Mach Mining, LLC v. Secretary of Labor , 809 F.3d 1259 ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 14, 2015 Decided January 12, 2016
No. 14-1266
MACH MINING, LLC,
PETITIONER
v.
SECRETARY OF LABOR, ET AL.,
RESPONDENTS
On Petition for Review of a Decision of the
Federal Mine Safety & Health Review Commission
James P. McHugh argued the cause for petitioner. On the
brief was Christopher D. Pence.
Cheryl C. Blair-Kijewski, Attorney, U.S. Department of
Labor, argued the cause for respondents. With her on the brief
was W. Christian Schumann, Counsel. John T. Sullivan,
Attorney, entered an appearance.
Before: HENDERSON, ROGERS and TATEL, Circuit Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
ROGERS, Circuit Judge: Mach Mining (“Mach”) petitions
for review of the final order of the Federal Mine Safety and
Health Review Commission concluding that two of Mach’s
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regulatory violations under the Mine Safety and Health Act were
the result of “high negligence” and one violation was also
“significant and substantial.” Mach contends these
determinations were unwarranted in view of its efforts to
mitigate the violations and the limited danger they posed.
Because the factual findings underlying these determinations are
supported by substantial evidence, we deny the petition.
I.
The Federal Mine Safety and Health Act of 1977 was
enacted giving “the first priority and concern” to the “health and
safety of its most precious resource — the miner,” in view of
“an urgent need to provide more effective means and measures
for improving the working conditions and practices in the
Nation’s coal or other mines in order to prevent death and
serious physical harm.” 30 U.S.C. §§ 801(a), (c). To carry out
this purpose, Congress directed the Secretaries of Health and
Human Services and Labor to develop permanent mandatory
health or safety standards. Id. § 801(g). Inspectors from the
Mine Safety and Health Administration (“MSHA”) in the
Department of Labor regularly inspect mines to ensure
compliance with mandatory health or safety regulations. Id.
§ 813. Upon discovering a mine operator is not in compliance
with these standards, the inspector must issue a written citation.
Id. § 814(a). The Secretary of Labor is authorized to enforce the
mandatory standards through civil penalties, see id. §§ 815, 820,
upon considering, among other things, the operator’s history of
previous violations and whether the operator was negligent, id.
§ 815(b)(1)(B). In more serious cases, the Secretary must issue
a withdrawal order, bringing mine operations to a halt until the
violation is abated. See id. § 814(d), (e), (h). When the
Secretary pursues enforcement measures or seeks civil penalties,
see id. §§ 814, 815, 820, the mine operator has the opportunity
for an administrative hearing and appeal to the Commission,
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followed by judicial review, id. §§ 815, 816.
Mach operates a longwall coal mine in Johnston City,
Illinois that releases more than 1 million cubic feet of methane
daily. The Secretary of Labor proposed civil penalties for a
series of citations that had been issued at the mine. Two
citations are at issue here.
On October 30, 2008, Mach received a citation for violating
30 C.F.R. § 75.400, which provides that “[c]oal dust, including
float coal dust deposited on rock-dusted surfaces, loose coal, and
other combustible materials, shall be cleaned up and not be
permitted to accumulate in active workings.” Inspector Edward
Law issued the citation based on coal that had accumulated
around two conveyor belts — a temporary belt and the main belt
carrying mined coal out of the mine. Due to the extensive
accumulations, the temporary belt was “actually sitting on top
of the coal.” Hr’g Tr. 113 (testimony of Inspector Law) (Aug.
2, 2011). To address the situation, Mach shut down the main
belt (and thereby also the temporary belt) at 2:30 a.m. on
October 30, and both belts remained off when Inspector Law
observed the area later that morning. Inspector Law nonetheless
concluded that the accumulations violation was the result of
high negligence and was “significant and substantial.”
On November 17, 2008, Mach received a citation for
violating 30 C.F.R. § 75.380(f)(3)(iii), which prohibits mine
operators from locating “battery charging stations” in primary
escapeways. Inspector Dean Cripps found a charging station
parked in the primary escapeway. He had cited Mach for the
same violation on October 28; that citation was terminated on
November 7, when another inspector observed that the charging
station was locked so it could not be used unless the lock was
removed. Although the charging station was locked when
Inspector Cripps saw it on November 17, he nonetheless issued
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the citation because he would not have terminated the prior
citation based merely on it being locked and he was convinced
the station had been unlocked at times between November 7 and
November 17. While Inspector Cripps was investigating the
charging station, a mine foreman approached to see if his
equipment had been charged, explaining that this was where he
normally charged his equipment. Inspector Cripps concluded
the November 17 violation was a result of Mach’s high
negligence.
The Secretary of Labor notified Mach of proposed
assessments totaling $4,800 in civil penalties for the two
regulatory violations. See 30 U.S.C. § 815. Mach admitted the
violations but disputed whether either citation warranted a
finding of high negligence and whether the coal accumulations
violation was “significant and substantial.” After a hearing, the
ALJ concluded the requested penalties were appropriate. Mach
Mining, LLC, 36 FMSHRC 2533, 2547 (2014). Mach petitions
for review of the ALJ’s decision, which became a final decision
40 days after the Commission denied Mach’s request for review.
See 30 U.S.C. §§ 816(a)(1), 823(d).
II.
Mach’s challenges to the ALJ’s “high negligence” and
“significant and substantial” determinations rest on its view that
its mitigating efforts should as a matter of fact and law have
reduced the level of negligence and eliminated the “significant
and substantial” determination. The ALJ’s factual findings
underlying these determinations are subject to review for
substantial evidence, which requires the court to “determine
whether there is such relevant evidence as a reasonable mind
might accept as adequate to support the judge’s conclusion.”
Jim Walter Res., Inc. v. Sec’y of Labor, 103 F.3d 1020, 1023–24
(D.C. Cir. 1997) (quoting Chaney Creek Coal Corp. v. Fed.
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Mine Safety & Health Review Comm’n, 866 F.2d 1424, 1431
(D.C. Cir. 1989)). Questions of law are subject to de novo
review, 30 U.S.C. § 816(a)(1); see Black Beauty Coal Co. v.
Fed. Mine Safety & Health Review Comm’n, 703 F.3d 553, 558
(D.C. Cir. 2012).
A.
In assessing civil penalties under the Mine Act for violating
mandatory health and safety regulations, the Commission is
required to “consider . . . whether the operator was negligent, . . .
the gravity of the violation, and the demonstrated good faith of
the person charged in attempting to achieve rapid compliance
after notification of a violation.” 30 U.S.C. § 820(i). The
parties’ briefs indicate that the proper framework for
determining negligence — and whether that negligence was
high, moderate, or low — is found in 30 C.F.R. § 100.3(d). This
provision defines negligence as “conduct, either by commission
or omission, which falls below a standard of care established
under the Mine Act to protect miners against the risks of harm.”
Id. Mitigating circumstances can alter the level of negligence,
and “may include, but are not limited to, actions taken by the
operator to prevent or correct hazardous conditions or
practices.” Id. In a formulaic mode, the level negligence is
high, moderate, or low if the operator “knew or should have
known of the violative condition or practice” and there are no,
some, or considerable “mitigating circumstances,” respectively.
Id.
Mach contends that a finding of a mitigating circumstance
is incompatible with high negligence under section 100.3(d) and
that its efforts to address the violations should have been
considered mitigating in nature. For the accumulations
violation, Mach maintains that its negligence was mitigated by
the efforts on October 29 to clean up the accumulations and by
its examiner’s decision, in compliance with 30 C.F.R.
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§ 75.363(a), to remove the main belt from service once he
discovered the accumulations on the day of the citation. Mach
notes that Inspector Law agreed that removing the belt from
service was what he expected an operator’s examiner to do in
these circumstances. For the charging station violation, Mach
maintains that it was not highly negligent because it had locked
the charging station by the time the inspector issued the citation.
Mach presumes, incorrectly, that evidence of a mitigating
circumstance precludes the Commission and its ALJs from
finding a regulatory violation resulted from the high negligence
of the mine operator. Section 100.3(d) does adopt a formulaic
approach suggesting high negligence is incompatible with the
existence of mitigating circumstances. But the Commission is
not bound by the MSHA regulation and has held, see
Sellersburg Stone Co., 5 FMSHRC 287, 291–92 (1983);
Shamrock Coal Co., 1 FMSHRC 469, 469 (1979), and recently
reaffirmed, that the regulation applies “only to the proposal of
penalties by MSHA and the Secretary of Labor,” Brody Mining,
LLC, 37 FMSHRC 1687, 1701 (2015); Jim Walter Res., Inc., 36
FMSHRC 1972, 1975 n.4 (2014). “[U]nder both Commission
and court precedent, the regulations do not extend to the
independent Commission, and thus the MSHA regulations are
not binding in any way in Commission proceedings.” Brody
Mining, 36 FMSHRC at 1701 (citing Jim Walter Res., 36
FMSHRC at 1975 n.4, and Sellersburg Stone Co. v. Fed. Mine
Safety & Health Rev. Comm’n, 736 F.2d 1147, 1151–52 (7th
Cir. 1984)). This differential approach to negligence was
contemplated in the relevant rulemaking, see Criteria and
Procedures for Proposed Assessment of Civil Penalties, 47 Fed.
Reg. 22,286, 22,287 (May 21, 1982), and a “split-function”
approach accords with the Mine Act, which “reflects Congress’s
concern that the adjudicatory function be institutionally
independent of potential influence by the agency responsible for
policymaking and enforcement decisions.” Prairie State
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Generating Co. v. Sec’y of Labor, 792 F.3d 82, 86 (D.C. Cir.
2015).
Instead of using the negligence standards in section
100.3(d), the Commission “may evaluate negligence from the
starting point of a traditional negligence analysis.” Brody
Mining, 37 FMSHRC at 1702. This analysis asks whether an
operator has met “the requisite standard of care — a standard of
care that is high under the Mine Act.” Id. Considerations
include “what actions would have been taken under the same
circumstances by a reasonably prudent person familiar with the
mining industry, the relevant facts, and the protective purpose of
the regulations.” Id. The Commission has explained as well
that an ALJ “is not limited to an evaluation of allegedly
‘mitigating’ circumstances” and should consider the “totality of
the circumstances holistically.” Id. For that reason, an ALJ
“may find ‘high negligence’ in spite of mitigating circumstances
or may find ‘moderate’ negligence without identifying
mitigating circumstances.” Id. at 1702–03. In the
Commission’s view, the real “gravamen of high negligence is
that it ‘suggests an aggravated lack of care that is more than
ordinary negligence.’” Id. at 1703 (quoting Topper Coal Co., 20
FMSHRC 344, 350 (1998)).
Although the ALJ’s analysis appeared to follow this more
holistic approach — explaining that “mitigating circumstances”
may be considered by MSHA and considering all the
circumstances surrounding the two regulatory violations,
including Mach’s compliance efforts, before concluding that a
high negligence determination was required for both violations
— the ALJ cited the negligence standards of section 100.3(d).
See Mach Mining, 36 FMSHRC at 2536, 2542–43, 2545–46.
We need not decide which standard the ALJ applied because the
analysis adopted by the ALJ is supported by substantial
evidence even under the more formalistic requirement of section
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100.3(d) that there be no mitigating circumstances.
Accumulations. The ALJ concluded that Mach failed to
take the steps required to prevent what had become a common
accumulations problem or to remove the accumulations
promptly upon discovery. Mach’s examiner and mine manager
both testified that spillage occurred “pretty often” because the
chute designed to transfer the coal to the middle of the main belt
could easily get blocked. The ALJ found that Mach was “on
notice that accumulations were likely to arise at this transfer
point and knew about the actual violative conditions in
question.” Mach Mining, 36 FMSHRC at 2543. Yet, as the
record shows, Mach did not start cleaning up the accumulations
until after the citation was issued. Mach attempts to justify the
delay, explaining that the 3:30 a.m. roof fall was a priority and
that at 7:15 a.m. MSHA ordered evacuation of the area near the
roof fall (which included the area with the coal accumulations).
This does not explain why Mach had not cleaned up the
accumulations in the hours between the initial afternoon
discovery of the accumulations and the roof fall.
Mach emphasizes that even though it had not rectified the
accumulations problem, it had taken corrective measures to
mitigate it. It claims that it had cleaned up the accumulations on
October 29 and turned off the main belt. The record supports
the ALJ’s finding that Mach had not cleaned up the
accumulations on October 29, despite having time to do so.
Although Mach’s log book included an entry that accumulations
were present on the afternoon prior to issuance of the October
30 citation, the inspector saw no notation that the accumulations
had been cleaned up. Lack of a corrective notation was not
dispositive because at the time the citation was issued there was
still time for Mach to record corrective actions made the day
before. But no record evidence required the ALJ to find such a
clean up had occurred.
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Mach’s only evidence on this point is testimony by one of
its examiners that at 9:30 p.m. on October 29, he saw the belts
were running and the “tail rotor was clear,” thus suggesting that
the spill found on October 30 was recent. The ALJ concluded
the examiner’s testimony deserved no weight because he had not
been making a full belt examination and gave no reason to
believe his “observation of the belt tail area was at all rigorous.”
Mach Mining, 36 FMSHRC at 2539. Instead, the ALJ credited
Inspector Law’s opinion that there had been no clean up.
Inspector Law acknowledged that he had “no way of knowing”
whether the accumulations had been cleaned up, but if they had,
he pointed out, then “the spill that [Mach] had ongoing was
creating a very big hazard.” Hr’g Tr. 157. He testified that
when he saw the coal spill at 10:40 a.m. the amount of
accumulations was “a pretty good size.” Hr’g Tr. 156-57.
There was coal spilled along both sides of the main belt,
spanning 5 to 10 feet, as well as behind it and underneath the
head area of the temporary belt, where accumulations piled from
10 to 18 inches such that the temporary belt was sitting on top
of the coal. Both witnesses had years of mining experience, but
the ALJ’s weighing of their testimony, when explained as here
to credit Inspector Law’s opinion, is entitled to deference. Cf.
Prairie State, 792 F.3d at 89; Black Beauty, 703 F.3d at 559–60.
Further, the ALJ could reasonably conclude that Mach’s
decision to turn off the main belt no more served to show that it
was not highly negligent. Shutting off the main belt “neither
prevented nor corrected the hazardous condition.” Mach
Mining, 36 FMSHRC at 2543. Instead, the ALJ concluded, the
fact that Mach needed to stop production to correct the
dangerous condition it had allowed to persist indicated how
negligent Mach had been. Upon turning off the belt, Mach took
no further step to clean up the accumulations.
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Charging station. The ALJ rejected Mach’s view that it
was not highly negligent because the charging station was
locked and functionally unusable at the time the inspector
discovered it in the primary escapeway on November 17.
Mach’s view is that if locking a charging station is enough to
terminate a citation, then it must be enough to reduce high
negligence to a lower form of negligence. Mach is correct that
when the agency misleads a mine operator — either with
inconsistent enforcement of the regulatory provision or with
ambiguous interpretations in the agency manual — that
circumstance may reduce the level of negligence and penalty
amount for a violation. See Mettiki Coal Corp., 13 FMSHRC
760, 770–71 (1991); U.S. Steel Mining Co., 6 FMSHRC 2305,
2310 (1984); King Knob Coal Co., 3 FMSHRC 1417, 1422
(1981). That is, “although an incorrect interpretation of a
regulatory requirement by an MSHA official does not have the
force and effect of law and will not serve to negate liability for
violative conduct, detrimental reliance on that interpretation is
properly considered in mitigation of penalty.” U.S. Steel
Mining, 6 FMSHRC at 2310.
The ALJ recognized that reliance could be a basis for
reducing a high negligence determination, but found no
evidence Mach had relied on the prior termination. This finding
is supported by substantial evidence in the record. Mach’s
manager did order the station be locked when he discovered the
non-compliant station, but the ALJ rejected Mach’s “late-in-the-
game attempt to rely on the abatement required for the October
28 citation.” Mach Mining, 36 FMSHRC at 2546. In view of
the plain text of the regulation, the ALJ reasoned, “Mach knew
or should have known the charger could . . . not be in the
escapeway regardless of whether it was locked.” Id. Mach’s
manager admitted he knew the charging station should not be in
the escapeway, acknowledging that locking it was the next best
option to full compliance, which required moving the station or
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putting it behind an air lock. Nothing in the record indicates the
manager’s half-measure of locking the charging station was
based on the terminated citation. Nor is there evidence that the
charging station was returned to the primary escapeway, after
being repaired following the October 28 citation, based on
“MSHA’s allegedly inconsistent guidance.” Id. The record is
silent on who ordered the station to be returned to the escapeway
or for what purpose.
To the extent Mach contends that the ALJ erred in requiring
a showing of actual detrimental reliance, it fares no better. The
Commission has found less than high negligence where the mine
operator “did not show actual reliance,” focusing instead on
what the operator knew or should have known about the
“appropriate standard of care.” See King Knob Coal, 3
FMSHRC at 1422; Mettiki Coal, 13 FMSHRC at 771. Even
assuming Mach partially complied with the standard of care
under 30 C.F.R. § 75.380(f)(3)(iii) when it locked the charging
station, Mach offered no evidence the station was continuously
locked during the period between the termination of the prior
citation and the issuance of the new citation. Rather, Mach’s
manager admitted that he had the station locked only a few days
before the citation was issued. Mach’s suggestion that this
temporary lapse should be forgiven because “there is no
evidence that any agent of Mach was aware the charging station
was or was planned to be returned to the primary escapeway,”
defies reason, as well as the purpose of the Mine Act. It cannot
be that a mine operator’s failure to keep track of equipment that
can pose a danger to miners when it is in the wrong place, see 30
C.F.R. § 75.380(f)(3)(iii), has made that operator less negligent.
B.
The “significant and substantial” designation stems from
section 104(d)(1) of the Mine Act, which distinguishes between
a violation of a mandatory health and safety standard that causes
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imminent danger and those that do not but nonetheless are “of
such nature as could significantly and substantially contribute to
the cause and effect of a coal or other mine safety or health
hazard.” 30 U.S.C. § 814(d)(1); see id. § 814(e)(1). It subjects
a mine operator to a withdrawal order, and higher civil penalties,
if subsequent inspections reveal further violations of the
standards. See 30 U.S.C. §§ 814(d), (e), 820(a)(3); Cyprus
Emerald Res. Corp. v. Fed. Mine Safety & Health Review
Comm’n, 195 F.3d 42, 43 & n.1 (D.C. Cir. 1999); Sec’y of Labor
v. Fed. Mine Safety & Health Review Comm’n, 111 F.3d 913,
915 (D.C. Cir. 1997). Mach does not dispute that whether a
violation is serious enough to be “significant and substantial” is
governed by the four-element test in Mathies Coal Co., 6
FMSHRC 1, 3–4 (1984). A violation is “significant and
substantial” if there is (1) a violation of the underlying
mandatory safety standard; “(2) a discrete safety hazard — that
is, a measure of danger to safety — contributed to by the
violation; (3) a reasonable likelihood that the hazard contributed
to will result in an injury; and (4) a reasonable likelihood that
the injury in question will be of a reasonably serious nature.” Id.
at 3–4; Amax Coal Co., 19 FMSHRC 846, 848 (1997).
“[R]easonable likelihood” is something less than “more
probable than not.” See Amax Coal, 19 FMSHRC at 848–49.
Instead, Mach maintains that the Secretary failed to prove the
third element of the Mathies test because there was insufficient
evidence the main belt had been operating in the coal
accumulations for a long time prior to the citation or would do
so again in the future, and because a belt fire was less likely to
occur because the accumulations were wet and contained
relatively little coal. Although Mach may be correct that it is
not possible to know with certainty how long the main conveyor
belt had been operating in the presence of the accumulations, the
ALJ could reasonably conclude, for the reasons discussed, that
the accumulations were extensive and had been present for a
significant period of time.
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Notably, Mach’s focus on the length of time that the
accumulations had been present misunderstands the “significant
and substantial” inquiry. That inquiry considers “the violative
conditions as they existed both prior to and at the time of the
violation and as they would have existed had normal operations
continued.” Knox Creek Coal Corp., 36 FMSHRC 1128, 1132
(2014); McCoy Elkhorn Coal Corp., 36 FMSHRC 1987, 1991
(2014). Even if there is a dispute about how many hours the belt
was operating in accumulations, there can be no dispute that at
the time of the shut down the belt was operating in the
accumulations and would do so again if the belt were turned
back on. The Commission “has expressly rejected the argument
that ‘accumulations of combustible materials may be tolerated
for a reasonable time.’” Knox Creek Coal, 36 FMSHRC at 1141
(internal quotation marks and citation omitted); cf. Black Beauty,
703 F.3d at 558. So, the fact that Mach turned off the main belt
at some point prior to the citation does not mean that the ALJ
erred in concluding the violation was “significant and
substantial.” In McCoy Elkhorn, the Commission upheld a
“significant and substantial” determination even though the
citation was issued when the mine operator was cleaning up the
accumulations and there were no ongoing mining operations. 36
FMSHRC at 1991; Knox Creek Coal, 36 FMSHRC at 1141.
Because the “significant and substantial” determination “must
be made at the time the citation is issued ‘without any
assumptions as to abatement,’” McCoy Elkhorn, 36 FMSHRC
at 1991 (quoting U.S. Steel Mining Co., 6 FMSHRC 1573, 1574
(1984)), neither the inspector nor the ALJ could assume that
Mach would complete cleaning up the accumulations prior to
resuming mining activities just because Mach had made some
effort to clean up accumulations at the time it was cited.
Finally, Mach insists that the danger presented by these coal
accumulations was minimal because they were wet, and rock,
not coal, made up a significant portion of the accumulations. It
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offers no basis for the court to conclude that the ALJ’s findings
that the accumulations were mostly coal and were not rock
dusted were not supported by substantial evidence. The ALJ’s
determination that the violation was “significant and substantial”
rests on a judgment that is supported by Commission precedent.
“[W]et coal accumulations pose a significant danger in
underground coal mines.” Consolidation Coal Co., 2013 WL
4648491, at *3 (FMSHRC Aug. 14, 2013). Wet coal, at best,
delays combustion because “accumulations of damp or wet coal
can dry out and ignite.” Amax Coal Co., 19 FMSHRC at
848–49 (citing Mid-Continent Res., Inc., 16 FMSHRC 1226,
1230 (1994)). Here, wet coal was found near an ignition source
(a running conveyor belt). See Mid-Continent Res., Inc., 16
FMSHRC 1218, 1222 (1994); Amax Coal, 19 FMSHRC at
848–49.
Accordingly, because substantial evidence supports the
ALJ’s findings for the “high negligence” and the “significant
and substantial” determinations, we deny the petition for review.