Hobet Mining, Incorporated

Plain-English summary

Hobet Mining challenged penalty proposals calculated under the Secretary's excessive-history program, which increased penalties based on prior violations. The Commission held that it had jurisdiction to review the program and that the program was an invalid substantive rule because it had not gone through notice-and-comment rulemaking and conflicted with Part 100. It reversed the judge's order and remanded the seven penalties calculated under the program for recalculation under the existing Part 100 rules. The judge could proceed with the four remaining civil penalties that were not based on the challenged program.

Decision snapshot

• Governing provisions: 30 C.F.R. §§ 100.3, 100.4, and 100.5(h); 30 U.S.C. § 815(d)
• Outcome: Seven excessive-history penalty proposals were remanded for recalculation; four other penalty proceedings could continue before the judge.
• Key point: An agency cannot apply a binding penalty formula as a substantive rule without required notice-and-comment procedures.

Full text (FMSHRC public release)

CCASE:
MSHA V. HOBET MINING
DDATE:
19920528
TTEXT:
May 28, 1992
SECRETARY OF LABOR,
MINE SAFETY AND HEALTH
ADMINISTRATION (MSHA)

v. Docket No. WEVA 91-65

HOBET MINING, INCORPORATED

BEFORE: Backley, Doyle, Holen and Nelson, Commissioners(Footnote 1)
DECISION
BY THE COMMISSION:
This civil penalty proceeding arising under the Federal Mine Safety and
Health Act of 1977, 30 U.S.C. § 801 et seq. (1988)("Mine Act" or "Act"),
involves the validity of the Secretary of Labor's interim "excessive history"
program as applied to the proposal of civil penalties under the Mine Act
against Hobet Mining, Inc. ("Hobet"). This decision is one of seven decisions
issued by the Commission with respect to the Secretary's excessive history
program.(Footnote 2)
In all seven proceedings, the mine operators filed motions with the
presiding Commission administrative law judges requesting that the proposed
penalties be remanded to the Secretary of Labor for recalculation. The
operators contended that the proposed penalties were improper because they
were not based on the Secretary's civil penalty regulations set forth at
30 C.F.R. Part 100 ("Part 100") but, instead, were computed in accordance with
the interim excessive history program set forth in the Secretary's Program
Policy Letter No. P90-III-4 (May 29, 1990)(the "PPL"), which, the operators
asserted, had been unlawfully implemented outside the notice-and-comment
process required by the Administrative Procedure Act, 5 U.S.C. § 551 et seq.
(1988)("APA"). Following hearings on the motions, the judges reached
conflicting decisions as to Commission jurisdiction, the validity of the PPL
and whether the proposed civil penalties should be remanded to the Secretary.

1 Chairman Ford did not participate in the consideration or disposition of
this matter.

2 The other excessive history decisions are: Drummond Co., Inc., 14 FMSHRC
, No. SE 90-126; Drummond Co., Inc., 14 FMSHRC , No. SE 90-125, etc.;
Drummond Co., Inc., 14 FMSHRC , Zeigler Coal Co., 14 FMSHRC , No.
LAKE 91-2; Texas Utilities Mining Co., 14 FMSHRC , No. CENT 91-26; Utah
Power & Light Co., Mining Div., 14 FMSHRC , Nos. WEST 90-320, etc.; and

Page 2

Cyprus-Plateau Mining Corp., 14 FMSHRC , Nos. 91-44, etc.
~718
The aggrieved parties filed petitions for interlocutory or discretionary
review seeking review of the same general issues: (A) whether the Commission
has subject matter jurisdiction to consider the validity of the PPL; (B)
whether the Secretary acted arbitrarily in proposing civil penalties on the
basis of the PPL, an issue that involves an examination of whether the PPL
exceeds the interim mandate of the United States Court of Appeals for the
District of Columbia Circuit in Coal Employment Project v. Dole, 889 F.2d 1127
(1989)("Coal Employment Project I"); and whether the PPL was adopted in
contravention of the APA's notice-and-comment requirements; and (C) whether
the excessive history provisions of the PPL are impermissibly
retroactive.(Footnote 3) The Commission granted the petitions for review
and heard consolidated oral argument in this and two other proceedings.
In the present case, Commission Administrative Law Judge William Fauver
denied the motion to remand filed by Hobet. 13 FMSHRC 711 (April 1991)(ALJ).
The judge based his decision upon his determination that the Commission lacked
subject matter jurisdiction over Hobet's challenge to the Secretary's civil
penalty proposal scheme. 13 FMSHRC at 715-17.
For the reasons fully set forth in our lead decision in Drummond Co.,
Inc., 14 FMSHRC , No. SE 90-126 ("Drummond I"), we conclude that the
Commission has jurisdiction under the Mine Act to review the validity of the
PPL in the context of these civil penalty proceedings, and we reverse Judge
Fauver's holding to the contrary. We also conclude that the PPL exceeded the
Court's interim mandate in Coal Employment Project I and was issued in
contravention of the APA. Accordingly, we reverse the judge's decision and
remand to the Secretary for recalculation of the civil penalty proposals.
I.
Drummond I summarizes the general legal and regulatory background common
to all seven cases. See 14 FMSHRC at , slip op. at 2-8. In the present
case, the Department of Labor's Mine Safety and Health Administration
("MSHA")
issued 11 citations to Hobet between July 19, 1990, and September 10, 1990,
alleging violations of various mandatory safety or health standards. The
Secretary then filed penalty assessment petitions for the citations,
calculating penalties for seven of the citations according to the provisions
of the PPL, and including, as part of Hobet's history, single penalty and
other violations for the previous two years. Four other proposed penalties
were based on the existing Part 100 regulations. H. Br. at 2; H. Motion to
Remand at 1.

3 The operators' challenge in these seven proceedings is not to the merits of
the excessive history program. Hobet, however, moved to supplement the record
with a letter dated January 15, 1992, from officials of the United Mine
Workers of America and the Bituminous Coal Operators' Association to the

Page 3

Assistant Secretary for Mine Safety and Health. The Secretary has not filed
an opposition to this motion. In the letter, the officials express their
concern that the excessive history program targets a group of mines that are
safer than the mines not so targeted. We hereby grant Hobet's motion to
supplement the record. See Fed. R. App. P. 28(j).
~719
Hobet objected to MSHA's use of the PPL in proposing the penalties in
issue and filed a motion with the judge to remand the penalties to the
Secretary for recalculation. Judge Fauver denied the motion and certified his
interlocutory ruling to the Commission pursuant to 29 C.F.R. § 2700.74(a)(1).
13 FMSHRC at 717.
In his decision, the judge concluded that the Commission lacked subject
matter jurisdiction to consider the validity of the Secretary's procedures for
proposing penalties. The judge interpreted the Commission's decision in
Youghiogheny & Ohio Coal Co., 9 FMSHRC 673 (April 1987)("Y&O"), to stand
for
the narrow proposition that the Commission has only limited authority to
review prehearing challenges involving claims that the Secretary failed to
comply with the Part 100 regulations when proposing penalties. 13 FMSHRC at

716. The judge explained that in Y&O, the Commission did not hold "that it
     has authority to determine the validity of the Secretary's regulations or
     rules for proposing civil penalties" but, rather, that "it has a limited scope
     of review of objections that the Secretary has failed to comply with Part 100
     of her regulations in proposing a penalty." 13 FMSHRC at 716-17. The judge
     distinguished the present case from the circumstances presented in Y&O on the
     basis that this case does not involve the question of whether the Secretary
     complied with the Part 100 regulations. 13 FMSHRC at 717. Rather, the judge
     reasoned, the issue is "whether [the PPL] is valid as being in compliance with
     the Court's remand order and with the rulemaking requirements of the APA."
     Id. (emphasis in original). The judge then held that such issues lie outside
     the jurisdiction of the Commission and are vested instead with the Courts of
     Appeals. Id.
     II.
     The Secretary's principal contention is that the Commission lacks
     subject matter jurisdiction to consider the operators' challenge to the PPL.
     The Secretary argues that section 101(d) of the Mine Act confers exclusive
     jurisdiction over the operators' challenge to her regulatory methods upon
     United States Courts of Appeals. In Drummond I, we concluded that section
     101(d) does not prohibit the Commission's consideration of the operators'
     challenge to the PPL in these contest proceedings. 14 FMSHRC at , slip
     op. at 13-16. We recognized that section 101(d) "clearly vests jurisdiction
     over challenges to the validity of mandatory safety or health standards
     exclusively with the United States Courts of Appeals." 14 FMSHRC at , slip
     op. at 13. We observed, however, that neither the PPL nor the Secretary's
     Part 100 penalty regulations are mandatory standards promulgated under section

Page 4

101 of the Mine Act. Id. The Secretary characterizes the PPL as a "nonbinding"
agency pronouncement issued as an extension of her Part 100
regulatory scheme, which was promulgated pursuant to section 508 of the Act,
30 U.S.C. § 957. In Drummond I, we concluded that section 101(d) neither
states nor implies that its provision for exclusive judicial review extends to
regulations adopted pursuant to section 508 of the Act, or to challenges to
non-binding agency pronouncements. Id.
In Drummond I, we explained that the present proceedings are contests of
the Secretary's proposed civil penalties brought under section 105(d) of the
Act, 30 U.S.C. § 815(d). 14 FMSHRC at , slip op. at 14. In such contest
~720
proceedings, the Secretary's less formal, "non-binding" regulatory
pronouncements would fall within the Commission's jurisdictional purview. Id.
We also noted that the Mine Act expressly empowers the Commission to grant
review of "question[s] of law, policy or discretion," and to direct review sua
sponte of matters that are "contrary to ... Commission policy" or that present
a "novel question of policy...." 14 FMSHRC at , slip op. at 14-15, citing
30 U.S.C. § 823(d)(2)(A)(ii)(IV) & (B). We stated that "the reason the
Commission was created by Congress and equipped with broad remedial powers
and
policy jurisdiction was to assure due process protection under the statute
and, hence, to enhance public confidence in the mine safety and health
program." 14 FMSHRC at , slip op. at 15 (citation omitted). We pointed
out that our analysis of the Commission's jurisdiction in such penalty
proceedings accords with Bituminous Coal Operators' Ass'n. Inc. v. Marshall,
82 F.R.D. 350 (D.D.C. 1979), the one extensive judicial discussion of this
issue to date. 14 FMSHRC at , slip op. at 15-16.
The Secretary additionally contends that our decision in Y&O does not
reach the issue presented in these cases. In Y&O the Commission held that, in
certain circumstances, the Commission may require the Secretary to repropose
penalties in a manner consistent with the Part 100 penalty regulations. 9
FMSHRC at 679-80. In the present cases, the mine operators are asserting that
the Secretary has failed to operate within, and to abide by, those
regulations. In Drummond I, we agreed with the operators and the judge that a
failure by the Secretary to comply with Part 100, by reliance upon an invalid
PPL, would be within the scope of Y&O. 14 FMSHRC at , slip op. at 17.
On the basis of our decision in Drummond I, we reverse the judge's
conclusion that the Commission lacks jurisdiction to review the validity of
the PPL in the context of this civil penalty proceeding. We also reverse the
judge's holding here that our decision in Y&O is not applicable to the present
case.
Although the judge did not reach any other issues in this case after
finding that the Commission lacked jurisdiction to review Hobet's challenge,
we summarize our conclusions as to the remaining relevant issues, given our
holding that Commission jurisdiction attaches. In Drummond I, we concluded

Page 5

that the PPL goes beyond the Court's interim mandate in Coal Employment
Project I because it requires consideration of an operator's significant and
substantial ("S&S") as well as non-S&S violations and because it establishes a
new schedule of penalties based on that history.(Footnote 4) 14 FMSHRC at
, slip op. at 19-20. In addition, we rejected the Secretary's attempts to
justify the PPL under any of the APA's exceptions to notice-and-comment
rulemaking.
14 FMSHRC at , slip op. at 21-30. We concluded that the PPL is not an
interpretative rule, general statement of policy, or a rule of agency
organization, procedure or practice. 14 FMSHRC at , slip op. at 24-28. We
also determined that the PPL cannot be justified on the basis of the good

4 The S&S terminology is taken from section 104(d) of the Act, which
distinguishes as more serious in nature any violation that "could
significantly and substantially contribute to the cause and effect of a ...
mine safety or health hazard...." 30 U.S.C. § 814(d)(1).
~721
cause exception of the APA. 14 FMSHRC at , slip op. at 29. Accordingly,
we affirmed the judge's holding that the Secretary was required to promulgate
the PPL through notice-and-comment rulemaking and concluded that the PPL, as
an invalidly issued substantive rule, can be accorded no legal weight or
effect in these proceedings. 14 FMSHRC at , slip op. at 30. We also
rejected the Secretary's contention that penalty proposals under the PPL fall
squarely within the special assessment provisions of section 100.5(h). 14
FMSHRC , slip op. at 29-30.
In Drummond I, we further concluded that the civil penalties were
inconsistent with the existing Part 100 regulations and constituted arbitrary
enforcement action. 14 FMSHRC at , slip op. at 31. We remanded the
invalidly proposed penalties to the Secretary for recalculation pursuant to
the Part 100 regulations, in accordance with the Commission's decision in Y&O.
Id. We concluded that such a remand qualified as "other appropriate relief"
under 30 U.S.C. § 815(d). Id.
Given our other dispositions in Drummond I, we did not resolve the
retroactivity issues raised by the operators. However, we noted the
retroactive nature of the PPL's excessive history procedures and signalled our
concern. 14 FMSHRC at , slip op. at 32.
In the present case, the facts relevant and necessary to final
disposition are undisputed. In the interest of judicial economy, we will
resolve the PPL-related issues without remand to the judge. We conclude for
the same reasons set forth in Drummond I, that the PPL, as an invalidity
issued substantive rule, can be accorded no legal effect. The penalties
proposed against Hobet pursuant to the PPL conflict with the Part 100
regulatory scheme and constitute arbitrary agency action. Based on section
105(d) of the Mine Act and in consideration of the Commission's decision in
Y&O, we conclude that these proposed penalties should be remanded to the

Page 6

Secretary for recomputation according to the Part 100 regulations and the
Court's interim mandate as explained in Drummond I.
~722
III.
For the foregoing reasons, we reverse the judge's order. The seven
penalties proposed pursuant to the PPL are remanded to the Secretary for
recalculation in accordance with the existing Part 100 regulations without
reference to or use of the PPL's "excessive history" provisions. The
Secretary remains obligated to comply with the D.C. Circuit's Coal Employment
Project mandates, as discussed in Drummond I. The judge may proceed with the
remaining four non-PPL based civil penalties, as he deems appropriate.
Richard V. Backley, Commissioner
Joyce A. Doyle, Commissioner
Arlene Holen, Commissioner
L. Clair Nelson, Commissioner