Maybe More Penalties?

There Are a Number of Concerns with MSHA’s Proposed Part 100 Overhaul.

By Breyana A. Penn

It is no secret that there are often differences in opinions between inspectors and operators on what exactly constitutes the proper negligence or gravity designation of an alleged violation.

Operators have therefore found themselves fighting to defend the integrity of their mine(s) in light of the blatant subjectivity and speculation that seems to accompany so many citations.

Case in point: in 2007 MSHA modified the penalty amount structure leading not only to an immediate increase in the amount of citations received by operators, but also in the amount of those contested. While the method behind the assessment process is relatively transparent, the way in which the categories are chosen has proven to be illusory at best – both the reasoning and rationale seemingly differing from inspector to inspector and even inspection to inspection. As alluded to above, the result has been increased confusion, frustration and debate across the board.

Well, as of July 31, 2014, MSHA claims to have a solution to this recurring issue. This intended resolution comes in the form of a proposal in the Federal Register of 30 C.F.R. Part 100 to overhaul the penalty assessment process. If you find yourself skeptical that this proposal will, in fact, solve those problems you are well within reason.

Too Good to be True?
MSHA insists that the proposal will improve the regular civil penalty assessment regulation by simplifying the criteria and providing a more streamlined approach to assessments as a whole. The belief is also that operators’ contest of penalties will decline as a result. The agency’s hope is for a more consistent, objective and efficient enforcement mechanism with an emphasis on what are deemed to be more serious safety and health conditions for miners.

Sound too good to be true? It just may be. Just as was the case following the modifications in 2007, there is bound to be an increase in litigation if change is to occur again.

While MSHA is adamant that the proposed changes will not result in a significant effect to the majority of operators, the minimum fines for unwarrantable failure violations alone will see an increase of approximately 50 percent. And this is not the only change which will come about in the event that this rule becomes reality.

Penalties for what is now “moderate negligence” will also be increased by approximately 50 percent. On top of that, there is no mention of any indirect effects. Although it is obvious that MSHA’s plans to change the citation form (Form 7000-3) will have some influence on the special assessments process as well, the exact impact is not addressed whatsoever. What this means for those penalties, only time will tell.

In the event that the new rule is implemented, the current categories of history of previous violations, negligence and gravity categories would be modified greatly. For instance, MSHA’s proposal would reduce the overall penalty points for mine size and controlling entity but a close reading of the new point scheme reveals that the largest operators are treated relatively better under the proposed rule then they are now.

However, the weight for history of violations would also see an increase. This could prove costly in the long run unless operators are more aggressive about challenging citations – exactly the opposite of the effect MSHA both intends to accomplish and claims will happen.

The gravity and negligence categories would also see significant changes. The proposal would result in the reduction of what are currently five categories of negligence to only three. Inspectors would then have the following options:

  • Not Negligent.
  • Negligent.
  • Reckless Disregard.

Although MSHA believes otherwise, this essentially “all or nothing” manner of assessment could potentially draw a host of disagreements between parties because there will no longer be any way to consider the mitigating factors that once served pivotal in determining negligence for operators.

Concerns Echoed
These concerns are echoed regarding the proposed changes to the gravity criteria. MSHA’s proposal would maintain the current three gravity factors, but the subcategories within these sections would be reduced greatly. This would likely result in increased penalties for operators where the new emphasis on “serious” violations will naturally influence inspectors’ designations which then drive assessment amounts.

Also on the table is the operator’s incentive for the abatement of violations. Today, mine operators have the opportunity to abate violations and, in turn, receive a 10 percent good faith reduction. This proposal would maintain the good faith reduction, but also provide an additional 20 percent reduction for operators who forego contesting citations and pay the resulting fine within 30 days.

Although MSHA seems to claim that the added incentive will lead to quicker abatement, we all know that abatement of violations has nothing to do with whether the citation is contested or not.

MSHA also seeks to curtail the Federal Mine Safety and Health Commission’s role in providing an independent review of its actions. As it currently stands, operators are given 30 days to contest a citation.

When citations and their assessed penalties are contested, absent an agreement reached via settlement, the matter is heard before an Administrative Law Judge (ALJ) of the Commission. Upon the ALJ’s review, the decision becomes a final order. The ALJ is currently at liberty to review the citation and issue either a higher or lower penalty based on his or her own findings. The ALJ is not confined to the assessment criteria which MSHA uses in the initial assessment process.

The proposal seeks to change that process altogether. MSHA claims that the current framework allows for inconsistencies between the ALJ rulings and the agency’s process resulting in what serves to undermine the agency’s efforts to achieve evenhanded and predictable treatment among violations.

Guiding the Commission
The proposed rule would therefore provide a set of rules and alternative methods to “guide” the Commission, resulting in their being confined to Part 100 in their assessment of penalties under most circumstances. Along with the fact that Congress fully intended for the Commission to serve as an independent body, coaxing ALJ’s into making decisions based on MSHA’s proposed measures raises a host of other concerns for operators’ ability to achieve fair results at hearing.

All in all, while it appears that MSHA professes to be focusing on a reduction of points for many, efforts in assessing the true affects that these changes could have on the amount of citations appears to be lacking.

MSHA says it welcomes ideas on alternative methods and is accepting comments through Sept. 29, 2014. 

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