A federal anti-shredding statute may provide a new avenue for MSHA criminal enforcement.

By Marci Fulton

The tragic events at the Upper Big Branch mine in West Virginia this April were followed by the inevitable scramble to determine not only what went wrong at the mine, but how the regulatory system responsible for the safety and health of America’s miners may have failed. Days following the accident, President Obama instructed the Department of Labor and the Mine Safety and Health Administration (MSHA) “to strengthen enforcement of existing laws and close loopholes” in mine safety and health.

The public’s misunderstanding of the regulatory enforcement environment under which mines operate is illustrated by President Obama’s concern that mines were able to “fil[e] endless appeals instead of paying fines and fixing safety problems.” Anyone familiar with MSHA knows that an operator’s exercise of its statutory due process right to challenge a citation and its associated penalty does not absolve the mine of remedying the alleged violation before the merits of the citation are adjudicated. However, with such intense scrutiny focused on its actions, MSHA will likely attempt to take very strong enforcement positions in the coming year.

Suggestions for legislative action abound (such as resurrection of the S-Miner Act), but such change occurs slowly and the agency is under pressure to take immediate action; a position that may result in hasty decisions not necessarily geared toward improving health or safety. While waiting for a legislative “fix,” MSHA will undoubtedly reexamine the tools already available to it under the Mine Act and other federal statutes. A similar reexamination occurred following the Sago and Crandall Canyon tragedies in 2006 and 2007 when MSHA “rediscovered” the pattern of violations sanction that had been authorized by law since 1978, but which had remained largely unused.

As part of this effort, the agency may direct its focus at increasing civil and criminal penalties. The Mine Act already provides for various civil and criminal penalties. For example, an operator’s or its agent’s willful violation of a mandatory health or safety standard, or the knowing refusal to comply with a Section 104 or 107 order, will, at most, result in a civil penalty of $220,000 and a fine of $250,000, one year in jail, or all of the above [30 U.S.C. § 820(c) and (d)]. Additionally, knowingly making a false statement or providing a false record to MSHA can result in a fine of $10,000, imprisonment of up to five years, or both [30 U.S.C. § 110(f)]. Operators may see an increased focus by MSHA on enforcement under these two sections of the Mine Act. Additionally, the industry may see MSHA, in conjunction with the Department of Justice, turning toward other, broader federal criminal statutes with more severe penalties.

In the wake of 2001’s Enron scandal, the United States undertook sweeping changes to its criminal code in an effort to “clarify and close loopholes in the existing criminal laws relating to the destruction or fabrication of evidence and the preservation of financial and audit records” [S. Rep. No. 107-146, at 14 (2002)]. 18 U.S.C. § 1519 provides:

Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States…, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.

Though passed in response to an accounting scandal, this statute is quite broad in reach. MSHA inspections or investigations are unquestionably matters within the jurisdiction of the agency and, therefore, documentation presented or withheld in connection with such matters are subject to the statute. While it does not appear as though this criminal statute has ever been raised in an MSHA context, if MSHA is seeking means of stricter enforcement, enforcement under this section may not be far behind.