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Individual Management Penalties


New Consequences For MSHA And Renewed Reminders For Operators.

By Annie Harrington

A tightened budget may not be the only source of pressure on the Mine Safety and Health Administration (MSHA). A recent order from Senior Administrative Law Judge Michael E. Zielinski, coupled with increased pushback from mine operators, suggests that MSHA risks dismissal of individual penalty cases against management officials for their investigation and filing delays.

Section 110(c) of the Mine Act provides for criminal fines and prison sentences up to one year (first offense), as well as civil penalties up to $250,000 against an individual (director, officer or agent of a corporation) who “knowingly authorized, ordered or carried out” any violation of any health or safety standard or any order issued under the Act.”

The section is commonly used against management employees, including foremen, safety directors, and other managers to conduct a “special investigation” and assess civil penalties against individuals.

In Secretary of Labor v. Dyno Nobel East-Central Region, the operator contested a violation and filed a motion to stay, pending MSHA’s special investigation. MSHA opposed the motion to stay, indicating that it could take between one and two more years to review the findings of the special investigation in order to proceed with the 110(c) case against a management official.

In a January 2, 2013, Order, Judge Zielinski commented:

In order to avoid substantial delays in the resolution of penalty cases against mine operators or the inefficiency of largely duplicative litigation and the inevitable delay it would force on the resolution of other cases in the backlog of litigation actions pending before the Commission, section 110(c) enforcement should be initiated within a reasonable time, considering the nature and complexity of the matters involved. Extensive delays should not be tolerated. Nor should operators charged with significant penalties be forced to proceed in the face of such investigations and, possibly, be saddled with the cost of defending essentially the same charges at multiple hearings.

Judge Zielinski warned the Secretary that “a motion to dismiss as untimely will be entertained as to any petition for assessment of civil penalty filed pursuant to Section 110(c) that is not filed sufficiently in advance of the hearing date to permit consolidation of that proceeding with this case.”

Judge Zielinski’s order should serve as a clear indication that failure to timely file 110(c) individual penalty proceedings may result in dismissal, even though other ALJs have denied motions to dismiss for late filings of 110(c) charges against individual management officials.

Management must understand that criminal sanctions or civil penalties against management officials are in addition to the penalties MSHA levies against the company. Whether such management penalties are sought depends largely on the nature of the violation issued, and the evidence uncovered during a MSHA special investigation, even though these are often conducted separately, at different times.

Operators and their on site management need to understand that the “triggers” for individual management penalties include not only serious accidents but also closure orders, unwarrantable failure enforcement actions, and allegations of misrepresentation to MSHA or false records (e.g. training).

Operators should conduct training to assist site management in handling these serious potential enforcement activities and involve counsel at the outset of any special investigation triggers to defend not only the original event or violation, but also against likely special investigations and individual management penalties.

Where appropriate, operators should consider seeking consolidation of Commission proceedings that involve a special investigation pursuant to Section 110(c) and a penalty proceeding of the underlying citation or order.

The dockets will likely involve common issues of fact and law, and discovery and litigation of the dockets will likely involve common evidence. Accordingly, judicial economy will be served through the consolidation, as only one hearing will require the travel of the court, parties, and witnesses, and consolidation will avoid the possibility of inconsistent rulings.

Given the backlog in special investigations, operators are well served to request that the penalty proceedings on the citation or order that gave rise to the 110(c) special investigation be stayed pending the outcome of the 110(c) proceedings, not only to produce efficient and less costly joint proceedings, but also to help prevent admissions in the citation/order case from being used against a management official in an individual civil penalty case.

Depending on the individual circumstances, operators should consider a motion to dismiss as untimely and prejudicial any 110(c) proceeding initiated more than 18 months after the issuance of the underlying citation or order.