National Independent Coal Operator's Ass'n v. Morton

• Decision Date: 11 February 1974
• Docket Number: No. 73-1678.,73-1678.
• Parties: NATIONAL INDEPENDENT COAL OPERATOR'S ASSOCIATION et al. v. Rogers C. B. MORTON (Secretary of the Interior of the United States) et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

161 US App. DC 68, 494 F.2d 987 (1974)

NATIONAL INDEPENDENT COAL OPERATOR'S ASSOCIATION et al. v. Rogers C. B. MORTON (Secretary of the Interior of the United States) et al., Appellants.

No. 73-1678.

United States Court of Appeals, District of Columbia Circuit.

Argued October 29, 1973.

Decided February 11, 1974.

Rehearing Denied April 24, 1974.

Michael Kimmel, Atty., Dept. of Justice, with whom Irving Jaffe, Acting Asst. Atty. Gen., Harold H. Titus, Jr., U. S. Atty., Kathryn H. Baldwin, Atty., Dept. of Justice, and J. Philip Smith, Asst. Sol., Dept. of the Interior, were on the brief for appellants. Arnold T. Aikens and Robert M. Werdig, Jr., Asst. U. S. Attys., also entered an appearance for appellants.

John L. Kilcullen, Washington, D. C., for appellees.

Before BAZELON, Chief Judge, and McGOWAN and MacKINNON, Circuit Judges.

MacKINNON, Circuit Judge:

Under the Federal Coal Mine Health and Safety Act of 1969¹ the Secretary of the Interior is charged with enforcing mandatory health and safety standards in the nation's coal mines. Pursuant to this authority the Secretary may assess civil penalties against operators of coal mines in which health and safety violations occur.² The present action challenges the procedures adopted by the Secretary to assess these penalties.

Plaintiffs, an association of coal mine operators and various individual coal mine operators, seek an injunction and declaratory relief on the ground that the civil penalty assessment procedures embodied in 30 C.F.R. Pt. 100 violate the procedural requirements of Section 109(a) (3) of the Act, 30 U.S.C. § 819(a) (3) (1970). The district court granted summary judgment for the plaintiffs and permanently enjoined the Secretary from utilizing or enforcing the challenged procedures.³ Because we find the Secretary's procedures to be legal under the Act as we interpret it, we reverse.

I

When a coal mine inspector discovers a health or safety violation he delivers a notice of violation to the mine operator.⁴ This notice contains "a detailed description of the conditions or practices which cause and constitute an imminent danger or a violation of any mandatory health or safety standard . . . ."⁵ For example, a notice of violation submitted to this court by the parties describes the violation as follows:

At 12:40 P.M. on December 21, 1971, an accumulation of float coal dust was present in the No. 3 return entry 3 south off 1 Main West for a distance of about 1,500 feet.⁶

Over 227,000 notices of violation were issued from the effective date of the Act, March 30, 1970, through June 30, 1973.⁷

The Act requires that for each violation of a mandatory health or safety standard the mine operator "shall be assessed a civil penalty by the Secretary . . . ."⁸ In view of the immense number of violations, the Secretary promulgated rules and regulations establishing preliminary procedures to be followed in assessing civil penalties.⁹ It is these preliminary procedures which are challenged in the present action.

The regulations provide that after a notice of violation is issued it is reviewed by an Assessment Officer who determines "the liability of the operator . . . for a civil penalty and the amount of penalty to be proposed."¹⁰ The Act prescribes six factors which the Secretary must consider in determining the amount of the penalty,¹¹ and the Secretary's regulations specifically require the assessment officer to consider all relevant circumstances, including the six factors specified in the Act.¹²

After reviewing the notice of violation and determining an appropriate amount for a civil penalty, the assessment officer serves a Proposed Order of Assessment upon the mine operator. This proposed assessment order refers to the particular violation, specifies the amount of the proposed penalty,¹³ and advises the mine operator that he has 20 days from receipt of the order either to protest the proposed penalty or to petition for hearing and formal adjudication.¹⁴ If the operator fails timely to protest or request a formal hearing, "he shall be deemed to have waived his right of protest and his right of formal adjudication with opportunity for hearing, and the Proposed Assessment Order shall become the final assessment order of the Secretary of the Interior."¹⁵

In the event that the operator protests the proposed order, the assessment officer may reconsider in light of the operator's arguments and redetermine, amend or reissue the proposed order.¹⁶ Upon amendment or reissuance of the proposed order, the operator again has 20 days to accept or reject it in whole or in part, and to request a hearing and formal adjudication.¹⁷ If the operator does not file a timely request for a hearing and formal adjudication, the amended or reissued proposed assessment order becomes the final assessment order of the Secretary.¹⁸

In the event that the operator does request a hearing,¹⁹ the hearing is de novo²⁰ and the Secretary has the burden of proving by a preponderance of the evidence that the violation occurred and that the penalty is warranted.²¹ The hearing examiner must render a decision based solely on the record of the hearing,²² incorporating findings of facts and conclusions of law.²³ Thus, throughout the preliminary procedures for assessing civil penalties, formal adjudication is available to a mine operator who either contests the occurrence of the violation or protests the amount of the proposed penalty.

II

Plaintiffs contend that these preliminary procedures violate the procedural requirements of Section 109(a) (3) of the Act which provides as follows:

A civil penalty shall be assessed by the Secretary only after the person charged with a violation under this chapter has been given an opportunity for a public hearing and the Secretary has determined, by decision incorporating his findings of fact therein, that a violation did occur, and the amount of the penalty which is warranted, and incorporating, when appropriate, an order therein requiring that the penalty be paid. Where appropriate, the Secretary shall consolidate such hearings with other proceedings under section 815 of this title. Any hearing under this section shall be of record and shall be subject to section 554 of Title 5.

30 U.S.C. § 819(a) (3) (1970). Plaintiffs argue that this section requires a formal decision incorporating findings of fact in every case regardless of whether a mine operator waives his right to a formal hearing by failing to file an objection to the proposed assessment order. If plaintiffs' interpretation of the Act is correct, then the Secretary's preliminary procedures for assessing civil penalties are illegal because, absent a request for formal adjudication, the final assessment order issues without a decision which complies with the formal requirements of the Administrative Procedure Act.²⁴

Section 109(a)(3) is logically capable of two different constructions. Plaintiffs would read the statute, even where no hearing is requested by the operator, as follows: "A civil penalty shall be assessed by the Secretary only after . . . the Secretary has determined, by decision incorporating his findings of fact therein, that a violation did occur, and the amount of the penalty which is warranted . . . ."

The Secretary maintains that the requirement for a decision must be read in context and that the section as a whole describes the formal adjudicative process which is available to a mine operator upon his request. The Act clearly requires a formal decision whenever disputed issues are contested in a hearing. However, according to the Secretary's interpretation, the requirement for a formal decision of the character and extent for which appellant argues, is linked to the statutory guarantee of an opportunity for a hearing. Under this interpretation a formal decision is not required unless the mine operator takes advantage of that opportunity by requesting a hearing.

In deciding which is the proper interpretation it is helpful to identify the nature of the decision contemplated by the Act. The Act requires more than an "act of deciding."²⁵ The decision described in Section 109(a) (3) parallels the decision required by the Administrative Procedure Act (hereinafter APA) after a formal hearing has been conducted. The APA specifies that a decision following a hearing must include "(A) findings and conclusions, and the reasons or basis therefor, on all the material issues of fact, law, or discretion presented on the record; and (B) the appropriate rule, order, sanction, relief, or denial thereof."²⁶ A decision under Section 109(a) (3) must include (1) findings on the material issues of the occurrence of a violation and the amount of the penalty, and (2) an order requiring that the penalty be paid.²⁷ This similarity to a formal APA decision suggests that when a decision is required under Section 109(a) (3), it must contain "specific and detailed findings and conclusions of the kind customarily associated with formal proceedings."²⁸

Plaintiffs would interpret the Act to require this kind of formal decision even though the mine operator wilfully chooses not to request a hearing on the proposed penalty. However, once given notice of his right to object, the operator's failure to request a hearing suggests that he does not dispute the fact of violation nor disagree with the appropriateness of the specific penalty proposed. As the district court pointed out, in the absence of a request for a hearing the Secretary may act on the information available to him and need not adduce evidence for the other side.²⁹ Where no issue is disputed by the operator, we do not believe that Section 109(a) (3) requires the Secretary to prepare a formal decision which merely would consist of the same information already contained in the proposed assessment order.

In situations where a statute prescribes a hearing prior to agency action the courts have held that the agency need not conduct a hearing if...