By law, civil penalties can become final only when approved by the Federal Mine Safety and Health Review Commission. Thus, penalty assessments issued by MSHA are “proposed” only. By a legal fiction, they can become final orders of the Federal Mine Safety and Health Review Commission, if not timely contested. Final penalties are to be based on consideration of six criteria in the Federal Mine Safety and Health Act: 1) history of violations; 2) size of business; 3) negligence; 4) ability to continue in business; 5) gravity; and 6) good faith in abatement. Operator contests typically dispute all or some of these findings.
Judges are not bound by the format of MSHA’s assessments. Judges may disregard points associated with inspector findings. Judges may disregard the penalty amount proposed by MSHA without regard to how it is developed. Nevertheless, it seems that ever since the 2006 changes in the civil penalty regulations, MSHA’s proposed penalty calculations carry more weight with judges than previously, and points have become integral in justifying changes to assessments in settlements submitted to judges for approval.
But something has been happening that conflicts with this approach. Solicitors and litigation representatives for MSHA are frequently telling companies in settlement negotiations that they can have changes in inspector findings or changes in penalties, but not both. The bottom line is, if MSHA has its way, even if you win, you lose because MSHA does not want to give you everything you would be entitled to when you establish that an inspector’s findings were wrong. (If the now defunct pre-litigation conference system were functioning as previously, operators would get 100% credit for every change of findings.)
The same problems are presented with special assessments, but there are no points calculations that can be argued. Special assessments were originally developed by MSHA as a means whereby civil penalties deemed too low under the numerical calculation of penalties could be assessed at higher monetary amounts based on perceived severity of violations. Since the 2006 revisions of civil penalty regulations, however, there are many assessments by regular point calculations that reach high dollar amounts (over $30,000, for example). Sometimes, special assessments are low by comparison, but many maximum assessments are derived in the special assessment process. (Penalties at $70,000 are maximum – except that “flagrant” violations can be much higher.)
Consulting the regular assessment schedule, it is perfectly clear how each assessment is calculated. By contrast, if you look at a special assessment sheet, you see only boilerplate language with no indication how the mandatory six criteria have been taken into account. Over the years, the prevailing thinking has been that it would not make much difference if an operator knew more. Numbers can always be entered to justify an essentially predetermined result, and if companies disagree they can contest. Judges are not bound by MSHA’s assessment, without regard to how it was calculated.
Interestingly though, in two recent cases, mine operators have requested internal MSHA special assessment review information. In Secretary of Labor v. Hidden Splendor Resources, Inc., Administrative Law Judge Priscilla Rae denied a discovery request for such information on grounds that such documents fall within the agency’s “deliberative process privilege.” In Secretary of Labor v. American Coal Company, however, Administrative Law Judge Gary Melick ruled that the forms are not privileged because in setting a penalty, MSHA is taking a position on what the assessment should be. The “facts” considered for assessment purposes, in Judge Melick’s view, would not disclose MSHA’s decision making process and therefore are not privileged. This issue bears watching as undoubtedly there will be future challenges to agency refusals to provide this information.