With the stated goals of improving the civil penalty process and reducing the number of contested citations, the Mine Safety and Health Administration (MSHA) has proposed a rule to amend its civil penalty provisions (30 C.F.R. Part 100).  If finalized, the proposal will impact mine operators significantly.  Although the existing minimum and maximum penalties for non-flagrant violations would not change, minimum penalties for “unwarrantable failure” violations would increase by 50%.  Further, as discussed below, the proposed rule would place significant limits on judicial review of assessed penalties. 

Penalty Criteria Revised

Established pursuant to the Federal Mine Safety and Health Act of 1977, six criteria are currently used for determining civil penalties for violations of safety and health standards in mining operations.  MSHA’s proposed rule would change the relative weight given to certain criteria in order to weigh more egregious operator conduct more heavily.  Highlights of the proposed changes to the six criteria and the relative weight attributed to each are as follows:

  • Negligence of the Operator.  The number of descriptive categories for operator negligence to be used by inspectors will be reduced from five (No Negligence, Low Negligence, Moderate Negligence, High Negligence and Reckless Disregard) to three (Not Negligent, Negligent and Reckless Disregard).  The definition of “negligence” will read “[t]he operator knew or should have known about the violative condition or practice.” In addition, the relative weight of Negligence will increase in the penalty computation.
  • Gravity of the Violation.  The number of categories that inspectors currently use for the three aspects of Gravity (Likelihood of Occurrence, Severity of Injury or Illness and Persons Affected) will also be reduced.  For example,  the current five categories of Likelihood would be reduced to three: Unlikely, Reasonably Likely and Occurred.  The existing categories of No Likelihood and Highly Likely would be eliminated.  As for Severity of Injury or Illness, the existing category of Permanently Disabling will be dropped, leaving three categories: No Lost Workdays, Lost Workdays or Restricted Duty and Fatal.  In addition, the relative weight of Severity will also increase in the penalty computation. 
  • Operator’s History of Violations.  The relative weight of violation history will increase as a percentage of total penalty points.  The manner in which violation history is determined will be revised to more equitably impact the Violations per Inspection Day formula for small metal/nonmetal mines.  The proposed rule clarifies that repeat violations apply only after (1) a mine operator has 10 or more violations that become final orders, more than 10 inspection days and six repeat violations of the same citable provision of a standard which become final orders, over a 15-month period; or (2) an independent contractor has a 6 or more violations at all mines which become final orders and 6 repeat violations of the same citable provision of a standard which become final orders, over a 15-month period.
  • Appropriateness of the Penalty to the Size of the Business.  This criteria will have less weight as a percentage of total penalty points.  The proposal will reduce the penalty points for mine size and controlling entity and decrease the number of penalty points for operators and independent contractors.
  • Demonstrated Good Faith of the Operator in Attempting to Achieve Rapid Compliance After Notification of a Violation. The proposed rule will provide an additional 20% good faith penalty reduction to mine operators that do not contest a citation, promptly correct the condition or practice that was cited and pay the civil penalty.
  • Effect of the Penalty on the Mine Operator’s Ability to Continue in Business.  This criteria will not substantively change as MSHA will continue to assume that the assessment of a civil penalty will not affect the ability of the mine operator to continue operations.  Operators may continue to submit information regarding its financial status to the District Manager.

Penalty Amounts – Only Minimum Penalties for Unwarrantable Failure Violations Will Increase

The civil penalties for non-flagrant violations will remain the same, with the minimum penalty of $112 and the maximum penalty of $70,000.  In order to deter mine operators from allowing unwarrantable failure violations to occur, the proposed rule will increase the minimum penalties for such violations by 50% to $3,000 under Section 104(d)(1) and $6,000 under Section 104(d)(2).

ALJ Review of Contested Cases to Be Limited

One of the most significant changes proposed in the new rule is that Federal Mine Safety and Health Review Commission administrative law judges (ALJs) who hear contested violations and penalty cases will have less independence in evaluating the appropriateness of MSHA’s proposed penalty assessments.  The rule provides limited circumstances under which an ALJ may assess a penalty other than that indicated by MSHA’s regular formula.  The stated goal of this change is to promote greater consistency and predictability.  However, because the Commission’s scope of authority and review process was created by statute, this proposed changed is highly controversial and will likely attract significant scrutiny. 

Comment Period Open Until September 29, 2014

Interested parties may submit comments about MSHA’s proposed rule no later than midnight on September 29, 2014.  Please contact the Holland & Hart Workplace Safety / Emergency Response attorney with whom you regularly work to obtain more information.  Comments may be submitted by email to: zzMSHA-comment@dol.gov (include “RIN 1219-AB72” in the subject line).  Those that wish to comment by facsimile, U.S. mail or by courier may find instructions at http://www.regulations.gov.