It further claimed that the Secretary of Labor’s test for ‘repeated” flagrant violations was not entitled to deference because it was contrary to the plain meaning of the statutory language. It added, in the alternative, that no deference was required because the Secretary’s interpretation as based on the informal PILs and press release, which were not the subject of rulemaking. There is a long line of administrative law cases that hold agency policy statements that are not subject to the notice-and-comment rulemaking process lack the force of law and can be denied deference from the court.

The judge found that the preferred interpretation of the provisions of Section 110(b)(2) with respect to “repeated” failure could not take effect because the PIL and News release were, in fact, substantive rules that failed to abide by the APA requirements.

ALJ Feldman analyzed the statutory language, noting that the plain meaning of “flagrant” is “conspicuously bad, offensive, or reprehensible.” The specific language used by Congress reflects that a flagrant violation is based on either a reckless or repeated failure to eliminate a known violative condition that can proximately cause serious injury or death. He found that a flagrant violation based on repeated conduct must be, at a minimum, also reckless, and that a repeated failure to eliminate the condition deemed flagrant may constitute ever greater culpability because it would be evidence of conscious disregard for obligations to comply.

He found the PILs were not valid. The first expired on March 31, 2008, and the second lapsed on March 31, 2010. The agency admitted that they had not been reissued. In the PILS, MSHA outlined its view of the requirements for a flagrant violation based on “repeated failure” to eliminate a known violation. The requirements in the PIL were the following:

(1) a citation or order is evaluated as significant and substantial (S&S);

(2) the injury or illness is evaluated as at least permanently disabling;

(3) the type of action is evaluated as an unwarrantable failure; and

(4) at least two prior “unwarrantable failure” violations of the same safety or health standard have been cited within the past 15 months. After the PILs expired, MSHA issued the April 2011 News Release, which recapped the criteria above, but added a fifth one: “Negligence is evaluated as reckless disregard.”

The judge acknowledged that MSHA did do a rulemaking on heightened penalties, and that final rule was issued on March 22, 2007. It spelled out criteria and procedures for penalties under Part 100 but — with regard to flagrant penalties — simply republished the statutory language without any reference to the first PIL, therefore depriving the regulated community of the right to comment on the agency’s enforcement scheme.

The judge found that the PILs were not interpretative policy because they are substantive and legislative in design, implementing the elevated operator liability contained in the MINER Act, with penalties threefold higher than before.

In finding that the PILs were an invalid exercise of rulemaking authority, the ALJ noted: “Pronouncements affecting fundamental rights and liabilities are not relieved of their substantive effect simply because the actions are committed to agency discretion. In the final analysis, the Secretary may not escape notice-and-comment requirements by, in effect, labeling a major substantive addition to section 100.5(e) of her regulations governing special assessments as a mere interpretation.”

After discarding the challenged policies, the judge examined whether the Commission had authority to evaluate the higher special assessments in contested cases and found that it did. He stressed: “the outcome of a civil penalty proceeding before the Commission is dependent on whether the Secretary can satisfy her burden of proving that a cited violation has been properly designated as S&S, unwarrantable, and/or flagrant.”

The FMSHRC retains authority, rather than deferring the MSHA, in matters concerning the appropriate tests for evaluating the specific charges brought against a mine operator. The ALJ added, “authorizing the Secretary to define the requisite evidentiary parameters necessary to satisfy her burden of proof is anathema to the Mine Act’s goal of ensuring due process.”

The discussion then turned to whether MSHA’s interpretation of the statute was legitimate. ALJ Feldman found that the statutory language had two essential elements:

(1) a repeated failure to eliminate a known violation: and

(2) the hazard posed by the violation reasonably could be expected to cause death or serious injury. The first element of a repeated flagrant violation requires both knowledge of the violation and a repeated failure to eliminate it. MSHA argued that a history of past similar violations was sufficient to constitute a “repeated” failure for section 110(b)(2) purposes.