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Coal, Mining Companies Face Uncertainty With Safety Panel’s Halt

Oct. 5, 2018, 10:21 AM

Some enforcement cases in the federal mine safety regulatory world are in flux after the five-member legal review panel that hears disputes between regulators and mining companies lost its quorum in late August.

One of the last cases the Federal Mine Safety and Health Review Commission settled was a dispute between the Mine Safety and Health Administration and Pocahontas Coal Co., a company with a history of safety violations.

The terms of Commissioners Robert F. Cohen, Jr., and William I. Althen expired Aug. 30, halting review of similar cases. Shortly before, the panel resolved the Pocahontas Coal case by relieving the company of liability after two miners were killed and it was cited with more than 120 significant and substantial violations.

Cohen’s scathing dissent in the case and the loss of quorum for the foreseeable future sets a tone for future mining safety disputes.

For now, the commission can’t hear cases until it gets a quorum. Safety advocates and industry attorneys agree that the lack of quorum could negatively affect mining companies’ bottom lines and worker safety, if operators can’t be held accountable in an appeals setting.

Dismissing a Serial Offender

Pocahontas’ Affinity Mine in West Virginia received more than 120 significant and substantial citations during a series of inspections in 2013, prompting MSHA to refer to it as one of the worst safety violators in the U.S.

Amid those inspections, two miners died in separate incidents and the mine received more than 30 orders to close.

MSHA put the mine on a “pattern-of-violations” list, which subjects coal companies to strict oversight until they complete a safety inspection without any significant and substantial violations of federal safety laws.

A case can’t be settled or dismissed until those violations are resolved.

In the August settlement derided by Cohen, the MSHA determined that the Pocahontas mine would no longer be subject to a pattern-of-violations notice, and it notified the review commission to officially dismiss Sec. of Labor v. Pocahontas Coal.

Cohen blasted the agency before his term ended, calling the move “unlawful” and “legally unsupportable,” because the agency and company did not comply with mine safety law in reaching the settlement. The Aug. 28 decision, he said, violated federal law and put mine workers in danger.

“Abandoning the (pattern of violation) regulation’s strict application sends the dangerous message that an operator who has chronically disregarded safety ... may nevertheless obtain reprieve from the Mine Act’s heaviest sanctions by the grace of a friendly administration no longer committed to enforcing these sanctions,” Cohen wrote.

‘Judicial Scrutiny’

Democratic lawmakers on the Senate Education and the Workforce Committee also called for legal justification in the matter.

They sent a letter to MSHA head David Zatezalo on Sept. 24 questioning the legal basis to enter a settlement agreement that ended sanctions on Pocahontas.

“In litigating this matter, I believe this was the strongest enforcement action that would withstand judicial scrutiny,” Zatezalo said in an email to Bloomberg Environment.

Paul A. Konstanty, vice president and general counsel of United Coal Company LLC—which owns Pocahontas Coal—didn’t respond to Bloomberg Environment requests for comment.

The company’s statement on the day of the decision said the mine’s safety has greatly improved in recent years.

‘That’s a Tall Order’

Attorneys representing mine operators are torn on what the decision means for companies and workers.

Willa Perlmutter, a counsel at Stoel Rives LLP in Portland, Ore., said she believes Pocahontas had “made good substantive progress” in addressing its safety record, adding that Cohen “overstates the direness of the commission’s decision.”

Perlmutter said she thinks Pocahontas should be more candid about the gravity of the pattern-of-violations designations, adding that she believes it may be the first company ever to be removed from the patterns-of-violations list.

Removing all significant and substantial violations is extremely difficult for companies, said Nick Scala, co-chair of Conn Maciel Carey LLP’s MSHA and workplace safety group. Looking at the criteria necessary to remove all violations—"that’s a tall order” to ask of a company.

Scala pointed to the ongoing American Coal Co. case that the review commission is handling as an example of how the agency sometimes lacks transparency in forming settlements, similar to the Pocahontas settlement.

Earlier this year, MSHA attempted to settle with American Coal, a Murray Energy Corp. subsidiary, despite protests over transparency by the United Mine Workers and the administrative law judge on the case.

Union officials told the commission that regulators need to explain how American Coal’s $44,376 fine for 32 mine safety violations dropped by 30 percent.

But the Labor Department’s Mine Safety Division said revealing that information would damage its case should it ever go to court.

That litigation is ongoing.

Cases Piling Up

The review commission has waited nearly eight months for President Donald Trump’s nominated chairman, Marco M. Rajkovich Jr., to be confirmed by the Senate. Without Rajkovich, the panel can’t issue decisions.

When cases pile up at the review commission, said Phil Smith, a spokesman for the United Mine Workers of America union based in Triangle, Va., “companies that are guilty of several and serial violations aren’t given the proper penalties” while they await the commission’s decision, and they aren’t required to fix the problems that exist.

From the mine operator’s perspective, a case can languish for years and a delay could keep companies from determining best practices for years, Scala, told Bloomberg Environment.

Some cases already take years to resolve, he said. “This will just prolong the process.”

The review commission’s attorney, Michael McCord, said he hopes the quorum is restored because it “can’t do a whole lot until [Rajkovich is] confirmed.”

The two remaining commissioners, Mary Lu Jordan and Michael G. Young—who is now acting chairman—can vote to move forward with any petition for review and any administrative law judge decision filed with the commission. But they can’t hear cases.

To contact the reporter on this story: Fatima Hussein in Washington at fhussein@bloombergenvironment.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bloombergenvironment.com

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