Secretary of Labor v. Gateway Eagle Coal Company, LLC

Plain-English summary

Gateway Eagle and the Secretary proposed cutting by half the penalties for two S&S citations that alleged fatal hazards. One citation concerned a damaged 480-volt roof-bolter cable splice with exposed conductors, and the other concerned dry coal fines compressed against a moving belt. The Judge found that the cable-checking practice cited in the motion did not explain why exposed conductors went undetected or justify reducing the $1,657 proposal to $829. He also found no supporting facts for the claim that the coal accumulation arose after the last examination or that a fire would cause less severe injuries, so the proposed reduction from $3,143 to $1,571 was unsupported. The Judge denied settlement approval and directed the parties either to provide a sufficient factual basis or prepare for trial; he did not decide the citations or final penalties.

Decision snapshot

• Cited standards: 30 C.F.R. §§ 75.517 and 75.400
• Outcome: Approval of the proposed 50 percent penalty reductions was denied without resolving the two citations or assessing final penalties.
• Key point: Section 110(k) requires facts connecting a proposed penalty compromise to the citation's actual negligence, gravity, and hazard allegations.

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

Telephone: 202-434-9933 / Fax:
202-434-9949

July 12, 2016

SECRETARY
OF LABOR,

MINE
SAFETY AND HEALTH   

ADMINISTRATION
(MSHA),

Petitioner,

v.

GATEWAY
EAGLE COAL CO., LLC,

Respondent.

CIVIL
PENALTY PROCEEDING

Docket
No. WEVA 2015-987

A.C.
No. 46-08637-388319

Mine:
Campbells Creek No. 10

DECISION DENYING
MOTION

FOR APPROVAL OF
SETTLEMENT

Before:
Judge Moran

Over at least the past 33 years,
Commission judges, citing section 110(k) of the Mine Act, 30 U.S.C. § 820(k), have
required that settlements must be adequately justified. The Secretary of
Labor has filed a motion to approve settlement in this matter. For the reasons that
follow, as the present motion fails to meet this requirement, the Court has no
choice but to deny the motion.

The settlement motion at issue involves
two citations. Citation No. 9055796 pertains to a section 104(a) action, marked
as significant and substantial (S&S), with a fatality as the injury
reasonably expected, and the negligence listed as moderate.  The standard
invoked, 30 C.F.R. § 75.517, provides: “Power wires and cables, except trolley
wires, trolley feeder wires, and bare signal wires, shall be insulated
adequately and fully protected.” Specifically, Citation No. 9055796 alleges:

The 480 volt
cable, supplying power to the Fletcher Roof Bolter (co.#406), is not insulated
adequately and fully protected. A splice in the cable is found to be damaged
with exposed conductors. This condition exposes the miners who handle and/or
work or travel near this energized cable to hazards of electrical shock, which
is likely to result in electrocution. Standard 75.517 was cited 11 times in two
years at mine 4608637 (11 to the operator, 0 to a contractor).

The
parties’ settlement agreement proposes reducing the civil penalty for Citation
No. 9055796 from $1,657.00 to $829.00.

The Secretary’s settlement motion
presents only the following in support of the 50% reduction of the proposed penalty:
“Respondent presented evidence that miners are required to check cables prior
to each use, a requirement that is more stringent than demanded by regulations,
potentially reducing its negligence. Based on this information and the risks of
litigation, the parties agreed to the stated penalty.” Mot. for Dec. and
Order Approving Settlement, at 4 (Apr. 20, 2016).

The “information” provided by the
Secretary, through the Respondent, does not add up, as section 75.517 does not
speak to checking cables prior to each use. Instead, it requires cables to be
“insulated adequately and fully protected,” and such cable conditions were
apparently not present. The Secretary bases his agreement for a 50% penalty
reduction “on [that] information,” which rests only upon a potential reduction
in the mine’s negligence, but leaves unanswered how it is that the mine’s “more
stringent” practice did not detect that the splice in the cable was “damaged
with exposed conductors.” Id. Thus, the “more stringent” requirement was
ineffective and the standard itself is not qualified by employing such alleged
practices. Instead, it plainly requires that cables be insulated adequately and
fully protected. As noted, the inspector marked the violation as S&S and
the expected injury to be a fatality. Correction of the violation required that
a damaged splice be replaced.

For Citation No. 9055799, another
section 104(a) action, marked as S&S, fatal, and with moderate negligence, invoked
30 C.F.R. § 75.400. That standard, titled “Accumulation of combustible
materials,” provides that “[c]oal dust, including float coal dust deposited on
rock-dusted surfaces, loose coal, and other combustible materials, shall be
cleaned up and not be permitted to accumulate in active workings, or on
diesel-powered and electric equipment therein.” Specifically, Citation No.
9055799 alleges:

Combustible
materials have been permitted to accumulate at the #9a Belt Take-up. Dry
coal fines have accumulated under the take-up and are found to be compressed
against the moving belt. The coal fines measure 6' long X 17" deep.
This condition exposes miners to hazards associated with mine fires which are
likely to result in fatal injuries due to smoke inhalation. Standard 75.400 was
cited 29 times in two years at mine 4608637 (29 to the operator, 0 to a
contractor).

(Emphasis
added). The parties’ settlement agreement proposes reducing the civil penalty
for Citation No. 9055799 from $3,143.00 to $1,571.00.

The settlement motion states that the
Respondent presented evidence that the coal belt accumulations “could have
occurred since the last examination, potentially reducing its negligence.” Mot.
for Dec. and Order Approving Settlement, at 4. The motion also stated that
the Respondent presented evidence that, “in the event of a fire, the expected
injuries may be less severe than originally assessed.” Id. As with the
first citation discussed above, the motion seeks a 50% reduction in the
penalty. The problem with the asserted basis for the reduction is that the
motion does not provide the information relied upon to support the claim that
the accumulations could have occurred since the last examination, nor does the
Secretary weigh in on that claim. Similarly, there is no basis to support the
claim that “the expected injuries may be less severe than originally assessed.”

As
the Commission has noted, accumulation violations are serious business.[1] In fact,
the provision essentially repeats the statutory language of section 304(a) of
the Mine Act. See 30 U.S.C. § 864(a). With respect to the issue of such
violations, the Commission has previously held that

section 75.400
‘is violated when an accumulation of combustible materials exists.’ Old Ben
I, 1 FMSHRC at 1956. The Commission has further held that a violative
‘accumulation’ exists ‘where the quantity of combustible materials is such
that, in the judgment of the authorized representative of the Secretary, it
likely could cause a fire or explosion if an ignition source were present.’ Old
Ben Coal Co., 2 FMSHRC 2806, 2808 (October 1980)(‘Old Ben II’) . . .
The Commission [has] emphasized that the legislative history relevant to the
statutory standard that section 75.400 repeats ‘demonstrates Congress’
intention to prevent, not merely to minimize, accumulations. The standard was
directed at preventing accumulations in the first instance, not at cleaning up
the materials within a reasonable period of time after they have accumulated.’ Old
Ben I, 1 FMSHRC at 1957.

Utah
Power & Light Co.,
12 FMSHRC 965, 968 (May 1990).[2]

The Court is aware that the Secretary
does not care for the Court’s requirements for additional information to
support settlements.  However, pursuant to section 110(k) of the Mine Act, it
is the Court’s responsibility to require additional information in motions
where reductions are insufficiently explained. It should be pointed out that
the requirement for adequate supporting information in motions for settlement
is not new. Former Chief Judge Paul Merlin invoked this requirement 33 years
ago in a denial of a proposed settlement order, noting that “[t]he Solicitor
has given me no basis whatsoever to approve the proposed settlement. None of
the violations are explained or analyzed.” Yakima Cement, 5 FMSHRC 1278,
1279 (July 1983) (ALJ). The Chief Judge went on to note:

The Act makes
very clear that penalty proceedings before the Commission are de novo. The
Commission itself recently recognized that it is not bound by penalty assessment
regulations adopted by the Secretary but rather that in a proceeding before the
Commission the amount of the penalty to be assessed is a de novo determination
based upon the six statutory criteria specified in section 110(i) of the Act
and the information relevant thereto developed in the course of the
adjudicative proceeding. Sellersburg Stone Company, 5 FMSHRC 287 (March
1983). Indeed, if this were not so, the Commission would be nothing but a
rubber stamp for the Secretary.

Id.
at
1279 (emphasis added); see also Columbia Portland Cement, 10 FMSHRC 1375
(Sept. 1988) (ALJ Merlin) (settlement motion denied by Chief Judge Merlin based
on insufficient information). Noting the Secretary’s practice, which continues
to be frequently carried out today, the Chief Judge noted: “Using the same
language each time, the Solicitor gives no facts or rationale to support any of
[its] conclusions . . . [and therefore the court has] no basis to accept [the
Secretary’s] representations.” Columbia Portland Cement, 10 FMSHRC at
1375, 1377, 1378, 1379.  

Among
many examples, in the same vein, a quarter century ago, Judge William Fauver found
two instances of deficient settlement presentations:

The settlement
motion does not state or show a factual basis for concluding that the alleged
violation did not present a substantial possibility of resulting in injury
within the context of continued normal mining operations. Determination of that
issue will depend on a fuller presentation and evaluation of the facts. The
settlement will therefore be rejected,” and later in the same decision stated,
“[t]he settlement motion does not state or show a factual basis for concluding that
the alleged violation did not present a substantial possibility of resulting in
injury within the context of continued normal mining operations. For the
reasons discussed above, I find the motion to be insufficient as to this
citation.

Consolidation
Coal,
13 FMSHRC 748, 751 (Apr. 1991) (ALJ).

In light of section 110(k) and the
Commission’s long-established construction of its role under that provision, in
reviewing proposed penalties contested before it, it is difficult to discern
any legitimate basis for the Secretary’s recalcitrance. As it is the Secretary
of Labor, not the Secretary of Commerce, that is objecting to demonstrating the
legitimacy of compromises associated with violations of the Mine Act, one would
anticipate that the Secretary would be anxious to demonstrate that his proposed
settlements are patently supportable. Frequently, in dragging his feet to
establish such legitimacy, the Secretary will invoke “transparency” in its
submissions. As this Court noted in Bristol Coal, 36 FMSHRC 2198, 2198 (Aug.
2014) (ALJ Moran):

[I]n Sec. of
Labor v. The American Coal Company, LAKE 2011-13 (“American Coal”) and in
its underlying submission to this Court in that case, the Secretary repeatedly
invoked the claim that its approach for settlement submissions promotes
transparency and satisfies the need for public scrutiny, objectives to which it
professedly subscribes. See, for e.g. Sec’s Brief in American Coal at
43.

The Secretary,
in this Court’s view, has not caught on to the trend that began in the late
twentieth century that more, not less, public information from government is
the preferred practice. As the dictionary explains, to be ‘transparent’ means
to be ‘easily detected … characterized by visibility or accessibility of
information especially concerning business practices.’ Merriam-Webster.com.  Instead,
in its Motion before this Court in American Coal, the Secretary merely
proclaimed, in a decidedly non-transparent manner that ‘[a]fter further review
of the evidence, the Secretary has determined that a reduced penalty is
appropriate in light of the parties’ interest in settling this matter amicably
without further litigation. In recognition of the nature of the citations at
issue, and the uncertainties of litigation, the parties wish to settle the
matter with a 30% reduction in the assessed penalty with no changes to gravity
or negligence for any of the citations at issue.” See, American Coal Motion
at 2-3. In the Court’s view, such an approach is at odds with the normal sense
of the meaning of transparency and, importantly, makes public scrutiny
impossible. Further, the Secretary exaggerates, and some might fairly state
outright misrepresents, what is required for a settlement to pass muster, by
asserting that the Commission’s approach requires ‘the Secretary to supply
extensive information to justify proposed settlements.’1 See, Sec’s Br.
at 5, presently before the Commission under interlocutory review in American
Coal.

Id.

The
Court hopes that the Secretary will see the short-sightedness of his lack of
transparency and, rather than fighting his duty to disclose the legitimacy
behind his proposed settlements, instead demonstrate the basis for his compromises.

On
the basis of the foregoing, the Secretary’s Motion is DENIED. The parties are
directed to provide a sufficient basis to support the proposed settlement
reductions or to prepare for trial. If a trial occurs, regarding any violations
that may be established, the Court may impose a greater, lesser, or the same
penalty as that proposed in the motion, but such penalties as may be imposed
will be based upon those facts found through the testimony and documentary
evidence produced in the proceeding.

SO
ORDERED

/s/ William B.
Moran

William
B. Moran

Administrative
Law Judge

Distribution:

Noah
AnStraus, Esq., U.S. Department of Labor, Office of the Solicitor, The Curtis
Center, Suite 630E, 170 S. Independence Mall West, Philadelphia, PA 19106

Jonathan
Ellis, Esq., Steptoe & Johnson PLLC, Chase Tower, Eighth Floor, P.O. Box
1588, Charleston, WV 25326

[1] At least one of
the Upper Big Branch citations involved an accumulation of loose coal at a
tailpiece, where the material was some two to eight inches in depth along the
number 2 belt. See Citation No. 8094527, issued 07/21/2009.  

[2] As noted in ICG
Knott County, 35 FMSHRC 1027, 1039 (Apr. 2013) (ALJ Moran):

To place these
standards in context, the legislative history of the Mine Act details Congress’
concern with the hazards associated with such belts, noting that ‘many fires
occur along belt conveyors as a result of defective electric wiring, overheated
bearings, and friction; and therefore, and examination of belt conveyors is
necessary.’ S. Rep. No. 91-411, at 57 (1967), reprinted in Senate Subcomm. On
Labor, Comm. On Labor and Public Welfare, Part I Legislative History of the
Federal Coal Mine Health and Safety Act of 1969, at 183 (1975).