons: (1) The surface mine foreman; (2) The assistant
superintendent of the mine; (3) The superintendent of the mine;

(4)
The person designated by the operator as responsible for health and safety at
the mine; or,

(5)
An equivalent mine official.” 30 C.F.R. §77.1713 (c) and (d). Subsection (b),
not invoked here, addresses only imminent dangers.

[3] The Court
wishes to make it plain that it is not engaging in bean counting. The purpose
of noting the few words offered is twofold. First, brief as the justifications
are, a large number of the few words are still empty, devoid of any meritorious
explanation for the proposed reduction. Second, when examining the few words
that seem to provide some justification, even those words are empty. This is
true for both of the distilled words offered as justification for these (d)(1)
matters.