**FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION**

#  OFFICE OF ADMINISTRATIVE LAW JUDGES

KAISER ALUMINUM & CHEMICAL ) CONTEST PROCEEDINGS

CORP., )

Contestant, )

> ) Docket Nos.: CENT 2000-122-M

) through CENT 2000-132-R

) Docket No.: CENT 2001-40-RM

) Docket No.: CENT 2001-41-RM

v\. )

> ) ) Citation Nos.: 7881936 through ) 7881956

SECRETARY OF LABOR, )

MINE SAFETY AND HEALTH ) Mine: Gramercy Works

ADMINISTRATION, )

Respondent, )

)

UNITED STEELWORKERS OF AMERICA,)

Intervenor, )

> and )

CRAIG PRICE, )

Intervenor. )

)

)

SECRETARY OF LABOR, ) PENALTY PROCEEDINGS

MINE SAFETY AND HEALTH )

ADMINISTRATION, ) Docket Nos. CENT 2000-200-M

) & CENT 2000-201-M

> Petitioner, )

) AC Nos. 16-00352-05573 &

> v\. ) 16-00352-05573

) Docket Nos. CENT 2001-51-M

> ) AC. No. 16-00352-05583

) Mine: Gramercy Works

KAISER ALUMINUM & CHEMICAL )

CORP., )

> Respondent. )

[SECRETARY'S REVISED MOTION TO APPROVE SETTLEMENT]{.underline}

[AND MOTION TO DISMISS]{.underline}

The Secretary of Labor, United States Department of Labor (Secretary)
moves for an Order approving the proposed settlement agreement which the
partieshave reached with respect to the above-captioned matters. In
summary, Kaiser has agreed to withdraw its contest of the below-listed
citations/orders and pay penalties in the amount of \$513,000. The
Secretary has agreed to vacate the remainder of the citations and orders
at issue in the remaining dockets. In addition, the Secretary has issued
two additional orders which Kaiser has contested and for which Kaiser
agrees to pay penalties in the amount of \$72,000 which is included in
the total penalty payment of \$513,000. Finally, two individuals have
agreed to settle and pay \$12,500 each in civil penalties assessed
pursuant to Section 110(c) of the Mine Act, for violations which they
had reason to know existed. The additional orders and the penalties
under Section 110(a) and (c) have been assessed and contested by the
Respondents. The Petitions for Assessment are being filed, and answered,
and the cases are now being settled as part of this total global
settlement between the Secretary of Labor, Kaiser Aluminum and Chemical
Corporation, and the individual Respondents.

1\. This case involves an investigation subsequent to an explosion that
occurred on the morning of July 5, 1999 at the Gramercy Works Facility.
A significant number of miners at the mine were injured, three of whom
sustained severe disabling injuries. The Gramercy Works Facility is an
alumina processing facility located in Gramercy, Louisiana. Although
contested earlier in a public hearing subpoena challenge and retained as
an issue for review in Kaiser's Petition for Certiorari (214 F.3d 586
(5^th^ Cir. 2000)), for purposes of resolving this matter, the parties
have agreed that the Gramercy Works Facility is a "mine" as defined
under Section 3(h) of the Mine Act. This mine was operated by Kaiser
Aluminum and Chemical Corporation.

2\. MSHA inspectors and investigators investigated the July 5, 1999
explosion. They concluded that the immediate cause of the explosion was
an excessive pressure build up in pressure vessels in the digestion
process area of the facility, following an electrical fault causing a
power distribution failure, and the response thereto. MSHA found
deficiencies in the pressure relief safety systems, which MSHA concluded
were violations of the regulations. Several of the deficiencies were
voluntarily disclosed to MSHA and other government agencies by Kaiser in
a letter dated August 5, 1999. These conditions were set forth in the
MSHA investigative report. MSHA also issued other citations and orders
for violations of the regulations which took place during the
investigative proceeding. See MSHA investigative report and the
additional conclusions and amendments in this settlement agreement. 3.
The Secretary and Kaiser have agreed to settle these matters. MSHA is
agreeing to modify certain negligence level findings, and a gravity
finding in one order and to vacate four orders, and Kaiser has agreed to
pay agreed upon sums for the remaining citations and orders. Below is a
list of the citations and orders and the disposition that the parties
have agreed to:

[Citation or]{.underline} [Alleged Negligence]{.underline}

[Order]{.underline} [Modifications]{.underline} [Agreed Upon
Penalty]{.underline}

7881936 High \$52,000

> 7881937 High \$52,000

7881938 High \$52,000

7881939 No changes \$52,000

7881940 High \$52,000

7881941 High \$52,000

7881942 vacated N/A

7881943 vacated N/A

7881944 High \$2,500

7881945 High \$2,500

7881946 High \$2,500

7881947 High \$2,500

7881948 vacated N/A

7881949 Moderate \$14,000

7881950 Moderate and \$10,000

Non-contributory

7881951 Moderate \$14,000

7881952 Moderate \$14,000

7881953 no change \$16,000

7881954 no change \$16,000

7881955 no change \$16,000

7881956 vacated N/A

7885803 no change \$10,000

7885804 no change \$9,000

7718310 no change \$52,000

7718308 no change \$20,000

With respect to the violations of 30 C.F.R. § 48.27(c) (Orders No.
7881949, 7881950, 7881951, 7881952), the reduction in negligence and
modification of the violations to Section 104(a) citations, except for
Order No. 7881950, acknowledges that proper emergency procedures task
training is beyond that specifically required by other provisions of
Part 48. The Secretary further determined that the digestion control
room operator's conduct addressed in Order No. 7881950 did not
contribute to the accident. Finally, the Secretary notes that each of
the miners involved in these violations had training that was otherwise
in compliance with 30 C.F.R. Part 48.

On October 26, 2000, two additional citations (No7718310 and 7718308)
were issued for violative conditions. MSHA proposed a civil penalty of
\$52,000 for one, and \$20,000 for the other. Kaiser concurrently
contested the citations and moved for consolidation with this case, and
the penalties and citations are subject to the terms of this Motion and
Settlement Agreement, with Kaiser agreeing to pay a \$52,000 penalty for
one and \$20,000 for the other. This settlement and the changes to the
proposed penalties reflect the vagaries of litigation and a compromise
between the parties in light of the risk of litigation.

4\. The payment of the total sum of \$513,000 by Kaiser Aluminum is
appropriate and reflects due consideration of the nature of its conduct
and the penalty criteria contained in §110(i) of the Act. The parties
agree that the mine is a large facility and that the operator is a large
company. The penalties, to be paid in twelve equal payments within one
year from thirty days after the approval of this settlement motion, will
not adversely affect the operator's ability to continue in business. The
operator has a favorable history of prior violations and has promptly
abated the cited conditions. Good faith abatement is also demonstrated
by the prospective steps that the operator has agreed to take in this
matter as set forth in Paragraph 9 below.

5\. For the sole purposes of this settlement motion the parties agree
that the gravity associated with these violations is as stated in the
citations and orders, including the amendment to Order No. 7881950.

6\. This agreement is entered into by both parties in lieu of continued
litigation under the Mine Act, other than the issues raised in Kaiser's
pending Petition for Certiorari, 214 F.3d 586 (5^th^ Cir. 2000). The
parties have taken different positions regarding the validity of the
citations and orders and the appropriate level of negligence. The
Secretary has agreed to modify the alleged negligence levels of some of
the above listed citations and orders as set forth in Paragraph 3, to
reflect a high level of ordinary negligence. The parties agree that for
all purposes except those delineated in Secretary v. Amax Lead Co., 4
FMSHRC 975 (1982), Kaiser does not admit either the validity of the
citations and orders, the alleged levels of negligence, or the facts
alleged by the citations, orders, or any and all reports of MSHA or its
personnel. The parties further agree that for purposes of all actions
except for actions to which the United States and/or the Secretary of
Labor is a defendant, nothing herein shall be construed as an admission
by Kaiser. The parties agree that for all purposes except those
delineated in Secretary v. Amax Lead Co., 4 FMSHRC 975 (1982), Kaiser
and the Secretary are entering this agreement without prejudice to their
rights to make future arguments or raise any defenses in any other
cases, including the pending Petition for Certiorari 214 F.3d 586 (5^th^
Cir. 2000) and, for all purposes except for those delineated in
Secretary v. Amax Lead Co., 4 FMSHRC 975 (1982), Kaiser and the
Secretary retain their right to assert in any subsequent action that
conditions or practices cited in the original citations, or the amended
citations or orders, may or may not be violations of standards or
provisions of the Mine Act.

7\. Pursuant to Section 110(c) of the Mine Act, two parties who had
reason to know regulatory violations existed, received personal civil
penalties of \$12,500 each. The two parties exercised their right to
contest the proposed penalties and agreed to pay them, without
admissions, pursuant to the terms of the attached settlement motions.

8\. The Secretary will not take any further action relating to the
actions, events, or violations at issue in these proceedings against
Kaiser or any corporate agents, nor will she refer any further action
against Kaiser or any corporate agents relating to the actions, events,
or violations at issue here to any other agency. This settlement
agreement is acknowledged by the parties to be a global and final
resolution of all outstanding and potential matters resulting from or
related to the July 5, 1999 event and the Secretary's investigation
thereof, except for the issues raised in Kaiser's pending Petition for
Certiorari, 214 F.3d 586 (5^th^ Cir. 2000). Further, upon request by
Kaiser, the undersigned counsel for the Secretary will inform any other
government agency or department of the finality of this settlement.

9\. As indicated in the attached document (Exhibit A), the respondent
has agreed to undertake a program of prospective efforts, thereby
demonstrating additional good faith in abatement of the conditions at
issue in these proceedings.

WHEREFORE, the Secretary moves for approval of this proposed settlement
and an order requiring compliance with the payment plan agreed to
herein.

DATED:

Respectfully submitted,

HENRY L. SOLANO

Solicitor of Labor

EDWARD P. CLAIR

Associate Solicitor of Labor

SHEILA K. CRONAN

> Counsel for Trial Litigation

MARK R. MALECKI

EDWARD H. FITCH IV

Trial Attorneys

U.S. Department of Labor

Office of the Solicitor

4015 Wilson Blvd. Suite 400

> Arlington, VA 22203
>
> \(703\) 235-1153