Ohio Coal Ass'n v. Perez

• Citation: 192 F.Supp.3d 882
• Decision Date: 16 June 2016
• Docket Number: Related Case: 2:15-cv-448,Case No. 2:14-cv-2646
• Parties: OHIO COAL ASSOCIATION, et al., and Murray Energy Corporation, et al., Plaintiffs, v. Thomas E. PEREZ, Secretary of Labor, and the Mine Safety and Health Administration, Defendants.
• Court: U.S. District Court — Southern District of Ohio

192 F.Supp.3d 882

OHIO COAL ASSOCIATION, et al.,andMurray Energy Corporation, et al., Plaintiffs,

v.Thomas E. PEREZ, Secretary of Labor, and the Mine Safety and Health Administration, Defendants.

Case No. 2:14-cv-2646

Related Case: 2:15-cv-448

United States District Court, S.D. Ohio, Eastern Division.

Signed June 16, 2016

Scott A. Carroll, Gretchen M. Treherne, Kimberly B. Bakota, Jackson Lewis P.C., Cincinnati, OH, Avi Meyerstein, Henry Chajet, Jackson Lewis P.C., Reston, VA, Mark Noah Savit, Jackson Lewis P.C., Denver, CO, for Plaintiffs.

Alice Lacour, U.S. Department of Justice, Washington, DC, for Defendants.

Opinion & Order

JAMES L. GRAHAM, United States District Judge

Regulated entities are suing their regulator. In two related cases, numerous mining companies and industry associations (collectively, "Plaintiffs"), bring claims against Thomas E. Perez in his official capacity as the Secretary of Labor (the "Secretary") and the Mine Safety and Health Administration (the "MSHA") (collectively, "Defendants"). (Compl., Doc. 1).¹ Plaintiffs complain that a rule promulgated by the Secretary violates the Administrative Procedure Act (the "APA") as well as the Due Process Clause of the United States Constitution. More on the rule later, but for now it is sufficient to say that the rule changes the regulatory environment for coal mine operators.

Defendants move to dismiss the claims for (1) lack of subject-matter jurisdiction, and (2) failure to state a claim upon which relief can be granted. See Fed. R. Civ. P 12(b)(1), (6) ; (Defs.' Mem. in Support of Mot. to Dismiss at 1–2, Doc. 26-1). Defendants argue that Plaintiffs cannot challenge the new rule in federal district court because the relevant statute creates a separate, comprehensive review scheme that precludes district courts from exercising jurisdiction. Defendants also argue that even if the Court has jurisdiction, Plaintiffs have not adequately pleaded their claims. Defendants also challenge Plaintiffs' standing. Because the Court does have jurisdiction, Plaintiffs have standing, and Plaintiffs have stated most of their claims with sufficient particularity, Defendants' Motions are granted in part and denied in part.

I. Background

A. Statutory and regulatory background

1. History of the Mine Act

In 1977, Congress passed the Federal Mine Safety and Health Act (the "Mine Act"). 30 U.S.C. § 801 et seq. "Under the Mine Act, Congress adopted a ‘split-enforcement’ regime where issues of policy and enforcement are delegated to the Secretary of Labor and issues of adjudication are addressed by an independent review body known as the Federal Mine Safety and Health Review Commission [ ("the Commission") ] and the federal court of appeals." Armstrong Coal Co. v. U.S. Dep't of Labor , 927 F.Supp.2d 457, 461 (W.D.Ky 2013). The MSHA is an administrative agency within the United States Department of Labor; acting on behalf of the Secretary of Labor, the MSHA implements and enforces the Mine Act. The Secretary establishes health and safety standards for mines, see 30 U.S.C. § 811, inspects mines at least annually, 30 U.S.C. § 813(a), and issues citations to mine operators that violate "any mandatory health or safety standard, rule, order, or regulation," 30 U.S.C. § 814(a).

The Secretary does issue citations: 118,619 in 2013 alone. (Compl. at ¶ 32). But not all citations are created equal. "S&S" violations—those "of such nature as could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards"—can lead to severe consequences. 30 U.S.C. § 814(e). For example, if an operator has a pattern of S&S violations, the Secretary gives the operator "written notice that such pattern exists"—a "POV Notice." 30 U.S.C. § 814(e)(1). In the next 90 days, if a mine inspector cites the operator for any S&S violation, the mine inspector must then issue a withdrawal order: an order that requires all persons in the affected area of the mine to be removed and not re-enter until the Secretary determines that the violation has been abated. 30 U.S.C. § 814(e). The POV Notice is deemed terminated if, after inspecting the entire mine, an inspector finds no S&S violations. 30 U.S.C. § 814(e)(3). Since the phrase "pattern of violations" is not defined by the Mine Act, Congress required the Secretary to "make such rules as he deems necessary to establish criteria for determining when a pattern of violations...exists." 30 U.S.C. § 814(e)(4).

The Secretary promulgated the first POV rule in 1990. See Pattern of Violations Rule, 55 Fed. Reg. 31128-01 (July 31, 1990). Under the 1990 POV Rule, the MSHA would use an initial screening process to identify mines "with a potential POV" ("PPOV"). 1990 POV Rule, 30 C.F.R. §§ 104.2(a)(1) ; 104.3(b) (1990). This screening process allowed mine operators to either appeal the underlying citation(s) or remediate the problem before receiving a POV Notice and risk the shutdown of the mine. Because of this preemptory mechanism (and other reasons), the MSHA never used its authority under the 1990 POV Rule to sanction a single mine for a pattern of violations. Pattern of Violations Rule, 78 Fed. Reg. 5056, 5058 (Jan. 23, 2013) (codified at 30 C.F.R. § 104.1 –104.4 (2013) ) (citing Office of the Inspector General's Audit Report: In 32 Years MSHA Has Never Successfully Exercised its Pattern of Violations Authority (Report No. 05–10–005–06–001)). Plaintiffs assert that while rarely invoked, the 1990 POV Rule dramatically improved safety in the mining industry by helping reduce fatalities and injuries. (Compl. at ¶¶ 49–56).

The OIG report identified limitations the 1990 POV Rule placed "on MSHA's authority, specifically, [r]equiring the use of final citations and orders in determining a PPOV." Pattern of Violations Rule, 78 Fed. Reg. at 5058 (citing OIG Report). Ultimately, the MSHA incorporated many of the report's recommendations into its revised POV rule, which became effective on March 25, 2013 (the "2013 POV Rule"). The 2013 POV Rule, according to MSHA, "simplifies the existing POV criteria, improves consistency in applying the POV criteria, and increases the efficiency and effectiveness in issuance of a POV notice." Pattern of Violations Rule, 78 Fed. Reg. at 5056. According to Plaintiffs, it "eliminates the PPOV notice system, enables MSHA to issue a POV Notice based solely on non-final citations, and, critically, fails to submit the actual POV criteria for notice and comment." (Compl. at ¶ 67).

2. The Mine Act's review system

The Mine Act vests jurisdiction with the Commission to hear disputes over Mine Act requirements. Typically, disputes arise after mine inspectors issue citations. Mine operators may contest those citations, and the Commission may affirm, modify, or vacate those citations. 30 U.S.C. § 815(d). Typically, the Commission adjudicates these disputes by appointing an Administrative Law Judge ("ALJ") to conduct the proceedings and render a decision "which constitutes his final disposition of the proceedings." 30 U.S.C. § 823(d)(1). The losing party can administratively appeal the ALJ's decision, filing what the Mine Act calls a "petition for discretionary review," but the Commission has unfettered discretion to hear or ignore the petition. 30 U.S.C. § 823(d)(2)(A)(i). After 40 days without review, the ALJ's decision becomes the final decision of the Commission. 30 U.S.C. § 823(d)(1). Final Commission decisions are subject to appeal in "any United States court of appeals for the circuit in which the violation is alleged to have occurred or in the United States Court of Appeals for the District of Colombia Circuit." 30 U.S.C. § 816(a)(1).

The Mine Act only explicitly vests jurisdiction with the district courts in two circumstances, both of which require the Secretary to initiate the lawsuit against an uncooperative mine operator: (1) if the Secretary seeks injunctive relief for an operator's failure to comply with his orders or interference with his inspection duties, 30 U.S.C. § 818(a)(1) ; or (2) if the Secretary seeks to recover unpaid civil penalties, 30 U.S.C. § 820(j).

3. The 1990 POV Rule

The 1990 POV Rule required the MSHA to conduct an annual review of "the compliance records of mines." Pattern of Violations Rule, 55 Fed. Reg. at 31136 (July 31, 1990). The critical piece of the compliance record was the "mine's history of...significant and substantial violations." Id. S&S violations were one of the 1990 POV Rule's seven criteria "used to identify those mines with a potential pattern of violations." Id. The 1990 POV Rule created a warning for mine operators that exhibited a "potential pattern of violations" by requiring the MSHA to notify them in writing of the potential pattern, give them "a reasonable opportunity" to take steps to review the basis for the POV warning, meet with the MSHA, and take corrective measures. 30 C.F.R. § 104.4(a)(1)–(4) (1990). Only after this potential pattern of violation notice (or "PPOV Notice") could the MSHA initiate the process that could culminate in the MSHA issuing a POV Notice. 30 C.F.R. § 104.4(b) (1990).

4. The 2013 POV Rule

In 2013, the Secretary made significant changes to the POV rule. First, the 2013 POV Rule allows the MSHA to consider a mine's history of S&S "citations" rather than violations. Pattern of Violations Rule, 30 C.F.R. § 104.2(a)(1). Second, the 2013 POV Rule eliminates the PPOV system. See 30 C.F.R. § 104.3 (Issuance of Notice). Third, the 2013 POV Rule expands the criteria the MSHA may use to identify mines with a pattern of S&S violations. See 30 C.F.R. § 104.2(a) (Pattern Criteria). Fourth, the 2013 POV Rule eliminates the option of a mine operator to "[i]nstitute a program to avoid repeated...violations," compare 30 C.F.R. § 104.1 –4 (2013)with 30 C.F.R. § 104.4(a)(4) (1990), but the MSHA issued informal guidance that it would accept what it called "Corrective Action Programs," the adoption of which could delay a POV Notice, 78 Fed. Reg. 5063 ; (...