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Another ALJ Rules Against Disclosure

Posted by Ellen Smith on October 2, 2013

ALJ William Moran ruled Sept. 25 that Consolidation Coal is not entitled to MSHA’s Special Assessment Review form when it comes to five alleged violations at the company’s Blacksville No. 2 Mine in Monongalia County, W.Va.

While the Secretary argued that the special assessment review (SAR) form was protected under attorney work-product privilege, Moran said he did not even need to rule on that issue.

“Once a matter is before the Commission, no part of Part 100 or that subset within it, special assessments under section 100.5, remains material,” Moran wrote. “Although the Secretary has put forth other, substantial, reasons to deny [Consol’s] Motion, the foregoing is sufficient, standing alone, to deny the motion.”

While Mine Safety and Health News rarely takes a stand in cases, when it comes to SAR forms we are in complete belief that these forms should be made available upon request. For this country to move in the direction of trust, openness and honesty, the answer is more openness and not less.

Review Commission ALJ’s are split on the issue. We would like to offer a historical context and the legislative history of the Mine Act to argue our case for disclosure.

In 1977, the Senate Subcommittee on Labor wrote:

“ The Committee strongly feels that the purpose of civil penalties, convincing operators to comply with the Act’s requirements, is best served when the process by which these penalties are assessed and collected is carried out in public, where miners and their representatives, as well as the Congress and other interested Parties, can fully observe the process.”

S. Rep. No. 95-181, at 44 ( 1977), reprinted in Senate Subcomm. on Labor, Comm. on Human Res., Legislative History of the Federal Mine Safety and Health Act of 1977, at 632 (1978)

Fast forward to January 2009 when President Obama has stated “My Administration is committed to creating an unprecedented level of openness in Government.”

It is hard to see the President’s commitment when representatives of his administration suppress information that was once made public.

Special assessment forms have been around for a long time – as long as we can remember. At times, these forms have been attached to copies of citations that we have asked for. When our Washington correspondent Kathy Snyder worked for MSHA, special assessment forms were often made available. Attorneys tell us that they have, in the past, been given copies of the special assessment forms when they have requested them from MSHA.

Special assessment forms are part of the civil penalty process and are not prepared for the prospect of litigation. The majority of citations – 68% to 70% of all citations – are in fact paid and not litigated.

Special assessment forms are prepared in the ordinary course of MSHA business of assessing civil penalties whether litigation is ever filed or not. They are not prepared under an attorney’s direction. They offer opinions and facts as to why a penalty should be increased, much like the inspector offers a narrative of facts and opinion when writing a citation. Although this information might be relied upon by the Solicitor’s Office to prepare for litigation, it is not in fact prepared in anticipation of litigation.

One need only look at the words from the legislative history of the Mine Act to know what Congress wanted in 1977. “Public meetings … public input … open to the public … intention that the public be notified…” Congress wanted the entire mine safety process open to public scrutiny.

Whether these forms are available for public review also affects the public perception in the settlement process – a legal process that Congress also wanted open after looking at the deficiencies of the 1969 Coal Act. If the Solicitor’s Office is going to make a settlement deal based in part on these special assessment forms, shouldn’t the public have a right to know how they made the decision? How are we going to have a system of checks and balances? How are we going to “fully observe the process” as called for in the Mine Act’s legislative history?

Special assessment forms offer transparency into why MSHA staff believes a fine needs to be increased on any given violation. Transparency assures that this information will be provided in a clear, concise and professional basis that can be defended.

Operators need to know that the special assessment isn’t “payback” for a disgruntled former employee or inspector.

The public needs to know if there was some particular behavior on the part of an operator that the families of miners should be made aware of, and why a special assessment is needed for deterrence.

There is no reason to hide the “thinking” or thought process behind a penalty or violation. We need this openness to understand what is going on. This is our government, and our country. We have a right to know how decisions are made.

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Heart Attack Not Reportable Under Part 50

Posted by Ellen Smith on August 7, 2013

A miner’s heart attack was not subject to MSHA’s “immediate” reporting requirement under Part 50, ALJ William Moran ruled Aug. 5.

At the time of the heart attack, the miner was driving a haul truck. He began having chest pains and exited the vehicle, lying down near a berm. A dozer operator and another driver went to help him, and he informed them that he thought he was having a heart attack.

The company called the local abulance at 3:35, and then management officials, who were off-site, were called right after the ambulance. Once they received details and assessed the situation, management then called MSHA at about 4:20.

The key facts in this case were that there was not an “accident.” The miner did not crash the truck or have a sudden, one-time event that happended in one instant.

The company relied on a Sept. 28, 1988 Program Information Bulletin (PIN No. 88-05) that offers the distinction between an injury, which would have to be reported within 15 minutes, and an illness, which is not instantaneous.

Moran said that applying MSHA’s theory, a duty to report would arise if a miner was eating a doughnut in a break room, then choked while eating it and passed out, and then required rescue personnel to arrive at the mine to resisciate him.

In this present case, no CPR was needed, although the miner did undergo surgery for a blockage.

While MSHA required the company to change its practices, and call MSHA immediatley following any 911 call, Judge Moran noted that “nowhere in Part 50 is a 911 call listed as a trigger to notify MSHA.”

A complete story and the full text will be in the Vol. 20, No. 16 issue of Mine Safety and Health News.

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Hanson a “small” operator?

Posted by Ellen Smith on July 31, 2013

There are some decisions that make me scratch my head. The most recent is a July 16, 2013 decision by FMSHRC ALJ Michael Zielinski who used MSHA’s information in determining a penalty calculation.

I won’t get into all of the details of the case because they aren’t important. What is important is that the information submitted by the Solicitor’s Office in Denver, which came from MSHA’s assessment office, indicated that Hanson Aggregates is a “small operator,” for purposes of making a penalty calculation.

The quarry in this case is owned by Hanson, which, according to MSHA’s DRS, is owned by Heidelberg Cement. According to Bloomberg News, Heidelberg Cement just beat all expectations and posted a $973 million second quarter profit.

The company employs some 52,000 people at 2,500 locations in more than 40 countries, according to its website.

If calling this a “small operator,” makes any sense, then I need my head examined.

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Viper Coal Hit with Delinquent Penalty Complaint

Posted by Ellen Smith on July 23, 2013

The government has filed a lawsuit against Viper Coal LLC for $318,981 in outstand MSHA penalties.

However, as of March 2013, MSHA records show that Viper, controlled by Jody D. Puckett, owes $501,634 in outstanding penalties, and was number 21 on the Mine Safety and Health News list of 98 controllers owing $100,000 or more in MSHA penalties (20 MSHN 189; April 8, 2013).

According to the lawsuit filed in U.S. District Court in Pikeville, KY., the penalties arose between January 2008 and August 2011.

One of the mines that was operated by Viper/Puckett, the #11 Mine (MSHA ID #1518472) shows a long list of operators who never paid their penalties. When the mine was operated by “Foggy Mountain Coal,” and controlled by Connie Bryant the mine amassed $179,902 in delinquent penalties that MSHA now lists as “uncollectible.”

James Bevins, who briefly controlled a Viper mine in 2009, amassed a little over $12,000 in delinquent penalties.

Once again, MSHA records show a string of operators who come into a mine, are cited for for safety and health violations, some of which maim or kill miners, and then the operator/controller leaves the mess.

Why Treasury and MSHA are not going after Viper for all delinquent penalties, and why the government waited five years is a mystery.

The system is broken and must be fixed.

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Justice Served?

Posted by Ellen Smith on July 16, 2013

An interesting quirk in the tax code requires that MSHA civil penalties, which are deemed “final,” are to be reported to the IRS as income if the penalties are not paid. Failure to report, and failure to pay tax on the benefit of having penalties not paid, can result in an action by the IRS.

This is an important part of the tax code, and an important part of the enforcement scheme of the 1977 Mine Act. Equally important, however, is the fact that we cannot have laws and regulations in this country where some operators play by the rules, but their competitors don’t.

Case in point is the latest guilty plea involving Brandy Horvath and The New West Virginia Mining Co. (See story in this issue under “Criminal Proceedings”).

After looking at all court documents, and asking questions of the U.S. Attorney, it appears that the controller and supporting actors in the IRS case against The New West Virginia Mining Co., actually owe more in back taxes than the federal investigators found when they brought this case involving fake controllers of the mine, drug deals and tax evasion. What they missed is more than $1 million in unpaid penalties owed to MSHA.

While MSHA made attempts to enforce compliance at the mine through warning letters and eventually placing the mine on POV status, there in fact was no one actually enforcing MSHA’s penalty scheme as envisioned under the 1977 Mine Act. While two miners became permanently disabled, Brandy Horvath, or her boyfriend James Trent, were allowed to keep operating The New West Virginia Mining Co. while MSHA delinquent penalties continued to escalate.

It’s not that Horvath hasn’t been on the radar screen. In 2011, when Mine Safety and Health News did a one day “snapshot” of delinquent penalties, Horvath’s mine had delinquent penalties of $177,627, of which $172,000 had been forwarded to Treasury for collection.

At the time of the first permanently disabling accident in The New WV Mine, on July 17, 2010, the company had $158,234 in delinquent MSHA penalties. At the time of the second permanently disabling accident on March 2, 2011, the mine was up to $177,846 in delinquent MSHA penalties.

As of today’s date, Horvath and the New West Virginia Mine civil penalty delinquency tally has reached $1,369,224.
The person identified by the IRS as Horvath’s boyfriend, James Trent, is “permit blocked” by the state of West Virginia, and also owes MSHA $68,730.92 in delinquent penalties from when he was controller of Century Energy Corp., Coal America Inc., and Atlantic Leaseco LLC. Steven Rocky Justus, the mine’s superintendent, was also implicated in this tangled web by the IRS, and found guilty in this scheme of defrauding the government. He owes MSHA $1,331.81 in delinquent penalties from when he controlled Double A Mining in 2004.

While Horvath and her associates are, or may end up in jail for tax evasion, this is just one of many cases that fell through the proverbial crack at multiple levels.

We have outlined many instances of companies – large and small – who manage to run safe mines and pay their MSHA penalties on time (18 MSHN 169; “Delinquent Penalties Are A Chronic Problem For MSHA and Treasury”). It is simply not fair that some companies obey the law, run safely, and pay penalties when warranted, while others can run up hundreds of thousands of dollars – or millions as in this case – in delinquent penalties, with little to no consequences.

As always, a little history is helpful. This very issue is why changes were made in the 1969 Coal Mine Act, and then passed as the 1977 Mine Act.

In a May 16, 1977 report, the Senate stated that “Mine operators still find it cheaper to pay minimal civil penalties than to make the capital investments necessary to adequately abate unsafe or unhealthy conditions, and there is still no means by which the government can bring habitual and chronic violators of the law into compliance.” The difference today is that we are seeing some operators simply refusing to pay any penalties at all, or paying in a piece-meal fashion.

The Senate also noted in 1977 that enforcement sanctions under the current laws were “insufficient to deal with chronic violators,” and that “all too often the operator finds it cheaper to pay the penalties than to strive for a violation-free mine.”

There are now over 100 violators with delinquent penalties over $100,000 from when we reported March 2013 numbers (see: 20 MSHN 189), and in the case of Horvath – her company was well past $1 million in delinquent fines. It can certainly be argued that today, like in 1977 under MESA, the Labor Dept. and Treasury have been seriously deficient in enforcement and administrative responsibilities under this statute.

When looking at the flaws in the 1969 Act, the Senate report said “that to effectively induce compliance, the penalty must be paid by the operator in reasonably close time proximity to the occurrence of the underlying violation.” The Senate also noted that “District Courts are still reluctant to schedule trials on these issues, and the Department of Justice has been reluctant to pursue such cases in the courts, the matters generally languish at that stage, and the penalties go uncollected.”

The fact is, while it is good to see Horvath and the other bad actors in this case taken care of, it’s too late. The bottom line is that if anyone at MSHA, the Solicitor’s Office and the Justice Dept. had taken the MSHA penalty scheme seriously – the goal of which is to prevent accidents through rigorous enforcement – then at least two miners would still have all of their fingers, and Horvath would not have been in business – at least the mining business – for very long.

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Top Delinquent Debtor Agrees to Guilty Plea in Tax Case

Posted by Ellen Smith on July 10, 2013

Brandy Horvath, controller of The New West Virginia Mining Co., and on the Mine Safety and Health News’ MSHA delinquent debtors list, has apparently agreed to plead guilty to charges stemming from a tax fraud case (see 20 MSHN 189, “As Budget Crisis Hits, Government is Owed $69.8 Million in delinquent Penalties.)”

Horvath was listed as fifth on the list of delinquent mine controllers owing $1,369,244 in delinquent penalties related to The New West Virginia Mining Co. However, according to an April 2012 indictment, the real controller of the mine was Horvath’s boyfriend, James Trent, who owes the IRS at least $800,000 in personal, corporate and employment taxes.

No word from MSHA on whether the agency will change the controller information, or how the agency plans on getting the $1.3 million plus in delinquent fines.

Horvath’s (or Trent’s) Apache Mine paid only $100 in penalties since Aug. 28, 2008 when Horvath/Trent became controllers of the operation. The mine received a “Potential Pattern of Violations” notice April 12, 2011.

The case is before the U.S. District Court in Beckley, W.Va. (Case No. 5:11-cr-00247).

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Proximity detectors needed to save lives

Posted by Ellen Smith on July 5, 2013

Mine Safety and Health News Washington Correspondent Kathy Snyder took a long hard look at haulage fatalities in Mine Safety and Health News, Vol. 20, No. 12. The bottom line of her story is that many of the fatal accidents in underground mines would have been prevented if proximity detection devices were mandatory on haulage equipment.

On July 2,2013, Nathan Clarida, a 35 year old miner in the prime of his life died in a preventable haulage accident in the Peabody Coal’s Wildcat Hills Mine near Eldorado in Saline County, Ill., when he was hit by a ram car that was moving through a ventilation curtain. It wasn’t the first haulage accident at the mine — it was the third in less than 2 years, and with tragic consequences.

In the same mine, on Sept. 17, 2012, a miner was injured while walking up to mantrip to hook up tow rope. Not knowing a ram car was in reverse coming toward him, he was hit and pinned in between the ram car and mantrip.

On July 22, 2011, in the same mine, a miner was injured while building a stoppage utilizing 6″ solid blocks between the #5 & #6 entries. A coal haulage operator with a load drove through the curtain & struck the construction. The collision knocked the blocks onto the injured miner, causing him to suffer a severely lacerated right calf, a broken fibula & a broken patella.

In less than two years, proximity detection devices would have saved a life and prevented two lost time injuries in just one mine.

What is MSHA waiting for?

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Former Massey Subsidiary President To Plead Guilty to Conspiracy Charges

Posted by Ellen Smith on November 28, 2012

David Hugart, 53, former president of Massey Energy’s White Buck Coal Co., was charged today in a two-count criminal information with conspiracy to defraud the U.S. government.

He has agreed to plead guilty and is cooperating with the investigation. He will plead guilt to conspiring to impede the Mine Safety and Health Administration (MSHA) and conspiring to violate mine health and safety laws.

The criminal investigation of the U.S. Attorney’s office out of Charleston, W.Va., has been looking into practices of Massey Energy mines before the April 2010 mine disaster that killed 29 miners at the Upper Big Branch mine in West Virginia. Hugart was president of Massey’s smaller division, and oversaw three mines: the Grassy Creek No. 1 Mine, Hominy Creek Mine and briefly, the Pocahontas Mine.

The criminal information claims that MSHA regulations were routinely violated at the White Buck Mines and at other coal mines owned by Massey, in part because of a belief that consistently following those laws would decrease coal production.

Hugart was charged with giving advanced notice of inspections so that conditions in the mines could be concealed or covered up before inspectors could get into the mines and issue citations. The information claims he also conspired with other directors, officers and agents of the Massey corporation.

Hughart is the highest-ranking official charged to date in an ongoing federal investigation of Massey.

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UBB Families File Suit for Restitution

Posted by Ellen Smith on November 27, 2012

Three families of the 29 miners killed in the Upper Big Branch disaster claim they have not been paid the restitution called for in the Dec. 6, 2011 “non-prosecution agreement” between the government and company, and have filed a complaint in U.S. District Court to enforce it.

The three families are part of the 11 who settled wrongful death claims before the U.S. Attorney’s Office reached the non-prosecution agreement with Alpha Natural Resources, who merged with Massey Energy, the owner of the UBB mine.

The $209 million settlement, in which the government agreed not to pursue criminal charges against the company, called for Alpha “to provide restitution to each of the families of the fallen miners and two individuals affected by the UBB explosion.” (Non-Prosecution Agreement, pg. 1, para. 3).

However, before the non-prosecution agreement, some of the families had settled “wrongful death” claims, which under West Virginia law is separate from a claim of “restitution.”

Restitution and subsequent payments are defined under West Virginia Code §61-11A-4.

Under West Virginia law, the victim’s estate must consent to the restitution. The 11 families never consented to the restitution as required under state law, explained Michael Ranson, attorney for the three families who have brought the complaint against Alpha.

Eleven families settled wrongful death claims with Massey prior to the non-prosecution agreement. Actions for wrongful death claims are defined under West Virginia Code §55-7-5. Under the state’s wrongful death statute, an injured party can recover damages, and the wrongful death action is brought by, and in the name of, “the personal representative of such deceased person who has been duly appointed in this state.” In wrongful death cases a court must award damages that “… seem fair and just, and, may direct in what proportions the damages shall be distributed to the surviving spouse and children, including adopted children and stepchildren, brothers, sisters, parents and any persons who were financially dependent upon the decedent at the time of his or her death.”

The complaint, filed Oct. 19, 2012, asks the U.S. District Court for the Southern District of West Virginia to enforce the restitution agreement for families of 11 miners listed in “Appendix C” of the non-prosecution agreement. The lawsuit was brought by Jeffrey Skeens as Administrator for the estate of Grover Skeens; Carolyn Davis on behalf of the estate of Charles Davis; and, Owen Davis on behalf of the estate of Cory Davis.

In explaining the reasoning behind the complaint, attorney Ranson likened it to a case of a drunk driver who agrees in court to pay $50,000 to a family hurt by his driving, “but then says the insurance company paid you $50,000 last year so I’m not paying.”

Eighteen families were treated differently than 11 families, Ranson said. “We settled cases for wrongful death, not restitution,” Ranson said. The 18 families who had not settled, and have received payments of restitution, are free to pursue wrong death claims in addition to the restitution called for under the agreement. But the 11 families have already settled their wrongful death claims, but never received the restitution. “Why should the 18 families be treated differently than then 11 families?” Ranson said. “Why did the government give advantage to the 18 over the 11?”

Page 5 of the non-prosecution agreement also states that $16,500,000 was previously paid out, or “anticipated” to be paid out, as part of the restitution, although the amount is under seal and cannot be verified. But again, Ranson stressed that any money paid by Massey was under wrongful-death claims the families had against the company – not restitution as called for in the agreement.

Other problems have cropped up because the agreement does not define who is “family.” For instance, if a miner has a sister with whom he had no contact, and a common-law wife, a court can award the wrongful death payment to the common law wife. However, in this case, if the restitution check is written to the estate, the sister gets the money, Ranson explained. In a wrongful death case, the court must approve the distribution of the money.

The lawsuit asks the court to recognize the 11 families listed in Appendix C of the Non-prosecution agreement as a “class,” and for an immediate restitution payment of $500,000 to each of the family members listed in Appendix C.

Miners Who Died in Explosion Whose Families Settled Wrongful Death Claims Before the Non-Prosecution Agreement:

Christopher L. Bell Sr.
Charles T. Davis
Cory T. Davis
Richard K. Lane
James E. Mooney
Joshua S. Napper
Grover D. Skeens
Benny R. Willingham
Rex L. Mullins
Edward D. Jones
Joel R. Price

The complaint can be read here: (JeffreySkeens_v_Alpha_FKA_Massey).

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Hurricane Relief – Where to Send Donations

Posted by Ellen Smith on November 4, 2012

THE OCEAN COUNTY Office of Emergency Management has released a list of locations throughout the county that are accepting donations in the wake of Hurricane Sandy.

“We ask that residents please do not attempt to drop off donations of food, clothing or other items directly to the shelters, but instead visit one of these collection points,” said Sheriff William L. Polhemus.

Many of the centers are collecting food, clothing, toiletries and other items, although several locations have made special requests for needed items.

Locations include:

· Stafford Township Town Hall – 260 Bay Avenue, Manahawkin, NJ 08050. Requesting paper products and protein bars.
Little Egg Harbor Township Senior Center, 965 Radio Rd, Little Egg Harbor, NJ 08087

· St. Mary’s of the Pines Church, 100 Bishop Lane, Manahawkin, NJ 08050.

· Ocean County Hunger Relief, 21 Germania Station Road, Toms River, N.J. 08753

· Food Bank of Ocean and Monmouth Counties, 3300 Route 66, Neptune, NJ 07753

· Lacey United Methodist Church, 203 Lacey Road, Forked River, NJ 08731

· Jackson Crossings, 21 South Hope Chapel Road,
Jackson, NJ 08527

· Calvary Lighthouse Church, 1133 County Line Road, Bldg. A, Lakewood, NJ 08701

Non-perishable food & clothing.

· Church of Grace & Peace, 1563 Old Freehold Road, Toms River, NJ 08753. Non-perishable food & clothing.

· Visitation Church, 755 Mantoloking Road, Brick, NJ 08723. No clothing please. Requesting food, toiletries, pillows and blankets.

· South Toms River Borough Hall, 144 Mill Street.

Added Monday:
Long Branch Middle School, 350 Indiana Ave, Long Branch NJ 07740

Emergency Management officials ask that anyone who wishes to volunteer during the storm recovery to please contact the American Red Cross at redcross.org or 732-493-9100.

For Staten Island: New York Container Terminal, Sandy Relief Warehouse, 300 Western Ave., Staten Isld., NY 10303.

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