Mine operators across the United States have all shuddered at the news of MSHA issuing an exorbitant flagrant penalty assessment and have wondered when their operations could be next. These operators are not concerned because of their safety records, but because of the arbitrary and unfair nature of the flagrant standard, which until recently, cast a broad net. Recent Administrative Law Judge (“ALJ”) decisions have stemmed the tide of such arbitrary enforcement by questioning MSHA’s authority to issue flagrant assessments based on guidelines set forth in certain Procedure Instruction Letters (PIL) or by relying on prior, unrelated violations as the basis for such enforcement. To understand the significance of the recent ALJ decisions, it is necessary to review the brief history of MSHA’s use of flagrant penalty assessments as an enforcement tool.

By way of background, Congress passed the Mine Improvement and New Emergency Response Act of 2006 (“MINER Act”) in response to the Sago and Aracoma mine disasters. The MINER Act increased the maximum penalty for violations deemed to be “flagrant” from $70,000 to $220,000. Since the effective date of the MINER Act, MSHA has utilized the elevated enforcement tool of flagrant violations with the stated goal of holding accountable those “[m]ine operators that show reckless disregard for the well-being of their workers . . . [and] MSHA will not hesitate to assess stiff penalties. . .” for such actions. MSHA has continued to issue flagrant assessments despite any clear interpretation of the vague flagrant violation standard.

The flagrant standard was first delineated in §110(b) of the MINER Act, which specifically provides:

Violations under this section that are deemed to be flagrant may be assessed a civil penalty of not more than $220,000. For purposes of the preceding sentence, the term ‘flagrant’ with respect to a violation means a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory health or safety standard that substantially and proximately caused, or reasonable could have been expected to cause death, or serious bodily injury.

Thus, this standard created a two-track approach for establishing a flagrant violation. Under this standard, MSHA can establish a flagrant violation by using the first track and proving that the operator recklessly failed to eliminate a known hazard. On the other hand, MSHA can utilize the second track and establish a flagrant violation by proving that the operator repeatedly failed to eliminate a known violation. The requisite proof includes knowledge of the violation on the part of mine management and proximate causation. Unfortunately, this standard fails to define many of the terms used and creates an excessively broad standard subject to abuse and arbitrary enforcement.

MSHA issued a final rule on flagrant violations in 2006 as set forth in 30 C.F.R. §105(e). This rule merely repeated or codified the statutory language of §110(b) of the MINER Act noted above and did nothing to define the terms “flagrant,” “reckless failure,” “repeated failure,” “known violation,” or “substantially and proximately caused.”

MSHA subsequently attempted to further define and clarify the flagrant violation standard by delineating specific criteria when it issued PIL I06-III-04 (Oct. 26, 2006). This PIL expired on March 31, 2008 and was reissued in PIL I08-III-02 (May 29, 2008), which expired on March 31, 2010. The PIL criteria for flagrant assessments were reiterated by the Secretary of Labor in a news release dated April 19, 2011. The Secretary has improperly relied on such arbitrary criteria in proposing flagrant penalty assessments.

The PIL criteria for the “reckless failure” track provides that an operator “recklessly” fails to make reasonable efforts to eliminate a known safety or health violation when:

  1. a citation or order is evaluated as significant and substantial;
  2. the citation or order is evaluated as having the potential to cause an injury that is reasonably likely to be at least permanently disabling;
  3. the citation or order is designated as an unwarrantable failure to comply with a mandatory safety or health standard under 104(d) of the Mine Act; and
  4. the negligence designation of the action designated as reckless disregard of a mandatory safety or health standard.

The PIL criteria for the “repeated failure” track provides that an operator has ‘repeatedly failed’ to make reasonable efforts to eliminate a known violation when:

  1. a citation or order is evaluated as significant and substantial;
  2. the citation or order is evaluated as having the potential to cause an injury that is reasonably likely to be at least permanently disabling;
  3. the citation or order is designated as an unwarrantable failure to comply with a mandatory safety or health standard under 104(d) of the Mine Act; and
  4. at least two prior “unwarrantable failure” violations of the same mandatory health or safety standard have been cited within the past 15 months.

Furthermore, PIL No. I08‐III‐2 (May 29, 2008) also provides a “proximate cause” requirement. Thus, the condition cited also must be evaluated to determine if it proximately caused or “could have been expected to cause death or serious bodily injury.” The PIL defines “proximate cause” as “one which directly produces the injury or death and without which the injury or death would not have occurred.”

Thus, the criteria for both the “reckless failure” and the “repeated failure” prongs are the same, except for the fourth and final criterion for each. These criteria place considerable power and discretion in the hands of federal mine inspectors, who are forced to make subjective determinations in interpreting vague standards. This enforcement scheme has been fraught with the potential for abuse, misuse, mistake, misinterpretation and misapplication by MSHA. Unfortunately, such subjective and arbitrary enforcement can only be rectified through litigation until the flagrant standard is more clearly interpreted and defined by the courts.

Until now, there has been little guidance from the Commission or its judges regarding the evidentiary requirements for the “reckless failure” and the “repeated failure” tracks of the flagrant standard. A few cases have been heard by ALJs, but none have yet to be heard by the Review Commission. While only Review Commission decisions are binding on the entire industry, recent ALJ decisions have addressed these standards in an effort to clarify their application. While these decisions help show the illegality of MSHA’s flagrant enforcement scheme, it is hoped that the Review Commission will address the issues raised by this enforcement scheme.

The evidentiary requirements for the “repeated failure” was at issue in Conshor Mining, LLC, KENT 2008-652 and KENT 2008-782 (Nov. 28, 2011) (ALJ Feldman). Judge Feldman had ruled that violations attributed to a “repeated failure” could not be deemed a “flagrant” violation under 30 U.S.C. § 820(b)(2) and he certified his decision to the Commission for an interlocutory ruling. The Commission granted review of the issue. However, before the Commission could issue a decision, the Secretary filed a motion seeking dismissal of the appeal because she decided not seek assessment of the three violations at issue as flagrant assessments after all. Conshor did not oppose the motion and the Commission granted it, dismissed the appeal and remanded to the case back to ALJ Feldman for further proceedings.

As a result, Judge Feldman’s prior ruling has provided considerable guidance on MSHA’s use of the PIL criteria to establish a flagrant violation through the “repeated failure” standard.

In the Conshor Mining case, Judge Feldman noted that the issue of evidentiary requirements to establish a “repeated failure” flagrant violation was “an issue of first impression” before the Commission judges. MSHA had relied on the last prong of the PIL criteria for “repeated failure” flagrant violations where Conshor had been cited for three unwarrantable failure violations under 75.220 within the previous 15 months. Judge Feldman held that the Secretary of Labor’s interpretation of the evidentiary requirements of a “repeated failure” could not stand because MSHA’s reliance on the PIL criteria was misplaced. The PIL criteria were not issued as substantive rules and were not subject to notice rulemaking procedures. As a result, the PIL criteria were not binding and had no legal effect.

More importantly, Judge Feldman held that the Secretary’s attempt to use the 15 month period for prior violations to establish a “repeated failure” flagrant violations was inconsistent with the language of §110(b) of the MINER Act. The judge stated that the plain language of this section referred to a single, known violation, and not a serious of prior similar, but unrelated, violations. Judge Feldman aptly stated that “…[t]he phrase ‘repeated failure’ when read in context, refers to current repeated conduct evidenced by a failure to eliminate a hazard pose by a discrete violation alleged to be flagrant, rather than a past history of violations . . .” The importance of Judge Feldman’s decision is that it prevent MSHA from establishing a “repeated failure” by proffering into evidence prior violations issued under the same standard in the previous 15 months. Such prior violations, although issued under the same standard as the underlying citation at issue, were issued under different facts and circumstances and the Commission has repeatedly stated that each citation stands or falls on its own facts.

The “repeated failure” standard based on MSHA’s reliance on PILs is currently on appeal before the Commission in Wolf Run Mining, Co., WEVA 2008‐1265 (Jan. 20, 2012). In Wolf Run, the Secretary sought a flagrant assessment based on two prior, unrelated unwarrantable failure violations under section 75.400 in the previous 15 months. Wolf Run challenged the Secretary’s position. Judge Barbour, relying on Judge Feldman’s guidance in Conshor, held that the Secretary’s interpretation of the “repeated failure” standard was not supported by the Mine Act. Judge Barbour indicated that the court could not determine whether or not the “flagrant” assessment was proper due to the Secretary’s reliance on Wolf Run’s past history of violations, rather than a “repeated failure” to eliminate a hazard posed by a discrete violation. In other words, the Secretary failed to assert a “repeated failure” by Wolf Run to eliminate the hazard posed by the underlying, related condition cited by MSHA.

The Conshor Mining and Wolf Run cases could have far reaching implications on MSHA’s use of flagrant assessments as an elevated enforcement tool. If Judge Feldman’s and Judge Barbour’s guidance stands, MSHA would be required to prove that a mine operator repeatedly failed to eliminate the underlying violation or hazard cited, rather than relying on prior, similar but unrelated violations. MSHA also would be required to focus on the mine operator’s current conduct, including its actual knowledge of the hazard, the likelihood and severity of the injury that may result from such conduct, and the operator’s actions in the face of such knowledge, rather than its past history of unrelated violations. It also will be more difficult for MSHA to establish a “repeated failure” flagrant violation as most mine operators immediately abate the underlying condition cited to have the citation terminated and to avoid 104(b) failure to abate or withdrawal orders.

In theory, the impact of these decisions should substantially curtail the issuance of flagrant violations by MSHA and limit them to pursuing flagrant assessments under the “reckless failure” standard, which should encompass only the most egregious situations where a mine operator ignores its obligation to abate a known violation or hazard that proximately causes or could be expected to cause serious injury or death. The questions of “recklessness” and “proximate cause,” however, are far from clear and also subject to arbitrary application. A corollary result will be MSHA’s focus on a mine operator’s pre-shift and on-shift records to establish that management knew of a violation and failed to correct it. Mine operators must give paramount importance to its examination reporting obligations and take credit for its corrective actions by reporting and recording them.

In conclusion, the rapidly changing legal landscape of flagrant violations will continue to evolve as other mine operators challenge this arbitrary enforcement tool and as the Commission and its judges work to clarify the vague flagrant standard and its evidentiary requirements. Mine operators should view these recent developments with a glimmer of hope that arbitrary standards and enforcement will not stand. Most, if not all, mine operators would agree that the enforcement of safety standards is necessary to improve mine safety. However, fair enforcement is crucial to changing the relationship between mine operators and MSHA from an adversarial one to one of mutual respect and with an open dialogue aimed at creating a partnership in safety compliance. Eliminating broad, vague enforcement standards is a positive step in that direction.