The Mine Safety and Health Administration (MSHA) has taken issue with the high volume of legal contests filed by operators in relation to civil penalties assessed against them. MSHA has even published a list of operators who are contesting the most. Is MSHA right in believing the industry is ganging up on the agency? Absolutely not.

Legal contests of MSHA enforcement have always been important. Legal contests are the means whereby companies can assure themselves that they are not being treated unfairly. While Congress has clearly ordained that MSHA must impose and enforce civil penalties for all violations, Congress surely never contemplated imposition of penalties where there are no violations. And Congress surely never meant for excessive penalties to be collected under MSHA civil-penalty regulations if they are based on subjective findings by an inspector who cannot be supported.

Enforcement and response
First, it is important that I say a few words about federal mine safety enforcement and legal contests prior to the 2006 enactment by Congress of the Miner Act, and prior to promulgation of the greatly revised MSHA civil-penalty regulations and recent pattern-of-violations enforcement activity by the agency. The fact is that mine operators have long been vigorously attentive to their obligations under the Federal Mine Safety and Health Act of 1977 and MSHA’s implementing regulations – much more attentive, I would say, than the majority of companies regulated by the Occupational Safety and Health Administration.

The fact is the mining industry has shown itself to be quite conscientious. Mining companies read and follow the detailed requirements of MSHA’s regulations. They strive to be safe in all regards. They want to comply with all mandatory safety and health standards. They also want a good safety record – and rightly so. I doubt seriously that MSHA could say otherwise. One problem has always been that MSHA often investigates and seeks to impose serious sanctions against individuals as well as companies for certain violations. These enforcement actions are often out of proportion to the matters at issue. Quite often they have been the subject of legal contests.

Also important is the fact that the majority of citations issued by MSHA inspectors during regular inspections seem to focus, not so much on dangerous conditions associated with causes of fatal and other serious accidents, but rather on violations that are easy to find and easy to cite. These include such things as housekeeping – an accumulation of material on a walkway, for example – or a door to an electrical box that is left open, damage to outer insulation of a power cord, an instrument panel gauge out of commission on a pickup truck or a machine guard that an inspector believes is not quite large enough.

These are among the most frequent violations each year, and yet they are not the items typically implicated following accident investigations. In any event, operators have long had reason to take exception to many of MSHA’s citations related to such things.

Burdens on business
Although mine operators have long had reason to take exception to MSHA enforcement actions, not all companies have felt equally motivated to secure their rights. When penalties were lower, they might decide to pay the penalties and move on. Today, operators are finding that such an approach does not work. Each individual inspector now has extraordinary power to impose serious financial burdens on companies. In fact, civil penalties based on inspector findings can and may very well put many smaller companies out of business.

In an article published in the January 2008 issue of Pit & Quarry, I described how a change in a single finding in a single citation could cost even a small company $10,000 or $20,000. I am talking about a subjective finding made by an inspector based on what he or she believes from a passing observation, often without adequate background information regarding exculpatory or mitigating circumstances.

In my article, the real-life example involving a small company went like this:
• History of more than 2.1 violations per inspection day.
• Inspector findings:
-- Possibility of injury: “reasonably likely.”
--Expected consequence: “lost work days.”
--Negligence: “high.”
--Number of people potentially affected: One.
• Penalty: $3,143.00.

If the inspector had made one or two different findings, the results would have been as follows:
• Possible “fatal” injury – penalty: $11,597.00.
• Number of people potentially affected: 10 – penalty $47,716.00.

When one considers that MSHA inspectors will frequently find that a fire extinguisher that has not been checked on schedule for operability could be “fatal,” it is easy to appreciate the fact that MSHA inspectors are in charge of real money. Their findings cannot be accepted at face value. Even a single, unchallenged, invalid citation could put a small operator with two inspection days and five citations into an excessive-history category that can greatly affect civil penalties. Add findings such as “high negligence,” and the operator is in real trouble.

Since MSHA has come out with its new penalties, small operators are getting hit hard with enforcement never before seen. We are seeing small operators with penalties as great as $80,000, $150,000 and $200,000 for single inspections. We are seeing large operators get hit the same way.

MSHA citations, findings and penalties have become a serious matter. Too much power resides with inspectors. The system is entirely subjective. The only safeguard is to contest citations as a way of auditing the inspector’s subjective judgment. The inspector is already judge, jury and executioner when it comes to issuing closure orders; now the inspector has the ability to be judge, jury and executioner for civil penalties.

The bottom line
Any penalty not contested in 30 days becomes final and unreviewable – a debt to be collected by the U.S. Treasury if not paid on time. “Why are mine operators lodging wholesale contests of civil-penalty assessments?” MSHA asks. “Why in the world wouldn’t they?” I ask.