MSHA’s proposed civil penalty rule will bring about a result directly opposed to that which the agency intends. While raising penalties and increasing litigation, it will not encourage operators to increase compliance. So say two Jackson Lewis attorneys experienced in MSHA enforcement actions and familiar with the proposed rule.

In a September 16 webinar presentation, Jackson Lewis attorneys Henry Chajet and Mark Savit painted a grim picture of the impact of MSHA’s proposal. Based on a preliminary analysis, they predicted total penalties on mine operators likely will rise between 50% and 200%.

The proposed changes also will increase the number of violations written as “unwarrantable failure”; i.e., aggravated conduct beyond ordinary negligence, the attorneys said. More mines will fall under the agency’s draconian pattern of violations (POV) enforcement weapon and there will be more closure orders.

These consequences are far from what MSHA says it intends. Penalties overall will decline slightly, the agency predicted. Operators would be encouraged to be more proactive and accountable in addressing safety and health hazards, there would be more clarity transparency about various penalty assessment criteria and less litigation. The citation-writing process would be simpler.

But the devil is in the details. MSHA proposes to cut the number of choices an inspector will have in several citation criteria. For instance, the number of options for negligence would drop from five to three – no negligence, negligent and reckless disregard. Chajet and Savit agreed those changes would streamline the citation writing process, but contended it would allow MSHA to avoid dealing with shortcomings in the training of inspectors. “They’re not well-trained now, and that’s why there’s the level of litigation that there is,” Savit said.

Rather than add clarity and transparency, cutting the number of categories will muddy the waters further, the attorneys warned. For instance, one of the five existing categories of negligence is high negligence. When it goes away, how will high negligence be categorized under the proposed scheme? Will inspectors choose the less severe “negligent” or the more severe “reckless disregard”? Their decision will have a profound impact on penalty points and hence the size of the monetary penalty imposed.

The two lawyers stated that, when faced with options, inspectors likely will choose the one associated with the tougher sanction. Under the proposal, the “permanently disabling” option will be dropped, cutting inspectors’ choices for severity from four to three. As a result, citations that otherwise might have been marked “permanently disabling” probably will be up-written to “fatal,” said Savit. This will produce more penalty points and a higher fine.

A proposed change in the definition of the word “occurred” will negate a key element in the long-standing legal test for defining a significant and substantial (S&S) violation. This will lead to more S&S violations and higher fines, the attorneys said. Worse, since an S&S finding is a necessary requirement for classifying violations as unwarrantable failure and for designating a mine as POV-eligible, those enforcement actions will increase, too. POV-designated mines are subject to profound business disruption through repeated closure orders.

Savit presented graphs demonstrating how the suggested rule could backfire. operators with a better compliance record will fare worse relative to bad operators under the new rule, he said, referencing violation history, repeated violations of a standard, and negligence. This will reduce the incentive for operators to be proactive about mine safety. “It is clear that MSHA has not thought through what they did ...the result ... is that the proposed rule will not accomplish what they want,” Savit said.

One of MSHA’s goals is to reduce litigation, but its proposed changes will have the opposite effect. Operators went to court in increasing numbers after MSHA amended its civil penalty regulation in 2007, and they will do so again, Savit predicted. 

The agency’s proposal also includes a section that would change the existing relationship between MSHA and the Federal Mine Safety and Health Review Commission.

Commission judges now review contested cases independently and issue decisions that determine the penalties operators must pay. Judges also review and approve settlement agreements. In what Chajet called a “pure power grab” by the agency, MSHA has presented options that would totally eliminate or severely restrict the Commission’s discretion in these areas.

The agency initially had set a deadline of September 30 for receipt of stakeholder comments. However, in response to requests for more time, MSHA has extended the deadline to December 3.