CHAPTER 13. Resolution of MSHA Disputes -- The Need for Change and Suggestions. for A More Productive Approach

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1 CHAPTER 13 Resolution of MSHA Disputes -- The Need for Change and Suggestions for A More Productive Approach Mark N. Savit Jackson & Kelly Washington, D.C. and Michael F. Duffy Counsel Federal Mine Safety and Health Review Commission Washington, D.C. Synopsis Introduction Statutory and Regulatory Scheme. [1]--Assessment Authority Under the Mine Act. [2]--Secretary's Procedures for Assessing Civil Penalties. [a]--regular Assessments. [b]--single Penalty Assessments. [c]--special Assessments. [d]--the Assessment Process. [3]--The Notice of Contest The Litigation Explosion. [1]--Broader Coverage Under the 1977 Act. [2]--"Excessive History" Policy.

2 [3]--Pattern of Violation Regulations. [4]--Statutory Increase in Civil Penalty Levels. [5]--Liability of Corporate Agents Under Section 110(c). [6]--"Mega-Cases." [7]--The Incentive to Litigate Current Avenues for Informal Dispute Resolution: Procedural Paralysis Suggestions for Improvement. [1]--Reconciling the New Approach with Statutory Time Constraints. [2]--Early Involvement of the Solicitor's Office. [3]--Training of Conference Officers. [4]--Resolution Teams. [5]--Self-Assessments. [6]--Agency Oversight of Alternative Dispute Resolution Benefits of the Informal Settlement Procedures Introduction. With the passage of the Federal Coal Mine Health and Safety Act of 1969 (1) (Coal Act or 1969 Act), Congress created one of the most pervasive regulatory regimes ever imposed on a segment of American business. Passage of the Federal Mine Safety and Health Act of 1977 (Mine Act, 1977 Act, or Act) (2) expanded this regime to include all coal and noncoal mines, whether operated by the private or public sector. The 1977 Act also adopted the split-enforcement model whereby mandatory safety and health standards are promulgated (3) and enforced (4) by the Secretary of Labor through the Mine Safety and Health Administration (MSHA). The Secretary's enforcement actions are challenged and adjudicated (5) before the independent Federal Mine Safety and Health Review Commission (Review Commission or Commission). (6) One of the stated purposes of the 1969 and 1977 Acts was 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, and in order to prevent occupational diseases originating in such mines." (7) Remedial statutes such as the Mine Act allow the federal government considerable latitude in securing widespread compliance with the safety and health mandates of Congress. A significant component of the Mine Act's remedial approach to occupational safety and health has been the mandatory civil penalty. Few would dispute that the civil penalty sanction, when properly used, can encourage voluntary compliance with the Act and the mandatory standards. When, however, the finite resources of government, industry, and labor are expended unnecessarily on the civil penalty process at the expense of devising "means and

3 measures for improving... working conditions," (8) a critical review of the current system is warranted. Accordingly, this Chapter first describes the current explosion of litigation under the Mine Act, as well as the procedural and institutional causes of the crisis. Thereafter, it outlines a proposal for the informal resolution of disputes associated with the assessment of civil penalties. Finally, it demonstrates the safety and health benefits to be gained from the alternative means of dispute resolution proposed by the authors Statutory and Regulatory Scheme. [1]--Assessment Authority Under the Mine Act. A key weapon in the arsenal available to the Secretary of Labor is the mandatory civil penalty system. Under Section 110(a) of the Mine Act, (9) the operator of a mine in which a violation occurs is strictly liable for the violation and is subject to the assessment of a civil penalty. Civil penalties have been imposed on operators even when the violation resulted from the idiosyncratic and defiant behavior of a rank-and-file employee (10) or when the violation was committed by an independent contractor. (11) Under Section 110(b) of the Act, (12) a mine operator may be held liable for a penalty assessed for failure to correct a violation within the time specified in the underlying citation. (13) Agents of corporate operators who knowingly authorize, order, or carry out an operator's violation are individually liable for civil penalties under Section 110(c) of the Act. (14) A constitutional challenge to Section 110(c) on due process and equal protection grounds has been rejected. (15) Mandatory civil penalties for operators' violations were first introduced in the 1969 Coal Act, with the maximum penalty set at $10,000. (16) The penalties for failure to abate a violation were set at a maximum of $1,000 per day for each day the violation went uncorrected. (17) These maximum levels were retained in the 1977 Act and made applicable to metal/nonmetal mines as well. (18) As part of the Omnibus Budget Reconciliation Act of 1990 (19) (OBRA), known more prominently for then President Bush's accession to a tax increase, Congress raised the maximum civil penalty for operators' violations from $10,000 to $50,000. Concurrently, the maximum penalty for failure to abate a violation was raised from $1,000 per day to $5,000 per day. The maximum civil penalty for a corporate agent found to have knowingly authorized, ordered or carried out the operator's violation was also increased from $10,000 to $50,000. [2]--Secretary's Procedures for Assessing Civil Penalties. Assessment of civil penalties under the Mine Act is governed by the Secretary's regulations. (20) Penalty amounts are set by three different procedures: regular assessments, (21) single penalty assessments, (22) and special assessments. (23) [a]--regular Assessments. Regular assessments, which account for the vast majority of penalties generated under the Act, are derived from a formula based on six statutory criteria used to evaluate a violation: (1) the size of the operator's business, (2) the operator's history of previous violations, (3) the degree of negligence surrounding the violation, (4) the gravity of the violation, (5) the good faith demonstrated by the operator in rapidly abating the violation, and (6) the effect of the penalty on the operator's ability to continue in business. (24)

4 The various criteria are assigned points, which, in the aggregate, correspond to a predetermined dollar figure comprising the assessed civil penalty. Points for the degrees of negligence and gravity and for the good faith exhibited by the operator in abating the violation are determined from the issuing inspector's findings as set forth in the citation or order. The size of the operator is determined from data required to be filed quarterly by all operators. (25) Coal operators are measured by tonnage produced, while noncoal operators are measured by total employee hours worked. (26) An operator's history of previous violations, stated in terms of violations per inspection day during the previous 24 months, is maintained by MSHA's Office of Assessments. (27) Information regarding the effect of a penalty on the operator's ability to continue in business is not maintained by MSHA. Ability to pay is assumed unless the operator provides evidence to the contrary to the MSHA District Manager in the course of the assessment process. (28) [b]--single Penalty Assessments. MSHA introduced the single penalty assessment in 1983, in response to Congressional and industry complaints that too much time and too many resources were being devoted to the processing of penalties for non-serious violations. (29) Providing additional impetus to the single penalty concept was the Review Commission's decision in Secretary of Labor v. National Gypsum Co. (30) In National Gypsum, the Commission distinguished between "significant and substantial" ("s&s") violations and less serious violations by defining the former as violations that are reasonably likely to result in a reasonably serious injury or illness. The single penalty assessment, as originally designed, consisted of a $20.00 penalty for those violations that were not reasonably likely to result in a reasonably serious injury or illness and that were abated within the time allowed by the inspector. As will be discussed below, (31) MSHA raised the $20.00 level to $50.00 to coincide with the 1990 overall increase in maximum civil penalties effectuated by OBRA. (32) As a result of an extraordinarily tardy challenge to the 1983 regulation, (33) however, and subsequent litigation over the means of implementing the court's disposition of that challenge, (34) the Secretary promulgated an amendment to the single penalty provision providing a larger penalty when the operator exhibits an "excessive history" of both "s&s" and "non-s&s" violations. (35) [c]--special Assessments. When the Secretary determines that conditions surrounding a violation do not lend themselves to evaluation under the regular penalty assessment formulas or the single penalty approach, the violation will be determined through the special assessment process. The regulations governing special assessments refer specifically to violations resulting in death or serious injury, violations caused by the operator's unwarrantable failure to comply with a cited standard, (36) violations creating an imminent danger to miners, (37) or "violations involving an extraordinarily high degree of negligence or gravity or other unique aggravating circumstances." (38) Special assessments also arise when the type of violation charged is unique. Examples include operating a mine in the face of a closure order, denying an MSHA inspector access to the mine, or violating the Act's anti-discrimination provision. (39) Lastly, special assessments are used where corporate agents are charged with violations under section 110(c) (40) since the regular assessment criteria would be inappropriate. [d]--the Assessment Process.

5 Since the passage of the 1969 Coal Act, the process by which a citation or order is eventually assigned a penalty assessment has undergone various revisions. These revisions have been made by amendment of the civil penalty regulations, by the agency's own program policy memoranda, and by structural changes undertaken by various Assistant Secretaries seeking to implement their own approaches to administering the Act. (41) Under the current regulations, adopted in 1982, once an MSHA inspector completes an inspection of the mine, the operator, the miners' representative, or both, are given the opportunity to review each citation and order issued in the course of the inspection. (42) This review process has come to be known as the close-out conference. Any affected party seeking further review of the inspector's enforcement action, or to submit additional information regarding an alleged violation, may request a safety and health conference with the District Manager or his designee within 10 days after the citation or order has been issued. (43) The decision to grant a request for a safety and health conference lies solely within the discretion of the District Manager. (44) On the basis of the safety and health conference and any information submitted by the parties, the District Manager or his designee may modify the citation or vacate the action if the facts warrant a finding that no violation occurred. (45) All citations that have been abated and all orders, including those discussed at the safety and health conference, are to be referred promptly to MSHA's Office of Assessments. (46) In turn, the Office of Assessments is directed to use the citations or orders, along with the inspector's evaluation, as the basis for determining the appropriate amount of the civil penalty. (47) The citation form used by the inspector was also revised in 1982 to show gradations of gravity and negligence and the degree of good faith abatement of the violation. These evaluations correspond directly to the regular assessment criteria set forth in the regulations. (48) For instance, with respect to the gravity criterion, the citation specifies the likelihood of occurrence of an injury in a range from "no likelihood" to "occurred," and the number of miners potentially affected, from 0 to 10 or more. (49) The findings translate to penalty points that are then factored into the formula to produce a penalty amount. (50) [3]--The Notice of Contest. Once a civil penalty assessment has been determined, a notice of proposed penalty is sent to the operator. On receipt of that notice, the operator has 30 days to pay the penalty or notify the Secretary that it intends to contest the proposed penalty. (51) This notice is usually accomplished by means of a pre-printed form (the so-called "blue card") sent to the operator with the notice of proposed penalty. (52) During the proceeding contesting a civil penalty, (53) the operator may also challenge the fact of violation and any special findings contained in the underlying citation or order. An operator may even challenge whether the citation was significant and substantial or caused by the operator's unwarrantable failure to comply with the Act or the cited standard. (54) It should be noted that an operator may contest a citation or order, or any special findings contained therein, within 30 days after its issuance. (55) The operator may also contest any modification of the citation within 30 days after the modification is issued. However, it is unclear whether the operator may challenge the underlying citation during this proceeding or must wait until the assessed penalty is determined and proposed. (56) The filing of the notice, however, raises certain jurisdictional issues that are addressed more

6 fully below The Litigation Explosion. In the first 12 years following passage of the Act, the amount of litigation before the Review Commission grew relatively steadily until the case load approached approximately 1,000 cases per year. In the last several years, however, the number of cases, as well as the rate of increase, has grown so fast that the entire adjudication system may be on the verge of breakdown. [1]--Broader Coverage Under the 1977 Act. The seeds of the litigation explosion were sown by the passage of the 1977 Act itself. First, the Act placed mandatory penalties on noncoal mines, which previously had been regulated by a separate statute. Thus, several large and relatively discrete industries (57) were brought under a much more stringent regulatory scheme than they had ever experienced. In addition to increasing the number of entities subject to the Act, (58) requiring penalty settlements to receive Commission approval (59) assured that the volume of litigation would increase exponentially. [2]--"Excessive History" Policy. After the initial surge of litigation owing to the broader sweep of the 1977 Act, the case load, as a percentage of total citations, remained relatively constant until approximately (60) In 1990, however, several developments caused the percentage of citations contested before the Commission to increase dramatically. First, on May 29, 1990, MSHA issued a "Program Policy Letter" implementing a system of increased civil penalty assessments for mine operators with an "excessive history" of violations. (61) The effect of this action was to add an automatic "surcharge" on every penalty assessed against an operator whose number of citations per inspection day exceeded the industry average. (62) [3]--Pattern of Violation Regulations. In addition to the penalties imposed via the "excessive history" policy, 1990 also brought the advent of the Pattern of Violations regulations. (63) The Pattern of Violations regulations apply to operators who have a history of (1) repeated violations of the same standard, (2) repeated violations of standards related to the same hazard, or (3) repeated significant and substantial violations caused by unwarrantable failure to comply. (64) These operators and operators who demonstrate certain other characteristics related to the number, variety, nature, and severity of previous citations, and those who experience higher accident, injury, or illness rates, (65) are subject to the issuance of a withdrawal order any time a "significant and substantial" (66) violation is cited. Under the regulations, "s&s" citations continue to result in withdrawal orders until the operator goes through a complete inspection without an "s&s" citation. (67) [4]--Statutory Increase in Civil Penalty Levels. Another chain of events was put in place in 1990 that increased the incentive to challenge citations. In response to the OBRA of 1990, in which Congress increased the maximum civil penalty from $10,000 to $50,000, MSHA increased the regular penalty levels derived from its penalty assessment formula. (68) The rules eventually adopted by MSHA had the overall effect of raising the lowest assessment by approximately 150% and incrementally raising higher assessments up to the 500% increase in the maximum penalty authorized by Congress. (69)

7 Although promulgated in late January, 1992, the revised assessment formula did not become effective until March 1 of that year. At present, it takes approximately three months following the issuance of a citation for an operator to receive a notice of proposed assessment if the regular assessment formula is used. Operators, therefore, probably did not start to receive the increased assessments until the middle of In addition, another 105 days may elapse between the receipt of the proposed assessment and the institution of proceedings before the Commission. (70) Thus, it is likely that MSHA's increase in assessment levels has yet to be reflected in the statistics cited below. [5]--Liability of Corporate Agents Under Section 110(c). Although it has been available since the passage of the 1969 Coal Act, one further enforcement tool has only recently taken on a significant rule. Under Section 110(c) of the Act, (71) any director, officer, or agent of the operator who knowingly authorizes, orders, or carries out a corporate operator's violation may be liable for the same civil and criminal penalties that may be imposed upon that operator. As a result of this language, an operator's acquiescence in certain citations could impair the ability of management employees to defend themselves from further enforcement actions stemming from the same alleged violation. Until recently, the imposition of Section110(c) sanctions was a relatively rare event and the penalties imposed were generally quite low. In the last two years, however, the number of these cases has increased dramatically with the average assessment rising just as rapidly. (72) [6]--"Mega-Cases." MSHA seems to be increasingly willing to initiate aggressive enforcement actions against large numbers of operators, with implications that go far beyond the scope of routine citations issued under Section 104(a) (or, for that matter, Section 104(d)) of the Act. The most recent example is the so-called "abnormal white center" or "AWC" enforcement cases. The AWC cases arose when, after several years of investigation, MSHA asserted that abnormally light colored areas in the center of cassettes used to sample respirable dust in underground coal mines were positive evidence that the cassettes had been tampered with in violation of MSHA's regulations. (73) As a result, MSHA simultaneously issued approximately 5,400 citations (one for each allegedly tampered cassette) at approximately 935 mines operated by hundreds of separate companies. The seriousness of the allegations, coupled with the sweeping nature of the action, galvanized the industry. This action alone virtually doubled the Commission's caseload -- straining the Commission's already inadequate resources even further. (74) While the proceedings have been consolidated for some limited, preliminary purposes, a very real possibility remains that hundreds, perhaps thousands, of separate trials will be required to resolve all of the pending cases. (75) The "mega-case" is a recent phenomenon. While it may be rare, it is by no means unique. Two similar mega-cases arose over thousands of penalties assessed under the Secretary's Excessive History policy. (76) Though MSHA has excluded "mega-cases" from its analysis of the rising rate of citation and assessment challenges, these cases cannot be ignored. They are an inevitable result of the evolving enforcement system. (77) While each of the "mega-cases" arose from a unique set of circumstances, MSHA's newly aggressive posture and the much heightened enforcement consequences now facing operators, suggest more mass enforcement cases, as well as more mass challenges, in the future. [7]--The Incentive to Litigate.

8 The upward spiral in both monetary and non-monetary penalties, coupled with an aggressive enforcement posture, will continue to push operators toward closer and closer pre-payment scrutiny of the citations they receive and the penalties assessed against them. For instance, both the excessive history penalties and the pattern of violation sanctions are based on an operator's history of violations during an historical period preceding the decision to impose the sanctions available under either program. (78) In both cases, the historical data may include only those citations and orders that have become final during the review period. (79) Thus, both the excessive history and pattern of violation regulations create a strong incentive to challenge any citation that appears vulnerable in any respect, even though the proposed assessment on that particular citation may not be monetarily significant. As a result, the incidence of citation challenges before the Commission doubled in 1990 alone, from its historic pre-1990 average of 3% to approximately 6% of all citations and orders issued. (80) The rate of challenge did not stop there, however. As more and more operators became aware of the cumulative consequences of allowing citations and orders to become final, the rate of challenge rose still further -- to 10.5% of all citations through 1991 and 9% through mid (81) As the consequences of MSHA's actions are more widely and deeply felt, the rate of challenge will rise inexorably. The mechanisms created by the drafters of the 1977 Act for resolving these challenges, both formal and informal, were not intended to cope with the current caseload, let alone the increases which must inevitably follow. Not only are these mechanisms riddled with bottlenecks and incentives to file cases that are not intended to be litigated, they contain no "safety valves" to cope with sudden surges in the caseload created by "mega-cases." Absent a radical reconstruction of these mechanisms, the system could easily collapse of its own weight Current Avenues for Informal Dispute Resolution: Procedural Paralysis. Once a penalty has been challenged, the Commission's jurisdiction is invoked. The conventional view has been that there can be no resolution of the dispute absent Commission approval. (82) That conventional view is open to challenge. Nevertheless, the perceived statutory restraint of formal settlement proceedings before the Commission severely restricts the parties' ability to achieve informal resolution. Even where mechanisms exist by which informal resolution can be pursued, they have not provided an effective means of addressing the full range of disagreements among the parties. Ironically, the most formal mechanism for resolving disputes, other than litigation before the Commission, is the ostensibly "informal" safety and health conference. (83) In pure theory and as originally conceived, (84) this safety and health conference should provide an immediate "escape valve," allowing the MSHA District Manager or his designee to vacate any citation or order that has been issued in error. In practice, however, the conference plays a substantially more limited role. In the first place, even though the conference must be requested within 10 days of receipt of the citation, MSHA is under no compunction to hold the conference within any set time period. This is particularly troublesome since it is often the case that the conference cannot be scheduled, or a decision made, until more than 30 days after the citation has been issued and, thus, the time for contesting the citation or order before the Commission will expire. (85) Of course, a "protective" notice of contest can be filed pending the outcome of the conference. However, in addition to defeating the purpose of having the conference, it raises two potential problems. First, once litigation is commenced, MSHA may no longer wish to go through with the conference, preferring instead to conduct all further discussion through counsel. (86) Second, should the matter be resolved through an informal conference after litigation has been commenced at the Commission, it is not at all clear that the

9 litigation may be terminated without Commission approval of some sort. The language of the Mine Act clearly requires that any compromise of a penalty must receive Commission approval. (87) Yet, the authority of the Commission with regard to the compromise, modification, or vacation of a citation after contest proceedings have been filed is murky. Since the contest proceeding is initiated by the operator (rather than the Secretary, as in penalty proceedings), it would appear that the operator should be free to ask for a voluntary dismissal. However, even that action may be taken only by motion, which, it would seem, clearly gives rise to the Commission's plenary authority to oversee the actions of MSHA. Based on its prior decisions, the idea that the Commission might actually put a contestant to trial even though it had moved to withdraw is a relatively close fetch. In the past, the Commission has made it clear that it may disapprove the Secretary's motion for withdrawal of a penalty proceeding, even where the Secretary has determined that there was no violation and has vacated the citation. (88) Recently, the Commission also has reaffirmed its position that it has a right to review motions to withdraw both the Secretary's proposals for penalty and operator's notices of contest, even when the motions are based on the ground that the penalties have been paid in full. (89) Although Section 820(k) is cited (in part) as the basis for the Commission's decisions on both penalty cases and notices of contest, this basis may be erroneous. Once a citation has been vacated, the Secretary's jurisdiction to assess a civil penalty is removed. Thus, any penalty that may have been assessed is voided because the penalty (rather than the citation) forms the basis of the Commission's review and approval powers. The Commission no longer retains any statutory jurisdiction over the pending action except as necessary to dismiss the proceeding. (90) A similar flaw infects the Commission's reasoning regarding its power over fully paid citations. Clearly, there is no statutory basis on which the Commission may exercise authority over penalties that are fully paid but not contested. The power to propose the penalty rests solely with the Secretary. (91) Should the operator wish to contest the penalty, initial notice is to be provided to the Secretary, not the Commission. (92) Once the penalty has been contested before the Commission, the Commission's approval authority extends only to the "compromise, mitigation or settlement" of the penalty. (93) Where the penalty has been paid fully and unconditionally it surely has not been "compromised," or "mitigated," and, arguably, it has not been "settled." The Commission's jurisdiction to review the Secretary's action in accepting full payment is, therefore, subject to question. In any event, Commission precedent may be fairly read to imply that the Commission retains the power to examine the compromise or vacation of contested citations even if no penalty has been assessed. This situation forces the parties to attempt to resolve disputes of potentially wide ranging effect within an extremely short time frame or submit their nego-tiations to the scrutiny of the Commission. In addition to the strictures placed on the informal conference procedure by current Commission practice, the informal conference may also be subject to other structural defects. In virtually every Coal District, and increasingly in Metal-Nonmetal Districts, informal conferences are conducted by "conference officers." In many instances, the use of conference officers expedites the process, making it easier to avoid the timing problems. However, the conference officer may not be fully trained, prepared, or authorized to deal with the wide array of legal, factual, and technical arguments he or she may face. (94) Assuming that the matter is not disposed of at the informal conference and that no Notice of Contest is filed, the current practice is for all parties to do nothing until a penalty is assessed or a "special investigation" begun. (95) This results in a period of approximately 6 to 18 months during which no attempts at formal or

10 informal resolution take place. This situation is significantly exacerbated when a special investigation is instituted. Then, it is virtually impossible to discuss the merits of the underlying citation until the investigation has been completed and a decision made regarding the issuance of a penalty. Although there are internal timetables intended to speed it along, the process is often exceedingly slow, commonly taking a year or more to be completed. (97) During this period, little or no progress is made toward the resolution of the underlying issues. At the same time, resources are often wasted preparing for unnecessary litigation or responding to an investigation that is doomed to fail. The only action that can initiate further movement toward resolution is the filing of Commission proceedings, the very result that informal resolution is undertaken to avoid. Finally, even if one is successful in convincing MSHA that a citation should be vacated, there is currently no way to ensure that the decision will have any binding effect on future enforcement policy. When a citation is vacated as the result of a settlement, current MSHA practice provides no assurance that the same condition will not be cited again during a subsequent inspection. (98) Since the vacation of a prior citation is not necessarily a complete defense to a subsequent citation issued in identical circumstances, (99) this assurance may be important in securing a satisfactory settlement, especially where permanently installed capital equipment or plant facilities are at stake. In summary, the current informal settlement procedures, when available, stymie the efforts of all parties to resolve conflicts without resort to litigation before the Commission. As a result, large numbers of formal proceedings are instituted solely for the purpose of attempting to find a forum in which settlement discussions can take place. A variety of changes to the current procedures could be undertaken to encourage, rather than discourage, settlement while, at the same time, streamlining litigation procedures Suggestions for Improvement. To provide a meaningful opportunity and adequate time to address the full panoply of issues at the "informal conference" stage, three things must happen. First, a method must be found to toll the 30 day period in which to initiate a formal contest proceeding without plunging the parties into preliminary litigation. Second, the Office of the Solicitor must be involved at the initial stage of discussions so that legal issues can be resolved through some means other than the institution of litigation. Third, the training of conference officers or other participating officials must be expanded, and their settlement authority clarified, so that an operator's efforts are not misdirected and MSHA's participants are adequately prepared to address all serious overtures of settlement. [1]--Reconciling the New Approach with Statutory Time Constraints. Section 815(d) (100) requires only that the operator notify "the Secretary" that it wishes to contest a citation or order issued under Section 814. (101) Although the same Section requires that the Secretary "shall immediately advise the Commission... and the Commission shall afford an opportunity for a hearing," there appears to be no requirement that the Commission institute proceedings immediately. (102) Thus, it should be possible for the Secretary to receive the Section 815(d) notice and notify the Review Commission that the time period for filing has been tolled, while simultaneously requesting that no proceeding be instituted before the Commission unless the parties determine that further attempts at informal resolution would be futile. This procedure would allow both the operator and MSHA to pursue a pre-penalty

11 settlement within a time frame more conducive to discussion while, at the same time, eliminating the expense of drafting and filing unnecessary pleadings before the Commission. Further, it would eliminate the expenses associated with having the Commission take jurisdiction of the case for the sole purpose of docketing and dismissing it. Of course, this procedure would be used only where all parties have consented and settlement discussions are already underway. Should any or all of the parties wish to institute formal proceedings at the outset, they would notify the Commission, the matter would be assigned a docket, and the 30 day period for the Secretary to file an answer would commence. [2]--Early Involvement of the Solicitor's Office. Currently, there are always two sets of settlement discussions -- the first with MSHA and the second with the Solicitor. This is unnecessary and wasteful. Virtually every law enforcement agency involves its counsel in settlement discussions early in the proceedings. This practice promptly identifies legal issues, prevents surprises late in the process, and ensures that any formal proceedings are focused only on those residual issues that the parties cannot resolve otherwise. [3]--Training of Conference Officers. To the extent that conference officers are used, they must receive the training necessary to equip them to consider all arguments raised. Of course, to the extent that attorneys or other technical experts are available, the conference officer can rely on them for advice on those issues. However, since the conference officer's role, as advocated here, is quite different from that of virtually any other MSHA official, training in mediation and other aspects of negotiated settlement is essential. (103) As an adjunct to this training, the extent of the settlement authority vested in the conference officer also must be made clear at the outset of the process. If the relief the operator is seeking lies beyond that authority, alternative arrangements should be made before the conference process begins. [4]--Resolution Teams. The period between the time allowed for filing a contest to the citation and the issuance of the proposed assessment (interim period) provides a potentially fertile interval for informal dispute resolution. Once it has been decided to involve the Solicitor's Office at the initial discussion stage and to assemble a cadre of conference officers trained in alternative dispute resolution, a mechanism must be devised for coordinating their activities. We propose that "resolution teams" be formed to provide a forum to consider proposals for informal resolution brought by operators during the interim period. The teams could be set up in each district, across district lines, or through the aegis of MSHA headquarters. In any case, each team would consist of personnel from the Office of the Solicitor, the Office of Assessments and technical support, if needed, in addition to appropriate personnel from MSHA enforcement. The structure of each team would be flexible enough to allow sufficient authority to bind the district or the agency, as well as sufficient legal and technical expertise to address the problems being considered. (104) If the caseload does not justify the permanent assignment of personnel to resolution teams, it may be possible to accomplish all of the objectives of this program simply by designating certain personnel from each of the necessary disciplines to be "on call" to participate in informal dispute resolution whenever the situation requires. [5]--Self-Assessments.

12 In order to speed the process along and conserve agency resources for those situations which merit them, a program should be put in place to allow operators to "self assess" any regular assessment and remit payment directly to MSHA without waiting for a proposed assessment to be generated. (105) To encourage this practice, it is proposed that operators who take advantage of the program be given a discount of 5% from the amount otherwise determined by the regulations. (106) MSHA would maintain accountability in the system through periodic, random audits. [6]--Agency Oversight of Alternative Dispute Resolution. MSHA might also consider establishing a headquarters resolution team that would (1) serve as a coordinating body for resolution mechanisms in the field; (2) provide a special forum for disputes involving multiple districts or issues with nationwide implications; and (3) become a focal point for agency accountability to Congress, the mining industry, and the public at large. To ensure that the central resolution team would not impose the dead hand of bureaucracy on dispute resolution in the field, its mission would have to be clearly enunciated. Nevertheless, one would anticipate that a central resolution team would be the most practical forum for resolving "mega-case" disputes, such as the AWC or excessive history cases. Likewise, the headquarters team might be the most appropriate negotiators in a dispute involving the interpretation of a given standard, the resolution of which would affect a large cross-section of the industry. In that connection, a case such as Secretary of Labor v. Cotter Corp. (107) comes to mind, where resolution of a dispute over the interpretation of a standard prohibiting miners from working alone under certain circumstances had far-reaching effects. The most important role for a central resolution team, however, would be its oversight responsibility. Congressional criticism of certain settlements reached under the 1969 Act was one reason for the establishment of an independent Review Commission to review and approve penalty settlements under the 1977 Act. Therefore, if an alternative dispute resolution program is established for civil penalties that are not ultimately contested before the Review Commission, there should be a means for both assigning accountability and ensuring that the deterrent effect of the civil penalty system is maintained. Accountability for the program could be established by requiring that headquarters review settlements above a predetermined dollar limit; monitor the training and performance of conference officers and other personnel involved in dispute resolution in the field; and, perhaps, publish periodic reports on the progress of informal dispute resolution throughout the agency Benefits of the Informal Settlement Procedures. A recent canvas of Commission decisions for fiscal years reveals that over 88% of all decisions rendered by the Commission's judges consisted of approvals of settlements or dismissals on other grounds. (108) It is, therefore, fair to assume that, as a rule, approximately 10% of all citation and penalty cases are actually litigated through hearing and decision. Thus, any effort to make informal resolution mechanisms available at the earliest stages of conflict should have a significant salutary effect on the entirety of the MSHA dispute resolution system. The authors wish to emphasize that their advocacy of dispute resolution, within the authority of the Act, should in no way be read as a criticism or loss of confidence in the ability of the Review Commission and its administrative law judges to oversee the settlement of civil penalty cases contested before it. (109) The proposal set forth in this Chapter merely recognizes a reality that no one could have anticipated in the extraordinary surge in litigation under the Mine Act. Likewise, no one doubts that that same surge in litigation will ensure a continuing and significant number of cases that, for any number of reasons, will require a full hearing,

13 decision and, perhaps, appeal via the Commission's formal procedures. A reduction in the amount of litigation (and the attendant monetary savings to all parties) is not the only rationale supporting a system of alternative dispute resolution under the Act. Other less tangible, but no less important, benefits would flow from such a system. First, it would provide a forum in which safety concerns, rather than purely monetary considerations, could be much more easily addressed. At present, the entire focus of virtually every penalty contest is limited to the ultimate size of the monetary penalty. There is virtually no discussion of non-monetary actions that operators might take in lieu of a portion of their civil penalty liability. It is not clear why more companies do not take this approach at present, however, it appears that the current settlement approval process may be the most significant culprit. (110) We wish to emphasize that a resolution reached before the proposal of an assessment is, arguably, not subject to Commission's review and approval, especially when MSHA vacates or modifies the penalty or other ancillary findings as part of that resolution. That resolution would not constitute the "compromise" of an already proposed (but contested) penalty. Rather, it would entail the payment in full of a proposed (and agreed upon) penalty. (111) Second, by providing a flexible forum, free from the strictures of litigation, the proposed informal resolution mechanisms should allow all affected parties a greater ability to address complex, mixed questions of law, technology, and enforcement policy. Further, by involving MSHA policy makers at the beginning, rather than the end of the process, it is much more likely that agreements of final and binding application (either on a case by case or nationwide basis, as appropriate) could be reached as quickly and efficiently as possible. What is remarkable about this plan is that MSHA, the Office of the Solicitor, and the operators are already doing it -- but only after litigation has begun. Changing the timing from the post- to pre-penalty assessment stage will make the process more timely and take advantage of a long, currently unused, time period. Most importantly, it will allow the parties in most cases to turn away from the purely monetary aspects of the case and focus on health and safety, the two objectives the Mine Act was designed to protect and promote in the first place Pub. L. No , 83 Stat. 742 (Dec. 30, 1969) U.S.C (1988) U.S.C U.S.C U.S.C U.S.C U.S.C. 801(c) U.S.C U.S.C. 820(a) See, e.g., Western Fuels-Utah v. F.M.S.H.R.C., 870 F.2d 711 (D.C. Cir. 1989).

14 3. See, e.g., Secretary of Labor v. Cathedral Bluffs, 796 F.2d 553 (D.C. Cir. 1986) U.S.C. 820(b) Unlike the procedure under the Occupation Safety and Health Act of 1970, 29 U.S.C (1988 & Supps. I & II 1989 & 1990), a mine operator who contests the validity of a citation cannot defer correction or "abatement" of the violation until after a hearing on the merits of the citation. Indeed, if the operator fails to abate the citation in the time specified, not only is it subject to a civil penalty, it may also be subject to a failure to abate order withdrawing miners from the mine area affected by the alleged violation. 30 U.S.C. 814(b) U.S.C. 820(c) Richardson v. Secretary of Labor, 689 F.2d 632 (6th Cir. 1982), aff'g Secretary of Labor v. Richardson, 3 F.M.S.H.R.C. 8 (1981) Now see 30 U.S.C. 820(a) Now see 30 U.S.C. 820(b) The Metal and Nonmetallic Mine Safety Act of 1966, 30 U.S.C (1988) did not contain any provision for civil penalties. While the statute provided for criminal penalties in instances constituting contempt, no such criminal sanctions were ever imposed Pub. L. No , 3102, 104 Stat (1990) (amending Mine Act 110(a), (b), codified at 30 U.S.C. 820(a), (b) (Supp. II 1990)) C.F.R. pt These regulations apply only to the Secretary of Labor. In those cases where an operator contests a citation or order, or the penalty proposed by the Secretary, the Review Commission and its judge's exercise de novo review over the amount of civil penalties ultimately assessed. See Sellersburg Stone Co. v. Federal Mine Safety & Health Review Comm'n, 736 F.2d 1147 (7th Cir. 1984) C.F.R C.F.R C.F.R C.F.R (a). See also, 30 U.S.C. 820(i) C.F.R C.F.R , 100.3(b) C.F.R (c) C.F.R (h) Oversight Hearing on the Federal Mine Safety and Health Amendments Act of 1977, Part 2: Nonmetallic Mines, 96th Cong. 1st Sess. (Oct. 30, 1979) F.M.S.H.R.C. 822 (April 1981) See text, infra, at 13.02[1] Pub. L. No , 3102, 104 Stat (1990) (amending Mine Act, 110(a)(6), codified at 30 U.S.C 820(a),(b)

15 (Supp. II 1990)) Coal Employment Project v. Dole, 889 F.2d 1127 (D.C. Cir. 1989). Although the challenged regulation had been promulgated in 1983, this action was not commenced until several years later Secretary of Labor v. Drummond Co., Inc., 14 F.M.S.H.R.C. 661 (1992). See text, infra, at 13.03[6] Fed. Reg. 60,690, 60,691 (1992) U.S.C. 814(d) U.S.C C.F.R (h) U.S.C. 815(c) U.S.C. 820(c) See, e.g, "Better Training, Communications Are Key Aims of MSHA Changes," Mine Safety & Health, Fall 1982, Vol. 7, No. 4, p C.F.R (a) C.F.R (b). MSHA has not been meticulous in enforcing this 10-day limit. In most circumstances, MSHA personnel at virtually all levels are willing to discuss any citation or order at any time (even during litigation), so long as there is no breach of the canons of professional responsibility prohibiting communications between counsel and represented parties C.F.R (c) C.F.R (e) C.F.R (f) C.F.R (g). Prior to the 1982 revised procedure, MSHA used a two-step process to determine the ultimate penalty to be assessed. Immediately following the inspection, the citation or order was sent to MSHA's Office of Assessments for what was referred to as an "initial review." This review resulted in an initial assessment that was then sent to the operator for payment. If the operator disagreed with the proposed amount, it could request an assessment conference within 10 days of receipt of the initial assessment. Miners' representatives were given an opportunity to attend the assessment conference. Assessment conference officers were authorized to reduce the amount of the initial assessment in the face of mitigating information presented by the operator but they were not authorized to modify or vacate the citation or order. (On occasion, the officer could request the issuing inspector to reconsider his enforcement actions.) The penalty amount arrived at through the assessment conference was then issued as a proposed assessment to the operator. At this time, the operator could formally contest the penalty and invoke the review authority of the Review Commission. See, M.T. Heenan, Understanding MSHA, (1982) C.F.R C.F..R 100.3(e) C.F.R (e) C.F.R (b). See also, 30 U.S.C. 815(a), 815(d).

16 C.F.R (b) C.F.R (b) Fed. Reg. 12,518, 12,167 (1993) (to be codified at 29 C.F.R ) U.S.C. 815(d) Fed. Reg. 12,158, 12,166 (1993) (to be codified at 29 C.F.R ) Unlike the coal industry, the non-coal mining industry deals in hundreds of separate commodities, mined by very disparate methods. This raises a number of questions beyond the scope of this Chapter regarding the wisdom of regulating such a variety of practices under a single, specialized statute As of the close of Calendar Year 1991, there were 11,474 non-coal mines and only 4,332 coal mines U.S.C. 820(k). Under the 1969 Coal Act, penalty collection actions required a de novo proceeding in the United States District Court for the district in which the mine was located. As a result, penalties were routinely settled by the agency for small fractions of the original assessment. See S. Rep. No th Cong., 1st Sess (1977), reprinted in Senate Subcommittee on Labor and Human Resources, 95th Cong., 2nd Sess., Legislative History of the Mine Safety and Health Act of 1977 at (1978) Prior to 1990, approximately 3% of all citations and orders were contested before the Commission. 57 Fed. Reg. 60,690 at 60,696. (1992) This program has since been promulgated as 30 C.F.R , & See 57 Fed. Reg. 60,690 (1992). The criteria set out in the May 29 Program Policy Letter differ in a number of ways from the criteria eventually adopted in the final rule For instance, MSHA's own analysis indicated that the application of the excessive history regulations would have the effect of raising the "single penalty assessment" from $50.00 to an average of $435.00, an increase of approximately 860% C.F.R. pt. 104 (1992) (promulgated at 55 Fed. Reg. 31,136 (1990)) C.F.R (a) C.F.R (a), (b) U.S.C. 814(d)(1) ("s&s"). For an explanation of the concepts embodied by the "s&s" designation, see text, supra, at 13.02[b]. Secretary of Labor v. Mathies Coal Co., 6 F.M.S.H.R.C. 1 (1984) C.F.R C.F.R Although MSHA had taken the position that its authority to increase penalties became effective immediately upon the effective date of the congressional action, it recognized that it could not revise its penalty assessment regulations without a formal rulemaking. See 55 Fed. Reg. 53,482 (1990) The $20 "single penalty assessment" was raised to $50 (or 150%) under the new regulations. Given the fact that the minimum increase in penalties effected by the new regulations is 150%, it is difficult to understand how MSHA was able to conclude that the effect of the entire rulemaking would be to raise penalties by only approximately 93%. See 57 Fed. Reg. 2,968, 2,970 (1992) See, infra, at n U.S.C. 820(c) In the last 5 years, the number of individuals against whom such penalties have been sought has increased over 1300% (from