By Brent I. Clark and Ilana R. Morady

iStock_000009254156LargeSeyfarth Synopsis: The proposed MSHA rule would require mine operators to examine their mines and to notify miners of dangerous conditions.

MSHA announced today that it has formally submitted a proposed mine examination rule for publication in the June 8, 2016 Federal Register.  81 Fed. Reg. 36818.

The proposed mine examination rule (RIN:1219-AB87) would require metal and nonmetal mine operators to: (1) examine their facilities before a shift begins; (2) explicitly notify miners of any dangerous conditions found; and (3) record their examinations and establish processes to fix hazards.  The current rule allows operators to examine mines during a shift.

MSHA will gather input on this proposed rule in four meetings to be held in Salt Lake City, UT (July 19), Pittsburgh, PA (July 21), Arlington, VA (July 26) and Birmingham, AL (Aug. 4).

Last year, MSHA chief, Joe Main, stated that tightening mine inspection requirements was one of his highest regulatory priorities.

By Andrew H. Perellis and Patrick D. Joyce

US Supreme Court Capitol Hill Daytime Washington DCIn the recently released decision in Perez v. Mortgage Bankers Association (MBA), 575 U.S. ____, 135 S.Ct. 1199 (2015), Supreme Court Justices Scalia and Thomas expressed their discontent with agency deference under the “Auer doctrine.”

Another Seyfarth blog, the Wage & Hour Litigation Blog, discusses the major holding in MBA: to reject the reasoning used by the D.C. Circuit that held notice and comment rulemaking pursuant to the Administrative Procedure Act (APA) must take place when an agency issues a new interpretation at odds with a prior interpretation. The focus of this blog is on an issue that MBA did not address, but which is creating friction for the courts. Specifically, what deference, if any, should courts give to an agency interpretation that has not gone through APA notice and comment rulemaking?

Historically, courts have struggled with the extent of deference to give an agency’s interpretations of its own regulations. Under the APA § 553(b)(A), agency interpretive rules and general statements of policy are exempt from notice and comment rulemaking because interpretative rules are non-substantive, and the APA only requires substantive interpretations, having the force of law, to go through notice and comment rulemaking. However, the “Auer doctrine,” from Auer v. Robbins, 519 U.S. 452, 117 S.Ct. 905 (1997), accords substantial deference to an Agency’s interpretation of its own regulations, even if presented in an unofficial manner such as in an amicus brief.

In separate concurrences in MBA, Justices Scalia and Thomas both call into question whether any judicial deference to agency interpretations of regulations is appropriate.

In his analysis, Justice Scalia cites § 556 of the APA for the proposition that only the courts may interpret agency actions, not the agencies themselves. Justice Scalia opines that the purpose of the § 553(b)(A) exemption was to allow agencies to advise the public on the impact of a complex regulation without binding the public to that interpretation.

However, Justice Scalia believes Auer deference allows agencies to both advise and bind the public because the agency can draft the regulation to be broad and vague and then interpret it in a manner that would not have been evident to the public when the regulation was originally proposed for notice and comment. Further, under Auer, a reviewing court is beholden to an agency interpretation unless its interpretation is unreasonable, and the public is thus bound by the agency’s interpretation with the force of law. Justice Scalia calls for abandoning Auer in a future decision, when the question is properly before the Court.

Justice Scalia distinguishes Auer deference and deference to an agency’s interpretation of its governing statute, also known as “Chevron deference,” from Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under Chevron, if a statutory term is ambiguous, then the agency has authority to construe that term and interpret its meaning within the statutory scheme by promulgating regulations following APA notice and comment procedures. This is arguably permissible because Congress explicitly granted agencies the ability to interpret their governing statutes, and APA rulemaking procedures are followed in establishing the interpretation via regulations. Justice Scalia points out that Auer is unlike Chevron because, under the Auer doctrine, an agency does not use APA notice and comment procedures and Congress has not explicitly granted agencies the ability to interpret their regulations. This difference is enough for Justice Scalia to call for the end of Auer.

Justice Thomas takes a different route when calling Auer into question, looking instead to the separation of powers and checks and balances put in place by the U.S. Constitution. In his concurrence, Justice Thomas refers to the cases dealing with deference to agency interpretations of regulations, beginning with Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 65 S.Ct. 1215 (1945), and calls into question the constitutionality of the entire line of cases, including Auer.

Justice Thomas believes any deference to administrative interpretations of regulations constitutes a transfer of judicial power to the executive, contrary to the language of the Constitution. Because Seminole Rock and Auer erode the judicial obligation to serve as a check on the other branches and muddle the separation between the Judicial and the Executive Branches, Justice Thomas calls for reconsideration of the entire Seminole Rock line of cases, including Auer, at the appropriate moment.

In addition, in a joint concurrence to a prior case, Decker v. Northwest Environmental Defense Center, 568 U.S. ___, 133 S.Ct. 1326 (2013), Chief Justice Roberts and Justice Alito indicated that reconsideration of Auer may be appropriate when the issue is properly before the Court. The issue of Auer deference was not before the Court in MBA or in Decker, but with at least four Justices questioning the continued validity of the doctrine, it is possible the question of judicial deference to agency interpretive rules will be reconsidered in the near future.

Such a reconsideration of Auer could have significant impact upon administrative law. Judicial review of agency action provides important protection against arbitrary or unfair agency action. However, that review is significantly restricted under Auer¸ because a court must defer to an agency interpretation simply because it is issued by the agency, with little check on the reasonableness of the interpretation. Allowing courts to consider but not defer to agency interpretations would compel agencies to be more exacting (and perhaps more forthcoming) when engaging in rulemaking. Rulemaking, while perhaps a tedious process for the agency, required notice to the public, an opportunity for the public to comment, and an opportunity for judicial review, all to ensure that the agency action is consistent with law and not arbitrary or capricious.

By Andrew H. Perellis and Craig B. Simonsen

In City of Arlington v. Federal Communications Commission, __ U.S. ___, No. 11-1545 (May 20, 2013), the Supreme Court re-affirmed the Chevron standard for deferring to an agency interpretation of an ambiguous statute even where the agency interpretation pertains to whether the agency possesses authority to act in the first instance. 

In this case the lower court considered whether an agency’s interpretation of a statutory ambiguity that related to its regulatory authority (its jurisdiction) was entitled to deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984).  The lower court decided it was.  The Supreme Court agreed, holding that courts must apply the Chevron framework to an agency’s interpretation of statutory ambiguities that concern the scope of the agency’s own statutory authority.

The Supreme Court concluded that a “general conferral of rulemaking authority validates rules for all the matters the agency is charged with administering. It suffices to decide this case that the preconditions to deference under Chevron are satisfied because Congress has unambiguously vested the FCC with general authority to administer the Communications Act through rulemaking and adjudication, and the agency interpretation at issue was promulgated in the exercise of that authority.”

The decision has broad implications for all of the various federal agencies vested with rulemaking authority, including, of course, the Environmental Protection Agency. Under the familiar two-step approach mandated by Chevron, the first step is whether the statutory language to be interpreted, on its face, is ambiguous, and whether Congress was silent regarding that ambiguity. If the answer to both of these questions is yes, then the second step is to evaluate whether the administering agency’s interpretation of that language is reasonable. Under the second step of Chevron, an agency’s interpretation of the statute it administers is afforded deference. If that interpretation is reasonable, it must be followed, regardless of whether or not the reviewing court would have come to the same conclusion.

Because the second step of Chevron requires deference, the holding of City of Arlington elevates the importance of Chevron’s first step when challenging whether the agency has authority to engage in a particular action or rulemaking under a statute. This requires arguing either that the statute is unambiguous in not providing such authority, or, although the particular statutory language is ambiguous, that Congress was not silent regarding the ambiguity – meaning that Congress resolved the ambiguity with other statutory language – so as to preclude the exercise of agency action.

By Brent I. Clark, Meagan Newman, and Craig B. Simonsen

Mine operators and employee interveners lost their joint appeal to U.S. Seventh Circuit Court of Appeals — where the Court agreed with the Commission that MSHA acted within its statutory and constitutional authority to issue document demands for employee medical and personnel records. Big Ridge, Inc., et al., v. Federal Mine Safety and Health Review Commission, et. al., __ F.3d __, Nos.12-2316 & 12-2460 (7th Cir. 2013).

In the underlying case, the Secretary of Labor issued citations alleging violations of 30 C.F.R. § 50.41. Section 50.41 states that:

Upon request by MSHA, an operator shall allow MSHA to inspect and copy information related to an accident, injury or illnesses which MSHA considers relevant and necessary to verify a report of investigation required by §50.11 of this part or relevant and necessary to a determination of compliance with the reporting requirements of this part.

The Administrative Law Judge upheld the MSHA citations and orders upon finding that the operators had violated section 50.41 when they failed to cooperate with a 30 C.F.R. Part 50 audit, by refusing to provide the requested information.  The Commission agreed with the ALJ.

On appeal, the mine operators and miner employees challenged the document demands on several grounds. They contended:

  1. That MSHA did not have the authority to require mine operators to comply with document demands for employee medical and personnel records under the Act or relevant regulations;
  2. That the relevant regulation, 30 C.F.R. § 50.41, is not a reasonable interpretation of the Mine Safety Act which was not properly promulgated;
  3. That the document demands infringed the mine operators’ Fourth Amendment right not to be searched without a warrant;
  4. That the demands violated the miners’ Fourth Amendment privacy rights in their medical records;
  5. That the daily penalties MSHA imposed for failure to comply violated the mine operators’ Fifth Amendment right to due process of law; and
  6. That the demands conflict with a variety of other federal and state laws.

In disposing of all of these contentions, the Court agreed with the Commission that MSHA acted within its statutory and constitutional authority both in demanding information that would permit MSHA to verify the accuracy of mine operators’ injury reports and in issuing citations and monetary penalties when mine operators refused to comply. Specifically, the Court found that “although the Mine Safety Act does not expressly refer to MSHA’s document review power as the power to issue an ‘administrative subpoena,’ the authority the Act confers upon MSHA amounts to an administrative subpoena in substance.”

This case again illustrates the need for employers to carefully interface with MSHA as it interacts with the Company. The need to protect the Company from citations and excessive penalties, and the necessity of protecting the Company’s employees’ privacy, demand cautious, measured responses.

By Brent I. Clark, Meagan Newman, and Craig B. Simonsen

The DC Circuit has just remanded a case to the Mine Safety and Health Review Commission because the Commission failed to explain its departure from its own precedent.

Failure to Contest Proposed Penalties Not Fatal

In this case the mine operator had contested an MSHA citation, but not the related proposed penalties. In Lone Mountain Processing, Inc., 33 FMSHRC Page 2373, No. Kent 2011-1153 (October 11, 2011), the Commission had decided that “Lone Mountain has failed to establish good cause for reopening the proposed penalty assessments.”

The DC Circuit of Appeals, in its remand, notes that “in past orders granting motions to reopen, the Commission has repeatedly stated that the timely challenge to a citation gives a ‘clear’ indication that a mine operator also ‘intend[s] to contest the proposed penalty for that citation’.”  The Court is insistent that the Commission “must address precedent directly on point.”