MSHA Section 110(c) Investigations Agent of the Company Your Responsibilities & Liabilities

Transcription

1 MSHA Section 110(c) Investigations Agent of the Company Your Responsibilities & Liabilities 33 rd Annual South Central Joint Mine Health & Safety Conference April 8, 2015 Dallas, Texas 1

2 Presenter Jason Nutzman 3501 Pelham Road Suite 100 Greenville, SC Cell ^ Fax ^ jason.nutzman@dinsmore.com 2

3 Dinsmore uses reasonable efforts to include accurate, complete and current (as of the date posted) information in this presentation. The information herein speaks as of its date. Accordingly, information may no longer be accurate as the passage of time may render information contained in, or linked to, this presentation outdated. Dinsmore is not responsible or liable for any misimpression that may result from your reading dated material. This presentation is not a substitute for experienced legal counsel and does not provide legal advice or attempt to address the numerous factual issues that inevitably arise in any dispute. RESPONSIBLE ATTORNEY: Jason Nutzman 3

4 What We Will Be Covering Background of the Mine Act MSHA Section 110(c)/MSHA Section 110(d) What Causes a Section 110(c) Special Investigation? Who is an Agent? How to Handle a Special Investigation What Can Be Done to Prevent a Special Investigation? 4

5 Background of the Mine Act Where does MSHA Get its Authority? Federal Mine Safety and Health Act of 1977 Title 30 of the Code of Federal Regulations Part 50 Part 56 Part 57 Part 58 Part 70 Part 71 Part 72 Part 75 Part 77 Notification, Investigation, Reports and Records of Accidents, Injuries, Illnesses, Employment, and Coal Production in Mines Mandatory Safety and Health Standards Surface Metal and Nonmetal Mines Mandatory Safety and Health Standards Underground Metal and Nonmetal Mines Health Standards for Metal and Nonmetal Mines Mandatory Health Standards Underground Coal Mines Mandatory Health Standards Surface Coal Mines and Surface Work Areas of Underground Coal Mines Health Standards for Coal Mines Mandatory Safety Standards Underground Coal Mines Mandatory Safety Standards Surface Coal Mines and Surface Work Areas of Underground Coal Mines 5

6 Background of the Mine Act MSHA employs a graduated enforcement scheme. The scheme is designed, in theory, to provide additional regulatory muscle as a mine operator s conduct becomes more egregious. 6

7 Background of the Mine Act MSHA s Graduated Enforcement Scheme 107(a) Section 8 Miner Act Flagrant Violation 103(k) 104(e) Control Order Pattern of S&S Violations 104(d)(1) 104(d)(1) Order 104(d)(2) Withdrawal Order Imminent Danger Order 104(b) Citation 104(a) Order 104(a) Non S&S S&S 7

8 Background of the Mine Act Section 104(d) Unwarrantable Failure Citations/Orders Unwarrantable failure citations and orders are NOT based on negligence by the mine operator. Negligence is defined as inadvertent, thoughtless, or inattentive. Unwarrantable failure citations and orders are based on aggravated conduct on the part of the mine operator. If not, they are invalid as a matter of law. 8

9 Background of the Mine Act Section 104(d) Unwarrantable Failure Citations/Orders The Commission has defined aggravated conduct as conduct on the part of an operator which displays: Reckless disregard; Intentional misconduct; Indifference; or A serious lack of reasonable care. 9

10 Background of the Mine Act Section 104(d) Unwarrantable Failure Citations/Orders The Commission examines the following factors to determine if the mine operator exhibited aggravated conduct: The extent of the violative condition; Length of time the condition existed; What efforts were made to abate the violative condition; Whether the violation was obvious; Whether the operator had been placed on notice that greater efforts were necessary for compliance; or The danger posed by the violative condition. 10

11 Background of the Mine Act Section 104(d) Unwarrantable Failure Citations/Orders Ramifications 104(d) Sequence; Mandatory Minimum Penalties; Special Investigations under Section 110 of the Mine Act; Potential Pattern of Violations; and Flagrant Assessments 11

12 Background of the Mine Act Section 107(a) Imminent Danger Orders If, upon any inspection or investigation of a coal or other mine an inspector finds that an imminent danger exists (as defined in Section 3(j) of the Mine Act) he shall determine the extent of the area affected and issue an order requiring all persons be withdrawn and prohibited from entering the area until the inspector determines the conditions or practices which caused such imminent danger no longer exist. 12

13 MSHA Section 110(c) Section 110(c) of the Mine Act states: Whenever a corporate operator violates a mandatory health or safety standard or knowingly violates or fails or refuses to comply with any order issued under this act or any order incorporated in a final decision issued under this Act, expect an order incorporated in a decision issued under subsection (a) or section 105(c), any director, officer, or agent of such corporation who knowingly authorized, ordered, or carried out such violation, failure, or refusal shall be subject to the same civil penalties, fines, and imprisonment that may be imposed upon a person under subsection (a) and (d). 13

14 MSHA Section 110(c) Knowing Standard A person has reason to know when he has such information as would lead a person exercising reasonable care to acquire knowledge of the fact in question or to infer its existence. Kenny Richardson, 3 FMSHRC 8 (1981). Thus, a person acts knowingly if he either knew, or had reasons to know that an unsafe or violative condition existed and he failed to act. Section 110(c) liability is premised upon aggravated conduct. The agent s conduct must go beyond negligence and be more than high negligence. 14

15 MSHA Section 110(d) Criminal Prosecution MSHA has the authority to bring criminal prosecutions under the Mine Act against a director, officer, or agent. To succeed in a criminal prosecution under Section 110 MSHA must prove a willful violation of a mandatory health and safety standard. 15

16 MSHA Section 110(d) Criminal Prosecution A person acts willfully when an act is done knowingly and purposely by a [person] who, having a free will and choice, either intentionally disobeys the standard or recklessly disregards its requirements. U.S. v. Consolidation Coal Co. & Kidd, 504 F.2d 1330, 1335 (6th Cir. 1974). MSHA must prove its criminal case beyond a reasonable doubt. 16

17 What Causes a Section 110(c) Special Investigation? According to MSHA s Program Policy Manual, the investigation of a potential Section 110(c) case is initiated at the request of the District Manager as a result of one of the following: A mine accident; A complaint (such as false reporting or equipment misrepresentation); A review of citations/orders for possible knowing or willful violations. 17

18 What Causes a Section 110(c) Special Investigation? According to MSHA s Program Policy Manual, the investigation of a potential Section 110(c) case is initiated at the request of the District Manager as a result of one of the following: Each Section 104(a) citation issued which contributed to the issuance of a Section 107(a) imminent danger order of withdrawal; Each Section 104(d) citation/order which is identified as S&S and the negligence is marked high or reckless disregard; and Each citation issued for working in violation of a withdrawal order. 18

19 What Causes a Section 110(c) Special Investigation? What have we seen regarding MSHA Special Investigations? Often begins with elevated enforcement actions by MSHA during regular E01 inspections, surprise impact inspections, accident investigations, or anonymous safety complaints. There appears to be an increase of investigations in metal/nonmetal. General increase following the UBB disaster in order to better target chronic violators. 19

20 Who is an Agent? Section 3(e) of the Mine Act defines agent as: Any person charged with responsibility for the operation of all or a part of a mine or the supervision of the miners in a mine. In certain cases this can also include hourly employees who direct the workforce. In considering whether an employee is an operator s agent, the Commission has relied, not upon the job title or the qualifications of the miner, but upon his function, [and whether it] was crucial to the mine s operation and involved a level of responsibility normally delegated to management personnel. Ambrosia Coal, 18 FMSHRC 1552, 1560 (Sept. 1996). 20

21 Who is an Agent? The important distinction between rank-and-file employees and agents of the operator. The Commission has recognized that the negligence of an operator s rank-and-file miner is not imputable to the operator for the purposes of penalty assessment or Section 104(d) unwarrantable failure determinations. Whayne Supply Co., 19 FMSHRC 447 (Mar. 1997) In contrast, the negligence of an operator s agent is imputable to the operator for penalty and unwarrantable failure purposes. Martin Marietta Aggregates, 22 FMSHRC 633 (May 2000). 21

22 Who is an Agent? Commission Cases Finding No Agency Relationship: U.S. Coal, Inc., 17 FMSHRC 1684 (Oct. 1995) Electrician was not an agent even though he was authorized to tell miners to stop working on dangerous equipment and to remove such machinery from service because he was performing routine duties not encompassing managerial responsibility or the supervision of other miners at the time of the issuance of the enforcement action. Whayne Supply Co., 19 FMSHRC 447 (Mar. 1997) Experienced repairman who needed little supervision and helped less experienced employees was not a supervisor because he was not exercising managerial or supervisory responsibilities at the time the negligent conduct occurred. REB Enterprises, Inc., 20 FMSHRC 203 (Mar. 1998) Leadman on highwall was not an agent because he did not have authority to hire and fire employees, did not assign equipment to employees, and was not given any instruction regarding discipline to employees. Martin Marietta Aggregates, 22 FMSHRC 633 (May 2000) Deceased miner was not agent of operator because the narrow authority given to him to assign specific tasks under close management supervision did not constitute the requisite level of supervisory responsibility. 22

23 Who is an Agent? Commission Cases Finding Agency Relationship: Rochester & Pittsburgh Coal Co, 13 FMSHRC 189 (Feb. 1991) Commission concluded that in carrying out required examination duties for an operator, an examiner may be viewed as being charged with responsibility for the operation of part of a mine, and thus an agent of the operator. Hyles v. All American Asphalt, 21 FMSHRC 34 (Jan. 1999) Leadmen who acted in a supervisory capacity and who were in a position to affect safety were agents of the operator. Nelson Quarries, Inc., 31 FMSHRC 318 (Mar. 2009) Employees agents of the operator when it was found that they (1) were responsible for conducting daily workplace examinations, (2) directed work, (3) identified themselves as functioning in supervisory roles, and (4) exercised managerial conduct at the time of the alleged violations. 23

24 Who is an Agent? Factors to Consider: Remember, the focus is on the miner s function, not his job title. Examine whether the miner s function involved responsibilities normally delegated to management personnel and whether his responsibilities were crucial to the mine s operation: Ability to hire/fire, evaluate, and discipline employees; Ability to change an employee s job title without prior approval; Ability to direct workforce; Whether they identify themselves as supervisors; Whether they are required to conduct workplace examinations; Whether they exercised managerial conduct at the time of the alleged violation; and Whether they have ability to take actions to abate citations/orders. 24

25 How to Handle a Special Investigation Assume that any Section 104(d) unwarrantable failure citation/order may be sent for possible Section 110(c) special investigation thus: Investigate all Section 104(d) enforcement actions; Consider securing outside counsel to preserve privileges; Identify and interview all management and hourly witnesses; Secure and preserve documents and tangible items Obtain other supporting evidence photographs, statements, notes, maps, etc.; and Send FOIA request for inspector s notes. Conference all elevated enforcement actions. Consider filing a Notice of Contest under Section 105(d) and possibly request an expedited hearing. Challenge the penalty assessment once issued by the Office of Assessments. 25

26 How to Handle a Special Investigation During investigations MSHA investigators typically speak to hourly as well as supervisory employees either on or off company property. The company may not interfere with investigations, but can insist that the investigation not be conducted in ways that will be disruptive. The company does not have to permit employees to be interviewed on company time, but any policies in this regard must be applied on a non-discriminatory basis. The company is permitted to provide legal assistance to any supervisor or other company representative involved in an investigation, and it is a good policy to do so. 26

27 How to Handle a Special Investigation Supervisors and others involved in an investigation have important rights that can be lost if not timely asserted. It is very important that you be fully advised before decisions are made regarding whether, when and how to proceed. Investigators often discourage the company and individuals from obtaining assistance because they want to proceed unimpeded. It is never advisable, however, to proceed without legal counsel. 27

28 How to Handle a Special Investigation Investigators are specially trained to investigate for either civil or criminal liability of both a company and individuals. They may or may not identify themselves as investigators and they try their hardest to become your friend. You must always be on your guard when talking to an investigator because he can come after you individually for either civil or criminal liability. 28

29 How to Handle a Special Investigation Investigators are trained to be friendly so that people will be encouraged to speak freely. You should avoid being misled into proceeding without being properly advised and represented. Unlike inspections, all investigations, with the exception of certain aspects of accident investigations, can be postponed, and this can be done without adverse consequences. 29

30 How to Handle a Special Investigation Tricks of investigators (directly from MSHA s investigation handbook) 30

31 How to Handle a Special Investigation Tricks of investigators (directly from MSHA s investigation handbook) 31

32 How to Handle a Special Investigation Tricks of investigators (directly from MSHA s investigation handbook) 32

33 How to Handle a Special Investigation Tricks of investigators (directly from MSHA s investigation handbook) This is very important even if you do not give the investigator permission to write down what you say, he will write it down as soon as the interview is over. This is called the Memorandum of Interview and is treated by MSHA like a witness statement. 33

34 How to Handle a Special Investigation Before settling any enforcement action issued to the company where there is a possibility of a Section 110(c) petition being filed against an agent of the company attempt to get written confirmation that the Section 110(c) investigation is complete and that no Section 110(c) case will be filed. 34

35 What Can Be Done to Prevent a Special Investigation? Strategies to avoid a special investigation: Training/Re-Training of Foreman/Leadmen: Mine Safety Regulations Citation investigation/pre-assessment awareness Safety policies/promoting strong safety culture. 35

36 What Can Be Done to Prevent a Special Investigation? Strategies to avoid a special investigation: Stressing pre-shift, on-shift, and pre-operational examinations. Reporting unsafe conditions or behaviors. Taking action on safety complaints and reported hazards and conditions. Documenting actions taken. Enforce safety policies/regulations. Discipline persistent and consistent. 36

37 What Can Be Done to Prevent a Special Investigation? Strategies to avoid a special investigation: Conference all 104(d) citations/orders. Pre-assessment reduction of gravity or negligence. Review documentation for problems. Consider involving counsel early in process. 37

38 Questions? Jason Nutzman 3501 Pelham Road Suite 100 Greenville, SC Cell ^ Fax ^ jason.nutzman@dinsmore.com 38