Opinion ID: 532510
Heading Depth: 2
Heading Rank: 2

Heading: Application of Chevron II to This Case

Text: 21 Even in the absence of precise guidance from the statute's text and structure on the question of individualized application of the six statutory criteria, we consult relevant language, structure, and legislative history to ensure that the Secretary's interpretation is arguably consistent with the underlying statutory scheme in a substantive sense; we must also determine whether 'the agency considered the matter in a detailed and reasoned fashion.'  Rettig v. Pension Benefit Guaranty Corp., 744 F.2d 133, 151 (D.C.Cir.1984) (quoting Chevron, 467 U.S. at 865, 104 S.Ct. at 2793 (footnote omitted)). We now undertake this inquiry with respect to the single penalty.
22 Congress' overriding concern in passing the Mine Act was to promote miners' health and safety in the wake of several mine disasters. 30 U.S.C. Sec. 801(a) (mine industry's first priority ... must be the health and safety of ... the miner). To remedy unsafe mines, Congress maintained and upgraded the civil penalty scheme of the Federal Coal Mine Health and Safety Act of 1969 (Coal Act) in order to induce those officials responsible for the operation of a mine to comply with the Act and its standards. S.Rep. No. 181, 95th Cong., 1st Sess. 41 (1977), U.S.Code Cong. & Admin.News 1977, pp. 3401, 3441, 1977 Legislative History at 629. Indeed, the sponsor of the 1977 Mine Act singled out the civil penalty as the mechanism for encouraging operator compliance with safety and health standards. 123 Cong.Rec. 4388 (1977), 1977 Legislative History at 85. The Senate Committee on Human Resources found that civil penalty assessments are generally too low, S.Rep. No. 181, at 41, U.S.Code Cong. & Admin.News 1977, at 3441, 1977 Legislative History at 629, to provide an effective inducement for mine operators to comply with the Coal Act and its standards. The Supreme Court as well has recognized that [t]he importance of [the civil penalty provision] in the enforcement of the [Coal] Act cannot be overstated because monetary penalties provide a deterrence that necessarily infrequent inspections cannot generate. National Independent Coal Operators' Ass'n v. Kleppe, 423 U.S. 388, 401, 96 S.Ct. 809, 816, 46 L.Ed.2d 580 (1976). Thus, Congress envisioned penalties that would be of an amount which is sufficient to make it more economical for an operator to comply with the Act's requirements than it is to pay the penalties assessed and continue to operate while not in compliance. S.Rep. No. 181, at 41, U.S.Code Cong. & Admin.News 1977, at 3441, 1977 Legislative History at 629; see also 123 Cong.Rec. 19,931 (1977), 1977 Legislative History at 921. 23 Congress was particularly concerned about curbing repeat offenders among mine operators. Reporting on the bill that became the Mine Act, the Senate Committee on Human Resources stated: 24 In evaluating the history of the operator's violations in assessing penalties, it is the intent of the Committee that repeated violations of the same standard, particularly within a matter of a few inspections, should result in the substantial increase in the amount of the penalty to be assessed. Seven or eight violations of the same standard within a period of only a few months should result, under the statutory criteria, in an assessment of a penalty several times greater than the penalty assessed for the first such violation. 25 S.Rep. No. 181, at 43, U.S.Code Cong. & Admin.News 1977, at 3443, 1977 Legislative History at 631; see also 123 Cong.Rec. 19,931 (1977), 1977 Legislative History at 922 (greater stress is put on the repetitive nature of the violation); 123 Cong.Rec. 20,027 (1977), 1977 Legislative History at 1074-75. 6 26 From this history, we conclude that Congress was intent on assuring that the civil penalties provide an effective deterrent against all offenders, and particularly against offenders with records of past violations. Thus, despite the Secretary's unchallenged broad discretion in devising an effective penalty scheme, the civil penalty regulations must not run contrary to that intent. 27
28 We now proceed to assess the petitioners' objection to the single penalty against the backdrop of Congress' intent to create an effective civil penalty scheme to deter repeat offenders. 29
30 Petitioners argue that neither the Mine Act nor its supporters envisioned uniform de minimis penalties for low-gravity, timely-abated violations. They point in contrast to the Occupational Safety and Health (OSH) Act, 29 U.S.C. Secs. 651 et seq. (1982), which statutorily provides for different levels of civil penalty maxima depending on whether the violation was willful or repeated, serious, or not serious. Id. Secs. 666(a)-(c). The OSH Act also authorizes the Secretary of Labor to issue a notice in lieu of a citation with respect to certain de minimis violations. Id. Sec. 658(a). Absent any similar authorization in the Mine Act, petitioners claim that assessing the same $20 penalty for all low-gravity, timely-abated violations runs so contrary to the congressional purpose as to fall short of even the relatively relaxed Chevron II threshold of reasonableness. See Pet.Br. at 18-20; Pet.Reply Br. at 9-10. 31 We disagree with that conclusion for several reasons. First, Congress indisputably left the actual size of all penalties, up to a maximum of $10,000, to the Secretary's discretion. Second, even under the regular assessment, a one-time, timely abated low-gravity penalty would probably incur a fine of around $30. See 30 C.F.R. Sec. 100.3(f), (g) (applying penalty conversion table, with possible 30% reduction for timely abatement). Thus, the single penalty, which inevitably saves agency time and paperwork, would yield nearly the same result as a regular assessment in the bulk of cases involving minor infractions. See generally Part II.B.2.b, infra. 32 Petitioners also point to the Senate Human Resources Committee's 33 intention that the unwarranted failure citation is appropriately used for all violations, whether or not they create a hazard which poses a danger to miners[,] as long as they are not of a purely technical nature. The Committee assumes, however, that when technical violations do pose a health or safety danger to miners, and are the result of an unwarranted failure the unwarranted failure notice will be issued. 34 S.Rep. No. 181, at 31, 1977 Legislative History at 619. Petitioners argue on the basis of this Report that Congress was willing to countenance a de minimis -type penalty only for violations that pose no threat of injury to the miner--a much narrower category than violations that are not reasonably likely to result in a reasonably serious injury, the classification now covered by the single penalty. Pet.Br. at 18-19. We find this reasoning problematic, however, because even under the cited language, the occurrence of a low-gravity violation that is timely abated is not automatic proof that the operator unwarrantably failed to comply with appropriate standards. The MSHA Manual indicates that a failure to comply is unwarrantable only if the operator was engaging in aggravated conduct constituting more than ordinary negligence. MSHA Manual, Vol. I, Sec. 104(d), at 16. Clearly, not all non-technical violations involve such extraordinary negligence. Furthermore, the cited language appears in the context of the Committee's approval of the Board of Mine Operation Appeals' decision minimizing the gravity of a violation necessary for it to be classified as significant and substantial. Thus, we understand the Committee to say that an unwarrantable failure citation is a remedy available to an inspector confronting a non-technical violation that involves unwarrantable behavior, such as the operator's deliberate or repetitious violation of a health or safety standard. We do not believe that the Committee concluded that every violation except the no-risk technical one requires an unwarrantable failure citation. 35
36 The petitioners' principal argument is that MSHA acted unreasonably in construing the statute to permit non-individualized treatment of the six statutory criteria in the single penalty. We do not agree. 37 Respondents maintain that the Secretary considered all six factors before devising the three assessment formulas. She then determined that in cases of low-gravity violations that are timely abated, the other four penalty criteria--negligence, violation history, operator size, and effect on the operator's ability to stay in business--are insufficiently relevant to warrant consideration on a violation-by-violation basis. MSHA acknowledges that a penalty assessment formula that disregards or excludes any of the statutory factors would be impermissible, Resp.Br. at 14 n. 9, but insists that a non-individualized penalty assessment formula reasonably reflects congressional intent in the Mine Act. 38 We determine first that, as a general matter, the assessment of penalties according to group classifications based on the presence or absence of specific criteria is a reasonable interpretation of the Mine Act. We then consider whether the Secretary could reasonably have made such across-the-board determinations for operator size, negligence, and violation history, or whether the non-individualized consideration of any of those factors amounts to its exclusion. If MSHA's justification for the non-individualized consideration of these factors is reasonable, our inquiry is ended, and we must deny the petition for review. If MSHA's justification is not reasonable, non-individualized consideration of the factors would be tantamount to their exclusion, which, by MSHA's own interpretation of the Mine Act, is inconsistent with the statutory command and would therefore necessitate modification of the civil penalty regulations. 39 (1) General Considerations. We recall that Sec. 110(i) of the Mine Act, 30 U.S.C. Sec. 820(i), provides in part: 40 In proposing civil penalties under this chapter, the Secretary may rely upon a summary review of the information available to him and shall not be required to make findings of fact concerning the above [six] factors. 41 At a minimum, this statement indicates that Congress did not intend for MSHA to engage in a full-scale fact-finding on each criterion in every case before designating a penalty. MSHA's decision to direct its energies to conditions which pose a serious risk to the safety and health of miners by applying the single penalty to low-gravity, timely-abated violations, 47 Fed.Reg. 22,292, does not seem unreasonable or inconsistent with this directive. Although there was strong support in Congress for using the civil penalties as a deterrent against operator violations, little discussion focused on the penalty formulas that could most effectively accomplish the deterrence objective. 42 The ultimate goal of MSHA's enforcement scheme is the permanent abatement of substandard mine conditions and practices. Once abatement occurs, the size of the civil penalty is relevant only as a means of deterring repeat violations. Since the violations involved in the single penalty are not reasonably likely to cause reasonably serious harm, even successful deterrence of these violations will not significantly reduce a miner's risk of serious illness or injury. Thus, we conclude that so long as they appropriately take account of the statutory criteria and principal congressional purposes, non-individualized determinations are properly within the Secretary's discretion. 43 (2) Operator size. We agree with MSHA that the single penalty reasonably accounts for operator size. To ensure the greatest degree of consistency in applications of the Mine Act, 43 Fed.Reg. 23,51 4 (1978 implementation of Mine Act civil penalty scheme), the regular and special assessments increase the assessed penalty as the size of the operator or its parent company grows. As MSHA explained, stiffer penalties against larger mines are necessary, at least in part, to ensure that operators of mines with more complex management structures would notice and correct violations. Id. at 23,515 (penalties must be such as to encourage management at all levels to respond positively to health and safety concerns). 44 It seems reasonable, however, for MSHA to determine that the single penalty should be the same regardless of the operator's size. Clearly, MSHA has a valid interest in promoting the efficient use of its own resources. We think it permissible for MSHA to adopt non-individualized standards of operator size in order to improve the agency's efficiency, even at the risk of losing the marginal deterrence that would accompany the higher penalty likely to result from a company-by-company evaluation of this criterion. See 47 Fed.Reg. 22,287-22,288. 7 45 (3) Negligence. We also agree with MSHA that the single penalty reasonably accounts for negligence. A mine operator observes the regulatorily mandated high standard of care owed to miners by being alert for conditions and hazards in the mine which affect the safety or health of the employees and ... [by] tak[ing] the steps necessary to correct or prevent such conditions or practices. 30 C.F.R. Sec. 100.3(d). The type of violation at issue in a single penalty assessment--one not reasonably likely to result in a reasonably serious injury or illness--involves an inherently limited amount of negligence. While a mine operator who acts at the mandated level of care will, presumably, not commit any violations, an operator incurring a single penalty is, by definition, only slightly negligent. Even under an individualized assessment, the negligence involved in a violation leading to a single penalty would not add substantially to the total fine. 8 It is plausible, therefore, that MSHA's efficiency gains from non-individualized treatment of negligence outweigh the deterrence benefits that individualized consideration of that criterion might generate. 9 46 We think MSHA's approach is reasonable even if a violation leading to a single penalty is reasonably likely to result in non-serious injury. 10 In such a case, although the operator may be alert to serious violations affecting mine safety, he would be negligent vis-a-vis potentially less harmful violations. It is credible, however, for MSHA to argue that because the likely harm is minor, the operator did not fall far short of his overall duty of care and that his total negligence was minimal. While repeated non-serious injuries may call for a higher negligence finding because they suggest that the operator failed to correct the problem, the violation history criterion provides a more accurate vehicle than the negligence criterion for weighing past non-serious injuries in the penalty calculation. Consequently, MSHA can properly rely on a non-individualized negligence determination. 47 (4) Violation History. We have seen that the operator's violation history was an especially important criterion in Congress' eyes. See Part II.B.1, supra. It figures in an evaluation of the validity of the single penalty in two ways: its presence or absence in the single penalty assessment itself, 30 C.F.R. Sec. 100.4, and the omission of single penalty assessments from an operator's past history of violations in applications of the regular and special assessment formulas, 30 C.F.R. Secs. 100.3(c), 100.5. To aid in deciding whether the single penalty's non-individualized treatment of violation history is a reasonable approach to deter repeat violators or creates an unreasonable loophole in the Mine Act, we examine two relevant scenarios--first, operators who commit and abate a series of violations that could not significantly and substantially contribute to the cause and effect of a ... mine safety hazard, 30 U.S.C. Sec. 814(d), 11 (Case 1), and second, operators who commit a significant-and-substantial violation after committing and abating a series of non-significant-and-substantial violations (Case 2). 12 48 (a) Case 1. Congress' decision to include violation history as one statutory criterion implies--as the regular assessment generally reflects--that the more infractions previously incurred, the higher the current penalty should be. 30 C.F.R. Sec. 100.3(c). There is no evidence that Congress did not mean this approach to apply to the violations governed by the single penalty. We are, therefore, troubled by the scenario of a mine operator committing a series of non-significant-and-substantial violations of mandatory standards, abating the problems, and incurring only a string of $20 penalties. Respondents answer that in such a situation, MSHA would not repeatedly issue single penalties but would, instead, impose a higher special assessment on the grounds of the operator's [u]nwarrantable failure to comply with mandatory health and safety standards. Charneski Letter, at 2-3 (referring to 30 C.F.R. Sec. 100.5(b)). 49 This response is not entirely satisfactory, however, because MSHA may issue an unwarrantable failure to comply citation only for significant-and-substantial violations of mandatory health and safety standards. 30 U.S.C. Sec. 814(d). 13 The single penalty itself, however, is applicable only to non-significant-and-substantial violations. Accordingly, we do not see how a special assessment for an unwarrantable-failure-to-comply could be invoked in any case where the present violation is not itself significant-and-substantial. 14 50 Respondents also call our attention to the provision in the MSHA Manual stating that special assessments are usually proposed for [n]on-significant-and-substantial violations that involve an extraordinarily high degree of negligence and a history of the same type of violation at the mine. MSHA Manual, Vol. III, Sec. 100.5, at 42 (reprinted as Attachment D to Charneski Letter). This provision appears to be an implementation of 30 C.F.R. Sec. 100.5(h), which states that [v]iolations involving an extraordinarily high degree of negligence or gravity or other unique aggravating circumstances are individually reviewed to determine the appropriateness of a special assessment. Yet this policy also does not provide a vehicle by which MSHA can penalize a history of non-significant-and-substantial violations that each qualify for single penalty assessments. 51 First, the extraordinarily high degree of negligence standard is more severe than even the aggravated conduct constituting more than ordinary negligence that is necessary for unwarrantable failure citations. See MSHA Manual, Vol. I, Sec. 104(d), at 16. 15 Even repeated non-significant-and-substantial violations of most mandatory standards are unlikely to involve this extreme degree of negligence. Second, although, in theory, Case 1 might constitute a unique aggravating circumstance, we find no evidence that MSHA envisioned placing a series of non-significant-and-substantial violations in this category. 16 Third, while the records of a mine operator's prior single penalty violations are available to district managers, MSHA is unaware of published national instructions that require the district manager to specifically consult those records in recommending the imposition of a special assessment. Charneski Letter, at 3. Thus, there is no guarantee that in Case 1, MSHA would consider a company's violation history. 17 We believe, however, that Congress intended that the penalty scheme promulgated by MSHA must take into account the operator's history of non-technical violations, regardless of whether they are significant-and-substantial or non-significant-and-substantial. 52 Additionally, we are troubled by MSHA's statement, in its discussion of the single penalty in the preamble to the civil penalty regulations, that [s]ingle penalty violations which are paid in a timely manner will not be included in the operator's history. 47 Fed.Reg. 22,291. This comment seems markedly inconsistent with respondents' written and oral representations that MSHA does keep records of all past violations, and that district managers determine whether to levy a single or special assessment based in part on whether the operator committed past infractions that resulted in the single penalty. In short, MSHA's own regulations do not appear to provide a reasonable and consistent method for imposing higher penalties against operators who commit numerous non-significant-and-substantial violations. Without further explanation, we are forced to conclude that this regulatory failure runs so contrary to a principal purpose of the Mine Act as to render MSHA's regulation unreasonable. 53 (b) Case 2. The second scenario, a significant-and-substantial violation following a series of non-significant-and-substantial violations, is only slightly less troublesome. Although 30 C.F.R. Sec. 100.3(c) states that timely paid single assessments will not be included in the computation of regular assessments, respondents represent that in Case 2, MSHA does consider the history of prior single penalties. If a significant-and-substantial violation of a mandatory standard occurs, the Mine Act authorizes an inspector to issue, when appropriate, an unwarrantable failure citation. 30 U.S.C. Sec. 814(d)(1). And MSHA's Policy Manual suggests that if the violation is repetitious of a previous violation, there may be sufficient grounds for an unwarrantable failure citation or order, MSHA Manual, Vol. I, Sec. 104(d), at 16, for which a special assessment is usually proposed, id., Vol. III, Sec. 100.5, at 41. Thus, if the significant-and-substantial violation is similar to the non-significant-and-substantial violations that preceded it, the offending operator is likely to incur a special assessment reflecting his pattern of violations. On the other hand, if the later violation is not repetitious of the earlier string of non-significant-and-substantial violations, MSHA's regulations and policies seem to imply that the later violation would generate only a regular assessment that does not reflect the earlier violations. Without further explanation by MSHA, we are again concerned that such a result would run contrary to the indications, discussed supra, that Congress intended to impose higher penalties on operators with a record of past violations.