**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

Wolf.tracy.e@dol.gov

 

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

scott.emily.t@dol.gov

 

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

Nelson.April@dol.gov

 

GregoryQ. Jensen

PerryCounty Resources, LLC

P.O.Box 606

Fishers,IN 46038

GQJ@AmericanResourcesCorp.com

 

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

wmoran@fmshrc.gov

 

MelanieGarris

Officeof Civil Penalty Compliance

MineSafety and Health Administration

20112th Street South, Suite 401

Arlington,VA 22202-5452

Garris.Melanie@dol.gov

 

 

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

GVoisin@fmshrc.gov

----

[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).