Aggregates Manager

December 2012

Aggregates Manager Digital Magazine

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by Ben McFarland Rock Federal Mine Safety and Health Review Commission approves heightened scrutiny, and less clarity, over proposed settlements. UGLY DECISION IN M ost who are familiar with penalty as- sessments under the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (Mine Act) are aware of the six statutory factors that the Commis- sion must consider when assessing monetary pen- alties. I am, of course, referring to Section 110(i) of the Mine Act, which plainly provides that, "In assessing civil monetary penalties, the Commis- sion shall consider the operator's history of previous violations, the appropriateness of such penalty to the size of the business of the operator charged, whether the operator was negligent, the effect on the opera- tor's ability to continue in business, the gravity of the violation, and the While deterrence is clearly a principle that underlies the civil penalty scheme, it is not a separate factor that can be used to adjust the penalty. The proper level of deterrence is achieved through an evaluation and application of the six statutory criteria set forth in Section 110(i). demonstrated good faith of the person charged in attempting to achieve rapid compliance after notifi- cation of a violation." Benjamin M. McFarland is a member of Jackson Kelly PLLC's Wheeling, W.Va., office, where he works with the firm's Oil and Gas Group. He can be reached at 304-233-4000 or via email at bmmcfarland@ jacksonkelly.com. 32 Despite this seemingly clear and unambiguous statutory language, the Federal Mine Safety and Health Review Commission (Commission) recent- ly held, in Secretary of Labor v. Black Beauty Coal Co., that in addition to the six statutory factors set forth above, the Commission is also authorized to consider a seventh factor when assessing monetary penalties in settlement proposals: the deterrent AGGREGATES MANAGER December 2012 effect that the penalty will have on the operator from repeat violations. Black Beauty arose from a settlement conference in which the Secretary of Labor (Secretary) and Black Beauty reached an agreement to settle three separate dockets. When the Secretary filed her motions to approve the set- tlements, ALJ Miller rejected the settlements and denied all three motions, opining, in part, that the reduced penalties would not adequately effectuate "the deterrent purpose underlying the Act's pen- alty assessment scheme." ALJ Miller specifically concluded that her "discre- tion in assessing penalties is [not bounded by] the factors set forth in [Sec- tion] 110(i), but also by the deterrent purposes" of the Mine Act's assessment scheme. On appeal before the Commission, both the Secretary and Black Beauty agreed and asserted that ALJ Miller was not authorized to consider "the deterrent effect" of the penalty amounts as a factor independent of the six statutory criteria set forth in Section 110(i) of the Mine Act. The Commission in Black Beauty — at least the ma- jority — was not persuaded, holding that Com- mission judges can and should consider "deter- rence" when determining whether to approve a settlement. The majority in Black Beauty looked Black Beauty

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