The Proposal Appears To Be a Change For The Sake Of Change, And Seeks To Ease The Burden Of Proof On Enforcement Actions and Increase Penalties Without a Safety Rationale.
By Ross Watzman
On July 31, 2014, the Mine Safety and Health Administration (MSHA) issued a proposed rule to reform civil penalties. In the commentary accompanying the proposed rule, MSHA asserts that its proposed changes will (1) improve objectivity and consistency in how inspectors write citations and orders; (2) result in earlier resolution of enforcement issues due to fewer areas of dispute; (3) result in greater emphasis on more serious safety and health conditions; and (4) provide increased openness and transparency in the application of the regular formula penalty.
According to MSHA, the proposed rule is structured to “encourage operators to be more accountable and proactive in addressing safety and health conditions at their mines.”
With the proposed rule, MSHA intends to reduce the number of gravity and negligence categories, revise the definitions of key terminology within those categories and modify the degree of emphasis for the parameters used to calculate the proposed penalties. Specifically, MSHA insists that the rule will, among other things:
- Increase emphasis on violation history (including repeat violations), negligence and the “severity” factor of the gravity criterion.
- Place less emphasis on mine size, controller/contractor size and the “likelihood of occurrence” factor of the gravity criterion.
In addition, one of MSHA’s stated goals is to avoid punishing mine operators with good records for the errors of mine operators who habitually fail to comply with MSHA standards.
As Assistant Secretary of Labor for Mine Safety and Health, Joe Main, stated in his written testimony to Congress on March 31, 2011, “[W]e also understand that MSHA’s effective enforcement of the law should create a level playing field, so that operators who play by the rules and provide safe mine conditions do not have to compete against operators that cut corners on safety.” A Tragic Anniversary: Improving Safety at Dangerous Mines One Year After Upper Big Branch: Hearing Before the Comm. On Health, Education, Labor and Pensions, 112th Cong. 2 (2011) (statement of Hon. Joseph Main, Asst. Secretary of Labor, MSHA).
As is the case with many proposed rules, MSHA’s justification of the necessity and contemplated effects of application are incomplete and incorrect. MSHA does not provide any data or evidence to support its conclusion. Instead, MSHA points to the initiatives and rules the agency has implemented in the last four years as evidence that the current enforcement efforts are already accomplishing those goals.
For example, MSHA claims that its “Rules to Live By” and “Impact Inspections” have reduced the total number of citations and orders assessed pursuant to Part 100. MSHA also notes that the number of contested citations and orders decreased by six percent between 2010 and 2013. However, MSHA’s description of the regulatory background not only understates the scope and reach of the proposed rule, but, using the correct mathematics, also undercuts the very rationale underlying the proposal.
In fact, industry research indicates the proposed rule will produce results that are opposite to those envisioned by MSHA because the proposed assessments will increase the penalties assessed against operators who have had good compliance records and typically receive “less-serious” violations at a higher rate, than will be seen for the penalties assessed against operators with sub-par compliance records or recipients of “more serious” violations.
The proposal, at best appears to be a change for the sake of change, and at worst seeks to ease the Secretary’s burden of proof on enforcement actions and increase penalties without a safety rationale.
Impact on Small, Historically Compliant, Operators
MSHA has considerably underestimated the impact of the proposed rule, particularly its impact on smaller mines. For example, the smallest coal mines and controlling entities receive one penalty point for size under the current rule and would receive one penalty point for size under the proposed rule. However, there are less than half the total penalty points under the proposed rule as there are under the current rule.
This means that the smallest mines and controlling entities will receive over a 100 percent increase in point percentage under the proposed rule. The size of the mine now accounts for 1 percent of the penalty points for the smallest mines, when it used to only account for .48 percent.
In addition, contrary to MSHA’s contention that the distribution of the penalty amount by mine size would remain generally the same, the new stair-step approach to point distribution disproportionally affects each mine. Graphically and algebraically, large mines would undoubtedly receive a much greater reduction under the proposed rule than small mines, not only within each size group that receives the same point assessment, but across the industry.
Similar to the size criteria, the proposed rule increases the penalties at a greater rate for the mines with good violation histories than it does for mines with poor violation histories. Because the maximum point value has dropped from 208 to 100, the relative weight of each penalty point for the proposed rule would be more than double the point’s current value.
As indicated in the preamble, the proposed changes would increase the relative weight for the History of Violations criterion penalty points from 11.6 percent of the total penalty points under the existing rule to 15.5 percent. As a result, this increased emphasis, coupled with the change in scale, equates to a 34 percent increase in the weight of the penalty points.
Although mine operators that receive few Violations Per Inspection Day (VPID) are treated equally under both the existing and proposed rules, and, in fact, the smallest mines with the fewest inspection days are treated better under the proposed rule, once a certain threshold is reached, the mines with the best histories will get the most severe penalties compared to the prior rule.
Under the proposed rule, the weight of the point for history of previous violations increases logarithmically; wherein the weight of penalty points increase faster for mines with the lowest VPID rate than for mines with a higher VPID rate. If MSHA wants to accomplish its goal of penalizing bad actors and deterring the occurrence of violations, the slope of the new line should increase exponentially. In that instance, the people with higher VPID would be penalized more than people with lower VPID.
In sum, while the proposed rule appears to offer relief to the smallest mines, it lacks statistical and empirical data to support its provisions. It is very likely that many operators can expect to see anywhere from 100-1,000 percent increase in penalty amounts.
Worse, the additional definition changes MSHA included in the proposed rule will significantly increase the rate of S&S violations and unwarrantable failures. We are hopeful that MSHA will take into account the following information, and revise its proposal to accomplish the goals it seeks to achieve.
Significant industry participation is needed to ensure that MSHA cannot turn a blind-eye and simply adopt the proposed rule as written.
Ross Watzman is an associate in the Denver, Colo., office of Jackson Lewis P.C., and a member of the firm’s Workplace Safety and Health Practice Group. He represents clients on a wide range of administrative, regulatory and public policy issues. Leveraging his educational background in biological resource engineering, Watzman advises clients on compliance with health and safety laws and regulations at the federal and state levels, and has experience with administrative appeals, motions practice, complex litigation and settlement negotiations.