New MSHA penalties

MSHA is amending civil penalty procedures. The agency says this is to promote consistency, objectivity and efficiency, and facilitate the resolution of enforcement issues.

Really, though, MSHA is displeased many cases are initiated by operators who disagree with inspector findings, which convert to points on which penalties are based. Currently, a maximum penalty of $70,000 is reached at 144 points out of a possible 208 points. MSHA plans to alter today’s scale and reduce points on which penalties are calculated. A maximum penalty of $70,000 would be reached at 73 points out of a possible 100.

Important inspector findings relate to negligence and gravity. If we analyze “negligence,” here’s what regulations currently provide:

■ No negligence (Operator could not have known of violation): 0 points
■ Low negligence (Operator knew or should have known, but there are considerable mitigating circumstances): 10 points
■ Moderate negligence (Operator knew or should have known, but there are mitigating circumstances): 20 points
■ High negligence (Operator knew or should have known, and there are no mitigating circumstances): 35 points
■ Reckless disregard (Absence of the slightest degree of care): 50 points

Under new regulations, the choices would be that an operator was negligent or an operator was not. The only other option would be reckless disregard.

Inspectors almost never find no negligence and rarely find reckless disregard. Everyone will be found negligent virtually all the time. Every negligence finding will be 15 points. There is a concern, though, that reckless disregard could become the new high negligence.

So that assessments stand up in court, MSHA wants judges to be limited just as inspectors are. MSHA wants judges to be compelled to apply points as MSHA does, too. This conflicts with the independence of the Federal Mine Safety and Health Review Commission, to which Congress gave final authority over all penalties. All of this will draw much opposition from the industry.

Why the findings

The Coal Mine Health and Safety Act of 1969 first introduced civil penalties. Congress established six criteria – still in effect today – to be applied in determining penalty amounts. They are the operator’s history of prior violations; appropriateness of penalty to size of business; whether the operator was negligent; effect on the operator’s ability to continue in business; the gravity of the violation; and the operator’s good faith in rapid compliance after being cited.

Originally the enforcement agency, the Bureau of Mines, assessed flat penalties of $100, $1,000, 5,000 and $10,000.

Supreme Court challenge

The industry sued because there were no findings on the six criteria. There was a long court battle. Ultimately, the U.S. Supreme Court reversed lower court rulings that said penalties were not valid when not supported by findings under the six criteria.

The Supreme Court-held findings were unnecessary for initial assessments because they could be challenged in administrative proceedings where findings would be made. Today, they can be challenged before an independent commission.

Ultimately, the court challenge produced the reform the industry demanded. It caused the agency to establish regulations requiring application of the six criteria, and inspector findings on gravity and negligence were mandatory for penalty calculation purposes. These findings and findings on mine size and history of violations, good faith in abatement, and, sometimes, the ability to continue in business are relied on today for all civil penalties MSHA assesses.

Observations

Taking judgment away from inspectors for penalty purposes in the new regulations is curious given the many other critical judgments inspectors make, such as whether a violation exists, whether it is significant and substantial, whether there is imminent danger, and whether an operator is guilty of unwarrantable failure.

One favorable aspect of the proposed regulations is they would relieve small operators of disproportionate effects under the history of
violations criterion. Currently, small operators – with inspections lasting one or two days – easily find themselves with an average of 2.1 violations per inspection day.

This adds 25 points to penalty calculation and grossly inflates penalties. The new regulations would preclude assignment of history points unless a mine has more than 10 inspection days during the calculation period, which most small operators will not have.

To avoid challenges to citations, MSHA proposes giving operators a 20 percent reduction in a penalty if they do not contest. This would be beside the standard 10 percent reduction for good faith in abatement.

So, the big questions are where will this lead, and how soon might we find out?

Take note

MSHA wants judges to be limited just as inspectors are so assessments stand up in court.