Opinion ID: 859134
Heading Depth: 2
Heading Rank: 3

Heading: Due Process and Penalties

Text: Petitioners and amicus National Mining Association argue that the audit scheme violates mine operators’ due process rights because it permits MSHA to impose daily penalties on mines not complying with the record demands before any opportunity for judicial review of the violations or demands. MSHA proposed daily penalties for one mine, Peabody Midwest, after it failed to comply with the failure-to44 Nos. 12-2316 & 12-2460 abate citations under 30 U.S.C. § 814(b) that MSHA issued when the mine refused to provide the documents. If a mine fails to correct a violation cited under section 814(b), section 815(b) authorizes the Secretary, through MSHA, to propose a penalty, and MSHA proposed pen- alties of $4,000 per day on Peabody Midwest, which were ultimately assessed. (Section 820(b) authorizes the Commission to assess proposed penalties for failure to correct a violation after a section 814(b) order.) Section 815(b)(1)(A) provides mines the opportunity to challenge the proposed assessment, in response to which the Commission must hold a hearing, and section 815(a)(1)(B) permits mines to request temporary relief from penalties. In determining whether to propose penalties, the statute directs the Secretary to consider: “[1] the operator’s history of previous violations, [2] the appropriateness of such penalty to the size of the business of the operator charged, [3] whether the operator was negligent, [4] the effect on the operator’s ability to continue in business, [5] the gravity of the violation, and [6] the demonstrated good faith of the operator charged in attempting to achieve rapid compliance after notification of a violation.” Section 815(b)(2) accords with section 820(i), which instructs the Commission to consider the same factors in deciding whether to assess proposed penalties. § 820(i). Congress intended this penalty scheme to provide swift, strong consequences for mines that failed to correct violations of mine safety rules and regulations. In passing the Mine Safety Act, Congress noted that the previous Coal Act’s weak penalty scheme permitted Nos. 12-2316 & 12-2460 45 mines to pay their way through violations and citations, and that Congress intended to strengthen the penalty scheme to ensure that mines fully complied with health and safety standards. The Senate Committee Report noted: The assessment and collection of civil penalties under the Coal Act has also been a great disappointment to the Committee. The Committee firmly believes that the civil penalty is one of the single most effective mechanisms for insuring lasting and meaningful compliance with the law. . . . The Committee firmly believes that to effectively induce compliance, the penalty must be paid by the operator in reasonably close time proximity to the occurrence of the underlying violation. S. Rep. No. 95-181, at 15-16 (1977), reprinted in 1977 U.S.C.C.A.N. 3401, 3415-16. In addition to emphasizing the importance of strong penalties, the Senate committee also noted problems with the previous and weaker penalty scheme: Final determinations of penalties are not self-enforcing, and operators have the right to seek judicial review of penalty determinations, and may request a de novo trial on the issues in the U.S. District Courts. This encourages operators who are not predisposed to voluntarily pay assessed penalties to pursue cases through the elaborate administrative procedure and then to seek redress in the Courts. Id. at 16, 1977 U.S.C.C.A.N. at 3416. Thus, Congress intended the scheme to allow MSHA to impose penalties 46 Nos. 12-2316 & 12-2460 with teeth, which would actually induce mines to comply with MSHA’s orders when it found a mine vio- lated a health or safety rule. Petitioners and amicus National Mining Association argue that this scheme impermissibly forces mine operators into an impossible choice — either they submit to violations of mine operators’ and mine employees’ privacy by allowing inspection of the records or they face staggering penalties that accumulate daily — all before review by an Article III court. They base this argument on Ex parte Young, 209 U.S. 123, 146-49 (1908). The Young case is best known these days for authorizing suits against state officials to require them to comply with federal law, despite the Eleventh Amendment to the Constitution. Here, however, we consider Young for its more specific facts. The Supreme Court held unconstitutional a state statute that set railroad rates one-third lower than the going rates at the time, and that also imposed hefty financial and even criminal penalties for any person or corporation not abiding by the statutory rates. The Court noted: “[W]hen the penalties for disobedience are by fines so enormous and imprisonment so severe as to intimidate the company and its officers from resorting to the courts to test the validity of the legislation, the result is the same as if the law in terms prohibited the company from seeking judicial construction of laws which deeply affect its rights.” 209 U.S. at 147. Petitioners and amicus National Mining Association argue that the penalty scheme here is similarly flawed because, for mine operators to Nos. 12-2316 & 12-2460 47 challenge the validity of the demands in federal court, they must violate the orders and submit to daily penalties, which in this case have accumulated for over a year. We do not find the procedures for imposing penalties here to be constitutionally flawed. As the Supreme Court noted in Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994), the Mine Safety Act’s procedures differ from the rate-setting scheme in Ex parte Young in three important respects. First, mine operators can contest and receive a hearing on proposed penalties and orders before they become final. See 30 U.S.C. § 815(b)(1)(A), (d). Second, mine operators can request that the Secretary delay imposing the penalties until further review. § 815(b)(2). Third, penalties are not automatic, but rather within the discretion of the Secretary to propose under § 815(b)(1)(B). See Thunder Basin, 510 U.S. at 217-18 (penalty scheme under Mine Safety Act does not in- volve “prehearing deprivation” comparable to Ex parte Young). The mine operators here were able to take advantage of this flexibility. They contested the order and received a hearing before an ALJ, the Commission, and now this court. The Secretary granted their request that MSHA not assess any failure-to-abate penalties until after the disposition of the hearing before the ALJ, and the Commission granted the mine operators’ request to expedite its review. Thus, we find that the penalties do not violate the mine operators’ right to due process because the statutory scheme offered opportunities both for review and to mitigate the penalties. 48 Nos. 12-2316 & 12-2460 Another important distinction is that the imposition of these penalties is discretionary, not automatic. The Mine Safety Act directs the Secretary and the Commission to take several factors into consideration before proposing and assessing penalties, including the size of the operator, its ability to continue business, and the gravity of the violation. 30 U.S.C. §§ 815(b)(2), 820(b)(2). The Secretary exercised discretion here and demonstrated appropriate fidelity to those factors. Of all the mines that received failure-to-abate orders, the Secretary ultimately imposed daily penalties on only one mine operator — Peabody Midwest. See Joint App. 92. In its letter notifying Peabody Midwest of the penalties, MSHA explained the rationale for proposing penalties according to all six criteria from section 815(b)(1), including that Peabody Midwest had a history of violations, that Peabody Midwest’s violations reflected an “intentional decision not to comply” with the demands, and that MSHA had no information indicating that the penalties would put Peabody Midwest out of business. Id. at 93. Thus, unlike the automatic penalties under the statute in Ex parte Young, which included time in prison, the Mine Safety Act requires the Secretary to consider the appropriateness of imposing a given penalty before proposing it, which provides an additional layer of process to mine operators. This comports with cases in which courts have found no Ex parte Young problem where, instead of automatic penalties, penalties depend on the party’s rationale for refusing to pay. Cf. Reisman v. Caplin, 375 U.S. 440, 446-47 (1964) (tax statute requiring witnesses or taxpayers to appear in court Nos. 12-2316 & 12-2460 49 subject to contempt does not present Ex parte Young problem because criminal sanctions and fines do not apply when summonses are contested in good faith); Solid State Circuits, Inc. v. EPA, 812 F.2d 383, 388-92 (8th Cir. 1987) (CERCLA’s treble damage penalty was not due process violation because statute permits agency not to impose penalty if party had “objectively reasonable basis” for believing order supporting penalties was “invalid or inapplicable,” even where no opportunity for prior administrative hearing). The procedures for proposing and assessing the penalties here under the Mine Safety Act did not violate mine operators’ right to due process under the Fifth Amendment.