Secretary of Labor v. Perry County Resources, LLC

Plain-English summary

Perry County Resources and the Secretary proposed settling four citations involving roof support, escapeways, a lifeline, and equipment guarding. A Judge denied approval because the Secretary would not provide a separate failure-to-abate order associated with a citation Perry accepted as written and agreed to pay in full. The Commission held that the Judge applied the wrong settlement standard and did not identify relevant missing facts, especially because no penalty was sought for the separate order. The parties supplied adequate facts to reduce negligence on the damaged-lifeline citation from moderate to low and lower its penalty from $530 to $264. The Commission reversed the Judge and approved the settlement.

Decision snapshot

• Cited standard(s): 30 C.F.R. §§ 75.202(a), 75.380(d)(1), 75.380(d)(7)(i), and 75.1722(a)
• Outcome: The settlement denial was reversed, three proposed penalties were approved unchanged, and one penalty was reduced from $530 to $264.
• Key point: A Judge reviewing settlement may request relevant facts but cannot require an unrelated enforcement document when the record already supports the agreed penalties.

Full text (FMSHRC public release)

FEDERAL MINE SAFETY AND HEALTH
REVIEW COMMISSION

1331 PENNSYLVANIA AVENUE, NW,
SUITE 520N

WASHINGTON, D.C. 20004‑1710

SECRETARY
OF LABOR,                             :        

MINE
SAFETY AND HEALTH                   :        

ADMINISTRATION
(MSHA)                      :        

:        

v.                                              
:         Docket No. KENT 2022-0024

:

PERRY
COUNTY RESOURCES, LLC         :

BEFORE:
Jordan, Chair; Althen, Rajkovich, and Baker, Commissioners

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. (2018) (“Mine Act” or “Act”), comes before us
on interlocutory review of a decision of a Commission Administrative Law Judge
denying a motion to approve settlement between Perry County Resources, LLC
(“Perry”) and the Secretary of Labor. The Judge based his denial on the
Secretary’s refusal to provide an order issued pursuant to section 104(b) of
the Mine Act, [1] which was
associated with a citation that was included in the motion to approve settlement.

For
the reasons discussed below, we conclude that the Judge abused his discretion
in denying the motion. Therefore, we reverse the Judge’s decision and approve
the settlement.

I.

Factual and Procedural Background

A.     Factual Background  

The Department of
Labor’s Mine Safety and Health Administration (“MSHA”) sent Perry a proposed
penalty assessment, proposing civil penalties against Perry for several
citations issued pursuant to section 104(a) of the Mine Act, 30 U.S.C. §
814(a), at Perry’s E4-2 mine. Perry contested the penalty proposals with
respect to four of the citations by checking the appropriate boxes on MSHA Form
1000-179. The Secretary subsequently filed a petition for assessment of
penalty, and Perry filed an answer to the petition.

The four citations
and associated penalties that Perry contested may be summarized as follows:

1. Citation No.
   9282162 ,
   alleging a significant and substantial (“S&S”) [2] violation of 30 C.F.R. § 75.202(a)
   because roof bolt plates were missing, due to rusting, on roof bolts along the
   primary escapeway. Proposed penalty : $336.

2. Citation No.
   9282163 , alleging an S&S violation of 30 C.F.R. § 75.380(d)(1)
   because the primary escapeway was not being maintained in safe condition
   because it had draw rock and thick mud which would impede safe passage. Proposed penalty : $ 302.

3. Citation No.
   9282123 ,
   alleging an S&S violation of 30 C.F.R. § 75.380(d)(7)(i) because the
   lifeline in the secondary escapeway was broken and pulled apart and was not
   being properly maintained. Proposed penalty : $530.

4. Citation No.
   9282125 ,
   alleging an S&S violation of 30 C.F.R. § 75.1722(a) because the equipment
   guard was not being properly maintained due to an opening in the guard along
   the belt tailpiece. Proposed penalty : $302.

Ex. A to PIR. In the row of MSHA Form
1000-179 that pertains to Citation No. 9282162, the type of action is listed as
“104(a) C/104(b) O.”

B.      Motions and
Correspondence

In
April 2022, the parties filed a Joint Motion to Approve Settlement. In the
motion, the parties proposed that there should be no modifications with respect
to three of the four citations, and that the operator would pay the proposed
penalties associated with those citations. Jt. Mot. at 2. Regarding the
remaining citation, Citation No. 9282123, the parties agreed that the operator
should pay a penalty of $264 rather than $530 due to a reduction in negligence
from moderate to low. Id. at 2, 4. The parties proposed no modification
with respect to Citation No. 9282162, which was associated with the failure to
abate order.

A
few weeks later, the Judge and the parties exchanged emails about the absence
of the section 104(b) order from the record. On May 31, 2022, the Judge emailed
the parties that he noticed that the section 104(b) order was not in the
official file, and that he needed to be provided with a copy of the order
before he could rule on the joint motion. Ex. C to PIR at 3. The Conference and
Litigation Representative (“CLR”) representing the Secretary’s interests
responded that the Secretary declined to provide other documents not before the
court because the order requested by the Judge was not contested. Id. at
2-3. The Judge replied that he would be unable to proceed on the motion until
he received the order and stated his opinion that the order was a matter of
public record. Id. at 2. The CLR then stated that the citation
affiliated with the order, Citation No. 9282162, had been affirmed and that the
good faith discount had not been given for the penalty for the underlying
violation. Id. at 1. The Judge again responded that he disagreed with
the CLR’s position and that he would have no choice but to file a request under
the Freedom of Information Act in order to obtain the order. Id.

Approximately
two weeks later, the parties filed a Supplemental Motion to Approve Settlement
or Motion to Certify for Interlocutory Review, which incorporated by reference
the Joint Motion to Approve Settlement. Supp. Mot. at 1. In the supplemental
motion, the Secretary submitted that she had not attached a copy of the section
104(b) order to the petition for assessment of penalty because she had not
proposed a penalty for that order. Id. at 2. She noted that because
Perry had not contested the order or sought temporary relief from it, the
Commission never had jurisdiction over the order. Id. The Secretary
asserted that the motion to approve settlement should be approved because the
settlement satisfies the Commission’s standard for approval of settlements. Id.
at 3. Alternatively, the Secretary requested the Judge to certify this case for
interlocutory review because the requirements for review had been met pursuant
to 29 C.F.R. § 2700.76. Id. at 5-6.

C.     Judge’s Orders

On
June 22, 2022, the Judge issued an order directing the Secretary to disclose
all documents pertaining to the issuance of the section 104(b) order associated
with Citation No. 9282162. 44 FMSHRC 501, 506 (June 2022) (ALJ). The Judge noted
that the abatement time had been extended for Citation No. 9282162, that the
record does not reveal whether the extended termination had been met, and that
the section 104(b) order would provide such information. Id. at 502. The
Judge reasoned that a section 104(b) order has significance in its own right in
that a penalty may be assessed in connection with the order and that its
issuance impacts the amount of penalty that is assessed for the underlying
violation based upon consideration of the operator’s demonstrated good faith in
attempting to achieve rapid compliance after notification of the violation. Id.
at 504-05. The Judge observed that the record also does not reveal if the
Secretary met his obligation to notify the miners’ representatives that the
operator failed to abate a violation within the specified abatement period. Id.
at 505.

The
Secretary and operator provided no further documents in response to the Judge’s
June order.

On
October 5, 2022, the Judge issued an order denying the Secretary’s settlement
motion and denying the Secretary’s motion to certify the matter for
interlocutory review. 44 FMSHRC 621 (Oct. 2022) (ALJ). The
Judge reiterated much of the reasoning set forth in his June order, concluding
that when presenting a motion to approve settlement, the Secretary should
provide the entire documentary record related to the citations involved in the
docket. Id. at 624. The Judge explained that Citation No. 9282162 is
part of the docket, and that the documentary record concerning the violation is
incomplete without the section 104(b) order. Id . at 627. The Judge
further denied the Secretary’s Motion to Certify for Interlocutory Review
concluding that the requirements for interlocutory review had not been met. Id.

D.     Interlocutory
Review

The
Secretary subsequently filed a petition for interlocutory review of the Judge’s
October 5 order. The Commission granted review “of the Judge’s order of October
5, 2022, and the issue of whether the Judge abused his discretion in denying
approval of the settlement motion based on the Secretary’s refusal to provide a
section 104(b) order that was associated with a citation that was a subject of
the motion to approve settlement.” 44 FMSHRC 703 (Dec. 2022).

On
review, the Secretary argues that the Judge abused his discretion in denying
the settlement motion. She explains that the instant docket involves four
violations and only one penalty compromise, and that the failure to abate order
was irrelevant both to the compromised penalty and to the citation associated
with such penalty. The Secretary submits that she provided sufficient facts to
permit the Judge to determine if the penalty modification protected the public
interest.  

She
further notes that the section 104(b) order was a separate enforcement action
with its own issuance number, and that if Perry wanted to contest the order, it
could have done so separately. The Secretary explains that because MSHA did not
propose a penalty for the order and Perry did not contest it, the Secretary did
not attach a copy of the section 104(b) order to the penalty petition.

II.

Disposition

Section 110(k) of
the Mine Act sets forth the Commission’s authority to approve settlements of
the Secretary’s proposed assessments once contested. It provides:

No proposed penalty which has been contested before
the Commission under section 105(a) shall be compromised, mitigated, or settled
except with the approval of the Commission. No penalty assessment which has
become a final order of the Commission shall be compromised, mitigated, or
settled except with the approval of the court.

30 U.S.C. §
820(k). Commission Procedural Rule 31 requires that a motion to approve penalty
settlement must include, for each violation, the original amount of the penalty
proposed by the Secretary, the amount of the penalty agreed to in settlement,
and facts in support of the penalty amount agreed to by the parties. 29 C.F.R.
§ 2700.31(b)(1).

The Commission has
explained that “Congress authorized the Commission to approve the settlement of
contested penalties . . . ‘to ensure penalties serve as an effective
enforcement tool, prevent abuse, and preserve the public interest.’” American
Coal Co. , 38 FMSHRC 1972, 1976 (Aug. 2016) (“ AmCoal I ”) (quoting Black
Beauty Coal Co. , 34 FMSHRC 1856, 1862 (Aug. 2012)). In “effectuating this
Congressional mandate, the Commission and its Judges
consider whether the settlement of a proposed
penalty is fair, reasonable, appropriate under the facts, and protects the
public interest .” AmCoal I , 38 FMSHRC at 1976. The Commission has
recognized that parties may submit factual support consistent with the penalty
criteria factors found in section 110(i) of the Mine Act, 30 U.S.C. § 820(i),
as well as facts supporting settlement that fall outside of the section 110(i)
factors. Id. at 1982.

The Commission
reviews a Judge’s denial of a proposed settlement under an abuse of discretion
standard. Sec’y
of Labor on behalf of Shemwell v. Armstrong Coal Co. , 36 FMSHRC 1097,
1101 (May 2014). An abuse of discretion may be found where there is no evidence
to support the Judge’s decision or if the decision is based on an improper
understanding of the law. Id. at 1101. In Solar Sources
Mining, LLC ,
41 FMSHRC 594, 599 (Sept. 2019) , the Commission concluded that the Judge abused his
discretion in denying a settlement motion because he: (1) failed to apply the AmCoal I standard, (2)
denied the settlement based on the Secretary’s refusal to provide a copy of the
inspector’s notes and photographs, and (3) erred in finding that the Secretary
failed to prove any facts in support of the settlement.

We conclude that
the Judge also abused his discretion in the case at hand; the Judge’s decision
is based on an improper understanding of the law. The Judge failed to apply the
AmCoal
I settlement
standard and instead denied the settlement motion because the Secretary did not
provide a copy of the section 104(b) Order related to Citation No. 9282162.

The Commission has
repeatedly recognized that a Judge who properly determines that a settlement
motion lacks sufficient information may permissibly request further facts from
the parties. Solar Sources , 41 FMSHRC at 602 (citing Black Beauty ,
34 FMSHRC at 1863).

However, the
Commission has explained that during the review of a proposed settlement, the
Judge is not expected to engage in fact finding as the Judge would
post-hearing. Solar Sources , 41 FMSHRC at 602 (“At the pre-hearing
settlement stage of a Commission proceeding, no evidence has been adduced into
the record and the Judge is not required to engage in fact finding.”). In the
context of reviewing a proposed settlement, a Judge may not “assign[] probative
value to some facts without the benefit of an evidentiary hearing.” American
Coal Co , 40 FMSHRC 983, 991 (Aug. 2018) (“ AmCoal II ”). Judges are
“expected to consider the facts as alleged by the parties in their settlement,
evaluate such information under the applicable Commission standard for review,
and determine whether the facts support the penalty agreed to by the parties.” See
Solar Sources , 41 FMSHRC at 602 .

Under the
circumstances of this case, the Judge erred by denying the settlement on the
basis that he was not provided the section 104(b) failure to abate order
associated with Citation No. 9282162. The operator agreed to accept
Citation No. 9282162 as written and pay the proposed penalty in full. The Judge
failed to identify relevant facts that would be provided by the order that had
not already been made a part of the record. [3]

An
operator’s timeliness in achieving abatement impacts the penalty criteria of
“the demonstrated good faith of the person charged in attempting to achieve
rapid compliance.” 30 U.S.C. § 820(i). Here, the Secretary provided factual
information that the good faith abatement discount was not given with respect
to the proposed penalty for Citation No. 9282162. Supp. Mot. at 3 (citations
omitted). [4]

In
addition, the Judge’s repeated concern that the record does not reveal if the
Secretary met his obligation to notify the miners’ representatives that the
operator failed to abate a violation within the specified abatement period (44
FMSHRC at 627; 44 FMSHRC at 505) is irrelevant to the subject proceeding. Section
105(b)(1)(A) [5] requires the Secretary to provide
notice to an operator and to the miners’ representative that the operator has
failed to timely abate a violation and that a penalty will be proposed under
section 110(b) of the Mine Act, 30 U.S.C. § 820(b). Here, the Secretary
provided factual information that she did not propose a penalty in connection
with the section 104(b) order. Therefore, the provisions of section
105(b)(1)(A) do not apply to this proceeding.

Under
Commission Procedural Rule 28, the Secretary is required to attach to a
petition for assessment of penalty “[a] legible copy of each citation or order
for which a penalty is sought.” 29 C.F.R. § 2700.28(c). Since the Secretary did
not propose a penalty for the section 104(b) order, the Secretary was not
required to attach a copy of the order to the Secretary’s petition. [6]

The
Judge further erred by failing to evaluate the facts provided by the parties
under the settlement against the AmCoal standard and to determine
whether those facts support the penalty agreed to by the parties. [7]
While we could remand this case to the Judge to apply the standard, relying
upon relevant factual support in the record, we conclude that remand is
unnecessary because the parties presented sufficient facts to support the
conclusion that the settlement is fair, reasonable, appropriate, and serves the
public interest.

In the
Joint Motion to Approve Settlement, the parties stated in part that they had
considered the alleged violations, the six statutory penalty criteria, “and
other non-monetary considerations that fall outside of [section] 110(i) but
that support settlement.” Jt. Mot. at 2. The parties agreed that Citation Nos. 9282162, 9282163,
and 9282125 should be accepted by Perry as written and that the operator should
pay the original proposed penalties associated with those citations. Id.
at 3; Supp Mot. at 1.

In
addition, the parties stated that modification was appropriate for Citation No.
9282123. This citation alleged an S&S violation of 30 C.F.R. § 75.308(d)(7)(i)
due to the lifeline in the secondary escapeway not being properly maintained. The
parties provided information that the negligence associated with the violation
should be reduced from moderate to low, and that the operator should pay a
penalty of $264 rather than $530. The lowering of negligence was based on
statements provided by the parties that: (1) mine management did not have
knowledge of the condition or reason to believe that it existed; (2) the
alleged condition was not present during the morning pre-shift examination or
when the crew traveled to the section at the start of their shift; (3) the
condition likely occurred when a load of supplies was transported to the
section without the knowledge of the equipment operator; and (4) the condition
was promptly corrected as soon as it was discovered. Jt.
Mot. at 4.

The Commission has recognized that an
“operator’s knowledge (actual or constructive) is a key component of a
negligence determination.” Ohio Cty Coal Co ., 40 FMSHRC 1096, 1099 (Aug.
2018). The Commission has considered evidence relating to an operator’s lack of
knowledge to support a reduction in negligence when approving a settlement
agreement. Id.

Here, the parties have provided relevant
information regarding the operator’s lack of knowledge to support a reduction
in negligence from moderate to low. We conclude that the facts alleged by the
parties are sufficient to establish that the penalty reduction is fair,
reasonable, appropriate under the facts, and protects the public interest. [8]
The settlement involved a modest reduction in penalty, and the
parties provided sufficient facts to support that penalty reduction. Accordingly,
we reverse the Judge’s denial of the motion to approve settlement, and we
hereby approve the settlement. 

III.

Conclusion

For
the foregoing reasons, we reverse the Judge’s denial of the motion to approve
settlement, and we approve the settlement.  

/s/ Mary Lu Jordan

Mary Lu Jordan, Chair

/s/ William I.
Althen

William I. Althen, Commissioner

/s/ Marco M. Rajkovich,
Jr.

Marco M. Rajkovich, Jr.,
Commissioner

/s/ Timothy J.
Baker

Timothy J. Baker, Commissioner

Distribution:

Tracy
E. Wolf, Esq.

Office
of the Solicitor

U.S.
Department of Labor, Division of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Emily
Toler Scott, Esq.

Counsel
for Appellate Litigation

Office
of the Solicitor

U.S.
Department of Labor, Division of Mine Safety and Health

201 12th
Street South, Suite 401

Arlington,
VA 22202

[email protected]

April
Nelson, Esq.

Associate
Solicitor

Office
of the Solicitor

U.S.
Department of Labor, Division of Mine Safety and Health

201
12th Street South, Suite 401

Arlington,
VA 22202

[email protected]

Gregory
Q. Jensen

Perry
County Resources, LLC

P.O.
Box 606

Fishers,
IN 46038

[email protected]

Administrative
Law Judge William Moran

Federal
Mine Safety Health Review Commission

Office
of the Chief Administrative Law Judge

1331
Pennsylvania Avenue, NW Suite 520N

Washington,
DC 20004-1710

[email protected]

Melanie
Garris

Office
of Civil Penalty Compliance

Mine
Safety and Health Administration

201
12th Street South, Suite 401

Arlington,
VA 22202-5452

[email protected]

Chief
Administrative Law Judge Glynn F. Voisin

Federal
Mine Safety Health Review Commission

Office
of the Chief Administrative Law Judge

1331
Pennsylvania Avenue, NW Suite 520N

Washington,
DC 20004-1710

[email protected]

[1]  Section 104(b) provides in part that if an
authorized representative of the Secretary finds during a follow-up inspection
that a violation described in a citation “has not been totally abated within
the period of time as originally fixed therein or as subsequently extended,

and
. . . that the period of time for the abatement should not be further
extended,” the representative shall issue an order requiring the removal of
certain persons from the affected area until “such violation has been abated.” 30
U.S.C. § 814(b).

[2] The “significant and substantial” terminology is
taken from section 104(d)(1) of the Mine Act, 30 U.S.C. § 814(d)(1), which
distinguished 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.”

[3] In Solar Sources Mining, LLC , 41 FMSHRC 594, 603
(Sept. 2019), the Commission held that the Judge abused his discretion when he
denied a settlement, in part, because the Secretary refused to provide
evidentiary documents such as the inspector’s notes and photographs. Without
reaching the question of whether a section 104(b) order issued for a failure to
abate a contested citation may ever appropriately be sought by a Judge to further
the Judge’s AmCoal I analysis or whether it constitutes prohibited
evidentiary documentation, we find the Judge’s request was inappropriate in
this case. The Judge failed to identify a rationale for requiring the order, considering
that the operator accepted the contested citation as written and agreed to pay
the proposed penalty in full.  

[4] Moreover,
regarding the Judge’s statement in his June 22 order that although the
termination date had been extended in Citation No. 9282162, the record was
missing information about whether the extended date had been met, the Judge
acknowledged that “one may presume it was not, because Exhibit A for this
docket reveals that a section 104(b) order was issued.” 44 FMSHRC at 502.

[5] Section 105(b)(1)(A) provides in part:

If the Secretary has reason to believe that an
operator has failed to correct a violation for which a citation has been issued
within the period permitted for its correction, the Secretary shall notify the
operator by certified mail of such failure and of the penalty proposed to be
assessed under section 110(b) . . . . A copy of such notification of the
proposed assessment of penalty shall at the same time be sent by mail to the
representative of the mine

employees.
. . .

30
U.S.C. § 815(b)(1)(A).

[6] The
section 104(b) order was a separate enforcement action with its own issuance
number (Order No. 9282166). S. Br. at 2 & Ex. A. Although the operator
could have chosen to contest the order, it did not. The Commission has held
that Commission jurisdiction attaches upon contest. Black Beauty , 34
FMSHRC at 1862 n.4.

[7] Although the Judge noted that the penalty reduction
related to Citation No. 9282123 was based upon a reduction in negligence, the
Judge did not evaluate the facts against the AmCoal standard. 44 FMSHRC
at 622 n.1.

[8] We
note that the following principle–ensuring that the public interest is
adequately protected by the reduction of a penalty in settlement–does not
require a determination of whether the proposed settlement best serves the
public interest. Shemwell , 36 FMSHRC at 1103-04. Rather, we consider whether
the proposed settlement is “ within the reaches of public interest.” Id.
at 1104 (quotations omitted and emphasis added).