Industry and MSHA pause POV case to talk settlement

A  federal district court judge in Ohio granted this week a joint request by industry plaintiffs and MSHA to put on hold their pending litigation over the validity of the agency’s 2013 Pattern of Violations (POV) rule while the parties explore settlement.

The POV rule is MSHA’s harshest enforcement mechanism. Brian Hendrix and law firm Husch Blackwell explains the case.

“In a motion filed in the U.S. District Court for the Southern District of Ohio, the parties jointly requested a stay of their litigation for 120 days. The motion noted that the parties had been scheduled to file cross-motions for judgment on the administrative record on May 19, 2017. The expectation is that the Court would decide the case based on those motions.

In seeking a stay, the parties wrote, “Rather than concurrently litigating and negotiating a possible settlement of the dispute, the parties are open to negotiating a mutually agreeable resolution that could avoid further litigation. Following a May 1, 2017 meeting of counsel and representatives of the plaintiffs in both related cases, the Department of Justice, the Department of Labor, and MSHA, all parties agreed that such settlement negotiations were sufficiently promising to warrant seeking a stay of this litigation. The parties have since discussed their commitment to a structured series of conferences to consider a negotiated resolution.”

The litigation actually involves two cases challenging the rule. One was brought by national and state industry associations, represented by Husch Blackwell LLP. The plaintiffs in that case are the National Mining Association, National Stone Sand and Gravel Association, Portland Cement Association, Kentucky Coal Association, and Ohio Coal Association. The second case was brought by Murray Energy.

The new 2013 POV rule has remained in effect while the case is pending, so the stay of the case does not affect MSHA’s ability to continue using the rule.

Suit claims that the rule designates pattern violators based on mere allegations
All of the plaintiffs have challenged the legality and validity of the revised POV rule adopted by MSHA in 2013 to implement Section 104(e) of the Mine Act. Under that Mine Act provision, once designated as a pattern violator, part or all of a mine could be shut down upon committing a single additional S&S violation.

Since 1990, MSHA’s POV rule has designates mine operators as “pattern violators” if they met certain criteria, including a minimum number of significant and substantial (“S&S”) violations of MSHA regulations. The original POV rule included a “potential” violator warning stage, whereby MSHA notified operators if they were approaching a pattern and provided an opportunity to adopt corrective measures to avoid pattern status.
MSHA removed these procedural protections in its 2013 revised rule. It pledged to determine patterns of violations based on all S&S citations, including those that had not yet become established as final (following an opportunity for contest and court review).

The plaintiffs have argued that under the Mine Act, an inspector issues citations based on “beliefs,” that such citations are merely unproven allegations, and that MSHA’s S&S citations are often unreliable, as a significant percentage of those that are challenged are later vacated or reduced in settlement or by a judge.

Likewise, in the contested 2013 POV rule, MSHA eliminated the potential pattern of violations (“PPOV”) warning stage. Now, the first time a mine operator receives a notification from MSHA, it is a notice that the operator already is a pattern violator. In addition, the new rule uses the threat of pattern notices to pressure mine operators to adopt “corrective action programs,” which can serve as mitigating factors when MSHA considers issuing a POV notice. Such programs essentially bind the operator to new mandates, such as additional staff, policies, and training not otherwise required by regulation.

The pending lawsuit includes claims by the plaintiffs that these and other aspects of the 2014 rule violate the Administrative Procedure Act.

Source: Husch Blackwell, Husch Blackwell

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