Peabody Midwest Mining, LLC v. Secretary of Labor

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 26, 2023 Decided June 16, 2023
No. 22-1242
PEABODY MIDWEST MINING, LLC AND MICHAEL BUTLER,
EMPLOYED BY PEABODY MIDWEST MINING, LLC,
PETITIONERS
v.
SECRETARY OF LABOR, MINE SAFETY AND HEALTH
ADMINISTRATION (MSHA) AND FEDERAL MINE SAFETY AND
HEALTH REVIEW COMMISSION,
RESPONDENTS
On Petition for Review of a Decision of the
Federal Mine Safety and Health Review Commission
R. Henry Moore argued the cause and filed the briefs for
petitioners. Patrick W. Dennison entered an appearance.
Susannah M. Maltz, Attorney, U.S. Department of Labor,
argued the cause for respondents. With her on the brief was
Emily Toler Scott, Counsel for Appellate Litigation.
Before: PILLARD, KATSAS and RAO, Circuit Judges.
Opinion for the Court filed by Circuit Judge PILLARD.
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PILLARD, Circuit Judge: In the early morning hours on
July 23, 2018, drillers at the Francisco underground coal mine
hit a pocket of gases, causing methane to blast into their
worksite in highly volatile concentrations. Methane is
considered the most dangerous gas in underground mining; in
sufficient concentrations, methane can ignite and cause a
potentially catastrophic explosion. To protect worker safety,
Mine Safety and Health Administration (MSHA) regulations
thus require miners to deenergize equipment and cease work
when they detect certain methane concentrations. But during
the methane inundation at the Francisco mine the miners did
not stop work. They instead continued operating an energized
drill, trying to stop the flow of methane.
MSHA issued two orders citing the mine operator,
Peabody Midwest Mining, LLC, for violating the applicable
safety regulations and designated those violations as
unwarrantable failures. It also individually cited the mine’s
manager, Michael Butler, as Peabody’s agent. An
administrative law judge and then the Federal Mine Safety and
Health Review Commission agreed with MSHA that Peabody
violated MSHA safety regulations, that those violations
constituted unwarrantable failures, that mine manager Butler
was individually liable, and that civil penalties were
appropriate. Peabody and Butler petitioned for review in this
court. We deny the petition. MSHA safety regulations
unambiguously prohibited Peabody’s operation of an
energized drill in a high-methane environment, and substantial
evidence supports the Commission’s unwarrantable failure and
individual liability determinations.
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BACKGROUND
A.
Congress enacted the Federal Mine Safety and Health Act
(Mine Act) to “protect the health and safety of the Nation’s coal
or other miners.” 30 U.S.C. § 801(g). Under the Act, “[t]he
Labor Secretary, acting through MSHA, sets regulatory
standards for mine safety, conducts regular mine inspections
and issues citations and orders in response to violations.” Sec’y
of Labor v. Knight Hawk Coal, LLC, 991 F.3d 1297, 1300
(D.C. Cir. 2021); see generally 30 U.S.C. §§ 811, 813-15, 820.
The Federal Mine Safety and Health Review Commission
(FMSHRC or Commission) is an independent adjudicatory
body that reviews citation, penalty, and order decisions by
MSHA. Knight Hawk Coal, 991 F.3d at 1300; see 30 U.S.C.
§§ 815(d), 823.
Methane is considered mining’s deadliest gas. A
byproduct of coal, methane is often present in underground
coal mines. When methane concentrations in the air reach 5%
by volume, the gas becomes explosive. An ignition source,
such as a spark from electrical equipment, can light the
methane and trigger a potentially deadly explosion.
MSHA safety standards prescribe actions that mine
operators must take to address methane as it accumulates in
different parts of a mine. See 30 C.F.R. § 75.323. The
standards are tiered, requiring additional steps as methane
concentrations increase. As relevant here, subsection
75.323(c) lays out what operators must do when methane
accumulates in a return air split (an airway ventilating air away
from a working face or worksite and out of the mine). That
subsection provides:
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(1) When 1.0 percent or more methane is present
in a return air split . . . changes or adjustments
shall be made at once to the ventilation
system to reduce the concentration of
methane in the return air to less than 1.0
percent.
(2) When 1.5 percent or more methane is present
in a return air split . . .
(i) Everyone except those persons referred
to in § 104(c) of the Act shall be
withdrawn from the affected area;
(ii) Other than intrinsically safe AMS,
equipment in the affected area shall be
deenergized, electric power shall be
disconnected at the power source, and
other mechanized equipment shall be
shut off; and
(iii) No other work shall be permitted in the
affected area until the methane
concentration in the return air is less than
1.0 percent.
Id. § 75.323(c). AMS is not defined in the rule or record but
apparently refers to atmospheric monitoring systems.
Two provisions are principally at issue in this case. The
first is subparagraph (c)(2)(ii), which we here refer to as the
deenergization-and-disconnection provision. That provision
requires operators to deenergize equipment, disconnect electric
power, and shut off mechanized equipment when methane
levels reach 1.5%. Id. § 75.323(c)(2)(ii). The second is
subparagraph (c)(2)(iii), or the no-other-work provision, which
5
prohibits any “other work” until methane levels return to below
1%. Id. § 75.323(c)(2)(iii).
B.
This case arises out of a methane inundation at the
Francisco underground coal mine in Indiana. Peabody
Midwest Mining, LLC (Peabody) operates the Francisco mine.
In July 2018, Peabody contracted with REI Drilling to conduct
exploratory drilling for abandoned mine works. Mine
operators often conduct exploratory drilling ahead of coal
extraction to avoid inadvertently encountering abandoned mine
works during the mining itself.
During the early morning hours on July 23, 2018, an REI
Drilling employee, Robert Ferrin, and a Peabody miner, John
Stevens, were conducting exploratory drilling at the mine.
Including miners working elsewhere in the mine, there were
approximately 60 people underground at the time. At around
1:49 a.m., the exploratory drill hit a void, meaning it punched
through solid matter and opened a pocket of gases. Air and
methane began to blast through the borehole. Moments later,
a personal methane detector (or “spotter”) worn by Stevens
began to alarm and read “over range,” indicating methane
levels in excess of 5% by volume. At some point, Ferrin’s
methane spotter also began to alarm and read over range.
Stevens phoned to ask the mine manager, Michael Butler,
to come to the drill site. Butler arrived at the drill site within a
few minutes. When Butler arrived, Ferrin and Stevens were
using an energized drill to pull drill rods out of the borehole to
clear the hole so they could try to plug it and stop the methane
inundation. Butler leaned in to speak to Ferrin and, as he did
so, his spotter also alarmed to signal that it detected methane
levels in excess of 5%. Ferrin told Butler that they needed to
remove the rods and plug the hole. Butler agreed to that plan.
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Butler then directed a maintenance foreman to deenergize
other equipment, kill power on the unit, and evacuate other
miners, which the foreman did. But Butler explicitly instructed
the foreman to maintain power to the drill.
Stevens and Ferrin continued using the drill to pull drill
rods. The drill had a safety feature to prevent methane
explosions: Its methane sensor automatically shut down the
drill when methane levels exceeded 2%. While Ferrin and
Stevens were working, the drill shut itself down two or three
times. Each time the drill shut down, the men waited a few
minutes for the methane levels to drop low enough so that they
could repower the drill.
Before long, the mine’s tracking office contacted
Peabody’s General Manager of the Francisco mine, Brad
Rigsby, at his home. Rigsby ordered that all mining operations
at the unit cease and that the miners “get ready to pull out.”
Hr’g Tr. 401 (J.A. 257). While driving to the mine, Rigsby
called the MSHA District Manager to report the methane
inundation. When he arrived at the mine, Rigsby called Butler,
who informed Rigsby that the drillers were preparing to plug
the borehole. Rigsby, who had not known that the drill was
energized and that miners remained at the worksite, told Butler
to cut power to all equipment and bring everyone out of the
unit. As for the methane pouring out of the borehole, Rigsby
told Butler to “let it bleed.” Peabody Midwest Mining, LLC,
44 FMSHRC 515, 518 (2022) (quoting Hr’g Tr. 404-05, 415).
Rigsby’s evacuation order came at least a half hour or so after
Butler first arrived at the drill site. The miners evacuated
shortly thereafter.
As relevant here, MSHA issued two orders to Peabody for
violating mine safety regulations during the methane
inundation. The first was for failing to deenergize the unit and
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disconnect power once methane concentrations exceeded
1.5%. See Order No. 9106663 (J.A. 39-40, 70-71); 30 C.F.R.
§ 75.323(c)(2)(ii). The second was for permitting other
work—i.e., authorizing miners to pull rods and plug the
borehole—when methane had not decreased to or below 1.0%.
See Order No. 9106664 (J.A. 41, 72); 30 C.F.R.
§ 75.323(c)(2)(iii). Both orders were designated as
“unwarrantable failures,” a designation MSHA applies to
aggravated conduct beyond ordinary negligence. MSHA also
determined that Butler was individually liable because he
knowingly authorized and carried out the violations. MSHA
proposed civil penalties against both Peabody and Butler.
The Secretary of Labor then petitioned an administrative
law judge (ALJ) for penalty assessments. The ALJ held an
evidentiary hearing and issued a consolidated decision and
order finding both violations to be unwarrantable failures and
imposing penalties on Peabody and on Butler individually as
Peabody’s agent. Peabody and Butler contested the orders
before the Federal Mine Safety and Health Review
Commission, which affirmed. Peabody and Butler then timely
petitioned for review in this court.
DISCUSSION
We review the Commission’s legal conclusions de novo
and findings of fact for substantial evidence. Knight Hawk
Coal, 991 F.3d at 1306. When interpreting a MSHA safety
standard, if “there is only one reasonable construction of [the]
regulation,” then “the court must give it effect, as the court
would any law.” Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019).
Peabody and Butler advance three principal arguments in
their petition. First, they contend that Peabody did not violate
MSHA safety standards by allowing a drill team to continue
working in a high-methane environment to remove rods and
8
attempt to plug the borehole. Second, they challenge the
unwarrantable failure determinations. Third, they contest
Butler’s individual liability for any violation, arguing that he
acted reasonably and in good faith to abate the methane hazard.
We hold that Peabody violated the applicable MSHA safety
standards. We further sustain the Commission’s
determinations that substantial evidence showed Peabody’s
violations to be unwarrantable failures and supported Butler’s
individual liability.
A.
Peabody first argues that it did not violate the MSHA
safety regulation prohibiting “other work” when methane
levels exceed 1.5% because the work it conducted—pulling
drill rods and attempting to plug the borehole—was intended
to stop the methane inundation. We hold that the no-other-
work provision unambiguously prohibited Peabody’s work
using an energized drill in those circumstances.
Recall that MSHA safety regulations impose three
requirements when methane levels exceed 1.5% in a return air
split: Mine operators must (i) withdraw everyone from the
affected area (except for certain exempt individuals),
(ii) deenergize equipment (other than specific intrinsically safe
equipment) and disconnect the power source, and (iii) permit
“[n]o other work” until methane levels fall below 1.0%. 30
C.F.R. § 75.323(c)(2). Recall also that Peabody challenges two
MSHA orders. The first was for failing to deenergize the drill
when methane exceeded 1.5%, in violation of the
deenergization-and-disconnection provision, subparagraph
(c)(2)(ii). The second was for permitting “other work”—that
is, pulling rods and attempting to plug the borehole—when
methane levels had not fallen below 1.0%, in violation of the
no-other-work provision, subparagraph (c)(2)(iii).
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Peabody challenges the finding of a violation only as to the
second order involving the no-other-work provision, having
conceded before the Commission that it violated the
deenergization-and-disconnection provision. The facts
underpinning that second order are largely undisputed: In an
area with methane levels fluctuating above 1.5%, Peabody
attempted to abate the methane by pulling drill rods with an
energized drill. The question before us is thus a legal one:
whether the no-other-work provision barred Peabody’s work
with an energized drill.
The Secretary urges that the bar against “other work”
prohibits all but work necessary to withdraw miners,
deenergize equipment, and disconnect power at the source.
Peabody counters that the provision should be read to allow
ventilation control and other work aimed at reducing methane,
like plugging the borehole. To bolster its argument, it points in
part to another provision of MSHA safety regulations requiring
“changes or adjustments [to] be made at once to the ventilation
system” in a return “when 1.0 percent or more methane is
present.” 30 C.F.R. § 75.323(c)(1) (emphasis added).
According to Peabody’s logic, the standard in paragraph (c)(1)
permits ventilation adjustments, as it broadly construes the
term, whenever methane is above 1%, even when it exceeds
1.5%.
We, like the Commission, conclude that “it is unnecessary
to fully define the categories of work” prohibited by the no-
other-work provision. Peabody Midwest Mining, 44 FMSHRC
at 522. Even assuming some ventilation adjustments might be
permitted when methane exceeds 1.5%, the MSHA regulations
plainly prohibit Peabody’s use of an energized drill to try to
plug the borehole and thereby lower methane levels. After all,
paragraph (c)(2), requiring the operator to conduct “[n]o other
work,” also requires the operator to withdraw miners and to
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deenergize and disconnect power. 30 C.F.R. § 75.323(c)(2)(i)-
(iii). Given the separate requirement for operators to
“deenergize[]” equipment and “disconnect[]” electric power
when methane levels exceed 1.5%, the no-other-work
provision must at minimum bar work with an electrically
powered drill. Id. § 75.323(c)(2)(ii). In other words, our
interpretation of the no-other-work provision “cannot conflict
with the plainly stated requirement in subparagraph (c)(2)(ii)
that all equipment be de-energized.” Peabody Midwest
Mining, 44 FMSHRC at 522.
Interpreting the no-other-work provision to at least
prohibit energized work is consistent with the standards’
purposes. MSHA safety regulations aim to protect miners from
methane, “the most dangerous gas encountered by miners
working underground.” Safety Standards for Underground
Coal Mine Ventilation, 61 Fed. Reg. 9764, 9777 (1996). They
“establish[] action levels” below the 5% explosive limit “to
permit appropriate actions to be taken by mine operators in
order to prevent an explosion.” Id. “Deenergizing or shutting
off” electrical equipment “protects miners by preventing th[at]
equipment from providing ignition sources.” Id. at 9778.
Permitting energized work when methane levels exceed 1.5%
would ill serve those purposes. Indeed, energized work in a
high-methane environment creates the very risk of explosion
that the MSHA safety regulations seek to avert.
Peabody protests that our interpretation of the no-other-
work provision renders the two orders “duplicative,” such that
it has been punished twice for the same act: not deenergizing
the drill. But MSHA orders and citations are not duplicative
“as long as the standards allegedly violated impose separate
and distinct duties.” Ky. Fuel Corp., 38 FMSHRC 1614, 1616
(2016). Here, the deenergization-and-disconnection provision
and the no-other-work provision imposed separate duties:
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Peabody had a duty to deenergize the drill, and it had a duty
not to use the drill to conduct any work. Even if Peabody had
for some reason left the drill energized, it could have still
avoided the second MSHA order by choosing not to continue
working with the drill within the mine. Similarly, Peabody
could have avoided the first violation by doing some form of
disallowed work that did not involve energized equipment.
Peabody’s violation of the no-other-work provision thus
encompasses “conduct . . . that was not already considered” in
its violation of the deenergization-and-disconnection
provision. Id. at 1617.
Finally, Peabody attempts to invoke a “diminution-of-
safety” or “greater-hazard” defense, arguing that
noncompliance with the regulations was safer than compliance.
A diminution-of-safety defense is generally available only
when a mine operator first petitions MSHA for a modification
of the standard, see 30 U.S.C. § 811(c), which Peabody agrees
it neither did nor had the time to do on the morning of July 23.
To raise such a defense without a petition for modification,
Peabody would have had to show that (1) the hazards of
compliance are greater than those of noncompliance,
(2) alternative means of protecting miners were unavailable,
and (3) a modification proceeding would have been
inappropriate. Westmoreland Coal Co., 7 FMSHRC 1338,
1341 (1985).
Peabody forfeited any such defense. Under the Mine Act,
“[n]o objection that has not been urged before the Commission
shall be considered by th[is] court, unless the failure or neglect
to urge such objection shall be excused because of
extraordinary circumstances.” 30 U.S.C. § 816(a)(1). Peabody
only glancingly alluded to the logic behind a diminution-of-
safety or greater-hazard defense in its post-hearing brief before
the ALJ and in a footnote in its brief before the Commission.
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“[A]t no point” did Peabody explain how it met the three
requirements for asserting such a defense without a petition for
modification. Marshall Cnty. Coal Co. v. FMSHRC, 923 F.3d
192, 205 (D.C. Cir. 2019). Because Peabody’s attempted
defense is too little too late, we do not consider it.
B.
Next, Peabody argues that neither order should have been
designated an “unwarrantable failure.” Under the Mine Act,
the Secretary may find certain violations “to be caused by an
unwarrantable failure” to comply with MSHA health or safety
standards. 30 U.S.C. § 814(d)(1). An “unwarrantable failure”
involves “aggravated conduct, constituting more than ordinary
negligence, by a mine operator in relation to a violation of the
Act.” Black Beauty Coal Co. v. FMSHRC, 703 F.3d 553, 560
(D.C. Cir. 2012) (quoting Jim Walter Res., Inc. v. Sec’y of
Labor, 103 F.3d 1020, 1025 (D.C. Cir. 1997)).
The Commission uses a multifactor test to determine
whether a violation stems from an unwarrantable failure. It
considers whether the violation posed a high degree of danger;
the extent of the violative condition; whether the violation was
obvious; the operator’s knowledge of the violation; the length
of time that the violation existed; the operator’s efforts in
abating the violative condition; and whether the operator was
on notice that greater efforts were necessary for compliance.
Id. at 560. “While an administrative law judge may determine,
in his discretion, that some factors are not relevant, or may
determine that some factors are much less important than other
factors under the circumstances, all of the factors must be taken
into consideration and at least noted by the judge.” Id. (quoting
IO Coal Co., 31 FMSHRC 1346, 1351 (2009)). The ALJ here
acknowledged Peabody’s good faith efforts to stanch the flow
of methane. But the ALJ found that those actions were not
13
reasonable where the violative conditions were highly
dangerous, extensive, obvious, known, and of sufficient
duration to constitute an unwarrantable failure.
We sustain the unwarrantable failure determinations. The
ALJ considered each factor, reasonably deeming one factor—
prior, similar violations providing notice of a need for greater
compliance efforts—to be irrelevant in the absence of any
evidence of past violations. Substantial evidence supports the
factual findings underpinning the unwarrantable failure
designations. Peabody’s conduct posed a high degree of
danger because “methane levels nearby [the energized drill]
exceeded five percent, creating the conditions that could have
led to combustion and a major accident.” Peabody Midwest
Mining, 44 FMSHRC at 523-24 (quoting 44 FMSHRC 377,
387 (2021)). The violation was extensive, exposing no less
than six miners to the risk of an explosion. The violation was
also obvious, as high methane levels set off at least three
methane spotters and caused the drill to shut off at least twice.
Furthermore, Peabody knew of the violative condition: Butler,
as Peabody’s agent, knew of multiple methane detectors
signaling high levels of methane, yet he approved continued
use of the drill, even directing that power to the drill be
maintained as other power was shut off. As for the duration of
the violative condition, the Commission rightly recognized that
“substantial evidence only supports a finding that energized
work was ongoing for approximately half an hour.” Peabody
Midwest Mining, 44 FMSHRC at 525. The 30-minute violation
may have been brief, but “the brief duration of a violative
condition . . . does not militate against a finding of
unwarrantable failure if the hazardous condition is ‘readily
distinguishable from other types of violations’ due to the ‘high
degree of danger’ it poses and its ‘obvious nature.’” Knight
Hawk Coal, LLC, 38 FMSHRC 2361, 2371 (2016) (quoting
Midwest Material Co., 19 FMSHRC 30, 36 (1997)). The
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obvious and highly risky methane exposures here meet that
standard.
The ALJ credited Peabody’s attempt to abate the influx of
methane as a mitigating factor in his unwarrantable failure
analysis. But, as the Commission correctly noted, the relevant
“[a]batement would consist of stopping work and de-
energizing.” Peabody Midwest Mining, 44 FMSHRC at 525
n.19. So the ALJ should have been asking whether Peabody
sought to “abat[e] the violative condition,” Black Beauty Coal
Co., 703 F.3d at 560 (quoting IO Coal Co., 31 FMSHRC at
1351)—that is, to abate the failure to stop work and to
deenergize equipment. Peabody instead continued work with
energized equipment. While Peabody sought to abate one
perceived hazard (the methane inundation), those efforts
created the violative condition (work with an energized drill in
the presence of six miners while methane concentrations
exceeded 1.5%) and the attendant risk of explosion.
Lastly, Peabody challenges the unwarrantable failure
determinations on the ground that it reasonably believed that it
was complying with the relevant safety standards. An
operator’s reasonable, good-faith belief that its cited conduct
was the safest method of compliance with the regulations can
be a defense to an unwarrantable failure determination. Cyprus
Plateau Mining Corp., 16 FMSHRC 1610, 1614-16 (1994).
But, while Peabody may have sincerely believed it was acting
safely, “no prudent operator would have believed that it was
reasonable” regulatory compliance to disregard the clear
prescriptions of the MSHA regulations and keep the drill
energized in a high-methane environment. Peabody Midwest
Mining, 44 FMSHRC at 526 n.20 (quoting 44 FMSHRC at
388). That is especially true given the well-known dangers in
combining elevated methane levels with a possible ignition
source.
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C.
We now turn to the decision to hold Butler, as a corporate
agent for Peabody, individually liable for the violations. Under
the Mine Act, corporate agents are liable for a safety violation
if they “knowingly authorized, ordered, or carried out [the]
violation.” 30 U.S.C. § 820(c). To be individually liable, an
agent must demonstrate “aggravated conduct,” not just
“ordinary negligence.” Freeman United Coal Mining Co. v.
FMSHRC, 108 F.3d 358, 363 (D.C. Cir. 1997) (quoting
BethEnergy Mines, Inc., 14 FMSHRC 1232, 1245 (1992)).
Under longstanding Commission precedent, an agent of an
operator may be liable where he is “in a position to protect
employee safety and health [and] fails to act on the basis of
information that gives him knowledge or reason to know of the
existence of a violative condition.” Kenny Richardson, 3
FMSHRC 8, 16 (1981).
Substantial evidence supports the Commission’s decision
to subject Butler to individual liability. Butler knew of the
violative condition: He knew that several spotters, including
his own, were reading “over range,” indicating methane levels
in excess of 5%, yet he personally asked that the drill remain
energized. Butler was also in a position to remedy the violation
and protect employee safety. He acknowledged that he was the
“number one man” on site and could order the miners to cut
power and stop pulling rods “if [he] felt that was needed.” Hr’g
Tr. 365-66 (J.A. 250-51). Instead of immediately and directly
abating the methane risk in the manner the regulation directs,
Butler authorized continued operation of the energized drill.
In contesting his liability, Butler argues that he acted in
good faith to address the hazard presented by the unplugged
borehole. Under Commission precedent, a good-faith belief in
the safety of the cited conduct can be a defense to individual
16
liability under 30 U.S.C. § 820(c) only if it is also reasonable
in the circumstances. See Lafarge Constr. Materials, 20
FMSHRC 1140, 1150 (1998). The Commission did not err in
rejecting Butler’s attempted defense. While Butler acted in
good faith to address the perceived methane hazard, taking
what he believed to be the best course in an emergency
situation, his belief in the safety of plugging the borehole was
unreasonable. Multiple methane sensors alarmed and the drill
shut itself down because methane had reached levels MSHA’s
regulations treat as posing extreme risk. Yet, Butler authorized
the miners to keep working despite the danger. As the
Commission recognized, “[b]y permitting miners to work with
energized equipment, Butler risked incurring the very hazard
section 75.323(c)(2) is intended to address, i.e., potential
ignition [in a] high-methane environment.” Peabody Midwest
Mining, 44 FMSHRC at 528.
* * *
For the foregoing reasons, we deny Peabody and Butler’s
petition for review.
So ordered.