**FEDERAL MINE SAFETY AND HEALTH REVIEWCOMMISSION**

**721 19th St., Suite 443**

**Denver, CO 80202-2500**

**Office: (303)844-5266/Fax: (303) 844-5268**

 

 

SECRETARYOF LABOR,                                 :     CIVIL PENALTY PROCEEDING

 MINESAFETY AND HEALTH                        :

 ADMINISTRATION(MSHA),                          :     Docket No. WEST 2022-0189

                                    Petitioner,                         :     A.C.No. 48-00152-548001

                                                                              :

                        v.                                                   :     

                                                                              :     

GENESISALKALI, LLC,                                   :

                                    Respondent.                      :     Mine:Genesis Alkali @ Westvaco

** **

** **

**ORDER DENYING SETTLEMENT**

 

This case is before meupon a petition for assessment of a civil penalty under Section 105(d) of theFederal Mine Safety and Health Act of 1977. The parties have notified the Courtthat they have reached a settlement agreement in this case. Based on thedrastic penalty reduction and unjustified modifications proposed, I deny thesettlement motion. The terms of the proposed settlement are as follows: 

 
| **Citation/  Order No.**     | **Originally Proposed Assessment** | **Settlement Amount** | **Modification**                                                                                                                                                                                                   |
|-------------------------------|------------------------------------|-----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Docket No. WEST 2022-0189** |
| 9479991                       | $  12,007.00                      | $  729.00             | Modify  gravity from “Reasonably Likely” and “Fatal” to “Unlikely” and “Lost Workdays  or Restricted Duty,” and modify Significant and Substantial from “Yes” to  “No.”                                         |
| 9655723                       | $   791.00                         | $    0.00             | Vacate.                                                                                                                                                                                                            |
| 9655731                       | $  1,006.00                        | $  125.00             | Modify  gravity from “Reasonably Likely” to “Unlikely,” modify negligence from  “Moderate” to “Low,” and modify Significant and Substantial from “Yes” to  “No.”                                                |
| 9655754                       | $  3,917.00                        | $  3,917.00          | No  change. 

                                                                                                                                                                                               |
| 9655756                       | $  3,917.00                        | $  530.00             | Modify  gravity from “Reasonably Likely” and “Permanently Disabling” to “Unlikely”  and “Lost Workdays or Restricted Duty,” and modify Significant and  Substantial from “Yes” to “No.”                         |
| 9655867                       | $  1,385.00                        | $  1,385.00          | No  changes.

                                                                                                                                                                                               |
| 9655868                       | $  4,980.00                        | $  1,500.00          | Modify  negligence from “High” to “Moderate.”                                                                                                                                                                     |
| 9655907                       | $  4,980.00                        | $  1,006.00          | Modify  gravity from “Reasonably Likely” to “Unlikely” and modify Significant and  Substantial from “Yes” to “No.”                                                                                               |
| 9655908                       | $  1,500.00                        | $  302.00             | Modify  gravity from “Reasonably Likely” to “Unlikely” and modify Significant and  Substantial from “Yes” to “No.”                                                                                               |
| **TOTAL**                     | **$  34,483.00**                  | **$  9,494.00**      | ** **                                                                                                                                                                                                         |

 

 

Section 110(k) of theMine Act provides that “[n]o 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.” 30 U.S.C. § 820(k). This provisionof the Act was designed to shed light and scrutiny upon the dealmaking thattakes place between mine operators and government regulators, and to ensurethat settlements further the public interest and the purposes of the Mine Act. *SeeBlack Beauty Coal Co.*, 34 FMSHRC 1856, 1860-64. 

 

Commission judgesreview settlements to determine whether they are “fair, reasonable, appropriateunder the facts, and protects the public interest.” *Am. Coal Co.*, 38FMSHRC 1972, 1976 (Aug. 2016). To enable judges to make this determination,Commission rules require that a motion to approve a penalty settlement mustinclude “facts in support of the penalty agreed to by the parties.” 30 C.F.R.§ 2700.31(b). A judge reviews the submitted facts,the six penalty criteria set forth in section 110(i) of the Act, and all otherrelevant considerations when scrutinizing a settlement. *See**Am. CoalCo.*, 38 FMSHRC at 1976, 1982.

 

**I.              ****TheAssessed Penalty, Proposed Settlement, and Amendments**

 

The Respondent operatesa large trona mine near Green River, Wyoming. This docket includes ninecitations issued to the Respondent between September and November of 2021 forvarious alleged violations of MSHA regulations.  The Respondent subsequentlycontested these citations. On May 17, 2022, the Secretary of Labor filed hispetition proposing a penalty of $34,483.00 for the citations contained in thisdocket. *See* Pet. for Assess. of Civil Pen. (hereinafter “Pet.”). 

 

On September 16, 2022,the Secretary filed his original Motion to Approve Settlement for this docket. Inthe filing, the Secretary proposed a settlement that would reduce the penaltyto $9,494.00, representing a **savings for the mine operator of nearly$25,000.00** and a **penalty reduction of 72.5 percent**. Theproposal seeks to modify or vacate seven of the nine citations, and to removeS&S designations from five of the citations. The facts submitted in supportof the proposed modifications were minimal. 

 

 

Accordingly, the Courtnotified the parties that their settlement could not be approved as submittedand gave the parties additional time to renegotiate the settlement or providemore supporting information. The Secretary filed an Amended Motion to ApproveSettlement on September 30, 2022.  The amended motion contains little, if any,additional information supporting the settlement. 

 

**II.           ****TheProposed Settlement is not Fair, Reasonable, Appropriate Under the Facts, orProtective of the Public Interest**

 

The Court now turns tothe terms of the agreement. The terms are analyzed based on the facts submittedin the settlement motion as amended by the parties. Consideration is given tothe monetary and nonmonetary terms of the settlement, and to the criteriaestablished in section 110(i) of the Mine Act, such as negligence and gravity. Onbalance, I find that the modified penalty proposed by the Secretary is unfair, unreasonable,inappropriate under the facts, and unprotective of the public interest. I findalso that the settlement motion does not adequately address the six penaltycriteria. I therefore deny the Secretary’s motion. 

 

**A.   ****The Proposed Modifications toCitation No. 9479991**

 

Citation No. 9479991alleges a violation of 30 C.F.R. § 57.14100(b) as follows: 

 

In Sesqui Pumphouse, a fan (Co.#KF-24) for ventilation in the tunnels under the pumphouse, has not been runningsince 10/08/2021. During the inspection of the tunnels 0.5 to 0.9 H2Sgas was detected. There are no alarms/warning lights and the miners that workin the area do not carry meters with them while in the tunnels. During a “WorkPlace Exam” conducted on 10/08/2021, the fan was found “Not Running” anddocumented and was not resolved. With this condition, exposes miners to fatalinjuries if H2S gas was to build up in the tunnels. Standard57.14100(b) was cited 27 times in two years at mine 4800152 (25 to theoperator, 2 to a contractor).

 

Pet. at 8. The cited standardmandates that “[d]efects on any equipment, machinery, and tools that affectsafety shall be corrected in a timely manner to prevent the creation of ahazard to persons.” 30 C.F.R. § 57.14100(b). The inspector issued this citationon November 3, 2021, indicating that the fan had been noted as nonfunctionalnearly a month before this inspection. Pet. at 8. Hydrogen sulfide (H2S)gas was observed in the tunnels. Pet. at 8. The inspector found that thealleged failure to fix the fan was reasonably likely to cause injury, and thatthe injury could reasonably be expected to be fatal. Pet. at 8. The inspectormarked the citation as high negligence and S&S. Pet. at 8. The Secretaryassessed a penalty of $12,007.00. 

 

Now, the Secretaryseeks to drastically alter this citation. He proposes the reduction of thegravity from “Fatal” to “Lost Workdays or Restricted Duty.” He seeks to reducethe likelihood of injury from “Reasonably Likely” to “Unlikely.” He alsoproposes the removal of the S&S designation. Altogether, these changeswould reduce the penalty from $12,007.00 to $729.00. 

 

While the proposedchanges are major, the facts offered in support are minimal. The Secretary hasonly submitted two statements to justify the changes proposed for thiscitation. The motion states that “[t]he amount of Hydrogen Sulfide detected byMSHA did not exceed MSHA’s Threshold Limit Value or the General IndustryCeiling Limit for Hydrogen Sulfide,” and that “there is no evidence thatexposure to a level which could result in a fatality [sic] could result.” Am.Mot. to App. Settlement at 3. 

 

The position taken bythe Secretary in this case is disconcerting. The Secretary bases the gravityreductions on the fact that hydrogen sulfide levels did not exceed thethreshold limit value (TLV) at the time of inspection. But the TLV is the pointabove which miners are exposed to unsafe concentrations of gas. If hydrogensulfide accumulations had exceeded the TLV, miners would have faced an activerisk of major health issues and the operator would have unlawfully exposedminers to noxious gases. *See* 30 C.F.R. § 56.5001.  In essence, theSecretary argues that gravity and S&S should be mitigated becauseconditions did not become so dangerous as to violate yet another regulation. 

 

 This rationale cannotsupport the proposed gravity modifications. And it is not aided by the secondand final fact offered by the Secretary: that there is “no evidence” that theconditions could lead to fatal exposure. Am. Mot. to App. Settlement at 3. Thisstatement is overbroad, conclusory, and at odds with the inspector’s account.  Theinspector found that the ventilation fans in an underground tunnel had been defectivefor several weeks. He observed the presence of hydrogen sulfide gas, asubstance that MSHA acknowledges as “one of the most poisonous gases known.”[1] Hydrogen sulfide exposure can bedeadly.[2]The inspector further determined that the extremely hazardous gas couldcontinue to accumulate in the tunnel and present a risk of fatal injury orillness for miners. Moreover, miners may not know about the risk due to thelack of alarms, warning lights, or gas meters in the area. The inspectorsupplied a factual basis supporting his gravity findings. In my estimation, theSecretary has not presented any concrete fact that would mitigate the originalgravity determination. 

 

Nor do the Secretary’sfacts mitigate the S&S finding. Ventilation violations are serious inunderground areas where toxic mine gases can accumulate. A persistent andconsciously overlooked defect in a ventilation fan is reasonably likely tocause a hazard that could injure a miner. The presence of hydrogen sulfide gas indicatesthat an injury could be reasonably serious. This is especially true if consideredin the continued course of normal mining operations, as is required by S&Scase law. *See U.S. Steel Mining Co.*, 7 FMSHRC 1125, 1130 (Aug. 1985)(“While it is true that methane measured in the section revealed a nonhazardousaccumulation at the time the citation was issued, an evaluation of thereasonable likelihood of injury should be made in terms of continued normalmining operations. The fact that the methane was low when the violation wascited is not fatal per se to the establishment of reasonable likelihood. Ifnormal mining operations were to continue, a rapid buildup of methane couldreasonably be expected.”) (internal citations and quotations omitted). 

 

It is important to notethat I am not making formal findings regarding S&S. Neither party haspresented evidence at hearing, and it would be inappropriate to make suchfindings. Rather, I am analyzing the basis for S&S as presented in theoriginal citation and determining whether the Secretary has submitted factsthat would make the removal of the S&S designation “reasonable” or“appropriate under the facts.” *Am. Coal Co.*, 38 FMSHRC at 1976; *seeid*. at 1982. I find that he has not.  

 

The Secretary furthersupports the S&S removal by claiming “discretion to modify the significantand substantial designation.” Am. Mot. to App. Settlement at 5. He findssubstantive authority for this contention in *American Aggregates ofMichigan, Inc*., 42 FMSHRC 570, 576-79 (Aug. 2020), and *MechanicsvilleConcrete, Inc*., 18 FMSHRC 877, 879-80 (June 1996). But the Secretary’sreliance on these cases is misplaced. The Commission in *Mechanicsville*held that an ALJ may not add an S&S designation on her owninitiative, and the Commissioners reiterated this holding in *AmericanAggregates*. By contrast, the present case involves the Secretary’s proposalto remove an S&S designation. The case citations are irrelevanthere. The Secretary’s claim of discretion regarding S&S is erroneous, andhis decision to alter the S&S finding here is unsupported by fact and contradictedby decades of history and precedent. 

 

In sum, the mineinspector presented a detailed account of the alleged violation and made hisgravity and S&S findings accordingly. The Secretary now seeks to sweepthese original findings under the rug based on two conclusory and irrelevantstatements. When given an opportunity to submit additional information, theSecretary declined to put forward any specific or concrete facts to support theproposed changes. I know that recent Commission case law would have me acceptthe Secretary’s changes wholesale, but the Mine Act requires me to use someexperience and judgement in determining whether a settlement motion issufficient. I simply cannot turn my back on something that is so obviously contrary to theAct and its purposes.  I therefore find that the proposed changes for CitationNo. 9479991 are unreasonable and inappropriate under the facts. 

 

**B.   ****The Proposed Penalty Reduction**

 

The other major defectin the present motion is the penalty reduction. The Secretary proposes adrastic penalty reduction from the assessed penalty of $34,483.00 to thecompromised value of $9,494.00. Based on the reasoning below, I find that theproposed penalty reduction is unfair and contrary to the public interest. 

 

Before passage of theMine Act, mine operators were governed by the Coal Act and its regulations. Operatorsand regulators negotiated settlements that never saw public scrutiny, andnegotiations often led to large penalty reductions for operators. SenatorRichard Schweiker (R-Pennsylvania) described the dysfunction: 

 

[Mine operators] get slapped [with]a fine of $100 or $200 or $300. They accumulate a whole lot of them and go backin court and ultimately settle them at 10 or 20 cents on the dollar... So whatyou actually assess them at and what they settle for are worlds apart and ispart of the frustration of dealing with the act.

 

123Cong. Rec. S10,277, *reprinted in*Senate Subcomm. on Labor, Comm. on Human Res., *Legislative History of the**FederalMine Safety and Health Act of 1977*,**at 1072-73 (1978) (“*Legis.Hist.*”). This system failed to deter hazardous workplace conduct, anddevastating mine accidents continued to occur. Members of Congress knew thatpaltry settlement amounts would not be sufficient incentive for mine operatorsto adopt safe and compliant practices. As Senator Wendell Ford (D-Kentucky)said: 

 

Thesettlement of penalty assessments in the past, often for as little as 30 centson the dollar, has been a disgrace, as well as a serious obstacle to effectiveuse of the civil penalty mechanism to encourage compliance. 

** **

123 Cong. Rec. S10,209, *reprinted in Legis. Hist.*, at 922. There was bipartisan consensusthat compromised settlements had become an impediment to ensuring miner safety.

 

Congress decided toreshape the settlement regime with the Mine Act.Congress identified the compromise of assessed penalties in settlement as aproblem with prior legislation, and it crafted section 110(k) of the Mine Actas a solution. By subjecting settlements to judicial review, Congress intendedto avoid “the unwarranted lowering of penalties as a result of off-the-recordnegotiations” and to ensure that “the public interest is adequately protectedbefore approval of any reduction in penalties.” S. Rep. No. 95-181, at 45(1977), *reprinted in Legis. Hist.*, at 633. 

 

It is therefore my dutyto review compromised penalties. Motions proposing large penaltyreductions—where the operator would pay only “10 or 20” or “30 cents on thedollar”—demand particular attention because they are the very settlements thatCongress saw as an obstacle to regulatory compliance. 123 Cong. Rec. S10,277,S10,209, *reprinted in Legis. Hist.*, at 1072-73, 922. The parties mustpresent concrete facts, review the six penalty criteria, and demonstrate howthe proposed settlement will be fair and protective of the public interest. 

 

Here, the publicinterest is not adequately protected. Encouraging compliance with safetyregulations was a key public interest motivating Congress to pass the Mine Act,and it has been a key public interest considered by the Commission whenscrutinizing settlements. *Black Beauty*, 34 FMSHRC at 1866. I fail to seehow this settlement could promote compliance. The facts presented here simplycannot support such a finding. Rather, the proposed settlement would underminecompliance with the Act and its regulations, by taking a meaningful civilpenalty assessment and gutting it on a threadbare factual basis.

 

I object, in particular,to the penalty reduction associated with Citation No. 9479991. The Secretaryhas lowered the original assessment of $12,007.00 to a mere $729.00. The mine 

 

operator will therefore pay justsix cents on the dollar for this alleged violation. As discussed above, the allegationsare serious and the facts supporting the modification are sparse. Thecompromised penalty negates the deterrent effect of the original citation—adeterrent effect that is sorely needed in this case, where the mine operatorallegedly allowed the violative condition to exist for weeks despite havingknowledge of the defect. 

 

Parties are notprecluded from reaching settlements with large penalty reductions. Suchsettlements are approved routinely by the Commission and its judges. However,large penalty reductions are more likely to undercut the deterrent purposes of the Mine Act, and partiesmust present a substantial factual basis showing how the settlement preservesthe public interest. The parties have not done so here. Accordingly, I find that this settlement is neither fair nor in thepublic interest. 

 

**C.   ****Non-monetary aspects of thesettlement**

 

I have also consideredthe non-monetary aspects of this settlement motion. Just as in all othersettlement motions, the Secretary includes the rote recitation that he “hasevaluated the enforcement value of the compromise and is maximizing hisprosecutorial impact in settling this case on appropriate terms.” Am. Mot. toApp. Settlement at 2. He says that resolution of this case through settlementis of “significant enforcement value to the Secretary” in part because thecitations, as modified, are “preserved for future enforcement actions and arenot subject to potential vacatur or further downward adjustment after ahearing.” Am. Mot. to App. Settlement at 2-3.

 

I accord significantweight to the value of avoiding litigation and its attendant uncertainty. However,the Secretary’s boilerplate statements do little more to help me understand howthis particular settlement meets the *AmCoal* standard. Strippingcitations of their S&S designations also impacts future enforcementactions, but this is not explained at all in the Secretary’s motion. 

 

Furthermore, “[t]he Commissionrecognized that significant non-monetary value flows from accepting thecitations as written.” *Solar Sources Mining*, 41 FMSHRC 594, 601 (Sept.2019) (internal citations omitted). Here, the Secretary has elected to modify orvacate sixteen of the present citations and thus forfeit much of thenon-monetary value that would flow from preserving them as written. 

 

Altogether, although there are somenon-monetary benefits to this settlement, none of the Secretary’s generalized statementsconvince me that the particular changes proposed here are “fair, reasonable,appropriate under the facts, and protect the public interest.” *Am. Coal Co.*,38 FMSHRC 1972

 

 

 

 

 

 

**III.         ****CONCLUSION**

 

In the petition, theSecretary alleged that the mine operator knew of a defective ventilation fan inan underground portion of the mine but refused to fix the fan for at least 26days. Hydrogen sulfide, a toxic gas, was documented in this underground area. Therewere no alarms, warning lights, or gas sensors in the area that could havealerted miners if the toxic gas accumulated to hazardous or deadly levels. 

 

These facts wouldstrike any neutral observer as serious. The original penalty for this citationalso indicated the seriousness of the alleged violation. But in his amendedmotion, the Secretary has done an about-face. He downplays the gravity of thecitation. He says there is no evidence of a fatal risk, despite the evidencesummarized by his inspector in the original petition. He says the gas had notyet accumulated to dangerous levels, but fails to demonstrate why it would beunlikely to do so in the future. He dispenses with the S&S designation, andhe slashes the assessed penalty by 94 percent. 

 

I will not rubber-stampsuch a drastic change. The Secretary is tasked with submitting facts to justifyhis proposed changes, and I am charged with the duty to weigh the sufficiencyof those facts. The facts here are insufficient. Approving this settlementwould force me to turn a blind eye to my statutory duty under section 110(k),to decades of case law regarding gravity and S&S, and to my own knowledgeand experience. Accordingly, I must deny the Secretary’s motion.

 

WHEREFORE,the Amended Motion to Approve Settlement is hereby **DENIED**. 

 

 

 

 

/s/Margaret A. Miller

Margaret A. Miller

Administrative Law Judge

 

 

 

Distribution:(Electronic and Certified Mail)

 

Bruce H.Jakubauskas, CLR, U.S. Department of Labor, Mine Safety and HealthAdministration, Thornhill Industrial Park, 178 Thorn Hill Road, Suite 100,Warrendale, PA 15086, 

jakubauskas.bruce@dol.gov

 

DonnaPryor, Husch Blackwell LLP, 1801 Wewatta Street, Suite 1000, Denver, CO 80202, Donna.Pryor@huschblackwell.com

 

----

[1]Mine Safety & Health Administration, U.S.Dep’t of Labor, Mine Rescue Team Training | Metal and Nonmetal Mines (2008) https://www.msha.gov/sites/default/files/Training_Education/MSHA3027%28Metal%20and%20Nonmetal%29.pdf

[2] One of thelargest modern mass fatalities in a metal/nonmetal mine occurred when hydrogensulfide gas was liberated at the Barnett Complex Mine, operated by theOzark-Mahoning Company, and killed seven miners on April 12, 1971. Acontributing factor to the mass fatality was the failure of an undergroundventilation fan at the mine. *See*Bureauof Mines, U.S. Dep’t of the Interior, Report on Major Hydrogen Sulfide DisasterBarnett Complex Mine Ozark-Mahoning Company Rosiclare, Pope County, IL(1971).