Civil penalty assessments: Myths versus facts

By and |  April 4, 2018

We are often asked how the Mine Safety & Health Administration (MSHA) sets civil penalty amounts for citations – a simple question with a not-so-simple answer.

So let’s discuss several myths about the process. As you’ll see, each of our “myths,” though not entirely accurate, has an element of truth to it.

Myth No. 1: Inspectors set civil penalty amounts. Inspectors do not set civil penalty amounts, but the findings they include in their citations have a huge effect on what the civil penalty will be.

Most civil penalties are set using MSHA’s “regular” assessment process. In this process, MSHA calculates penalties using a point system. Points are assigned for each designation in the citation (such as negligence and gravity), as well as other factors (such as violation history, size of the mine and its controlling entity). The points are added up, and the total number of points equates to a civil penalty amount appearing in a chart published in 30 C.F.R. Part 100.

The amount of the final civil penalty increases significantly as points add up. The higher you are in the total number of points, the more each additional point counts in dollar value.

This is where the subjective judgment of the inspector, in marking the designation boxes on the citation, has its greatest potential impact on the civil penalty. For instance, a citation issued to a large mine in a large company with a high violation history could be assessed at $15,664 if the citation were designated as S&S (significant and substantial) with moderate negligence.

If the inspector were to make just one change – raising negligence from moderate to high – the penalty for that same violation jumps to $50,699.

Myth No. 2: The penalties operators pay go right into MSHA’s budget. The Federal Mine Safety and Health Act states that civil penalties are paid to the U.S. Treasury. Penalties paid by mine operators go directly into the same general government account that receives our income tax payments. Penalties do not go directly to fund MSHA operations.

While MSHA does not benefit outright from civil penalty payments, the agency does rely on data regarding citations and penalties to justify its funding requests in the government budgeting process. So you could say there is an indirect benefit to MSHA’s funding in assessing more and higher civil penalties.

Myth No. 3: Special assessment amounts are entirely arbitrary. As an alternative to its regular assessment process, MSHA assesses penalties for more serious violations under a “special” assessment process.

While it often seems that MSHA pulls special penalty amounts out of thin air, MSHA would say that special assessments are also based largely on a point system. The agency uses a special assessment review form that includes a points-based calculation in the special assessment process.

The points-based portion of the calculation relies on some of the same criteria used in the regular assessment process. This makes sense given MSHA is required by the Mine Act to assess all civil penalties based on the same six criteria:

  1. Appropriateness of the penalty to size of the business
  2. Violation history for the mine
  3. Negligence of the violation
  4. Gravity of the violation
  5. Good faith of the operator in abatement
  6. Effect of the penalty on the ability of the operator to remain in business

There is more to the special assessment process than just the points, and that is where the subjectivity comes into play in the assessment. After the points calculation is performed, MSHA adjusts the points-based penalty amount based on the allegations in the citation. There is no published criterion for how this is done, and that is where the potential for arbitrariness can creep into the process.

Civil penalties increase

Civil penalty amounts under the Mine Act are adjusted periodically for inflation. Here are the new civil penalty levels for citations issued after Jan. 2:

  • 104(a) citation minimum: $132
  • Non-flagrant violation maximum: $70,834
  • Flagrant violation maximum: $259,725
  • 104(d)(1) citation or order minimum: $2,361
  • 104(d)(2) order minimum: $4,721
  • Accident reporting citation minimum: $5,903
  • 104(b) Failure to abate daily penalty: $7,673 civil

Take our quiz on MSHA civil penalty assessments to find out how much you learned.


Bill Doran and Margo Lopez are with the national labor, employment and safety law firm Ogletree Deakins. Contact them at william.doran@ogletree.com and margaret.lopez@ogletree.com.

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