ALJ Knows Best


August 1, 2013

Recent orders denying motions for settlement signal a need for change in the settlement process.


by Adam J. Schwendeman


In August of 2012, the Federal Mine Safety and Health Review Commission (FMSHRC) issued its decision in Black Beauty Coal, 34 FMSHRC 1733 (Aug. 20, 2012) which held that, in addition to the six criteria outlined in section 110(i) of the Mine Act, ALJs are empowered with the authority to consider the deterrent effect that a penalty will have on an operator when reviewing settlement proposals. Although orders denying settlement motions are nothing new, since Black Beauty, ALJs have issued several decisions denying settlement proposals. These decisions signal a possible movement toward a heightened scrutiny of settlement agreements.

In February 2013, Judge William Moran rejected a proposed settlement between a conference and litigation representative (CLR) and American Coal Co.’s New Era Mine in Secretary of Labor v. The American Coal Co., 2013 WL 1385618 (Feb. 11, 2013, ALJ Moran). The settlement motion submitted by the CLR sought a 30-percent reduction for each citation involved. In Judge Moran’s opinion, such an across-the-board reduction indicated that the proposed modifications were “more in the nature of yard sale, rather than any individualized review” of each citation.

gavelUntitled-1Unfortunately, the settlement motion failed to dispel the court’s initial conclusion. According to Judge Moran, the motion failed to present relevant and persuasive facts that would justify the reductions and modifications sought. For example, the motion stated that the reductions were justified because the parties had an interest in settling the matter without further litigation. As the court noted, such a justification would warrant a similar reduction in every case. Judge Moran, therefore, denied the motion to approve the settlement.

Similarly, in March of this year, Judge Margaret Miller rejected proposed settlements in several dockets concerning citations issued to Marfork Coal Co.’s Brushy Eagle Mine. Secretary of Labor v. Marfork Coal Co., 2013 WL 1856612 (March 22, 2013, ALJ Miller). In Markfork, Judge Miller denied settlement motions submitted by the CLR in five dockets. Judge Miller denied the settlement proposals due to a lack of facts to explain why the modifications were proper. Although the motions included long explanations of the proposed modifications, Judge Miller concluded that the facts were not relevant to the proposed modifications. For instance, many of the explanations in the motions contained facts related to gravity of the violations, yet it was the negligence designation that the parties were seeking to modify.

In addition to the decisions by ALJs Moran and Miller, in October of 2012, ALJs McCarthy and Rae each issued orders denying settlement agreements. These decisions were also based upon the fact that the court felt the motions submitted by the Secretary did not contain sufficient facts to justify the modifications proposed.

Operators and the Secretary should learn from these recent decisions. Given the heightened scrutiny in which some courts are engaging, the Secretary and operator’s representative should work together to ensure that sufficient factual support is included in settlement motions. Operators will need to investigate the facts fully and completely on the front end, and use such facts to their advantage in settlement negotiations. The operator’s representative should then push to include as many of these helpful facts and arguments as possible in the settlement motion. Because both the Secretary and the operator wish to see the settlement approved, the Secretary should be willing to include such facts and/or arguments. If the Secretary is unwilling to include such facts and information in the settlement motion, it may very well result in a denial of the settlement proposal and a waste of time and valuable resources.

Adam J. Schwendeman is an associate in Jackson Kelly PLLC’s Charleston, W.Va., office. He can be reached at 304-340-1077 or via email at

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