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Mine Act Clear on Commission’s Role in Settlements


By Ellen Smith

In a unanimous decision on Aug. 25, 2016, the Review Commission held that it has the exclusive authority to oversee settlements of contested penalty cases, based on the “very clear” language of Sect. 110(k) of the Mine Act. 

The five commissioners also found that Judge William Moran did not abuse his discretion when he denied a settlement motion that would have provided a 30 percent across-the-board penalty reduction for 32 citations and orders that were issued to Murray Energy Corp.’s New Era Mine in Saline County, Ill. 

The Secretary is seeking significant legal changes to current settlement procedures, and wants to overturn 38 years of administrative practice and case law that empowers Commission judges to reject settlements that lack factual support for penalty reductions, and which may not be in the best interests in protecting the health and safety of the nation’s miners. Few settlements are rejected. From 2009 through October 2014, Review Commission records showed 38,501 settlements were approved by Commission ALJs, and only 17 were rejected. This is a rejection rate of .04 percent (21 MSHN 651). 

The Commission’s decision may not be the final word on the issue, since there were indications that the decision may be challenged by the Secretary. 

The Memo

Heidi Strassler, the Associate Solicitor of Labor for Mine Safety and Health, indicated in a May 2, 2014, memo that the Solicitor of Labor anticipated two years ago that the issue would be taken up with the U.S. Court of Appeals, and the issues in the case would take several years to resolve.

At that time, Strassler said in the memo that the move was a “significant change to existing settlement procedure,” and wanted all of the SOL attorneys to ensure that specific language was placed in each settlement motion that was before a Federal Mine Safety and Health Review Commission (FMSHRC) judge. The Secretary refused to release the memo under the Freedom of Information Act (FOIA) at that time, citing attorney work-product privilege, even though the memoranda was not prepared for a specific case. The memo was obtained and published by the Mine Safety and Health News (21 MSHN 319). 

In that memo, Strassler said the Commission should not evaluate or oversee settlements. The Commission’s role, according to the memo, “should simply be to confirm the clarity and enforceability of the agreement as submitted.” In the memo, Strassler said she wanted every penalty settlement motion to contain the following paragraph: 

“In reaching this settlement, the Secretary has evaluated the value of the compromise, the likelihood of obtaining a still better settlement, the prospects of coming out better or worse after a full trial, and the resources that would need to be expended in the attempt. The Secretary has determined that the public interest and the effective enforcement and deterrent purposes of the Mine Act are best served by settling the citations as indicated above.”

In the case involving the New Era Mine, the citations and orders would have remained as written, but Judge Moran said the settlement motion submitted by the Secretary lacked factual support for the 30 percent across-the-board penalty reductions sought for very serious violations, and the Secretary refused to provide any explanation to justify them. The Secretary claimed that Judge Moran had an incorrect reading of Sect. 110(k) of the Mine Act, and that settlements involve “policy choices that the U.S. Constitution vests in political branches, not in court-like agencies like the Commission.”

The Secretary also sought to apply the consent decree standard of review employed by the Second Circuit in a case involving Citigroup, but the Commission rejected this stance, citing Congressional concerns of past abuses and behind-the-scenes compromises by the Mining Enforcement and Safety Administration (MESA) – the MSHA predecessor agency.

The legislative history shows that Congress was very explicit on the unique MSHA/FMSHRC split enforcement scheme created by Congress. “Adoption of the Second Circuit’s consent degree standard found in Citigroup would effectively render section 110(k) meaningless,” the Commission said.

In oral arguments and in his brief, the Secretary attempted to compare the FMSHRC to a generalist court – an argument also staunchly rejected by the Commission.

The decision stresses that the May 16, 1977, Senate report on the Mine Act was clear in its rationale giving the Commission an active “role in approving settlements in unusually specific terms. That legislative history cannot be ignored simply because of the passage of time or because it may be convenient for the Secretary to do so,” noted the Commission. 

“It is also noteworthy that civil penalties under the Mine Act ultimately become final orders or decisions ‘of the Commission,’ not of the Secretary,” the Commission said. 

“Uncontested penalties, that is, penalties that have been proposed by the Secretary but have not been contested by an operator or miner under section 105(a) or 105(b) of the Mine Act, are ‘deemed a final order of the Commission’ 30 days after the operator or miner receives the penalty notification from the Secretary. ... Contested penalties that are the subject of proceedings before the Commission and its Judges ultimately become part of final decisions of the Commission under section 113(d) of the Act. … Similarly, in cases in which an operator has defaulted on a proposed penalty assessment by failing to timely answer the Secretary’s penalty petition, the Judge’s default order on the penalty becomes a ‘final decision of the Commission 40 days after its issuance. Under section 110(k), courts of appeals may review a proffered settlement of a ‘penalty assessment which has become a final order of the Commission.’”

And while the Secretary sought to compare FMSHRC to the Occupational Safety and Health Review Commission, “there is no provision similar to section 110(k) in the OSH Act. Indeed, the parties have not revealed a single provision in any federal statute that is similar to section 110(k) ... [A]lthough Congress gave the Secretary most of the enforcement powers under the Act, it expressly chose to give to the Commission the authority to assess penalties and approve settlements -powers that usually are given to an enforcement agency. Congress spoke clearly in this regard,” the Commission said. “Section 110(k) is an explicit expression of Congressional authorization that rebuts any presumption of unreviewability. The Commission does not review the Secretary’s decision to settle. Rather, the Commission reviews the proposed reduction of civil penalties in settlements.” 

In terms of the Secretary wanting to settle cases because of the “uncertainties of litigation,” the Commission said “all litigation contains uncertainties.”

Guidelines for Settlements

The Secretary also attempted to argue that there are no meaningful guidelines or standards for attorneys to rely upon when submitting settlements to Commission ALJs. 

While there are no “explicit restrictions” on what can be offered in a settlement proposal, the Commission said the guidelines can be found in the six statutory criteria under Sect. 110(i) of the Mine Act, and factors outside of 110(i), such as whether the company provided additional training, change in personnel, or made relevant engineering changes.

And while the Commission’s judges do not need to make a factual finding with respect to each of the 110(i) criteria, the judge will consider this information when making a determination on if the penalty reduction is “fair, reasonable, appropriate under the facts, and protects the public interest.” 

The Commission stressed in this case that Judge Moran did not substitute “his views of enforcement policy for those of the Secretary. Rather, the judge requested facts to support the proposed settlement of 32 reduced penalties, and the Secretary refused to provide any facts whatsoever.

“The Judge did not abuse his discretion by denying approval of the settlement without any supporting facts. … the Secretary’s repeated failure to provide any facts to support the proposed reduction of 32 penalties through a settlement agreement is inconsistent with the requirements of the Act, Congressional intent, and Commission procedure. Accordingly, we conclude that the Judge did not err in denying the proposed settlement.”

THE AMERICAN COAL CO., 8/25/2016, Docket No. LAKE 2011-13